FVNH and Comcare
[2013] AATA 832
•22 November 2013
[2013] AATA 832
Division GENERAL ADMINISTRATIVE DIVISION
File Number(s) 2013/2731
ReFVNH
APPLICANT
And Comcare
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 22 November 2013
Place Melbourne
The Tribunal:
(1)decides to affirm the reviewable decision of the respondent dated 30 May 2013; and
(2)notes that the respondent’s decision affirmed a determination dated 11 April 2013 refusing the applicant’s claim for loss of earnings as a result of his part-time employment as a Reserves Officer with the Royal Australian Air Force.
…[sgd]…………………
Deputy President
CATCHWORDS
COMPENSATION – reservist work – injury sustained during full time employment – relevant weekly earnings that of the latest 2 weeks of continuous full time employment – earnings or potential earnings of reservist work not included in compensation
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 35
Australian Federal Police Act 1979, s 24
Defence Act 1903, s 4
Defence Reserve Service (Protection) Act 2001, ss 7, 10, 26, 27, 28, 29, 30, 31, 33
Military Rehabilitation and Compensation Act 2004
Parliamentary Services Act 1999, s 22
Public Service Act 1999, ss 7, 22, 25
Safety, Rehabilitation and Compensation Act 1988, ss 4, 5, 5A, 5B, 6, 8, 9, 14, 19, 97A, 108DCASES
Breust v Commissioner for the Safety, Rehabilitation and Compensation of Commonwealth Employees [1991] FCA 241; (1991) 30 FCR 40; 101 ALR 1; 13 AAR 399
Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
REASONS FOR DECISION
FVNH[1] works full-time for a Commonwealth agency and has done for some five years. At the relevant time, he was also a member of the High Readiness Active Reserve (HRAR) posted within the Royal Australian Air Force (RAAF). His High Readiness Reserve Service Agreement (HRRSA) with the RAAF required him to perform a minimum of 50 Reserve Salary Days (RSD) or the equivalent days on Continuous Full Time Service (CFTS) each year in order to maintain his proficiency and competency. The agreement was a renewal of an earlier agreement between him and the RAAF. When he was injured in the course of his employment with the agency, he was unable to complete the HRRSA as he was on a Return to Work plan and prohibited by the agency from undertaking any work as a reservist. That meant that he could not complete the remaining 30.5 days of the 50 days he was contracted to perform under the HRRSA and unable to qualify for payment of $5,000.00 for completing the contract.[2] In all, he has lost over $10,000.00 in tax free earnings by being unable to work in the Defence Reserve. FVNH has said that he understands that Comcare cannot take his lost earnings into account in the calculation of the weekly payments of compensation payable under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) but asks that it be paid to him in the form of a lump sum. I have decided that my only power in the matter comes from the SRC Act but that does not authorise me to make the decision that FVNH would have me make.
[1] On 4 July 2013, a differently constituted Tribunal made an order under s 35 of the Administrative Appeals Tribunal Act 1975 (AAT Act) to the effect that publication of the name of the applicant and information tending to identify him or his employer is restricted to the parties and their advisers, members of staff of the Tribunal and staff or Merrill Corporation Australia Pty Ltd in the course of their duties.
[2] T documents; T1 at 13
I have read the documents setting out the course of events associated with FVNH’s injury, his rehabilitation and his return to work plans. Strictly speaking, those events are not relevant to the resolution of the issue I have to decide but they do explain why FVNH would have thought that he was in a position to sign an HRRSA in December 2011. With the benefit of 20:20 hindsight and the knowledge of events after that date, it is clear that he was not. However, at the time he signed it, he had resumed the full duties of his substantive position, had worked since 4 April 2011 otherwise than on a return to work plan and had submitted only one total incapacity certificate for 23 and 24 November 2011. At the time, there was no reason to think that he could not meet the requirements of the HRRSA.
COMCARE’S SUBMISSIONS
On behalf of Comcare, Mr Harris submitted that the starting point is s 19(2), which provides that Comcare is liable to pay compensation for injuries resulting in incapacity on the basis of a calculation of the injured employee’s normal weekly earnings. He then moved to s 8 and, in particular, ss 8(1) and (3), which I set out below.[3] The word “employment” used in those provisions has, Mr Harris submitted, been considered by the Full Court of the Federal Court in Breust v Commissioner for the Safety, Rehabilitation and Compensation of Commonwealth Employees[4] (Breust). Although the name of the legislation has been changed to the SRC Act, Comcare has now taken the place of the Commissioner and s 8 has been amended on half a dozen occasions, the relevant provisions of s 8 have, Mr Harris submitted, remained unamended over the years.
[3] See [16] and [19]
[4] [1991] FCA 241; (1991) 30 FCR 40; 101 ALR 1; 13 AAR 399; Davies, Beaumont and O’Connor JJ
Mr Breust was a full-time employee of the Australian Taxation Office (ATO) and a member of the Defence Force Reserve. He had claimed that his earnings from both sources should be taken into account in calculating his normal weekly earnings. The Commissioner for Taxation had supported Mr Breust’s position but the Full Court of the Federal Court held that regard could be had only to Mr Breust’s earnings from his full-time employment with the ATO. Davies J explained it in this way:
“… [Section] 8 is drafted so as to leave no doubt that the references in s 8(1) to ‘his or her employment’ and ‘that employment’ are references to the employment out of which, or in the course of which, the injury or disease arose or was incurred. This is because the section does not refer to earnings generally but to the number of hours worked each week in an employment, to the employee’s average hourly ordinary time rate, to the average amount of allowances payable ‘in respect of his or her employment’ and to ‘the relevant period’, a term defined in s 9. All of these provisions show that s 8 is not concerned with earnings generally. From this I deduce that the term ‘employment’ has the limited meaning of ‘the relevant employment’ …
This interpretation is confirmed by s 8(3). This provision distinguishes between part-time employment with the Commonwealth, and “any other employment.” The subsection provides that, where the liability to pay compensation arose out of part-time employment with the Commonwealth, then any other earnings of the employee shall be treated as earnings of the employee from his or her employment. Mr Johnson and Mr Driver submitted that the term “part-time employment” does not reflect the employment giving rise to the liability. However, it does so, for it adds to the earnings from that employment the employee’s earnings from any other employment. It does not have the effect, for which counsel seemed to contend, of adding to the earnings from full-time employment by the Commonwealth earnings from any part-time employment with the Commonwealth which the employee also had. The provision distinguishes between the part-time employment and “any other employment”, and it is the earnings from the latter that are to be included”.[5]
[5] [1991] FCA 241; (1991) 30 FCR 40; 101 ALR 1; 13 AAR 399 at [9]-[10]; 43; 4-5; 402
There is, Mr Harris submitted, nothing to distinguish FVNH’s position from that of Mr Breust. Both have been engaged in full-time employment by the Commonwealth and suffered an injury arising out of, or in the course of, that employment.
LEGISLATIVE FRAMEWORK
Although the specific provisions of the SRC Act relating to the resolution of this matter have not been amended, the legislation has been amended and other legislation relating to the Defence Reserve and the Public Service have been enacted. They all provide context to the decision I must review. Therefore, I have worked through the relevant legislation to resolve the issue rather than simply applying the conclusion reached by the Full Court of the Federal Court in Breust. As it is, I reach the same conclusion but having regard to other matters that impinge on the issue of FVNH’s employment.
Outline of provisions relating to entitlement to compensation for injuries
The starting point is s 14(1) of the SRC Act. Subject to certain exceptions that are not relevant in this case, it provides:
“Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.”
A.What is an “injury”?
The meaning to be given to the word “injury” is set out in s 5A:[6]
[6] SRC Act; s 4(1)
“(1) In this Act:
Injury means:
(a)a disease suffered by an employee; or
(b)an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment; or
(c)an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), that is an aggravation that arose out of, or in the course of, that employment;
but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.
(2)For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following:
(a)a reasonable appraisal of the employee’s performance;
(b)a reasonable counselling action (whether formal or informal) taken in respect of the employee’s employment;
(c)a reasonable suspension action in respect of the employee’s employment;
(d)a reasonable disciplinary action (whether formal or informal) taken in respect of the employee’s employment;
(e)anything reasonable done in connection with an action mentioned in paragraph (a), (b), (c) or (d);
(f)anything reasonable done in connection with the employee’s failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment.”
The word “disease” is also defined:
“(1) In this Act:
Disease means:
(a)an ailment suffered by an employee; or
(b)an aggravation of such an ailment;
that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth or a licensee.
(2)In determining whether an ailment or an aggravation was contributed to, to a significant degree, by an employee’s employment by the Commonwealth or a licensee, the following matters may be taken into account:
(a)the duration of the employment;
(b)the nature of, and particular tasks involved in, the employment;
(c)any predisposition of the employee to the ailment or aggravation;
(d)any activities of the employee not related to the employment;
(e)any other matters affecting the employee’s health.
This subsection does not limit the matters that may be taken into account.
(3) In this Act:
significant degree means a degree that is substantially more than material.”
B. What is an “injury arising out of or in the course of employment”?[7]
[7] As FVNH has suffered an injury within the meaning of the SRC Act, I will refer only to an injury in these reasons. My reasoning does, however, apply equally to a disease for that term is also defined, in part, by reference to an employee’s employment. There is no reason to reach a conclusion that it bears any different meaning from that which it bears in the definition of “injury”.
Section 6 of the SRC Act sets out circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, an employee’s employment. It does not limit those circumstances and just when an injury has done so has been the subject of considerable judicial consideration. I do not propose to refer to that authority for I am concerned with what is meant by “employment”. The first five paragraphs of s 6(1) are sufficient to give a flavour of its provisions:
“Without limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment, an injury shall, for the purposes of this Act, be treated as having so arisen if it was sustained:
(a)as a result of an act of violence that would not have occurred but for the employee’s employment or the performance by the employee of the duties or functions of his or her employment; or
(b)while the employee was at the employee’s place of work, including during an ordinary recess, for the purposes of that employment; or
(c)while the employee was temporarily absent from the employee’s place of work undertaking an activity:
(i)associated with the employee’s employment; or
(ii)at the direction or request of the Commonwealth or a licensee; or
(d)while the employee was, at the direction or request of the Commonwealth or a licensee, travelling for the purpose of that employment; or
(e)while the employee was at a place of education, except while on leave without pay, in accordance with:
(i)a condition of the employee’s employment by the Commonwealth or a licensee; or
(ii)a request or direction of the Commonwealth or a licensee; or
(iii)the approval of the Commonwealth or a licensee; or
(ea)-(g)…”
C.What is an “employee”?
The word “employee” has the meaning given by s 5 and also applies to persons 65 years or older.[8]Section 5(1) provides:
“employee means:
(a)a person who is employed by the Commonwealth or by a Commonwealth authority, whether the person is so employed under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship; or
(b)a person who is employed by a licensed corporation.”
[8] SRC Act; s 4(1)
The remaining provisions of s 5, ss 5(1A) to (16), qualify and elaborate upon that definition. Section 5(1A), for example, provides for the circumstances in which a person will be taken to be an employee of a licensed corporation. Statutory office holders in the Australian Federal Police (AFP) and AFP employees as well as members of the Defence Force and the holders of certain offices established by a law of the Commonwealth are, for the purposes of the SRC Act:
“… taken to be employed by the Commonwealth, and the person’s employment shall, for those purposes, be taken to be constituted by the person’s performance of duties as the Commissioner of the Australian Federal Police, a Deputy Commissioner of the Australian Federal Police or an AFP employee, by the performance of duties as such a member of the Defence Force or by the person’s performance of the duties of that office, as the case may be.”[9]
[9] SRC Act; s 5(2)(a), (b) and (c)(i) I note that neither the AFP nor the Australian Defence Force (ADF) can be described as a “Commonwealth authority” as that expression is defined in s 4(1) of the SRC Act for neither has been established as a body corporate. At the time of their enactment, ss 5(2)(a) and (b) were required to bring both the AFP and ADF within the scope of the SRC Act. That continues to be the case for the ADF although, since it was enacted in 1988, the legislation has been amended and, to a large extent, members of the Defence Force are no longer covered by its provisions but by the Military Rehabilitation and Compensation Act 2004 (MRC Act). In the case of the AFP, s 5(2)(a) would seem to remain more out of an abundance of caution than a necessity for, since 2 July 2000, s 24(1) of the Australian Federal Police Act 1979 has provided that “The Commissioner, on behalf of the Commonwealth, may, by writing, engage persons as employees.” The wording of s 24(1) brings the AFP into line with those who are engaged by an Agency Head under the Public Service Act 1999 (PS Act) or under the Parliamentary Services Act 1999 (PSA). Section 22(1) of the PS Act provides: “An Agency Head, on behalf of the Commonwealth, may engage persons as employees for the purposes of the Agency.” Section 22(1) of the PSA is in similar terms.
As a final example, I will refer to ss 5(4) and (5) relating to a person employed from time to time by the Commonwealth. It provides:
“(4) A person:
(a)who is ordinarily engaged for employment at a prearranged place at which employers engage persons for employment; and
(b)whose last employer under an engagement at that place was the Commonwealth, a Commonwealth authority or a licensed corporation;
shall, for the purposes of this Act, be taken to be employed by the Commonwealth, that authority or that corporation, as the case may be, until the person is next engaged under such an engagement, and the person’s employment shall, for those purposes, be taken to be constituted by the person’s attendance at that place for the purpose of seeking such an engagement.
(5)Subsection (4) does not operate to make Comcare liable to pay compensation in respect of an injury sustained by an employee during an attendance to which that subsection applies if the injury was sustained because the employee voluntarily and unreasonably subjected himself or herself to an abnormal risk of injury.”
Outline of provisions relating to payment of compensation for injuries resulting in incapacity
A.What is an incapacity for work?
Section 4(9) provides:
“A reference in this Act to an incapacity for work is a reference to an incapacity suffered by an employee as a result of an injury, being:
(a)an incapacity to engage in any work; or
(b)an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened.”
B.Calculation of incapacity payments
As FVNH has claimed compensation for incapacity, I must look to s 19. Unless the employee is in receipt of a superannuation pension or a lump sum benefit or both or is maintained in a hospital, s 19 applies to an employee who is incapacitated for work as a result of an injury.[10] Section 19(2) goes on to provide that:
“Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate of compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
NWE- AE
where:
AE is the greater of the following amounts:
(a)the amount per week (if any) that the employee is able to earn in suitable employment;
(b)the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week.
NWE is the amount of the employee’s normal weekly earnings.”
[10] SRC Act; s 19(1)
The expression “normal weekly earnings” is defined in s 4(1) to mean “… the normal weekly earnings of an employee calculated under section 8.” Section 8(1) provides:
“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.”
The term “relevant period” is given its meaning by s 9.[11] Only s 9(1) is relevant in this context:
“For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference to section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.”
[11] SRC Act; s 4(1)
What amounts to “suitable employment” is defined in s 4(1):
“suitable employment”, in relation to an employee who has suffered an injury in respect of which compensation in respect of which compensation is payable under this Act, means:
(a)in the case of an employee who was a permanent employee of the Commonwealth or a licensee on the day on which he or she was injured and who continues to be so employed – employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to:
(i)the employee’s age, experience, training, language and other skills;
(ii)the employee’s suitability for rehabilitation or vocational retraining;
(iii)where employment is available in a place that would require the employee to change his or her place of residence – whether it is reasonable to expect the employee to change his or her place of residence; and
(iv)any other relevant matter; and
(b)in any other case – any employment (including self-employment), having regard to the matters specified in subparagraphs (a)(i), (ii), (iii) and (iv).”
Other provisions in s 8 are concerned with various situations in which an employee may find him or herself. The only one that is relevant in this context is s 8(3), which provides:
“Where an employee was, at the date of the injury, employed by the Commonwealth or a licensed corporation in part-time employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth or a licensed corporation.”
CONSIDERATION
The SRC Act
The SRC Act is generally stated to relate to the “… rehabilitation of employees of the Commonwealth and certain corporations and to workers’ compensation for those employees and certain other persons, and for related purposes.”[12] Those benefits to employees are provided under the umbrella of what is, for all practical purposes, an insurance scheme in which Entities (which include agencies for the purposes of the PS Act and a Parliamentary Department within the meaning of the PSA and whose employees are employed by the Commonwealth[13]) and Commonwealth authorities who have not been licensed under Part VIII of the SRC Act pay a premium to Comcare.[14] The amount of those premiums is determined in accordance with s 97A of the SRC Act. At the heart of the components used to determine the amount payable by a particular Entity or Commonwealth authority are the number of claims made by its employees, the amount of compensation paid to them and the number of injuries estimated to befall its employees in the coming year.[15]
[12] SRC Act; Long Title
[13] Definition of “Entity” in s 4(1) of the SRC Act and see FN 9 above.
[14] Those licensed under Part VIII of the SRC Act are subject to the terms of the licence agreement they reach with the Safety, Rehabilitation and Compensation Commission. Among the conditions on which they may be required to meet is that they maintain sufficient funds to discharge their duty to make payments under the SRC Act: SRC Act; s 108D(1)(c).
[15] SRC Act; s 97A
This background does not determine the meaning to be given to the word “employment” but it puts Comcare’s liability to pay compensation under s 14 in context. In the first place, it is a liability to pay an “employee”. As is apparent from the definition of “employee”, a person may come within that description in a variety of ways. Provided he or she is employed by the Commonwealth, a Commonwealth authority or a licensed corporation or a person otherwise taken to be an employee under s 5, he or she will meet the criterion of being an “employee”. He or she will be engaged as an employee by, and have “employment” with the Commonwealth or other body.
That is one of the senses in which the word “employment” is used in general language[16] but it is not the sense in which it is used in determining whether Comcare’s liability arises under s 14. Liability only arises in respect of an injury suffered by an employee and that injury has one of the three outcomes stated in s 14(1). When reference is made to the definition of “injury”, it is apparent that the word “employment” is used in the second sense in which it is used in ordinary language i.e. “… an occupation, especially regular paid work.”[17] That follows from the fact that the nature and scope of the employee’s employment becomes relevant when it comes to working out whether he or she has suffered an injury “… arising out of, or in the course of, the employee’s employment.” What the person was doing at the time of injury will be relevant. So too may be the duties he or she was required to perform and the directions or permissions he or she was given by the Commonwealth or a licensed authority. Those matters are not determined by reference to the fact that the employee is employed by the Commonwealth, a Commonwealth authority or a licensed authority but by reference to the terms and conditions of employment applying to that particular employee in the particular employing body. That is so even when they are said to be employing a person on behalf of the Commonwealth.
[16] “… the act of employing or the state of being employed. …” Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers (Chambers)
[17] Chambers
Take, for example, a member of the Australian Public Service. Under s 22 of the PS Act, he or she will have been engaged by an Agency Head as an employee for the purposes of the Agency.[18] Subject to certain qualifications, s 24 of the PS Act provides that an Agency Head may, from time to time, determine in writing the remuneration and other terms of employment applicable to an APS employee or APS employees in the Agency. An Agency Head may determine the duties of an APS employee in the Agency and the place or places at which those duties are performed.[19] In summary, the person is employed on behalf of the Commonwealth but the person’s “employment” is determined by the Agency Head acting within the powers conferred by the PS Act.
[18] See FN 9 above. An “Agency” means a Department, Executive Agency or Statutory Agency: PS Act; s 7.
[19] PS Act; s 25
It follows that the precise nature of an employee’s employment is relevant in determining whether or not he or she has suffered an injury. It is not enough simply to have been employed by the Commonwealth, a Commonwealth authority or a licensed authority in a generic sense. The word “employment” is used in this more precise sense in the definition of “injury” in s 5A of the SRC Act.
When it comes time to assess an employee’s entitlement to compensation for an injury that has resulted in incapacity for work, the focus is on the particular duties of the work in which he or she was engaged by the Commonwealth or a licensed corporation before the injury happened if he or she retains capacity to work at all. That follows from the provisions of s 4(9), that I have set out at [14] above. That means that reference has to be made to the particular duties in the particular employee’s employment and they are tied to the particular Agency, Commonwealth authority or licensed corporation that has employed him or her as I have explained.
Compensation for injuries resulting in incapacity for work is payable under s 19 in the form of weekly payments. Again, it is clear from s 19 that reference is made to the particular employment. The normal weekly earnings of an employee are those calculated, in part, by reference to the average number of hours worked in each week by the employee “in his or her employment”.[20] Under s 19(1), those normal weekly earnings are reduced by reference to what he or she is able to earn in suitable employment. When regard is had to the definition of “suitable employment” that I have set out at [18] above, it is clear that the employment from which the injury arose or in the course of which it was suffered may not, in the case of a permanent employee of the Commonwealth or of a licensed corporation, be employment that is regarded as “suitable employment”. What amounts to suitable employment may be found elsewhere in the Commonwealth or in the licensed corporation having regard to the criteria set out in the definition. A clear distinction is made between the employment giving rise to the injury and employment also offered by the Commonwealth or the licensed authority.
[20] SRC Act; s 8(1)
Once that distinction is understood, it becomes clear that an employee’s normal weekly earnings are calculated by reference to the number of hours worked and the rate for those hours in the employee’s employment. That is the same employment in which the employee suffered an injury so that the injury could be said to have arisen out of, or in the course of, that employment.
No regard is had to earnings from other employment in which the employee might have been engaged unless the SRC Act provides for it. It does provide for it in one case. That case arises when the employee was, at the date of the injury, employed by the Commonwealth in part-time employment. It is provided for in s 8(3) of the SRC Act.[21] This is not a situation in which FVNH found himself. He was not a part-time employee of the relevant Commonwealth authority. It follows from this analysis that FVNH is not entitled to compensation under the SRC Act.
[21] See [19] above
DRSP Act
There is another reason why FVNH is not entitled to receive compensation under the SRC Act. It is found in the Defence Reserve Service (Protection) Act 2001 (DRSP Act). FVNH is a member of the Reserves i.e. a member of the “… Naval Reserve, the Army Reserve and the Air Force Reserve.”[22] The DRSP Act is intended “… to protect members of the Reserves in their employment and education, to facilitate their return to civilian life, and for related purposes”.[23] Of particular importance in this case is s 26 which provides:
“(1) If a member was employed before starting to render defence service, the contract of employment is not terminated (or taken to be terminated) because of the member’s failure to perform his or her duties under the contract while absent on defence service.
(2)Instead, the contract is suspended while the member is absent on defence service, unless terminated earlier in accordance with law.
(3)A period during which a contract of employment is suspended is taken not to be a period of employment under the contract unless this Part provides otherwise.
(4)Subsection (1) does not prevent the termination of the contract if the member does not apply to resume employment under the contract within 30 days after ceasing to render defence service.”
For the purposes of the DRSP Act, “… the appointment or employment of a person under a law of the Commonwealth … is taken to be employment under a contract of employment”.[24]
[22] DSRP Act; s 7 and see also Defence Act 1903; s 4(1)
[23] DSRP Act; Long Title A “member means a person who is, or has been, a member of a part of the Reserves, but does not include a person called upon to serve in the Defence Force under section 60 of the Defence Act 1903”: DSRP Act; s 7
[24] DRSP Act; s 10(2) See also the definition of “employment” in s 7.
Complementing s 26 are the provisions of s 33(1):
“To avoid doubt, this Act does not oblige an employer of a member who is, or has been, absent on defence service to do any of the following in respect of the period of the absence:
(a)to pay the member’s remuneration in respect of the employment; or
(b)to grant the member’s entitlements in respect of the employment (except as provided under this Part); or
(c)to meet the employer’s obligations under a workers’ compensation law to pay premiums, contributions or similar payments in relation to the member; or
(d)to meet the employer’s obligations under the Superannuation Guarantee (Administration) Act 1992 in relation to the member.”
Section 33(2) explains that an employer must pay a member’s remuneration or entitlements if the member’s absence from his or her employment is for a reason other than rendering defence service. A member who chooses, for example, to render defence service while on annual leave from his or her employment would be entitled to receive his or her remuneration. That follows from the fact that the member would be entitled to it because his or her absence is for a reason other than rendering defence service.
At the conclusion of a period of defence service, a member of the Reserves has the right to resume employment under the contract. That right is given by s 27(1). Subject to certain qualifications set out in s 28(2), the employer has a duty to allow the member to resume work or to reinstate him or her in employment in the same capacity in which he or she was employed immediately before starting to render defence service. The conditions of employment, including remuneration, must be at least as favourable as those that would have applied to him or her but for the service.[25] Sections 29 to 31 provide for the effect that defence service has on the entitlements of a member arising under a contract of employment in relation to annual leave and leave loadings, personal or carer’s leave, including sick leave, family leave, bereavement leave, compassionate leave, cultural leave and other forms of leave, parental leave including maternity and adoption leave, long service leave or an amount of long service leave in place of that leave or any other prescribed matter. No mention is made of compensation.
[25] DSRP Act; s 28(1)
The omission of any mention of compensation is consistent with Parliament’s having relieved the employer from any obligation to meet its obligations under a workers’ compensation law to pay contributions or similar payments in relation to the member. That is consistent with the employer’s not incurring any liability under the SRC Act in relation to injuries arising out of or in the course of the member’s rendering defence service. It is also consistent with the fact that if a member of the Reserves were injured while rendering defence service, his or her entitlements would now arise under the MRC Act and not under the SRC Act. Even if they had arisen under the SRC Act, the relevant employment would have been that under the HRRSA and not employment by the Commonwealth agency.
Earnings under HRRSA irrelevant for purposes of calculating NWE
Under the HRSSA that he signed, FVNH was only paid for the days on which he rendered service. His entitlement to the $5,000.00 HRR Completion Bonus only arose if he completed the HRRSA. That was a matter of agreement between FVNH and RAAF. It was not a matter that related to his employment with the Commonwealth agency by which he was also employed.
Account also must be had of the effect of s 26 of the DRSP Act. It suspended FVNH’s employment with the Commonwealth agency each time he rendered defence service. For the purposes of calculating his normal weekly earnings before he was injured, regard was to be had to the “… latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed authority.” Generally, that is the “relevant period” provided by s 9(1). That means that, had FVNH been rendering defence service for three days in one five day week, worked for the Commonwealth authority on the other two days of the week and been injured in the following week when he was still working for the Commonwealth authority, his earnings in the preceding week would have been disregarded for the purposes of calculating his normal weekly earnings. That would follow from the fact that he would not have been continuously employed by the Commonwealth in that period and it could not have been regarded as a relevant period for the purposes of s 8.
Conclusion
For these reasons, I have decided that FVNH is not entitled to compensation under the SRC Act in respect of his inability to complete his HRRSA due to his injury and the consequent loss of income. That means that I affirm Comcare’s reviewable decision dated 30 May 2013.
I certify that the thirty five preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ……(sgd)......................................................
Leah Berardi Associate
Date of Hearing 15 November 2013
Date of Decision 22 November 2013
Self-represented Applicant FVNH
Counsel for the Respondent Mr J Harris
Solicitor for the Respondent Mr B Lochert
Comcare
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