Howarth v Bosmac Pty Ltd
[2005] NSWWCCPD 49
•9 June 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Howarth v Bosmac Pty Ltd [2005] NSW WCC PD 49
APPELLANT: Gary Howarth
RESPONDENT: Bosmac Pty Ltd
INSURER:GIO Workers Compensation (NSW) Ltd
FILE NUMBER: WCC16996-03
DATE OF ARBITRATOR’S DECISION: 21 July 2004
DATE OF APPEAL DECISION: 9 June 2005
SUBJECT MATTER OF DECISION: Findings of fact in relation to section 40 of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Adams Leyland Solicitors
Respondent: Rankin Nathan Lawyers
ORDERS MADE ON APPEAL: (1) That part of the Arbitrator’s decision dated 21 July 2004 ordering the Respondent to pay the Appellant’s expenses pursuant to section 60 of the Workers Compensation Act 1987 is confirmed.
(2) That part of the same decision making an award in favour of the Respondent in respect of the Appellant’s claim for weekly compensation payments, is revoked and the matter is remitted to the Arbitrator for determination of the Appellant’s entitlement to weekly compensation payments pursuant to section 40 of the Workers Compensation Act 1987 in accordance with the reasons for this decision.
(3) The Respondent is to pay the Appellant’s costs as agreed or assessed.
BACKGROUND TO THE APPEAL
On 10 August 2004, the Appellant, Gary Howarth, sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 21 July 2004.
The Respondent to the Appeal is Bosmac Pty Ltd (‘Bosmac’).
Mr Howarth was born on 29 July 1969 and is aged 35. He is married with five children now aged 6 to 19, all of whom were dependants at the relevant time.
Mr Howarth is a qualified welder and commenced employment with Bosmac in Parkes, NSW, under the classification ‘boilermaker’ on 26 November 2001. His duties included repairing farm and mining equipment. He was injured in an accident at work on 30 January 2003 when he was cutting the walls out of a mining bucket and the bucket slipped to one side hitting his left leg. He notified Bosmac of the injury that day.
Following the accident, Mr Howarth was off work until 3 February 2003. He then returned to work, performing his normal duties until early June 2003. At that time, he aggravated his left knee condition during the course of his work and consulted his treating doctor, Dr Soheir Abadier, who referred him to an Orthopaedic Surgeon in Orange, Dr Geoffrey Mutton. On 12 June 2003, Dr Abadier certified Mr Howarth as fit for “suitable duties” from 13 June 2003 for 8 hours a day, five days a week, with no heavy lifting and no squatting or kneeling. This continued until 31 August 2003 when the hours Dr Abadier certified that Mr Howarth was capable of working were increased to 48 hours per week.
By letter dated 16 September 2003, Mr Howarth claimed weekly compensation payments to make up for loss of overtime, together with medical expenses for treatment of his left knee. By letter dated 1 October 2003, Bosmac denied liability for payment of weekly payments, denying that Mr Howarth had “lost” any overtime: Bosmac contended that Mr Howarth had always refused to be inducted for underground maintenance work and there had otherwise been a downturn in the availability of overtime. On 30 October 2003, Mr Howarth’s solicitors lodged an ‘Application to Resolve a Dispute’ with the Commission.
The Arbitrator held teleconferences with the parties on 4 March and 23 March 2004. At the latter teleconference, the parties agreed that the matter should be determined ‘on the papers’ without a conference or formal hearing. The Arbitrator was satisfied that the parties had had sufficient opportunity to explore the possibility of a settlement and had been unable to reach an agreement. He therefore proceeded to make a determination ‘on the papers’.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 21 July 2004, records the Arbitrator’s orders as follows:
“1. Award for the Respondent in respect of the Applicant’s claim for weekly payments.
2. Respondent to pay the Applicant’s section 60 expenses upon production of accounts and/or receipts.”
The Arbitrator found:
“the reason for the Applicant not being able to have overtime available to him is because of a downturn in the Respondent’s business.”
ISSUE IN DISPUTE
The issue in dispute in the appeal is whether the Arbitrator failed to properly take into account the evidence in making his findings of fact and applying section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’).
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties 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, which provides:
“352Appeal against decision of Commission constituted by Arbitrator
(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b)at least 20% of the amount awarded in the decision appealed against.
(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4)An appeal can only be made within 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.”
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
With regard to section 352(2), Mr Howarth’s solicitors assert that the amount in dispute is $8,384.88, being the shortfall in Mr Howarth’s earnings for the period 11 June 2003 to 7 January 2004. They contend that the shortfall over this period of 28 weeks averaged $299.46 per week, making a total of $8,384.88. I note that the medical expenses sought at the time of Mr Howarth’s original claim appear to have comprised $3,907 in respect of proposed surgery to his left knee (Dr Mutton’s letter to Bosmac dated 20 August 2003) plus a few relatively small unpaid accounts of Dr Abadier (letter to Mr Howarth’s solicitors dated 14 October 2003).
I am satisfied that the weekly compensation in dispute exceeds $5,000 which is more than 20% of the award in respect of medical expenses made by the Arbitrator. Thus, I am satisfied that I should grant leave to appeal and leave is granted.
FRESH EVIDENCE
Fresh evidence on appeal is governed by section 352(6) of the 1998 Act, which states:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No. 6 sets out the process for seeking leave of the Commission to give ‘fresh evidence’ on appeal. The ‘Application – Appeal Against a Decision of an Arbitrator’ must include:
“- a schedule of the new evidence
– a copy of the new evidence
– a brief outline of the new evidence and the reasons why it was not given in the proceedings before the Arbitrator, and
– submissions on why the new evidence should be admitted.”
The Practice Direction also provides as follows:
“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, the party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably be obtained by and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
Mr Howarth’s solicitors seek the admission of new evidence, namely newspaper clippings from the Parkes Champion Post dated 9 and 14 July 2004. They submit that this evidence, which came into existence after the Arbitrator’s determination,
“clearly indicates that the Respondent had obtained a significant contract to be performed from Nash Tanks as indicated in the Applicant’s statement and the statement of Gary Hardy.
The contract was obtained within the period of the Applicant’s section 40 claim and [sic] consistent with the Applicant’s assertion that overtime was available but not provided to same due to his incapacity for work.
We therefore submit that a substantial injustice would be occasioned to the Applicant if such evidence was not allowed in these proceedings.”
Bosmac’s solicitors deny that the newspaper clippings have any probative value. They submit that the clippings say nothing about whether overtime was available to any Bosmac employees as a result of it being involved in the construction of a new building for Nash Tanks in Parkes. Moreover, even if admitted, the Commission should attach no weight to the clippings because they lack relevance and are of no probative value.
The admission of new or fresh evidence in an appeal has been considered by the Commission in a number of cases and the principles are well established: see, for example, Shipman Pty Ltd v Matters [2003] NSW WCC PD 19, McMahon v Laguna and Lavella t/as the Vessel “Nimble II” [2003] NSW WCC PD 22. The factors that weigh in favour of the exercise of the discretion to admit fresh evidence in an appeal include:
• if the request is refused, a substantial injustice will result to the party who seeks to have the evidence admitted;
• the evidence could not have been discovered, with reasonable diligence, at the time of the original proceedings; and
• the evidence is of such probative value that there is a high degree of probability that it would lead to a different outcome in the case.
Factors weighing against the exercise of the discretion include:
• the interest in the finality of the litigation and the importance of the successful party being able to rely on the outcome of the proceedings;
• the prejudice, if any, that may result to the other party, particularly if the fresh evidence raises new arguments in the appeal; and
• the intention of the legislative scheme in relation to the nature of the proceedings.
With regard to the intention of the legislative scheme, it should be noted, in particular, that section 352(5) of the 1998 Act provides that “[a]n appeal under this section is to be by way of review of the decision appealed against” – the appeal is not a rehearing of the matter. The Presidential member’s role is to review the decision of the Arbitrator, and the Presidential member may only revoke, substitute or remit in relation to that decision (section 352(7)) where it can be demonstrated that the decision is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).
I note that Bosmac’s solicitors do not dispute “that the available overtime work in July 2003 was to build a workshop which required labourers” (Bosmac’s submissions dated 2 June 2004). I therefore fail to see how the newspaper clippings add anything significant to the evidence that is already before the Commission. It seems to me there are two issues in this regard. The first is the overall availability of overtime and whether, as Bosmac contends, less overtime was available than previously during the relevant period. The second issue is how and on what basis such overtime as was available was shared between Bosmac’s employees. The newspaper clippings would make no significant contribution to a resolution of these issues. In my opinion, the evidence is not of such probative value that it would make any difference to the outcome in this appeal, and I am not satisfied that to refuse admission of this evidence would lead to a substantial injustice to Mr Howarth. Leave to introduce the newspaper clippings as new evidence is therefore refused.
SUBMISSIONS
Mr Howarth’s solicitors submit that the Arbitrator misapplied section 40 of the 1987 Act. In particular, he failed to take into account the following admissions made by Bosmac:
“(i) The Applicant worked overtime prior to injury.
(ii) Following his return to work the Applicant worked little or no overtime.
(iii)That the Applicant worked less hours than comparable employees.”
Mr Howarth’s solicitors submitted that the Arbitrator failed to take these admissions into account in determining on the balance of probabilities what Mr Howarth would have earned had he not been injured and, thereby, the Arbitrator made an error of law. Moreover, the Arbitrator “has erred in law as an award was made in favour of the Applicant for section 60 expenses and that the Applicant’s costs follow the event”.
Bosmac’s solicitors submit, in relation to section 40(2) of the 1987 Act:
“The fact that the Appellant’s average weekly earnings after the injury are less than his weekly earnings prior to the injury does not establish the Worker’s entitlement to an Award pursuant to Section 40. The Appellant must show his actual post injury earnings are less than what he probably would have earned in the same or some comparable employment but for the injury.”
They noted that it is Mr Howarth’s actual post injury earnings that are relevant for the purposes of section 40(2)(b) of the 1987 Act. The Arbitrator acknowledged that Mr Howarth worked less overtime after his return to work than prior to his injury. However, the Arbitrator found that this was because of a downturn in Bosmac’s business and not because of Mr Howarth’s injury. Bosmac’s solicitors submitted that the Arbitrator’s finding that Mr Howarth would not have been able to work overtime even if he had not been injured was correct and supported by probative evidence, namely that of Mr Ehsman, Mr Cornelissen and Mr McMaster.
With regard to costs, Bosmac’s solicitors submit that the section 60 claim for medical expenses would have been resolved whether or not it was referred to the Commission. The reason for the delay in Bosmac determining the claim was that it was awaiting a report on the projected costs of the proposed surgical procedure. The arthroscopic surgery was subsequently approved and took place on 6 January 2004. Thus, Bosmac submits it was unnecessary to commence proceedings for compensation under section 60 in respect of the proposed surgery. The Arbitrator’s decision not to award costs in favour of Mr Howarth was a proper exercise of his discretion. In the alternative, if the Commission considers the Arbitrator did err in exercising his discretion with respect to costs, then costs should not be awarded in connection with the work associated with lodging and dealing with the section 60 claim prior to the commencement of proceedings since this was essentially the same as that done in connection with the claim for weekly compensation.
EVIDENCE
There is no dispute as to the accident and consequent injury that Mr Howarth suffered in the course of his employment. Bosmac have conceded liability and accepted his claim for compensation. The outstanding dispute relates to his entitlement to overtime in the 28-week period 11 June 2003 to 7 January 2004. In Mr Howarth’s statement of 12 March 2004, he claims that Bosmac had overtime available but did not provide this to him because of the restrictions placed on his employment as a result of his WorkCover Medical Certificates.
Mr Howarth’s WorkCover Medical Certificates from 12 June 2003, in respect of the period from 13 June 2003 to 30 August 2003, record that he was “fit for suitable duties” for 40 hours a week, with no heavy lifting, squatting or kneeling. His Medical Certificates from 1 September 2003, in respect of the period from 31 August 2003 to 3 November 2003, record that he is fit for suitable duties for 48 hours per week, with the exception of the period 9 to 16 October 2003 when he was unfit for work. From 4 November 2003 until 13 February 2004, Mr Howarth was unfit for work, with the surgery to his left knee being performed on 6 January 2004.
The WorkCover Medical Certificate issued by Dr Abadier immediately following Mr Howarth’s accident and dated 30 January 2003, states that Mr Howarth was unfit for work from 30 January 2003 to 3 February 2003. Mr Howarth says in his statement made on 6 November 2003, at paragraph 11, that when he returned to work in February 2003:
“I was placed back on my normal duties and performing overtime as previously performed. I was able to perform these duties albeit with difficulty however at the end of May [sic] approximately beginning of June 2003 I was instructed to attend North Parkes Mine to do above ground work on a feed bin. Whilst performing this duty I have to tentatively walk up and down numerous stairs in a shift of 14 hours and then a shift of 13 hours. This aggravated my left knee condition and I reported the aggravation to my supervisor Hank Corneilson [sic]. Further as a result of such aggravation I again consulted my general practitioner Dr Abadier on 3 June 2003. The doctor referred me for further x-ray and CT scan. On review of such investigative procedures I was referred to orthopaedic specialist Dr Mutton of Orange. I was also given a medical certificate to perform suitable duties. I was required to perform no heavy lifting, no squatting or kneeling however was capable of performing my 8 hours per day, 5 days a week.
12. During this period I was given duties by my employer as per my normal duties with the exception of no heavy lifting, no squatting or kneeling and the non-performance of overtime. These suitable duties with these restrictions remained until 31 August 2003 whereupon the restrictions remained the same but my capabilities were for 48 hours per week. My doctor put in the 48 hours per week pursuant to my request, as I was unable to pay my bills on the reduced wages that I was receiving of [sic] the period between 13 June and 31 August 2003.
13. I remain on [sic] fit for suitable duties pursuant to such restrictions on a 48 hour week to date and continuing. During this period I have attempted to perform overtime on 2 occasions however on each occasion the overtime aggravated my injury due to the length of time I had to stand and as a result if overtime is available I am no longer in a position to perform it.”
The General Manager of Bosmac, Robert Ehsman, in a statement dated December 2003, stated that prior to his injury on 30 January 2003, Mr Howarth:
“was working on average about 51.7 hours per week in the calendar year 2002. His average weekly pay that year was $917 gross per week.”
With regard to the availability of overtime, Mr Ehsman said:
“9. In late 2002 our major customer, Northparkes mine, reduced their business and we lost most of their business. For about one or two months before his accident he [Mr Howarth] was only working 3 to 4 hours overtime per week.
10. After he returned to work in February [2003] the overtime available reduced dramatically throughout the factory. We lost further business in July this year [2003] when another major customer Lachley Meats closed.”
In his statement made on 6 November 2003, Mr Howarth states that [in 2003] Bosmac obtained a contract with Nash Tanks to build a workshop in Parkes and that Bosmac was providing overtime to ensure the work was completed by 1 February 2004. Mr Howarth said he was unable to perform such overtime duties due to his injury. In a statement dated 18 April 2004, Gary Hardy, a former fellow employee with Mr Howarth, dates Bosmac’s obtaining this contract to July 2003. As stated above, Bosmac’s solicitors acknowledge that “the available overtime work in July 2003 was to build a workshop”.
Mr Hardy, who was also a boilermaker but, unlike Mr Howarth, worked both above ground and underground, stated that between June and December 2003 he performed overtime above ground at “HWE Open Cut North Park Mines” working on buckets. He
“requested Gary Howarth assist me on a couple of jobs at HWE Open Cut regarding above ground bucket work, this was declined by Bosmac Pty Ltd as they said he was on light duties”.
Nevertheless, Mr Hardy acknowledged that there were fluctuations in overtime in 2003.
A number of the statements go to the amount of overtime that would have been available to Mr Howarth had he not been injured. In a letter dated 1 October 2003, Mr Ehsman noted that:
“Of particular importance, is the fact that Mr Howarth did not want to be inducted for underground mining and he could not be used for any underground maintenance work.”
A second statement by Mr Ehsman dated 6 April 2004, draws a comparison between the overtime worked by Mr Hardy who, unlike Mr Howarth, was a leading hand boilermaker, in the period 11 June 2003 to 7 January 2004. Allowing for adjustments, including a reduction for time Mr Hardy worked underground, Mr Ehsman calculated a difference of 87.44 hours overtime not worked by Mr Howarth. Allowing for some of these hours to be paid at time and a half and others at double time, he calculated the difference in money terms to be $2,133.46. However, Mr Ehsman stated that had Mr Howarth been fit for pre-injury duties and willing to work overtime, there was no guarantee that he would work the total hours worked by Mr Hardy.
Attached to Mr Ehsman’s statement dated 6 April 2004 were two other statements. The first was a statement from Hank Cornelissen, Mine Site Foreman, dated 26 March 2004, explaining the process used to select employees for overtime, which takes into account capability, availability and sharing of overtime, with exceptions to that process in the case of client knowledge, request or need. In the second statement, dated 29 March 2004, Peter McMaster, Factory Foreman, said that “all overtime is relative to each person’s ability, knowledge and acceptance and willingness to do job at hand”. Mr McMaster said the “total amount of overtime owing to Gary Howarth, would only be 50% of what Gary Hardy earnt”.
DISCUSSION AND FINDINGS
As stated above, the issue in dispute in the appeal is whether the Arbitrator failed to properly take into account the evidence in making his findings of fact and applying section 40 of the 1987 Act. In particular, did the Arbitrator make a legal, factual or discretionary error? The admissions made by Bosmac, to which Mr Howarth’s solicitors draw attention, include that after he returned to work following his accident, Mr Howarth worked less hours than comparable employees.
There is no dispute that Mr Howarth worked overtime before his accident. His pay slips show that he continued to work a reasonably significant amount of overtime after his return to work in the period 13 February 2003 to 4 June 2003 (Attachment F to his statement of 12 March 2004). However, in the last two months of that period, it would appear that Mr Howarth’s overtime was declining, there being a period of 6 weeks when his overtime was between 1.20 and 2.00 hours a week. In the period 5 June 2003 to 7 January 2004, his pay slips show only two weeks where he worked more than two hours overtime (Attachment G to his statement of 12 March 2004).
Having read Mr Howarth’s statements and looked at his pay slips, I am satisfied that he would have performed overtime in the period 11 June 2003 to 7 January 2004 had he been capable of doing so and had the overtime been available. I am also satisfied from Mr Ehsman’s statements and that of Mr Hardy, that there continued to be some overtime available to Bosmac’s employees in that period, albeit that the availability of overtime was reduced as a result of a downturn in Bosmac’s business.
I therefore disagree with the Arbitrator’s finding that “the reason for the Applicant not being able to have overtime available to him is because of a downturn in the Respondent’s business”, because this is only a part of the story. Thus, the Arbitrator made a factual error –that had a significant effect on his decision. In my view, the evidence supports two separate findings. Firstly, there was reduced overtime available to comparable Bosmac employees in the period 11 June 2003 to 7 January 2004 relative to previous periods, because of a downturn in Bosmac’s business. However, secondly, the evidence also supports a finding that in the period 11 June 2003 to 7 January 2004, Mr Howarth was not capable of performing his full pre-injury duties. He was certified as being “fit for suitable duties” with no heavy lifting, squatting or kneeling for 40 hours a week from 13 June to 30 August 2003 and for 48 hours a week from 31 August 2003. He was also certified as “unfit for work” as a result of his knee condition for the period 9 to 16 October 2003 and from 4 November 2003 to 13 February 2004.
I note that the capability for performing an overtime task or job is one of the criteria taken into account by Hank Cornelissen, Bosmac’s Mine Site Foreman (statement of 26 March 2004), and Peter McMaster, Bosmac’s Factory Foreman (statement of 29 March 2004), when deciding on the allocation of overtime among employees. Capability includes having both the necessary knowledge and skill, but also the physical ability to do something. Thus, the restrictions imposed by Mr Howarth’s injury on his physical ability would obviously affect his capability for certain tasks or jobs. A comparison of Mr Howarth’s overtime for the period 13 February to 4 June 2003 shows that when there were no restrictions imposed on Mr Howarth’s ability to work, he was still being allocated some overtime. In the period after restrictions were imposed, with the exception of the weeks beginning 11 and 18 September 2003, he was not being allocated overtime. Given the evidence of Mr Hardy and Mr Ehsman that other employees were being allocated some overtime, albeit less than that allocated in other comparable periods, it seems to me that the conclusion that Mr Howarth was being allocated less overtime because of the restrictions imposed by his injury is inescapable and I therefore find to this effect.
The question then is how much overtime did Mr Howarth loose because of his injury? I accept that a comparison with the overtime he worked in the same period in the previous calendar year, 2002, is not definitive because Bosmac was suffering a downturn in business in 2003. It would seem that the best comparison is therefore the overtime performed by comparable employees in the period 11 June 2003 to 7 January 2004. There was some disagreement between the parties about identifying a comparable employee to Mr Howarth, but, ultimately, Mr Ehsman supplied details of the overtime worked by Mr Hardy in this period, even though Mr Ehsman noted that “Mr Hardy was a Leading Hand boilermaker with far greater expertise than Mr Howarth” (statement of 6 April 2004, paragraph 4). Mr Ehsman calculated that the adjusted difference between the hours worked by Mr Hardy and by Mr Howarth was 87.44 hours (some hours at time and a half and some at double time), giving a gross figure of $2,133.46 less overtime pay received by Mr Howarth. However, Mr Ehsman then halved this amount to $1,066.73 “to give a realistic figure for Mr Howarth’s claim” (statement of 6 April 2004, paragraph 14) by allowing for the finite amount of overtime which was available and which had to be shared between capable, willing and available employees. Mr McMaster stated that the amount of overtime owing to Mr Howarth “would only be 50% of what Gary Hardy earnt”.
I note that Mr Howarth’s solicitors dispute Mr Ehsman’s figures, instead seeking to rely on the average overtime worked by Mr Howarth in the six months prior to the date of the accident.
Compensation in the form of weekly payments for partial incapacity is calculated in accordance with section 40 of the 1987 Act. Section 40(1) states:
“(1) Entitlement
The weekly payment of compensation to an injured worker in respect of any period of partial incapacity for work is to be an amount not exceeding the reduction in the worker’s weekly earnings, but is to bear such relation to the amount of that reduction as may appear proper in the circumstances of the case.”
The approach to be adopted in determining an entitlement under section 40 was set out by the NSW Supreme Court, Court of Appeal, in Mitchell v Central West Health Service (1997) 14 NSW CCR 526 (‘Mitchell’) at 529. A decision-maker is required:
“1. To determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)) …
2. To determine ‘the average weekly amount the worker is earning or would be able to earn in suitable employment from time to time after the injury’ (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following:(a)the determination is to be based on the worker’s ability to earn in the general labour market reasonably 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 …
3. To subtract the figure derived from 2 from the figure derived from 1 (section 40(2).
4. To decide whether and to what extent the reduction calculated as above bears ‘such relation to the amount of the reduction as may appear proper in the circumstances of the case’ (section 40(1)) …
5. To make an award in the amount arrived at in step 4.”
The difficulty in Mr Howarth’s case is in calculating the amount at step 1. Given my finding that Bosmac’s business was suffering a downturn in 2003, with the consequence that Mr Howarth would have had less overtime available to him even if he had been uninjured during the period 11 June 2003 to 7 January 2004, Mr Howarth’s earnings for the comparable period before the injury occurred when more overtime was available cannot be used in the calculation. A determination must be made of the weekly amount Mr Howarth would probably have earned in the period 11 June 2003 to 7 January 2004 but for the restrictions imposed by his injury, having regard to the reduced overtime that was available to comparable employees during this period.
Given the disagreement between the parties as to the facts on this issue – in particular, as to the accuracy of Mr Ehsman’s figures in his statement of 6 April 2004, and that this review is one ‘on the papers’, the appropriate course is to remit the matter to the Arbitrator to determine Mr Howarth’s entitlement to weekly payments in accordance with these reasons and the approach set out in Mitchell.
DECISION
(1) That part of the Arbitrator’s decision dated 21 July 2004 ordering the Respondent to pay the Appellant’s expenses pursuant to section 60 of the 1987 Act is confirmed.
(2) That part of the same decision making an award in favour of the Respondent in respect of the Appellant’s claim for weekly compensation payments is revoked and the matter is remitted to the Arbitrator for determination of the Appellant’s entitlement to weekly compensation payments pursuant to section 40 of the 1987 Act, in accordance with the reasons for this decision.
COSTS
The Respondent is to pay the Appellant’s costs as agreed or assessed.
Robin Handley
Acting Deputy President
9 June 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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