Layton v Leichhardt Municipal Council

[2006] NSWWCCPD 100

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Layton v Leichhardt Municipal Council [2006] NSWWCCPD 100

APPELLANT:  John Layton

RESPONDENT:  Leichhardt Municipal Council

INSURER:GIO Australia Limited

FILE NUMBER:  WCC737-04

DATE OF ARBITRATOR’S DECISION:          8 April 2005

DATE OF APPEAL DECISION:  30 May 2006

SUBJECT MATTER OF DECISION: Section 40 of the Workers Compensation Act 1987; rule 77 Workers Compensation Rules 2003; Extension of time in respect of the late lodgement of an Appeal Against Decision of the Commission constituted by an Arbitrator.

PRESIDENTIAL MEMBER:  Acting Deputy President Robert Harrington

HEARING:On the papers

REPRESENTATION:  Appellant:      Turner Whelan, Solicitors

Respondent:   Greylings, Attorneys

ORDERS MADE ON APPEAL:  1. Paragraph A of the Arbitrator’s decision dated 8 April 2005 is revoked and the following order is substituted:

A.    The Respondent (Leichhardt Municipal Council) pay the Appellant (John Layton) weekly compensation:

(i)at the rate of $155.00 per week from 1 March 2001 to 13 April 2001; and

(ii)at the rate of $291.10 per week (being the maximum statuary rate for a worker without dependants) from 14 April 2001, as adjusted, to date and continuing under section 40 of the Workers Compensation Act 1987.

2.   The Respondent is to pay the Appellant’s costs of the appeal.

BACKGROUND TO THE APPEAL

1.On 6 May 2005 John Layton (‘Mr Layton’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation (Commission) against a decision dated 6 May 2005.

2.The Respondent to the appeal is Leichhardt Municipal Council (‘the Council’).

3.Mr Layton was born on 5 May 1956 and has recently turned 50 years of age.

4.In 1989 whilst working at the Balmain Leagues Club he suffered a head injury as a result of which he suffered permanent brain damage, but notwithstanding this injury he has, by and large, managed to maintain himself in the workforce.

5.On 17 February 1981 he commenced employment with Council.  He commenced as a jackhammer operator but was subsequently given the job as ‘a runner’ in ‘garbage collection’ for the Council.

6.Mr Layton, in order to carry out his duties, was required to run ‘with the garbage truck’ in order to collect garbage from residential properties in Leichhardt Municipality.

7.On 2 September 1996 Mr Layton twisted his left knee in the course of his employment with the Council when he stepped into a pothole.  He suffered further injuries to his right knee on 12 or 19 May 1997 and 22 June 1998 when he, on each occasion, slipped and twisted his right knee.

8.Mr Layton continued to work up until 1998 when the Council, wishing to shed twenty-four people from their workforce, offered voluntary redundancy packages.  Mr Layton accepted voluntary redundancy. Within two months of taking the redundancy package, he returned to his former employment, on a casual basis

9.In or before January 2001 Mr Layton’s solicitor made a claim on the Council for lump sum compensation in respect of the injuries to his legs.  Because of this claim and the belief by the Council that he was at risk of further injury to his knees if he continued to carry out garbage collection work, the Council terminated his services. 

10.Mr Layton obtained employment as a waste collector with the Auburn Council between 1 March 2001 and 1 April 2001 when his employment was terminated by that Council.

11.He was then unemployed and placed on an invalid pension, which he received up until 29 September 2003 when he obtained employment, as a cleaner, with the Glebe/Leichhardt Police Citizens Youth Club where he continued to work, at least, up until the time of the Arbitration.

12.Mr Layton sought weekly compensation benefits from the Council from March 2001 to date and continuing, together with lump sum compensation for loss of use of his right and left leg and section 60 (medical expenses).

13.Mr Layton was referred to Dr Bodel, Approved Medical Specialist, who issued a Medical Assessment Certificate.  The certificate certified, inter alia, that Mr Layton had suffered ‘frank injuries’ on 2 September 1996, 12 May 1997 and 22 June 1988 and injury as a result of “the nature and conditions of his work from commencement of employment (with the Council) until January 2001” as a result of which Mr Layton had a 10% loss of efficient use of both his left and right leg at or above the knee.

14.In the ‘Statement of Reasons For Decision’, issued on 8 April 2005 the Arbitrator, relevantly found:

“In summary the resolution of the issues in dispute is as follows: …

On 2 September 1996, 12 May 1997 and 22 June 1998, and as a result of the nature and conditions of his employment, the Applicant received injuries to his knees arising out of or in the course of his employment as a labourer with the Leichhardt Municipal Council.”

15.The Arbitrator entered an award for Mr Layton in respect of lump sum compensation for the permanent impairment of his legs and medical expenses but then entered an award for the Council in respect of his claim for weekly compensation benefits and issued a Certificate of Determination dated 8 April 2005 - as detailed below:

(A)Determination in favour of Respondent in respect of Applicant’s weekly benefits claim.

(B)Determination in favour of Applicant in respect of his section 60 claim.

(C)Determination in favour of Applicant under section 66 for the payment by the Respondent of the sum of $7,500.00 in respect of a 10% permanent loss of efficient use of the left leg at or above the knee.

(D)Determination in favour of Applicant under section 66 for the payment by the Respondent of the sum of $7,500.00 in respect of a 10% permanent loss of efficient use of the right leg at or above the knee.

(E)Determination in favour of Respondent in respect of Applicant’s claim under section 67.

(F)Respondent to pay the Applicant’s costs as agreed or assessed.

16.The appeal concerns only the decision, by the Arbitrator, not to award weekly compensation payments to Mr Layton.

17.The ‘Application Appeal Against Decision of Arbitrator’ was lodged in the Workers Compensation Commission on 6 May 2005, this was within 28 days as specified in section 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). The Application that I am dealing with bears the Commission date stamp of the 6 May 2005. The application was resubmitted on 17 May 2005. There is no explanation as to why there was a need to resubmit the application other than the additional submissions attached to the application, which I infer were added between 6 May 2005 and 17 May 2005, relevantly, the submissions state:

“2.1(a)the appeal was lodged in time but because of technical deficiency it was rejected.”

ON THE PAPERS REVIEW

18.Section 354(6) of 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.”

19.Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Mr Layton and the Council 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

20.Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

21.The amount of compensation that is at issue on appeal in this matter exceeds $5,000.00 such that section 352(2)(a) is satisfied. Further section 352(2)(b) is satisfied as no weekly compensation payments were awarded.

22.The appeal application was signed by the solicitor for Mr Layton on 6 May 2005. The document bears two date stamps from the Commission one being 6 May 2005 and the other 17 May 2005. If the latter date is correct, then the appeal was not made in time in accordance with section 352(4) of the 1998 Act.

23.The Council has made no submissions in respect to the granting of leave to appeal or as to whether the appeal was in fact filed out of time.  The Appellant’s submission is that the document was lodged in time but because of a technicality it was rejected. 

24.It is clear from an examination of the appeal documents that the application filed by Mr Layton on 6 May 2005, other than paragraphs 2.1(a) to (e) is the application that is before me.  This application complies with rule 77(3) of the Workers Compensation Rules 2003 (‘the Rules’). Mr Layton having filed this document on 6 May 2005 I am of the view that he has fulfilled the requirements of section 352(4) of the 1998 Act and has, to use the words of the section, made the appeal within the twenty-eight days after the Arbitrator’s decision. The fact that the Registrar rejected the application because of “technicality” (which would seem to be the failure by Mr Layton solicitor’s to tick a box in either paragraphs 2.1 or 2.5 in part 2 of the supporting documents to the application) does not alter the fact that the application for appeal was made within the 28 days.

25.I would, if necessary, pursuant to rule 77(8) of the Rules have extended time for the filing of the appeal to 17 May 2005.  I am of the view that substantial injustice would have been suffered by Mr Layton if the right to appeal had been lost.  It would be an exceptional circumstance if Mr Layton was denied his right because of the failure, by his legal representatives, to tick the appropriate answer in the pro-forma, form 9 ‘Appeal Against Decision of an Arbitrator,’ a document issued by the Workers Compensation Commission.  I am of the view that to require such a strict compliance with the rule would lead to substantial injustices for Mr Layton; see Gallo v Dawson (1990) 93 ALR 479. I, therefore, grant leave to appeal.

EVIDENCE AND SUBMISSIONS

26.Mr Layton’s legal representatives submit that the Arbitrator erred in law in failing to apply section 40(3) of the Workers Compensation Act 1987 (‘the 1987 Act’) and that the Arbitrator’s decision was against the weight of the evidence to such an extent that reviewable error has occurred.

27.The Council’s legal representative submits that there was no error of law or error of fact finding and that the decision was within a reasonable discretionary range and is not open to review.

DISCUSSION AND FINDINGS

28.I am of the opinion that the Arbitrator fell into reviewable error in relation to his factual finding that Mr Layton was fit for his pre-injury employment and that he fell into error in respect of his application of section 40 of the 1987 Act. It is necessary first of all to examine the evidence and the Arbitrator’s findings relative to his ultimate finding that Mr Layton was fit for his pre-injury duties.

Mr Layton’s fitness for his pre-injury occupation

29.In order to assess the medical evidence dealing with Mr Layton’s fitness for his pre-injury occupation, it is necessary first to define the nature of that occupation.  The description of his employment is that of a garbage collector.  It is clear from the medical report and Mr Layton’s statement, particularly at paragraph 20, that his work required him to follow a garbage truck as it moves down the street, and to lift garbage bins and carry them to the garbage truck so that they could be emptied into that truck.  Mr Layton had to work quickly to carry out this occupation and negotiate the usual defects found in roads on suburban streets.  For example, his injury in June 1998 occurred when he tripped over a pothole.  This work clearly placed strain on his knee and required a certain amount of climbing, squatting, running and the carrying of weights.

30.Dr James Bodel, the Approved Medical Specialist, who recorded a similar history to that set out above, was of the opinion that the damage and impairment occasioned to Mr Layton’s knee was caused by the injuries in September 1996, May 1997 and June 1998, as well as, ‘the nature and conditions of his employment’ up until the end of his employment in 2001.

31.The Arbitrator at paragraph 43 made a specific finding that:

“On 2 September 1996, 12 May 1997 and 22 June 1998 as well as a result of the nature and conditions of his employment, the Applicant received injuries to his knees arising out of or in the course of his employment with the Leichhardt Municipal Council.”

32.This is clearly a finding that Mr Layton’s pre-injury duties, in themselves, were causing and would have continued to cause additional damage to his knees.

33.The medical evidence before the Arbitrator was overwhelmingly against the finding that he was fit for his pre-injury occupation.

34.Dr Anthony Hodgkinson who examined Mr Layton at the request of the Council on 16 November 1999 was of the view that:

“At this stage he is reasonably fit for his previous work, but I believe that repetitive squatting or bending strain would cause recurrent aggravation of his right knee.” 

35.It is clear from this report that the doctor is not of the view that Mr Layton is completely fit for his pre-injury work which did require repetitive bending strain in lifting up the garbage containers.  Dr Hodgkinson’s opinion does not take into account the fact that Mr Layton sustained further injuries to his knees, after the examination by Dr Hodgkinson in 1999, as a result of his work duties, as found by the Arbitrator.

36.Dr Burrows, at the request of the council, examined Mr Layton on 27 August 2002.  Although the doctor was of the opinion that Mr Layton was fit to work full time as a garbage collector, he was of the view that Mr Layton may need to protect his knee from intermittent pain especially with some squatting and stair walking.  Dr Burrows’ opinion, that it is unlikely that he would suffer significant further damage to either knee if he resumed the work, is inconsistent with the findings of the Approved Medical Specialist and the Arbitrator’s findings.  Dr Burrows’ opinion is, therefore of little assistance.

37.Dr Michael Limb who, at the request of the Council, examined Mr Layton on 26 April 2004 stated, relevantly, in relation to his fitness for work:

“On the basis of the physical findings of 23 April 2004, it is my opinion that Mr Layton is fit to perform occupational duties with the following restrictions;

·     to avoid traversing uneven terrain (eg back lanes with potholes) while carrying heavy objects (eg laden rubbish bins)

·     to avoid working from crouched or lowered positions requiring prolonged and significant flexion of one or both knees.

·     to avoid excessive use of steps or ladders.

Mr Layton is not fit for his former duties as a garbage collector.  However, the duties of a garbage collector have been changed in recent years, eg it is not necessary to carry rubbish bins now as most councils provide wheel bins and tip trucks.  He is fit to work as a garbage collector under such circumstances.”

38.Dr Limb clearly supports the proposition that Mr Layton is unfit for his pre-injury occupation.  The modified duties of a garbage collector to which the doctor refers are not the duties that Mr Layton was performing when he suffered his frank injuries.  In any event these duties are not available to Mr Layton as the Council terminated his casual employment because of the risk of further injury.  The Auburn Council, for reasons unknown, also terminated Mr Layton’s employment. 

39.Mr Layton’s, relevant medical evidence consisted of Dr A P Miller and Dr Robert Elliott.  Dr Miller in his final report of 3 October 2003, following an examination of Mr Layton on 29 September 2003 stated:

“He is totally unfit for employment as a garbage collector.  He is only fit for very light work, which is alternatively sedentary and ambulatory and does not include lifting or carrying and should not involve significant or frequent use of stairs.”

40.The doctor also considers that there has been deterioration to the extent of 5% in his right knee from the previous examination.

41.Dr Elliott, in his report of 10 March 2004, refers to a report of 29 August 2002 which was not in evidence.  He states that he saw Mr Layton on 17 September 2003 because of ongoing problems with his right knee and increasing problems with his left knee.  He noted that there was swelling and occasional locking and giving way.  Climbing stairs and kneeling was painful.  He was of the opinion that Mr Layton had degenerative changes developing in both knees especially in the patella femoral joints.  He was of the opinion that Mr Layton was well motivated and had an ability to continue with his light cleaning job but he should avoid stairs, kneeling and ladder work.  He was of the view that there had been deterioration in Mr Layton’s condition. He assessed the impairment of the right knee in 1999 (there was a typographical error in the May 1990 report as it referred to the left knee when it was, clearly the right knee) at 15% impairment and was unable to give an assessment of the left knee as he had not reviewed the left knee.  In 2004 he was of the opinion that the disability was 20% of the right leg at or below the knee [sic] and 10% of the left knee at or below the knee [sic].  It is clear, in my view, that Dr Elliott’s report, findings and clinical examination are not consistent with the finding that Mr Layton is fit for his pre-injury occupation as a garbage collector. 

42.Finally Mr Layton had been referred for a binding medical assessment which was carried out by the Approved Medical Specialist, Dr James Bodel.  Although the doctor was not asked to specifically report on Mr Layton’s fitness for his pre-injury duties he made a number of relevant findings.  The doctor, at paragraph 4, found:

“There is painful retropatellar crepitus in both knees and there is tenderness over the medial joint line of each knee.  Any attempt at kneeling, squatting or climbing makes this pain worse.  There is no ligamentus laxity in either knee and no reflex abnormality or sensory impairment in the lower limb.” 

The doctor noted that Mr Layton after his employment with the Council was terminated worked at Auburn Council for about eight weeks. The doctor, at paragraph 4 recorded:

“He worked collecting garbage and that aggravated his knees.”

Dr Bodel’s summary of ‘injury and diagnosis’ was as follows:

“This gentleman has clinical evidence of painful retropatellar crepitus in both knees and some medial joint line tenderness probably associated with a degenerative tear of the medial meniscus.”

Relevantly he found:

“This gentleman’s clinical complaints are consistent with the history that he gives.”

43.The doctor found a 10% overall permanent loss of efficient use of the right and left leg at or above the knee.  Half of the loss in each leg resulted from ‘the nature and conditions of the work’ Mr Layton performed for the Council.

44.Although the doctor did not directly comment on Mr Layton’s fitness for work. The doctor’s acceptance of his clinical complaints (pain aggravated by attempting to kneel, squat or climb and the need to take medication) together with the finding that ‘the nature and conditions’ of the Mr Layton’s work for the Council caused him additional injuries and impairment to the knees is not consistent with Mr Layton being able to carry out his pre injury work duties.

45.The lay evidence in respect of Mr Layton’s incapacity consisted of a statement of Mr Layton dated 6 May 2004, histories given by Mr Layton  to various medical practitioners and documents produced by the Council; in particular an email/memo dated 5 January 2001.

46.The email/memo dated 5 January 2001 passing between council officers: Alan Willding, Bourke, Frances, Kane and Marion is particularly relevant.  At the time of the email/memo Mr Layton was working for the Council casually.  The email/memo came into existence as a result of Mr Layton making a claim for lump sum compensation for loss of use of his right and left legs.  The relevant part of the email/memo is as follows:

“I do suggest however that council should consider its position as John is apparently still being offered work on a causal basis – he was last paid in December 2000.  Given that he is claiming to have permanent loss of use of both legs, he must be viewed as being at a very high risk of sustaining further injuries if he continues performing heavy manual labour. Any new injuries would result in new claims which council would then have to bear the cost of for another three years.”

47.The memorandum is important for two reasons one it establishes that the work that Mr Layton was doing for the Council was heavy manual labour, (all doctors are of the opinion Mr Layton is incapacitated) and it establishes that in the Council’s opinion Mr Layton is unfit for his pre-injury occupation because of the risk of further injury.  The Council terminated Mr Layton’s employment after this memo/email. 

48.There is a level of tension and inconsistency in the Council; on the one hand, dismissing Mr Layton from its employment because of the risk of further injury and on the other hand in order to defeat his compensation claim, at a later date, asserting that, he has no economic loss because of his fitness for his pre-injury employment. 

49.The Arbitrator’s findings at paragraphs [38] and [43] are inconsistent with a finding that Mr Layton is fit for his pre-injury employment.  At paragraph [38] the Arbitrator concludes:

“Undoubtedly this Applicant does have ongoing bilateral knee problems related to employment factors which probably in many people would prevent their working as a garbage collector but with this particular Applicant the view I take is that he is the sort of person that would have soldiered on with his garbage collection work despite his knee problem.”

And at paragraph [43] his finding that the injury to his knees was occasioned in part by the nature and conditions of his employment is not consistent with these employment duties being suitable. 

50.In conclusion I am of the view that the Arbitrator’s ultimate finding at paragraph [38] of his decision:

“I am, therefore, not satisfied on the balance of the lay medical evidence this Applicant has established that he has an ongoing earning loss that can be attributable to employment factors.  I, therefore, find in favour of the Council in relation to the Applicant’s weekly benefits claim.  Particularly, I have reached this view since there is just no evidence of the Applicant ever having asserted to any doctor that he is unable to work as a garbage collector.” 

was manifestly against the weight of the evidence.

51.The Arbitrator’s finding of no ‘earnings loss’ because of Mr Layton’s fitness for his pre-injury duties is not only against the weight of the evidence but the evidence is, in my view, overwhelmingly in favour of the contention that Mr Layton is not fit for all of his pre-injury duties and as such is partially incapacitated for work as a result of his injuries.

52.The question of when and to what extent an Arbitrator’s decision in respect of factual matters can be disturbed on review was considered by Deputy President Fleming in Knight v Eyles Nominees Pty Limited t/as Processed Forest Products [2004] NSWWCCPD 73 (27 October 2004). The Deputy President’s decision relevant to this appeal is set out in paragraphs [36] to [38] and [40].

“An Arbitrator’s decision should not be disturbed unless, on review, it contains an error of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6).

The error must be such that, but for it, a different decision would have been made (Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).

The errors alleged by the Appellant are largely matters of discretionary judgement by the Arbitrator, on the basis of her view of the evidence before her.  As with any exercise of discretion by an administrative decision maker, this discretion must be exercised lawfully and fairly, taking into account the scope of the discretion and the objects of purpose for which it is conferred.  To succeed on the grounds of appeal the Appellant must demonstrate that the Arbitrator has failed to exercise her discretion fairly and lawfully.

Interference with an Arbitrator’s discretionary judgement as to the weight of evidence should only be done where it is manifestly obvious the discretion has so miscarried that it has not been exercised fairly and lawfully. In my view this is such a case.  The Arbitrator has not, in her reasons, given a fair or accurate account of the evidence that was before her.”

53.To adopt the terminology, used by the Deputy President in that case, the Arbitrator’s discretionary judgment, that is a finding that Mr Layton was not entitled to ongoing earning loss because he was fit for his pre-injury employment, was so contrary to the weight of the evidence that it is manifestly obvious the discretion that he exercised had miscarried and was not exercised fairly and lawfully.

54.The Arbitrator’s finding that Mr Layton was ‘fit for his pre-injury duties’ should be set aside and a finding that: “his injuries did not result in ongoing earning loss that can be attributed to employment factors” should be set aside. I am, however, also of the opinion that the Arbitrator erred in his application of section 40 of the 1987 Act to the facts

Legal error

55.The relevant statutory provisions are sections 33, section 40 and section 43A of the 1987 Act:

Section 33:If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.

Section 40(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

(2)Calculation of reduction in earnings of worker – general. The reduction in the worker’s weekly earnings is (except as provided by this section) the difference between:

(a)the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment (but not exceeding $1,000),

(b)the average weekly amount which the worker is earning or would be able to earn in some suitable employment from time to time after the injury (but not exceeding $1,000.00).

(2A)…

(2B)….

(3)Ability to earn in suitable employment.  The determination of the amount that an injured worker would be able to earn in suitable employment is subject to the following:

(a)the determination is to be based on the worker’s ability to earn in the general labour market reasonable accessible to the worker,

(b)the determination is to be made having regard to suitable employment for the worker within the meaning of section 43(A).

Section 43A:   Suitable employment

(1)For the purposes of sections 38, 38A and 40:

“suitable employment”, in relation to a worker, means employment in work for which the worker is suited, having regard to the following:

(a)the nature of the worker’s incapacity and pre-injury employment,

(b)the worker’s age, education, skills and work experience,

(c)the worker’s place of residence,

(d)the details given in the medical certificate supplied by the worker,

(e)the provisions of any injury management plan for the worker,

(f)any suitable employment for which the worker has received rehabilitation training,

(g)the length of time the worker has been seeking suitable employment,

(h)any other relevant circumstances.

56.In Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 Kirby A-CJ considered the circumstances in which an error of fact finding may result in an error of law and he stated at page [26G]:

“One exception to the immunity from review, acknowledged by their holding in Azzopardi, is where the trial judge has misdirected himself or herself, that is has defined otherwise than in accordance with law, the question of fact which is to be answered: see also Hope v Bathurst City Council (1980) 144 CLR 1 at 10 Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 138.”

57.His Honour then at page [30] proceeded to consider the question of fact which needs to be answered in order to determine a claim under section 11(1) of the Workers Compensation Act 1926 (predecessor of section 40):

“The terms and purpose of section 11(1): 

It is now convenient to set out the terms of s 11(1)(a) of the Act:

‘In the case of partial incapacity, the weekly payment shall in no case exceed the difference between the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper.’

A starting point for considering the meaning of this provision is an understanding of the purposes of s 11(1)(a) of the Act.  It is, as has been said, a provision to compensate a worker for the economic effects upon him or her of an employment injury.  The question is whether the compensable injury lessened the worker’s capacity to earn ‘in the open labour market place’: see Starke J in Williams v Metropolitan Coal Co Ltd (1948) 76 CLR 431 at 444. The subsequent question of what the worker is “able to earn in some suitable employment… after injury” must therefore be understood as that expression contributes to the achievement of the purpose of the subsection.

In Steele v Australian Gas Light Co (1962) 80 WN (NSW) 503; [1963] NSWR 1524, the Full Court had before it a case concerned with s 11(2) of the Act. However, the Court also discussed the meaning of s 11(1). Sugerman and Manning JJ in a joint judgment observed (at 506; 1528):

‘…The worker is entitled to compensation if the accident disables him from earning wages such as he was capable of earning previously to the accident.  The compensation is to be measured by the disability that is due to the injury sustained, and that compensation is to be turned into a money value according to the state of the normal market at that time without taking into account abnormal and ephemeral conditions.’

In Metropolitan Coal Co Ltd v Duffy (1966) 67 SR (NSW) 163; 84 WN (Pt 2) (NSW) 25, in this Court, Jacobs JA described the purposes of the inquiry required by s 11(1) thus (at 168; 29):

‘…The question is whether the admitted employment injury has affected the value of the worker on the labour market… The fact that his previous job is open to him and that he is able to carry it out are no doubt very important elements in determining whether the injury has affected the value of the worker on the labour market.  However, they are not conclusive and, particularly if his pre-injury employment is a suitable employment as a result of particular circumstances of the applicant’s position, it does not follow as a matter of law that the applicant has suffered no incapacity for work.’ ”

58.His Honour at page [32] went on to state that if a worker had deliberately abandoned employment which returned him an equivalent amount to his pre-injury earning then this is a matter more properly dealt with under the residual discretion to adjust weekly compensation payments in section 40 and he stated at [32F]:

“This residual discretion, rather than artificial constructions of the phrase ‘is able to earn’, seems more appropriate as a means of dealing with cases of a worker who has thrown up a job or by folly, irresponsibility or misconduct been dismissed from it.  I say this bearing in mind the purpose of the workers compensation legislation.  Relevantly, they are to provide, in money terms, for the economic measure of a continuing physical disability resulting from a work injury.”

59.The problem faced by the worker in Novello was that he had given up employment which returned to him wages equivalent to his pre-injury earning as a miner.

60.Kirby A-CJ was reviewing the approach required of a decision maker when there was evidence that the worker had engaged in employment which would return wages equal to his pre-injury earnings he stated at page [34 E to G] quoting, with approval, from a decision of Priestley JA Steggles Pty Limited v Aguirre (1998) 12 NSWLR 693. Priestley JA was also, quoting with approval from Atkin LJ in Hamilton v Shelton Iron Steel and Co Limited (1926) 96 LJKB 295:

“Priestley JA described this passage as providing the ‘Atkin principle’ which runs through the cases on this section [11(1)] and is not to be forgotten by courts applying it.  It is sufficient to include, in this judgment, the following passage:

‘…if [the partially incapacitated worker] gives up a job of his own accord, it may very well be found by the Judge that in fact that he was able to earn those wages, because except for his own fault he would be in that employment still earning those wages.  That is a matter to be taken into account: but if the job has ceased, then it seems to me it matters not why it has ceased, whether it has ceased because the employer has given up business or has become insolvent, or because the work has been suspended by reason of accident, fire, flood, or, as I think, from a strike: the job, at any rate, is then at an end and the Judge has to determine whether or not the man is able to earn in the labour market the wages, and if so, at what rate, taking into account the fact that he was when last employed earning the particular wages that he was receiving from his employers.’ ”

61.It can be seen from his Honour’s decision in Novello that the appropriate test to be applied once it has been established that a worker is partially incapacitated for work is; whether the compensable injury lessens the worker’s capacity to earn in the open labour market place.  The fact that in the past in his injured state Mr Layton has shown an ability to earn monies equal to or higher than his pre-injury earning either through suitable employment or carrying out his pre-injury duties, maybe a relevant consideration but is not determinative of the issue.

62.In a situation where a partially incapacitated worker was earning income equivalent to his pre-injury earning and he leaves that employment or the employment is taken from him and that employment is no longer available to him, that employment should not be taken into account in an assessment of section 40, as it is not part of the general labour market reasonably accessible to the worker.

63.The Arbitrator at paragraph [38] of his decision posed the wrong question to be answered in respect to a section 40 assessment, with respect, the questions to be posed as outlined in the Novello decision were:

(1)Has Mr Layton suffered an injury which results in an inability to do activities which uninjured the worker could do; and

(2)Does the resulting physical defect make his labour less saleable than it would otherwise have fetched on the labour market available to him?

The answer to both questions in the present case was clearly, yes; the medical evidence is unanimous in it support of the proposition that Mr Layton’s knee injuries limit his ability to perform manual labouring work as he did prior to his injuries, and that as a result of the physical defect his labour was less saleable on the open labour market available to him.

64.The Arbitrator then was obliged to determine the worker’s ability to earn in the general labour market reasonably accessible to the worker.

65.Had the Arbitrator in accordance with law defined the question of fact which was to be answered in respect of a section 40 assessment, it would have been clear that the reasonably accessible labour market did not include Mr Layton’s pre-injury duties or the modified pre-injury duties referred to in Dr Limb’s report. This is because the Council had terminated Mr Layton’s casual employment on being informed of his injuries. Additionally The Auburn Council had also terminated Mr Layton’s employment. Mr Layton is clearly well motivated, and if garbage collection work on a full time basis, within his capacity was available, he would have been performing that work. It is therefore clear, in my view, that garbage collection work was not work in the labour market reasonably accessible to Mr Layton.

Suitable employment 43A

66.Although not clearly expressed by the Arbitrator, the Arbitrator’s conclusion at paragraph [38] is a conclusion that Mr Layton’s pre-injury, garbage collection employment, was suitable employment as defined in section 40 and section 43A of the 1987 Act.

67.It would seem that the Arbitrator approached this assessment on the basis of a subjective test.  The Arbitrator’s determination of the suitability or otherwise of Mr Layton’s pre injury employment duties was, it would seem, based solely on the subjective assessment, by Mr Layton, of his fitness for work.  This is demonstrated by the Arbitrator’s conclusion:  “Furthermore, Mr Layton does not assert in his statement that he is unable to do the job.”  To the extent, that the Arbitrator applied a subjective test it was incorrect.  Just as a decision maker would not accept, in isolation, the subjective assertion of a worker that he is unfit for work when he has been proven to be a dishonest malingerer, the decision maker, in the appropriate circumstances, would not accept the assertion of a worker that he is fit for employment where that employment was clearly not suitable for him.  The test is an objective test and the worker’s view of himself or herself is important but not determinative.  In the present case the Approved Medical Specialist’s findings and the findings of the Arbitrator were that the very nature of Mr Layton’s work caused injury and structural damage to both knees, it follows therefore that his pre-injury employment as a garbage collector, on an objective approach, could not be considered suitable employment.

68.In conclusion, therefore, I am of the view that the Arbitrator erred in his approach both factually and legally to the assessment of Mr Layton’s entitlement under section 40 of the 1987 Act.

Assessments entitlement under section 40

69.A Presidential Member where possible should, consistent with the objects of the Act, determine the matter fully unless there is some factual or legal reason that the matter should be remitted to an Arbitrator for determination. In the present case there was no oral evidence given before the Arbitrator. The matter was decided on the papers at first instance and I have wages and medical material to determine Mr Layton’s section 40 entitlement.

70.Both parties agreed that the matter could be determined “on the papers” as such, I intend to assess Mr Layton’s entitlement to weekly compensation pursuant to section 40 of the 1987 Act.

The weekly amount which Mr Layton would probably have been earning as a worker but for the injury (section 40(2)(a) 1987 Act)

71.Mr Layton suffered injuries on 2 September 1996, 12 May 1997 and 22 June 1998 which resulted in incapacity for work. Mr Layton was working full time as a garbage collector. The weekly amount that the worker would probably have been earning, but for these injuries, would be that of full time garbage collector. Mr Layton suffered further injuries to his knees (as a result of the nature of conditions of his employment) after his voluntary redundancy and whilst working casually for the Council. In his casual employment Mr Layton was earning approximately $321.26 gross per week because he was not working full time. The earnings of comparable (full time garbage collector) employees; Mr Nance and Mr Bennett, established weekly earnings in excess of $750.00 per week. It is my view, that the appropriate assessment of Mr Layton’s earnings but for injury is that of a full time garbage collector, that is, the wages of the comparable employees of Mr Nance and Mr Bennett. The reasoning being, that at the time of Mr Layton’s ‘frank injuries,’ as found by the Arbitrator, Mr Layton was working as a full time garbage collector. In my view there is no need for further analysis as this complies with the clear wording of section 40(2)(a) of the 1987 Act.

72.However I should address what was said by the Arbitrator at paragraph [21] of his decision:

“At the time of the injury being the conclusion of the nature and conditions period Mr Layton was earning an average of $321.26 gross per week.”

73.Mr Layton has established beyond doubt that he is a motivated person who at all times has attempted to use his residual earning capacity.

74.At the time of the cessation of the nature and conditions of his employment when the Council terminated his employment because he was “a workers compensation risk” he was working casually because that is the only work that the Council could supply him with at that point in time.

75.It is clear from Mr Layton’s work history both before and after the injury that if the Council was in a position to offer him full time employment Mr Layton would have taken up that offer.

76.Applying the principles of New South Wales Harness Racing Club Limited v Forrest (1995) 12 NSWCCR 21, I am of the view that in respect of the ‘nature and conditions injury’ that the appropriate assessment of the weekly amount that the worker would have earned but for this injury is also the full time rate of a garbage collector.

77.Additionally, I am of the view, that the facts of this case bring the worker within the provisions of section 43(1)(f) of the 1987 Act, Mr Layton being a casual worker whose earnings were reduced as a result of intermittency of employment. Additionally, in my view, his income being reduced because the Council did not have full time work for him, is a “reasonable cause” within the meaning of section 43(1)(f).  As such the average weekly earnings are calculated, under section 43(1)(f)(ii), at not less than the full wage for the full normal working week of that worker.

78.Before the Arbitrator was a handwritten table of comparable employees, Mr Bennett’s and Mr Nance’s wages, from January 2001 to date.  Mr Layton’s legal advisors have submitted in their written submission that Mr Layton’s earnings but for injury were in excess of $740.00 nett per week and this is consistent with the comparable employees earnings.

79.Mr Nance’s average earnings between January 2001 and January 2005 were less than Mr Bennett but it is clear that during these periods he was not working a regular 38 hours per week whereas Mr Bennett was.

80.As I have found that the appropriate ‘comparable’ is that of a full time garbage collector Mr Bennett’s earnings would seem to be more appropriate and I have adopted the handwritten assessment that was before the Arbitrator.

81.In summary therefore I find that the earnings but for injury are as follows: 

(i)        January 2001 to January 2002 $752.00

(ii)       January 2002 to January 2003 $784.00

(iii)      January 2003 to January 2004 $805.00

(iv)      January 2004 to January 2005 $830.00

(v)       January 2005 to date and continuing $840.00

Appellant’s earnings but for injury

82.Mr Layton’s employment with the Council was terminated on 1 February 2001.

83.Mr Layton then obtained employment with the Auburn City Council where he worked from 28 February 2001 to 13 April 2001, when his employment was terminated by that Council.  Mr Layton told Dr Bodel the Approved Medical Specialist that this work aggravated his knees.

84.He was then unemployed between 14 April 2001 and 28 September 2003 where it would seem from his statement that the Commonwealth Government deemed him sufficiently incapacitated to be granted a pension.

85.From 29 September 2003 he has been working for PCYC as a cleaner.

86.Prior to his employment with the Council Mr Layton suffered a major head injury. Notwithstanding this injury, Mr Layton, up until his knee injury maintained himself in work, other than during the initial periods of recovery from the head injury.

87.Following the termination of his casual employment by the Council, because of the risk to the Council of Mr Layton suffering further injury, Mr Layton, notwithstanding his significant head injury and his significant (from a labourer’s point of view) injuries to his legs, has managed to remain in employment, other than the period of April 2001 to September 2003.

88.Mr Layton is clearly a motivated individual.  This I believe has also been made clear by Arbitrator in his reasons for decision. All doctors considered him to be genuine and motivated.  His ability to remain in the workforce with his various disabilities corroborates the doctors and Arbitrator’s opinion of him.

89.Applying the clear words of section 40 of the 1987 Act and the decision of Aitkin v Goodyear Tyre and Rubber Company (1946) 46 SR 20, it is my view, that Mr Layton’s actual earning represents his ability to earn in the general labour market reasonably accessible to him. That determines the second stage of a section 40 assessment other than for the period 14 April 2001 and 28 September 2003 when he was not working. During this period it would seem to me that the appropriate assessment of his ability to earn would either be his earnings at Auburn Council at $597.00 per week or his earnings at PCYC that is $418.30 per week.

90.I find that his ability to earn during the period; April 2001 to 28 September 2003, is $418.30 for the following reasons:

(1)The work that he was carrying out for the Council was not available to him during this period.

(2)The work that he was doing for the Council i.e. garbage collection work would, if he remained employed on a continuous basis, cause further injury to his knees.

(3)He told the AMS, Dr Bodel, that the work for the Council aggravated his knees.

91.The final question is; when does his compensation entitlement start?  The application for determination claims compensation from March 2001.  This is the basis on which Mr Layton makes his claim and this is the date from which I assess the compensation entitlement.

92.I set out hereunder a table setting out the basis of his compensation entitlement.

93.Mr Layton in his first amended application for determination does not claim any person to be dependent on him.  In his statement he states that he is living in a defacto relationship, however, Mr Layton has not asserted that he has anyone dependent upon him. 

94.I set out hereunder a table of his compensation entitlements:

Earnings but for injury	Appellant’s ability to earn in the general labour market reasonably accessible	Difference
1/3/01 to 13/4/01	$752	$597	$155
14/4/01 to 31/12/01	$752	$418.30	$337.70
1/1/02 to 31/12/02	$784	$418.30	$365.70
1/1/03 to 31/12/03	$805	$418.30	$386.70
1/12/04 to 31/12/04	$830	$418.30	$411.70
1/1/05 to date and continuing	$840	$418.30	$421.70

95.Other than the period 1/03/01 to 13/04/01 the difference between the actual earnings and the probable earnings exceed the statutory maximum rate for a worker without dependants. The parties have not made submissions in respect of the residual discretion under section 40 of the 1987 Act. In my view there is no reason to exercise discretion to reduce the mathematical difference as Mr Layton at all times has endeavoured to exercise his residual earning capacity.

96.As such Mr Layton is entitled to an award of weekly compensation under section 40 at a rate of $155.00 from 1 March 2001 to 13 April 2001 and from the 14 April 2001 to date and continuing at the maximum rate applicable as adjusted from time to time under section 37 of the 1987 Act.

DECISION

97.Paragraph A of the Arbitrator’s decision dated 8 April 2005 in respect of weekly payments of compensation is revoked and the following order is made in its place:

A.The Respondent (Leichhardt Municipal Council) pay the Appellant (John Layton) weekly compensation:

(i)at the rate of $155.00 per week from 1 March 2001 to 13 April 2001; and

(ii)at the rate of $291.10 per week (being the maximum statuary rate for a worker without dependants) from 14 April 2001, as adjusted, to date and continuing under section 40 of the Workers Compensation Act 1987.

Certificate of determination

98.It follows from this decision that the ‘Certificate of Determination’ dated 8 April 2005 as amended by this determination reads as follows:

(A)The Respondent (Leichhardt Municipal Council) pay the Applicant (John Layton) weekly compensation:

(i)at the rate of $155.00 per week from 1 March 2001 to 13 April 2001; and

(ii)at the rate of $291.10 per week (being the maximum statuary rate for a worker without dependants) from 14 April 2001, as adjusted, to date and continuing under section 40 of the Workers Compensation Act 1987.

(B)      Determination in favour of Applicant in respect of his section 60 claim.

(C)Determination in favour of Applicant under section 66 for the payment by the Respondent of the sum of $7,500.00 in respect of a 10% permanent loss of efficient use of the left leg at or above the knee.

(D)Determination in favour of Applicant under section 66 for the payment by the Respondent of the sum of $7,500.00 in respect of a 10% permanent loss of efficient use of the right leg at or above the knee.

(E)Determination in favour of Respondent in respect of Applicant’s claim under section 67.

(F)       Respondent to pay the Applicant’s costs as agreed or assessed.

COSTS

99.The Appeal having been successful I order the Respondent to pay the Appellant’s costs.

Robert Harrington

Acting Deputy President

30 May 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBERT HARRINGTON, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE