Marie Desiree Antoinette Martin and Comcare
[2013] AATA 268
[2013] AATA 268
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/2094
Re
Marie Desiree Antoinette Martin
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Hon. Brian Tamberlin, QC, Deputy President
Date 2 May 2013 Place Sydney The decision under review is set aside and remitted to the Respondent for reconsideration with a direction that it provide a clear and detailed statement as to the precise steps and manner in which the calculations have been made.
...........[sgd].............................................................
Hon. Brian Tamberlin, QC, Deputy President
CATCHWORDS
WORKERS COMPENSATION - Entitlement to compensation - method of calculation - definition of adjustment percentage – decision under review set aside and remitted
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988: ss 8,19, 21
CASES
Comcare v Heffernan (2011) 196 FCR 494
John Holland Group Pty Ltd v Robertson (2010) 185 FCR 566
SECONDARY MATERIALS
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REASONS FOR DECISION
Hon. Brian Tamberlin, QC, Deputy President
2 May 2013
This is an application to review a determination of 8 May 2012, by the Respondent, that the Applicant’s entitlement to weekly compensation under s 21 of the Safety, Rehabilitation and Compensation Act 1988 (the Act), for the period 31 March 2009 to 11 September 2011 (the closed period) was nil.
ISSUES
There are two issues for determination by the Tribunal concerning:
(i)The correct method of calculation of the amount that the Applicant could earn in “suitable employment” over the closed period and
(ii)The application of the definition of “Adjustment percentage” in circumstances where the employee has been determined to be capable of working a certain number of hours in a particular week but does not in fact work any hours during that week.
The Applicant’s case is that the reasons for determination set out in the reviewable decision made by the Respondent are incorrect as a matter of law and should be set aside because the Respondent erred in construing and applying the provisions of the Act to the calculation of compensation under s 21.
BACKGROUND
On 16 November 2005 the Applicant suffered an injury to her right knee in the course of a soccer game at work. She was working with the Department of Immigration in a managerial position at that time. She then made a claim for compensation under the Act and on 20 December 2005 a determination was made accepting liability under s 14 for “strain of unspecified site of the right knee and leg (right)”.
The Applicant had periods of time away from work and treatment for her right knee for which she was paid compensation. On 20 July 2006 she underwent a right anterior cruciate ligament reconstruction. Various payments were made to the Applicant after that date in respect of treatment and periods of incapacity. On 4 October 2007 she was certified fit for pre-injury duties by her general practitioner.
In January 2008 the Applicant commenced part-time work with the Commonwealth Bank Padstow as a bank teller but continued to have problems with her right knee. On 9 May 2008 she retired from the Australian Public Service at the end of a period of leave. She received a lump sum superannuation payment. During 2008 the Applicant had further problems with her right knee and sought further medical treatment and was paid compensation by the Respondent. She retired from her employment with the Commonwealth Bank on 16 September 2008.
On 15 December 2011 in the course of an appeal to this Tribunal, a consent determination was made which provided that the Applicant was partially incapacitated for work as a result of the injury for the duration of the period from 31 March 2009 to 12 September 2011 and was capable of working 22.5 hours per week in suitable employment in that period and was deemed able to earn an amount equal to that she would have earned had she continued to work 22.5 hours per week in suitable employment with the Department.
On 22 March 2012 the Respondent determined that the Applicant was not entitled to any compensation under s 21 of the Act for the entire period 31 March 2009 to 12 September 2011. The Applicant sought reconsideration of that determination and it was affirmed on 8 May 2012. The Applicant then lodged the present application for review by this Tribunal.
First Issue – calculation of Applicant’s normal weekly earnings
The review delegate started with the calculation of the Applicant’s normal weekly earnings at the time of the injury assessed as $1,066.25.
The review delegate then applied various salary adjustments up to 9 May 2008 when the Applicant ceased her employment with the Commonwealth. Initially, the Respondent took the position that the normal weekly earnings figure as at 9 May 2008 was $1,293.07. In submissions on the hearing before this Tribunal this figure was revised downward by the Respondent to $1,238.38.
In its reasons of 22 March 2012 the Respondent calculated the amount of compensation as follows:
Amount of compensation – (Weekly interest on the lump sum + 5% of the employee’s
normal weekly earnings)
To establish the amount of compensation for the purposes of section 21 of the SRC Act, I must first determine your deemed ability to earn (AE) as per the formula indicated under section 19(3) of the SRC Act based on your ability to work 22.5 hours per week in suitable employment with DIAC. Section 19(3) is calculated using the formula:
(Adjustment percentage x NEW) – AE
To assist with determining your AE, DIAC have advised, had you remained an employee of their department your income would have been as follows:
Effective Date
Weekly Rate
19/03/2009
$1,358.03
18/07/2009
$1,414.77
1/04/2010
$1,457.21
25/11/2010
$1,468.87
For the purposes section 21 of the SRC Act, the adjustment percentage is 75% of your NWE. The Amount of compensation has been calculated has follows:
Effective Date
NWE
NH
(Decimal)
75% NWE
Deeming Income
Deemed NH
AE
Amount of Compensation
19/03/2009
$1,347.38
37.08
$1,010.54
$1,358.03
22.5
$824.05
$186.49
1/07/2009
$1,403.97
37.08
$1,052.98
$1,358.03
22.5
$824.05
$228.93
18/07/2009
$1,403.97
37.08
$1,052.98
$1,414.77
22.5
$858.48
$194.50
1/04/2010
$1,403.97
37.08
$1,052.98
$1,457.21
22.5
$884.23
$168.75
1/07/2010
$1,444.69
37.08
$1,083.52
$1,457.21
22.5
$884.23
$199.29
25/11/2010
$1,444.69
37.08
$1,083.52
$1,468.87
22.5
$891.30
$192.21
1/07/2011
$,1499.59
37.08
$1,124.69
$1,468.87
22.5
891.30
$233.39
The Respondent concluded that as the Applicant’s entitlement to compensation for each period of incapacity equated to a negative figure, the total liability for the period of 31 March 2009 up to and including 11 September 2011 was zero.
It can be seen from the above tables that the “Weekly Rates” figures in the top table are identical to the figures in the lower table column “Deeming Income” but these are different from the earnings figures under the heading “NWE” in the lower table. These differences, which in my view have not been properly explained, give rise to the first issue and the application of the 75% adjustment percentage figure in the lower table gives rise to the second issue.
The Applicant submits there is not sufficient information in the evidence and documents before the Tribunal which would enable it to determine the extent of increases in salary between 9 May 2008 and 11 September 2011 which should have been applied in the calculation of her Normal Weekly Earnings in accordance with s 8(6) of the Act. The Applicant takes issue with the calculations made under s 8 of the Act and the adjustments which ought to have been made.
The Applicant says that, properly calculated, the Applicant’s Normal Weekly Earnings would have increased between 9 May 2008 and 11 September 2011 through indexation mandated under s 8. Counsel for the Applicant submits that there is nothing to indicate that the calculation carried out by the Respondent correctly took into account the increases and that this cannot be established by mere assertion. Justification of the figures requires the production of documents which identify with precision whether any of the increases in the notional Normal Weekly Earnings of the Applicant occurring between 9 May 2008 and 11 September 2011 were increases to which s 8(6) could properly apply. The Applicant submits that if the calculation exercise under s 8 is carried out properly with the capacity for adjustment built into that section there should be no significant difference between the Net Weekly Earnings figures and the Weekly Rate.
The Applicant further contends that the problem is not simply one of calculation but is one of principle – whether, on the correct construction of the Act, it would be wrong to use two different Normal Weekly Earnings figures in this case where the employment used to calculate the figure for the purpose of the amount of compensation and the employment used to calculate what the employee could earn in suitable employment, is the same employment.
The Applicant does not identify any precise or specific error but submits that, as a matter of principle the Act, properly construed, does not envisage that there could be more than one normal weekly earnings figure applicable at the same time to the same employment when calculating components of entitlements under the Act. Such a result, it is said, is prime facie, irrational and unreasonable.
Having considered the Respondent’s submissions and the evidence, I do not consider that they are sufficient to explain and justify the differences referred to above, or explain the way in which the amount that the Applicant could earn in suitable employment has been calculated.
Accordingly, I consider that the reviewable decision should be set aside and that the correct decision is that the matter should be remitted to the Respondent for reconsideration and the provision of a clear and detailed statement as to the precise steps and manner in which the calculations have been made.
Second Issue – proper application of the definition of the adjustment percentage
Under s 19(3) of the Act, Comcare is liable to pay compensation to an employee in respect of an injury for each week during which the employee is incapacitated in an amount calculated using the formula:
(Adjustment percentage x NWE) – AE
The “Adjustment percentage” is relevantly a percentage equal to:
(a)If the employee is not employed during that week – 75%; or
(b)if the employee is employed for 25% or less of his or her normal weekly hours during that week – 80%; or
…
(d)if the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week – 90%; (emphasis added)
… .
Section 19(4) is a broad provision which provides that:
In determining for the purposes of subsections (2) and (3) the amount per week that an employee is able to earn in suitable employment Comcare shall have regard to:
(a)where the employee is in employment … the amount per week that the employee is earning in that employment;
(b)where after becoming incapacitated for work the employee received an offer of suitable employment and failed to accept that offer – the amount per week that the employee would be earning in that employment if he or she were engaged in that employment;
…
(g)any other matter that Comcare considers relevant. (emphasis added)
The Applicant argues that because in the Consent Determination it was agreed that the Applicant could work 22.5 hours per week (which amounts to approximately 61% of her normal weekly earnings) the correct “Adjustment percentage” is 90% of normal weekly earnings and not 75% as determined by the Respondent.
The Respondent’s response is that because the Applicant was not in fact employed during any week in the period from March 2009 to 11 September 2011, paragraph (a) of the definition of “Adjustment percentage” should be applied and the correct percentage is therefore 75%.
The Applicant’s submission is that notwithstanding she was not in fact employed in the closed period, the effect of the determination is that she is considered capable of working 61% of normal weekly hours, and therefore the “Adjustment percentage” is 90%. The Applicant says that the Respondent’s calculation of 75% ignores the effect of the determination.
The Applicant argues that s 19 is not a “punitive provision” and that the Respondent’s interpretation would in effect be imposing an unintended penalty on the Applicant and that this indicates that the Respondent’s interpretation is unreasonable.
In summary, the Applicant’s case is that since it has been established by the Consent Determination that the incapacitated employee is able to work a certain number of hours per week over the closed period then, for the purpose of determining what the employee can earn in suitable employment, s 9 does not envisage any further enquiry into whether the employee actually worked that number of hours or some lesser number of hours. The Applicant says that the adjustment percentage calculation cannot be “uncoupled” from the number of hours per week that go to make up the amount that an incapacitated employee could earn in suitable employment.
The Applicant also says that paragraph 19(a) should be read so that the expression “employed” includes deemed employment, and that if it had been intended that the provision was limited to actual employment, it would have been a simple matter to have made this clear by inserting the word “actually” before the word “employed” in the definition.
I do not accept the interpretation advanced by the Applicant for the following reasons.
First, the language of the definition of “Adjustment percentage” is clear and unambiguous. A clear distinction is drawn between being in employment and not being employed.
Secondly, the verb “is” makes it clear that the references are to actual employment and not deemed employment. Therefore if a person is not in fact employed during any week, the 75% figure applies. There is no basis for construing the words ‘is employed’ as meaning ‘is deemed to be employed’.
Thirdly, in its Reasons for Decision in Comcare v Heffernan (2011) 196 FCR 494 at [496] the majority judgement, in referring to the provisions, proceeds on the basis that if an employee does no work in the week in question only 75% of the compensation will be paid and that if the injured employee does return to work more than 75% will be paid. The payment is the percentage of the employee’s normal working hours which are in fact worked in the week in which the compensation is payable. In my view these observations are apposite in the present case.
Fourthly, there is no reason why the word “employed” should not be given its ordinary dictionary meaning. see John Holland Group Pty Ltd v Robertson (2010) 185 FCR 566 at [59] ff. The expression on its ordinary meaning denotes the state of being employed. In the present case the Applicant was not in a state of employment during the closed period.
Fifthly, the interpretation advanced by the Respondent is consistent with the purpose of s 19 being to encourage incapacitated employees to return to work to the maximum extent possible: see the remarks of Downes J in Heffernan at [33] and [34] as to the objective of the provisions.
CONCLUSIONS
The decision under review is set aside and remitted to the Respondent for reconsideration with a direction that it provides a clear and detailed statement as to the precise steps and manner in which the calculations have been made.
I certify that the preceding 35 (thirty -five) paragraphs are a true copy of the reasons for the decision herein of Hon. Brian Tamberlin, QC, Deputy President
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Associate
Dated 2 May 2013
Date of hearing 18 March 2013 Counsel for the Applicant Mr L Grey Solicitors for the Applicant Carroll & O'Dea Lawyers Counsel for the Respondent Mr B Dube Solicitors for the Respondent Sparke Helmore
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