Knight v The State of South Australia

Case •

[2022] SASCA 14

•

4 March 2022

SUPREME COURT OF SOUTH AUSTRALIA

(Court of Appeal: Civil)

KNIGHT v THE STATE OF SOUTH AUSTRALIA & ANOR

[2022] SASCA 14

Judgment of the Court of Appeal  

(The Honourable President Kelly, the Honourable Justice Livesey and the Honourable Justice Bleby)

4 March 2022

WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - EMPLOYMENT RELATED INJURY, DISABILITY OR DISEASE - GENERALLY

WORKERS' COMPENSATION - ASSESSMENT AND AMOUNT OF COMPENSATION - AMOUNT OF COMPENSATION DURING INCAPACITY - CALCULATION OF WEEKLY EARNINGS

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION

This is an appeal against a decision of the Full Bench of the South Australian Employment Court, concerning the question whether weekly payments of compensation made pursuant to s 39 of the Return to Work Act 2014 (SA) (the Act) are taken to be earnings pursuant to s 5 of the Act.

The appellant worked as a teacher.  In April 2011, she was working full-time when she suffered a psychiatric injury following an incident in her classroom. She claimed and was paid compensation in accordance with the now repealed Workers Rehabilitation and Compensation Act 1986 (SA). When she returned to work, she did so on reduced hours due to her ongoing incapacity. In April 2017, the appellant was working part-time as a teacher when she suffered a recurrence of her psychiatric injury as the consequence of another incident at school. She made a claim under the Act. On 18 September 2017, the respondent accepted her claim as an aggravation of the earlier psychiatric injury.

At first instance, the trial Judge found that weekly payments of compensation for the appellant’s prior injury did not constitute a payment of leave which could be considered in the calculation of her average weekly earnings pursuant to s 5(3), and that s 5(9) of the Act does not apply to a prior injury but is confined to the work injury for which compensation is claimed.

On appeal, the Full Bench upheld the trial Judge, finding that neither ss 5(3) nor 5(9) of the Act permitted the appellant’s weekly compensation payments during the relevant period to be included in the calculation of her average weekly earnings.

The appellant contended that the Full Bench erred in finding that the appellant’s work injury of 7 April 2011, which affected the level of earnings of the appellant in the relevant period, was not a “work injury” for the purposes of s 5(9) of the Act when calculating her average weekly earnings for her aggravation injury. The appellant further contended that the Full Bench erred in failing to find that the absence of a worker from the workplace while recovering from a work injury constituted, “other leave” for the purposes of s 5(3) of the Act, and therefore erred in finding that the receipt of weekly payments of compensation does not constitute an “amount paid” for the purposes of that section.

Held (by the Court) granting permission to appeal:

1.The Full Bench was correct to conclude that payments of workers compensation are not to be taken into account as amounts paid while a worker is on leave for the purposes of s 5(3) of the Act.

2.The Full Bench was correct to conclude that the words “a work injury” in s 5(9) of the Act referred to the injury for which average weekly earnings must be set and did not extend to a prior injury.

3.      The appeal is dismissed.

Long Service Leave (Calculation of Average Weekly Earnings) Amendment Act 2015 (SA); Long Service Leave Act 1987 (SA); Return to Work Act 2014 (SA) ss 3, 4, 5, 7, 33, 37, 39, 56, 58, 188; Workers Rehabilitation and Compensation Act 1986 (SA) s 4, referred to.
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; Amalgamated Wireless (A/asia) Ltd v Philpott (1961) 110 CLR 617; Australian Leisure and Hospitality Group Pty Ltd v Director of Liquor Licensing [2012] WASC 463; Badenhorst v Teys Bros (Naracoorte) Pty Ltd [2011] FWA 5622; Bridge v Mattis [1953] 52 AR (NSW) 49; Commonwealth v Baume (1905) 2 CLR 405; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Ltd [2020] FCAFC 205; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485; Frkic v Return to Work Corporation of South Australia (No 2) [2020] SASCFC 59; Grain Elevators Board (Vic) v Dunmunkle Corp (1946) 73 CLR 70; Hall v Medical Imaging Queensland Pty Ltd [2015] FCCA 326; Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249; K&S Lake City Freighters Pty Ltd v Gordon and Gotch Ltd (1985) 157 CLR 309; Knight v Department for Education [2019] SAET 64; Knight v Department for Education [2020] SAET 250; Kuerschner v WorkCover Corporation/Employers Mutual Ltd (Masonic Homes Inc) and Resthaven Inc [2011] SAWCT 6; Last v WorkCover Corporation (Australian Fishing Enterprises Pty Ltd [2010] SAWCT 54; Lee v Hills Before and After School Care Pty Ltd [2007] FMCA 4; Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) 94 ALJR 818; Ogden Industries Pty Limited v Lucas (1968) 118 CLR 32; Perry v Wright; Cain v Frederick Leyland & Co. (1900), Limited; Bailey v GH Kenworthy, Limited; Gough v Crawshay Brothers, Cyfartha, Limited [1908] 1 KB 441; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; R v Berchet (1688) 1 Show KB 106; R v Gronert (1975) 13 SASR 189; Redman v Return to Work Corporation of South Australia [2021] SASCA 25; Return to Work Corporation of South Australia v Watkins [2017] SASCFC 149; State of South Australia (In Right of Dept for Health and Ageing (SA Ambulance Service)) v Dohnt and Others (2021) 138 SASR 270; Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853; WorkCover Corporation (SE Meat Australia Ltd) v Shortt (1990) 2 WCATR 10; WorkCover Corporation v Jakas (2003) 86 SASR 20; WorkPac Pty Ltd v Bambach [2012] FWAFB 3206, considered.

KNIGHT v THE STATE OF SOUTH AUSTRALIA & ANOR
[2022] SASCA 14

Court of Appeal – Civil:  Kelly P, Livesey and Bleby JJA

THE COURT:

  1. The appellant worker sustained an aggravation to a prior psychiatric injury whilst working part-time as a teacher.[1] The issue arising on this appeal is whether, when calculating her average weekly earnings pursuant to s 5 of the Return to Work Act 2014 (SA) (the Act), weekly payments of compensation made pursuant to s 39 of the Act are taken to be earnings.

    [1]     On 19 February 2021, Doyle JA referred the question of permission to appeal for argument as on appeal. As permission should be granted, we shall refer to the applicant as the appellant.

  2. In effect, the question is whether s 5 of the Act permits the calculation of average weekly earnings based upon full-time earnings (including weekly payments of compensation) or only actual, part-time earnings.

  3. The appellant says that weekly payments of compensation must be included, amongst other reasons, because s 5(3) of the Act provides that amounts paid whilst on leave will be taken to be earnings:

    For the purposes of this section, any amount paid while a worker was on annual, sick or other leave will be taken to be earnings.

  4. Alternatively, or in addition, the appellant contends that the term “a work injury” in s 5(9) of the Act includes a “prior work injury”:

    If because of a work injury or the gradual onset of a work injury it appears that the level of earnings of an injured worker prior to the relevant date were affected by the injury, the average weekly earnings of the worker must be set at an amount that fairly represents the weekly amount that the worker would have been earning if the level of earnings had not been so affected.

  5. Although the appellant also relied on s 5(6) of the Act, it was conceded at trial and on appeal that the proper application of that provision confined the appellant worker to the rate she was receiving at the time of the aggravation. Excluding weekly payments of compensation, that rate was equivalent to 0.6 of a full-time equivalent (that is, the 0.6 FTE rate).[2] Given that concession, this case does not present an opportunity to address the potential operation and scope of s 5(6) of the Act, nor the effect of Last v WorkCover Corporation (Australian Fishing Enterprises Pty Ltd or whether it was correctly decided.[3]

    [2]     Knight v Department for Education [2020] SAET 250, [29] (Gilchrist and Rossi DPJJ).

    [3]     Last v WorkCover Corporation (Australian Fishing Enterprises Pty Ltd) [2010] SAWCT 54 (Last).  See the analysis of this case in Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [66]-[82] (Gilchrist and Rossi DPJJ).

  6. For the reasons that follow, the calculation of the appellant’s average weekly earnings made pursuant to s 5(1) of the Act is confined to that which she was receiving in exchange for her labour. The amounts received by way of weekly payments of compensation pursuant to s 39 of the Act must be left out of account. Weekly payments of compensation are not amounts paid whilst on leave within the meaning of s 5(3) of the Act. In addition, the reference in s 5(9) to “a work injury” means the injury for which average weekly earnings must be set; it does not extend to a prior injury, particularly one for which the worker has received, or is entitled to receive, compensation.

  7. Accordingly, permission to appeal should be granted but the appeal must be dismissed.

    The factual background

  8. The appellant worker has been a teacher for over a decade.  On 7 April 2011 she was working full-time when she suffered a psychiatric injury by reason of an incident in her classroom.  She claimed and was paid compensation pursuant to the now repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act).  When she returned to work, she did so on reduced hours because of ongoing incapacity.

  9. By April 2017, the appellant was working at 0.4 FTE at a different school, but still for the Department for Education. On 5 April 2017 she suffered a recurrence of her psychiatric injury as the consequence of another incident at school. By this time the Act was in operation and her claim was made pursuant to it. By determination dated 18 September 2017, the respondent accepted the claim as an aggravation of the earlier psychiatric injury.

  10. At the time of the 5 April 2017 injury, the appellant was still in receipt of weekly payments of compensation by way of income maintenance in connection with her earlier injury. These were described as “top-up” payments. That entitlement, however, ceased by operation of the Act at the end of June 2017.

  11. A dispute then arose regarding the correct calculation of average weekly earnings for the purposes of the appellant’s 5 April 2017 aggravation injury.

  12. In the 12 months before 5 April 2017, the appellant worked at different schools in different roles on differing part-time hours, albeit all for the same employer, the respondent. Her hours ranged between 0.4 and 0.6 FTE, although there was a period when she was completely incapacitated for work.

    The decision at first instance

  13. At the trial the parties agreed a calculation of the appellant’s average weekly earnings for the purposes of s 5(1) of the Act at $804.84, being an average of the earnings received in the 12 months before injury. This average excluded any “top-up” payments of compensation.

  14. Based on the concession made with respect to s 5(6) of the Act, earlier mentioned, the Deputy President found that the $804.84 calculation should not be used and, for the purposes of s 5(1) and s 5(6), the appellant’s average weekly earnings in respect of the aggravation sustained on 5 April 2017 should be calculated at the rate of 0.6 FTE. The trial Judge found that the circumstances came within “the terms of the worker’s employment or for any other reason” for the purposes of s 5(6) of the Act.

  15. The Deputy President had regard to a Return to Work Plan made in February 2017, under which the appellant and the respondent had agreed that the appellant would be provided with and undertake teaching duties at 0.6 FTE.  The only reason the appellant was performing less hours was that 0.4 FTE was all that the Department could then offer.  According to the Deputy President:[4]

    It would not be fair to visit upon Ms Knight a reduced level of average weekly earnings on account of her employer’s failure to provide the work that she was certified fit to do, was willing to perform and both had agreed as part of the return to work plan.

    [4]     Knight v Department for Education [2019] SAET 64, [45] (Kelly DPJ).

  16. No challenge is made to this aspect of the decision. The Deputy President rejected the appellant’s arguments concerning ss 5(3) and 5(9) of the Act.[5] There is no need to address the rulings made concerning s 5(6) as the appeal to this Court is now concerned only with the rulings made on ss 5(3) and 5(9) by the majority of the Full Bench.

    [5]     Knight v Department for Education [2019] SAET 64, [16]-[19] and [20]-[41] (Kelly DPJ).

    The decision of the Full Bench

  17. On the question whether the words “or other leave” in s 5(3) applied to weekly payments of workers compensation, the Deputy President at trial and all members of the Full Bench held that they were bound by the ruling of the Full Court in Flinders Ports Pty Ltd v Woolford, to the effect that absence from work by reason of a work injury whilst in receipt of workers compensation could not be regarded as “‘leave’ in any commonly understood industrial sense”.[6]

    [6]     Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485 (Woolford), [105] (Stanley J, with whom Kelly J agreed, Kourakis CJ contra).  As to the obligation to follow decisions of this Court, see R v Gronert (1975) 13 SASR 189, 191 (Bray CJ) and WorkCover Corporation v Jakas (2003) 86 SASR 20, 31 (Lander J). The appellant’s submissions on this point in the hearings below were made formally, so as to permit the point to be taken before this Court.

  18. The appeal to the Full Bench was heard immediately after the matter of Heywood-Smith v Return to Work Corporation of South Australia.[7] On the question whether the term “a work injury” in s 5(9) of the Act encompassed a prior work injury, the majority followed their reasoning in Heywood-Smith to the effect that this term only referred to the subject work injury, not a prior injury.[8]  The effect of the majority’s reasoning was as follows:

    1.Section 5(9) is of limited application and must be evaluated in light of the potential reach of s 5(6);[9]

    2.Where the qualifying criteria are met, 5(9) is mandatory in its terms, whereas s 5(6) is a discretionary power that may or may not be exercised;[10]

    3.Section 5(6) is to be construed liberally and provides for a flexible approach that enables the assessor, whether that be the compensating authority or the Tribunal, to address the variety of employment circumstances that may potentially influence the fair setting of average weekly earnings;[11]

    4.Section 5(9) must be construed in the context of ss 4(11), 39 and 188(1), which create several statutory fictions.[12] The effect of these statutory fictions is that a work injury can affect the wages earned, and yet not result in an entitlement to weekly payments; therefore, the compendious description of “a work injury or the gradual onset of a work injury” operates in those particular factual circumstances;[13]

    5.The “use of the present tense, the absence of reference to a prior injury, and the compendious reference to a work injury or gradual onset of a work injury, strongly indicates”, under a textual approach in the context of s 5 as a whole, that the work injury affecting earnings referred to in s 5(9) is the same injury in respect of which the average weekly earnings rate is to be set under s 5(1);[14] and

    6.This textual analysis is supported by a purposive approach, as an important object of the entitlement to weekly payments for a work injury is generally limited to 104 weeks, “the construction advanced by the appellant could give rise to a practical consequence of an entitlement to weekly payments at a rate set for an injury extending beyond that period.”[15]

    7.Further, if s 5(9) referred to any work injury, particularly a prior work injury, that could require the Tribunal to undertake the “daunting exercise of assessing how a medically unrelated prior work injury that occurred many years before a later work injury may have affected the average weekly earnings of the worker at the time of the later injury”.[16]

    [7]     Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249 (Heywood-Smith) (Gilchrist and Rossi DPJJ).

    [8]     Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249 (Gilchrist and Rossi DPJJ).

    [9]     Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [84]-[85] (Gilchrist and Rossi DPJJ).

    [10]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [85] (Gilchrist and Rossi DPJJ).

    [11]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [76] and [80]-[82] (Gilchrist and Rossi DPJJ).

    [12]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [88]-[94] (Gilchrist and Rossi DPJJ).

    [13]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [100]-[101] (Gilchrist and Rossi DPJJ).

    [14]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [102] (Gilchrist and Rossi DPJJ).

    [15]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [103] (Gilchrist and Rossi DPJJ).

    [16]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [104] (Gilchrist and Rossi DPJJ).

  19. For these reasons the majority dismissed the appeal. In dissent on the s 5(9) issue, Lieschke DP adopted his dissenting reasons in Heywood-Smith, explaining:[17]

    In summary I decided that the plain and ordinary meaning of the text of s 5(9) could apply to an earlier compensable work injury of a different type to the injury for which AWE are being set. This meaning is not displaced by considerations of entitlement periods or possible factual complexity. The phrase ‘a work injury’ is not confined to the work injury for which weekly payments are being claimed, but can include any prior compensable injury that ‘appears’ to have affected a worker’s earnings at the time of the later injury.

    This construction does not potentially extend any entitlement period for an incapacitating injury, as suggested by her Honour.[18] Each claimed injury must be identifiable and separately causative of incapacity for there to be any entitlement to weekly payments, with the worker carrying the onus of proof. The appearance of extending a single entitlement period only arises if separate entitlements for distinct incapacitating injuries is not recognised.

    [17]   Knight v Department for Education [2020] SAET 250, [71]-[72] (Lieschke DP).

    [18]   Knight v Department for Education [2019] SAET 64, [41] (Kelly DPJ).

    The appellant’s contentions

  20. The appellant commenced with the proposition that it is necessary to begin with the text: as the High Court explained in Federal Commissioner of Taxation v Consolidated Media Holdings Ltd:[19]

    “This Court has stated on many occasions that the task of statutory construction must begin with the consideration of the [statutory] text”.[20] So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and insofar as, it assists in fixing the meaning of the statutory text. Nor is their examination an end in itself.

    [19]   Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ).

    [20]   Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, [47] (Hayne, Heydon, Crennan and Kiefel JJ).

  1. On the question whether the words “or other leave” in s 5(3) of the Act incorporated weekly payments of compensation, the appellant contended that her “top-up” payments of compensation constituted amounts paid whilst she was relevantly on leave and “thus should be taken to be earnings”. The appellant argued that any absence from employment was authorised, in just the same way as might be absences to attend medical appointments or treatment. It made no difference, she contended, whether the absence was or was not connected with a work-related injury.

  2. Whilst acknowledging that federal and interstate authorities are not uniform as to when an absence from work is “leave”, the appellant emphasised that the issue has arisen in different statutory contexts and it has been approached in different ways.  It follows that care must be taken when referring to what has been said by judges about the meaning of a provision, particularly where it concerns a different statutory scheme.[21] 

    [21]   Ogden Industries Pty Limited v Lucas (1968) 118 CLR 32 (PC), 39 (Lords Reid, Hodson, Upjohn, Donovan and Pearson): “It is quite clear that judicial statements as to the construction and intention of an Act must never be allowed to supplant or supersede its proper construction and courts must beware of falling into the error of treating the law to be that laid down by the judge in construing the Act rather than found in the words of the Act itself”.

  3. On this basis the appellant contended that the reasoning in Woolford ought not be applied to the Act because the context was different: the proper meaning of “leave” in that case arose in connection with the use of the term “unpaid leave” in legislation concerning the calculation of long service leave entitlements.[22]  Despite passages in Woolford suggesting that the Court was laying down a rule that absence from work whilst incapacitated and in receipt of workers compensation could never be regarded as “leave”, the better view was that, on the facts, there had been no positive authorisation by the employer over a period of three years whilst the employee “had been completely absent from the workplace due to injury”.[23] Finally, and if necessary, the appellant contended that Woolford was wrongly decided and should not be followed.

    [22]   Being the Long Service Leave Act 1987 (SA).

    [23]   Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, [105]-[108] (Stanley J, with whom Kelly J agreed, Kourakis CJ contra). 

  4. The appellant referred to a large number of decisions in other statutory contexts concerning the meaning of “leave”.[24]  For example, in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Gageler J observed that:[25]

    “Leave”, in an employment context, means authorised absence from work. A “day” of leave, in the context of the National Employment Standards in Pt 2-2 of the Fair Work Act, means an authorised absence from all work that would otherwise be performed in a period of 24 hours.

    [24]   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Ltd [2020] FCAFC 205, [82] (Rares and Colvin JJ); Badenhorst v Teys Bros (Naracoorte) Pty Ltd [2011] FWA 5622, [20]-[22] (Bartel DP); Torpia v Empire Printing (Australia) Pty Ltd [2009] FMCA 853; Lee v Hills Before and After School Care Pty Ltd [2007] FMCA 4, [23]-[24] and [27] (Raphael FM). See further WorkPac Pty Ltd v Bambach [2012] FWAFB 3206; Hall v Medical Imaging Queensland Pty Ltd [2015] FCCA 326.

    [25]   Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) 94 ALJR 818, [47] (Gageler J in dissent).

  5. The appellant contended that a broad view of “leave” was open, particularly on the facts of this case, and that absence from work by reason of a work injury could be said to be both authorised by an employer, and “leave” within the meaning of s 5(3). Reliance was placed on the dissenting reasons of Kourakis CJ in Woolford:[26]

    … I accept that in many other industrial contexts absence by reason of compensable injury is not ordinarily regarded as leave.  Leave in an award, industrial agreement or contract of employment commonly and generally refers to an entitlement such as annual leave or sick leave.  In an employment context it may also refer to a dispensation granted by the employer by way of an indulgence. 

    However, the word leave is not yet a term of art.  The ordinary meaning of the term is wide enough to refer to any release from the employment obligation to be ready, willing and able to perform work as directed by the employer, effected by operation of law or allowed at the discretion of the employer.  The Workers Rehabilitation and Compensation Act 1986 (SA) does not confer a statutory entitlement to leave during a period of incapacity caused by a compensable injury. Nor in this case, and in most cases of absence due to compensable injury, is there evidence of active consent by the employer. However, an employer’s decision not to exercise, for a definite or indefinite future period, the power to direct an injured worker to perform work, when communicated to a worker, in effect releases the worker from the obligation to be ready, willing and able to work and gives that worker leave from his or her employment. Indeed if an employer does not so direct over a period of the time whilst the worker is in receipt of compensation, it is likely that the employer would be estopped from terminating the contract of employment for breach without first giving the worker notice that he or she is once again required to be ready, willing and able to work.

    [26]   Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, [20]-[21] (Kourakis CJ).

  6. On the question of the proper meaning of s 5(9), the appellant emphasised that all words used in a statute should be accorded meaning,[27] and she referred to the ruling in Australian Leisure and Hospitality Group Pty Ltd v Director of Liquor Licensing:[28]

    … If it is intended that a word in a statute will be used in a specific way that may not accord with ordinary usage such an intention is generally reflected in a definition in the statute. Absent such a definition, the ordinary meaning should prevail unless there is something in the context to suggest that another meaning is intended…

    (Citations omitted)

    [27]   Dennis Pearce, Statutory Interpretation in Australia (LexisNexis, 9th ed, 2019) [2.43] 67-69; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, [71] (McHugh, Gummow, Kirby and Hayne JJ), citing Commonwealth v Baume (1905) 2 CLR 405 and R v Berchet (1688) 1 Show KB 106.

    [28]   Australian Leisure and Hospitality Group Pty Ltd v Director of Liquor Licensing [2012] WASC 463, [22] (Hall J). See further, Dennis Pearce, Statutory Interpretation in Australia (LexisNexis, 9th ed, 2019) [4.12] 146-148.

  7. And, whilst the appellant accepted that any relevant legislative history may be relevant to determining the proper meaning of the text, that history cannot replace the words of the text,[29] and the significance of the insertion of new words must be recognised:[30]

    When we see Acts in pari materia by the very same Legislature words added to those used in a prior enactment, it would be setting at nought the clear intention of the Legislature to give the later enactment the construction judicially placed on the earlier enactment. To do so would be to read out of the statute expressions which must be held to have been deliberately inserted to make the new Act differ from the old.

    [29]   Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ).

    [30]   Bridge v Mattis [1953] 52 AR (NSW) 49, 56-7, citing S G G Edgar, Craies on Statute Law (Sweet & Maxwell, 5th ed, 1952) 133. See further, Amalgamated Wireless (A/asia) Ltd v Philpott (1961) 110 CLR 617, 624 (Dixon CJ, Kitto, Taylor and Windeyer JJ); Grain Elevators Board (Vic) v Dunmunkle Corp (1946) 73 CLR 70.

  8. Whilst the appellant questioned the reliance placed by the Full Bench on its earlier decision in Last,[31] that was a matter primarily relevant to the ruling made on s 5(6), an issue that need not be addressed.

    [31]   Last v WorkCover Corporation (Australian Fishing Enterprises Pty Ltd) [2010] SAWCT 54.

    The contentions of the respondent and the intervenor

  9. On the question of the meaning of “leave” in s 5(3), the respondent emphasised that Woolford is the only authority of a Superior Court addressing whether absences from employment during a period when a worker is incapacitated by a work injury and in receipt of workers compensation should be regarded as “leave”. 

  10. The respondent contended that leave, in the sense of paid leave which might constitute earnings in relevant employment for the purposes of s 5(1), is properly to be regarded as an entitlement accruing to a worker in accord with any applicable industrial agreement, legislation or instrument. Properly understood, it is an entitlement which is earned. The respondent contrasted unpaid leave which is not relevant for the purposes of s 5 of the Act.

  11. It is in this sense, according to the respondent, that s5(3) deems amounts paid while a worker is on “other leave” to be taken to be earnings. Moreover, this payment is made in the context of “relevant employment” which is an inapt way of describing the relationship between the worker and a compensating authority under the Act. By contrast, workers compensation payments are not met by an employer but only by a compensating authority and these payments are “made in accordance with a statutory obligation and not as pay for work done”.[32]

    [32]   Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, [24] (Kourakis CJ).

  12. The respondent emphasised that the appellant’s construction of s 5(3) gave rise to tension because, as Stanley J explained in Woolford, it is implicit in s 50 of the Act that the absence of a worker from employment due to compensable injury is not a form of leave.[33]  And, importantly, the effect of the appellant’s contention would be to rise to a form of double compensation: that is because a worker receives weekly payments for the subject injury calculated (at least in part) by reference to the weekly payments received in respect of a prior injury notwithstanding that the worker has already been paid (or at least has an entitlement to) compensation – whether weekly or lump sum compensation – in respect of that prior work injury. 

    [33]   The reference being made to the predecessor provision under the 1986 Act, Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, 513 [105]-[107] (Stanley J, with whom Kelly J agreed).

  13. The intervenor emphasised that the question of construction of s 5(3) does not require consideration of the meaning of “leave” in other industrial contexts. Moreover, it submitted that as a central tenet of the Act is the payment of income support to workers suffering from a work injury resulting in an incapacity for work, it ought not lightly be inferred that Parliament intended to encapsulate weekly payments in respect of that incapacity in a clause directed to the concepts of annual and sick leave using language as oblique as “other leave”.

  14. Whilst the intervenor accepted that the constructional question arising in Woolford was arguable because the period of service during a period of incapacity due to a work injury might well fall within the scope of the phrase “unpaid leave” under the Long Service Leave Act 1985 (SA) (LSL Act), the relevant meaning was “much more straightforward in this case”. 

  15. The intervenor contended that s 33(20) provides a clear example under the Act where the use of the words “an entitlement to receive weekly payments” demonstrates beyond argument what the Parliament had in mind. Finally, insofar as s 37(b)(i) refers to “any payment, allowance or benefit related to annual or other leave” this tends to demonstrate that the words “other leave” in s 5(3) do not embrace a right to receive weekly payments under Part 4, Division 4 of the Act.

  16. Otherwise, the intervenor submitted that insofar as the appellant addressed the proper meaning of s 5(6), that issue should await a case in which it is necessary to address the meaning of that provision.

  17. On the question of the proper meaning of the words “a work injury” in s 5(9) of the Act, the respondent emphasised that the term “a work injury” appears in conjunction with the words “or the gradual onset of a work injury”. The respondent contended that these latter words effectively appeared in s 4(9) of the 1986 Act and clearly referred to the injury that gave rise to the claim for weekly payments. The retention of the same form of phrase in s 5(9) of the Act suggested that the same approach was intended. There was, the respondent contended, no good reason to construe the first reference to “a work injury” in s 5(9) as having a meaning different to the words “the gradual onset of a work injury”.

  18. In addition, the Act otherwise expressly stated where a reference to a “work injury” was intended to be a reference to an injury different from that which gives rise to a relevant claim. Examples included ss 7(3) and 58(7)(a) which refer, respectively, to a “prior injury” and to a “prior work injury”. It was noteworthy, the respondent contended, that the word “prior” did not appear in s 5(9) preceding the words “work injury”.

  19. This view of the meaning of “a work injury” was borne out, the respondent contended, by the reference to the “relevant date”, because it was defined by s 5(16)(a) as “the date on which the relevant injury occurs”. The respondent contended that in cases where there was no acute incident leading to a work injury, there may be difficulty identifying a precise date when a work injury has occurred. In that setting, the mischief targeted by s 5(9) was to allow the relevant date to be notionally fixed as the first date of incapacity in conformity with s 4(11) whilst, at the same time, ameliorating any prior deleterious impact of that work injury on the worker’s earnings in the 12 months preceding.

  20. The respondent contended that s 56 of the Act provides an important contextual indication. In the case of workers who are not seriously injured, their entitlement to weekly payments is limited to 104 weeks. However, by s 56 those workers have an entitlement to compensation for loss of future earning capacity by way of a lump sum. If s 5(9) of the Act includes a prior work injury, that would include a prior work injury where the worker has been paid or at least has an entitlement to be paid a lump sum for loss of future earning capacity. This, the respondent contends, gives rise to a form of double compensation. The worker would receive weekly payments for a subsequent work injury calculated on the basis of an amount that effectively compensates for the incapacity arising from the prior work injury. However, that would be notwithstanding that the worker has already been paid (or has an entitlement to) lump sum compensation for the loss of future earning capacity arising from that prior work injury.

  21. The respondent contended that it would be incongruous to allow any prior work injury to be taken into account under s 5(9), particularly where those injuries may have occurred some years previously. That would not be consistent with the notion that average weekly earnings are usually determined by reference to the 12 months preceding the relevant date. There would, in any event, be practical difficulty determining how a medically unrelated prior work injury affected average weekly earnings at the time of the subject injury.[34]

    [34]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249 [104] (Gilchrist and Rossi DPJJ).

  22. Finally, the respondent contended that the effect of the appellant’s approach to s 5(9) would be that an aggravation injury would “completely reset” the entitlement to 104 weeks of weekly payments at a rate that ignores the prior receipt of weekly compensation payments for the prior work injury. That would tend to undermine the clear intention that the entitlement to weekly payments be limited.

    The relevant provisions of the Act

  23. For the purposes of determining this appeal it is necessary to consider ss 3, 5(1) to 5(10), and 7(3) of the Act:

    3—Objects of Act

    (1)The object of this Act is to establish a scheme that supports workers who suffer injuries at work and that has as its primary objective to provide early intervention in respect of claims so as to ensure that action is taken to support workers—

    (a)in realising the health benefits of work; and

    (b)in recovering from injury; and

    (c)in returning to work (including, if required, after retraining); and

    (d)in being restored to the community when return to work is not possible.

    (2)In connection with subsection (1), the other objectives that apply with respect to this Act are—

    (a)to ensure that workers who suffer injuries at work receive high-quality service, are treated with dignity, and are supported financially; and

    (b)to ensure that employers' costs are contained within reasonable limits so that the impact of work injuries on South Australian businesses is minimised; and

    (c)to provide a reasonable balance between the interests of workers and the interests of employers; and

    (d)to reduce the overall social and economic cost of work injuries to the State and to the community; and

    (e)to support activities that are aimed at reducing the incidence of work injuries; and

    (f)to reduce disputation when workers are injured at work by improving the quality of decision-making and by reducing adversarial contests to the greatest possible extent.

    (3)A person exercising judicial, quasi-judicial or administrative powers must interpret this Act in the light of its objects and these objectives without bias towards the interests of employers on the one hand, or workers on the other.

    (4)The Corporation, the worker and the employer from whose employment a work injury arises must seek to achieve an injured worker's return to work (taking into account the objects and requirements of this Act).

    5—Average weekly earnings

    (1)Subject to this section, the average weekly earnings of an injured worker is the average weekly amount that the worker earned during the period of 12 months preceding the relevant date in relevant employment.

    (2) For the purposes of subsection (1), relevant employment is constituted by—

    (a) employment with the employer from whose employment the injury arose; and

    (b) if the worker was, at the time of the occurrence of the injury, in the employment of 2 or more employers, employment with each such employer.

    (3) For the purposes of this section, any amount paid while a worker was on annual, sick or other leave will be taken to be earnings.

    (4) If during the period of 12 months before the relevant date the worker had changed the circumstances of his or her employment from working casually or seasonally to working in permanent employment (whether on a full-time or part-time basis) and the worker was in that permanent employment on the relevant date, the worker's average weekly earnings may be determined by reference to the average weekly amount that the worker earned during the period of that permanent employment rather than during the period of 12 months preceding the relevant date, unless to do so would disadvantage the worker.

    (5) If a worker voluntarily (otherwise than by reason of an incapacity resulting from a work injury)—

    (a) reduces the normal number of hours worked; or

    (b) alters the nature of the work performed with the result that a reduction occurs in the worker's weekly earnings, any period before the reduction or alteration takes effect will be disregarded for the purposes of determining average weekly earnings.

    (6) In addition, if by reason of the shortness of time during which the worker has been in employment, the terms of the worker's employment or for any other reason, it is not possible to arrive at a fair average, the worker's average weekly earnings may be determined by reference to the average weekly amount being earned by other persons in the same employment with the same employer who perform similar work at the same grade as the worker or, if there is no person so employed, by other persons in the same class of employment who perform similar work at the same grade as the worker.

    (7) If a worker is a contractor rather than an employee, the worker's average weekly earnings will be determined by reference to the rate of pay that the worker would have received if the worker had been working as an employee and, if there is an award or industrial agreement applicable to the class and grade of work in which the worker was engaged, the worker's average weekly earnings will be determined by reference to that award or industrial agreement.

    (8) If—

    (a) an employer is a body corporate; and

    (b) the worker is a director as well as an employee of the employer, the worker's average weekly earnings will be determined by reference to the remuneration (calculated on a weekly basis) last reported in a return from the employer to the Corporation under Part 9 Division 7 (unless the Corporation determines that there is good cause not to apply this subsection in the circumstances of the particular case).

    (9) If because of a work injury or the gradual onset of a work injury it appears that the level of earnings of an injured worker prior to the relevant date were affected by the injury, the average weekly earnings of the worker must be set at an amount that fairly represents the weekly amount that the worker would have been earning if the level of earnings had not been so affected.

    (10)The average weekly earnings of an injured worker who—

    (a)was not a full-time worker immediately before the relevant date; and

    (b)immediately before the relevant date had been seeking full-time employment; and

    (c)had been predominantly during the preceding 18 months a full-time worker, will be taken to be the average weekly earnings of the worker while employed in full-time employment during the period of 18 months preceding the relevant date.

    7—Injury must arise from employment

    (3)In connection with the application of subsection (2) to an injury that is, or results from, the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury (a prescribed event)—

    (a)in the case of an injury other than a psychiatric injury—employment must be a significant contributing cause of the prescribed event; and

    (b)in the case of a psychiatric injury—

    (i)employment must be the significant contributing cause of the prescribed event; and

    (ii)the prescribed event must not arise wholly or predominantly from any action or decision designated under subsection (4),

    and then the injury is only compensable to the extent of and for the duration of the relevant aggravation, acceleration, exacerbation, deterioration or recurrence.

    Determination of the appeal

  1. The Act is, amongst other matters, intended to compensate work injuries and impairments caused by work injuries, see s 3 of the Act.[35] The Act recognises that an aggravation is itself an injury and that this kind of injury “is only compensable to the extent of and for the duration of the relevant aggravation …”.[36]

    [35]   Frkic v Return to Work Corporation of South Australia (No 2) [2020] SASCFC 59, [35] (Livesey J, with whom Doyle J agreed).

    [36]   Return to Work Act 2014 (SA) s 7(3).

  2. Pursuant to s 39 of the Act, workers other than seriously injured workers are entitled to weekly payments in respect of a work injury that results in incapacity for work equal to “the worker’s notional weekly earnings”. As has been observed, a key feature of the Act is that the entitlement of workers other than seriously injured workers to weekly payments is confined to a maximum period of 104 weeks.[37]

    [37]   Return to Work Corporation of South Australia v Watkins [2017] SASCFC 149, [2] (Kourakis CJ, with whom Nicholson J agreed), [33] (Stanley J, with whom Kourakis CJ and Nicholson J agreed); Redman v Return to Work Corporation of South Australia [2021] SASCA 25, [82]-[84] (Livesey JA, with whom Bleby JA agreed); State of South Australia (In Right of Dept for Health and Ageing (SA Ambulance Service)) v Dohnt and Others (2021) 138 SASR 270, [92]-[104] (Livesey J, with whom Kourakis CJ and Parker J agreed).

  3. Section 4 defines “notional weekly earnings” as “the worker’s average weekly earnings”.[38]  A worker’s average weekly earnings is the average weekly amount that the worker earned during the period of twelve months preceding the relevant date,[39] in relevant employment.[40]

    [38] Whilst s 39 also refers to “designated weekly earnings” these are a worker’s “current weekly earnings” less any “prescribed benefit”, see s 39(2).

    [39]   The “relevant date” is the date the work injury occurs, see Return to Work Act 2014 (SA) s 5(16).

    [40]  Return to Work Act 2014 (SA) s 5(1).

  4. The term “relevant employment” is defined to mean the employment with the employer from whose employment the injury arose and, if at the time of the work injury the worker was employed by two or more employers, the earnings from all employers must be taken into account.[41]

    [41]   Return to Work Act 2014 (SA) s 5(2).

  5. The concept of “earnings” is not confined to wages. It encompasses any amount paid whilst a worker is on annual, sick or other leave.[42] It extends to any amount otherwise payable to the worker the subject of a voluntary salary sacrifice for superannuation purposes by the worker, as well as any non-cash benefit of a prescribed class provided to the worker by an employer, provided that the worker does not retain the benefit of the non-cash benefit.[43]

    [42]   Return to Work Act 2014 (SA) s 5(3).

    [43]   Return to Work Act 2014 (SA) s 5(13).

  6. As the Full Bench in Heywood-Smith explained:[44]

    Unlike earlier versions of the [1986] Act, there is no express statement that average weekly earnings are to be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated. It is however, clear enough that the purpose of these provisions, initially at least, is to provide weekly payments during a period of incapacity for work at a level equal to the worker could have expected to have earned but for the incapacity.

    The [Act] recognises that sometimes, basing that entitlement on the average weekly amount that the worker earned during the period of twelve months preceding the relevant date, will not produce a fair outcome. Accordingly, it has made provision for exceptions and in some cases, alternate means of assessment.

    [44]   Heywood-Smith v Return to Work Corporation of South Australia [2020] SAET 249, [26]-[27] (Gilchrist and Rossi DPJJ).

  7. Section 5 — the context in which ss 5(3) and 5(9) appear — establishes the principles by which a worker’s average weekly earnings must be determined. Usually, that is done in accord with what may be described as the “dominant principle”:[45]

    The ‘dominant principle’ under s 5(1) is that “average weekly earnings” means the average weekly amount earned during the 12 months preceding the date of the relevant injury.

    [45]   State of South Australia (In Right of Dept for Health and Ageing (SA Ambulance Service)) v Dohnt and Others (2021) 138 SASR 270, [35]-[38] (Livesey J, with whom Kourakis CJ and Parker J agreed).

  8. However, other principles operate where the dominant principle may be thought to operate unfairly or be incapable of operating at all. For example, s 5(4) of the Act enables average weekly earnings to be calculated on the basis of earnings in permanent employment, rather than any period of casual or seasonal employment, where a worker’s circumstances have changed during the 12 months preceding the date of a work injury.[46] By contrast, s 5(5) operates where a worker voluntarily reduces the normal number of hours worked for reasons unconnected with a work injury, or where there has been an alteration in the nature of the work performed, with a resulting reduction in weekly earnings. In those events, the period before the reduction or alteration takes effect “will be disregarded for the purposes of determining average weekly earnings”.[47]

    [46]   Return to Work Act 2014 (SA) s 5(4).

    [47]   Return to Work Act 2014 (SA) s 5(5).

  9. By s 5(6), where the “shortness of time during which the worker has been in employment”, or the terms of employment, or “any other reason” render it impossible to “arrive at a fair average”, a worker may be able to have average weekly earnings determined by reference to the average weekly amount earned by others in the same employment with the same employer performing similar work or, if necessary, by others in the same class of employment performing similar work at the same grade as the worker.[48]  In SE Meat Australia Ltd v Shortt, Stanley J held that the purpose of this type of provision was to “arrive as far as … humanly possible … [at] a fair average of weekly payments” which the worker would likely earn during the period of incapacity.[49]  Similarly, in Perry v Wright it was said that the object of a provision such as this is “to give greater freedom to the Courts in the admission of evidence in cases where the ordinary modes of computing the average weekly earnings fail”.[50]  The methodology was “a guide, and not a fetter”.[51]

    [48]   Return to Work Act 2014 (SA) s 5(6).

    [49]  WorkCover Corporation (SE Meat Australia Ltd) v Shortt (1990) 2 WCATR 10, 8 (Stanley J).

    [50]   Perry v Wright; Cain v Frederick Leyland & Co. (1900), Limited; Bailey v GH Kenworthy, Limited; Gough v Crawshay Brothers, Cyfartha, Limited [1908] 1 KB 441, 458 (Fletcher Moulton LJ).

    [51]   Perry v Wright; Cain v Frederick Leyland & Co. (1900), Limited; Bailey v GH Kenworthy, Limited; Gough v Crawshay Brothers, Cyfartha, Limited [1908] 1 KB 441, 458 (Fletcher Moulton LJ).

  10. It is in this context that one may view a provision such as s 5(9) of the Act. It reflects the concern that the ordinary approach to determining average weekly earnings may be unfair where “because of a work injury or the gradual onset of a work injury … the level of earnings … were affected by the injury”. In that event, average weekly earnings can be determined by reference to an amount that fairly represents what the worker would have earned if earnings “had not been so affected”.[52]

    [52]   Return to Work Act 2014 (SA) s 5(9).

  11. A similar point may be made about s 5(10) of the Act. Where immediately before the work injury a worker was not in full-time employment, but the worker had been seeking full-time employment and predominantly in full-time employment during the preceding 18 months, average weekly earnings will be based on the average weekly earnings while the worker was employed in full-time employment during the 18-month period.

  12. The intention to ameliorate the potential for unfairness in the operation of the dominant principle is also evident in s 5(11). Where the worker is under 21 years of age and suffers a permanent incapacity, average weekly earnings will be determined by applying the rate that would have been payable had the worker been 21 years old, and if the worker was an apprentice, average weekly earnings are determined by applying the rate payable had the worker completed the apprenticeship.

  13. Section 5(12) of the Act makes provision for overtime, whereas s 5(15) ensures that average weekly earnings will be based on a worker’s lawful entitlement under an award or industrial agreement. See also s 42 of the Act.

    Sub-section 5(3) of the Act

  14. The concept of “employment” is, for the purposes of the Act, defined by s 4 to include “work done under a contract of service”. As is now common under modern contracts of service, workers receive paid leave of various kinds. Examples include paid long service leave, paid parental leave and paid compassionate or bereavement leave.

  15. That kind of paid leave is, however, readily distinguishable from workers compensation.  When a worker is incapacitated from work and in receipt of weekly payments of compensation, the worker is unable to provide labour to the employer and not merely relieved from the obligation of doing so. The compensation paid in those circumstances cannot be said to be “any amount paid while a worker was on … leave”. As was said in Woolford:[53]

    … a worker’s absence from his or her employment because of an injury arising from employment is not “leave” in any commonly understood industrial sense. Leave is an entitlement relieving the employee from the performance of work duties, which is conferred by the terms of the employment contract, an industrial instrument or Act of Parliament that applies to that employment. Usually such leave is paid.

    [53]   Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, [105] (Stanley J, with whom Kelly J agreed).

  16. Whilst the observations made in this passage were made in the quite different statutory context of the LSL Act there is no reason to doubt their accuracy or utility. We would reject any contention that the statements made about leave in Woolford were wrong, or that it was wrongly decided.

  17. The language and operation of the LSL Act nonetheless left room for the contention that incapacity due to a work injury might well fall within the scope of the phrase being construed by the Full Court in that case.  In that setting, the issue before the Full Court was more nuanced than the issue arising in this case.  Reasonable minds could easily differ on the question whether a worker’s entitlement to long service leave should be calculated by reference to a period of service that includes time away from work by reason of work-related incapacity which is compensable under workers compensation legislation.  That is shown by the difference of opinion in the Full Court in Woolford, as well as by the dissatisfaction expressed by the members of that Court about the terms in which the legislation was cast.[54] Indeed, the Act was later amended so as to incorporate time spent away from work by reason of compensable work injuries when calculating an entitlement to long service leave.[55] 

    [54]   See Flinders Ports Pty Ltd v Woolford (2015) 121 SASR 485, [20]-[25] (Kourakis CJ) and [106]-[108], [115] (Stanley J, with whom Kelly J agreed).

    [55]   Long Service Leave (Calculation of Average Weekly Earnings) Amendment Act 2015 (SA).

  18. In so far as the appellant pointed to other decisions made in other legislative contexts, it may be doubted whether they advance the issue of construction arising under s 5(3) of the Act.

  19. The purpose of s 5(3) is clear enough: it is intended to ensure that the calculation of average weekly earnings reflects what the worker was in fact being paid by the employer under a contract of service during the 12 months preceding the relevant date, being the date on which the relevant work injury occurred. Payments made pursuant to leave entitlements are included because they form part of the worker’s employment entitlement. That is to say, s 5(3) is directed to what it is that a worker was being paid by an employer in exchange for labour provided under a contract of service by reason of that contract or any other relevant industrial instrument.

  20. Whilst it may readily be accepted that “leave” tends to mean a period during which the employer permits a worker to be absent from employment, that does not naturally embrace what occurs when a worker is not working by reason of incapacity caused by a work injury and in receipt of workers compensation. That must be contrasted with, for example, a period away from work whilst the worker is receiving annual or sick leave payments. Payments of workers compensation are different in character. They are paid pursuant to a statutory entitlement which operates in the context of a contract of service. Ordinarily, they are not paid pursuant to a contract of service or any other industrial instrument. Payments of workers compensation are not relevantly “earned” as s 5(1) assumes, and there is no good reason why they should “be taken to be earnings” for the purposes of s 5(1) of the Act.

  21. The terms “annual, sick or other leave” in s 5(3) of the Act must be construed ejusdem generis and confined to those species of payment which are made by an employer in connection with employment.

  22. The Full Bench was correct to conclude that payments of workers compensation are not to be taken into account as amounts paid while a worker is on leave for the purposes of s 5(3) of the Act.

    Sub-section 5(9) of the Act

  23. In Heywood-Smith the Full Bench observed that neither s 5(9) of the Act nor its predecessor, s 4(9) of the 1986 Act, appear to have been applied or subjected to detailed analysis.[56]  The Full Bench regarded this as fortifying the conclusion that this provision is of “limited application” and only applicable in “unusual circumstances”.[57]

    [56]   Heywood-Smith v Return to Work SA [2020] SAET 249, [84] (Gilchrist and Rossi DPJJ).

    [57]   Heywood-Smith v Return to Work SA [2020] SAET 249, [83]-[84] (Gilchrist and Rossi DPJJ).

  24. It is helpful to again set out s 5(9) of the Act:

    If because of a work injury or the gradual onset of a work injury it appears that the level of earnings of an injured worker prior to the relevant date were affected by the injury, the average weekly earnings of the worker must be set at an amount that fairly represents the weekly amount that the worker would have been earning if the level of earnings had not been so affected.

  25. The text of s 5(9) is concerned with the problem of determining or setting average weekly earnings where the level of earnings has been affected, that is, deleteriously affected, by a work injury. Where that is shown, the determination must, not might, be set at an amount that fairly represents what the worker would have earned if earnings had not been deleteriously affected by the work injury.

  26. The words of s 5(9) are best read as targeting a single work injury, even if it is one of gradual onset, which has affected the level of earnings of a worker before the relevant date. The focus on a single injury tends to undermine the contention that the words “a work injury” are to be read as broadly as encompassing any injury, including a prior injury. In addition, the reference to “the relevant date” is a reference to the date on which the “relevant injury” occurs, see s 5(16)(a) of the Act.

  27. When these provisions are read as a whole, it is clear that the references to “a work injury” in s 5(9) are references to the injury for which the calculation of average weekly earnings is being determined. They are references to “the relevant injury” or subject injury and not to any other, prior injury.

  28. The only relevant injury for the purposes of determining average weekly earnings under s 5(1) in this case was the aggravation injury sustained in 2017.

  29. This approach to the text of s 5(9) is supported by a number of contextual matters. The first of these is the way in which s 5(9) is intended to operate. As earlier explained, the “dominant principle” is concerned with average earnings in the 12 months preceding injury. Where a worker is affected by a work injury, particularly one of gradual onset, earnings may be deleteriously affected before a diagnosis has been given, indeed, before the worker knows that the work injury has occurred. In that setting it would be unfair to permit average weekly earnings to be set at a rate that does not fairly reflect the earnings that could have been made without the effects of a work injury. Viewed in this way, the beneficial effect of s 5(9) is clear enough: where a work injury can be identified, and where the period during which weekly earnings were deleteriously affected by that work injury can be identified, then a worker is entitled to point to earnings unaffected by the work injury when setting average weekly earnings.

  30. This way of viewing s 5(9) is reinforced by six further matters. The first is the reference in the provision to a work injury of gradual onset. This type of injury provides a good example of an injury that may affect earnings before the existence and effect of the work injury has been identified. The first reference to a work injury in s 5(9) may therefore, in context, be regarded as expanding the beneficial reach of s 5(9) to work injuries which are not of gradual onset, but which may nevertheless give rise to the same difficulty; for example, some diseases may comprise work injuries which are not identified until after they have affected earnings even though they are not of gradual onset. These examples, injuries of gradual onset and injuries or diseases that have not initially been recognised as affecting earnings, give rise to a common difficulty which is beneficially addressed by s 5(9) in a straightforward, common manner. Both are concerned with the setting of average weekly earnings in respect of an injury “prior to the relevant date”.

  31. Secondly, by contrast, it makes little sense to view s 5(9) as broadly as the appellant contends. If the work injury that affects earnings is a prior compensable injury then, to the extent permitted by the Act, that deleterious effect will be the subject of compensation — whether by way of entitlement or payment — in connection with a prior claim. If the prior work injury is not compensable then it should not be taken into account when determining average weekly earnings for the later work injury. Moreover, if the prior injury is compensable and an entitlement has arisen and payments have been made, there appears to be no good reason why the average weekly earnings rate for the later injury should be set by effectively ignoring the fact of the entitlement and payments. That would result in a form of double compensation because the later rate would have factored into it the reduction in earnings referable to the earlier injury. The worker would therefore receive the benefit of the entitlement and payments for the earlier injury, as well as the higher rate for the later injury. A similar problem would arise when determining a claim for loss of future earning capacity under s 56 of the Act.

  32. Thirdly, it is necessary to view s 5(9) in its historical and legislative context. Under the 1986 Act, s 4(9) was as follows:

    If because of the gradual onset of a compensable disability it appears that the level of earnings of a disabled worker prior to the relevant date were affected by the disability, the average weekly earnings of the worker must be set at an amount that fairly represents the weekly amount that the worker would have been earning if the level of earnings had not been so affected.

  33. It may be seen that this predecessor provision did not include the words “a work injury or” which comprises the first reference to a work injury in s 5(9) of the Act. The appellant’s argument is that these words must be given meaning and effect and their inclusion broadens the reach of s 5(9). Whilst that is so, the inclusion of these words does not have the effect of transforming s 5(9) as the appellant suggests, they simply ensure that a worker’s average weekly earnings rate is not unfairly affected by a work injury even if that injury was not of gradual onset.

  1. In context, and as the Full Bench in Heywood-Smith correctly recognised, this provision must operate in harmony with other provisions of the Act.[58]  For example, s 4(11) stipulates that the date on which an incapacity for work first occurs will be taken to be the first day in respect of which the worker has an entitlement to a weekly payment of compensation.[59]  By contrast, s 188(1) provides:

    An injury (not being noise induced hearing loss) that develops gradually or is a disease will be taken to have occurred when the worker first becomes totally or partially incapacitated for work by the injury.

    [58]   Heywood-Smith v Return to Work SA [2020] SAET 249, [87] (Gilchrist and Rossi DPJJ); K&S Lake City Freighters Pty Ltd v Gordon and Gotch Ltd (1985) 157 CLR 309, 315 (Mason J).

    [59] Pursuant to Part 4 Division 4 Subdivision 2 of the Return to Work Act 2014 (SA), on account of that incapacity, cf Kuerschner v WorkCover Corporation/Employers Mutual Ltd (Masonic Homes Inc) and Resthaven Inc [2011] SAWCT 6, [163] (McCouaig DP).

  2. The potential tension between these provisions is, as the Full Bench recognised, probably resolved by the terms of s 4(11) which commences with the words: “For the purposes of this Act…”.  Whilst it is not easy to reconcile all of the potential problems, including the “conundrum” to which the Full Bench referred,[60] the general scheme is that a worker is entitled to compensation by way of weekly payments under s 39. When setting average weekly earnings for that purpose, the “dominant principle” looks to the 12-month average preceding the onset of the work injury — however that may be determined — unless one of the other principles in s 5 operates. Here, and relevantly, where the work injury can be shown to have affected earnings, a worker can point to earnings unaffected by the work injury, even if that injury was not one of gradual onset.

    [60]   Heywood-Smith v Return to Work SA [2020] SAET 249, [99]-[101] (Gilchrist and Rossi DPJJ): “It begs the question as to how a work injury could be affecting the level of earnings of an injured worker prior to the relevant date, given that under s 5(16) ‘a reference to the relevant date is a reference to the date on which the relevant injury occurs’”.

  3. Fourthly, there are in any event real practical difficulties associated with reading the term “work injury” in s 5(9) as encompassing a prior injury. As the Full Bench explained, trawling back in time to determine the effect of prior injuries on earnings in the relevant period would often be “daunting”:[61]

    … if it were otherwise, s 5(9) could require the Tribunal to undertake the daunting exercise of assessing how a medically unrelated prior work injury that occurred many years before a later work injury may have affected the average weekly earnings of the worker at the time of the later injury. This would constitute a major change to the way in which average weekly earnings are assessed. If this is what Parliament intended, we would have expected it to have made that position abundantly clear…

    [61]   Heywood-Smith v Return to Work SA [2020] SAET 249, [104] (Gilchrist and Rossi DPJJ).

  4. Fifthly, and following on from the observations made by the Full Bench about clarity of legislative expression, it is noteworthy that the words “prior injury” (s 7(3)) or “prior work injury” (s 58(7)(a)) do not appear.  The general expression “work injury”, coupled with the indefinite article, reinforce the view that the provision is directed to the relevant injury, and the relevant date, and not to any other injury or date.

  5. Finally, it ought not be overlooked that the effect of the appellant’s contention tends to undermine the legislative purpose evident in the confinement of an entitlement to weekly compensation to a maximum of 104 weeks. As this case demonstrates, if “a work injury” is read as broadly as the appellant contends, the appellant will effectively extend the entitlement beyond the requisite period; the rate will be set having regard to an entitlement under s 39 which has come to an end. That is because, for the purposes of determining the average weekly earnings rate in connection with the 2017 aggravation injury, any right or entitlement to weekly payments in respect of the 2011 injury was spent. It is difficult to see why what must be viewed as a non-compensable condition should influence the setting of the s 5 rate. The Court should be slow to embrace a construction of s 5(9) that appears to be inconsistent with the operation of s 39 and with the scheme and objects of the Act more generally.

  6. The Full Bench was correct to conclude that the words “a work injury” in s 5(9) of the Act did not extend to a prior injury.

    Conclusion

  7. The appeal must be dismissed.


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Cases Cited

22

Statutory Material Cited

1

Flinders Ports Pty Ltd v Woolford [2015] SASCFC 6
City of Mitcham v Mol Pty Ltd & Ors No. Scciv-02-1103 [2003] SASC 155
Flinders Ports Pty Ltd v Woolford [2015] SASCFC 6