Magic Motorcycles Pty Ltd v Bartley
[2007] NSWWCCPD 122
•24 May 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Magic Motorcycles Pty Limited v Bartley [2007] NSWWCCPD 122
APPELLANT: Magic Motorcycles Pty Limited
RESPONDENT: Kerry Bartley
INSURER:Gallagher Bassett Services
FILE NUMBER: WCC10853-06
DATE OF ARBITRATOR’S DECISION: 22 November 2006
DATE OF APPEAL DECISION: 24 May 2007
SUBJECT MATTER OF DECISION: Section 40 Workers Compensation Act 1987; calculation of probable earnings but for injury; application of Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20; exercise of discretion
PRESIDENTIAL MEMBER: Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Edwards Michael Moroney
Respondent: Slater & Gordon
ORDERS MADE ON APPEAL: Paragraph one of the Arbitrator’s determination is revoked and the following order made:
“1.Award for the Applicant under section 40 of the Workers Compensation Act 1987 as follows:
a) $146.00 per week from 12.3.2001 to 30.6.2001;
b) $73.00 per week from 1.7.2001 to 30.6.2002;
c) $3.00 per week from 1.7.2002 to 30.6.2003, and
d) $176.00 per week from 1.7.2003 to 26.7.2004.”
Paragraph two of the Arbitrator’s determination is confirmed.
The Appellant Employer is to pay one half of the Respondent Worker’s costs of the appeal.
BACKGROUND TO THE APPEAL
On 11 December 2006 Magic Motorcycles Pty Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 22 November 2006.
The Respondent to the Appeal is Kerry Bartley (‘the Respondent Worker/Mr Bartley’).
Mr Bartley is a 55-year-old man who worked for several years in his own business as an electrical contractor. On 14 February 2000 he started work for 15 hours per week as a shop assistant with the Appellant Employer’s motorcycle sales business. On 20 August 2000 he was riding a motorcycle in the course of his employment when another bike collided with him. As a result he sustained a compound comminuted fracture of his right second metacarpal and a fractured scaphoid, with tendon and skin avulsion over the dorsum of the second metacarpal.
His injury was reported and compensation was paid for a period.
On 18 July 2006 an Application to Resolve a Dispute (‘the Application’) was filed in the Commission seeking weekly compensation from 20 April 2001 to date and continuing together with lump sum compensation and hospital and medical expenses.
Mr Bartley’s claim for lump sum compensation was settled for $22,500.00 in respect of 30% loss of efficient use of his right arm below the elbow and $17,500.00 for pain and suffering. The claim for medical expenses was discontinued by consent (T10.11).
The claim proceeded to arbitration hearing before a Commission Arbitrator on 14 November 2006. Ultimately the claim was reduced to a closed period from 12 March 2001 to 26 July 2004. After hearing submissions from both parties the Arbitrator delivered an ex tempore decision in favour of Mr Bartley.
The Appellant Employer seeks leave to appeal that decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal 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 quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. There is no issue that the threshold in section 352(2)(b) is also satisfied.
Time
The appeal was lodged within 28 days of the date of the Certificate of Determination in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
PRELIMINARY MATTERS
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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 22 November 2006, records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly payments of compensation pursuant to s40 of the 1987 Act:
a.from 12 March 2001 to 30 June 2001 at the rate of $278;
b.from 1 July 2001 to 30 June 2002 at the rate of $209;
c.from 1 July 2002 to 30 June 2003 at the rate of $143;
d.from 1 July 2003 to 26 July 2004 at the rate of $320.
2.That the Respondent pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)assessing Mr Bartley’s probable earnings but for the injury to be $461.00 per week (‘probable earnings’);
(b)not assessing Mr Bartley’s probable earnings but for the injury to be $329.22 per week (‘probable earnings’);
(c)determining that Mr Bartley’s probable earnings would have increased by 3% per annum for each of the four years after his accident (‘probable earnings’);
(d)failing to consider Mr Bartley’s capacity to earn in some suitable employment (‘ability to earn’);
(e)failing to give adequate reasons to support his determination that Mr Bartley’s actual earnings reflected his capacity to earn (‘ability to earn’), and
(f)failing to exercise his discretion to determine an award that was ‘proper’ in the circumstances of the case (‘discretion’).
SUBMISSIONS AND FINDINGS
The Appellant Employer submits:
a) the Arbitrator wrongly assessed probable earnings but for the injury (section 40(2)(a)) to be $461.00 per week by considering Mr Bartley’s average earnings over the 12 months prior to the date of his accident. There was no basis for such a calculation as Mr Bartley was not a “casual worker” as defined in section 43(1)(e) of the 1987 Act;
b) the Arbitrator failed to give sufficient reasons identifying why he assessed probable earnings by reference to the 12 months prior to the date of injury;
c) there was no evidence to support the annual increase in the probable earnings by the 3% awarded by the Arbitrator. Movements in the Consumer Price Index (‘CPI’) in 2003 and 2004 were less than 3%. In Whittaker v Abacus Security and Surveillance Pty Limited [2006] NSWWCCPD 86 at [61] (‘Whittaker’) the Commission disallowed CPI adjustments because there was no evidentiary basis for that adjustment;
d) none of the restrictions in the medical evidence prevented Mr Bartley from working as a sales assistant or from increasing his earnings as an electrician;
e) the Arbitrator failed to consider whether the injury reduced Mr Bartley’s ability to perform his pre-injury duties. If there was such a reduction, the Arbitrator failed to review the wage material, which identified no economic loss had arisen from it. The tax returns demonstrated that Mr Bartley’s earnings as an electrician increased in the financial years 2002 and 2003. These records were inconsistent with the Arbitrator’s finding that Mr Bartley was not fit for work as an electrician;
f) it is conceded that Mr Bartley sustained a loss of $81.00 per week in the financial year following his injury;
g) in view of the lapse of time since the injury and the fact that there was no contemporaneous evidence as to the extent of Mr Bartley’s capacity to work in the period covering the award, it was unreasonable to rely on his actual earnings as being the determinative feature of the assessment of his ability to earn;
h) the Arbitrator failed to consider the fact that Mr Bartley’s earnings averaged $346.00 per week in 2003 or why they decreased to $184.00 per week in 2004. The Arbitrator should have found Mr Bartley’s ability to earn in 2004 was equal to his ability to his earnings in 2003. There was no evidence for a finding that Mr Bartley’s ability to earn in 2004 was equal to his “actual earnings due to the open labour market” (Appellant Employer’s submissions page six). The Arbitrator gave no consideration to the state of the labour market;
i) in Malaquin v Cargill Meat Processors Pty Ltd [2006] NSWWCCPD 156 it was held that a worker’s ability to earn was the same as his actual earnings during an earlier period of employment. There was no evidence as to why Mr Bartley’s earnings decreased in 2004 and an inference ought be drawn “in favour of the Employer for [sic] this omission that the worker would have continued to maintain such earnings as obtained in the previous financial year” (Appellant Employer’s submissions page six);
j) the Arbitrator failed to apply the principles in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’) appropriately and fairly. He ought to have found that Mr Bartley had a capacity to earn $346.00 per week in the financial year ending 2004. The Arbitrator failed to consider Mr Bartley’s ability to earn in some suitable employment and failed to state his reasons for his findings in respect of Mr Bartley’s ability to earn;
k) the Arbitrator adopted a purely mathematical approach to the calculation of the award and relied solely on the Respondent Worker’s wage schedule;
l) the Arbitrator should have found as follows:
Period Probable Actual Ability to Difference
Earnings Earnings Earn
12.3.2001-30.6.2001 $329.00 $183.00 $183.00 $146.00
1.7.2001-30.6.2002 $329.00 $266.00 $266.00 $63.00
1.7.2001-30.6.2003 $329.00 $346.00 $346.00 Nil
1.7.2003-26.7.2004 $329.00 $184.00 $346.00 Nil
m) the Arbitrator failed to consider the authority of Commonwealth v Muratore (1978) 141 CLR 296 at 300 where it was stated ‘incapacity for work’ is only relevant where it produces an economic incapacity;
n) the only restriction on Mr Bartley was in the performance of heavy physical work or fine manipulative movements;
o) the worker did not provide any evidence that his physical restrictions produced an economic incapacity. The Arbitrator did not make any enquiry as to whether Mr Bartley’s loss of earnings resulted from his injury or some other reason, and
p) the Arbitrator failed to consider what award was ‘proper’ in the circumstances and failed to exercise his discretion under section 40(1). The Arbitrator should have considered the “diverse and temporary nature” of Mr Bartley’s employment history (see Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (‘Nicholson’) and Harding v Transfield Pty Limited (2003) 25 NSWCCR 86 (‘Harding’)), especially in respect of the financial year 2004.
The Respondent Worker submits:
a) as a member of a specialised tribunal, it was open to the Arbitrator to find probable earnings in the sum of $461.00 per week;
b) circumstances may be such that it is appropriate to estimate probable weekly earnings in some comparable employment;
c) the Arbitrator did not err in his assessing Mr Bartley’s probable earnings;
d) the Arbitrator’s application of the CPI was supported by the decision of Berri (NSW) Ltd v Moxham [2005] NSWWCCPD 55 (‘Berri’);
e) Mr Bartley’s incapacity was manifest and significant;
f) the Arbitrator’s commonsense conclusion was that Mr Bartley had and has a significant incapacity on the open labour;
g) the Arbitrator’s decision clearly reflects fairness and justice between the parties;
h) it is clear from the Arbitrator’s Statement of Reasons for Decision (‘Reasons’) that he had regard to Mitchell. He referred to the steps required by Mitchell at page eight of the transcript, and
i) the Appellant Employer has not demonstrated that the Arbitrator made any error in his decision.
DISCUSSION AND FINDINGS
Probable Earnings (section 40(2)(a))
Section 40(2)(a) provides:
“(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), and…”
In determining this amount it is necessary to determine the worker’s average weekly earnings in accordance with section 43. Section 43(1)(a) provides:
“43 Computation of average weekly earnings
(1) For the purposes of the provisions of this Act relating to ‘earnings’ and ‘average weekly earnings’ of a worker, the following rules shall be observed:
(a) Average weekly earnings shall be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated, except that if, because of the shortness of the time during which the worker has been in the employment of the employer or the terms of the employment, it is impracticable at the date of the injury to compute the rate of remuneration, regard may be had to the average weekly amount which, during the 12 months previous to the injury, was being earned:
(i) by a person in the same grade, employed at the same work, by the same employer, or
(ii) if there is no person so employed, by a person in the same grade employed in the same class of employment, and in the same district.”
Thus the relevant time at which a worker’s probable earnings are to be assessed is either the time of injury or the time at which the relevant weekly compensation is due (section 42(8)).
In determining probable earnings under section 40(2)(a) it is only necessary to consider a worker’s earnings in the 12 months up to the date of injury if the worker is a ‘casual worker’ or if, because of the shortness of time during which the worker has been employed by the particular employer, it is impractical at the date of injury to compute the rate of remuneration.
In the present matter, the Appellant Employer employed Mr Bartley on 14 February 2000 as a shop assistant for 15 hours per week. Whilst the Appellant Employer’s “Report of Injury” form described his employment status as “casual”, Mr Bartley’s statement of 12 July 2006 stated that he was employed on a part time basis. A ‘casual worker’ is defined in section 43(1)(e) to be a “worker whose contracts of service are mainly contracts for separate periods each of which is of not more than 5 working days in the same industry”. There is no evidence that Mr Bartley was a casual worker within the definition of that term in section 43. Mr Bartley’s period of employment with the Appellant Employer was not so short that it was ‘impractical at the date of injury to compute his rate of remuneration’. Therefore, the appropriate measure of his probable earnings is the wage he would have earned in the same or some comparable employment.
In addition, at the time of injury Mr Bartley also earned income as a self-employed electrical contractor. It was appropriate to take that income into account in determining both probable earnings pre-injury and ability to earn post injury. In Hill v Bryant [1974] 2 NSWLR 423 it was held that section 11 of the Workers Compensation Act 1926 (the predecessor of section 40 of the 1987 Act) requires that a comparative account be taken on a weekly basis from all sources of a worker hypothetically uninjured and the same person subject to a given injury. Therefore, it was appropriate to consider Mr Bartley’s earnings as an electrician.
The evidence disclosed that in the financial year ending 30 June 2000 Mr Bartley earned $4,378.00 as an electrician or $84.00 per week (rounding to the nearest whole dollar). In the period from February to 30 June 2000 he earned $4,414.00 or an average weekly amount of $245.00 (T4.58 and T5.1) with the Appellant Employer. This gives a total average income from all sources at the date of injury of $329.00 per week.
The figure accepted by the Arbitrator as being Mr Bartley’s probable earnings was the figure set out in the wage schedule ($461.00 per week). That figure was based on his total earnings for the 2000 financial year divided by 52. The earnings for that year included earnings with Southern Cross Resources (‘Southern Cross’), the Appellant Employer, West State Training (‘West State’) and as a self-employed electrician. Mr Bartley stopped work with Southern Cross in September 1999 and with West State on 30 June 2000. As neither Southern Cross nor West State could be classified as concurrent employers at the date of injury and neither of the conditions in paragraph [22] above applied, there was no basis for taking into account Mr Bartley’s earnings with either of those companies in determining his probable earnings. The Arbitrator was in error in doing so.
In my view the correct figure for comparable earnings at the date of injury was $329.00 per week. This figure is arrived at by adding the sum of $245.00 per week Mr Bartley earned with the Appellant Employer to the sum of $84.00 per week he earned through his labours as a contract electrician.
On the question of increasing probable earnings by 3% per annum to allow for movements in the CPI, the Respondent Worker relies on Berri. In that case the Arbitrator adjusted probable earnings by 3.5% per annum. That adjustment was not overturned on appeal as the Arbitrator had reference to the earnings of an alleged comparable employee in comparison to the indexed figures for the worker’s earnings. The Arbitrator was held not to have been in error in doing so because the indexation produced a fair result when compared to the alleged comparable’s earnings.
The Appellant Employer relies on Whittaker. In my view the approach taken in Whittaker is too narrow and ignores the fact that the Commission is a specialist tribunal and that it may inform itself “on any matter in such manner as the Commission thinks fit” (Section 354(2) of the 1998 Act). Where the employer has not provided comparable earnings as required under the legislation, an adjustment to probable earnings to allow for general wage movements over time may need to be made from time to time so that cases are determined on their “substantial merits” (section 354(3) of the 1998 Act). Each case will depend on its own facts. Normally, the parties should be required to call evidence and or make specific submissions on such issues. In the present matter, after submitting that the correct figure for comparable earnings was $329.00 per week, counsel for the Appellant Employer conceded that “there’s some scope for an increase in that, but it wouldn’t be any more than a small annual percentage increase” (T2.49). Given that concession it is not now open to the Appellant Employer to complain on appeal that the Arbitrator allowed 3%. The Respondent Worker’s wage schedule allowed for an adjustment of 5%, which the Arbitrator found to be too high. It will not be appropriate to adopt a blanket 3% in all situations. It would have been preferable if the Arbitrator had been referred to or informed himself of the annual movement in average weekly earnings for full-time adult males. Those statistics reveal that those earnings increased from $988.40 per week in May 2001 to $1,111.70 in May 2004 (Australian Bureau of Statistics, Commonwealth of Australia), an increase of just under 3% per annum over three years. In these circumstances, and having particular regard to the concession made by counsel for the Appellant Employer, I believe the Arbitrator was correct to adjust the probable earnings by 3% per annum. Making that adjustment to $329.00 per week the following figures result to give probable earnings but for injury under section 40(2)(a):
12.3.2001-30.6.2001 $329.00
1.7.2001-30.6.2002 $329.00 x 103% $339.00
1.7.2001-30.6.2003 $338.87 x 103% $349.00
1.7.2003-26.7.2004 $349.03 x 103% $360.00
In the above figures I have not adjusted for the three weeks in July 2004 and have rounded all figures to the nearest whole dollar.
Ability to Earn (section 40(2)(b))
The Appellant Employer’s submission that none of the restrictions placed on Mr Bartley in the medical evidence prevented him from working as a sales assistant or an electrician is not accurate. As a preliminary point it should be noted that Mr Bartley was not employed solely as a shop assistant, but as a “salesman, cleaner” and “general hand around the shop” (report Dr Lewis, 23 October 2005, page one).
Dr Lewis, orthopaedic surgeon, examined Mr Bartley on 23 October 2005 and reported that his main injury was a compound fracture of the right second metacarpal and metacarpophalangeal joint and a fractured right scaphoid (report 23 October 2005, page four). The injury required surgical reconstruction of the injured joint and the insertion of a screw across the fractured scaphoid. Dr Lewis recorded that Mr Bartley tried to return to his electrical contracting work “but had great difficulty” and was only able to do a few small jobs (report page two). Mr Bartley had difficulty picking up small screws and using pliers. Dr Lewis felt that Mr Bartley should avoid work involving heavy and repetitive use of the right hand and would have great difficulty undertaking fine work with the right hand.
At the time of his statement on 12 July 2006 Mr Bartley said that he still got pain in his hand, particularly if he put it under stress or tried to do anything manipulative or heavy with it and had lost strength in his injured hand (Mr Bartley’s statement, paragraph 17). He listed his other relevant restrictions to be the following:
a) he is unable to go trail riding, the work activity he was engaged in when he was injured;
b) he has to be careful not to knock his right hand or put it under stress;
c) he is restricted in his daily and work activities;
d) he cannot put his hand down pipes or in holes (something that is frequently required of an electrician) for fear of knocking it and causing it to bleed;
e) he had difficulty performing the work of an electrical contractor and could only do it with the assistance of family and friends;
f) he has lost feeling and sensation in his right hand particularly over the knuckle of the right index finger;
g) his right hand aches constantly, and
h) he drops tools and household equipment more than normal.
In respect of employment, Mr Bartley stated that while he was still incapacitated he applied for his old job with the Appellant Employer in about April/May 2001 but it was not available. He attempted to continue work as an electrical contractor but that work was interrupted because of his injury. He said “up to the end of 2002 I was earning substantially less than I earned at the time of the accident” (statement paragraph six). From 2003 he secured work doing air-conditioning maintenance which increased his earnings to “roughly what I had earned pre-injury” (statement, paragraph seven). When that job finished he secured another job that involved school maintenance. On 26 July 2004 he secured a full time position with Picton Plants that paid him an amount greater than his pre-injury earnings, regardless of how those earnings were calculated.
Dr Mander, consultant orthopaedic surgeon, examined Mr Bartley on behalf of the Appellant Employer on 30 November 2001 (report 7 December 2001). At page three of his report Dr Mander noted that Mr Bartley had a significant disability “due to lack of abduction of his right index finger and ulnar deviation of the other fingers” as well as reduced power of grip and pinch in his right hand. Mr Bartley complained to the doctor of having discomfort at the end of the day and experiencing difficulty with fine handwork, particularly using tools such as pliers, screwdrivers and hammers. He also complained of discomfort in his right wrist with repetitive work and that working in confined spaces and using tools aggravated his discomfort. In terms of work, Dr Mander noted that Mr Bartley had managed to obtain work for only two days per week, as he had to be selective about the work he accepted. He had restrictions due to reduced power in his right hand and the persistent deformity in the index finger.
Dr Chapman, general practitioner, declared Mr Bartley to be fit for work on 6 March 2001. In light of the above specialist reports, I place no weight on this unsupported opinion.
I do not accept the Appellant Employer’s submission that none of the above restrictions prevented Mr Bartley from performing his pre-injury duties with it. Those duties were not restricted to mere sales assistant work but also involved physical activities, such a cleaning and trail bike riding. In any event the submission ignores the fact that the Appellant Employer declined to offer Mr Bartley any employment after the accident. Therefore, his incapacity must be assessed on the open labour market. Having a skill as an electrician, Mr Bartley chose to exercise that skill and work in that field. His actual post injury earnings were as set out in the wage schedule and reproduced in paragraph [17 (l)] above.
If an incapacitated worker has returned to work, his actual earnings are prima facie evidence of his ability to earn unless he is deliberately avoiding work or deliberately taking lower paid work (Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20 (‘Aitkin’). There is no evidence that Mr Bartley was deliberately avoiding work or taking lower paid work.
The Appellant Employer’s submission before the Arbitrator was that Mr Bartley’s earnings for the 2003 financial year were indicative of his capacity to earn in 2004 (T3.49) and that, given his demonstrated capacity to earn in 2003 there was only a compensable loss up to 30 June 2002. This submission is inconsistent with the principles stated in Aitken.
Aitkin was considered by the Court of Appeal in Pira Pty Ltd t/as Langdon & Bartley v Tucker (1996) 14 NSWCCR 26 (‘Pira’). In that case the trial judge assessed the worker’s ability to earn at a time when she was unemployed to be between $310.00 and $320.00 per week. When the worker found suitable employment for 10 hours per week (at a wage much less than $320.00) the trial judge did not make an assessment of her ability to earn but accepted her actual earnings as evidence in assessing the section 40(2)(b) part of the equation. On appeal the employer argued that the trial judge was in error and should have ignored the worker’s actual earnings and assessed her ability to earn on the same basis he had done up to the time she obtained part time employment. In unanimously rejecting that argument, the Court held, applying Aitkin, that the appropriate amount to be applied under section 40(2)(b) in determining the rate of compensation to be awarded under section 40 is, prima facie, the person’s actual earnings after injury unless it is proved that the worker’s actual earnings are not the proper test, because there is some reason unconnected with the worker’s earning power which made them lower than they should be (see headnote to Pira).
Whilst I agree that there is no evidence explaining the post injury fluctuations in Mr Bartley’s earnings, no application was made to cross-examine Mr Bartley. In these circumstances there is no reason why the principles discussed in Aitkin and Pira should not be applied in the matter before me.
I reject the Appellant Employer’s argument that Mr Bartley’s actual earnings should have been ignored. The argument fails to acknowledge the authorities of Aitkin and Pira. It also ignores the evidence set out above as to the broad ranging nature of Mr Bartley’s pre-injury duties, the fact that the Appellant Employer refused to provide employment to Mr Bartley after his injury and the significant restrictions he had and has on the open labour market. No persuasive reason has been advanced as to why Mr Bartley’s actual earnings do not represent a proper test of his capacity. The argument that the Appellant Employer has been prejudiced because it would be impossible for it to collect wage information on the wide array of customer services roles and opportunities for an electrician available to Mr Bartley from 2001 to 2004 is totally without merit and ignores the resources available to an insurer from rehabilitation specialists and vocational guidance experts.
The Appellant Employer’s argument that there was no contemporaneous evidence available to the parties during the period of the claim (March 2001 to July 2004) is incorrect and ignores the evidence from Dr Mander in his report dated 7 December 2001 addressed to the Appellant Employer’s insurer.
The authority of Malaquin turns on its own facts. In that case the worker obtained post injury employment earning $303.10 per week, which was terminated on 24 October 2004 because of a downturn in the employer’s business. That wage entitled him to an award of $446.90 per week under section 40. He obtained further full time employment on either 17 or 22 November 2004. In considering the worker’s entitlement to compensation in the period from 25 October to 16 November 2004 the Acting Deputy President found that the worker was able to earn the sum of $303.10 per week. Both before and after the short closed period the worker was in full time employment and was paid a wage from that employment that resulted in a significant economic loss. Within weeks of losing his job in October 2004 he found another similar job. It would seem reasonable on those facts that the worker’s ability to earn on the labour market available to him was reflected in his actual earnings in two jobs he obtained within weeks of each other. There are no similarities between Malaquin and Mr Bartley’s situation.
For the reasons set out above the Arbitrator was entitled to find that Mr Bartley’s actual earnings represented his ability to earn under section 40(2)(b).
Discretion (section 40(1))
Section 40(1) provides:
“40 Weekly payments during partial incapacity—general
(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.” (emphasis added)
The Appellant Employer’s reference to Muratore is misguided. That case concerned the question of who carried the onus of proof in an application under section 63 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) for judicial review of a determination by the Commissioner for Employees’ Compensation. To the extent that the submission relying on Muratore has any relevance to the case it may be relevant to the calculations under section 40(2)(b) dealt with above. For the reasons already given, I reject the submission that Mr Bartley’s incapacity did not result in an economic loss in the 2004 financial year.
The Appellant Employer’s further submissions under this heading are difficult to follow. The submission that the Arbitrator failed to make any enquiry as to whether Mr Bartley’s loss of earnings resulted from his injury or some other cause ignores the overwhelming evidence of disability set out above at paragraphs [31] to [34] inclusive. Again, that is not a discretionary matter, it is a matter under section 40(2)(b). In any event, the Arbitrator correctly noted that Mr Bartley’s injury was “a relatively serious one for a worker such as he is” (T9.24) who relies on his hands for his livelihood. The Arbitrator accepted that Mr Bartley had done what he could on the open labour market (T9.29) and accepted the actual earnings set out in the Respondent Worker’s wage schedule. On the authorities of Aitkin and Pira and, given the state of the evidence, it was open to the Arbitrator to accept those figures as representing the appropriate figures under section 40(2)(b).
The Appellant Employer argues that the Arbitrator failed to consider what award was ‘proper’ in Mr Bartley’s circumstances. At the arbitration hearing the Appellant Employer made no submissions that the discretion under section 40(1) should have been used to reduce the difference between probable and actual earnings. A party is bound by the conduct of its case at arbitration (see Metwally v University of Wollongong (1985) 60 ALR 68). An arbitration hearing is not a trial run with a view to presenting new or alternative arguments on appeal (see Autohaus Five Dock Pty Limited v Germanos [2007] NSWWCCPD 86).
If I am wrong in this approach and in circumstances where the Respondent Worker has not objected to the Appellant Employer raising the ‘discretion’ issue on appeal, it is appropriate that I consider it. It is correct that the Arbitrator did not make any direct reference to the exercise of his discretion. The Appellant Employer’s submissions did not ask him to do so.
The Appellant Employer’s reliance on Harding is inappropriate. In that case it was held that the fact that a worker’s pre-injury employment would not have continued in any event was a factor to be considered in the exercise of the discretion. There is no evidence that Mr Bartley’s employment with the Appellant Employer would have ceased had he not been involved in the accident. The evidence was that some time after the accident the Appellant Employer told him that his job was not available (Mr Bartley’s statement, paragraph five). It is not clear if the position ceased to exist or if someone else had filled the vacancy created by Mr Bartley’s accident. The evidence does not assist the Appellant Employer.
In Nicholson it was held that a worker’s employment history is a relevant consideration in the exercise of the discretion (per McHugh JA (as his Honour then was) at 55). Mr Bartley’s employment history was that he had worked as an electrician since 1970 and had spent 13 years doing that kind of work in the mines (Dr Mander 7 December 2001, page two). In the two financial years before his accident he earned $33,427.00 working for Southern Cross in 1999 and earned $23,995.00 working for three employers and from his own effects as a contractor in 2000. After his injury his income fluctuated for reasons that were not explained in the evidence. On the limited evidence as to Mr Bartley’s employment history he had three employers (including the Appellant Employer) in the financial year ending in June 2000. I do not accept that the evidence justifies a conclusion that Mr Bartley’s employment history was so ‘diverse and temporary’ that it justifies a reduction in the difference between the probable earnings and ability to earn as found in this decision. In my view, having regard to the severe injury and significant disability sustained by Mr Bartley, the difference between steps one and two of the Mitchell process is the ‘proper’ amount of compensation payable and there is no valid reason to reduce that amount.
Conclusion
Mr Bartley is entitled to an award for the full difference between his probable earnings and his actual earnings calculated as follows:
Period Probable Actual Difference
Earnings Earnings
12.3.2001-30.6.2001 $329.00 $183.00 $146.00
1.7.2001-30.6.2002 $339.00 $266.00 $73.00
1.7.2002-30.6.2003 $349.00 $346.00 $3.001.7.2003-26.7.2004 $360.00 $184.00 $176.00
DECISION
Paragraph one of the Arbitrator’s determination is revoked and the following order made:
“1.Award for the Applicant under section 40 of the Workers Compensation Act 1987 as follows:
a)$146.00 per week from 12.3.2001 to 30.6.2001;
b)$73.00 per week from 1.7.2001 to 30.6.2002;
c) $3.00 per week from 1.7.2002 to 30.6.2003, and
d) $176.00 per week from 1.7.2003 to 26.7.2004.”
Paragraph two of the Arbitrator’s determination is confirmed.
COSTS
Whilst the Appellant Employer has partially succeeded in the appeal, it has failed on several issues that had no merit and occupied a large proportion of the time on review. In these circumstances the proper order for costs is that the Appellant Employer pay half of the Respondent Worker’s costs and that is the order I make.
Bill Roche
Deputy President
24 May 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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