Luland v MPA Energy Services Pty Limited
[2006] NSWWCCPD 74
•2 May 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Luland v MPA Energy Services Pty Limited [2006] NSWWCCPD 74
APPELLANT: Robert Wayne Luland
RESPONDENT: MPA Energy Services Pty Limited
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC 7891-04
DATE OF ARBITRATOR’S DECISION: 2 December 2004
DATE OF APPEAL DECISION: 2 May 2006
SUBJECT MATTER OF DECISION: Fresh evidence; sections 38, 39 and 40 of the Workers Compensation Act 1987; section 40(1) discretion
PRESIDENTIAL MEMBER: Dr Gabriel Fleming, Deputy President
HEARING:On the papers
REPRESENTATION: Appellant: Higgins and Higgins Lawyers
Respondent: Rankin Nathan Lawyers
ORDERS MADE ON APPEAL: Leave to Appeal is granted
Leave to Mr Luland to admit fresh evidence is refused.
The decision of the Arbitrator dated 2 December 2004 is revoked and the following decision is made in its place:
MPA Energy Services Pty Limited is to pay Robert Wayne Luland weekly compensation at the rate of $222 from 27 November 2003 to 1 June 2004.
MPA Energy Services Pty Limited is to pay the costs of the appeal.
BACKGROUND
Robert Wayne Luland was employed by MPA Energy Services Pty Limited (‘MPA’) at Mount Piper Power Station as a mobile plant operator from early 1995. Mr Luland claims to have suffered injuries to his left shoulder on 9 April 1996 and 2 September 2003. Both injuries occurred at work. The 1996 injury occurred when he was steering a front-end loader and in 2002 when he was steering a forty-tonne dump truck. On both occasions he was attempting to manoeuvre in very confined spaces.
Mr Luland sought weekly benefits compensation and section 60 medical expenses for the period 2 September 2003 and continuing. MPA’s insurer, GIO Worker’s Compensation (‘GIO’), denied liability and subsequently, Mr Luland filed an ‘Application to Resolve a Dispute’ in the Workers Compensation Commission on 17 May 2004.
GIO acted for and on behalf of MPA, the employer, in the Commission proceedings.
THE ARBITRATOR’S DECISION
The dispute was referred to a Commission Arbitrator who held an arbitration on 28 September 2004. Prior to the Arbitration, some aspects of the claim had been resolved and it was agreed that the only period in dispute was 27 November 2003 to 1 June 2004. On appeal Mr Luland submits that his claim is for weekly compensation from “27 November 2003 to date and continuing at $429.70 (as adjusted to age 65)”.
The Arbitrator identified the following matters as in issue:
·was Mr Luland totally or partially incapacitated as a result of his work injuries;
·for what period was he partially incapacitated; and
·whether the medical expenses claimed were reasonably necessary for the compensable injury.
A ‘Certificate of Determination’ and attached ‘Statement of Reasons for Decision’ were issued on 2 December 2004 containing the following orders:
“1.Award in favour of the respondent in respect of the Applicant’s claim for weekly payments of compensation.
2.That the Respondent pay the Applicant’s section 60 of the Workers Compensation Act 1987 [‘the 1987 Act’] expenses on production of accounts or receipts.
3.That the Respondent pay the Applicant’s costs as agreed or assessed.”
The Arbitrator summarised the reasons for his decision as follows:
“In summary the resolution of the issues in dispute is as follows:
Weekly Benefits Claim:·On 9/4/96 and 2/9/2003, Robert Wayne Luland received injuries to his left arm at or above the elbow, specifically his shoulder, arising out of or in the course of his employment as a mobile plant operator with MPA Energy Services Pty Limited.
·Robert Wayne Luland’s employment was a substantial contributing factor to his injury.
·Robert Wayne Luland was unable to work as a mobile plant operator and the Respondent [MPA] provided suitable light duties in the alternative. That is, the Applicant was partially incapacitated however that degree of incapacity was acknowledged by the Respondent and suitable work provided. Any diminution in earnings on the part of the Applicant was not related to the injury.
·Robert Wayne Luland would have continued to receive his weekly earnings but for disciplinary action, and subsequent negotiated redundancy on 9 December 2003. The Applicant suffered no loss of income as a result of the injuries to his left shoulder.
Medical Expenses Claim
·Robert Wayne Luland’s medical and related expenses incurred as a result of treatment, services or assistance that were reasonably necessary for the compensable injury should be paid by the Respondent on the production of accounts and/or receipts.”
ISSUES IN DISPUTE
Mr Luland argues that the Arbitrator’s decision not to award him weekly benefits compensation is wrong, that it should be revoked and another decision made in its place that he is entitled to the compensation claimed. He has submitted numerous grounds for the appeal, which are set out in detail later in these reasons.
Clearly the issues of ‘injury’ and ‘substantial contributing factor’ are not in dispute as the Arbitrator determined these matters in Mr Luland’s favour. The grounds of appeal go generally to the Arbitrator’s findings on the weight of the evidence and the alleged failure by the Arbitrator to assess Mr Luland’s capacity to earn as a result of his injury.
LEAVE TO APPEAL
Before dealing with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The appeal meets the threshold requirement of section 352(2)(a) of the 1998 Act as the amount of compensation claimed is $1066 per week over the period 27 November 2003 to 1 June 2004 (or continuing, as argued by Mr Luland on appeal).
The threshold requirement in section 352(2)(b) of the 1998 Act does not apply as no amount of compensation was awarded in the Arbitrator’s decision (Mawson v Fletchers International Exports Pty Ltd [2002] NSW WCC PD 5).
With respect to the time limit for the filing of the appeal (section 352(4) of the 1998 Act) I note that the properly completed ‘Application: Appeal Against Decision of Arbitrator’ was filed on 17 January 2005 outside the 28-day time limit. This was the third attempt by the solicitors for Mr Luland to file the Appeal. The Commission rejected the first two attempts, as the document did not comply with the procedural requirements for appeals. The appeal was first filed on 15 December 2004, but did not address the issues required by the Practice Direction. Similarly when the appeal was filed a second time, on 10 January 2005, it did not address a required issue. The failure to properly complete the appeal documentation reflects poorly on Mr Luland’s legal representative. However Mr Luland should not suffer the substantial injustice of not having his appeal heard because of this. At stake is a substantial claim for weekly benefits compensation. Clearly he instructed his legal representatives to file the appeal, within time and some, albeit inadequate, effort was made to do so.
Leave is granted to extend time for filing of the appeal to 17 January 2005 (Rule 77(8) Workers Compensation Commission Rules 2003; section 352 of the 1998 Act).
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides that:
“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.”
The parties are on notice, via Practice Direction No. 6, that the matter may be determined on the papers and therefore all submissions must be filed with the Application and Opposition to Appeal.
Both MPA and Mr Luland consent to the determination of the appeal on the papers.
I have before me all the evidence and submissions that were before the Arbitrator and the transcript of the arbitration held on 28 September 2004.
I also have before me the ‘Application: Appeal Against Decision of Arbitrator’ setting out Mr Luland’s grounds of appeal and MPA’s ‘Notice of Opposition’ which contains submissions in relation to those grounds.
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 (section 354(6) of the 1998 Act; Practice Direction No. 6).
FRESH EVIDENCE
Between February and April 2005, Mr Luland filed three ‘Applications to Admit Late Documents’ in relation to the appeal. However, these Applications were withdrawn by consent between the parties and the Commission was notified accordingly in letters dated 1 April 2005 and 6 May 2005 from Mr Luland’s solicitors.
Since that time, Mr Luland has lodged a further three ‘Applications to Admit Late Documents’ concerning the following ‘fresh evidence’:
·filed 12 July 2005 - WorkCover NSW Medical Certificate dated 14 June 2005 by Dr Suresh;
·filed 13 July 2005 - report of Dr Suresh dated 6 July 2005; and
·filed 7 October 2005 - report of Dr Stephenson dated 18 August 2005.
Section 352(6) provides that ‘fresh evidence’ may only be given on appeal with leave. Practice Direction No. 6 sets out the process for seeking leave of the Commission to give ‘fresh evidence’ on appeal. It provides that, amongst other things, the application must contain a brief outline of the new evidence and indicate why it was not given in the proceedings before the Arbitrator and also contain submissions as to why it should be admitted. I note that Mr Luland’s solicitors have not complied with these requirements. Again, this reflects poorly on their conduct of the appeal.
The fresh evidence filed by Mr Luland is not relevant to whether the Arbitrator, on the evidence before him, erred in fact, law or discretion in coming to his decision. All of the documents filed as fresh evidence were created after the Arbitrator’s decision and are relevant only if the dispute is found to be for a weekly benefits claim that is ‘continuing’, rather than for the closed period of 27 November 2003 to 1 June 2004. The parameter of the claim, and consequently the dispute before the Commission, is a live issue on the appeal. For the reasons set out below I am of the view that the dispute before the Commission concerns only weekly compensation for the period 27 November 2003 to 1 June 2004. The ‘fresh evidence’ all relates to Mr Luland’s status after this time. It is not relevant to the matters in dispute and I am satisfied that Mr Luland will not suffer any injustice if it is not admitted.
Leave to admit fresh evidence on appeal is refused.
RELEVANT FACTS AND EVIDENCE
Mr Luland was employed by MPA from 1995 as a mobile plant operator.
He suffered an injury to his left shoulder at work, on 9 April 1996 (reported to the Insurer on 22 November 1996).
He suffered a second injury to his left shoulder at work on 2 September 2003. He lodged a workers compensation claim form in relation to that injury on 24 September 2003.
In his statement Mr Luland claimed that he was placed on ‘light duties’ from about 1 July 2003. As a result he states that he “was losing $300 per week in salary”. He was paid workers compensation weekly payments for periods of total incapacity. He claims that his employment was terminated “whilst on light duties because of my injuries and disabilities. I have been unable to obtain any alternate employment and claim total incapacity or in the alternative partial incapacity deemed total incapacity from that date”.
MPA filed evidence that on 25 November 2003 Mr Luland met with Officers of MPA in relation to his work performance. A copy of the Memorandum of this meeting was filed by MPA in the proceedings before the Arbitrator. The Memorandum records that Mr Luland accessed and downloaded material from internet sites at work, using MPA computers and on work time, that MPA considered “inappropriate and/or offensive”. The Memorandum, dated 25 November 2003 states that:
“This is the third letter you have received regarding your conduct in general in the recent past. The last letter received by yourself clearly indicated that a third letter of this nature may result in dismissal from MPA Energy Services.
Accordingly, due to your recent conduct, MPA Energy Services now has no option but to terminate your employment. This will be effective immediately.”
Dr Denovan, General Practitioner, certified him fit for ‘suitable duties’ on and from 24 September 2003 (and with subsequent medical certificates) until 9 December 2003, on which date he certified him fit for his pre-injury duties.
MPA offered Mr Luland suitable, light, duties at least from September 2003, and possibly earlier - the evidence is contradictory. Mr Luland was certainly on ‘light duties’ in November and December 2003.
Mr Luland also saw Dr Dearin, General Practitioner, who certified him unfit to work from 5 December 2003. He received cortisone injection treatment from Dr Dearin and also attended physiotherapy. Clearly the reports of Dr Denovan and Dr Dearin are contradictory. The explanation given by Mr Luland (in his statement dated 25 August 2004) for this contradiction is that:
“As the employer wished to offer me a retrenchment package it required me to be certified fully fit for work to be entitled to the package. They arranged for me to see Dr Denovan who provided that certificate on 9 December 2003”
Despite the purported termination of his employment on 25 November 2003 Mr Luland, on 9 December 2003, accepted a voluntary redundancy package from MPA. This arrangement was entered into after negotiation with MPA on his behalf by his union. He states that he has not been able to find other employment since then.
On 2 February 2004 Mr Luland lodged a claim on MPA for weekly compensation, on and from 2 September 2003, and medical expenses in relation to his injuries. The claim for medical expenses was met. The weekly benefits claim was disputed.
On 17 May 2004 Mr Luland filed an ‘Application to Resolve a Dispute’ in the Commission.
Both parties filed medical evidence in the Commission. Mr Luland filed a report of Dr Burgess, Orthopaedic Surgeon, dated 16 February 2004, which stated that as of that date Mr Luland was unable to work in his pre-injury job “or in any labouring type of job that places a specific impact on his left shoulder”. Mr Luland saw Dr Biggs, Orthopaedic Surgeon and on 29 April 2004, he reported that Mr Luland required surgery to his left shoulder. This surgery was conducted in June 2004.
MPA relied upon the report of Dr Denovan, dated 9 December 2003, that stated Mr Luland was fit for his pre-injury employment from that date. MPA also filed a report of Dr Stephenson, Orthopaedic Surgeon, dated 3 August 2004, which states that Mr Luland was incapacitated for work at that date, as a result of the injury on 2 September 2003.
GROUNDS OF APPEAL – SUBMISSIONS AND FINDINGS
In order to be successful on appeal Mr Luland must demonstrate the Arbitrator has made an error of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, as applied to the Commission in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6; The King Island Company Limited v Deery [2005] NSW WCC PD 1).
The error must be such that, if it were not made, a different decision would have resulted (Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56).
A Presidential Member determining the appeal may revoke the arbitrator’s decision and substitute a different decision for it, or may remit the matter to the arbitrator concerned or a different arbitrator for re-determination in accordance with the decision on appeal (section 352(7) of the 1998 Act).
The ‘Application to Appeal’ lists seventeen grounds of appeal, without elaboration as to how and where the Arbitrator might be seen to have made errors in relation to them. The failure by Mr Luland’s legal representative to file more substantive submissions is surprising, given that the appeal was in fact filed three times. I have proceeded to determine the appeal on the submissions filed, in accordance with the express agreement of both parties.
Mr Luland’s grounds of appeal may be summarised as follows:
Nature of the Dispute Error
·The Arbitrator failed to head nature of claim as from 27 November 2003 to date and continuing.
Section 40 Errors
·The Arbitrator failed to properly apply section 40 of the 1987 Act.
·The Arbitrator found the applicant partially incapacitated pursuant to section 40 but failed to enter an award accordingly.
·The Arbitrator failed to properly consider the steps necessary under section 40 to determine the applicant’s capacity on the open labour market and loss compared to comparable employees as opposed to his artificially created position whilst on light duties.
· The Arbitrator failed to consider, as he was required to do that the artificially created position by the Respondents that involved no work by the applicant did not represent his capacity to earn on the open labour market.
· The Arbitrator failed to find the applicant totally incapacitated on the open labour market by recognition of the evidence that the applicant had no demonstrable earning capacity on the open labour market under section 40(3)(a) as required to.
· The Arbitrator failed to properly apply the steps laid down in Mitchell v Central West Health Service (1997) 14 NSWCCR 527.
·The Arbitrator failed to exercise his discretion under section 40(1) in terms of what is “proper in the circumstances of the case” by applying workers compensation principles generally.
Weight of Evidence Errors
·The Arbitrator’s findings of fact were against the weight of the evidence in relation to allegation of past conduct.
· The Arbitrator failed to consider the unchallenged evidence of Mr Luland that he was singled out and discriminated against on the basis of his workers compensation claim.
·The Arbitrator failed to consider Mr Luland’s evidence that the purported disciplinary action was without basis.
·The Arbitrator placed undue weight on denied allegations of misconduct by the employer that were not relevant to the matters in issue.
Section 11A Error
·The Arbitrator mistakenly sought to apply section 11A in relation to ‘reasonable disciplinary action’ that is only applicable to psychological injury or claim for physical injury.
·The Arbitrator appeared to confuse Industrial Court issues relating to unfair dismissal with workers compensation issues of incapacity.
Section 38 Error
·The Arbitrator failed to consider the breach of section 38 of the 1987 Act by singling out and terminating the applicant on what he alleges was an artificial and unfair pretext whilst on light duties.
Section 39 Error
· The Arbitrator failed to consider or make findings under section 39.
Inadequate Reasons Error
·The Arbitrator failed to provide adequate reasons for the decision.
Nature of the Dispute Error
Mr Luland submits that the Arbitrator failed to “head nature of claim as from 27 November 2003 to date and continuing” (sic).
MPA submit that Mr Luland’s claim in respect of the period 2 June 2004 to date and continuing was discontinued by consent. As there was no dispute in respect of that period, it was not the subject of the determination and cannot be revisited on appeal. Given that Mr Luland was paid until his redundancy on 9 December 2003, they submit that the real dispute concerns the period from 9 December 2003 to 1 June 2004.
This ground of appeal has no merit. It is a surprising claim in light of what occurred at the arbitration proceedings, as recorded in the transcript of those proceedings of 28 September 2005. Mr Collins, solicitor, appeared for Mr Luland at the arbitration. I note he also appears on the appeal. The transcript reads, at page one, as follows:
“ARBITRATOR: Thank you. At this point, then I might just ask you, Mr Collins, as the Applicant, what the claim is at this point.
MR COLLINS: Right. The claim has now resolved in many respects to be a closed-period claim from 27 November 2003 to 1 June 2004, the applicant having had surgery on 2 June 2004, and the insurer voluntarily commencing payments of weekly payment at the – and I’m reading from my friend’s letter, if that’s not a problem - at the rate of $544.20 gross per week, being the statutory rate for a worker with dependent spouse and two dependent children, from 2 June 2004 to date and continuing, subject to the provision of appropriate WorkCover medical certificates.So the only issue then is the issue from 27 November 2003 to 1 June 2004 . . . at the rate of $1066 per week . . . ”
In addition, Mr Collins put to Mr Luland, when giving his evidence in chief to the Arbitrator, that “you understand that there’s a dispute in relation to your compensation from 27 November 2003 to 1 June 2004”. To which Mr Luland replied “yes” (page 10 of the transcript of arbitration).
It was also agreed that the section 60 expenses were not in issue and had, in fact, been paid.
Clearly the Arbitrator did not err in treating the dispute between the parties as relating to a weekly claim for compensation for the period 27 November 2003 to 1 June 2004. Other matters had been resolved in the conciliation stage of the proceedings or by agreement between the parties prior to the arbitration. The closed period claim is exactly as the matter was put to the Arbitrator for determination. It reflects poorly on Mr Luland’s legal representative that this submission is now made on appeal, in direct contradiction of the submission put, by the same legal representative, at the arbitration.
Section 40 Errors
Section 40 of the 1987 Act provides for the payment of weekly compensation during any period of a worker’s partial incapacity.
The Court of Appeal held in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) that section 40 of the 1987 Act requires the finder of fact undertake a five-step process being:
1.Determination of the weekly amount the worker would probably have been earning if uninjured.
2.Determination of the amount that the worker is earning or would be able to earn subject to subsection 40(3) and section 43A.
3.Subtraction of the figure in 2 from the figure in 1.
4.Exercise of the discretion contained in subsection (1) of section 40 (being a discretion to reduce the amount otherwise payable, not increase it); and
5.Make an award in the amount arrived at by step 4.
Mr Luland claims that the Arbitrator failed to properly apply section 40 of the 1987 Act in that he:
·found Mr Luland partially incapacitated pursuant to section 40 but failed to enter an award;
·failed to properly consider the steps necessary under section 40 to determine Mr Luland’s capacity on the open labour market and loss compared to comparable employees as opposed to his artificially created position whilst on light duties;
·failed to consider that the artificially created position by MPA involved no work by Mr Luland and did not represent his capacity to earn on the open labour market;
·failed to find Mr Luland totally incapacitated on the open labour market by recognition of the evidence that the applicant had no demonstrable earning capacity on the open labour market under section 40(3)(a);
·failed to properly apply the steps laid down in Mitchell; and
·failed to exercise his discretion under section 40(1) of the 1987 Act.
MPA submit that the Arbitrator correctly applied section 40 of the 1987 Act. They submit that the Arbitrator was entitled to take into account the fact that Mr Luland would probably not have been employed by MPA, or at all, had he not been injured (Viliami v National Springs (1993) NSWCCR 453). MPA submit that a finding of incapacity does not necessarily give rise to an award under section 40.
MPA submit that whether or not the determination is couched in terms of Mitchell, the decision was correct on its merits. In particular, once the Arbitrator has determined that the earnings under section 40(2)(a) were nil or the difference between Mr Luland’s earnings under section 40(2)(a) and section 40(2)(b) was zero there is no need to exercise the discretion under section 40(1). MPA argue that, in any event, section 40(1) does not provide a discretion to increase the amount of the entitlement in excess of the reduction in the weekly earnings as defined in section 40(2).
MPA also claim Mr Luland adduced no evidence at the hearing as to what he could have earned on the open labour market had he not suffered any injury and thus there is no basis for finding that his probable earnings but for the injury were any greater than his earnings in some suitable employment following the injuries. MPA argue that the earnings of comparable employees are irrelevant given the Arbitrator’s findings about the termination of his employment. Further, Mr Luland did not adduce evidence indicating he could obtain similar employment with another organisation given his disciplinary records.
The Arbitrator states, at paragraphs 27 and 28 of his reasons, that:
“27.The Applicant relies upon Dr Denovan’s certificate to obtain a redundancy payment, a condition of which is that the Applicant is fit for pre-injury duties. Such clauses are ordinarily found in redundancy agreements because it is unlawful to contract out of workers compensation entitlements. The Applicant suggests to me that the certificate was “necessary” to obtain the redundancy payment. I am sure it is not suggested to me that the certificate is fraudulent, or reflects anything other than the Applicant’s medical and physiological condition at the time. I do not regard it as anything other than such an accurate reflection, and the Applicant has relied on that assessment to obtain a redundancy payment.
28 It has been submitted to me that I might also consider partial incapacity for some or all of the claimed period. A difficulty with this approach is that the Applicant has been found to be fit for light duties by virtually every medical practitioner, in addition to the Occupational Therapist Ms Tancred on 2 December 2003. Suitable light duties were available at the Respondent’s workplace, and, but for the disciplinary action, the Applicant could have continued to work in that situation, at least up until the date of surgery, which is after the claimed period.”
The Arbitrator’s reasons lack clarity and coherence relevant to the statutory basis for an entitlement to weekly compensation benefits. The findings in paragraph 27 appear to lead to the conclusion the Arbitrator was persuaded by the medical evidence of Dr Denovan that Mr Luland was fit for pre-injury duties on 9 December 2004 and therefore was not incapacitated for work at all. However the findings at paragraph 28 suggest that the Arbitrator was persuaded by the weight of the medical evidence that Mr Luland was partially incapacitated, but suffered no economic loss as a result of this incapacity because he was offered, and able to perform, suitable duties by his employer. In either case Mr Luland suffered no loss of income, however the basis for the decision should have been made clear.
In my view Mr Luland is correct to assert that the Arbitrator erred in failing to properly consider the steps necessary under section 40 and to properly apply the steps laid down in Mitchell.
The fact that Mr Luland injured his left shoulder and that his employment was a substantial contributing factor to his injury is, on the evidence, rightly not in issue. It is necessary to review the evidence that was before the Arbitrator on the issue of incapacity for the period 27 November 2003 to 1 June 2004. It is, in summary, as follows:
· In the months leading up to 27 November 2003 Mr Luland was doing light duties, being ‘office work’ full time for MPA. The duties he was given did not fill his working hours and he was ‘bored’ and wanting more work to do.
· On 22 October 2003 Mr Luland underwent a functional assessment by AIMS, injury management specialists, and it was recommended that he could perform restricted duties, including limits on lifting. Mr Luland reported to AIMS that he had increased pain in his left shoulder. A further Workplace Assessment Report by AIMS, dated 19 November 2003, which recommended that Mr Luland could perform a range of duties, albeit with a lifting restriction.
· Mr Luland saw Dr Dearin, General Practitioner, on 5 December 2003. Dr Dearin gave him a cortisone injection in the left shoulder and certified him fit only for light duties until 5 January 2004.
· Mr Luland also consulted Dr Gounder, General Practitioner, in Dr Denovan’s surgery, who certified him fit for only light duties on 4 November 2003.
· Dr Denovan certified Mr Luland fit for suitable duties from 18 September 2003, through October and until November 2003. Mr Luland saw Dr Denovan, on behalf of MPA, on 9 December 2003, who certified him fit for his pre-injury duties on and from that date. In his statement of 13 April 2004 Mr Luland describes Dr Denovan also as “my General Practitioner”. He had previously nominated Dr Denovan as his treating doctor.
· Mr Luland received a course of physiotherapy treatment to his shoulder from September to December 2003. On 4 December 2003 Ms Stevens, Physiotherapist, reported that Mr Luland continued to have pain in the shoulder.
· Dr Biggs, Orthopaedic Surgeon, examined Mr Luland on 29 April 2004 and reported, on 21 May 2004, that Mr Luland had “significant pathology associated with the left shoulder” and advised surgery.
· Mr Luland gave oral evidence that he continued to have shoulder pain up until surgery was carried out in June 2004.
· On 31 August 2004 Dr Burgess reported significant improvement in Mr Luland’s shoulder following surgery, albeit with limitations on range of movement.
· Dr Stephenson, for MPA reported, on 3 August 2004, that Mr Luland was incapacitated for work other than light office duties.
The overwhelming weight of the medical evidence supports the conclusion that Mr Luland’s injury, at work, on 2 September 2003 continued to cause him to be to be incapacitated for his normal duties throughout the remainder of 2003 and until his surgery in July 2004. The evidence is that he was still incapacitated for his normal duties after the surgery, but this is not relevant to the period of the claim that was before the Arbitrator, i.e. 27 November 2003- 1 June 2004. In my view the report of Dr Denovan dated 9 December 2003 should be given little weight. It is at odds with all of the other evidence, including Mr Luland’s own account, physiotherapy and rehabilitation reports and Dr Dearin. It is not plausible, nor consistent with the whole of the evidence, that Mr Luland was fit for his pre-injury duties on 9 December 2003, having been certified unfit only weeks before by Dr Denovan, and only four days before by Dr Dearin, and being referred for surgery to his left shoulder in April 2004.
The difficulty is that Mr Luland used this same report of Dr Denovan to claim his redundancy entitlement. I note that Mr Luland has accepted the redundancy monies on the basis of Dr Denovan’s report. Whether there was any misrepresentation made in relation to the redundancy is not the issue to be determined here. Any action in relation to that is for MPA and Mr Luland in another forum. The role of the Arbitrator was to determine Mr Luland’s incapacity arising from his injury, if any, on the whole of the evidence. It was then for the Arbitrator to determine whether any entitlement to weekly compensation arose because of this incapacity. It is untenable to find that Mr Luland was not partially incapacitated for work from 27 November 2003 to 1 June 2004.
Whether or not Mr Luland’s partial incapacity led to any economic loss is the next question. Section 33 of the 1987 Act provides that:
“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.”
The amount of weekly payments during any period of partial incapacity falls to be determined in accordance with section 40 of the 1987 Act. Mr Luland is correct to argue that the Arbitrator failed to properly apply the steps necessary to make an assessment under that section. I find that the application of section 40 of the 1987 Act to the evidence is as follows:
STEP 1
It was agreed that, had Mr Luland continued in his employment with MPA, he would have been earning $1,066 per week. However the question to be asked is “what is the weekly amount Mr Luland would probably have been earning if uninjured”. This amount is calculated on the basis that the worker would have continued in the employment he was in at the time of the injury.
The Arbitrator found that Mr Luland was “not entitled to weekly payments under s40 as any diminution in income is not as a result of an injury sustained at the workplace of the Respondent, but as a result of his termination for discipline reasons, and then his decision to accept a redundancy effective 9 December 2003”.
This reasoning is in error for two reasons. Firstly, while there may be other factors that are relevant to whether the worker’s employment would have ceased, these should be considered in the exercise of discretion in relation to the award (Step 5; Section 40(1); Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50; Harding v Transfield Pty Ltd (2003) 25 NSWCCR 86). Secondly, the acceptance of a redundancy payment does not, of itself, deny an injured worker compensation where there is a continuing partial incapacity to work (Priest v Southern Cross University [2005] NSWWCCPD 111).
The answer to STEP 1 is $1066.00.
STEP 2
This requires a determination of the amount that Mr Luland is earning or would be able to earn in some suitable employment from time to time after the injury (subject to subsection 40(3) and section 43A).
Mr Luland would not have been working for MPA, either in his normal duties or in light duties, after 27 November 2003, regardless of his injury. This is because his employment was terminated for reasons unrelated to his injury. Had Mr Luland not been terminated or not accepted a redundancy payment his ‘light duties’ would likely have continued.
At the arbitration Mr Luland’s legal representative submitted that Mr Luland would be able to earn between $10 and $20 per hour, for between fifteen and twenty hours per week. These figures appear to be chosen at random – resulting in an earning capacity of between $150 and $400 per week. The evidence is that Mr Luland is a resident of a country town with limited employment possibilities; he is unskilled and has poor educational qualifications. He has some computer and clerical skills.
The evidence in relation to Mr Luland’s capacity to earn in suitable employment is very poor. However, in the circumstances of this case, I accept the submission made by his legal representative that he had a residual earning capacity of $400 per week.
STEP 3
Subtracting $400 from $1066 leaves $666 per week ($1066 minus $400).
STEP 4
This requires the exercise of the discretion contained in subsection (1) of section 40 - being a discretion to reduce the amount otherwise payable, not increase it. It is in this step that “the artificialities which may result from the required hypotheses in the first [and second] stage can be adjusted to take account of the ‘realities of law and fact proved in the evidence of the particular case.’” (Farrell v Metromix Pty Limited [2001] NSW CA 166; Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 538-541). This is a case where there are a number of factors relevant to the exercise of the discretion to award weekly benefits compensation.
The discretion should be exercised in accordance with the purpose of section 40 of the 1987, which is:
“not to ensure that an injured worker’s post injury earnings are the same as were his pre-injury earnings, but to ascertain, and to provide for the payment to the injured worker of, a money sum which represents a value of the diminution in the earning capacity of the worker which he has suffered as a result of the relevant injury” (Malco Engineering v Ferreira (1994) 10 NSWCCR 117 at 134).
Mr Luland’s employment was terminated by MPA because he was alleged to have breached the company’s policy of accessing inappropriate material on the Internet. His diminution of earning capacity resulting from this has been addressed in relation to the calculation of his earning capacity in suitable employment post injury (Step 2).
The calculation of by how much to reduce the amount of an award of weekly benefits to Mr Luland, if at all, is particularly difficult in the circumstances of this case. To reduce the award to $Nil appears unjust in the face of the clear evidence of Mr Luland’s continuing incapacity and its causal relationship to his employment. The fact that he underwent shoulder surgery in June 2004 is one indicator of the severity of the symptoms during the period immediately preceding that.
The fact of the redundancy payment and the circumstances surrounding its negotiation, in so far as they also relate to Mr Luland’s injury, incapacity and claim for weekly payments of compensation, is relevant to the exercise of discretion under section 40(1) (Zinc Corporation Ltd v Robbins [1999] NSW CA 194). Mr Luland clearly made himself unavailable for suitable duties at MPA when he accepted the redundancy offer. However, any reduction in Mr Luland’s weekly compensation pursuant to section 40(1) should not be equated to the amount of a redundancy payment. Such a payment compensates a worker for a range of factors relevant to the lack of secure employment, including loss of income, recognition of past service and loss of other opportunities within a workplace. Mr Luland gave evidence that he accepted a cash redundancy payment on the basis of Dr Denovan’s report that he was fully fit to return to his normal duties, while at the same time he maintains that he continued to be fit only for light work.
It is untenable for Mr Luland to argue contradictory claims, namely that he was fit for his pre-injury employment and only fit for suitable duties, during the same period. It is also untenable that Mr Luland then obtains a substantial financial benefit from such duplicity. To do so would put Mr Luland in a financially better position post-injury, when compared with his pre-injury earnings. However, the exercise of discretion in section 40(1) must not be punitive. This is a case where care must be taken not to use the determination of weekly benefits as a punitive measure for Mr Luland’s apparently duplicitous claims on his employer. On one issue Mr Luland’s legal representative is correct, namely that whether or not Mr Luland was properly entitled to his redundancy payment is a matter for a different forum, perhaps the Industrial Commission of NSW (as suggested by his legal advisor) not for the Workers Compensation Commission.
There was also evidence that the restructuring of MPA would have likely resulted in a reduction of Mr Luland’s income even if he were not injured, although exactly when the restructure would have had that result was not made clear.
There was no evidence of Mr Luland seeking alternative employment in order to limit the loss of earning capacity that resulted from his injury.
In summary, I find that the amount of compensation payable to Mr Luland should be adjusted because:
·in accepting the redundancy he removed himself from the possibility of suitable duties at MPA;
·he has not evidenced any desire or action on his part to find alternative employment in the relevant period; and
·the restructuring of his workplace would likely have reduced his earning capacity in any event.
Taking all of these factors into account I am of the view that Mr Luland’s award of weekly compensation should be reduced by a further two thirds, the amount of $444 per week for the period 27 November 2003 to 1 June 2004. The fixing of this amount is informed by the particular circumstances of this case.
STEP FIVE
Exercising the discretion to make an award that is ‘proper in the circumstances’ of the case, and taking into account the matters set out above, I would reduce the award to $222 ($666-$444).
Weight of Evidence Errors
Mr Luland submits that the Arbitrator’s decision was against the weight of the evidence in that the:
·Arbitrator’s findings of fact were against the weight of the evidence in relation to allegations of past conduct.
· Arbitrator failed to consider the unchallenged evidence of Mr Luland that he was singled out and discriminated against on the basis of his workers compensation claim.
·Arbitrator failed to consider Mr Luland’s evidence that the purported disciplinary action was without basis.
· Arbitrator placed undue weight on denied allegations of misconduct by the employer that were not relevant to the matters in issue.
In response to this ground MPA submit that the evidence about discrimination was challenged by a substantial weight of evidence. MPA submit that the evidence supported the findings relating to past conduct and their submissions contain details of the evidence before the Arbitrator relating to this issue.
The weight of evidence grounds have largely been addressed above, however, as they form separate and distinct grounds of appeal they are also considered here.
The general nature of the complaint that the Arbitrator’s findings were “against the weight of the evidence in relation to allegations of past conduct” does not disclose an error by the Arbitrator. I assume the “conduct” referred to is the breach of company policy in relation to accessing inappropriate material on the Internet. It is simply false to claim that “the unchallenged evidence of Mr Luland that he was singled out and discriminated against on the basis of his workers compensation claim”. The transcript records Mr Luland’s evidence that while eight or ten persons were involved in accessing the Internet without permission, disciplinary action was taken against only one other worker. However this person was not on workers compensation. The result being that two persons were subject to disciplinary action over the breach, one was in receipt of workers compensation payments and the other was not. There was no probative evidence before the Arbitrator to suggest ‘discrimination’ against Mr Luland on the basis of his workers compensation claim.
The Arbitrator was entitled to consider the evidence in relation to Mr Luland’s termination of employment. This was clearly relevant and Mr Luland himself sought to put it in issue as he claimed that the report of Dr Denovan was obtained only to facilitate his redundancy payment - as an alternative to a simple termination for breach of company policy. These matters are relevant to the issues of earning capacity in the calculation of section 40 entitlements for partial incapacity and as can be seen from the process set out above, they are relevant to the exercise of discretion to adjust an award “in the circumstances of the case”.
The weight to be given to logically probative evidence is a matter for the discretion of the Arbitrator, to be exercised fairly and lawfully. The Arbitrator did not err in giving weight to the evidence of Mr Luland’s conduct in his employment and of the circumstances of his termination and redundancy from his employment.
Section 11A Error
Mr Luland submits that the Arbitrator:
·mistakenly sought to apply section 11A of the 1987 Act in relation to ‘reasonable disciplinary action’ that is only applicable to psychological injury or claim for physical injury; and
·appeared to confuse Industrial Court issues relating to unfair dismissal with workers compensation issues of incapacity.
MPA submit that the Arbitrator has not sought to apply section 11A and found on the basis of logically probative evidence that Mr Luland’s employment was terminated because of misconduct (and not as a result of a work related injury). MPA submit that the Arbitrator did not confuse industrial relations issues with the workers compensation issues and that the termination of Mr Luland’s employment for disciplinary reasons was irrelevant to incapacity. It is submitted by MPA that the weight of the evidence contradicts the assertion that the purported disciplinary action was without basis.
The Arbitrator’s reasons for decision make no reference to section 11A of the 1987 Act. Nor is there any reference to section 11A in the submissions or in the transcript of the Arbitration. There is no detail provided of this alleged error by the Arbitrator and nothing on the face of the documents to substantiate this assertion. Section 11A relates to compensation for psychological injury which was never an issue in this matter.
The Arbitrator did not err in relation to the application of section 11A of the 1987 Act.
Section 38 Error
Mr Luland submits that the Arbitrator failed to consider the breach of section 38 of the 1987 Act in circumstances where MPA singled out and terminating his employment, on what he alleges was an artificial and unfair pretext, whilst on light duties.
MPA submit that section 38 does not impose obligations on an employer and therefore the Arbitrator did not fail to consider that issue.
Section 38 of the 1987 Act provides for ‘special initial payments’ of workers compensation where a worker is partially incapacitated and not ‘suitably employed’. Mr Luland had been ‘suitably employed’ on ‘light duties’ after his injury in September 2003. Mr Luland accepted the redundancy package on 9 December 2003 and thereby indicated to the employer that he was not available for ‘suitable employment’. He did not approach the employer for suitable duties after 9 December 2003. There was no evidence that he was seeking suitable duties elsewhere during the relevant period.
The Arbitrator did not err in relation to section 38 of the 1987 Act.
Section 39 Error
Mr Luland submits that the Arbitrator failed to consider or make findings under section 39 of the 1987 Act.
Section 39 provides that:
“(1) If-
(a)a worker is fit for employment of a kind not commonly available for a person in the worker’s circumstances; and
(b)but for this section, the worker would be entitled to be compensated under this Division as totally incapacitated for work,
the worker is not entitled to be so compensated unless-
(c)the worker proves to the satisfaction of the Commission that the worker has taken all reasonable steps to obtain (but has failed to obtain) employment for which the worker is fit; and
(d)payment is made in accordance with the Commission’s order.”
MPA submit that section 39 is inapplicable and further submit that there was no evidence before the Commission to support the assertion that Mr Luland would not have continued to be employed on suitable duties and to receive his normal earnings. MPA refer to paragraph 28 of the Reasons which states as follows:
“It has been submitted to me that I might also consider partial incapacity for some or all of the claimed period. A difficulty with this approach is that the Applicant has been found to be fit for light duties by virtually every medical practitioner, in addition to the Occupational Therapist Ms Tancred on 2 December 2003. Suitable light duties were available at the Respondent’s workplace, and, but for the disciplinary action, the Applicant could have continued in that situation, at least up until the date of surgery, which is after the claimed period.”
I accept MPA’s submission on this alleged error. Mr Luland did not argue this claim before the Arbitrator nor did he present evidence to satisfy the claim that he was “fit for employment of a kind not commonly available for a person in his circumstances”.
The Arbitrator did not err in the application of section 39 of the 1987 Act.
Inadequate Reasons Error
Mr Luland submits that the Arbitrator failed to provide adequate reasons for the decision. MPA submit that the reasons are correct.
An Arbitrator has a statutory obligation to provide adequate reasons for decision (section 294(2) of the 1998 Act). Rule 73 of the Workers Compensation Commission Rules 2003 provides as follows:
“(1) A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and(c) the reasoning processes that lead the Commission to the conclusions it made.
(2) Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
The failure to give adequate reasons is an error of law. The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself, the statutory context of the decision and the nature of the decision-maker (see discussion in Mayne Health Group t/as Nepean Private Hospital v Sarah Sandford [2002] NSW WCC PD 6). It is not necessary for Commission Arbitrator’s to write lengthy and legalistic decisions. Nor is it necessary for an Arbitrator to identify every piece of evidence in the proceedings. However it is necessary that they meet the minimum requirements of Rule 73 and that the reasons communicate clearly to the parties the basis upon which the decision was made.
Unfortunately the Arbitrator’s statement of reasons is difficult to read because it has numerous spelling and layout errors and refers to incorrect dates (see paragraphs 14, 15, 18 19, and 22). The Arbitrator also fails to give an adequate account of the factual evidence, which he later relies upon in coming to his decision. He refers in his findings, for example, to the disciplinary proceedings against Mr Luland, without setting out what occurred and whose evidence of what occurred he accepted. The Arbitrator gives a summary given of Mr Luland’s statement but does not refer to any of the medical certificates and other documents filed that were relevant to his claims, eg. the reports of injury, the memorandum of the meeting at which he was dismissed or the occupational reports. I note that the Arbitrator found it unnecessary to examine the medical evidence however, nonetheless the recitation of the medical evidence should have been clear (for example, a report of Dr Gounder is referred to at paragraph 18 but is not listed as in evidence for either party at paragraph 11).
As noted above the Arbitrator did not set out clearly or adequately his analysis and application of section 40 of the 1987 Act to the circumstances of this case. The ‘Findings and Reasons’ at paragraphs 23-30 of the decision do not set out the legal basis for the Arbitrator’s decision.
The Arbitrator erred in failing to give adequate reasons for the decision.
DECISION
I am satisfied that the Arbitrator erred in the application of section 40 of the 1987 Act and in giving inadequate reasons for the decision. For the reasons set out above the decision of the Arbitrator in this matter is revoked. In reviewing the Arbitrator’s decision I have come to a different view of Mr Luland’s entitlement pursuant to section 40 of the 1987 Act.
I note that the parties came to an agreement before the Arbitrator, affirmed by me on appeal, on the closed period of 27 November 2003 - 1 June 2004. Absent that agreement it would be necessary to consider in more detail what payments were made to Mr Luland from 27 November 2003 until 9 December 2003, the latter being the date that he finally separated from MPA and accepted the redundancy monies. In the absence of evidence in relation to this issue, and given the agreement of the parties before the Arbitrator I propose to make an award for the whole of the closed period. The amounts owing to Mr Luland should be adjusted between the parties to account for payments already made pursuant to his entitlement under the Workers Compensation Acts.
The following decision should be substituted for the decision of the Arbitrator: MPA Energy Services Pty Limited is to pay Robert Wayne Luland weekly compensation at the rate of $222 from 27 November 2003 to 1 June 2004.
COSTS
Mr Luland has been successful on the appeal and it is fair and appropriate that he obtain an order for costs.
MPA Energy Services Pty Limited is to pay the costs of the appeal.
Dr Gabriel Fleming
Deputy President
2 May 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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