Department of Corrective Services v Byrnes

[2009] NSWWCCPD 38

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE

COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Department of Corrective Services v Byrnes [2009] NSWWCCPD 38

APPELLANT:  Department of Corrective Services

RESPONDENT:  Francis John Byrnes

INSURER:Employers Mutual Ltd - TMF

FILE NUMBER:  A1-008025/08

DATE OF ARBITRATOR’S DECISION:          15 December 2008, amended by consent on 13 January 2009

DATE OF APPEAL DECISION:  1 April 2009

SUBJECT MATTER OF DECISION: Weekly compensation; sections 9A and 11A of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:Determined on the papers

REPRESENTATION:  Appellant:      Rankin Nathan Lawyers

Respondent:   Higgins & Higgins Lawyers

ORDERS MADE ON APPEAL:  The decision of the Arbitrator, dated 15 December 2008, as amended by consent on 13 January 2009, is revoked and the following decision is made in its place:

1. There will be an award in favour of the Department of Corrective Services with respect to Mr Byrnes’ claim for weekly compensation and medical expenses.

2. There will be no order as to costs.

There is no order as to the costs of this appeal.

BACKGROUND

1. On 14 January 2009, the Department of Corrective Services (‘the Department’) sought leave in the Workers Compensation Commission (‘the Commission’) to appeal against a decision of an arbitrator dated 15 December 2008, as amended by consent on 13 January 2009. The Respondent to the appeal is Francis Byrnes.  The Department’s workers compensation insurer is Employers Mutual Ltd (‘EMI’).

1. Mr Byrnes is aged 62 and has worked for the Department since July 2003. He is employed by the Department as a General Duties Relief Overseer at the Oberon Correctional Centre. In 2004, when positions with the Department became available in Kempsey, Mr Byrnes and his wife put their house in Oberon up for sale, in part because of his wife’s health. They had previously purchased a house at Lake Cathie (south of Port Macquarie) with a view to ultimately retiring there. Since 2005, Mr Byrnes has applied for a number of positions at the Mid North Coast Correctional Centre without success and claims he has been offered secondments that have later been withdrawn.

1. In December 2007, Mrs Byrnes had major surgery after which she moved to their house at Lake Cathie, where Mr Byrnes states, she needed his assistance. From 7 January 2008, Mr Byrnes was spending weekends at Lake Cathie and driving to work in Oberon (640 kms), where he remained during the course of his weekly shifts. On 5 February 2008, Mr Byrnes applied for a transfer to the Mid North Coast Correctional Centre on compassionate grounds but this application was denied.  He began to suffer from stress and, in April 2008, his doctor diagnosed an “anxiety disorder – work induced” and certified him as unfit for work for a month from 15 April 2008.

1. On 15 April 2008, Mr Byrnes lodged a claim for weekly compensation for stress, anxiety and depression from 14 April 2008 to date and continuing, caused by the nature and conditions of his employment. On 22 May 2008, Mr Byrnes’ solicitors made a claim for workers’ compensation on his behalf. On 23 June 2008, EMI denied his claim.

1. On 9 October 2008, the Commission registered Mr Byrnes’ ‘Application to Resolve a Dispute’ in respect of his claim for weekly compensation and medical benefits. On 30 October 2008, EMI filed a ‘Reply’. On 13 November 2008, the Arbitrator conducted a teleconference with the parties.  On 2 December 2008, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing.  On 15 December 2008, the Commission issued the Arbitrator’s Certificate of Determination and accompanying Statement of Reasons. The Certificate of Determination was subsequently amended by consent of the parties and a new Certificate was issued on 13 January 2009.

THE DECISION UNDER REVIEW

1. The ‘Certificate of Determination’ dated 13 January 2009 records the Arbitrator’s orders as follows:

“1. That the respondent pay the applicant weekly compensation at the rate of $1,150.63 from 14 April 2008 to 6 July 2008 and at the rate of $1,196.66 from 7 July 2008 to 11 July 2008 pursuant to s 36 of the Workers Compensation Act 1987.

2. That the respondent pay the applicant’s medical and other expenses under section 60 of the Workers Compensation Act 1987 on production of receipts or accounts.

3. That the respondent pay the applicant’s costs as agreed or assessed.”

1. In the Statement of Reasons (‘Reasons’) for his decision, the Arbitrator found Mr Byrnes had suffered a psychological injury that resulted in him being unfit for work.  The Arbitrator found the injury was caused by in part by excessive driving and Mr Byrnes’ concern for his wife, which did not arise out of his employment, and in part by the rejection of the transfer applications, which did arise out of his employment.  The Arbitrator found that while “the rejection of Mr Byrnes’ applications for transfer were a substantial contributing factor to his injury” (section 9A of the Workers Compensation Act 1987 (‘the 1987 Act’)), “the injury was not caused wholly or predominantly by the actions of the employer in connection with the transfer” (section 11A): paragraphs 48 and 49 of the Statement of Reasons. The Arbitrator found, further, that “the actions of the employer in connection with the applications for transfer were reasonable”.

ISSUES IN DISPUTE

1. The Department contends the Arbitrator made an error of law by incorrectly applying sections 9A and 11A of the 1987 Act. The parties’ submissions on this issue are discussed below.

ON THE PAPERS REVIEW

1. 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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents before me, and the submission by the parties that the appeal can 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. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. 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.

1. With regard to section 352(2), the requirement that the Commission is not to grant leave to appeal unless the amount of compensation at issue in the appeal is at least $5,000 and at least 20% of the amount awarded in the decision appealed against, I am satisfied that the amount of compensation at issue in the appeal exceeds $5,000 and more than 20% of the amount awarded in the decision appealed against.  Accordingly, I am satisfied that the section 352 threshold has been met, and I grant leave to appeal.

SUBMISSIONS

1. The Department submits that, pursuant to the decision of the NSW Court of Appeal in Department of Education and Training v Sinclair [2005] NSWCA 465 (‘Sinclair’):

“the Arbitrator should have made a finding that to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by the reasonable action taken by the employer with respect to transfer and therefore compensation was not payable. This is consistent with the factual findings made by the Arbitrator”.

1. Mr Byrnes’ solicitors contend that for section 11A to apply, the injury must be “wholly or predominantly caused” by the conduct of the employer. This was not the case: the medical evidence established that driving long distances and the consequent fatigue were a major factor in causing Mr Byrnes’ condition. The Arbitrator did not err and the Department’s submissions in relation to Sinclair “are not relevant on this point”.

DISCUSSION

1. Pursuant to s 352(5) of the 1998 Act, the role of a Presidential Member on appeal is to conduct a review of the decision appealed against. At issue is whether the Arbitrator made an error of law in his application of sections 9A and 11A of the 1987 Act.

1. Section 9A(1) states:

“No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.”

Section 11A(1) states:

“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”

1. In his Reasons, the Arbitrator said, at paragraph 32, that he accepted “that excessive driving was part of the cause of the injury as was concern for his [Mr Byrnes’] wife and the refusal of the transfer applications”. While recognising that “excessive driving (and the concern for his wife) ... did not arise out of or in the course of Mr Byrnes’s employment”, the Arbitrator found, at paragraph 33, that the rejection of the transfer applications did arise out of his employment. At paragraphs 36 and 37, the Arbitrator found, in relation to section 9A, having “earlier found that the injury was the result of a cluster of three factors”, that “the refusal of the transfer application was a substantial contributing factor to the injury”.

1. The Arbitrator then considered the meaning of the words ‘wholly or predominantly caused’ in section 11A, referring to the decision of Acting Deputy President Snell in Smith v Roads and Traffic Authority of NSW [2008] NSWWCCPD 130. Essentially, Acting Deputy President Snell came to a similar conclusion to that which I reached in Ponnan v George Weston Foods Ltd [2007] NSWWCCPD 92, at paragraph 24 - that this phrase means ‘mainly or principally caused’, with which meaning Deputy President Roche agreed in Temelkov v Kemblawarra Portugese Sports and Social Club Ltd [2008] NSWWCCPD 96, at paragraph 79.

1. Having discussed the meaning of the words ‘wholly or predominantly caused’, the Arbitrator, while finding that the rejection of Mr Byrnes’ application for transfer was a substantial contributing factor to the injury, said he was not satisfied on the medical evidence that the injury was wholly or predominantly caused by the employer’s actions.

1. The Department submits that pursuant to the Court of Appeal decision in Sinclair, the Arbitrator should have made a finding that “to the extent that the employment contributed to the injury”, that contribution was wholly or predominantly caused by the reasonable action taken by the employer with respect to the transfer and, therefore, compensation was not payable.

1. In Sinclair, at paragraph 48, Spigelman CJ, with whom Hodson and Bryson JJA agreed, held that, “A literal reading of the combined operation of s 9A and s 11A would give rise to an absurdity”. He said, at paragraph 58:

“To avoid the absurdity that arises from a literal approach, and having regard to the context of the legislative scheme and its purpose, it is necessary to understand s 11A to mean that the employer is not liable where, to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by reasonable action taken with respect to ... discipline”.

1. When considering the application of section 11A, the context in which the section operates must be considered. That context includes the section 9A(1) requirement that for compensation to be payable, employment must be a substantial contributing factor to the injury. If a literal approach were to be taken to the combined operation of sections 9A and 11A, the result would be that if there were found to be, for example, three substantial contributing factors to an injury, one of which was employment related, it would probably never be possible for an employer to establish a defence under section 11A. This is because it is unlikely that one employment related factor would be found to have wholly or predominantly caused the injury, given the existence of two other substantial contributing factors. Thus, to avoid this ‘absurdity’ and with a view to the purpose of the legislation, the Chief Justice interpreted section 11A as meaning that an employer will not be liable where, to the extent that the employment contributed to the injury, that contribution was wholly or predominantly caused by the employer’s reasonable action or proposed action with respect to transfer, demotion, promotion etc.

1. Thus, in this case, the question the Arbitrator should have posed was whether the substantial contributing factor that was employment related was wholly or predominantly caused by the Department’s rejection of Mr Byrnes’s application(s) for transfer. Instead, the Arbitrator appears to have misdirected himself. He said, at paragraphs 48 to 49:

“48. Section 11A provides a defence for the respondent who must show that a cause of the psychological injury falls within the limited range of matters set out in the section. I have found that one of the factors causing the injury does fall within that range.

49. The respondent must then satisfy me, if the respondent is to have the benefit of s 11A defence, that that factor was the predominant cause of the injury. It has not done so and the medical evidence does not support such an assertion if it is made.”

1. I note that, at paragraph 49, the Arbitrator said:

“49. I further find the actions of the employer in connection with the applications for transfer were reasonable.”

1. In my view, the Arbitrator clearly made an error of law in applying the ‘wholly or predominantly caused’ test – applying it across all substantial contributing factors to the injury and not just to the employment related factor. Had the Arbitrator applied the ‘wholly or predominantly caused’ test only to the employment related factor, given his findings, he would have come to a different conclusion.

1. I have reviewed the Arbitrator’s finding in paragraph 49, as to the reasonableness of the Department’s conduct. At paragraph 45, the Arbitrator states that he accepts the version of events put forward by counsel for the Department. He rejects Mr Byrnes’ solicitor’s submissions, set out in the transcript of the hearing, that the Department, “while appearing to encourage Mr Byrnes was in effect white-anting him and thereby acting unreasonably”, and states that he cannot make the inferences proposed. While it would have been preferable for the Arbitrator to have set out his reasons on the issue of reasonableness more fully, it is understandable that he did not do so in circumstances where he found the Department’s section 11A defence failed because the ‘wholly or predominantly caused’ test had not been satisfied.

1. I have examined the correspondence between Mr Byrnes and Departmental officers attached to the ‘Application to Resolve a Dispute’ and the ‘Reply’. I have also reviewed the transcript of the hearing and note that both representatives addressed the facts concerning Mr Byrnes’ application for transfer at some length. In my view, it was open to the Arbitrator to find that the actions of the Department were reasonable based on the evidence and submissions before him.

1. In conclusion, the appropriate decision for me to make in these circumstances is to set aside the decision under review and substitute a new decision that an award be made in favour of the Department with respect to Mr Byrnes’ claim for weekly compensation and medical expenses.

DECISION

1. The decision of the Arbitrator, dated 15 December 2008, as amended by consent on 13 January 2009, is revoked and the following decision is made in its place:

1. There will be an award in favour of the Department of Corrective Services with respect to Mr Byrnes’ claim for weekly compensation and medical expenses.

2. There will be no order as to costs.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

1 April 2009

I, MARIE JOHNS CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE