Cumming v Colin Sullivan and Dorthey Sullivan
[2009] NSWWCCPD 80
•17 July 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Cumming v Colin Sullivan and Dorthey Sullivan [2009] NSWWCCPD 80 | |||||
| APPELLANT: | Anthony John Cumming | |||||
| RESPONDENT: | Colin Sullivan and Dorthey Sullivan | |||||
| INSURER: | GIO General Limited | |||||
| FILE NUMBER: | A1-9478/08 | |||||
| ARBITRATOR: | Mr P Theobald | |||||
| DATE OF ARBITRATOR’S DECISION: | 19 March 2009 | |||||
| DATE OF APPEAL DECISION: | 17 July 2009 | |||||
| SUBJECT MATTER OF DECISION: | Weekly payments claim; assessment of comparable earnings; applicability of award rates of pay; adequacy of evidence; application of section 40 of the Workers Compensation Act 1987. | |||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Deborah Moore | |||||
| HEARING: | On the papers | |||||
| REPRESENTATION: | Appellant: | Mitchell Playford & Radburn | ||||
| Respondent: | Turks Legal | |||||
| ORDERS MADE ON APPEAL: | 1. Paragraphs 1, 2 and 3 of the decision of the Arbitrator dated 19 March 2009 are revoked and the following decision made in its place: | |||||
| (1) The Respondent to pay to the Applicant weekly compensation pursuant to section 40 of the Workers Compensation Act 1987 at the following rates for the periods specified: | ||||||
| From 1 July 2005 to 31 December 2005 at $86.90 per week; | ||||||
| From 1 January 2006 to 1 April 2006 at $ 109.70 per week; | ||||||
| From 2 April 2006 to 1 October 2006 at $90.70 per week; | ||||||
| From 2 October 2006 to 31 December 2006 at $ 321.70 per week; | ||||||
| From 1 January 2007 to 1 April 2007 at $ 345.20 per week; | ||||||
| From 2 April 2007 to 31 December 2007 at $95.20 per week; | ||||||
| From 1 January 2008 to 1 April 2008 at $119.40 per week; | ||||||
| From 2 April 2008 to 1 October 2008 at $146.40 per week; | ||||||
| From 2 October 2008 to 31 December 2008 at $430.40 per week; | ||||||
| From 1 January 2009 to 18 January 2009 at $455.30 per week; | ||||||
| From 19 January 2009 to date and continuing at $ 166.30 per week. | ||||||
| (2) Credit to the Respondent for any payments made to date. | ||||||
| 2. Paragraphs 4 and 5 are confirmed. | ||||||
| 3. The Respondent is to pay the Appellant’s costs of the appeal. | ||||||
BACKGROUND TO THE APPEAL
On 9 April 2009 Anthony John Cumming (‘the Appellant/Mr Cumming’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision dated 19 March 2009
The Respondent to the Appeal is Colin Sullivan and Dorthey Sullivan (‘the Respondent/ Employer/the Sullivans’).
Mr Cumming is presently forty years old. He left school at age sixteen and worked in the Casino Meat Works for approximately eighteen months.
He became an apprentice carpenter in about 1988. He commenced work with the Respondent in 1991 and continued in that employment until 2000. He was employed as a carpenter’s assistant. His hours of work he said were from 7.00am to 4.00pm Monday to Friday, but he was not paid over holidays nor when it rained and no work was available. His work, he said, involved “90% of the time on domestic housing.”
Mr Cumming stated that in about 2000 he started getting pain in his back caused by heavy lifting and bending particularly when he was involved in flooring and roofing work. He started having several days off work when his pain was particularly bad and had some chiropractic treatment together with some treatment at Casino Hospital. He continued to work apparently until 5 May 2000 when the pain in his back and both legs became so severe he was unable to continue.
He reported the injury to his employer then consulted his general practitioner, Dr Castagna, who referred him for a CT scan and apparently put him off work.
Liability was accepted by the Respondent’s insurer, GIO General Ltd (‘GIO’) and weekly payments commenced, together with physiotherapy treatment and rehabilitation.
Re-training was arranged by the GIO with the Commonwealth Rehabilitation Service (‘CRS’), and ultimately Mr Cumming was re-trained in real estate.
He then commenced employment as a real estate agent in Casino. Mr Cumming said that although he qualified as a real estate agent, he did not have his own license. He remained in that employment for approximately six years. He said that the early years were profitable, but by 2005 the industry had slumped, and it became more difficult for him to reach target sales. He was then required to do a considerable amount of door-knocking and ‘cold calling’ which involved extensive walking. He was also expected to make numerous telephone calls which involved lengthy periods of sitting.
These activities caused increasing symptoms in his back so he eventually ceased that employment in about March 2006.
He then obtained his own ABN and commenced work on a contract basis with various real estate agents in the Northern Rivers area.
He and his wife then decided to leave the Casino area for better opportunities and moved to the Gold Coast in August 2007. Mr Cumming continued to work in real estate on a contract basis. He then attempted to set up his own business, but this was not particularly successful. He subsequently performed a variety of odd jobs both through his own business known as “Cummings Consultancy” and through labour hire firms. He was trying to get work as a consultant in the building industry, but performed a variety of jobs throughout 2008.
Eventually, on 19 January 2009 Mr Cumming commenced employment as a schools officer with the Department of Education in Queensland. His duties involve general maintenance at a school near his home.
On 27 November 2008 Mr Cumming filed an Application to Resolve a Dispute (‘the Application’) in the Commission seeking weekly benefits of compensation from 1 July 2005 together with medical expenses and lump sum compensation pursuant to the provisions of the Workers Compensation Act 1987 (‘the 1987 Act’).
The parties reached agreement as to the level of impairment of Mr Cumming’s back and left leg. At a teleconference on 22 January 2009, the claim in relation to impairment of the right leg was referred to the Registrar for the appointment of an Approved Medical Specialist (‘AMS’).
The parties attended a conciliation/arbitration hearing on 25 February 2009 where Mr Cumming gave oral evidence recorded in a transcript of that date. The Arbitrator made an award in favour of Mr Cumming at various rates for various periods commencing on 2 October 2006.
It is from this decision that Mr Cumming seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 19 March 2009 records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation at the rate of $141.70 from 2 October 2006 to 1 April 2007 under s40 of the Workers Compensation Act 1987.
2. That the Respondent pay the Applicant weekly compensation at the rate of $227.60 from 2 October 2008 to 9 October 2008 under s40 of the Workers Compensation Act 1987.
3. That the Respondent pay the Applicant weekly compensation at the rate of $250.40 from 9 October 2008 to 19 January 2009 under s40 of the Workers Compensation Act 1987.
4. That the costs of both parties be subject to an uplift of 10% to recognise the complexity of the matter.
5. That the Respondent pay the Applicant’s costs as agreed or assessed.”
A ‘Statement of Reasons’ (“Reasons’) was attached to the determination.
ISSUES IN DISPUTE
The issues in dispute in the appeal relate solely to the Arbitrator’s findings as to Mr Cumming’s earnings but for injury and the consequent award based on those findings. As the Arbitrator noted at [17], “Neither injury nor liability was in issue.”
Mr Cumming has identified three grounds of appeal as follows:
“a. The Arbitrator erred in assessing the comparable rates of pay in the relevant period (post July 2005) which were less than what was paid on an hourly basis to the Appellant in 2000;
b. The Arbitrator erred in applying the rates of pay set under the Award for the classification of a carpenter’s assistant when the Appellant was not paid pursuant to the Award, was paid well above those rates in 2000 and the Respondent otherwise ceased business in 2006;
c. The Arbitrator failed to exercise its [sic] knowledge as an expert tribunal of wage rates applicable to the industry.”
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. The amount at issue on appeal satisfies the threshold requirements of section 352(2).
Leave to appeal is granted.
FRESH EVIDENCE
Mr Cumming has sought to place before the Commission on appeal a copy of the Building Employees Mixed Industries (State) Award 2001 (‘2001 Award’) as ‘fresh evidence.’ This document, he submits, supports his assertion that, at the time of injury, he was not being paid pursuant to an award. Reference was made by the Arbitrator to this particular award at [40] and also to what was described as the “Carpenters Award” at [41].
The Respondent opposes the introduction of this evidence principally on the grounds that no explanation has been given by Mr Cumming as to why it was not available at the arbitration.
Annexed to the Respondent’s Reply was a copy of this Award but with rates effective from 1 October 2007 (‘2007 Award’). The Arbitrator appears to have applied the rates under the 2007 Award to establish Mr Cumming’s earnings but for injury in respect of the claimed period, that is, from 1 July 2005.
Mr Cumming submits that it was unknown at the time of the arbitration hearing that the Respondent was alleging that, at the time of the injury in May 2000, he was paid pursuant to the 2007 Award. No reference had been made by the employer to this award. The only reference to it was contained in the Respondent’s Section 74 Notice. In that Notice, a reference is made to what would be Mr Cumming’s “current award”, that is, as at 2008. Mr Cumming submits that he is “…caught by surprise…” at the Arbitrator’s finding at [41] that: “I think it more likely that Mr Cumming would be paid under the Carpenter’s Award as Mr Sullivan[the employer] apparently paid him.”
The terms of the 2001 Award were not before the Arbitrator although he appears to have adopted the Respondent’s submission that the rates applicable under the 2007Award were the relevant rates for the period from 1 July 2005. As Mr Cumming’s submits:
“The Arbitrator was not asked to determine, as he found at [41], that the Appellant was paid under the Award… The Respondent’s contention was restricted to whether the Award rates were relevant to rates of pay post July 2005.”
Mr Cumming’s submits that in those circumstances, “…the Commission has acted on evidence not before it and the Appellant has been denied procedural fairness.”
I do not accept this submission to the extent that there was clearly some evidence of the terms of what was claimed by the Respondent to be the relevant award (albeit the 2007 version). The dispute between the parties appears to focus on the relevance of award rates of pay to this particular claim.
I do however accept his submission that the 2001 Award does not constitute fresh evidence since, as Deputy President Roche said in Combined Civil Pty Ltd v Rikaloski [2007] NSWWCCPD 181 at [32]:
“Whilst the Commission is an expert tribunal and it is taken to be aware of wage rates in the general labour market (see Akawa Australia Pty Ltd v Cassells (1995) 25 NSWCCR 385 at 392 and ICI Australia Operations Pty Limited (now known as Orica Australia Pty Ltd) and Another v WorkCover Authority of New South Wales [2004] NSWCA 55; (2004) 60 NSWLR 18 at [219] - [232]) that expertise does not extend to determining issues of ‘injury’ and ‘causation’ … “
In those circumstances, I do not consider that leave to adduce this evidence is necessary. The Arbitrator has referred to the award generally in his decision, and appears to have adopted the terms of the 2007 Award. The 2001 Award is of relevance to the issues in dispute, and I propose to admit it into evidence on appeal.
The Respondent also wishes to rely upon “fresh evidence.” This evidence is a list of weekly compensation payments made to Mr Cumming from 5 May 2000. Mr Cumming has no objection to the tender of that document but makes certain submissions as to its relevance. The Respondent submits that this material was available at the arbitration but it did not seek to tender it as there was no dispute that payments were made to Mr Cumming from that date.
There appears to be some misunderstanding by the Respondent as to Mr Cumming’s allegations on appeal. The Respondent seeks to admit this document on the grounds that Mr Cumming now asserts that “…no compensation was paid during that period.”
In his submissions in reply to the Respondent’s ‘Notice of Opposition,’ Mr Cumming submits that, since payment wasn’t made until 29 June 2000, that compensation was not included in his 2000 tax return. The 2000 tax return produced by Mr Cumming was the subject of considerable discussion at the arbitration, forming the basis of Mr Cumming’s argument as to actual earnings at the time of injury.
I accept the Respondent’s submissions as to why this document was not produced at the arbitration, and given that Mr Cumming has no objection to it, I propose to admit it on appeal.
THE EVIDENCE
Mr Cumming’s Evidence
I do not propose to refer to the medical evidence filed by the parties. There is no dispute that Mr Cumming has an impairment of his back and legs that restrict him in carrying out certain tasks, and render him unfit for his former work as a carpenter.
The only evidence relevant to the issues in dispute in Mr Cumming’s Application was contained in the section number 5.2 “Schedule of wages claimed.” His actual earnings per week from 1 July 2005 to 2 October 2008 were as follows:
1/7/05 to 1/10/05 $673.00
2/10/05 to 1/4/06 $673.00
2/4/06 to 1/10/06 $692.00
2/10/06 to 1/4/07 $461.00
2/4/07 to 1/10/07 $711.00
2/10/07 to 1/4/08 $711.00
2/4/08 to 1/10/08 $684.00
2/10/08 to date $400.00
These figures were not challenged by the Respondent.
In an ‘Application to Admit Late Documents’ filed on 18 December 2008, Mr Cumming included a detailed statement dated 12 December 2008, a letter from Bennett Constructions of Lismore dated 16 July 2008, and an undated and handwritten document titled “Schedule re annual income.”
There was no information of relevance to the issues in dispute in the statement dated 12 December 2008, other than Mr Cumming’s evidence that he had “some very good years” in real estate in 2003 and 2004 until things slowed down in 2005. In that statement, Mr Cumming set out details of his various jobs since ceasing with the Respondent in May 2000.
The letter from Bennett Constructions dated 16 July 2008 addressed to Mr Cumming’s solicitor under the hand of Mr Piper, managing director, set out details of “average gross income for a carpenter employed by our company.”. Earnings ranged from approximately $37,600.00 in the 1999/2000 financial year to $50,900.00 in the 2007 /2008 year.
The document described as “Schedule re annual income” does not reflect the figures set out in the Application, and its relevance escapes me.
.
A further ‘Application to Admit Late Documents’ filed on 16 February 2009 contained a statement from Mr Cumming dated 12 February 2009 which set out details of his work and income with the Department of Education in Queensland. He commenced that employment on 19 January 2009 earning $689.00 gross per week. He also said:
“Recently I have spoken to Mr Kelvin Cufkelly from the Queensland Housing Association and he advised me that carpenters presently earn between $35.00 to $43.00 per hour gross. Taking an average of $39.00 per hour I would have a weekly wage of $1,485.00 working for 38 hours if I was able to work as a carpenter.
I have also spoken to the manager at Evans & Harch a large building development company operating nearby and they have advised me that the weekly wage for carpenters is between $1,300.00 per week gross and $4,000.00 per week gross depending on the experience and other factors.”
In his oral evidence, Mr Cumming was asked by his Counsel about his employment with the Respondent. This exchange took place [T6-7]:
“Q. And what were you working as?
A. I was employed – I was being paid as a carpenter as seven of us, six or seven different people all paid the same amount.
Q. Okay.
A. Whether you’ve got certificates or not.Q. At the time are you able to comment as to whether you agree that you were working a 28-hour week at that time of the injury in May 2000?
A. If it was that week I’m not 100 per cent sure but all I know is I worked from – I worked for Col for nearly 10 years, and I worked Monday to Friday, except at Christmas time we had some time off, and if it rained we didn’t work. So I worked from Monday to Friday whenever the work was available. I was available to work five days a week.”
Under cross-examination, this exchange took place [T8-9]:
“Q. Colin in filling out his report to the insurer indicated that you had worked 28 point, and there’s two decimal places.
A. Yeah.
Q. You wouldn’t suggest that you’d only worked one week of 28.86 hours or whatever the number was?
A. The only thing I can think of is because we do have – when we have time off for Christmas time, as builders do, I don’t get paid. Like, we weren’t paid for time off and that…and, as I said, if it rained – if we had some rainy periods, we didn’t work, you know. But there was always – Col always made work available.
Q. And I want to suggest to you that your average weekly payment from Col was…about $485 a week?
A. Yes.
Q. And was the appropriate rate for what you were being paid about $17 an hour?
A. I think so, yeah. I’ve never checked it.”
Q. 485 was your weekly payment in 2000?
A. I think so. No, I don’t believe all those things. I can remember being paid over $500 a week taking home off Mr Sullivan.”
When asked questions about the slow down in real estate work, Mr Cumming said that , although sales slowed, it had become a “physical thing” and he was having some difficulty keeping up with targets he was supposed to meet [T11]. At [T13], he said that he did not work after ceasing on 5 May 2000 until about November 2000 when he took up “a work placement thing…” At [T14], he was asked about his apprenticeship. He said that he only needed about another two months but his employer at that time went bankrupt. He then said at [T15]:
“A Well, about two months of TAFE but I never really needed it because I was always employed as a carpenter anyway.
Q. Well, what does that mean?
A. Well, you’re getting the same wages because I’ve done the same job because I stayed with Col. You know, if I had a certificate I wasn’t going to get any more money for it.”
Mr Cumming denied describing himself as a carpenter’s assistant and said that he was employed as a carpenter. When asked if he had told a doctor that he was employed as a carpenter’s assistant, Mr Cumming said [T15]: “I don’t think I would have called myself a carpenter’s assistant.”
The Respondent’s Evidence
Relevant material contained in the Respondent’s Reply filed on 18 December 2008 included:
1. The Employer’s Report of Injury undated;
2. Mr Cumming’s Compensation Claim on the GIO dated 18 May 2000;
3. A letter from the GIO to Mr Cumming’s solicitor dated 18 November 2008;
4 Tax assessments for the years ending 30 June 2005, 2006 and 2007;
5. A copy of the Building Employees Mixed Industries (State) Award relevant for the period from 1 October 2007.
An ‘Application to Admit Late Documents’ from the Respondent filed on 19 February 2009 included:
1. Mr Cumming’s tax assessment for the year ending 30 June 2008;
2. A copy of a letter from the GIO to Mr Sullivan, the employer, dated 7 January 2009
3. Mr Sullivan’s reply, undated, but received by the GIO on 30 January 2009.
In the Employer’s Report of Injury form, in answer to the question: “Is the worker employed under…” Colin Sullivan ticked the box marked “State Award”. However, he did not nominate the name of the award nor the worker’s classification or number under that award. He did not answer the question: “What is the worker’s minimum weekly wage rate, exactly as prescribed by worker’s classification name and number, grade or group in the award…mentioned above?” He did not enter the worker’s “rate per week” nor did he answer the question “What is the current rate per week paid to worker?” He did not tick the box indicating that Mr Cumming was an apprentice.
In answer to the question: “If the worker is employed as a part-time or casual employee, what is the average number of hours worked per week as a casual or part-time employee?” Mr Sullivan wrote: “28.26 hours.” On the front of the form, Mr Sullivan wrote that his “ hours worked per week” were “40”.
In answer to the question: “Where there is no Award or Agreement to cover the type of work being performed by the injured worker, please state the average weekly earnings of the injured worker during the past 12 months?” Mr Sullivan wrote “$487.50”
In the letter from the GIO to Mr Cumming’s solicitor dated 18 November 2008, the GIO set out details of how it proposed calculating any entitlement to weekly payments and said:
“With respect to your client’s current average weekly earnings (AWE) for years 10/07/05 onwards, we have made the following assessment.
We have [been] provided [with] a document from Bennett Constructions dated 16/07/08 providing details of comparable employees working as a carpenter. We have contacted Bennett Constructions and requested details of how they have calculated their averages. Mr Piper advised that these employees were all full time employees working under various grades of the relevant state award.
The information is not a true reflection of the worker’s comparable wages for the following reasons:
· These workers were all employed on a fulltime basis.
· These workers work on major construction sites attracting higher rates of pay.
· Mr Cumming was employed as a casual employee working 28.26 hours per week. His average weekly earnings were $487.50 per week…
· GIO contacted the Department of Industrials (sic) who advised Mr Cumming’s current award would be Building Employees Mixed Industries (State) Award…This is the award that covers smaller domestic building sites. Our policy documents indicate that our insured was involved in house construction with 4 employees.
· Mr Cumming’s average weekly hours were 28.26 per week. As he was a casual, he is entitled to a 21.5% loading in addition to his hours worked.
o For the period 01/07/05 to 09/07 06 his award was ($581.20 divided by 38) $15.26 per hour. His weekly wage would have been ($15.26 x 28.26) =$525.00 per week
oFor the period 10/07/06 to 09/10/07 his award was ($602.70 divided by 38) $15.86 per hour. His weekly wage would have been ($15.86 x 28.26) = $544.56 per week.
o For the period 10/10/07 to 09/10/08 his award was ($627.60 divided by 40 ) $15.69 per hour. His weekly wage would have been ($15.69 x 28.26) = $538.73 per week.
o For the period 10/10/08 to date and continuing will be ($650.40 divided by 40) $16.26 per hour ($16.26 x 28.26) = $558.30 per week.”
A copy of the “current relevant award” was enclosed with this letter.
Mr Cumming’s tax assessment for the 2005 year showed a taxable income of $35,509. For the 2006 year, it was $35,889; for the 2007 year it was $24,669; for the 2008 year it was $10,872. His 2000 tax assessment was tendered at the hearing, and showed gross earnings of $22,188.00.
The GIO wrote to the employer on 7 January 2009. Mr Sullivan was asked to provide the following information:
“(i) What award was Mr Cumming paid under? If there was no award, please provide details of any relevant EWA or AWA.
(ii) What were his weekly average earnings?
(iii) As per the attached claim forms, you stated that Mr Cumming was working approx. 28.26 hrs p/w and that his average weekly earnings was (sic) $487.50 at the time of injury. Could you please confirm this information is correct?”
Mr Sullivan replied:
“As this case is now nine years old, I have very few records as my business closed two years ago.
I would stand by re question 3 about number of hours work and weekly earnings as these figures were taken from records available at the time and would have been accurate at the time.”
THE ARBITRATOR’S FINDINGS AND REASONS
After setting out the background to the claim and the evidence before him, the Arbitrator made reference to the oral evidence given by Mr Cumming at the arbitration, stating as follows:
“23. Mr Cumming gave his evidence in a straightforward and honest fashion. He did not prevaricate and he did not pause for long periods to consider his answers.
24. [Counsel for the Respondent’s] cross-examination was skilful as he attempted to have Mr Cumming admit that he had worked twenty-eight hours per week and that he had taken time off from his real estate work for reasons not associated with his injury.
25. Mr Cumming answered [his] questions well and I found his answers totally believable.”
The Arbitrator then considered the statutory framework for determining claims for weekly compensation before setting out his findings in relation to Mr Cumming’s “capacity to earn but for injury” as follows:
“30. This issue was made difficult by the ambiguity over the hours that Mr Cumming worked for the respondent employer. It was also made difficult by Mr Cumming not being a fully qualified carpenter and therefore not entitled to be paid at the carpenter’s award rate.
31. The respondent employer’s notification of the claim is a contemporary document to the date of injury. The document makes it clear that Mr Cumming was for the employer’s purposes a carpenter. He was employed on a permanent part-time basis and according to the front page of the report of injury worked forty hours per week.
32. On the second page the employer states that the normal working hours are 7:00am – 4:00pm and Mr Cumming was paid under the State Award and averaged 28.26 hours per week with average earnings of $487.57.
33. Mr Cumming gave evidence that he was employed on a full-time basis by the Sullivans but all staff were stood down during periods of bad weather or when there was no work. I gathered from the evidence that there was rarely no work available but there had been periods when they were unable to work due primarily to inclement weather.
34. I find that Mr Cumming was:
· Employed to work 38 hours per week, subject to weather conditions;
· Willing to work thirty-eight hours per week, and after hearing his evidence;
·I am satisfied that he would now, if he had not been injured be willing to work thirty eight hours per week.
35. It was Mr Cumming’s evidence that he was paid as though he were a carpenter since he was within a few months of completing his training.
36. It was submitted by [Counsel for Mr Cumming] that I should accept the figures set out in the letter dated 16 July 2008 from Bennett Constructions of Lismore as indicating what Mr Cumming could earn but for his injury as a carpenter. I don’t accept that submission as no evidence was produced to support a finding that the pay rates paid by Bennett Constructions were for carpenters without formal qualifications or that they were comparable with the pay rates of smaller construction firms such as the respondent. The issue of comparability was opened in the letter dated 18 November 2008 from the insurer to Mr Cumming’s solicitor.
37. I have considered the pay rates for carpenters alleged in Mr Cumming’s statement of 12 February 2009 and rejected them for similar reasons.
38. I accept [Counsel for the respondent’s] submission…that not being a properly qualified carpenter meant that Mr Cumming would always require a qualified carpenter to supervise him.
39. I note that Mr Cumming did not at any time assert that he would complete his training as a carpenter had he not been injured.
40. I note from the letter addressed to Mr Cumming’s solicitors from the insurer dated 18 November 2008 that the insurer relied on the Building Employees Mixed Industries (State) Award in calculating Mr Cumming’s earnings had he not been injured.
41. I take into account that Mr Cumming is not a carpenter and is therefore unlikely to earn the premium rates paid to carpenters who can work on their own unsupervised as a result of their formal qualifications. I think it more likely that Mr Cumming would be paid under the Carpenters Award as Mr Sullivan apparently paid him. In making the following findings as to Mr Cumming’s ability to earn I have adopted the amounts set out in the insurer’s letter of 19(sic – 18) November 2008.
42. Utilising those figures and my findings relating to the hours Mr Cumming was willing and able to work I find that:
·For the period 1 July 2005 – 9 July 2006 Mr Cumming could have earned $581.20 but for his injuries.
·For the period 10 July 2006 – 9 October 2007 he could have earned $602.70 but for his injuries.
·For the period 10 October 2007 – 9 October 2008 he could have earned $627.60 but for his injuries.
·For the period 10 October 2008 to date and continuing he could have earned $650.40 but for his injuries.
43. I have taken those figures as a permanent employee rather than a casual because Mr Cumming was a permanent employee with the respondent according to the employer’s claim form attached to the Reply.”
The Arbitrator then turned to consider Mr Cumming’s ability to earn. He made reference to the Wage Schedule filed by Mr Cumming noting that it was not challenged by the Respondent and accepting the amounts earned by Mr Cumming set out therein as a proper reflection of his ability to earn ( Howe v Dell-Bak Imports (Wholesale) Pty Ltd [2007] NSWWCCPD 103 referred to).
The Arbitrator concluded that there were only two periods since 1 July 2005 where Mr Cumming had earned less than his findings as to his ability to earn since that time, and entered awards for those periods accordingly. He found that there was no basis upon which to exercise his discretion to reduce the award.
DISCUSSION AND FINDINGS
The principle issue to resolve is whether the Arbitrator correctly calculated Mr Cumming’s probable earnings but for injury.
Section 40 of the 1987 Act provides as follows:
“40 (1) Entitlement. The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.
(2) Calculation of reduction in earnings of worker – general. The reduction in the worker’s weekly earnings is (except as provided in this section) the difference between:
(a) The weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker stayed in the same or some comparable employment…
(b) The average weekly amount which the worker is earning or would be able to earn in some suitable employment from time to time after the injury…”
The main argument centres around the issue of whether Mr Cumming was paid pursuant to an award. The Arbitrator accepted that Mr Cumming would more likely be paid pursuant to “the Carpenters Award” and appears to have accepted that he was paid under this award by his employer.
I do not accept this finding. The Employer’s Report of Injury form referred to at [53] above was silent as to the nature of any claimed “State Award” under which Mr Cumming was purportedly paid. Indeed, Mr Sullivan specifically filled in the section titled “ Where there is no Award…” Mr Sullivan was unable to identify any award when asked to do so by the GIO in their letter to him of 7 January 2009. As Mr Cumming rightly points out in his submissions, the only evidence on this point is Mr Sullivan’s Report of Injury form which merely mentioned a “State Award” without any details.
The Respondent’s assertion that Mr Cumming was paid under an award seems to stem from the GIO’s letter to his solicitor dated 18 November 2008 where, after apparently making enquiries with the Department of Industrial Relations or some similar organisation, the GIO set out what would be the award relevant to the sort of business conducted by the employer.
Mr Cumming’s submission that “…it is also difficult to accept that the Appellant was paid under the Award if he was not paid at Christmas or during rainy periods…” is compelling.
In any event, as Mr Cumming submits, any award merely sets the minimum as opposed to the actual wages paid in an industry. Moreover, as he points out:
“… an award does not form part of the contract of employment unless the terms of the award are incorporated into the contract: Byrne v Australian Airlines Pty Ltd (1995) 185 CLR 410 at 420.”
I also accept his submission that “…it is unfair to use the Award as a guide when there is evidence of actual wages paid…”
In this case, there was clear evidence of the actual wages paid to Mr Cumming. His average weekly earnings for the year ended 30 June 2000 were $487.50 per week. The average hours worked over that period were 28.26 per week. That equates to an hourly rate of approximately $17.25 per hour. This is consistent with the proposition put to Mr Cumming by Counsel for the Respondent [T8-9]. His 2000 tax assessment (discounting unpaid time and that he ceased work on 5 May 2000) is broadly consistent with these figures too. I note also Mr Cumming’s evidence that he recalled “taking home” over $500.00 per week on occasions, which is consistent with the fluctuating hours worked, depending on weather conditions and the availability of work.
I reject the Respondent’s submission that the Arbitrator “…has not accepted that the Appellant worked only 28.26 hours per week…and… has accepted that the wage paid to the Appellant by the Respondent [of] $487.50 per week was the Appellant’s wage for 38 hours per week…” This is an incorrect interpretation of the evidence. The average hours worked in the year ended 30 June 2000 were 28.26. The Employer’s Report of Injury form discloses that he was employed to work 40 hours per week. That is consistent with Mr Cumming’s evidence. The Employer made it clear that the wages paid of $487.50 were for an average of 28.26 hours per week. In short, the Arbitrator found that Mr Cumming was employed to work for 38 hours per week, not that he was paid for those hours.
The 2001 Award shows that the minimum weekly wage for a qualified carpenter and joiner was $507.20 for a 38 hour week, or $13.34 per hour. For a fourth year apprentice it was $383.80 per week. The 2007 Award shows a minimum hourly rate for a qualified carpenter and joiner of $15.69.
Mr Cumming earned $17.25 per hour, or $655.50 for a 38 hour week, significantly higher than the amounts set out in the Awards to which I have referred. In those circumstances, I am satisfied on all the evidence that he was not paid pursuant to an Award, and that his actual earnings are the proper basis for assessing his entitlement to weekly benefits. Curiously, the Arbitrator observed at [30] of his Reasons that, since Mr Cumming was not a fully qualified carpenter, he was “…not entitled to be paid at the carpenter’s award rate,” but he did not say at what rate or on what basis he should be paid. Notwithstanding this remark, the Arbitrator nonetheless concluded at [40] that it was “ more likely that Mr Cumming would be paid under the Carpenter’s Award…” This anomaly remains unexplained.
In any event, the Respondent having ceased business “about two years ago”, the issue for the Arbitrator to determine was what Mr Cumming would have been able to earn in some comparable employment, not, as Mr Cumming submits, “…an analysis of what the Respondent ‘may’ have paid the Appellant had it remained in business.”
Mr Cumming’s qualifications was another of the issues in dispute between the parties. It is true that Dr Langley, whom Mr Cumming saw at the request of his solicitors on 18 March 2008, recorded in his report of 25 March 2008 that Mr Cumming “…was working as a carpenter’s assistant and was required to lift and carry objects, which resulted in an injury to his lower back.” However, I note that at the front of his report, Dr Langley noted his “Past Occupation” as “Carpenter.”
This appears to be the only reference to Mr Cumming being a “carpenter’s assistant”. The employer’s Report of Injury form refers to him as a carpenter. Mr Cumming also noted on his claim form that he was a carpenter. The letter from the GIO dated 18 November 2008 setting out details of award rates of pay similarly raises no issue as to his qualifications, only that he was employed as a “casual employee.”
In his oral evidence, Mr Cumming denied that he was a carpenter’s assistant, and thought it unlikely that he had described himself to Dr Langley as that, but more relevantly, he said at [T15] that he was “…always employed as a carpenter…” and that he and other carpenters employed by the Sullivans were paid the same wage.
In my view, not a great deal turns on this issue since I have found that Mr Cumming was not employed pursuant to an Award, and that his actual earnings were the proper basis for calculating his entitlements. However, it does have some relevance in assessing probable earnings given the evidence brought by Mr Cumming as to comparable wages currently paid in the building industry to which I will refer shortly.
Given his evidence, I accept that, notwithstanding his failure to attend a short stint at TAFE to complete his apprenticeship, his qualifications and years of experience would enable him to be employed in that industry as a carpenter. I do not accept the Respondent’s submission, adopted by the Arbitrator, that “…not being a qualified carpenter meant that Mr Cumming would always require a qualified carpenter to supervise him.” There was no evidence of that. More importantly, there was no evidence from the Respondent that Mr Cumming was supervised in his work with the Sullivans.
On this issue, I accept Mr Cumming’s submission that:
“…it is more likely than not, given the wages previously paid, that the Appellant would have been paid as if he was a qualified carpenter post 2005. This is because there is no reason to reject his evidence that he was paid rates of pay well above those of a ‘carpenter’s assistant’ in 2000. His qualifications through experience and education would only have increased over the five year plus period following the work injury.”
I turn now to consider the evidence of current rates of pay in the building industry.
The Arbitrator rejected Mr Cumming’s evidence of wages paid to carpenters at Bennetts Constructions and other firms, on the basis that there was insufficient evidence as to their “comparability.” I accept that he was entitled to treat that evidence with some caution for the reasons stated. Mr Piper from Bennetts Constructions told the GIO (as reported in their letter of 18 November 2008) that his employees were all full-time and working on major construction sites. Leaving aside for the moment the “full-time” aspect, it seems clear that the Sullivans were involved in the construction of domestic housing, and were not involved in “major construction sites.”
Nevertheless, it was appropriate for the Arbitrator to give some consideration to this evidence, since it was clearly of assistance to his overall knowledge of the industry’s pay rates. As his Honour Judge Keating said in Hamilton v D & L E Paddon Pty Ltd [2008] NSWWCCPD 138 (‘Hamilton’) at [91]:
“As a member of a specialist tribunal the Arbitrator was entitled to have regard to his general knowledge and experience of the value of work in the labour market, (see J & H Timbers Pty Ltd v Nelson [1972] HCA 12; (1972) 126 CLR 625, Akawa Australia Pty Ltd v Cassells (1995) 25 NSWCCR 385, Goktas v Goodyear Australia Pty Limited [2007] NSWWCCPD 1 and Forests NSW v Hancock No.2 [2007] NSWWCCPD 191).”
Mr Cumming makes the following submission:
“The Appellant submits that the rates of pay asserted by the Respondent must be viewed against the background of actual wages paid to the Appellant and a commonsense application of pay rates in the industry. Awards simply set minimum standards and should not be used when there is evidence of actual wages far in excess of the minimum standard. In these circumstances it is submitted that the figures provided by Bennett Constructions of a range of between $900 and $1,000 per week are a proper comparable of the Appellant’s earnings but for injury given his relevant experience.
It is noted that in Hamilton… Judge Keating described a pay rate of $17.50 per hour as a ‘modest hourly rate for an unskilled labourer.’ The pay rates found by the Arbitrator for the Appellant’s comparable earnings but for injury as a semi-skilled/skilled worker were, it is submitted, simply too low.”
I find Mr Cumming’s submission persuasive, however, I do not regard the rates of pay described by Bennetts Constructions as truly comparable in this case. That is a company involved in major construction work, unlike the Sullivans, although both were operating in regional New South Wales.
In the circumstances, having regard to my general knowledge and experience, together with the evidence, I think it more likely that Mr Cumming would have remained, uninjured, in the employ of the Respondent or some similar building company, earning rates a little less than those paid by, for example, Bennetts Constructions.
I note at this point the Arbitrator’s finding that Mr Cumming was employed by the Sullivans to work 38 hours per week subject to weather conditions, and that he would now, if uninjured, be willing to work 38 hours per week.
That finding is consistent with the evidence, and I accept it.
At the time of his injury, Mr Cumming was paid $17.25 per hour, which equates to $655.50 for a 38 hour week. I think that the appropriate way to assess comparable earnings since that time is to apply CPI increases of 3% per annum. This was the approach adopted by Deputy President Roche in Miller v A & R Pearson Pty Limited [2007] NSWWCCPD 111 where he said that this was an appropriate way to calculate probable earnings when the employer had ceased business, and an appropriate comparable earning figure was not available. This approach was cited with approval by his Honour Judge Keating in Plumbers Supplies Co-Operative Limited v Behnampirouz [2008] NSWWCCPD 47.
For the relevant periods, the following rates then apply:
2005 $759.90
2006 $782.70
2007 $806.20
2008 $830.40
2009 $855.30
Given the acceptance by the parties of Mr Cumming’s actual post – injury earnings, he is entitled to an award from 1 July 2005 to date and continuing.
CONCLUSION
The Respondent quite properly confined its submissions principally to the issue of comparable earnings, and particularly to the relevance of the Award in assessing Mr Cumming’s entitlements. There was no challenge to Mr Cumming’s actual earnings post injury, nor was there any challenge to the Arbitrator’s decision not to exercise his discretion to reduce his award.
Having conducted a review on the merits (per Spigelman CJ in State Transit Authority vFritzi Chemler [2007] NSWCA 249), I am of the view, for the reasons stated, that Mr Cumming was not paid pursuant to any Award, and is entitled to have his claim for weekly benefits assessed on the basis I have set out. In calculating his entitlements, I note that Mr Cumming claims two dependant children.
DECISION
Paragraphs 1,2 and 3 of the decision of the Arbitrator dated 19 March 2009 are revoked, and the following decision made in its place:
(1) The Respondent to pay to the Applicant weekly compensation pursuant to section 40 of the 1987 Act at the following rates for the periods specified:
From 1 July 2005 to 31 December 2005 at $86.90 per week;
From 1 January 2006 to 1 April 2006 at $109.70 per week;
From 2 April 2006 to 1 October 2006 at $90.70 per week;
From 2 October 2006 to 31 December 2006 at $321.70 per week;
From 1 January 2007 to 1 April 2007 at $ 345.20 per week;
From 2 April 2007 to 31 December 2007 at $95.20 per week;
From 1 January 2008 to 1 April 2008 at $119.40 per week;
From 2 April 2008 to 1 October 2008 at $ 146.40 per week;
From 2 October 2008 to 31 December 2008 at $ 430.40 per week;
From 1 January 2009 to 18 January 2009 at $ 455.30 per week;
From 19 January 2009 to date and continuing at $ 166.30 per week.
(2) Credit to the Respondent for any payments made to date.
Paragraphs 4 and 5 of the decision of the Arbitrator dated 19 March 2009 are confirmed.
COSTS
The Respondent is to pay the Appellant’s costs of the appeal.
Deborah Moore
Acting Deputy President
17 July 2009
I, MARIE JOHNS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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