Nielsen v Taz-West Electrical Pty Ltd - [1999] TASSC 102

[1999] TASSC 102

CITATION: Nielsen v Taz-West Electrical Pty Ltd [1999] TASSC 102

PARTIES:  NIELSEN, Wayne Michael
  v
  TAZ-WEST ELECTRICAL PTY LTD

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 17/1999
DELIVERED ON:  6 October 1999
DELIVERED AT:  Hobart
HEARING DATES:  22 September 1999
JUDGMENT OF:  Evans J

CATCHWORDS:

Workers Compensation - Assessment and amount of compensation - Weekly earnings - Tasmania - Total incapacity - Characterisation of portion of wages as "directors' fees" - Whether included in "normal weekly earnings" in the Workers Rehabilitation and Compensation Act 1988, s69(1)(a).

Workers Rehabilitation and Compensation Act1988 (Tas), s69(1)(a).
Workers Compensation Act 1926 (NSW), s11(1)(a).
Johns Perry Hayward Pty Ltd v Greaves (No 2) A13/1991; Brambles Holdings Ltd t/as Brambles Shipping v Pincott A30/1994, considered.
Aust Dig Workers Compensation [211]

REPRESENTATION:

Counsel:
           Appellant:  R J Phillips
           Respondent:  W T McMillan
Solicitors:
           Appellant:  Phillips Taglieri
           Respondent:  Ritchie & Parker Alfred Green & Co

Judgment Number: [1999] TASSC 102
Number of Paragraphs: 12

Serial No 102/1999
File No LCA 17/1999

WAYNE MICHAEL NIELSEN v TAZ-WEST ELECTRICAL PTY LTD

REASONS FOR JUDGMENT EVANS J
6 October 1999

On 27 February 1997, the appellant worker was injured in the course of his employment with the respondent employer and totally incapacitated for work. Whilst the appellant's entitlement to weekly compensation is not in dispute, the quantum of his entitlement is.

Pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s69(1)(a), the appellant is entitled to be paid:

"(a) … weekly rate payments equal to ¾
(i) the normal weekly earnings of the worker; or
(ii) the ordinary time rate of pay of the worker for the work in which, and for the hours during which, the worker was engaged immediately before the period of incapacity ¾
whichever is the greater;"

The appellant began his employment with the respondent on 11 October 1995. His agreed rate of pay was $25 per hour. The appellant was also a director of the respondent. At a meeting of the directors of the respondent on 7 January 1996, the following resolution was passed:

"directors

remuneration:

Resolved that remuneration paid to Directors be reduced to $12.50 per hour effective from January 7th, 1996, except for Thompson, Leonard Maxwell who was paid $25 per hour for the month of January, 1996 until the date of his resignation.

Further resolved that a bonus be payable periodically to the Directors equal to $12.50 per hour effective from January 1st, 1996. It was agreed that no bonus would be paid to Thompson, Leonard Maxwell, for the period until his resignation."

The resolution was put into effect and, thereafter, for each hour the appellant worked as an employee of the respondent, he was paid:

(a) $12.50 characterised as wages; and
(b)$12.50 variously characterised as directors' fees, bonuses or remuneration. I will refer to this payment as "directors' fees".

At the time of the appellant's injury, he was being paid as above.

The apparent purpose of the resolution was to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] TASSC 102
Decision Date: 6 October 1999

CaseChat Overview and Summary

In the Supreme Court of Tasmania, Wayne Michael Nielsen, the appellant, pursued an appeal against the decision of the Workers Rehabilitation and Compensation Tribunal regarding the quantum of his weekly compensation entitlement under the Workers Rehabilitation and Compensation Act 1988. Nielsen was totally incapacitated for work after an injury sustained in the course of his employment with Taz-West Electrical Pty Ltd, the respondent employer. The core dispute centred on the proper calculation of Nielsen's normal weekly earnings, specifically whether the $12.50 characterised as directors' fees should be included in the calculation of his weekly earnings.

The primary legal issue before the court was whether the $12.50 per hour paid to Nielsen, categorised as directors' fees, should be included in determining his normal weekly earnings for the purposes of calculating his compensation under the Act. Nielsen argued that his normal weekly earnings should reflect both the $12.50 characterised as wages and the $12.50 characterised as directors' fees, resulting in a total of $25 per hour. The Tribunal had previously rejected this contention, leading to Nielsen's appeal.

Evans J, delivering the judgment, examined the statutory language and relevant case law to determine the correct interpretation of "earnings" under the Act. The court considered that the Act is social legislation that should be construed liberally in favour of injured employees, but not to the extent of rewriting the statute. The court highlighted that the underlying policy of workers compensation legislation is to ensure that an injured employee is not worse off due to their incapacity. However, it also underscored that the injured employee should not be better off. Evans J concluded that the $25 per hour Nielsen was entitled to for each hour worked, regardless of how it was characterised, constituted his earnings as an employee. Therefore, the learned Commissioner's decision to exclude the directors' fees from the calculation was erroneous. The court allowed the appeal and set aside the Tribunal's order, directing that the matter be reconsidered to determine the final disposition.

Orders