Hobday and Comcare (Compensation)
[2016] AATA 504
•19 July 2016
Hobday and Comcare (Compensation) [2016] AATA 504 (19 July 2016)
Division
General Division
File Number
2015/1974
Re
Robert Hobday
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Deputy President J W Constance
Date 19 July 2016 Place Sydney The reviewable decision made 27 February 2015 to reduce the weekly rate of compensation payable to Mr Hobday for incapacity from 19 May 2014, is affirmed.
................[sgd]........................................................
J W Constance
Deputy PresidentCATCHWORDS
WORKERS COMPENSATION - reduction in amount of weekly compensation payable - calculation of normal weekly earnings - where employee is incapacitated for work - where there is a change in the employee's classification of employment - decision affirmed
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 8(10), 14, 19
CASES
Australian Capital Territory v Comcare and Another (2011) FCR 287
Bortolazzo and Another v Comcare (1997) 75 FCR 385
Comcare v Simmons [2014] FCAFC 4
REASONS FOR DECISION
Deputy President J W Constance
19 July 2016
INTRODUCTION
In August 2013 Mr Hobday suffered a work-related injury in respect of which Comcare paid compensation to him in accordance with the Safety, Rehabilitation and Compensation Act 1988 (Cth).
By a decision dated 27 February 2015 Comcare reduced the amount of weekly compensation payable to Mr Hobday in respect of his loss of income arising from his injury. This decision was based on advice from his employer that he had been reclassified to a position in which, had he been at work, he would have earned less than he had earned prior to his injury. The reclassification was a result of disciplinary proceedings taken against Mr Hobday.
Mr Hobday has applied to the Tribunal to review Comcare’s decision. For the reasons which follow the decision will be affirmed.
BACKGROUND
Unless otherwise stated, the findings of facts set out in these reasons are based on the evidence of Mr Hobday.
Mr Hobday was initially employed by the Australian Customs and Border Protection Service in 2006. He resigned in 2008 to pursue other employment. He was re-employed by the Service as a CL2 Instructor in June 2009 and has been employed by the Service continuously since that time. He was promoted to CL3 Supervising Instructor in 2011.
In early October 2012 several students in Mr Hobday’s group asked him questions concerning the powers of uniformed armed Customs officers outside their work environment. Having answered the questions, he was informed by the students that his response was in direct contradiction to advice that had been given recently by senior Service executives. In view of this Mr Hobday discussed the issue with his manager.
On 11 December 2012 Mr Hobday and other instructors, managers and support staff attended a conference with their National Manager, Ms Major. During the conference Ms Major made derogatory remarks about some of those present, which included Mr Hobday. During exchanges between Mr Hobday and Ms Major later in the conference, Ms Major made further derogatory comments directed to Mr Hobday personally.
In the following months Mr Hobday raised with management a number of legitimate concerns arising from his role as an instructor. He was also involved in workplace negotiations with management on behalf of colleagues. In August 2013 another incident occurred during which Ms Major made further derogatory comments to Mr Hobday in the presence of others.
On 6 November 2013 Mr Hobday received official notification of a Code of Conduct enquiry under the Public Service Act 1999 (Cth). The principal issue in the enquiry was the manner in which he spoke to students in training courses earlier in the year. On 8 November 2013 he received an email setting out some of the evidence in relation to the allegations against him. Further evidence was sent to him a short time later. Mr Hobday provided a response to the allegations in which he denied any inappropriate conduct.[1]
[1] Exhibit R1 T40.
Mr Hobday gave detailed evidence of many workplace incidents during 2013 which caused him to feel stressed and anxious. On 15 November 2013 he consulted his general practitioner. Following this consultation Mr Hobday was deemed unfit for duty until 2 December 2013. He was diagnosed as suffering psychological distress arising from incidents in his workplace.
On 16 December 2013 Mr Hobday submitted a claim for workers compensation.[2] The claimed injury was psychological distress first experienced in August 2013. On 21 March 2014 Comcare accepted liability under the Safety, Rehabilitation and Compensation Act to compensate Mr Hobday for an injury being an adjustment reaction with mixed emotional features.[3] By letter dated 14 April 2014[4] Comcare advised Mr Hobday that:
… effective from your DOI of 6 August 2013, I have determined under section 8 of the SRC Act that your NWE [normal weekly earnings] is:
……
Total NWE: $1,996.45.
Comcare commenced paying compensation to Mr Hobday in respect of his loss of earnings whilst absent from his employment. The calculation of the amount of compensation was based on this figure.
[2] Exhibit R1 T3.
[3] Exhibit R1 p.158.
[4] Exhibit R1 p.172.
By letter of 4 April 2014[5] Mr Hobday was advised by the Service that it had been determined that he had breached the Code of Conduct in relation to the allegations of using inappropriate language and behaviour and of not fulfilling his mandatory e-Learning modules. On 8 May 2014 Mr Hobday was advised that the sanction in relation to these breaches was that he be “reduced in classification from Customs Level 3 to Customs Level 2, and reassignment to another work area”. [6] The sanction was to take effect from 19 May 2014.
[5] Exhibit R2 p.90.
[6] Exhibit R2 p.104.
Mr Hobday applied to the Merit Protection Commissioner to review the findings and the sanction imposed. On 10 March 2015 the Commissioner recommended that the Service confirm the decision under review. The decision was subsequently confirmed.
On 12 December 2014 the Service notified Comcare that:
Mr Hobday was moved into a lower classification of position with date of effect 19 May 2014. This move is not due to his compensable work injury.[7]
It was further advised that from 19 May 2014 Mr Hobday’s total normal weekly earnings were $1395.64.
[7] Exhibit R1 p.207.
On 19 December 2014 Comcare wrote to Mr Hobday and advised him that effective 19 May 2014 his total normal weekly earnings were determined to be $1395.64.[8]
[8] Exhibit R1 p.212.
During the hearing of this application the parties filed a statement of agreed facts as follows:
1. That the applicant’s behaviours that led to:
a. the findings that he breached the APS Code of Conduct;
b. the sanctions imposed following the findings of breach (namely, the reduction in classification from Customs Level 3 to Customs Level 2 and re-assignment)
were not caused by his 6 August 2013 “adjustment reaction with mixed emotional features” for which Comcare accepted liability under s14 of the Safety, Rehabilitation and Compensation Act 1988 on 21 March 2014. (T18)
2. The applicant continues to be employed by the Commonwealth.
3. The applicant has not appealed the decision of the Merit Protection Commissioner to the Federal Court of Australia or the Federal Circuit Court of Australia.
4. Accordingly the reduction in the applicant’s classification stands.
I am satisfied that these agreed facts are consistent with the evidence before me.
RELEVANT PROVISIONS OF THE SAFETY, REHABILITATION AND COMPENSATION ACT 1988 (CTH)
Subsections 19(1) and 19(2) provide:
(1) This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.
(2) 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 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
Section 8 makes detailed provisions for the determination of an injured worker’s normal weekly earnings. Subsection 8(10) provides:
(10)If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:
(a) where the employee continues to be employed by the Commonwealth or a licensed corporation—the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or
(b) where the employee has ceased to be employed by the Commonwealth or a licensed corporation—whichever is the greater of the following amounts:
(i)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury;
(ii)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;
the amount so calculated shall be reduced by the amount of the excess.
THE ISSUE
The issue for determination in this matter is whether the decision to reduce Mr Hobday’s weekly compensation payments in respect of his incapacity for work, from 19 May 2014, is correct.
CONSIDERATION
The scheme of the Safety, Rehabilitation and Compensation Act 1988 (Cth)
Section 14 of the Act makes Comcare liable to pay compensation “in accordance with“the Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment. Other sections of the Act set out the manner of calculating particular amounts of compensation.
As set out earlier in these reasons, the formula for determining the amount of compensation payable to an employee for each week during which he or she is incapacitated is provided in subsection 19(2). In applying this formula, it is necessary to calculate the employee’s normal weekly earnings. The method of doing this is set out in section 8. Subsection 8(10), which comes at the end of the section, provides for a reduction of the amount otherwise payable in respect of incapacity in certain circumstances.
Principles to be applied
The following principles are applicable in determining this matter.
(a)Subsection 8(10) contains different wording for calculations relating to two distinct situations – first the situation where the employee continues to be employed by the Commonwealth or a licensed corporation and secondly, where the employee has ceased to be an employee of the Commonwealth or a licensed corporation.
---- Comcare v Simmons[9]
[9] [2014] FCAFC 4 at para10.
Subsection 8(10)(a) is applicable to Mr Hobday’s situation.
(b)“The fact that s8(10)(a) and (b) are directed to two different situations and require separate calculations to be undertaken does not necessarily give rise to any “anomaly”. The two provisions are directed at placing a “cap” on the calculation of “normally weekly earnings” and are an attempt to accommodate the many different situations which may confront an injured employee. The different inquiries which must be undertaken is but a consequence of the statutory language employed by the legislature.”
---- Comcare v Simmons[10]
[10] At para. 11.
(c)Subsection 8(10)(a) differs from subsection 8(10)(b) as the former provision is not tied to a fixed point in time.
---- Comcare v Simmons [11]
(d)“The provision of compensation is to operate from week to week: see for example, the detailed formulae in s 19. The underlying policy is that an injured employee should not be worse off during the period of incapacity as a result of work-related injury. However, it follows conversely that the injured employee should not be better off.”
---- Bortolazzo and Another v Comcare [12]
(e)“The correct test under s 8(10) of the SRC Act is whether an incapacitated employee’s NWE amount in any week after an injury exceeds the weekly earnings that he or she would receive in continuing employment, but for incapacity or cessation of the employment. It is not whether an incapacitated employee is “better off” because his or her NWE amount exceeds the amount of actual earnings in any week after injury.”
---- Australian Capital Territory v Comcare and Another[13]
[11] At para. 43.
[12] (1997) 75 FCR 385, p.388.
[13] (2011) FCR 287 para.34.
Discussion
I have decided that the decision to reduce the weekly amount of compensation payable for incapacity after 19 May 2014 is correct. The reduction was properly calculated on the basis that, had he not been incapacitated he would have received $1395.64 per week from 19 May 2014 rather than his pre-injury earning of $1996.45 per week. I have reached this conclusion on the basis of the Service’s decision to reduce Mr Hobday’s classification to Customs Level 2, (at which position his normal weekly earnings would have been $1395.64 per week had he not been incapacitated) and applying the principles to which I have referred. This is consistent with the scheme of the Act to provide compensation to Mr Hobday so that he is in a position which is neither better nor worse than the position in which he would have been had he not been incapacitated.
There is no evidence to suggest that Mr Hobday would have earned a weekly amount in excess of $1395.64 at any time since 19 May 2014. Bearing in mind that compensation under section 19 is calculated on a weekly basis, if Mr Hobday’s earnings would have changed since that date then Comcare should take that change into account in determining the compensation payable.
This is not a case in which an employee’s weekly earnings reduced as a result of the effect of the injury for which compensation for incapacity is payable. On the basis of the agreed facts this situation is clearly excluded from consideration.
Counsel argued that I should be satisfied that the Code of Conduct proceedings which resulted in Mr Hobday being moved to a lower classification were instigated by Ms Major as part of a vendetta against him arising from the differences that had developed between them after August 2012 – in short that it was Ms Major who “set the hares running”.[14] It was put that the same person and the same factual situation prompted both the psychological reaction which caused the compensable injury and the sanction which arose from the Code of Conduct violation.
[14] Transcript 06/04/2016.
Counsel sought to distinguish the judgement in Bortolazzo and Another v Comcare on the basis that, in that matter the change in earnings was caused by a change in the general conditions of employment applicable to the applicants and not, as in Mr Hobday’s case, a change which was particular to him. In Bortolazzo the applicants’ entitlements changed because of a cessation of duties requiring the payment of shift allowances. These changes applied to all employees in the same positions as the applicants.
I cannot accept this argument. The cause of the reclassification of Mr Hobday’s position was his own conduct, not that of Ms Major. The proposition put by Counsel confuses the conduct in respect of which the sanction was imposed with the conduct which may have given rise to the investigation which ultimately led to the findings against Mr Hobday. It is unnecessary to make a finding as to the role of Ms Major in the Code of Conduct proceedings as, in my view, her involvement in that process is irrelevant.
Counsel put to me that the judgement in Bortolazzo illustrates the application of subsection 8(10) as Parliament intended. However, there is nothing in subsection 8(10) to suggest that changes as a result of individual circumstances are excluded from its operation. This is made clear by the judgement in Comcare v Simmonds. In that case the change which brought about the reduction in compensation for incapacity was Mr Simmonds’ personal decision to move to a position for which a particular allowance he was receiving prior to his injury was no longer payable. It was this decision which caused his normal weekly earnings to be reduced; there was no change in the general conditions of employment as experienced by the applicants in Bortolazzo.
CONCLUSION
The reviewable decision made 27 February 2015 to reduce the weekly rate of compensation payable to Mr Hobday for incapacity from 19 May 2014, will be affirmed.
I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance. ................[sgd]........................................................
Associate
Dated 19 July 2016
Date of hearing 7 April 2016 Date final submissions received 7 April 2016 Counsel for the Applicant Mr L Grey Solicitors for the Applicant J Matthews; Brydens Law Counsel for the Respondent Mr P Woulfe Solicitors for the Respondent B Dean; 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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Appeal
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Causation
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Remedies
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Statutory Construction
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