Graham and Comcare (Compensation)
[2016] AATA 932
•5 September 2016
Graham and Comcare (Compensation) [2016] AATA 932 (5 September 2016)
Division
GENERAL DIVISION
File Number
2014/5179
Re
Phillip Graham
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Senior Member N A Manetta
Date 5 September 2016 Date of written reasons 23 November 2016 Place Adelaide For the reasons given orally at the conclusion of the hearing of this matter, the Tribunal affirms the decision under review.
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Senior Member N A Manetta
CATCHWORDS
COMPENSATION - Rehabilitation and Compensation - “normal weekly earnings” – Section 8 of Safety, Rehabilitation and Compensation Act, 1988 - whether increases in salary for employees judged “fully effective” are to be included in calculation of compensation paid to injured employees by s 8(6) – such increases are not included as they must be earned – decision under review affirmed.
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 (Cth), s8
CASES
Comcare v Simmons [2014] FCAFC 4, 138 ALD 58
Re Frew and Comcare [2011] AATA 597, 126 ALD 375
SECONDARY MATERIALS
The Department of Human Services Agreement 2011-2014
REASONS FOR DECISION
Senior Member N A Manetta
23 November 2016
After delivery of my decision and oral reasons, I received a request for written reasons, which I now publish.
This is an application by Mr Phillip Graham seeking a review of the decision of the respondent, Comcare. By its decision, Comcare refused to assess compensation to Mr Graham under the Safety, Rehabilitation and Compensation Act, 1988 (the Act) by adjusting his normal weekly earnings to reflect the highest level of “APS5” salary that employees judged “fully effective” in the discharge of their duties may earn at that level. Mr Graham maintains that his compensation payments should be calculated by reference to this level; Comcare disputes this.
At the hearing before me, Mr Graham represented himself; Ms Walker, of counsel, appeared for Comcare. As Mr Graham was self-represented, I shall endeavour to state my decision and reasons in as straightforward a manner as possible.
PRINCIPAL ISSUE
As I have said, the issue before me, hearing the matter afresh on the evidence adduced by the parties, concerns Mr Graham’s entitlement to compensation payments, and, in particular, whether he should receive the benefit[1] of all possible increases to the “APS5” level that an active employee might receive.
[1] In terms of the increase flowing through to a recalculation of his normal weekly earnings.
BACKGROUND FACTS
Before considering the question, I set out the salient background facts. Mr Graham gave oral evidence, which I accept in the main. He was born in July 1956, and his work history as described to me in his evidence is as follows. He commenced his working life as a bricklayer in Murray Bridge in 1973. In 1975 he joined Australian National Railways (ANR)[2] and participated in civil and rail construction activities. These involved, he said, bricklaying and building roads and bridges to support rail infrastructure. Mr Graham said that in 1979 he suffered an injury to a vertebra in his back whilst using a sledgehammer. He was off work for a short time only and returned to work too soon, he said, which resulted, unfortunately, in an exacerbation of his medical problems.
[2] Which became AN (Australian National) at some point. I shall refer to ANR alone, however, in the course of these reasons.
He underwent surgery in about 1982 and returned to similar duties, but in 1984 he changed position at ANR and started a new clerical role on less pay. Unfortunately, in 1989 he suffered a further aggravation of his injury, and, later on, he suffered yet further injury while undertaking exercises intended to strengthen his back. In 1992 he received, he said, a permanent-impairment lump-sum payment reflecting a 25% reduction in his work capacity.
Mr Graham gave evidence that eventually ANR began to wind down its operations, and Mr Graham resigned from the organisation in 1994 to work with what was then known as the Commonwealth Employment Service (or CES). Whilst at ANR, Mr Graham had received promotions, and in 1994 his final salary was $34,400 approximately. At the CES, his salary went down to $26,000. Mr Graham said that not long after 1994, he filed an application for compensation payments, and this dispute was finally resolved in 1998 or 1999 when he was back paid to 1994.
One critical feature of Mr Graham’s case is that from 1999 onwards, Comcare decided to assess Mr Graham’s compensation by reference to an ASO5/ASP5 level in the Australian Public Service. Mr Graham’s ANR position and its classification had disappeared as ANR wound up operations. This had left Comcare in something of a quandary as to how it was to continue to assess Mr Graham’s earnings as a former employee of a now defunct organisation.
The decision was taken that Mr Graham’s former position at ANR could fairly be treated as equivalent to an ASO5/APS5 level position in Centrelink (the successor to the CES). In a written submission from Comcare provided at my request after the conclusion of the hearing, the history of the matter is set out. I shall not set out the submission but I have considered it.
Having considered the submission, I note that the legal authority for equating Mr Graham’s ANR position with an ASO5/APS5 position is still not clear. Neither party before me disputed this aspect of the matter, however. Accordingly, for the purposes of deciding the application before me, I shall assume it to be an appropriate decision.
Department of Human Services Agreement 2011-2014
I turn now to the Department of Human Services Agreement 2011-2014 (Agreement). This industrial agreement covers many of the employees in the Department of Human Services (including Centrelink staff) and was concluded under the Fair Work Act, 2009. Among other things, it sets out pay scales for employees. The Agreement specifies pay rates for Mr Graham’s APS5 level.
Clauses B4 and B5 deal with “salary increases” and “salary advancements” respectively. Under clauses B4.1, B4 .2, and B4.3, a 3% salary increase for all eligible employees had to occur immediately, a further 3% was allowed on 1 July 2012, and a further 3% on 1 July 2013. It was made clear in clause B4.4 that an eligible employee for these purposes was any employee whose salary was equal to or less than the maximum salary level for his or her classification.
It is clear from clause B4 that, in general terms, all eligible employees, irrespective of performance, were to receive the three 3%-increases mandated in the section.
Clause B5 deals with “salary advancement”, which is clearly introduced into the agreement as a distinct concept. Clause B5.2 provides that a performance-based salary advancement will be applied from 1 September in each year commencing 1 September 2012. Clauses B5.4ff specify certain increases for eligible employees. For the purposes of clause B5 an “eligible employee” is defined somewhat differently. Under clause B5.3, employees are eligible employees if four conditions are satisfied. These four conditions are as follows:
(i)They are ongoing employees or non-ongoing employees with 12 months’ service in the same role;
(ii)They are not undertaking an entry-level programme;
(iii)They have performed duties at or above their classification level for an aggregate of at least 18 weeks during the relevant performance cycle; and
(iv)They have had their performance in relation to each relevant classification level assessed as at least fully effective in accordance with clause I4.
Clause I4.7 sets out a table specifying four ratings of an employee’s performance as follows:
(i)requirements not met;
(ii)support required;
(iii)fully effective;
(iv)exceeds expectations.
Each of these rating levels refers to an individual performance agreement.
Mr Graham submitted strongly that as an injured employee, he should have the level of his normal weekly earnings increased by reference to clause B5 because, whilst injured, an employee is prevented from performing duties and unfairly misses out on increases which are granted to all employees who are rated as fully effective in their role.
Safety, Rehabilitation and Compensation Act 1988
Whether Mr Graham’s submission is correct depends upon the Safety, Rehabilitation and Compensation Act 1988 and in particular s 8(6). Section 8(6) provides as follows:
“Subject to this section, if the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth or a licensed corporation at the date of the injury is increased, or would have been increased if the employee had continued that employment, because of:
(a) the attainment by the employee of a particular age;
(b) the completion by the employee of a particular period of service; or
(c) the receipt by the employee of an increase in salary, wages or pay by way of an increment in a range of salary, wages or pay applicable to the employee or to his or her office, position or appointment;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased, or would have been increased, as the case may be.”
I accept that this subsection should be construed benevolently in Mr Graham’s favour so far as the resolution of ambiguities are concerned. I think it is clear that the overall purpose of s 8(6) is to ensure injured employees are not disadvantaged by not receiving commensurate increases in the calculation of the normal weekly earnings as their co-employees’ wages or salaries increase.[3] In my opinion, Mr Graham was entitled to the 3% salary increases that are specified in clauses B4.1, B4.2, and B4.3 provided the conditions in B4.4 were met. These are increases that are mandated in the Agreement to apply to employees irrespective of performance. That is, the salary increases are not performance-related.
[3] Cf, for example, Comcare v. Simmons (2014) 138 ALD 58 at [62] and [79].
By way of contrast, the difficulty with applying the “Salary Advancement” increases under clause B5 to Mr Graham’s circumstance is that an assessment of an employee’s discharge of his or her duties is required and a rating of at least “fully effective” must be given. In a large organisation, there will be some active employees who will be assessed as “not fully effective” and who will not therefore receive the increase.
The question that arises is whether an injured employee unable to serve in a position because of injury was intended to take the benefit of this additional payment under s 8 of the Act. In my opinion the answer to this question is “no”.
In Re Frew and Comcare (2011) 126 ALD 375, the Tribunal considered this situation. The learned Deputy President concluded in respect of the industrial agreement before her that progression from a lower level to a higher level did not depend simply on the effluxion of time: it depended, rather, on performance at a particular level of competency. In her view, s 8(6) did not apply to increases of that type. I think the same result should apply in Mr Graham’s case.
The distinction becomes clearer, perhaps, if one assumes a situation where the salary advancements were payable only in the case of outstanding performance. Could an injured employee not performing in the role receive the advancement? I think the answer is clearly “no” in this situation. Salary advancement received only by those performing at an outstanding level could not have been intended to be passed on automatically by s 8(6) to injured employees.
I think the same reasoning must apply where additional pay is paid only in the case of employees judged “fully effective”. I accept that “fully effective” does not betoken superior performance but merely competent performance without the need for support. It is nevertheless the case that there is a performance standard set that not all employees in a large organisation will reach.
Section 8(6) is clearly intended to preserve normal weekly earnings so that they keep pace, so to speak, with regular increases in active employees’ pay. But, in my opinion, increases that must be earned through competent performance before they are payable do not fall within the purview of s 8(6).
It is one thing to view s 8(6) as intending to ensure that an injured employee is not disadvantaged by not receiving increases in pay that flow automatically to all employees. It is quite another thing, in my opinion, to interpret s 8(6) as intending to give injured employees the benefit of performance-related increases that must be earned and that not all active employees will in the event receive. I should also add that I do not believe the intention behind s 8(6) is to require Comcare to make judgments about the possible performance of employees over time. Poorly performing employees might improve; superior employees may decline in performance. To predict performance is necessarily speculative even in the case of competent long-standing employees. I do not think s 8(6) was intended to impose on Comcare the task of making speculative assessments about ongoing performance.
Mr Graham pressed me with a submission that he has been compensated, at least in more recent times, by reference to the top level of APS5, and that this should continue. He continues to be so compensated in my view. What has changed, however, is that active employees who are performing at a fully effective or higher level receive a performance-based increase on account of that performance. The increase is not automatic but must be earned.
I should say immediately that the fact that Mr Graham has not ever served in the APS5 position is, to my mind, irrelevant to the question. Comcare has chosen the APS5 level with Mr Graham’s agreement as the appropriate equivalent of Mr Graham’s old ANR position. Furthermore, I am prepared to assume in Mr Graham’s favour that he might well be able to perform at a “fully effective” level in the role were he to serve in that role freed from the disability brought on by his injuries.
Nevertheless, as a matter of construction, s 8(6) of the Act is, as I have said, concerned with preserving the normal weekly earnings of injured employees by reference to, amongst other things, the increases all other non-injured employees would receive by effluxion of time. Performance-based increases that must be earned fall outside its purview in my opinion.
CONCLUSION
It follows, in my opinion, that Mr Graham is not entitled to have the level of his normal weekly earnings calculated by reference to the increases referred to in clause B5 of the Agreement. I shall make an order reflecting this ruling and affirm the decision under review.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Senior Member N A Manetta ......................[Sgd]............................
Administrative Assistant
Dated 23 November 2016
Date(s) of hearing 28 & 29 January, 5 September 2016 Date final submissions received 29 February 2016 Applicant In person Counsel for the Respondent Ms G Walker Advocate for the Respondent Ms V Vuksan Solicitors for the Respondent Australian Government Solicitor
Key Legal Topics
Areas of Law
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Employment Law
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Statutory Interpretation
Legal Concepts
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Statutory Construction
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Causation
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Remedies
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