Daly Smith Corporation (Aust) Pty Ltd t/as DSC Personnel v Scherf
[2008] NSWWCCPD 74
•17 July 2008
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Daly Smith Corporation (Aust) Pty Ltd t/as DSC Personnel v Scherf [2008] NSWWCCPD 74 | ||||
| APPELLANT: | Daly Smith Corporation (Aust) Pty Ltd t/as DSC Personnel | ||||
| RESPONDENT: | Wayne Scherf | ||||
| INSURER: | QBE Workers Compensation (NSW)Ltd | ||||
| FILE NUMBER: | WCC8953-07 | ||||
| DATE OF ARBITRATOR’S DECISION: | 1 April 2008 | ||||
| DATE OF APPEAL DECISION: | 17 July 2008 | ||||
| SUBJECT MATTER OF DECISION: | Section 40 of the Workers Compensation Act 1987; assessment of ability to earn; exercise of discretion; whether the exercise of the discretion was required because the worker did not hold a driver’s licence. | ||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Leigh Virtue & Associates | |||
| Respondent: | Marsdens Law Group | ||||
| ORDERS MADE ON APPEAL: | For the reasons given in this decision, the Arbitrator’s determination dated 1 April 2008 is confirmed. | ||||
| The Appellant Employer is to pay the Respondent Worker’s costs of the appeal. | |||||
BACKGROUND TO THE APPEAL
This appeal concerns the quantification of an award for weekly compensation under section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) and whether the Arbitrator erred in taking into account, in assessing the worker’s ability to earn, that the worker lives at Currans Hill near Campbelltown, and that suitable employment would only be available to him 30% of the time. It is also argued that the Arbitrator erred in failing to exercise the discretion under section 40(1) of the 1987 Act to reduce the quantum of the award because the worker does not have a driver’s licence.
On 15 October 2004 Wayne Scherf sustained a serious injury to his left elbow including extensive damage to his left ulnar nerve resulting in numbness and weakness in his left hand and arm. He had unsuccessful surgery to repair his ulnar nerve on 2 December 2004 and further surgery on 5 August 2005 when a nerve graft was taken from his left leg leaving him with weakness and restrictions in that leg but failing to alleviate the left arm disabilities.
The employer, Daly Smith Corporation (Aust) Pty Ltd t/as DSC Personnel (‘DSC’), a labour hire company, paid voluntary weekly compensation at the maximum statutory rate until 30 August 2007 when it reduced that rate to $184.91 per week as a result of a “Section 40 Assessment” conducted on behalf of the insurer by Lesley Staats, Rehabilitation Counsellor, on 13 July 2007, which assessed Mr Scherf would be able to undertake the jobs of usher, car park attendant and horticultural nursery assistant.
By an Application to Resolve a Dispute (‘the Application’) filed in the Commission on 22 November 2007, Mr Scherf sought weekly compensation from 3 August 2007 (presumably, this should have been 31 August 2007). A Commission Arbitrator heard his claim in an arbitration on 29 February 2008 when the only issue was the extent of Mr Scherf’s incapacity and the quantum of his entitlement to weekly compensation, if any.
In a reserved decision delivered on 1 April 2008, the Arbitrator found Mr Scherf’s probable earnings but for his injury to be $707 per week and his ability to earn to be $157 per week. As the difference ($550) exceeded the statutory maximum for a worker without dependents and as the Arbitrator found there were no reasons to reduce that amount in the exercise of his discretion, the Arbitrator made the following orders:
“1.The Respondent to pay weekly compensation to the Applicant pursuant to section 40 of the Workers Compensation Act 1987 at the maximum statutory rate for a person with no spouse and no dependant, such payments to continue in accordance with the Act.
2. Respondent to be given credit for payments already made with respect to the period commencing 31 August 2007.
3. The Respondent will pay the Applicant’s costs as agreed or assessed.”
By an appeal filed on 15 April 2006, DSC seeks leave to appeal the Arbitrator’s determination.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
There is no dispute that the thresholds in section 352(2) are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
ON THE PAPERS
Section 354(6) of 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.”
DSC’s solicitor argues that the matter should not be determined on the papers but should be given an oral hearing as the appeal involves complex issues which would benefit from an oral hearing and the transcript of the proceedings was not available at the time it filed the appeal. I do not accept that the issues raised are so complex that an oral hearing is required.
In respect of the transcript, the Commission forwarded a copy of the transcript to the parties on 24 April 2008. On 4 June 2008 DSC’s solicitor wrote to the Commission stating that as he had not received any submissions from Mr Scherf, he did not consider it necessary to rely on any additional grounds of appeal. According to the Commission’s file, Mr Scherf’s solicitor filed his Notice of Opposition (with submissions attached) on 26 May 2008. On the same day he filed a Certificate of Service certifying that the Notice of Opposition had been served electronically on the Appellant Employer’s solicitors, Leigh Virtue & Associates, on that day.
In response to a Direction issued by me on 9 July 2008, the Appellant Employer filed “Appellant’s Further Submissions” on 11 July 2008 and I have taken these submissions into account in determining this appeal.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Mr Scherf 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.
ISSUES IN DISPUTE
DSC seeks a review on the grounds that the Arbitrator:
(a)erred in making findings and determinations not supported by the evidence, and
(b)erred in failing to have proper regard to the discretionary considerations required in step 4 of Mitchell v Central West Area Health Service (1997) 14 NSWCA 526 (‘Mitchell’).
REVIEW
The nature of a review was considered by the Court of Appeal in Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34; (2006) 4 DDCR 358 (‘Zheng’) where Bryson JA said at [38]:
“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v. Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”
This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds (2007) 4 DDCR 421; [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]). Thus, on review, a Presidential member is not bound by an Arbitrator’s discretionary decision, but can reach his or her own conclusion.
The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 (‘Chemler’) where Spigelman CJ said at [28] and [30]:
“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”
I intend to apply the above principles in the matter before me.
SUBMISSIONS AND DISCUSSION
DSC submits:
(a)the Arbitrator erred in accepting a submission that the area where Mr Scherf lives, Currans Hill, a suburb near Campbelltown, about 60 kilometres west of Sydney, “is not a hub of industry and that work is not at Mr Scherf’s doorstep such that he may have to travel distances more than the average worker to get to major centres of employment” (Statement of Reasons for Decision (‘Reasons’) at paragraph 37) when there is no evidence of that fact;
(b)the Arbitrator erred in finding, on a completely arbitrary basis unsupported by the evidence, that work for which Mr Scherf is fit would only be available to him for 30% of the time (Reasons, paragraph 51);
(c)there is no evidence that the work for which Mr Scherf is fit would not be available to him all of the time and, in these circumstances, the finding as to Mr Scherf’s ability to earn ought properly have been at least $562.80 per week , or, at the very least, $523.92 per week, being the average of the base rate earnings for a car park attendant, sales assistant and usher;
(d)the best evidence as to Mr Scherf’s functional capacity and the manner in which that translates into an ability to earn is that set out in the Section 40 Assessment by Ms Staats dated 13 July 2007, and
(e)Mr Scherf did not seek to deny or traverse the assertions contained in Ms Staats’ report and, in these circumstances, it was not open to the Arbitrator to do other than accept that evidence.
Mr Scherf submits:
(a)the Arbitrator dealt with each of the elements set out in section 43A of the 1987 Act in assessing what would be suitable employment for Mr Scherf;
(b)in commenting on Mr Scherf’s place of residence, the type of employment he might be fit to perform and his prospects of obtaining such employment, the Arbitrator expressed the ability of the Commission to be able to determine the value to ascribe to a worker’s ability to earn in suitable employment, a practice approved by the High Court in J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 (‘Nelson’) where Barwick CJ said at 633, “the value of described work in the labour market is a matter well within the knowledge and experience of the Commission”;
(c)the Arbitrator properly referred to Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 17 at [49] (‘Mangion’), adopted by Handley JA in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 (‘Quinn’) at 179;
(d)the Arbitrator did not have to accept Ms Staats’ evidence but only had to take it into account to the extent considered relevant. He then had to make up his own mind regarding Mr Scherf’s ability to earn, taking into account all the factors in section 43A, and
(e)the Arbitrator did consider Ms Staats’ report (at paragraphs 48 and 51 of his Reasons), and took that evidence into account with all the other factors in section 43A in determining Mr Scherf’s ability to earn. This was the correct approach.
In its Further Submissions, DSC argues:
(a)it is not appropriate to ascribe the knowledge and experience attributed by the High Court to the former Workers Compensation Commission to Arbitrators in the current Commission. In any event, such knowledge and experience does not extend to the knowledge of the state of the labour market in and in the vicinity of Currans Hill;
(b)the evidence does not support the Arbitrator’s finding relevant to the state of the labour market available to Mr Scherf. The evidence in the Section 40 Assessment is to the contrary;
(c)the Arbitrator’s task is to determine the issues in dispute by reference to the evidence. The Section 40 Assessment is the best evidence as to Mr Scherf’s ability to earn in the labour market available to him. There is no suggestion that the “other factors” (matters required by section 43A) were not taken into account in the Section 40 Assessment;
(d)a Presidential member has power to correct errors of discretion, and
(e)Mr Scherf’s choice not to obtain a driver’s licence should properly be taken into account in the exercise of the section 40 discretion.
The Arbitrator had to assess Mr Scherf’s ability to earn in the open labour market reasonably assessable to him. In performing that task, the Arbitrator carefully considered and analysed the evidence in some detail. He correctly observed that Mr Scherf suffered a serious injury that has left him with a substantial incapacity “of his left dominant upper limb” (Reasons, paragraph 35). He also observed that Mr Scherf has the following restrictions in respect of his left leg: difficulty standing for long periods, pain in his left leg after walking up stairs, cramping and numbness. As a result of his injuries, Mr Scherf has an agreed 24% whole person impairment.
The Arbitrator then methodically and thoroughly considered each of the subsections in section 43A of the 1987 Act and observed that Mr Scherf’s work history and experience since leaving school has been limited to welding, labouring, and work as a storeman, all involving manual activities and none of which Mr Scherf is now fit to perform.
After recording that Mr Scherf lives at Currans Hill, a residential suburb on the south west outskirts of Sydney in the Campbelltown region, he stated that he accepted the submission to the effect that Currans Hill is “not a hub of industry and that work is not at Mr Scherf’s doorstep such that he may have to travel distances more than the average worker to get to major centres of employment” (Reasons, paragraph 37).
A worker’s “place of residence” is a factor to be considered in assessing “suitable employment” in section 43A (section 43A(1)(c)). At the arbitration, counsel for Mr Scherf submitted, after referring to Currans Hill as a very scenic place (T5.51), that it is “some way out of Campbelltown” to which Mr Scherf interjected, “Camden”. He then submitted there was no point in saying that Mr Scherf could be “an usher in the George Street, theatres, or even in the Campbelltown theatres, for that matter, particularly if he can’t get there and back. You’ve got to take into account geographically where he is, and my submission there is that he’s not in little old, say Bankstown or something where there might be some sort of light fabricating work” (T6.2).
In response, DSC’s solicitor submitted that Camden is a thriving metropolis, “probably the biggest growth area in New South Wales at the moment” (T11.56), but then added that he was no more of an expert on this issue than counsel for Mr Scherf (T12.6) and:
“We don’t have evidence to say, ‘Oh, look, Camden is in recess, in Camden it’s difficult to get jobs.’ You have to go on evidence, not on guesswork about what may or may not be available to people in various places. There is no evidence to suggest that that is a place where it is any more difficult than anywhere else to get employment. Camden has cinemas, Camden has car parks, and Camden is far more likely than the city to have horticultural enterprises, for which the applicant is clearly fit. So, with respect, it’s not right to say, ‘Oh, take his address, and that means he can’t get work.’”
This submission overlooks the fact that the Commission is a specialist tribunal and, as such, its Arbitrators are entitled to draw on their knowledge of the labour market and wage rates. In Akawa Australia Pty Ltd v Cassells (2003) 25 NSWCCR 385 it was noted at 392:
“The Compensation Court is a specialised tribunal the judges of which are well qualified by their experience and knowledge of matters in the labour market and wages paid to make the type of assessment Burke CCJ was called on to make in this case. This has been recognized by appellate courts for many years.”
Similar statements have been made by Barwick CJ in Nelson at 634, by Sugerman JA in Australian Iron & Steel v Elliott (1966) 67 SR (NSW) 87 at 94 and by Jordan CJ in Bryer v Metropolitan Water Sewage & Drainage Board (1939) 39 SR (NSW) 321 at 330. Subject to two important matters, the same general principles apply to proceedings in the Commission, and I reject DSC’s submission to the contrary. First, the Commission has the power to inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter permits (section 354(2) of the 1998 Act). This power can be an enormous benefit to the Commission in the efficient and fair determination of matters, but it is a power that is always subject to compliance with the rules of procedural fairness (see Paul Segaert Pty Limited t/as Lidco v Narayan [2006] NSWWCCPD 296). That is, the parties must be informed of the relevant matter about which the Commission has informed itself and be given the opportunity to respond to it (see Goktas v Goodyear Australia Pty Ltd [2007] NSWWCCPD 1). Second, an Arbitrator should not act on his experience and knowledge of matters in the labour market when his experience is contrary to the evidence in the case.
In respect of the first matter, the Arbitrator has not purported to inform himself under section 354(2). In respect of the second matter, the evidence suggests that the labour market reasonably accessible to Mr Scherf, that is, the labour market in the Macarthur/Campbelltown area, was and is reasonable. In the six months leading up to his statement of 12 November 2007, Mr Scherf made over 100 job applications (paragraph 38). I infer from the fact that he has searched the “My Career” section of the Sydney Morning Herald and in his “local papers” that many of those applications were in the Macarthur area. In addition, Mr Scherf identified three specific jobs he applied for in his local area (Mr Scherf’s statement, paragraph 44). This evidence does not support the Arbitrator’s finding that Currans Hill is not “a hub of industry and that work is not at Mr Scherf’s doorstep such that he will have to travel distances more than the average worker to get to major centres of employment” (Reasons, paragraph 37).
Further, save for one employment classification (nursery work, that I will consider further below at [62]), Ms Staats did not suggest that Mr Scherf’s residence was situated in such a remote location that he would, by that fact alone, be disadvantaged in seeking employment. In these circumstances, the Arbitrator should have assessed the relevance of Mr Scherf’s place of residence on the basis of the evidence and not on the basis of the broad and general submissions made by Mr Scherf’s counsel, which were inconsistent with that evidence. That course will usually be preferable, assuming the evidence is available, to an Arbitrator relying on his or her expertise as a member of a specialist tribunal.
It is also alleged that the Arbitrator erred in finding, on an arbitrary basis unsupported by the evidence, that work for which Mr Scherf is fit would only be available 30% of the time. In support of this finding the Arbitrator relied on Clarence River Fisherman’s Co-operative v Swain [2008] NSWWCCPD 2 (‘Swain’). In that case the Commission held (at [82]), on the basis of the evidence, that suitable work would only have been available to the worker for two-thirds of the time. This finding was supported by the fact that the worker lived in the country, had experienced real difficulty in finding and retaining employment since his injury, and, significantly, one of the jobs for which Mr Swain was fit (tractor driving with GPS navigation) was seasonal.
In the present matter, Mr Scherf does not live in the country and the jobs for which he is said to be fit are not seasonal. However, the evidence as to his success in obtaining and retaining suitable employment is that he obtained employment with Weldmaster Industries at Liverpool as a customer services officer on 9 October 2006. Weldmaster terminated his employment on 3 November 2006 because of his poor computer skills, he was very slow with his keyboarding, was careless with his attention to detail and reportedly made many mistakes or omitted vital contact details. Notwithstanding having applied for over 100 jobs in the six months up to November 2007 (see Mr Scherf’s statement 12 November 2007, paragraph 38) Mr Scherf had not, as at the date of the arbitration on 29 February 2008, obtained any employment.
Therefore, whilst the evidence does not support the Arbitrator’s finding that Currans Hill is not a “hub of industry” or that work is “not at Mr Scherf’s doorstep”, it does support a finding that, because of his injuries and significant disabilities, he has experienced extreme difficulty in finding and retaining suitable employment in the labour market reasonably accessible to him. It is arguable that that evidence would support a finding of total incapacity (see Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 and Moran Health Care Services v Woods (1997) 14 NSWCCR 499). The Arbitrator rejected such an argument and, in the absence of a challenge to that finding by Mr Scherf on appeal, and in the absence of any submissions on that issue, it would not be proper for me to make any finding on it. It follows however that, on the evidence, it was open to the Arbitrator to find that suitable employment would only be available to Mr Scherf for very limited periods and to calculate his ability to earn accordingly. That is what the Arbitrator did and I agree with his approach and his conclusion. The assessment that suitable employment would only be available for 30% of the time was, on one view, generous to DSC because the evidence is that over the period from October 2006 until 29 February 2008 (the date of the arbitration) Mr Scherf only secured suitable employment for a few weeks (that is, much less than 30% of the time) notwithstanding extensive efforts to obtain such employment.
If I am wrong in this approach, and the Arbitrator’s error warrants the matter being re-determined, then, since Mr Scherf did not give oral evidence and there are no credit issues involved, I am in as good a position to re-determine the matter and that is the course I propose to adopt.
RE-DETERMINATION
The Authorities
In the text Workers Compensation (New South Wales), second edition, 1979, by C P Mills (‘Mills’), the following passage provides what I believe to be a fair summary of the law on incapacity and identifies the proper question to be asked. At page 285 the author said:
“The question is whether the injury has left the worker in such a position that in the open labour market his earning capacity is less than it was before the injury (Williams v Metropolitan Coal Co Ltd (1948) 76 CLR 431 per Starke J), and it is not limited to the effect on his capacity for his former work (per Dixon J). In Ball v Hunt [1912] AC 496, Lord Loreburn had said that there is incapacity when a man has a physical defect which makes his labour unsaleable in any market reasonably accessible to him, and there is partial incapacity when such a defect makes his labour saleable for less than it would otherwise fetch: see Commissioner for Railways v Agalianos (1955) 92 CLR 390 per Dixon CJ.” (emphasis added)
In Alexander v Ashfield Municipal Council, CA 78/81, 27 October 1982, Hutley JA (with Samuels JA agreeing) observed:
“Capacity is diminished, even though in selected instances the worker can earn as much as he did before, if there are fields from which he is excluded, by reason of the injury, in which he laboured at the time of injury.”
The case of Summerson v Alcan Australia Ltd (1994) 10 NSWCCR 571 is also instructive. In that case the worker suffered a repetitive strain injury to her left dominant arm whilst working for Alcan as a switchboard operator/telephonist. After being retrenched by Alcan and undergoing treatment the worker obtained employment as a telephonist with George Patterson & Co earning more than she earned with Alcan. The later employment ended because of a reason unrelated to her injury. In her claim for weekly compensation Alcan argued that the worker had no entitlement to compensation because she had a proven capacity to earn more than her pre injury earnings and, therefore, there was no economic loss as a result of her injury. The medical evidence established and the judge accepted that the worker had a continuing problem with her left arm as a result of her injury with Alcan and that that problem prevented her from doing rapid or repetitive work with her left arm. Prima facie, that finding indicated the worker had an incapacity on the open labour market.
In quantifying that incapacity the judge held, at 577F:
“…the appropriate way of looking at the case is that the applicant’s ability to get jobs such as the one she got with George Patterson & Co, is reduced. For example, she could not work where no headset was provided to her, where she would have to hold the telephone appliance in her dominant left hand. Nor would she be able to work with computerised switchboards which would require keying duties with her dominant left hand and which she has said she could not do and which I accept she could not do.
Therefore, the number of jobs which she could hold down has been reduced. That reduction means that if the applicant finds herself unemployed, it is harder and would take longer to obtain suitable employment - that is, employment suitable to a lady with her disability in her dominant left arm.”
The judge ultimately made an award in favour of the worker on a continuing basis in the sum of $83.00 per week. The judge based that finding on the evidence that Ms Summerson took two months to find work after being certified fit for suitable duties and she had been unable to find suitable employment in the 10 months since she stopped work up to the date of the hearing. Therefore, his Honour found that over a one-year period she might, because of her injury, have to spend two months unemployed. Thus her ability to earn was reduced by 1/6.
A similar factual situation arose in Akawa Australia Pty Ltd v Cassells (2003) 25 NSWCCR 385 (‘Cassells’). In that case the worker suffered an injury to his left foot that left him with a permanent restriction. He returned to work with Akawa in a light duties capacity but ceased when it relocated. He subsequently obtained employment at a wage higher than his pre injury earnings. He ceased that work partly because of his foot and partly because of poor relations with the staff. In his claim for weekly compensation the employer argued that the worker had a proven capacity to earn more than he did in his pre injury job and, therefore, he had no entitlement to compensation. The trial judge rejected that argument. On appeal, the Court of Appeal held that once the trial judge found a partial incapacity he was entitled to quantify it and there was no error in the approach adopted. The headnote to the case states at 385 that “partial incapacity due to injury will ordinarily be reflected in reduced earning capacity even though a worker may in some post-injury employment earn as much if not more than pre-injury”.
In Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 (‘Mangion’) a Commissioner of the former Compensation Court of NSW (‘the Court’) found an injured worker to be partially incapacitated but did not award any weekly compensation on the ground that the worker was able to earn more as a security guard (suitable light duties) than he had in his pre-injury job. On appeal to a judge of the Court it was held by Judge Burke that the Commissioner had fallen into error in his approach to calculating compensation under section 40 of the 1987 Act. His Honour said at 180:
“When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work - availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn.”
His Honour added:
“When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.”
In Cowra Shire Council v Quinn (1996) 13 NSWCCR 175, the Court of Appeal expressly approved the approach by Burke J in Mangion.
The approach set out in the above authorities was considered and approved in Ric Developments t/as Lane Cove Poolmart v Muir [2008] NSWCA 155 where Campbell JA (Rein J agreeing) said, at [48]:
“That the Worker had the physical and mental capacity to carry out the tasks involved in some particular job is not sufficient to establish that there was a realistic prospect that anyone would actually give him such a job, or that he would be able to keep it. A further enquiry was needed concerning those matters,…”
In referring to the factors in section 43A, his Honour said, at [50]:
“Those factors are all ones that concern the practical realities of the worker, in his or her injured condition and with his or her actual age, abilities, limitations and circumstances in life, being able to get and keep employment. In my view the Deputy President was right in taking the view that the practical realities of the Worker actually getting and keeping a job, in his injured condition, were required to be assessed.” (emphasis added)
Evidence Discussion and Findings
A section 40 assessment requires the application of the five steps in Mitchell v Central West Area Health Service (1997) 14 NSWCA 526 (‘Mitchell’). The Arbitrator determined probable earnings but for the injury (section 40(2)(a) of the 1987 Act) (Step 1) to be $707.00 per week. No challenge is made to this part of the Arbitrator’s findings and, for the reasons given by the Arbitrator, I agree with it.
The Arbitrator determined Step 2, ability to earn in some suitable employment after the injury (section 40(2)(b) of the 1987 Act), to be $157.00 per week. This figure represented 30% of the average earnings as an usher ($523.88), car park attendant ($488.10) and sales assistant ($562.80).
As a result of his injury Mr Scherf’s has undergone two operations on his left ulnar nerve. Neither provided any significant relief of his symptoms, which are listed in the report of Dr Mears, hand surgeon, dated 27 November 2006, and include:
(a)numbness over most of his left hand;
(b)gross weakness in his left hand;
(c)wasting and clawing in his left hand (particularly the left ring and little fingers), and
(d)numbness in the left leg and a feeling “like ants at night”.
In addition to the symptoms listed by Dr Mears, Mr Scherf refers, in his statement of 12 November 2007, to the following disabilities and symptoms:
(a)he has little use of his left hand;
(b)his left hand and arm is weak;
(c)he has great difficulty in grasping any item in his left hand;
(d)he has constant pain in his left arm and hand;
(e)his left leg is painful after “waling” [sic, walking] any considerable distance;
(f)he now writes with his right hand and is very slow and his writing is not the most legible;
(g)because of his pain, he only sleeps around four hours per night, and
(h)his lifting capacity is around 8-10 kilograms.
Mr Scherf is currently 48 years of age. He left school after attaining his school certificate and then worked as a welder for 10 years, though he never completed any formal training in that field or any other. He then worked as a builder’s labourer for 15 years for various employers. In or about 2000, he started work as a storeman picking and packing orders and unloading stock with Howard Silvers Hardware. In 2002 he “enrolled” with DSC as a labourer and was placed with different companies whilst with them. At the time of his accident, he was working at the premises of Hayman Industries Pty Ltd at Minto as a labourer/machine operator.
After his unsuccessful surgery, Injury & Occupational Health Pty Ltd (‘IOH’), a rehabilitation and injury management company, assessed Mr Scherf in March 2006 and found him to have restrictions in his ability to stand, walk, lift and carry. During discussions with Mr Scherf’s treating doctor, Dr Ebrahim, the vocational goals of administrative assistant/clerk/receptionist/customer services officer were identified as the most appropriate for Mr Scherf, though it was noted that Mr Scherf had no computer skills (see report Ms Ashfield-Smith, occupation rehabilitation consultant with IOH, 27 March 2006, page three). A position in retail sales, an area in which Mr Scherf had expressed some interest, was also discussed, but Dr Ebrahim agreed that it was not appropriate for Mr Scherf because of the prolonged standing and walking required in such positions.
From 11 April to 29 September 2006, DSC provided Mr Scherf with light duties at its offices at Liverpool. He initially worked three days per week but increased to four 7.5-hour days per week in late July 2006 with rest breaks from sitting every 20 minutes and regular breaks from other activities to reduce repetitive use his left hand (see report Ms Ashfield-smith 31 August 2006, page two). His duties included processing resumes, which involved phoning and checking applicant’s references, filing, and answering the phone. The work permitted him to take regular breaks and to walk around to assist his leg. Whilst using the phone he would make notes with his right hand, which he found difficult, as he is left hand dominant. Throughout this time, Mr Scherf attended computer literacy training and reportedly achieved a good understanding of basic computer operations including MS Word, Excel and Internet/Email. For the reasons given below, the validity of this assessment is doubtful. His keyboard skills are significantly limited because of the deformity in his left hand.
While on light duties with DSC, issues arose as to Mr Scherf’s phone manner, attitude and accuracy when recording and inputting data into the computer. In her report of 30 September 2006, Ms Ashfield-Smith noted that factors affecting Mr Scherf’s return to work included his ongoing physical restrictions, his difficulty adjusting to his altered lifestyle, and his psychological difficulties and his dependence on others to support him with decision making as it relates to his personal and work circumstances.
In October 2006, Mr Scherf found a customer services position with Weldmaster Industries at Liverpool. IOH assessed this position to be suitable, subject to the provision of an ergonomic chair, a footrest and monitor riser, and subject to Mr Scherf taking regular postural breaks and performing upper limb stretching exercises. IOH found Mr Scherf to be highly motivated to undertake this position and he commenced on 9 October 2006.
On 26 October 2006, Ms Ashfield-Smith was informed by Mr Scherf’s supervisor that Mr Scherf “was experiencing a high level of adjustment and that he was very slow with his data input and to complete orders” (Ms Ashfield-Smith, 30 October 2006, page three).
In her November 2006 report, Ms Ashfield-Smith noted that Mr Scherf had poor computer skills, was very slow with his keyboarding, was careless with his attention to detail and reportedly made many mistakes or omitted vital contact details in his work. In addition, it was claimed that Mr Scherf demonstrated an unsatisfactory attitude with his application to his new job and attended only to those tasks that he was required to undertake. Weldmaster terminated his employment on 3 November 2006. IOH sought further funding to facilitate Mr Scherf’s return to work via the JobCover Programme or via a Work Trial.
Mr Scherf’s file was transferred to Ms Corkin at Campbelltown and attempts were made to place him in a work trial at Bunnings hardware store at Campbelltown, but that did not occur. IOH closed its file in March 2007.
In May 2007 QBE Workers Compensation (NSW) Limited (‘QBE’) referred Mr Scherf to Ms Staats, a rehabilitation counsellor with a BA and a Diploma in Rehabilitation Counselling, for a Section 40 Assessment. Ms Staats interviewed Mr Scherf on 18 May 2007 and reported to QBE on 13 July 2007. Under “Executive Summary” on page two, she made the following recommendations; “Mr Scherf would be able to undertake the following jobs and to earn the following amount[s] now, given their [sic, his] injury, without re-training, since injury”. She then listed the following jobs and wages: usher ($524.88 per week), car park attendant ($484.10 per week) and horticultural nursery assistant (specifically in propagation) ($488.30 per week).
In the body of her report, Ms Staats stated that Mr Scherf’s functional capacity would allow him to perform the job of an usher or ticket collector. Under “Labour Market Research”, however, she added that no positions were identified on the Internet for usher or ticket collecting roles. She did not indicate the geographical area her search covered, but it is reasonable to infer that her search covered the Sydney metropolitan area. When she contacted “local cinemas” (presumably in the Camden and Campbelltown area) she was told the best way to apply for such a position was to cold canvas. On the authority of Mangion, this job can therefore be discounted in assessing Mr Scherf’s ability to earn, because, on the evidence, it is simply not readily available.
In respect of the position of horticultural nursery assistant, the report observed that the physical requirements of the job include, sustained standing/sitting, walking, repetitive grasp and release to operate secateurs, and repetitive manipulation and dexterity to handle cuttings and small plastic tubes (Section 40 Assessment, page seven). Whilst it is possible to work in this field without formal qualifications, applicants are more likely to gain work if they have suitable qualifications. Employment opportunities are expanding in areas of contract mowing, gardening services and plantation timber operations, none of which Mr Scherf could manage (Section 40 Assessment, page eight). Most of the nursery jobs that previously existed in the Liverpool and Macarthur areas in “potting on” and propagating have “disappeared due to land redevelopment, and the only nurseries that still undertake extensive potting up, planting of seedlings, propagation etc are in the Dural region” which is “too far for Mr Scherf to travel” (Section 40 Assessment, page eight). Potential difficulties for Mr Scherf in obtaining work in this field include, “the lack of available nearby work, and also [an] untested ability to carry out the fine movements required. Some parts of the job at least would need to be a bilateral task, for example lifting and carrying trays of small pots.”
Given Mr Scherf’s significant disability in his left dominant hand and his restricted ability to stand because of his leg disability, I do not accept that the job of a horticultural nursery assistant is suitable for Mr Scherf. If I am wrong in that assessment, I note that the job is not readily available in the Liverpool and Macarthur areas and Ms Staats’ evidence is that Dural is too far for Mr Scherf to travel. Therefore, the income from the job of horticultural nursery assistant is not a suitable measure of Mr Scherf ability to earn.
Some jobs as a car park attendant may be suitable for Mr Scherf and an Internet search revealed 17 advertised job vacancies within 14 days of Ms Staats’ report. She did not indicate where those jobs were or if they were within a reasonable distance from Mr Scherf’s residence. She did indicate, however, that large parking stations, for example, Wilson’s Parking, usually employ a pool of casual staff with some permanent full-time people. Ezy-Parking uses “mainly casual staff” averaging 32 hours per fortnight with some permanent day shift employees. In addition, there is a need for some computer literacy, as reports may need to be filed. Ezy-Parking does not usually advertise vacancies. The vocational assessment from Ms Ashfield-Smith dated 27 March 2006 stated at page 13 that the labour market for suitable positions for Mr Scherf as a car park attendant (working where he is responsible for cashier duties and using automated reading of parking tickets and providing change, but not involving parking cars) is “poor”, though Ms Staats assessed general job prospects in the field to be “good”. In addition, Ezy-Parking advised that the need for car park attendants is declining as car parks become more automated (Ms Staats’ report, page nine).
Given the evidence that two large car park operators in Sydney “usually” or “mainly” employ casual staff and given the evidence from Ms Ashfield-Smith about the job prospects in this field for Mr Scherf, it is not appropriate to assess Mr Scherf’s ability to earn by reference to the full time award rate for a car park attendant ($484.10 per week). A more appropriate assessment, consistent with the evidence, is that Mr Scherf may be able to obtain casual work as a car park attendant for 32 hours per fortnight at the rate of $14.64 per hour (Ms Staats’ report page two). If he were to obtain such work for 32 hours per fortnight, it would provide a weekly wage of $234.40. In assessing his ability to earn it is necessary to consider his prospects of obtaining and retaining such work, given the matters listed in section 43A, and these matters are discussed further below at [70].
In respect of work as a retail assistant, I note Ms Ashfield-Smith’s statement at page 13 of her Vocational Assessment of 27 March 2006 that retail sales work was:
“Not a viable option [though Mr Scherf had expressed an interest in this field]. Mr Scherf would probably be required to stand for long periods and his fine motor co-ordination would not be adequate to perform the required tasks.”
At page three of the assessment, Ms Ashfield-Smith stated that Dr Ebrahim agreed that such work was not suitable.
Given the restrictions noted by Ms Ashfield-Smith, which remained valid at the date of Ms Staats’ assessment in May 2007, it is difficult to see how work in retail sales (even in selected areas) is suitable for Mr Scherf. Ms Staats conceded that Mr Scherf would not be able to work in every retail outlet and he would require an area that allowed him to change his posture as required including the ability to sit when necessary. She did not say if such a job was available. In any event, retail work would only be a possibility with re-training and no re-training has been offered in the retail field.
Having regard to Ms Ashfield-Smith’s evidence as to the unsuitability of retail sales work for Mr Scherf, which I accept, I find that such work would not be suitable for Mr Scherf.
Having regard to the nature and extent of Mr Scherf’s significant disabilities and his consequential restrictions, and taking into account the terms of section 43A, I find that the only employment suitable for him is likely to be that of selected car park attendant duties of the kind outlined by Ms Ashfield-Smith (see [64] above). Further, on the evidence of Ms Ashfield-Smith, which I accept, I find that the labour market for such positions is “poor”. Moreover, car park attendant work is “usually” or “mainly” casual. The wage for a casual car park attendant working 16 hours per week is $234.40 per week. However, having regard to all the evidence, in particular the evidence of the real difficulties Mr Scherf has experienced in obtaining employment since Weldmaster terminated his employment November 2006, and the evidence of Ms Ashfield-Smith, I find that the figure of $234.40 should be reduced by one third to allow for extended periods when, because of his disability, Mr Scherf will be unable to secure any employment. I therefore find Mr Scherf’s ability to earn in the labour market reasonably accessible to him to be $156.00 per week (after rounding down to the nearest dollar). Given Mr Scherf’s evidence that he has not been able to find any suitable work since November 2006, it is arguable that the reduction should be 100%. However, such a discount would be tantamount to a finding of total incapacity and would not be consistent with the evidence that Mr Scherf does have a residual earning capacity, albeit fairly modest. I therefore prefer and adopt the reduction of one third.
Step 3 of the Mitchell analysis requires that I deduct $156.00 from $707.00. This gives a difference of $551.00 per week.
Step 4 requires consideration of whether there are any factors that warrant the exercise of the discretion under section 40(1) to ensure that any award bears such relation to the reduction of the worker’s earning capacity that is “proper in the circumstances of the case”.
Exercise of the Discretion
DSC argues any difference between Steps 1 and 2 should be reduced to reflect the fact that Mr Scherf does not hold a driver’s licence. It is submitted that Mr Scherf’s decision not to obtain a driver’s licence has precluded him from obtaining access to a large number of vocational opportunities (such as driving jobs) and there is no evidence why he would be physically incapable of driving or obtaining a driver’s licence. The Arbitrator rejected this argument, stating at paragraph 55 of his Reasons that “To a large extent a Respondent must accept an Applicant as it finds him”.
The only authority cited by DSC is support of its submission is Moy v Eisenhower 1967 WCR 137 (‘Moy’). In that case the difference between Steps 1 and 2 was reduced in the exercise of the discretion because, before his injury, the worker only worked for six months of the year.
I see nothing in Moy that assists DSC. Mr Scherf did not work for only part of the year, as Mr Moy did. I assume the argument being advanced is that by not obtaining a driver’s licence, Mr Scherf has voluntarily reduced his ability to earn and that fact should be taken into account in assessing his entitlement to compensation.
The fact that Mr Scherf does not hold a driver’s licence is not an appropriate basis on which to exercise the section 40 discretion. Mr Scherf has never held a driver’s licence and that fact did not adversely impact on his ability to earn before his injury because he used public transport or got a family member to drive him (Ms Staats’ report, page four). In assessing his ability to earn after his injury, DSC must take Mr Scherf as he is: a man with limited education and work experience (other than heavy physical jobs for which he is now unfit) who does not have a driver’s licence.
As was observed in Mitchell (at 534F) “The discretion is a broad one”. The courts have considered the exercise of the discretion in many cases in recent years and have applied it in the following situations:
(a)where the worker has retired or suffered some supervening illness or injury (Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50 at 55 (‘Nicholson’), and Australia Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87);
(b)where the worker had been retired for two years before the injury which occurred during a short period of work which was a one-off job (Pratt v Claydon (1996) 14 NSWCCR 86);
(c)where the worker was imprisoned during a period of partial incapacity (Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91);
(d)where, since the injury, the worker has been dismissed because of a criminal conviction (Morgan v Commissioner for Railways [1972] WCR 33);
(e)where, before the injury, the worker chose to work for only limited periods each year (Moy);
(f)where the worker was pregnant (Wrigley Co Pty Ltd v Holland (2002) NSWCCR 463), and
(g)where a worker sustained injury while working two jobs and the court had regard to the practical impossibility of continuing two full-time jobs over any lengthy period (Erisir v Kellogg (Australia) Pty Ltd (1987) 3 NSWCCR 92).
In Nicholson, McHugh JA (as his Honour then was) held, at 54:
“The third step [the fourth step in Mitchell] in the process requires the Compensation Court to look at the circumstances of the case. The weekly payment awarded must bear such relationship to the differential amount – which is the result of the exercise under the first and second steps – as under the circumstances of the case is proper. This third step therefore calls for the exercise of a judicial discretion of a kind with which courts have long been familiar.
It is at this stage that the Compensation Court can and must examine all the facts. The matters which can be examined include such matters as retirement, other supervening illnesses or injuries, the personal employment history of the worker, and so on.”
Applying the above authorities, I am not satisfied that there is any proper basis for exercising the discretion to reduce the sum of $551.00 per week in the present matter. In his post injury state, the use of public transport may be more problematic because of his leg pain and, as a result, he is “less able to travel longer distances” (Ms Staats’ Section 40 Assessment, page 13). However, apart from the possible nursery work at Dural (which I have found to be unsuitable in any event), which Ms Staats felt was too far for Mr Scherf to travel, no jobs have been identified as being within Mr Scherf’s physical ability but unsuitable because he does not hold a driver’s licence. Even if such a job had been identified, that would not justify a reduction in the difference between Steps 1 and 2 because the restriction in Mr Scherf’s ability to travel is because of his leg disability, which has resulted from his work injury. Therefore, the restriction on his ability to travel is a direct result of his injury and not a consequence of his inability to drive.
When Mr Scherf was assessed for a return to work on suitable duties with DSC, it was noted that he would have to catch a bus, train and a bus to get to work at Liverpool (see Ms Ashfield-Smith’s report 7 April 2006, page two), which I assume he did for as long as the suitable duties were made available to him.
DSC made a further submission to the Arbitrator about the relevance of Mr Scherf not having a driver’s licence. It was that if Mr Scherf had a licence it would “open to him a vast array of jobs. Taxi driving is only one of them, courier truck driving, or just general truck driving” (T14.54). I do not accept that submission as it is unsupported by any evidence. There are many licences or other qualifications that Mr Scherf does not have. His ability to earn is assessed on the basis of his current circumstances, not on the basis of what DSC would like his qualifications to be. Employers take their workers as they find them. Some are better qualified than others.
In all the circumstances, the evidence falls well short of establishing any basis on which to reduce the figure of $551.00 per week. The Arbitrator did not err in declining to do so and I also decline to do so on the re-determination.
As the sum arrived at in Step 4 of Mitchell is in excess of the statutory maximum rate of weekly compensation payable to a worker with no dependants, Mr Scherf remains entitled to an award at that rate, as determined by the Arbitrator.
CONCLUSION
Having conducted a “review on the merits” (per Spigelman CJ in Chemler at [28]) I conclude, for the reasons in this decision, that the Arbitrator made the correct determination.
DECISION
For the reasons given in this decision, the Arbitrator’s determination dated 1 April 2008 is confirmed.
COSTS
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
Bill Roche
Deputy President
17 July 2008
I, EMMA LETHBRIDGE-GILL, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
3
8
0