McGree and Comcare (Compensation)

[2016] AATA 756

McGree and Comcare (Compensation) [2016] AATA 756 (29 September 2016)

Division	GENERAL DIVISION
File Number	2013/4687
Re	Bronwyn McGree
APPLICANT
And	Comcare
RESPONDENT
File Number	2013/4688
Re	‘Other Applicant’
APPLICANT
And	Comcare
RESPONDENT

DECISION

Tribunal	Deputy President K Bean
Date	29 September 2016
Place	Adelaide

1.       In application 2013/4687, the decision under review is set aside and the matter is remitted to the respondent for re-determination of Ms McGree’s NWE amounts between 11 December 1995 and 1 July 2013, in accordance with the Tribunal’s Reasons for Decision.

2.       In application 2013/4688, the decision under review is set aside and the matter is remitted to the respondent for re-determination of the Other Applicant’s NWE amounts between 11 December 1995 and 1 July 2013, in accordance with the Tribunal’s Reasons for Decision.

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Deputy President K Bean

CATCHWORDS

COMPENSATION – Commonwealth employees – Calculation of normal weekly earnings – Decisions under review set aside and remitted.

LEGISLATION

Safety, Rehabilitation and Compensation Act 1988, s 8

Administrative Appeals Tribunal Act 1975, s 35

CASES

Re McGree & Anor and Comcare (2014) 142 ALD 598

REASONS FOR DECISION

Deputy President K Bean

29 September 2016

1. The applicants are each in receipt of compensation as a result of injuries they suffered in the course of their employment as nurses at the Repatriation General Hospital Daw Park (the Repatriation General Hospital) in Adelaide during the mid-1990s.

2. They have also each applied for review of determinations made by the respondent, Comcare, regarding their respective normal weekly earnings (NWE) for the purposes of calculating the incapacity payments payable to each of them under the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act). As their circumstances and the issues which arise from their applications are similar, the applicants have each requested that their matters be dealt with and heard together.

3. At the request of one of the applicants, on 4 April 2016 I made an order pursuant to s 35 of the Administrative Appeals Tribunal Act 1975 that her name be anonymised in my Decision and Reasons, and in the transcript. Accordingly, I will refer to that applicant as the ‘Other Applicant’ in these Reasons.

4. Prior to the matters proceeding to a final hearing, a preliminary issue was identified, which was the subject of my Decision on 28 August 2014.[1] By that decision, I determined that after 8 March 1995, neither Ms McGree nor the Other Applicant continued to be employed by the Commonwealth for the purposes of subs 8(10) of the SRC Act, which had implications for their compensation entitlements after that date.

   [1]     Re McGree & Anor and Comcare (2014) 142 ALD 598.

5. However, although the parties accept that that issue was resolved by my earlier Decision, there are a number of further issues which remain to be determined in the context of the two applications. Those issues all relate to calculation of the applicants’ NWE, which, in turn, affects the calculation of their compensation entitlements.

   BACKGROUND

6. As the background to the applications was set out in detail in my previous Decision, I will not traverse this in detail again here. However, for present purposes, it is sufficient to recount that in 1995, after the applicants had suffered their respective injuries, the ownership of the Repatriation General Hospital was transferred from the Commonwealth to the South Australian Government. As a result of this, both applicants were initially transferred to employment with the South Australian Health Commission, then subsequently reappointed to the Australian Public Service (the APS) from 9 September 1995.

7. It was these circumstances which led to my decision that, in each case, the applicants had ceased to be employed by the Commonwealth following their injuries, although they each subsequently resumed employment with the Commonwealth.

8. I will next set out the applicable statutory provisions, before defining and addressing the issues remaining to be determined in each application.

   THE STATUTORY FRAMEWORK

9. Section 19 of the SRC Act provides for an injured employee’s incapacity payments to be calculated by reference to their ‘normal weekly earnings’ before their injury. Section 8 of the SRC Act also contains provisions which determine how an employee’s ‘normal weekly earnings’ are derived, and what changes are made to that amount over time.

10. It relevantly provides:

    8       Normal weekly earnings

    (1)For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:

    (NH  x  RP)+ A

    where:

    NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;

    RP is the employee’s average hourly ordinary time rate of pay during that period; and

    A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.

    …

    (3)Where an employee was, at the date of the injury, employed by the Commonwealth or a licensed corporation in part-time employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth or the licensed corporation.

    …

    (6)Subject to this section, if the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth or a licensed corporation at the date of the injury is increased, or would have been increased if the employee had continued in that employment, because of:

    (a)the attainment by the employee of a particular age;

    (b)the completion by the employee of a particular period of service; or

    (c)the receipt by the employee of an increase in salary, wages or pay by way of an increment in a range of salary, wages or pay applicable to the employee or to his or her office, position or appointment;

    the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased, or would have been increased, as the case may be.

    …

    (8)Subject to this section, where:

    (a)the employment of an employee is of a kind referred to in subsection 5(4) or (6) or subsection (3) of this section; and

    (b)the employee is not receiving earnings from any other employment at the date of the injury;

    the normal weekly earnings of the employee before the injury shall be an amount determined by Comcare to be the amount per week that the employee would have been able to earn at the date of the injury (including any amount in respect of overtime worked on a regular basis) if he or she had engaged in suitable paid employment.

    (9)The normal weekly earnings of an employee before the date of the employee’s injury, as calculated under the preceding subsections, must, while the employee continues to be employed by the Commonwealth or a licensed corporation, be increased or reduced by the relevant percentage.

    (9A)For the purposes of subsection (9), relevant percentage means the same percentage as the percentage of increase or reduction in the minimum amount per week payable in respect of employees included in a class of employees of which the employee was a member at the date of the injury as a result of:

    (a)the operation of a law of the Commonwealth or of a State or Territory; or

    (b)the making, alteration or operation of an award, order, determination or industrial agreement or the doing of any other act or thing, under such a law.

    (9B)The normal weekly earnings of an employee before injury, as calculated under subsections (1) to (8) and as increased or reduced under subsection (9) must, if the employee has ceased, or ceases, to be employed by the Commonwealth or a licensed corporation, be further increased, with effect from each indexation date in relation to that cessation, by reference to the percentage of increase (if any) of an index that is prescribed for the purposes of this subsection over the year ending on the 31 December preceding each such indexation date.

    (9C)For the purpose of subsection (9B), the indexation date, in relation to a cessation of employment, is:

    (a)the 1 July next following:

    (i)      the date on which this Act receives the Royal Assent; or     (ii)       the date of that cessation of employment;

    whichever last occurs; and

    (b)each subsequent 1 July.

    …

    (10)If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:

    …

    (b)where the employee has ceased to be employed by the Commonwealth or a licensed corporation—whichever is the greater of the following amounts:

    (i)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury;

    (ii)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;

    the amount so calculated shall be reduced by the amount of the excess.

    THE ISSUES

11. As I understand it, the specific issues which have arisen with respect to each application are as follows.

    Both applicants

    (a)The extent to which both applicants’ NWE needs to be adjusted from April 1998 to reflect that, from that time, nurses employed by the Department of Veterans’ Affairs were ‘broadbanded’ into APS 4 roles, such that shift allowances were not payable; and

    (b)The extent to which the applicants’ NWE should have been adjusted pursuant to subs 8(6) by reference to South Australian Industrial Agreements for Registered Nurses after their Commonwealth employment ceased.

    Other Applicant

    (a)The amount the Other Applicant earned in the 2 weeks immediately prior to her injury, including by reference to shift allowances; and

    (b)The Other Applicant’s hours of work prior to the injury and whether she should be regarded as having worked full-time hours.

12. I note there had also been an issue as to whether Ms McGree was a Registered Nurse Level 1 or Level 2 at the time of her injury. However, both parties now agree that at the date of her injury Ms McGree was acting as a Nurse Level 2 and being paid a higher duties allowance such that her earnings were equivalent to the salary for a Registered Nurse (Level 2).[2] Accordingly, both parties agree that her NWE amounts should be based on the earnings of a Registered Nurse (Level 2).

    [2]     See Respondent’s Statement of Facts, Issues and Contentions dated 16 November 2015 (McGree matter), [3], and the attached schedule, Annexure A.

13. I will first address the issues common to both applicants, before turning to those which are specific to the Other Applicant.

    SHOULD THE APPLICANTS’ NWE INCLUDE SHIFT ALLOWANCES AFTER APRIL 1998?

    Contentions

14. On behalf of the applicants, their representative, Mr Crowe, submitted that the relevant question for the purposes of applying subs 8(10) was what would have happened if the Commonwealth had continued to employ nurses. He also relied upon the fact that if they had not been injured, the applicants would, in fact, have continued to work and be paid as nurses, albeit in the employment of the South Australian Health Commission rather than the Commonwealth.

15. The respondent’s position with respect to this issue is that registered nurses employed by the Department of Veterans’ Affairs (the DVA) were transferred to ‘APS classifications’ on the first payday in April 1998.[3] The respondent contends that from that time, shift penalties were no longer available because the DVA did not intend to introduce shift work.[4] The respondent accordingly contends that if the applicants had continued to be employed as nurses by the DVA, they would have been transferred to APS classifications from the first payday in April 1998 and would not have been in receipt of shift allowances after that. This was dictated by the ‘broadbanding’ effected by the enterprise agreement.[5]

    [3]     Respondent’s Statement of Facts, Issues and Contentions dated 16 November 2015 (the Other Applicant matter), [43]; Exhibit 2A, T15/79 [5.5.2].

    [4]     Exhibit 2A, T15/82 [7.2.18].

    [5]     Exhibit 2A, T15/83.

    Consideration

16. I accept the respondent’s submissions on this issue.

17. I have concluded that the inquiry to which subs 8(10)(b) is directed in this case is what the applicants would have earned if they had continued to be employed by the Commonwealth as nurses, as each of them were when their Commonwealth employment ceased. I accept the respondent’s contention that it is clear on the evidence that if the applicants had continued to be employed as nurses, from the first pay period in April 1998, they would have become APS 4 employees, without access to shift allowances. Accordingly, I accept that after that date, it is appropriate to calculate their NWE amounts without reference to shift allowances.

    INCREMENTS AFTER APRIL 1998

18. Consistently with the position taken with respect to shift allowances, Mr Crowe also argued that after April 1998, the applicants were entitled to have their NWE calculated by reference to increments which would have been applicable if they had continued to be employed as nurses. He relied on subs 8(6) of the SRC Act for the proposition that increments should be taken into account in calculating the applicants’ NWE, and urged me to have regard to the applicable South Australian Enterprise Agreement[6] in determining what the increments were. In other words, this argument also depended upon a contention that s 8 of the SRC Act allowed regard to be had to what the applicants would have been paid if they had continued to be employed as nurses, albeit by the South Australian Government rather than the Commonwealth.

    [6]     Exhibit 6.

19. However, in my view, nothing in s 8 allows reference to be made to what the applicants’ earnings would have been if they had continued to be employed as nurses after April 1998. Rather, in my view, both subss 8(6) and 8(10) require that the applicants’ NWE be determined by reference to what they would have earned if they had not been injured and had remained employed with the Commonwealth after March 1995. On the evidence, I am satisfied that if they had each continued to be employed by the Commonwealth and not been injured, then in April 1998 their positions would have been ‘broadbanded’ to APS 4 positions and they would not have received subsequent increments on the basis that they continued to be employed as nurses.

20. I acknowledge that in reality, if they had not been injured, it is likely that they would have continued to be employed by the South Australian Health Commission as nurses. However, on my reading of s 8, it requires that an employee’s NWE is determined strictly by reference to their Commonwealth employment and what they would have been likely to earn if they had continued in that employment.

21. Accordingly, I accept the respondent’s submission that the increments payable to nurses employed by the South Australian Government are not relevant for the purposes of calculating the applicants’ NWE. Rather, after April 1998, the NWE of both applicants must be calculated by reference to what they would have earned as APS 4 employees.

    SHOULD THE OTHER APPLICANT BE TREATED AS WORKING FULL-TIME AT THE DATE OF HER INJURY?

    Contentions

22. At the hearing, Mr Crowe also contended that, for the purpose of calculating her NWE, the Other Applicant should be treated as working full-time or 40 hours per week, notwithstanding that it was agreed that as at the date of her injury she was, in fact, working 32 hours per week.

23. Mr Crowe’s argument was that as the Other Applicant was working part-time at the date of her injury, she came within the terms of subs 8(3) of the SRC Act. In addition, he contended that she also came within the terms of subs 8(8) of the SRC Act such that, although she was not receiving earnings from any other employment as at the date of her injury, regard could be had to the amount she would have been “able to earn at the date of the injury … if … she had engaged in suitable paid employment”.[7] In other words, as she was only working part-time at the date of the injury, by reference to subss 8(3) and 8(8), her NWE could be ‘topped-up’ by reference to what she could have earned in addition to her part-time earnings from the Commonwealth.

    [7]     Subsection 8(8).

24. However, Ms Walker, who appeared as counsel for the respondent, contended that this was contrary to the language and intention of the provision. She contended that the Other Applicant was not in fact in receipt of any earnings from any other employment as at the date of her injury and, therefore, subs 8(3) did not apply to her. She further contended that when regard was had to the other provisions referred to in subs 8(8), namely subss 5(4) and (6), it became clear that the purpose of subss 8(3) and 8(8) was to provide for circumstances where an employee was injured in the course of their part-time or unpaid employment by the Commonwealth. Subsection 8(3) allows for regard to be had to an employee’s other earnings in calculating their NWE if they are injured in the course of part-time Commonwealth employment. Further, subs 8(8) allows regard to be had to what an employee would have been able to earn in other employment but was unable to earn due to being injured in the course of their unpaid or part-time employment with the Commonwealth.

25. The respondent further relied upon the terms of subs 8(1), as an indication that, generally speaking, an employee’s NWE was to be calculated by reference to the hours they were working in their Commonwealth employment as at the date of the injury. Ms Walker further contended that if it had been the intention of the Parliament to allow employees who were employed on a permanent part-time basis to claim compensation on the basis that they could have worked full-time, this would have been made clear.

    Consideration

26. Having carefully considered the submissions of both parties, I accept Ms Walker’s submissions on this issue. I do not accept that the Other Applicant’s circumstances fall within the terms of subs 8(3), as she had no earnings from other employment as at the date of the injury. Further, and in any event, I accept that the intention of subs 8(8) is to provide for an employee who happens to be injured in the course of part-time or unpaid employment with the Commonwealth in circumstances where it is clear they have an additional working capacity for which, in the absence of subs 8(8), they would not be compensated.

27. In addition, even if subs 8(8) was construed so as to apply to the Other Applicant, I would not be satisfied that as at the date of injury, she had a clear capacity to work more than 32 hours per week, so as to engage subs 8(8). Nor is it the intention of this provision, in my view, to apply to a potential to earn more income from the employee’s part-time Commonwealth employment. In my view, it is clearly the intention of the provision that in calculating the NWE of an employee who is injured in part-time or unpaid Commonwealth employment, regard may be had to other employment, apart from their Commonwealth employment, or their potential to engage in such employment. I accept the respondent’s contention that it would be a misapplication of s 8 to calculate the Other Applicant’s NWE by reference to an assumption that, in theory, she could potentially have worked 40 hours per week in her Commonwealth employment, when it was clear that she was actually working 32 hours per week.

1. Accordingly, I have concluded that the Other Applicant’s NWE must be calculated by reference to her normal hours of 32 hours per week in the 2 weeks prior to her injury.

   WHAT WERE THE OTHER APPLICANT’S EARNINGS IN THE 14 DAYS PRIOR TO HER INJURY?

2. Unfortunately, the records relating to precisely what the Other Applicant earned in the fortnight before her injury are incomplete. It became apparent on the first hearing day in this matter on 4 April 2016 that the parties were not agreed as to what her original NWE figure should be, and more inquiries were needed. Accordingly, the hearing was resumed on 31 May 2016 and additional material was tendered, which assists to some extent with this issue.

3. There is no dispute between the parties that, consistently with ss 8 and 9 of the SRC Act, the relevant period for the purpose of calculating the Other Applicant’s original NWE was the “period of 2 weeks before the date of the injury”[8], or, in other words, the period 17 – 31 January 1995.

   [8]     Subsection 9(1).

4. Understandably, in her evidence, the Other Applicant indicated she had no clear recollection of the days she worked during this period, although she was confident that she worked weekends, and that she tended to work nights.

5. Her attendance records for June 1994 appear to reflect a pattern whereby the Other Applicant worked from 10.30pm to 7.00am on 4 consecutive days, giving a total of 32 hours.[9] The contemporaneous records also appear to indicate that the Other Applicant took sick leave from 16 – 18 January 1995, being a total of 16 hours.[10]

   [9]     Exhibit 9, p 7.

   [10]    Exhibit 7.

6. Records produced by the People’s Choice Credit Union also indicate that on 25 January 1995, the Other Applicant received a fortnightly salary payment of $765.78 (net) and on 9 February 1995, she received a fortnightly salary payment of $884.09 (net).

7. The respondent contended that these payments would have generally been made 2 days after the end of the relevant salary period. If correct, that would have the result that the payment for 25 January 1995 related to the fortnight ending on 23 January 1995, and the payment on 9 February 1995 was for the fortnight ending on 7 February 1995.

8. The Other Applicant’s compensation claim in respect of her injury on 1 February 1995 was signed by her on 16 February 1995.[11] On the part of that form completed by her employer, her NWE figure was given as $554.20, comprised of $463.41 by way of substantive salary and $90.79 by way of shift penalties.

   [11]    Exhibit 9.

9. Having considered all of this material, I have ultimately concluded that the amount advised by the Other Applicant’s employer shortly after her injury constitutes the best evidence I have of what her NWE were in the 2 weeks before her injury. I note that this amount, of $554.20 per week (gross), is broadly consistent with the other relevant material, including the contemporaneous bank statements, and there is nothing before me which clearly indicates it is not correct.

10. For completeness, I also note that the Other Applicant gave evidence on the first day of the hearing to the effect that, at the time of her injury, she was repaying a debt to the Department by way of deductions from her salary, such that she was not actually receiving the shift allowance component of her pay at that time. However, at the resumed hearing on 31 May 2016, she gave evidence that she did not recall the amount of the debt, whether she was still paying it off after her injury, how long it took to pay off, or what the repayment arrangement was. In the absence of any contemporaneous evidence corroborating the proposition that debt amounts were deducted from the Other Applicant’s salary with respect to the 2 weeks prior to her injury, and that this affected the calculation of her NWE, I am not satisfied that the figure of $554.20 should be altered by reason of any debt repayment arrangement.

    DISPOSITION

11. Although they were not discussed in any detail at the hearing, I note that the respondent has provided a schedule of what it says are the correct NWE amounts for each applicant, from particular dates in 1995 through to 1 July 2013. The amounts reflected in these schedules differ in some respects from those contained in the relevant reviewable decisions, for a number of reasons.

12. In each case, the respondent says that the reconsideration delegate failed to exclude shift penalties after April 1998. In addition, with respect to the Other Applicant, the respondent contends that for the period after September 2000, the reconsideration delegate incorrectly based the Other Applicant’s NWE amounts on a figure provided by her employer which related to full-time earnings rather than the applicable earnings for 32 hours per week.[12] With respect to Ms McGree, the relevant schedule also contains adjustments made to reflect the parties’ agreement that she was being paid as a Nurse (Level 2) at the date of her injury.

    [12]    See the Respondent’s “Explanation of Calculation of Normal Weekly Earnings by Comcare” filed on 15 December 2014 (the Other Applicant matter), and Exhibit 2A, T33/141.

13. Mr Crowe did not take issue with these calculations or corrections, or contend that the adjustments sought by the respondent should not be made in the event that the Tribunal did not accept his submissions on the substantive issues.

14. I have no reason to doubt the correctness of the amounts put forward by the respondent. However, the material before me does not allow me to verify the accuracy of all of these amounts. Accordingly, I have decided that the most prudent and appropriate course is for me to set aside the decision under review and remit each application to the respondent for re-determination of the applicants’ NWE amounts in accordance with these Reasons. I expect the practical result of this will be that the re-determined NWE amounts will be as set out in the schedules provided by the respondent (annexed to each of their Statements of Facts, Issues and Contentions), unless some problem or error is identified with any of those amounts.

15. For completeness, although the period between Ms McGree’s date of injury, on 12 July 1994, and 10 December 1995, is not strictly before me, I note the respondent’s concession (which I have accepted) that her NWE should be determined by reference to the earnings of a Registered Nurse (Level 2) may also have implications for her NWE and incapacity entitlements during that earlier period.

    DECISION

16. In application 2013/4687, the decision under review is set aside and the matter is remitted to the respondent for re-determination of Ms McGree’s NWE amounts between 11 December 1995 and 1 July 2013, in accordance with the Tribunal’s Reasons for Decision.

17. In application 2013/4688, the decision under review is set aside and the matter is remitted to the respondent for re-determination of the Other Applicant’s NWE amounts between 11 December 1995 and 1 July 2013, in accordance with the Tribunal’s Reasons for Decision.

I certify that the preceding 44 (forty-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean

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Associate

Dated 29 September 2016

Dates of hearing	4 April 2016 and 31 May 2016
Advocate for the Applicants	Mr A Crowe
Counsel for the Respondent	Ms G Walker

Solicitors for the Respondent           Australian Government Solicitor