Mitchell and Military Rehabilitation and Compensation Commission

[2005] AATA 221

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 221

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/174

GENERAL ADMINISTRATIVE DIVISION		)
Re		JOHN MITCHELL

Applicant

And MILITARY REHABILITATION AND COMPENSATION COMMISSION

Respondent

DECISION

Tribunal Ms M J Carstairs, Member

Date16 March 2005

PlaceBrisbane

Decision The Tribunal affirms the decision under review.   

................[Sgd].........................

MJ Carstairs
  Member

CATCHWORDS

COMPENSATION – incapacity payments – rate of payment based on pre-injury earnings – whether applicant’s rate of pay should be increased to be based on the normal weekly earnings of a Corporal – advancement dependent on achievement of skill and an element of merit – decision under review affirmed.

Safety Compensation and Rehabilitation Act 1998 s 8, 19

McDonald v Department of Defence [1999] FCA 882

REASONS FOR DECISION

16 March 2005 Ms M J Carstairs, Member

1.      This is an application by John Mitchell (the applicant) for review of a decision made by the Military Compensation and Rehabilitation Service (the respondent), to affirm an earlier determination made by the respondent concerning the rate of the applicant’s incapacity payments.

2. The applicant and respondent agreed that this matter should be heard on the papers. The material before the Tribunal comprised the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1-T52) as well as the following:

·Letter dated 24 June 2004 from Defence Force Pay Accounting Centre  providing information about relevant pay structures; and

·Written submissions, dated 19 October 2004, prepared by Mr T Howe of Counsel filed on behalf of the respondent.

3.      The applicant filed no additional materials and made no further submissions in his application.. 

BACKGROUND

4.      The applicant is 41 years old and served in the Royal Australian Air Force (RAAF).  He enlisted in the RAAF on 5 November 1986 and was discharged medically unfit on 28 August 1996 as a result of an injury he suffered on 11 August 1995.  At the time of his discharge he was an Avionics Fitter but he was training as an Avionics Technician.  His rate of pay at the time of discharge was that of Leading Aircraftman Pay Group 4 (LAC4). 

5.      The respondent accepted the applicant’s conditions of degenerative lumbar spondylosis with chronic low back pain, major depressive disorder and temporary mild sexual dysfunction, and the applicant has been receiving incapacity payments calculated on the basis of his service as LAC4. 

6.      The applicant’s letter dated 3 November 2003 (T42) was treated as a request for review of a determination made on 16 July 2002 (T17) that the applicant be paid compensation based upon 75% of the rate for an LAC4.   The applicant contends that he is entitled to have his compensation calculation based on the normal weekly earnings (NWE) of a corporal.   He says that when he was discharged from the RAAF, time based promotions to the rank of corporal were in place and his promotion to corporal would have followed as a matter of course.

7.      In a reviewable decision dated 6 January 2004 (T51) the respondent affirmed its original decision.   The applicant applied to this Tribunal on 8 March 2004 for review of that decision.

8.      The issue for the Tribunal is whether the applicant’s incapacity payment should be increased, to be calculated based on the NWE of a corporal. 

EVIDENCE

9.      In a letter dated 22 December 2003 (T48) Mr B Hutchins, officer with the Defence Personnel Executive provided the following information:

§  At the date of the applicant’s injury Defence Instructions (Air Force) Personnel 4/2001 – Airman and Airwoman Promotion System provided that promotion was determined by qualifications and time in rank without regard to vacancies.

§  Australian Air Publications 2321.101 – 1M – Occupational Specifications Aircraft Engineering Trade Group provided that eligibility for conditional time promotion to corporal would occur twelve months after the qualification level of AVTECH 1 was reached if the Trade Supervision Principles Course was completed and the member met certain assessment processes required by the Trade Supervisors Board. 

§  The applicant was re-mustered to Leading Aircraftman Aviation Fitter 2 with effect from 16 June 1995.   If he had completed the technician’s course, he was eligible for re-muster to Leading Aircraftman Aviation Technician 1 from 16 June 1996.

§  Had the applicant progressed to Leading Aircraftman Aviation Technician 1 and had his employment not ceased on 26 August 1996 he would have been eligible for a conditional time promotion to the rank of Corporal on 16 June 1997.

§  The applicant’s chance of progression was about 99% assured.  

10.     In the letter dated 24 June 2004, Ms A Tryphonos stated that on 16 June 1994 the applicant achieved Avionics Fitter Grade 1, and rose to Avionics Fitter Grade 2 on 16 June 1995.   After a restructure of Australian Defence Force Pay Structures which came into effect on 30 November 1995, the applicant’s relevant pay level was LAC4.   This change in pay structures did not affect the amount that the applicant was paid.

CONSIDERATION OF THE ISSUES

11.     Section 19 of the Safety Rehabilitation and Compensation Act 1988 (the Act) provides for the Military Rehabilitation and Compensation Commission to pay incapacity payments to an employee who is incapacitated for work as a result of injury.   Incapacity payments are worked out using formulae that take in to account NWE.   Section 8 sets out how NWE should be calculated.  The relevant parts of section 8 are set out below.

8.(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. 

(7) Subject to this section, if:

(a) an employee continues to be employed by the Commonwealth or a licensed corporation after the date of an injury; and

(b) the minimum amount per week payable to the employee in respect of that employment is increased because of the promotion of the employee;

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. 

12.     The applicant contends that subsection 8(6)(b) of the Act is applicable to his situation and that at the time of his injury, his employment was of a kind where career advancement was dependent upon his completion of a particular period of service.  Essentially the applicant says that his promotion to corporal, were it not for his injury, would have been determined by time in rank and pre-requisite qualifications without regard to vacancies.  He says the promotion was non-competitive and not based on merit.

13.     The respondent submits that the lynchpin for calculation of NWE is pre-injury earnings: s8(1), 8(2) and 8(3).  Certain increases are allowed for under s8(6) and these include both actual and hypothetical increases.  However it was submitted that s8(7) deals with promotions, but only where the employee continues in employment with the Commonwealth, which is not the case here.  The respondent submitted that s8(7) deals only with actual promotions, not the hypothetical situation where a person may have achieved a promotion.   

14.     The respondent submitted that s8(6) and s8(7) have different work to do and do not overlap: McDonald v Department of Defence [1999] FCA 882.  The respondent submitted that the applicant is not entitled to rely on subsection 8(6)(b) of the Act to allow for his promotion to corporal.   

15.     In summary the respondent submitted that:

§   the applicant could not rely on s8(7) because that sub-sections deals with actual promotions while the employee remains in Commonwealth employment.    

§  the applicant cannot rely on s8(6)(b) because his advancement did not solely depend upon the completion of a particular period of service, because he needed to achieve certain skill level which he had not achieved at the date of his injury or by discharge.   There was therefore an element of merit quite apart from completion of a period of service before achieving the rank of corporal.

16.     The respondent’s submission is clearly correct.   As the Federal Court said in McDonald case:

The opening words of s8(6), which require increases in ‘the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth at the date of the injury’ to be taken into account, support this view.   Thus, what is to be considered is the employee’s position at the date of the injury, not any position to which the employee may be promoted after that date.   That s8(6) is not concerned with increases in pay attributable to an employee’s promotion is confirmed by subs(7), which deals expressly with that subject (in a manner which does not avail the applicant).

17.     This reasoning applies to the applicant’s case.   Achieving the rank of corporal is a matter of promotion between ranks.  It is not in increment within a rank.   Promotion is dealt with by s8(7) and is only available to the employee who continues to be employed by the Commonwealth: s8(7)(a).  The applicant is not such an employee.

18.     Section 8(6)(b) cannot be applied as the applicant had to achieve certain merit based components for advancement to corporal that he had not completed at the time of his injury.    

19.     For these reasons the Tribunal affirms the decision under review.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Member  

Signed:         Camille Banks
  Associate

Hearing on the Papers                   
Date of Decision  16 March 2005
The Applicant was unrepresented
For the Respondent                  Australian Government Solicitor