Faulks and BIS Industries Ltd (Compensation)

[2018] AATA 4128

Faulks and BIS Industries Ltd (Compensation) [2018] AATA 4128 (5 November 2018)

Division:GENERAL DIVISION

File Number(s):      2017/6913

Re:John Faulks

APPLICANT

AndBIS Industries Ltd

RESPONDENT

DECISION

Tribunal:Mark Hyman, Member

Date:05 November 2018

Place:Canberra

1. The applicant may draw on material relating to his earlier employment by the respondent in advancing the NWE matter before the tribunal.

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   Mark Hyman, Member

   Catchwords

   PRACTICE AND PROCEDURE - compensation – jurisdiction – normal weekly earnings – where earlier applications dismissed for failure to proceed – whether material relating to earlier period may be drawn on in later application – estoppel principles – distinction between matters settled on their merits or by consent and matters dismissed on technical grounds – matter not yet considered and determined by the tribunal - tribunal’s jurisdiction extends to earnings pattern established before the dismissal of earlier applications

   Legislation

   Administrative Appeals Tribunal Act 1975, ss 25, 33, 34D, 42A, 42B, 42C, 43

   Safety, Rehabilitation and Compensation Act 1988, ss 8, 9, 14, 19, 62

   Cases

   Comcare v Grimes [1994] FCA 1054
   Grimsley and Telstra Corporation (2010) 51 AAR 401
   Matusko and Australian Postal Corporation [1995] AATA 14
   Mulheron and Australian Telecommunications Corporation [1991] AATA 673
   Nicholson and Secretary, Department of Social Security [1990] AATA 212
   Novosel v Comcare [2017] FCA 722
   Quinn and Australian Postal Corporation (1992) 15 AAR 519

   REASONS FOR DECISION

   Mark Hyman, Member

   05 November 2018

2. This decision is about whether the tribunal has jurisdiction to determine the normal weekly earnings (NWE) of the applicant, Mr John Faulks, on the basis that he contends. Mr Faulks has a number of matters before the tribunal, one of which relates to the determination of his compensation entitlements in the period 24-30 October 2017. An element in the calculation of compensation under section 19 of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) is the figure for NWE, which is itself calculated under section 8 of that Act. Mr Faulks has previously raised several matters related to the calculation of NWE, in matters 2016/5163, 2017/0005, 0008 and 0010. These four matters were dismissed by the tribunal on 23 June 20178 for failure to proceed. Mr Faulks now urges the tribunal to determine his NWE for 24-30 October 2017 with reference to new material he has assembled relating to an earlier period of his earnings. Mr Faulks provided to the tribunal his payroll records for the period 11 August 2010 to 12 December 2016 and seeks to obtain from the respondent, BIS Industries Ltd (BIS), payroll records for comparable employees from 2011 to the present.

3. BIS argues that Mr Faulks cannot seek to vary his NWE in the way he seeks; NWE for all periods up to 23 June 2017 has been decided by the tribunal through its dismissal of the earlier applications, and NWE can only be decided for subsequent periods through the application of the methods of adjustment and updating set out in the various subsections of section 8, for example through indexation. In BIS’s contention, the tribunal does not have jurisdiction to consider any other basis, since the starting point for calculation of NWE was determined by the tribunal in its earlier dismissal, and any attempt to establish a new basis would be a relitigation of a matter already finally decided at tribunal level.

4. In order to resolve the jurisdictional issue the tribunal held an interlocutory hearing on 16 October 2018. Mr Brian Hatch of Gerard Malouf and Partners appeared for Mr Faulks, by telephone. Mr David Richards of Counsel and his instructor Ms Claire Tota of HBA Legal appeared for BIS; Mr Richards appeared in person and Ms Tota by telephone. The tribunal has available to assist in making its decision the documents provided in respect of the several matters before the tribunal, which have been linked and will be heard together: documents submitted under sections 37 and 38AA of the Administrative Appeals Tribunal Act 1975 (the AAT Act) and documents obtained under section 71 of the SRC Act and provided to the Tribunal.

   THE LEGISLATIVE CONTEXT

5. The SRC Act provides for compensation to be paid to an employee whose employment occasions an injury, subject to the tests set out in various parts of the Act. The Act applies to the Commonwealth workers’ compensation scheme through the Commonwealth’s workers’ compensation agency, Comcare, but also, through Part VIII of the Act, to certain licensed corporations. BIS is such a corporation.

6. Section 14 of the SRC Act, sometimes described as the gateway provision, states that compensation is payable where an injury results in death, incapacity for work or impairment. Incapacity payments are worked out under section 19 of the Act, which requires that a calculation be made using as one input a figure for NWE.

7. NWE is defined in section 8 of the SRC Act. Subsection 8(1) reads as follows:

   (1)  For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:

   (NH X RP) + A

   where:

   NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;

   RP is the employee’s average hourly ordinary time rate of pay during that period; and

   A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.

8. Later subsections then allow the above formula to be varied and adjusted in various ways: subsection (2) allows an additional amount for overtime to be taken into account; other subsections provide for adjustment in respect of part-time work (subsections (3) and (8)), increments and other wage or salary increases (subsection (6)), promotion (subsection (7)), the operation of law or of industrial awards and determinations (subsections (9), (9A)), indexation (subsections (9B), (9C), (9D), (9E), (9F), (9G)); subsection (10) caps the adjusted NWE amount so that it cannot exceed the amount the employee would have been earning at the time if not incapacitated. Subsection 8(4) is of particular relevance in the present matter. It reads as follows:

   (4)  Where, because of the shortness of the relevant period, it is impracticable to calculate the normal weekly earnings of an employee before an injury under subsection (1) or (2), the normal weekly earnings of the employee before the date of injury shall be taken to be the normal weekly earnings before that date of another employee performing comparable work, being normal weekly earnings from employment by the Commonwealth or a licensed corporation and calculated under subsection (1) or (2), as the case requires.

9. The “relevant period” for section 8 is set out in section 9 of the SRC Act. The relevant period is defined in subsection (1) as the period of two weeks before the date of the injury (subsequent subsections allow some adjustment for reasons not relevant for present purposes). Subsection 8(5) allows a different period to be used in calculating NWE if the two-week period specified in section 9 would not fairly represent the rate of earnings of the employee.

   THE ISSUE

10. The only issue before the tribunal is whether the tribunal has jurisdiction to hear the claim for adjustment of NWE on the basis that Mr Faulks asserts, i.e. by comparing his earnings in the period from 2010 to 2016 with those of comparable employees over the period from 2011 to the present.

    THE ARGUMENTS OF THE PARTIES

11. Mr Hatch argued that there is no obstacle to the method by which Mr Faulks proposes to demonstrate a basis for an amended NWE figure. NWE figures for earlier periods have been established by the tribunal in the dismissal decision and those figures are not at issue; Mr Faulks is not intending to reopen any matters already settled. The present matter goes only to the week of 24-30 October 2017, and it is perfectly proper for earlier information about earnings to be used to determine NWE for that period. The value of NWE is not set in stone by the dismissal of the earlier applications; it is absurd to contend that it can never vary again except through the application of those subsections in section 9 that allow for such adjustment and variation.

12. Mr Richards argued for BIS that the SRC Act provides for NWE to be determined and amended only through the application of a specified set of processes. Once NWE is first determined, the variation and adjustment processes established in the later subsections of section 8 can be applied to change the figure arrived at. It follows that when the applications were dismissed by the tribunal in June 2017, NWE up to that time was determined by that decision, which had the effect of affirming each of the reconsideration determinations relating to NWE of which Mr Faulks was seeking review; and NWE subsequent to that date – including for the period in October for which review was now sought in the present matter - could only be varied by the application of the processes set out in later subsections of section 8.

    CONSIDERATION

13. Correspondence from Mr Hatch contends that during the period of his employment by BIS Mr Faulks earned at a very high rate by undertaking a great deal of overtime. Since he has been incapacitated others have undertaken the same work but not at the same rate – they have worked fewer hours – and are therefore earning less. It is clear that Mr Faulks’ intends to establish this pattern through providing his own payroll records and seeking those of comparable employees. BIS argues that it is improper for him to do so, I gather on the basis that he is prevented by the tribunal equivalent of the court doctrines of res judicata and/or issue estoppel.

14. There has been debate about whether this tribunal (and tribunals more generally) are subject to doctrines such as res judicata, cause of action estoppel and issue estoppel: see Quinn and Australian Postal Corporation (1992) 15 AAR 519 (Quinn); Matusko and Australian Postal Corporation [1995] AATA 14 (Matusko). It appears that the question is yet to be definitively determined (although it is perhaps the preferred position that estoppel does not apply to the tribunal, as an administrative decision maker: see Comcare v Grimes [1994] FCA 1054 (Wilcox J)), but it is a common position in the authorities that the powers given the tribunal by sections 33, 42A and 42B of the AAT Act provide the tribunal with very flexible means of controlling its own processes, and these powers can be used to address the concerns that doctrines such as res judicata and estoppel evolved to deal with in the courts.

15. In particular, it is clear that the tribunal has the power under section 42B of the AAT Act to dismiss a matter that has already been finally decided and to prevent its reagitation, or, as is sought by BIS in the present matter, the tribunal could constrain the scope of its review to exclude matters already decided, for example under subsection 25(4A) of the AAT Act. A check in practice on the exercise of those powers, however, arises from the provision in some statutes, including the SRC Act, for continuing determination of a person’s entitlements. The SRC Act provides in section 62 for reconsideration of determinations, on the determining authority’s own motion or at the request of a claimant or another affected body. Thus a person who has a worsening compensable injury under the SRC Act, or an exacerbation of an injury, or a new condition, can seek redetermination of their matter. That implies that the tribunal may be called on to review a matter already determined in the tribunal at an earlier time.

16. This requirement is recognised in Quinn and Matusko. In the latter case the tribunal reached the conclusion that while in general the tribunal should not allow the relitigation of issues already decided it might do so where:

    ·there is a new or different decision;

    ·there is a clear legislative intent;

    ·the reconsideration decision is not final;

    ·there has been a change in circumstances or new evidence; or

    ·justice to the parties requires a departure from the general rule.

17. The principles of estoppel (if not the doctrine as applied by the courts) as outlined above will prevent reagitation of a matter plainly where the tribunal has decided the matter on the merits (assuming the exceptions in Matusko have no application), and they also affect consent decisions. In Novosel v Comcare [2017] FCA 722 [103] Perry J commented that:

    … a consent decision made under s 34D of the AAT Act is no less final than a decision made on the merits following a hearing. As the respondent contends, “[i]t would be contrary to the intention of the legislature in enacting a range of alternative dispute resolution mechanisms to conclude that a consent decision is any less final than a decision that has been dealt with on the merits.”

    Similar considerations apply to consent decisions reached under section 42C of the AAT Act: see the comments of D P Hack in Grimsley and Telstra Corporation (2010) 51 AAR 401, in finding that the applicant should not be allowed to reopen a matter already resolved in a consent decision: “Prima facie, the consent decision in the matter ought to be regarded as having determined the matters in controversy.”

18. In the present matter there is an argument that the NWE application fits the exceptions outlined in Matusko, in that it could be argued that Mr Faulks has brought new evidence forward; but a much more powerful argument against BIS in this dispute is that the tribunal has not considered and determined the merits of the matter. The authorities clearly distinguish between decisions that have settled the issues in a matter and dismissals on other grounds. In Mulheron and Australian Telecommunications Corporation [1991] AATA 673 the then President of the Tribunal, O’Connor J, noted the differences between decisions under those provisions where a dispute has been determined, such as sections 43 and 42C, and dismissals on essentially technical grounds, where the tribunal has not exercised all its powers with respect to the matters in dispute (see also Nicholson and Secretary, Department of Social Security [1990] AATA 212). The latter are not affected by estoppel principles in the same way as the former. They cannot be reagitated, in that the dismissal completes the tribunal’s engagement with the matter (unless they can be reinstated under the limited provisions in the AAT Act for that purpose); but a fresh application can be made without raising estoppel principles.

19. The cases quoted in the preceding paragraph involved a fresh application on the issues dismissed at an earlier time. The present case is different. Mr Faulks seeks to agitate questions which have not previously been considered substantively by the tribunal; the dismissal of the earlier matters does not raise estoppel principles in a way that prevents him from doing so. In August 2018 the parties reached agreement that the tribunal’s jurisdiction did not extend to the matters covered by the dismissal decision of June 2017, but the agreement on jurisdiction was not argued before the tribunal, nor was there any tribunal decision endorsing that conclusion. The parties reached agreement and notified the tribunal by email. Thus the matter cannot be regarded as having been settled on its merits by the tribunal.

20. The tribunal’s jurisdiction is not constrained in the way that BIS contends. Mr Faulks may agitate his NWE matter before the tribunal and can draw on material deriving from his employment by BIS at an earlier time.

21. Mr Richards made the point that the amount of time needed to determine this matter, taking into account the earnings of employees in a comparable position, might extend well beyond the time otherwise needed for a hearing. That point may be accurate, and that is likely to influence the amount of time needed for a hearing for these matters; but the issue has no bearing on the present question of jurisdiction.

21.     I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Member Mark Hyman

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Associate

Dated: 5 November 2018

Date(s) of hearing:	16 October 2018
Solicitors for the Applicant:	Mr Brian Hatch, Gerard Malouf & Partners
Solicitors for the Respondent:	Ms Claire Tota, HBA Legal
Counsel for the Respondent:	Mr David Richards