Glavan Pty Limited v Isagon
[2006] NSWWCCPD 12
•2 February 2006
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Glavan Pty Limited v Isagon [2006]
NSWWCCPD 12
APPELLANT: Glavan Pty Limited
RESPONDENT: Danilo Isagon
INSURER:Employers Mutual Indemnity Limited
FILE NUMBER: WCC1962-2004
DATE OF ARBITRATOR’S DECISION: 17 August 2004
DATE OF APPEAL DECISION: 2 February 2006
SUBJECT MATTER OF DECISION: Partial incapacity; section 40 Workers Compensation Act 1987; ability to earn; specialist knowledge of the labour market.
PRESIDENTIAL MEMBER: Acting Deputy President Lansdowne
HEARING:On the papers
REPRESENTATION: Appellant: Nevill & Edwards
Respondent: Taylor & Scott
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator, dated 17 August 2004, is revoked and the following decision is made in its place:
(1)That Glavan Pty Ltd (‘the Employer’) pay Danilo Isagon (‘the Worker’) weekly compensation under section 40 of the Workers Compensation Act 1987 as follows:
(a) from 24 October 2003 to 20 January 2004 at the rate of $150 per week;
(b) from 21 January 2004 to 2 April 2004 at the rate of $60 per week;
(c) from 3 April 2004 to 27 May 2004 at the rate of $150 per week; and
(d) from 5 June 2004 to date and continuing at the rate of $150 per week.
(2)That the Employer pay the Worker’s expenses under section 60 of the Workers Compensation Act 1987 on production of accounts or receipts.
(3)That the Employer pay the Worker’s costs as agreed or assessed.
2. No order as to the costs of the appeal.
BACKGROUND TO THE APPEAL
This appeal was filed by Employers Mutual Indemnity (Workers Compensation) Limited (‘the Insurer’ and ‘the Appellant’) on 13 September 2004. The appeal arises out of the decision of an arbitrator (‘the Arbitrator’) made ex tempore at the conclusion of an arbitration conducted on 17 August 2004. The Arbitrator made awards for weekly compensation for partial incapacity in favour of Danilo Isagon (‘the Worker’ and ‘the Respondent’) from the date the Insurer ceased payments, 24 October 2003, to the date of the arbitration and continuing. The effect of the awards is that with the exception of two periods during which the Worker was employed he is to be paid compensation at the rate of $230 per week, being the difference between what the Arbitrator found to be his probable earnings had he not been injured and his ability to earn. The decision was confirmed by Certificate of Determination issued 19 August 2004.
The Worker was employed by Glavan Pty Ltd (‘the Employer’) to sand wooden panels to be used in the construction of kitchen cupboards from 10 May 2001 to 19 January 2002. In September 2001 he suffered an injury to his right shoulder while assisting a fellow employee to lift a heavy drum of rubbish so that it could be tipped into the larger collection bin. The drum fell onto his right shoulder. He was subsequently diagnosed with an injury to the soft tissue of his shoulder, and underwent surgery. The medical evidence filed by both parties before the Arbitrator was broadly in agreement, to the effect that the Worker could return to full time employment provided that that employment did not require use of his right arm above shoulder height (as had his previous employment). The Insurer does not in this appeal dispute the Arbitrator’s findings that the Worker suffered this injury, that it arose out of or in the course of his employment with the Employer and that he is partially incapacitated for work. The major issues at the arbitration concerned a dispute as to what the Worker’s earnings would have been had he not been injured (his “probable earnings”), and his ability to earn. The Arbitrator found that the Worker’s probable earnings were $630 gross per week. The Insurer does not appeal that finding. The Insurer appeals only the Arbitrator’s finding that the amount the Worker is able to earn is $400 per week.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 19 August 2004 records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation under s40 of the Workers Compensation Act 1987 as follows:
a. from 24 October 2003 to 20 January 2004 at the rate of $230 per week;
b. from 21 January 2004 to 2 April 2004 at the rate of $60 per week;
c. from 3 April 2004 to 27 May 2004 at the rate of $230 per week;
d. from 5 June 2004 to date and continuing at the rate of $230 per week.
2. That the Respondent pay the Applicant’s expenses under s60 of the Workers Compensation Act 1987 on production of accounts or receipts.
3. That the Respondent pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The sole issue in dispute in the appeal is the Arbitrator’s finding that the Worker is able to earn $400 per week.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The Appellant is content for the appeal to be determined on the papers. The Respondent submits that “due process can only be secured by the appeal being heard in open court”. No reasons are advanced for this submission. Neither party seeks to rely on any further evidence. All the evidence has already been filed, and in ordinary circumstances there would be a full transcript of the arbitration. Unfortunately, the transcript in this case includes multiple instances of gaps in transcription, due to faulty sound recording. I have given consideration to whether or not this is a reason why the appeal should be heard orally (although it is not relied on by the Respondent) but have come to the conclusion that this defect, in so far as it relates to the Arbitrator’s Reasons, could not be cured by oral hearing in any event. Further, no evidence was lead orally at the arbitration by either party and only brief questions asked of the Worker by the Arbitrator, and so the Arbitrator was required to base her findings, including the disputed finding, on the filed material. In conclusion, having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Appellant that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act as to timely filing of the appeal and quantum. There is no dispute that these requirements are met here. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act and concerns at least $5000 and 20% of the amount awarded in compliance with section 352(2). Accordingly, I grant leave to appeal.
EVIDENCE AND SUBMISSIONS
I have before me the following documents:
(1)Application and attached documents filed 23 January 2004 and registered 2 February 2004.
(2)Reply and attached documents filed 23 February 2004.
(3)Reports of Dr Hagan dated 30 March 2004, filed by the Insurer on 6 May 2004 as identified in the Reply.
(4)Teleconference outcome sheet prepared by the Arbitrator in respect of the teleconference held 11 May 2004.
(5)Worker’s wage schedule, filed 1 July 2004.
(6)Application to Admit Late Documents, filed by the Insurer on 1 July 2004, the documents being a statement of Mr M. Almaet, Managing Director of Simply Wood Furniture Pty Ltd (for which the Worker worked for a time after the cessation of his employment with the Employer); statement of Mr A. Callipari, financial controller of the Employer; and statement of the earnings of a worker said to be a comparable worker, Mr S. Boulignaphon.
(7)Application to Admit Late Documents, filed by the Worker on 5 July 2004, the documents being two further medical reports by Dr Green.
(8)Application to Admit Late Documents, filed by the Worker on 9 July 2004, the documents being an amended statement by the Worker and further medical reports by Dr Collins.
(9)Application to Admit Late Documents filed by the Worker on 13 July 2004, the document being a medical report by Dr Duckworth.
(10)Email from Arbitrator to the Commission setting out the directions made at the conclusion of the conciliation/arbitration held 15 July 2004, which was adjourned to 17 August 2004.
(11)Further amended statement by the Worker filed by the Worker on 10 August 2004, in accordance with the directions made at the conciliation/arbitration held 15 July 2004.
(12)Application to Admit Late Documents filed by the Insurer on 13 August 2004, the documents relating to the earnings of Mr Boulignaphon and other possible comparable employees.
(13)Application to Admit Late Documents filed by the Insurer at the arbitration held 17 August 2004, the documents being a statement of Mr I. Simic, wage records of Mr Boulignaphon and schedule of payments made to Mr Boulignaphon.
(14)Certificate of Determination, dated 19 August 2004.
(15)Transcript of both conciliation/arbitrations (containing gaps due to faulty recording).
(16)Appeal filed 13 September 2004.
(17)Submissions by the Worker in opposition to the appeal.
All of the documents filed by either party after the Application and Reply were admitted without objection at various stages of the subsequent proceedings, with the exception of the statement of Mr Simic attached to the Application to Admit Late Documents filed by the Insurer on the day of the second arbitration. The statement was physically removed from the Application, and is not on the Commission file.
As earlier indicated, the only matter appealed is the Arbitrator’s finding that the Worker’s ability to earn is $400 per week. The Arbitrator’s finding that the Worker would probably have earned $630 per week were it not for the injury is not appealed, although this issue consumed much of the arbitration and filed material. The Appellant submits that the Arbitrator erred in that she made the finding in relation to ability to earn:
“(a) when there was no evidence to support it;
(b) against the evidence and the weight of the evidence;
(c) by adopting an approach constituting an error of law; and
(d) without giving any or any adequate reasons for it” (Appeal, paragraph 2).
The Appellant submits that “on the whole of the evidence, the worker’s ability to earn should have been assessed as being in the range of $525 to $600 per week” (Appeal, paragraph 12) and seeks that the Arbitrator’s decision be revoked and substituted by a decision giving effect to a finding that the Worker could earn $550 per week (Appeal, paragraph 20). This would result in an award of weekly compensation of $80 per week for periods during which the Worker was not employed (being the difference between probable earnings found to be $630 per week and ability to earn of $550 per week).
The Worker submits that the finding that the Worker could earn $400 per week was open to the Arbitrator on the evidence (paragraph 19, Submissions in Opposition) and that her reasons were adequate (paragraph 20). Alternatively, if the reasons were not adequate then the Worker submits that the matter ought to be remitted to the Arbitrator for fresh determination on both probable earnings and ability to earn (paragraph 21, Submissions in Opposition).
DISCUSSION AND FINDINGS
Relevant law
Case law has established that the basis of appeal to the Commission from the decision of an Arbitrator is that the arbitrator erred, whether by way of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, as applied to the Commission in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6). If such an error is established, and it is such that but for it a different decision would have been made (Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56 at paragraph 4), then the Presidential Member determining the appeal may revoke the arbitrator’s decision and substitute a different decision for it, or may remit the matter to the arbitrator concerned or a different arbitrator for re-determination in accordance with the decision on appeal (section 352 of the 1998 Act).
Payment of weekly compensation where a worker is partially incapacitated is governed by section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’). Subsection (1) of that section provides that the payment is to be “an amount not exceeding the reduction in the worker’s weekly earnings” and “is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case”. Subsection (2) provides for the calculation of the “the reduction” as the difference between “the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment”(paragraph (a)) and “the average weekly amount which the worker is earning, or would be able to earn in some suitable employment” (paragraph (b)). Each of these amounts and the total amount payable is subject to maximum limits that are not relevant in this case.
Subsection (3) of section 40 amplifies the calculation of the amount that the worker “would be able to earn” as follows:
“The determination of the amount that an injured worker would be able to earn in some suitable employment is subject to the following:
(a)the determination is to be based on the worker’s ability to earn in the general labour market reasonable accessible to the worker;
(b)the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.”
The relevant portion of section 43A, being subsection (1), provides as follows:
“For the purposes of sections 38,38A and 40:
“suitable employment”, in relation to a worker, means employment in work for which the worker is suited, having regard to the following:(a)the nature of the worker’s incapacity and pre-injury employment;
(b)the worker’s age, education, skills and work experience;
(c)the worker’s place of residence;
(d)the details given in the medical certificate supplied by the worker;
(e)the provisions of any injury management plan for the worker;
(f)any suitable employment for which the worker has received rehabilitation training;
(g)the length of time the worker has been seeking suitable employment;
(h)any other relevant circumstances.”
The Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) held that section 40 requires that the finder of fact undertake a 5 step process being:
1. determination of the weekly amount the worker would probably have been earning if uninjured;
2. determination of the amount that the worker is earning or would be able to earn (subject to subsection 40(3) and section 43A);
3. subtraction of the figure in 2 from the figure in 1;
4. exercise of the discretion contained in subsection (1) of section 40 (being a discretion to reduce the amount otherwise payable, not increase it); and
5. make an award in the amount arrived at by step 4.
Mitchell was applied by the Commission in Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56 (‘Snow Confectionary’).
The Appellant contends that the Arbitrator erred in relation to step 2. I list below the matters relied on by the Appellant and will then consider them one by one, noting the Respondent’s submissions. Point (2) is not disputed.
(1)The Arbitrator should have considered the amount that the Worker earned in the two periods he has been employed since ceasing work for the Employer as “reflective, or at least indicative” of his earning capacity. From 21 January 2004 to 2 April 2004 (approximately 10 weeks), the Worker was employed by Simply Wood Furniture Pty Ltd (‘Simply Wood Furniture’) as a carpenter earning $570 per week. From 28 May 2004 to 4 June 2004 (one week) the Worker was employed in heavier work by a different employer and earned in excess of $752 per week. The Appellant concedes that the Worker was obliged to leave this work because it was too heavy, but disputes that this was the reason for the Worker ceasing employment for Simply Wood Furniture (paragraphs 4 to 7 of the appeal).
(2)The medical evidence placed no restriction on the Worker’s ability to perform “full time work of a moderate nature” (paragraph 8).
(3)Vocational assessments undertaken at the instigation of the Insurer identified a range of jobs within the Worker’s capacity. The wages for these jobs varied between $481.50 per week (award rate for an usher) and $690 (market rate for an usher). The Worker was assessed as being suited for work as a sales assistant (award rate $506.80 and market rate $584). The Appellant submits that the Worker is also able to undertake a range of other jobs on a full time basis, such as console operator, process work, forklift driver, courier driver or cleaner (appeal paragraphs 9 to 10).
(4)The Worker’s own counsel submitted at the arbitration that the Worker’s ability to earn “should not be considered to exceed $526 per week”.
(5)The Arbitrator has discounted the figure which should have been arrived at by a proper application of step 2, being a figure in the range of $525 to $600 per week, when there is no warrant for doing so in the legislation (paragraphs 12 to 17). The discretion in section 40(1) arises only after the mathematical enquiry prescribed by section 40(2) has been undertaken, and can only reduce a worker’s entitlement, not increase it.
(6)The Arbitrator failed to give any or adequate reasons for her findings under section 40(2)(b) (paragraphs 18 to 19).
Actual earnings : earnings with Simply Wood Furniture (Point (1) above)
Mr Michael Almaet, managing director of Simply Wood Furniture, says in his statement dated 7 June 2004 that the Worker was employed as a casual labourer (general hand), cutting decorative strips of timber, gluing them on to items of furniture and sanding timber. He says the Worker performed his duties well, without apparent difficulty or complaint about his right shoulder. He says the Worker was off sick on about 4 occasions in the 10 week period, but told him it was for kidney stones. He says that the Worker’s employment with his company ceased because the company moved premises on 1 April 2004 and no longer required as many general hands. Other employees as well as the Worker ceased on that day. The Appellant says that this evidence conflicted with the Worker’s evidence that he was unable to cope with that employment, that the Arbitrator failed to resolve the conflict and should have found this employment as “reflective, or at least indicative” of the Worker’s earning capacity.
The Respondent says in submissions that there was no conflict, as the Respondent did not say that he left this employment because he could not cope with it (saying this only in relation to the later employment) but did say that the work aggravated his pain. The Respondent says that on this basis the Arbitrator found and was entitled to so find that the work at Simply Wood Furniture was not suitable and so the Worker’s earnings there did not represent his ability to earn (submissions, paragraph 12).
The Respondent’s evidence in relation to his employment at Simply Wood Furniture is contained in his amended statement dated 2 July 2004, and in his further amended statement dated 9 August 2004. In his amended statement he said that he “was unable to continue (at Simply Wood Furniture) with the ongoing pain to my right shoulder”. This is a direct statement as to why that employment ceased which is in contradiction to the evidence of Mr Almaet, and also in contradiction to the Respondent’s submissions on the appeal. In the further amended statement the Respondent does not explicitly say why the employment ceased. He said the following in relation to employment after ceasing work for the Employer:
“10. Since my employment ended I have looked for all different types of work. I believe I have made over 100 job applications but with only very limited success. I am usually told either I do not have the experience or I do not have the skills or they simply make an excuse if they learn I have a Workers Compensation claim. I registered with an employment agency IBC at Rooty Hill in 2002.
11. One job as a front desk clerk with the Regis Hotel in the city lasted for less than a week after the Supervisor realised I was experiencing trouble with my shoulder standing up using the computer key board without support and having to carry the luggage up to the rooms. He told me it was best if I found other work. From 21 January 2004 to April 2004 I worked with Simply Wood Furniture doing similar but lighter work than my pre-injury work. In particular, I was not required to do any heavy lifting or work above shoulder level in that job. I believe my earnings were in the vicinity of $560 to $580 per week gross. I then worked for one week only from 28 May 2004 to 4 June 2004 for KD Concept attempting to perform duties not dissimilar to my pre-injury duties. I was simply unable to last. I have not worked since.
12. In relation to the (sic) those jobs I took them because I was desperate. I did not tell the bosses about my injury. I tried my best but found the work aggravated my pain. I ended up having to increase my medication on a short term basis” (emphasis in italics added).
It is not easy to determine the Arbitrator’s findings in relation to the Worker’s employment with Simply Wood Furniture, having regard to the gaps in transcription in the transcript. The Arbitrator referred to this employment in the section of her Reasons in which she set out the facts (page 21 of the transcript), but the reference is not intelligible having regard to the faulty recording. In the portion of her judgment beginning “Findings and reasons” (from page 22, line 37) the Arbitrator made the following comments in relation to the Worker’s employment with Simply Wood Furniture (‘< --->’ indicates a gap in transcription):
“The next issue to determine is what was the average weekly amount the < --- > restrictions, including restrictions on heavy lifting and not lifting above shoulder level. I accept the applicant’s evidence that he was unable to continue because of the ongoing pain in his right shoulder < --- > earned 560 to 580 gross < --- > I have averaged that out to an amount of $570 < --- > duties similar to his pre-injury duties. The applicant stated he was < --- > . The applicant in his supplementary statement dated 9 August 2004 < --- > looked for all different types of work and believed he made over < --- > usually told he did not have the experience or skills < --- > desperate for work and tried his best but found work aggravated his pain” (page 23, lines 18 to 31).
The Arbitrator then referred to the vocational reports obtained by the Insurer and set out her conclusions as follows:
“The respondent relies on the report of the Vocational Capacity Centre dated 10 September < --- > overall assessment concluded that the applicant was not capable of < --- > was determined that the applicant was suitable for a range of other occupations < --- > sedentary and semi sedentary work categories with < --- > some occupations. It was also noted the applicant possesses a degree in business from the Philippines but has never worked specifically < --- > the respondent’s submissions that the applicant could earn within a range of 400 < --- > could earn up to $600 per week.
However, taking into account all the evidence and the general availability of work in the labour market, I find that the average weekly amount that the applicant would be able to earn is $400 a week in suitable employment. The applicant’s probable earnings but for the injury would be < --- > $400 a week. The applicant’s loss is, therefore, as follows: from 24 October < --- > April 2004 to 27 May < --- > both parties have made submissions on the exercise < --- > no views. No < --- > in my view in this matter of any circumstances why the exercise of the discretion under section 41” (transcript page 23, line 37 to page 24, line 1).
It appears from the portions of the transcript that could be transcribed that the Arbitrator at least took the view that the reference by the Worker in paragraph 12 of his further amended statement to “those jobs” and “the work” included the work for Simply Wood Furniture and found that the work for Simply Wood Furniture aggravated his pain. She may have gone further and accepted his evidence that he left the employment due to pain. Having regard to her ultimate findings the Arbitrator must have considered that the Worker’s earnings at Simply Wood Furniture did not represent his ability to earn in suitable employment. The best approach would have been to state this finding, and the reasons for it, explicitly. It would also have been desirable for the Arbitrator to directly refer to the evidence of the managing director of Simply Wood Furniture and state why she preferred the evidence of the Worker as to the effect of the work on his pain. There was, however, an evidentiary basis for the Arbitrator to reject the Simply Wood Furniture earnings as a measure of ability to earn because that work aggravated the Worker’s pain (even if he did not leave the employment because of pain) and so could not be considered “suitable employment”. Given this, I do not consider the Arbitrator’s brevity on this issue to be an error that justifies reversal of the decision.
Ability to earn and adequacy of reasons (Points (3) to (6) above)
The Respondent relies on two vocational assessments of suitable employment for the Worker. The first was carried out by CRS Australia over the period July to September 2002. That report was prepared for the purposes of identifying a “suitable vocational goal for (the Worker’s) rehabilitation program”. The Worker identified job preferences as a taxi driver, security officer, front desk clerk and travel agent. Only the last was considered suitable by the rehabilitation service, which recommended that the Worker attend a suitable training course (presumably at a cost to the Insurer), undertake work experience and participate in job seeking workshops with a view to gaining employment as a travel agent. There is no information in the documents before me as to whether or not these recommendations were accepted by the Insurer and the Worker and if so, what transpired.
The second assessment is contained in a report dated 10 September 2003, prepared by the Vocational Capacity Centre. That report confirms that the Worker is not able to undertake his pre-injury employment, but concludes that he is suitable “for a range of other occupations in the sedentary and semi-sedentary work categories with some occupations from the light work category”. The report identifies three categories of employment for which the Worker would be suited: various jobs he could undertake with no training (tour guide, tourist information worker, switchboard operator, usher and sales assistant); jobs he may be able to undertake depending on the results of a driving assessment and appropriate vehicle modification (mini bus driver, courier, sales representative) and jobs he could undertake with formal training (shop manager, driving instructor and motor vehicle licence examiner). The wages for the jobs in the first category, for which the Worker was considered immediately suitable, vary between $473.50 gross per week (state award for tour guide) to $690 gross per week (market rate for usher – state award rate being $448.40). With the exception of the state award rate for an usher, all the award rates quoted are in the range $473 to $506 per week. The market rates quoted for tour guide and tourist information worker are also in this range, with higher market rates for switchboard operator ($545), usher ($690) and sales assistant ($584).
I have set out earlier the Arbitrator’s findings in relation to these assessments and her finding that the Worker’s ability to earn is $400 per week. It is simply not clear from her reasons what weight, if any, the Arbitrator gave the assessments, and how she arrived at the figure of $400 per week. This is not a figure that appears as a possible wage in any job category identified in the vocational assessments. Given the deficiencies of the transcript, it is not clear whether it was a figure put to the Arbitrator by the Worker’s representative in submissions. Certainly, the Worker’s representative did say, at one point, that the Worker’s ability to earn should not be considered to exceed $526 per week (the wage for a courier given in the Vocational Capacity Centre report) but he then went on to say that the Worker’s ability to earn was “probably more reflective of the most basic wage out there, which is about four < --- >.” (transcript page 18, lines 25 to 26 ‘< --->’ refers to a gap in transcription). There was no written evidence before the Arbitrator of the basic wage.
The only specific factor to which the Arbitrator refers that may have caused her to find that the Worker’s ability to earn is $400 per week is “the general availability of work in the labour market”. It is not clear to what the Arbitrator was referring by this phrase. Further, and even more significantly, the phrase is not an accurate statement of the requirements of the legislation. Section 40(3) requires the Arbitrator to have regard to the worker’s ability to earn in the “general labour market reasonably accessible to the worker” (emphasis added). As the Appellant correctly states in the appeal, the reference to reasonable accessibility is a reference to the geographic labour market accessible to the worker. The difference between geographic accessibility and availability in the sense of whether or not the labour market is depressed was highlighted by Burke CCJ in Mangion v Visy Board Pty Ltd (1992) 8 NSWCCR 175 (‘Mangion’) at page 179 as follows:
“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…to someone in Brewarrina or Mungindi there is little point in considering jobs such as console operator in a self service garage or a lift driver in a department store. Whether the man has the capacity to do the job or not, it doesn’t constitute any part of his accessible labour market. One always seeks to assess the capacity to earn of this particular worker in his particular circumstances.”
This statement was approved by the Court of Appeal in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175 (‘Cowra Shire Council’) at 179. In that case the Court of Appeal dismissed an appeal from the Compensation Court as to the worker’s ability to earn, on the basis that the trial judge was entitled to find that the worker had a capacity which he was not fully able to exploit because he lived in Cowra. In this case the Worker lives in Sydney and there are no travel restrictions placed on him due to his partial incapacity. Accordingly, if the Arbitrator determined that there was a geographic limit on the worker’s ability to earn that was in my view an error. If the Arbitrator was relying not on geographic accessibility but some other measure of “availability”, not provided for by the legislation, then I consider she was also in error.
Section 40(3) also requires that the Arbitrator consider suitable employment for the worker within section 43A. I have set out the factors listed in section 43A earlier in this decision. It is unclear from the Arbitrator’s reasons whether or not she considered the factors listed in section 43A. If she did, then she did not set out her findings in relation to them. Accordingly, I consider that the Arbitrator was further in error in failing to set out her findings in relation to “suitable employment” under sections 40(3) and 43A. There was evidence before the Arbitrator that the Worker had obtained a degree in commerce in the Philippines, which was studied in English, although the degree is not recognised in Australia. The vocational assessments assessed him as having adequate proficiency in English for the jobs described in the assessments. Further, the vocational assessments state that the Worker had worked in non-manual fields, being sales and tourism, in the Philippines, prior to migrating to Australia. When these matters are given their proper weight, then in my view the field of “suitable employment” for the Worker was not limited to manual work and the Arbitrator’s errors have resulted in a decision that is not supported by the evidence.
The Worker submits in response to this portion of the appeal that the Commission is a specialist tribunal, and so an Arbitrator can rely on his or her knowledge of the general labour market (paragraph 17 of the submissions in opposition to the appeal). This principle was referred to by the Court of Appeal in Cowra Shire Council by Handley J.A. in the following terms:
“This case, in my judgment, falls within a well-established principle applied by this Court in Australian Iron & Steel Pty Ltd v Elliot (1966) 67 SR (NSW) 87 at 94 and recognised by the High Court in J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 at 633 where Barwick CJ said “ the value of described work in the labour market is a matter well within the general knowledge and experience of the Commission”, which was the predecessor of the Compensation Court. It was therefore open to the trial Judge to find that this worker’s diminished ability to earn in the general labour market in the Cowra district was no greater than as assessed by him.”
The trial judge in that case had, however, made specific reference to why he reached the assessment he did of the worker’s earning capacity, that being that in the Cowra district the contracting jobs the worker was undertaking “will not be frequently available”. In this case, the Arbitrator has given no explanation why she assessed the Worker’s ability to earn as less than the vocational assessments would suggest, other than reference to a principle which does not form part of the legislative scheme. In my view, the fact that an arbitrator may have specialist knowledge of the labour market is not an excuse for failing to set out the reasons why he or she reaches a conclusion as to ability to earn. Rule 73 of the Workers Compensation Commission Rules 2003 requires an arbitrator to set out his or her findings on material questions of fact “referring to the evidence or other material on which those findings were based”, together with her understanding of the law and application of the law to the findings (see Snow Confectionary at paragraph 47).
The Worker submits in relation to the vocational assessments that the Arbitrator was not bound to accept them, and little weight could be attached to the wages there set out by the author, a Ms Wild, whose qualification is listed as physiotherapist, because the reports do not satisfy the tests for expert evidence laid down in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705. While this may be so, if this objection was to be taken to the admissibility of the evidence it should have been taken at the outset at the arbitration, or Ms Wild required for cross examination. There is some reference in the submissions of the Worker at the arbitration to the weight to be placed on the reports, but no suggestion (at least in the portions of the sound recording that could be transcribed) that they were not admissible. The significant point is, however, that there is no indication in her reasons that the Arbitrator rejected the reports or considered them of little weight on this basis. As stated, she fails to indicate what weight she gives to them, and so her reasons are inadequate.
For these reasons I consider that the decision of the Arbitrator is tainted by error and requires redetermination. I have given consideration to whether the matter should be returned to the Arbitrator for redetermination, or whether I should make a substituted decision on the evidence before me. The Worker submits that to the extent that the Arbitrator has failed to give adequate reasons for her finding as to ability to earn, she has also fallen into the same error in relation to her finding as to probable earnings and so the whole determination cannot stand, and should be remitted to the Arbitrator. The Arbitrator’s finding as to probable earnings was not the subject of appeal by either party, however. Having regard to the time already elapsed since the lodging of the appeal, the limited nature of the appeal and the fact that all the evidence on this point is before me I consider the appropriate course is to substitute a decision on the issue of ability to earn solely.
Substituted decision: ability to earn
I set out my findings in relation to section 40(3). In relation to section 40(3)(a), I find that the “general labour market reasonably accessible to the worker” is the Sydney metropolitan area. There is no limitation imposed by geography on the availability of the type of jobs listed in the vocational assessments. In relation to section 40(3)(b), and the factors listed in the definition of “suitable employment” in section 43 I find as follows:
(a)The Worker is unable to carry out the repetitive reaching and overhead lifting tasks required in his pre-injury employment as a sander. The nature of his incapacity is that he is unable to use his right arm for heavy lifting or repetitive use overhead (Dr Duckworth, report dated 16 June 2004).
(b)The Worker is now aged 45 years. He has a degree in commerce obtained in English in the Philippines, but not recognised in Australia. He moved to Australia in 1994. Since that time he has worked only in manual labour, in connection with the making of furniture. Prior to that time in the Philippines he worked in marketing in his family’s footwear business (1989-1994), as a sales representative in a travel agency (1986-1989) and in various positions in the hotel industry (1979-1986) (source: CRS report). He has the skills to undertake further training for sedentary or clerical positions (CRS and Vocational Capacity Centre reports) but it may be his age will be a negative factor for future employers.
(c)His place of residence is Sydney, and so he has a wide labour market available to him.
(d)Medical certificate: The most recent WorkCover certificate submitted by the Worker is the certificate signed by Dr Green dated 29 July 2003. This states that he is fit for suitable duties from 11 April 2004 to 11 September 2004, being 3 days per week with a lifting restriction of 2.5kg below the shoulder. I consider the report of Dr Duckworth dated 16 June 2004 to be more reliable in relation to the Worker’s current position, given that it is later in time and prepared by the Worker’s treating orthopaedic surgeon, rather than a general practitioner. That report places no limitation on full time work.
(e)Injury management plan: no such plan is before me.
(f)Suitable employment for which the worker has received rehabilitation training: such training was recommended in relation to employment as a travel agent but there is no evidence as to whether it was undertaken. Accordingly, I find that employment as a travel agent is not currently suitable.
(g)The Worker has been seeking employment since late 2002 (source: report of Dr Green dated 24 May 2004).
(h)Any other relevant circumstances:
(i) The Worker’s representative submits on the appeal that the Worker’s command of English is limited. This is not supported by some of the evidence before the Arbitrator. Neither of the vocational assessments identify language difficulties. The CRS report notes that the Worker’s university qualifications were obtained in English and says on this basis “it is expected he would be able to manage to complete any relevant courses to assist him to return to the work force”. The Vocational Capacity Centre says that “he is able to process written information quickly and accurately. His capacity for clerical and administrative forms of work is rated in the average to high average range”. On the other hand, an interpreter was present at the arbitration but it is unclear whether or not his or her services were required for the small number of questions the Arbitrator asked the Worker (page 9, transcript). I find on all the evidence that the Worker has a reasonable command of written English but some limitations in relation to spoken English that may inhibit his employment in positions requiring good communication skills.
(ii) The Worker’s representative also submits that a lot of the jobs outlined in the vocational assessments require training, and so are not immediately suitable. This is not correct. There are some jobs identified by the Vocational Capacity Centre which do not require training.
Having regard to all of the above, I find that the earning ability of the Worker is in the range $448.40 to $506.80, being the state award rates of pay for jobs not requiring training in the Vocational Capacity Centre report. I consider that the award rates are a more reliable guide to the Worker’s earning capacity than market rates, because his age, lack of recent experience in other than manual work and the fact that English is not his first language may make him a less attractive employee than some others. Despite the fact that he has only worked in manual fields since his arrival in Australia, I consider that these non-manual fields of activity are suitable employment, given his prior experience in sales and tourism, and his tertiary qualification in the Philippines. Taking an approximate average of the various state awards, and having regard to the fact that the majority of the listed awards are in the area of $480 per week, I find that the Worker’s ability to earn is $480 per week.
DECISION
I revoke the decision of the Arbitrator made 17 August 2004 and substitute for it an award that gives effect to my finding as to the Worker’s ability to earn. The result is that for all periods during which he was not or is not employed, his weekly payment of workers compensation for partial incapacity is $150 per week, being the difference between probable earnings of $630 per week, and ability to earn of $480 per week. As the award remains in favour of the Worker, it remains appropriate that Employer pay the Worker’s costs of the original proceedings.
COSTS
I have given consideration to whether or not the Appellant should obtain a costs order. Costs of the appeal are in the discretion of the Commission (section 341 of the 1998 Act) subject to the limitations on making a costs order in favour of an unsuccessful appellant (section 345). The Appellant has been successful in altering the Arbitrator’s award in favour of the Employer, but not to the degree sought. In all the circumstances, I do not propose to make an order that the Respondent pay the costs of the appeal.
Robyn Lansdowne
Acting Deputy President
2 February 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBYN LANSDOWNE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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