Korkidas v NSW Department of Education & Training

[2007] NSWWCCPD 225

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE

COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Korkidas v NSW Department of Education & Training [2007] NSWWCCPD 225

APPELLANT:  George Korkidas

RESPONDENT:  NSW Department of Education & Training

INSURER:GIO General Ltd

FILE NUMBER:  WCC2983-07

DATE OF ARBITRATOR’S DECISION:          23 July 2007

DATE OF APPEAL DECISION:  15 November 2007

SUBJECT MATTER OF DECISION: Claim for weekly compensation; probable earnings but for the injury; residual ability to earn in the general labour market reasonably accessible to the worker: section 40 of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant:      Steve Masselos & Co

Respondent:   TurksLegal

ORDERS MADE ON APPEAL:  The decision of the Arbitrator dated 23 July 2007 is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.

The Respondent, the Department of Education & Training, is to pay the costs of the Appellant, Mr Korkidas in this appeal.

BACKGROUND TO THE APPEAL

1. On 15 August 2007, George Korkidas sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 23 July 2007. The Respondent to the appeal is the NSW Department of Education & Training (‘the Department’) whose workers compensation insurer is GIO General Ltd.

1. Mr Korkidas was born on 4 March 1963 and is aged 44. He was employed as a temporary art teacher at Kingsgrove High School when, on 12 June 2003, he walked into wooden stool injuring his left knee. Notwithstanding an arthroscopy on his knee on 22 October 2003 and again on 4 August 2004, Mr Korkidas claims to have significant ongoing problems with his knee that have restricted his ability to work.

1. On 27 April 2007, the Commission registered Mr Korkidas’ ‘Application to Resolve a Dispute’ in respect of his claim for weekly compensation from 30 August 2004 to date and continuing. On 18 May 2007, the Department lodged its ‘Reply’. On 1 June 2007, the Arbitrator conducted a teleconference with the parties. On 19 June 2007, conciliation having proved unsuccessful, he conducted an arbitration hearing. On 23 July 2007, the Arbitrator gave his decision in the terms set out below.

THE DECISION UNDER REVIEW

1. The ‘Certificate of Determination’, dated 23 July 2007, records the Arbitrator’s orders as follows:

“(1) Award for the Respondent in respect of the Applicant’s claim for weekly benefits compensation.

(2) There is no order as to costs.”

1. In the Statement of Reasons for his decision, the Arbitrator said, having discussed the medical evidence, that he intended to consider Mr Korkidas’ entitlement to compensation on the basis that he is not fit for his pre-injury duties but is able to perform work in a sedentary capacity, subject to restrictions, without limitation of his working hours (paragraph 37).  The Arbitrator found that, at the time of the accident, Mr Korkidas was employed on a full-time temporary basis with that appointment not due to finish until 26 January 2004. The Arbitrator found no evidence that Mr Korkidas would secure a further temporary appointment after that date (paragraph 40), and he was unable to determine the probable date of Mr Korkidas’ appointment to permanent employment (paragraph 41).

1. The Arbitrator found that, but for the injury, Mr Korkidas would have reverted to casual employment at the conclusion of his temporary appointment on 26 January 2004 (paragraph 44). Having regard to the history of Mr Korkidas’s casual employment, the Arbitrator found that on the basis of an average of 98 casual days employment per annum, and the casual rate of $254.86 per day paid to Mr Korkidas in late 2004, Mr Korkidas “would have been remunerated at the rate of $480.30 per week in 2004 and 2005, had he not been injured” (paragraph 48). Further, on the basis of evidence of the casual rate being $271.69 per day in December 2006, the Arbitrator determined that “with effect from 1 December 2006 the Applicant would have earned $512.03 per week had he not been injured” (paragraph 49).

1. While accepting that Mr Korkidas has difficulty using stairs, the Arbitrator was “confident that within “the greater Sydney area” the Applicant will be able to secure employment at premises which do not require him to use stairs” (paragraph 50). The Arbitrator said:

“52. The Applicant is educated and articulate. He has post-graduate qualifications and worked as a teacher for over 5 years. There can be no question that he is more than capable of working in a clerical and administrative capacity. The weekly wage for the most basic form of clerical and administrative work as regulated by the relevant State instrument (Clerical and Administrative Employees (State) Award), $543.60, exceeds the probable income I have determined above. The Applicant can, in my opinion, be expected to be able to secure employment providing for him to be remunerated at more than the minimum rate payable to Award employees. I would be surprised if the Applicant were not able to secure employment at a Grade 5 level under the Award and to accordingly earn $700 per week.

53. In the circumstances, I determine that the Applicant has not established any entitlement to compensation.”

ISSUES IN DISPUTE

1. Mr Korkidas’ solicitors accept that Mr Korkidas is partially incapacitated for work. They submit that the Arbitrator made errors of law in determining Mr Korkidas’ probable earnings but for the injury and in assessing his residual ability to earn in the general labour market reasonably accessible to him. The parties’ submissions are discussed below.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:

“(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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties that the appeal can 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. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. 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), I am satisfied that the amount of compensation at issue is at least $5,000 and constitutes 100% of the amount awarded in the decision appealed against. Accordingly, I am satisfied that the section 352 threshold has been met, and I grant leave to appeal.

SUBMISSIONS

1. Mr Korkidas’ solicitors said the Department provided no evidence to categorically state that Mr Korkidas would not have obtained continuing employment at a full-time salary rate but for his injury. The Arbitrator accepted that Mr Korkidas has difficulty with stairs, and Mr Korkidas gave evidence that the work trials provided for him by Centrelink in March 2007 requiring him, after travelling by car, to walk various distances over various terrain, aggravated his knee condition.

1. Mr Korkidas’ solicitors submit that the Arbitrator misdirected himself in a “tortuous calculation of what might have happened in respect of the applicant’s employment had he not been injured and what he might have been earning in those circumstances” (p 2). Mr Korkidas’ ‘average weekly earnings’ should have been calculated in accordance with section 43 of the Workers Compensation Act 1987 (‘the 1987 Act’), applying the definition prescribed in section 42(8). Mr Korkidas’ solicitors submit that had the calculation of average weekly earnings been undertaken in accordance with the Act, then Mr Korkidas’ average weekly earnings should have been found to be $1,001.38 per week, based on a salary level of $50,072.00, which is what he would have earned as a full-time employee as at 13 December 2006.

1. Mr Korkidas’ solicitors also submit that the Arbitrator misdirected himself in determining Mr Korkidas’ entitlement in respect of his partial incapacity. The labour market reasonably accessible to him is the market in the geographical area in which he lives: “This does not mean ... that he should be obliged to travel to any place within the greater Sydney area to find work which does not require him to use stairs.”

1. The Department notes that the evidence in this matter was that Mr Korkidas was offered and accepted a temporary appointment to fill a vacancy caused by the permanently appointed teacher taking long service leave. Both before and after the expiry of the temporary appointment, Mr Korkidas was employed as a teacher on a casual basis. The Department submits the Arbitrator did not err in law by finding that there was no evidence that Mr Korkidas would secure a permanent appointment after the expiry of his temporary appointment. The Department submits the Arbitrator properly calculated the aggregate number of casual days worked by Mr Korkidas between 1998 and 2002 in determining his probable casual earnings in 2004 and 2005 but for the injury. The Arbitrator made no error of law in this regard and this ground of appeal must therefore fail.

1. Secondly, with respect to Mr Korkidas’ residual ability to earn, the Department submits the Arbitrator accurately reviewed the medical evidence and had the benefit of Mr Korkidas’ oral evidence. Noting medical evidence that Mr Korkidas was not restricted in his ability to travel, the Arbitrator took a common sense and practical view of modern day Sydney where there are a plethora of business premises with lifts and escalators, obviating the need to use stairs, and where employees are only required to use stairs in an emergency. The Commission has a wide discretion to take judicial notice of a wide range of factors in the area of employment. While the Arbitrator did not define “the greater Sydney area”, the Department submits this should be interpreted as meaning the Central Business District (‘CBD’) and surrounding metropolitan area, which includes the suburb of Campsie where Mr Korkidas lives. There was no medical evidence before the Arbitrator to indicate that Mr Korkidas could not travel in the Sydney metropolitan area. Moreover, there is no evidence to support Mr Korkidas’ solicitors’ assertion that the Sydney metropolitan area is not a market in the geographical area in which he lives. The Department submits the Arbitrator made no error of law in assessing Mr Korkidas’ ability to earn.

1. In further submissions in response, Mr Korkidas’ solicitors contend that the Arbitrator misdirected himself in law by considering what may have happened at some uncertain time in the future. Mr Korkidas’ probable weekly earnings should be assessed having regard to what he would have earned in the employment he was undertaking at the time he was injured: NSW Harness Racing Club Ltd v Forrest (1995) 12 NSWCCR 217. Moreover, there is no evidence upon which it can be concluded that he would not have been offered further periods of temporary employment. The Arbitrator also erred in assessing Mr Korkidas’ residual ability to earn by failing to properly consider the reduced avenues of employment available to him because of his injury.

DISCUSSION

1. The role of the Presidential Member on appeal is to review the Arbitrator’s decision as a whole. The review is not a rehearing. In this case, Mr Korkidas’ solicitors must demonstrate that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172; The King Island Company Limited v Deery [2005] NSWWCCPD 1) in order to enliven the Presidential Member’s power to interfere with the Arbitrator’s decision pursuant to section 352(7) of the 1998 Act.

Probable earnings

1. I have reviewed the Arbitrator’s decision. With regard to the first ground of appeal, that the Arbitrator erred in law in determining Mr Korkidas’ probable earnings but for the injury, I note this concerns the Arbitrator addressing step 1 of the five step process prescribed by the NSW Court of Appeal in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 527 (‘Mitchell’), at pages 529 to 530. The five steps are as follows:

“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 that the worker is earning or would be able to earn in some 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 that 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.”

1. At step 1, section 40(2)(a) of the 1987 Act requires the determination of the worker’s probable weekly earnings but for the injury “had the worker continued to be employed in the same or some comparable employment”.

1. Mr Korkidas’ solicitors submit that the Arbitrator should have calculated Mr Korkidas’ earnings but for the injury in accordance with section 42(8) and section 43. Pursuant to section 42(8), the Arbitrator was required to calculate Mr Korkidas’ average weekly earnings by reference to the time at which the injury occurred or the time at which the relevant payment of compensation is due, whichever produces the higher average weekly earnings, “on the assumption that the worker had been earning the wage or salary which the worker would probably have been earning if the worker had remained uninjured and continued to be employed in the same or some comparable employment”. Section 43 prescribes rules to be observed in the computation of average weekly wages. Pursuant to section 43(1)(a), average weekly earnings “shall be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated”.

1. In making a determination under section 40(2)(a), the process engaged in is a hypothetical one in which it is assumed that the worker would have continued in the same employment in which he or she was engaged at the time of the injury, and that the worker would have earned income of the same or a comparable amount. It is only at the fourth step prescribed in Mitchell – the exercise of discretion under section 40(1), that all the circumstances must be examined, such as in this case the employment history of the worker and the likelihood of full-time employment beyond the expiry of the temporary appointment: Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50; Harding v Transfield Pty Ltd (2003) 25 NSWCCR 86; Singh v TAJ (Sydney) Pty Ltd [2006] NSWCA 330.

1. Thus, I am satisfied that the Arbitrator made an error of law in failing to follow the steps prescribed in Mitchell. At step 1, the Arbitrator should have made a determination of Mr Korkidas’ probable weekly earnings but for the injury assuming his ongoing full-time employment with the Department. At step 4, the Arbitrator should have decided whether and to what extent any reduction in Mr Korkidas’ earnings as a result of the injury, calculated in accordance with steps 2 and 3 of Mitchell, bears “such relation to the amount of that reduction as may appear proper in the circumstances of the case” (section 40(1)). It was at this stage that it was open to the Arbitrator to exercise his discretion to reduce the amount derived from step 3 to take account of the circumstances of the Mr Korkidas’ case.

Residual ability to earn

1. With regard to the second ground of appeal, that the Arbitrator erred in law in assessing Mr Korkidas’ residual ability to earn in the labour market reasonably accessible to him, Mr Korkidas’ solicitors submit the Arbitrator failed to properly consider the reduced avenues of employment open to him because of his injury, pointing, in particular, to the restrictions on his ability to travel. This ground of appeal concerns the second step prescribed in Mitchell and a determination under section 40(2)(b). Section 40(3)(a) states that the determination of the amount an injured worker would be able to earn in some suitable employment “is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker”.

1. In Collins v Days Transport Service Pty Ltd (1999) 18 NSWCCR 116, at paragraph 19, O’Meally J said that the general labour market reasonably accessible to the worker is the labour market in the geographical area in which the worker lives. What that area is will be a question of fact in a particular case. In the present case, the Arbitrator was “confident that within the greater Sydney area the Applicant will be able to secure employment at premises which do not require him to use stairs” (paragraph 50). The Arbitrator gave no further description of what he meant by “the greater Sydney area”.

1. The Department submits that this should be interpreted as meaning the CBD and surrounding metropolitan area, including suburbs immediately surrounding the CBD, one of which is Campsie, where Mr Korkidas lives. The Department submits there is no evidence to support Mr Korkidas’ solicitors’ assertion that the Sydney metropolitan area is not a market in the geographical area in which Mr Korkidas lives. The Department also submits that the Commission may take judicial notice of the fact that Campsie is serviced by City Rail and that there is other public transport, such as bus services, available for travel into the CBD and surrounding area.

1. The Department submits there is no medical evidence before the Arbitrator to indicate that Mr Korkidas could not travel in the Sydney metropolitan area.

1. The Arbitrator discussed the restrictions on Mr Korkidas’ ability to work at paragraph 50 of his Statement of Reasons. The Arbitrator noted Mr Korkidas’ evidence that he has difficulties with commuting: he gave evidence at the arbitration hearing that while he can drive, the difficulty he experiences is walking from where he leaves his car to his destination (transcript pp 3, 8-9). The Arbitrator also referred to the evidence of Dr WGD Patrick, Surgeon, and that of Mr Korkidas’ general practitioner, Dr H Boulis. Dr Patrick, in his report dated 20 February 2007, noted that Mr Korkidas “has considerable difficulty walking distances”, “difficulty using public transport”, and “difficulty with steps and stairs and slopes”. Dr Patrick considered Mr Korkidas fit for suitable lighter, sedentary work. Dr Boulis, in a number of WorkCover medical certificates (for example, the certificate dated 16 February 2007), while recording restrictions on Mr Korkidas’ ability to walk, stand and lift, certified that he is capable of unlimited sitting and travelling. However, Dr Boulis stated that Mr Korkidas is only capable of working on four hours a day on three days a week.

1. I am not satisfied that the Arbitrator made an error of law in assessing Mr Korkidas’ residual ability to earn in the general labour market reasonably accessible to him. In my view, the Department’s interpretation of “the greater Sydney area” is a reasonable one, and I agree with its submission that given where Mr Korkidas resides, the CBD and surrounding metropolitan area is the general labour market reasonably accessible to Mr Korkidas. However, I note, in particular, that the restrictions on Mr Korkidas’ ability to walk and stand will limit his ability to access employment in the CBD and metropolitan area, because of the need to walk to places of employment from where he leaves his car or alights from public transport. With regard to stairs, I accept that many places of employment will have lifts or escalators and the use of stairs will not be required except in an emergency. In my view, the overall picture is that while Mr Korkidas may be capable of sedentary employment, the range of opportunities open to him in the general labour market reasonably accessible to him is likely to be limited by problems of access.

1. Although, as I have stated, I am not satisfied that Mr Korkidas’ solicitors have established their second ground of appeal, on the remittal which follows from my finding of an error of law in relation to the first ground of appeal and my setting aside the decision of 23 July 2007, the new Arbitrator, in following the steps prescribed in Mitchell, should have regard to Mr Korkidas’ difficulty in accessing employment where walking is required.

DECISION

1. The decision of the Arbitrator dated 23 July 2007 is revoked and the matter is remitted to another Arbitrator for determination afresh in accordance with these reasons.

COSTS

1. The Respondent, the Department of Education & Training, is to pay the costs of the Appellant, Mr Korkidas in this appeal.

Robin Handley

Acting Deputy President  

15 November 2007

I, MARIE JOHNS, 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.

ASSOCIATE