Hobday and Comcare (Compensation)

Case [2016] AATA 504

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 President

CATCHWORDS

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

  1. 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).

  2. 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.

  3. Mr Hobday has applied to the Tribunal to review Comcare’s decision. For the reasons which follow the decision will be affirmed.

    BACKGROUND

  4. Unless otherwise stated, the findings of facts set out in these reasons are based on the evidence of Mr Hobday.

  5. 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.

  6. 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.

  7. 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.

  8. In the following months Mr Hobday raised with management a number…

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Details
AGLC
Hobday and Comcare (Compensation) [2016] AATA 504
Case
[2016] AATA 504
Decision Date

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered a review of Comcare's decision to reduce the weekly compensation payable to Mr Hobday. Mr Hobday had lodged a claim for workers' compensation after experiencing psychological distress arising from workplace incidents, which Comcare accepted. Comcare subsequently calculated Mr Hobday's normal weekly earnings (NWE) and commenced paying compensation based on this figure. However, Comcare later determined to reduce the weekly compensation payable from a specified date.

The central legal issue before the Tribunal was whether Comcare's decision to reduce Mr Hobday's weekly compensation payments, effective from 19 May 2014, was correct. This required the Tribunal to interpret and apply the provisions of the *Safety, Rehabilitation and Compensation Act 1988* (Cth), specifically section 8 concerning the calculation of normal weekly earnings and subsection 8(10) which provides for a reduction in compensation in certain circumstances.

The Tribunal's reasoning was guided by established legal principles concerning the operation of section 8(10). It noted that subsection 8(10)(a) applied to Mr Hobday's situation, which deals with employees who continue to be employed by the Commonwealth. The Tribunal affirmed that the purpose of compensation is to ensure an injured employee is not worse off due to their injury, but conversely, should not be better off. The correct test under section 8(10) is whether an incapacitated employee's NWE amount in any week after an injury exceeds the weekly earnings they would receive in continuing employment, not simply whether they are "better off" compared to their actual earnings post-injury. The Tribunal found that changes in an employee's individual circumstances, which affect their NWE, are not excluded from the operation of subsection 8(10), as demonstrated by the case of *Comcare v Simmons*.

Consequently, the Tribunal affirmed the reviewable decision made on 27 February 2015 to reduce the weekly rate of compensation payable to Mr Hobday for incapacity from 19 May 2014.

Orders

Orders of the court

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Background

Background to the litigation

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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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.CONSIDERATIONThe 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