Northern Co-operative Meat Company Ltd v Kitto - [2011] NSWWCCPD 16

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Northern Co-operative Meat Company Ltd v Kitto [2011] NSWWCCPD 16
APPELLANT:		Northern Co-operative Meat Company Ltd
RESPONDENT:		Cheryl Kitto
INSURER:		Northern Co-operative Meat Company Ltd
FILE NUMBER:		A1-5068/10
ARBITRATOR:	Mr J Hertzberg
DATE OF ARBITRATOR’S DECISION:		24 November 2010
DATE OF APPEAL DECISION:		16 March 2011
SUBJECT MATTER OF DECISION:		Partial incapacity; ability to earn in some suitable employment; s 40 Workers Compensation Act 1987; exercise of discretion where worker resigns
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	N W Aussel
Respondent:	Somerville Laundry Lomax
ORDERS MADE ON APPEAL:		For the reasons given in this decision, the Arbitrator’s determination of 24 November 2010 is confirmed. The appellant employer is to pay the respondent worker’s costs of the appeal, assessed at $600 plus GST.

BACKGROUND

The respondent worker, Cheryl Kitto, started work for the appellant employer, Northern Co‑operative Meat Company Ltd, as a full-time casual meat-packer at its Casino abattoir in 2004. In April 2005, she injured her left dominant shoulder while transferring heavy boxes of meat from scales to a conveyor belt.
Ultimately, Ms Kitto was placed on light duties for 32 hours per week over four days per week. She continued to have pain and discomfort in her shoulder and underwent surgery on 5 May 2008. Surgery did not relieve all of her symptoms, but she was able to return to work on light duties for the same hours as before her surgery.
On 2 March 2009, she was provided with a new light duties position that required her to work full-time over five days. The new position caused an increase in her pain and discomfort, and she resigned on 27 March 2009, effective on 3 April 2009. Her husband, who also worked with the appellant employer, resigned on 6 April 2009 and moved to Ormeau in Queensland, where he had obtained alternative employment. The worker remained in Casino until December 2009, when she also moved to Queensland to join her husband.
On 8 June 2010, the parties settled the worker’s claim for compensation for whole person impairment in the sum of $8,750, representing seven per cent whole person impairment as a result of her shoulder injury.
In an Application to Resolve a Dispute (the Application) registered in the Commission on 25 July 2010, Ms Kitto claimed weekly compensation in the sum of $700 per week from 3 April 2009 to date and continuing.
Notwithstanding that the appellant employer had not served a s 74 notice, a Reply filed on 16 July 2010 purported to dispute incapacity. The Reply also asserted, among other things, that the employer “may rely upon various provisions of the Workers Compensation Act including 38A(2), (3), (4), (5), 52A(i), section 42A [sic] and B [sic], section 40 generally”. Such a Reply is unacceptable and does not comply with the statutory provisions in s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).
The parties appear to have agreed that the appellant employer disputed the following issues:
(a) whether, by resigning, Ms Kitto had unreasonably rejected suitable employment within the meaning of s 40(2A) of the Workers Compensation Act 1987 (the 1987 Act), and
(b) Ms Kitto’s entitlement to weekly compensation, if any, from 3 April 2009 under s 40 of the 1987 Act.
The Commission listed the matter for conciliation and arbitration on 1 November 2010. Neither side sought leave to call any oral evidence and the matter proceeded with submissions.
In a reserved decision delivered on 24 November 2010, the Arbitrator:
(a)     found that Ms Kitto had not unreasonably rejected suitable employment when she resigned;
(b)     found her probable earnings but for the injury were agreed at $700 per week;
(c)     found that Ms Kitto had an ability to earn $380 per week working 20 hours per week as a shop assistant at $19 per hour;
(d) was not persuaded that there were any relevant matters that required the exercise of the discretion under s 40(1), and
(e)     made an award in favour of the worker in the sum of $320 per week from 3 April 2009 to date and continuing.
The Commission issued a Certificate of Determination on 24 November 2010 in the following terms:
“The Commission determines:
1. That the Respondent pay the Applicant weekly benefits compensation pursuant to Section 40 of the Act from 3 April 2009 to date and continuing at the rate of $320 per week.
2. That the Respondent pay the Applicant’s costs as agreed or assessed.
3. I certify that the matter is complex and allow an uplift of professional fees of ten percent for both parties.”
In an appeal lodged on 14 December 2010, the appellant employer seeks leave to challenge the Arbitrator’s s 40 assessment. It has not challenged the Arbitrator’s finding that the worker had not unreasonably rejected suitable employment.

LEAVE

Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of s 352 of the 1998 Act.

Monetary threshold

It is not disputed that the monetary thresholds in s 352(2) are satisfied.

Time

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with s 352(4) of the 1998 Act.
I grant leave to appeal.

ON THE PAPERS

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 Nos 1 and 6, the documents that are before me, and the submissions 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.

EVIDENCE

Lay evidence

Ms Kitto was born in 1963 and is now 47 years old. She left school at the age of 16 and completed an apprenticeship in hairdressing. She worked in that occupation for about eight years until she ceased work to start a family in about 1987. She did some casual hairdressing between 1991 and 1992, but again stopped work in 1993 when she had her third child. She remained out of the workforce until she started work with the appellant employer as a full-time casual meatpacker at Casino in July 2004.
The exact chronology of events after Ms Kitto injured her shoulder in April 2005 is unclear. However, it is agreed that the worker ultimately returned to work on light duties for 32 hours a week spread over four days. Between September 2008 and February 2009, she worked doing laboratory testing on meat, again for 32 hours per week.
On 2 March 2009, the worker was given a new job on the “frozen line” for full-time hours five days per week. This job initially required the worker to push and pull boxes up to 27 kgs. Ms Kitto experienced an increase in her symptoms and complained to the union representative and to Mr Winnell, the boning room foreman. She was upset and crying. She then spoke to the boning room manager, Mr Rankin, who said that she had been given the wrong job. He organised new duties that required the worker to push boxes with her right hand and use her left hand to operate a touch screen computer on the frozen line. The new duties involved “continuous and repetitious” use of the worker’s left arm.
In respect of this job, the worker said in her statement of 16 May 2010:
“It soon became evident that I would not be able to do this job for long periods. On top of this I was located in an area of the boning room that was cold 4–6 degrees Celsius and breezy. The breeze came from an automatic sliding door, which was located behind and to my left approx 4–6 mtrs away. This door was an exit and so therefore used regularly. My shoulder condition worsened considerably as a result of the work I was doing.”
The constant cold and repetitious work soon became too much for Ms Kitto and she made an appointment with Dr Grace Bryant, the visiting general practitioner used by the appellant employer, on 13 March 2009. At that appointment, the worker was very upset, as she was struggling to perform her job because of her shoulder symptoms. Mr Rankin again spoke with the worker and said he would get her a freezer jacket. The jacket did help with the cold, but was restrictive. She was told that a new chair would be organised because the one she was using was too high and not adjustable. There was no change in her duties. Because the freezer jacket was so thick, it added to the worker’s left shoulder pain.
Ms Kitto was unable to work on 17 and 18 March 2009 because of pain in her shoulder.
She returned to work on the same duties on 19 March 2009, which left her in “continuous agony” and required her to take “excessive amounts of pain killers”. Prior to her shoulder surgery in 2008, she had damaged her kidneys by taking too many Panadeine Forte tablets and had to be hospitalised for three days. She was concerned that she was “heading in the same direction”.
She tendered her resignation on Friday 27 March 2009 because she felt she was left with no alternative. She felt “physically and mentally broken”. After tendering her resignation, she was returned to the laboratory until her last day on Friday 3 April 2009. She had previously worked in the laboratory and was able to cope with it, but had been told that it was only temporary.
After her resignation, Ms Kitto decided to give herself time for her shoulder to heal. She attended physiotherapy twice per week and performed home exercises. Her shoulder did not improve and she eventually stopped physiotherapy because of the pain.
In December 2009, Ms Kitto moved to Ormeau with two of her children to join her husband.
In January 2010, she was offered three days’ work as a hairdresser, but declined because she felt there was no way she could do the job, given that she could not even cut her own children’s hair. She said that she has continued to look for work, but her only training has been as a hairdresser and her only other work experience has been at the meatworks at Casino. Every job for which she has applied required her to give a medical history, which meant that she had “no chance of finding a job”. She would be happy to go to TAFE, but really does not know what kind of work she could do.
The appellant employer tendered a statement from Ms Formaggin, their return to work coordinator. She admitted that the worker had been placed on the wrong task when her hours were increased in March 2009 and confirmed that the worker had complained of an increase in pain due to the cold. The worker also complained about the increase in her hours and that the use of the touch screen had increased her pain. She said that the appellant employer had other suitable duties that could have been arranged and that it was not necessary for the worker to resign.

Medical evidence

In a report dated 16 September 2009, the worker’s usual general practitioner, Dr Currie, provided a comprehensive history of the treatment he provided to the worker between April 2005 and her last visit on 1 September 2009. The worker attended on him regularly in that period, complaining of left shoulder pain and restrictions. He confirmed that she had a flare-up of pain on 18 March 2009 and that she felt the cold in the meatworks was an “ongoing trigger”.
When he saw the worker on 1 September 2009, she said that she had given up work at the meatworks in April 2009 as she could not handle the heavier work or the increased hours. She was still off work and “had difficulties even with home duties of washing and vacuuming”. Though she was still having physiotherapy twice per week, she could still only lift to elbow height and had ongoing pain. He thought her prognosis was guarded and that she would never return to her pre-injury duties.
Dr Currie referred the worker to Dr Kinny, orthopaedic surgeon, in August 2006. He reported that the worker’s shoulder was “deteriorating over time” as she continued to work on normal duties. Cortisone injections provided only short-term relief. Recently, the worker had changed to lighter duties that did not involve heavy lifting, but they were more repetitious than her normal duties. He diagnosed a bursitis of the left shoulder. He discussed her treatment options, including surgery. He concluded:
“My advice to Cheryl is that since she only works as a casual at the Meat works, she either reduce her hours to half days, or she changes to working alternate days. She needs to try and reduce the repetitious component of her work duties, and also eliminate lifting at above shoulder height if possible. I think personally she should consider giving away such physical work permanently, otherwise she is going to do significant damage to the rotator cuff area as a result of ongoing inflammation. The patient already has come to that opinion independently. I don’t think she needs medical or surgical intervention by me currently, and she agrees. I am happy to see her again if her situation deteriorates.”
Dr Gilpin, orthopaedic surgeon, performed an arthroscopic acromioplasty on the worker’s left shoulder on 5 May 2008. There was a small partial thickness tear on the bursal surface of the rotator cuff. He debrided the area and was hopeful of a good result. At review in December 2008, Dr Gilpin said that the worker had increased her use of her left limb at work, but had not “really coped with this”. He felt that there would be a permanent restriction “both in work and leisure activities to avoid use of her arms either in push/pull activities or lifting above chest height”.
Ms Pennefather, physiotherapist, reported on 14 August 2008 that the worker’s main problem was “trying too hard to progress quickly – trying to please” the doctors and everybody else. She found she could manage half an hour in the boning room, so tried to push for one hour, and found “it tipped her over”. She could manage 10 minutes of ironing, so then tried to finish the lot, and suffered pain. The worker was going to return to half-an-hour in the packing room and modify her home duties.
Dr Geoffrey Miller, specialist surgeon, provided a medicolegal report on 8 January 2010 after he examined the worker on 14 December 2009. The worker complained of continuing intermittent pain in her left shoulder that involved the whole shoulder joint and radiated to her left elbow. The pain was worse after repetitive use and she particularly found it difficult to perform forceful activities above the horizontal. She found that her left arm was “generally weaker”. She found it difficult to write, vacuum, sweep, or push a supermarket trolley in a car park. She also found it difficult to mow the lawn and had given up tenpin bowling, fishing and tennis.
On examination, Dr Miller found the worker to be generally tender over her left shoulder and to have a restricted range of movement. He felt that she was unfit to return to any work “that would place heavy manual stress on her left shoulder” and was unfit to work at the meatworks as a packer. He felt she would benefit from professional help with the heavier aspects of her house and garden maintenance.
In addition to the above medical reports, there are several WorkCover medical certificates in evidence that have certified the worker fit for suitable duties with lifting restrictions up to 7.5 kg, the avoidance of overhead duties, and restricted pushing or pulling with the left arm. The last certificate (dated 4 December 2009) added, “overhead duties very restricted – not sustained [sic] not repetitive”. None of the medical certificates place any restriction on the number of hours the worker is fit to perform suitable duties.
The appellant employer tendered no medical evidence.

PROCEEDINGS BEFORE THE ARBITRATOR

Both counsel submitted that the Arbitrator would look at Ms Kitto’s ability to earn by reference to work as a shop assistant. Ms Kitto’s counsel, Mr Willis, submitted “perhaps, part-time shop assistants’ work where she’s not required to use her arm above shoulder height” (T10.4) would be suitable, or clerical work. He said (at T10.28):
“The calculation of her earning capacity, in my submission, would be an assessment of what a part-time shop assistant would earn and, you know, I don’t move away from the fact that two and a half days per week, or three days per week, or alternatively working five days a week of shifts of four hours would be – or four or five hours – would be where you would imagine she would be able to work, bearing in mind the level of pain that she has and her, her capacity.”
Counsel for the appellant employer, Mr Keesing, submitted there was no ground for concluding that Ms Kitto could only work part-time (T18.34). He said that the worker “regarded herself as capable of doing the work that Woolworths could provide” (T18.39). He did not suggest that she could stack shelves (T18.44), but Woolworths and Coles were “special places” (T18.48) and there were other shop assistant jobs that did not require “the repetitive work involved in checking out” (T18.50). He referred to work in pharmacies (T18.51), in clothing shops (T19.1), or in delicatessens (T19.2) as jobs that did not “require heavy lifting or repetitive work” (T19.3) and (by implication) would be suitable. He added that there was no “skill requirement, to get shop assistants’ work” (T19.7).
Mr Keesing conceded that, with respect to work as a shop assistant, Ms Kitto had a “more restricted range than a person who had no injury” (T19.17) and that she could not work in a hardware store. He said there was a “whole range of shop assistants’ work that she can do” (T19.19) and it paid as well as the work Ms Kitto did with the appellant employer (it was agreed that the casual rate for a shop assistant was $19 per hour). Therefore, he submitted that Ms Kitto was only entitled to a “fairly limited assessment if any at all, under section 40” (T19.26).
Mr Keesing also submitted (picking up a submission by Mr Willis) that there would be a range of “simple clerical jobs” Ms Kitto could perform (T19.12). However, he did not identify which jobs.
The Arbitrator noted that Ms Kitto was restricted in many activities and in any position involving lifting or overhead movement of her left shoulder. Whilst he accepted Mr Keesing’s submission that she had “capacity to be employed as a shop assistant”, he did not accept that she had the capacity to work full-time in such a job. He said (at [47]) that any such positions would “require some physical work and lifting” and he accepted the submission by Mr Willis that Ms Kitto only had a capacity for four hours work per day for five days per week, or to work two to three days per week. He therefore found her ability to earn to be $380 per week, based on an ability to work 20 hours per week at $19 per hour.
Deducting $380 per week from agreed probable earnings but for the injury of $700 per week gave a difference of $320. The Arbitrator saw no reason to reduce that figure in the exercise of the discretion under s 40(1).

ISSUES IN DISPUTE

The appellant employer challenges the Arbitrator’s determination on the following grounds:
(a)     that there is no evidence to support the finding that the worker is restricted to working only 20 hours per week;
(b)     the Arbitrator’s finding that the worker is only able to work for 20 hours per week was against the weight of the evidence;
(c)     the Arbitrator misdirected himself in assessing the evidence as to the worker’s ability to earn in the open labour market;
(d)     the Arbitrator misinterpreted the evidence when determining the worker’s capacity for work in the open labour market, and
(e)     the Arbitrator failed to exercise his discretion when considering whether there ought to be a reduction in the weekly benefit under the test propounded in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (Mitchell).

SUBMISSIONS, DISCUSSION AND FINDINGS

The appellant employer has submitted:
(a)     the Arbitrator accepted that the worker has a capacity to work as a shop assistant;
(b)     there is no medical evidence that the worker’s hours should be curtailed;
(c)     the worker’s evidence was that she worked at various jobs at the meatworks without apparent difficulty for 32 hours per week for close to four years from the time of her injury;
(d)     the latest certificate from Dr Currie (dated 18 February 2009) certified that she was permanently fit for modified duties from 19 March 2009. That certificate placed no restriction on the hours Ms Kitto could work;
(e)     Ms Kitto did not say in her statements that she was restricted in the number of hours she could work, but did say she had difficulty with the repetitive nature of her job and the increased hours at the meatworks in March 2009;
(f)      Ms Kitto did not say that she had difficulty coping with the 32 hours per week she worked up to March 2009. There was no evidence that her fitness for work had changed or deteriorated as a result of anything that happened in February or March 2009. She must therefore be fit for at least 32 hours of work per week and the work of a shop assistant would most probably be lighter than manual work in the meatworks;
(g)     there is no evidence upon which the Arbitrator could come to the conclusion that the worker was only fit to work 20 hours per week;
(h)     the most favourable finding that could be made in the worker’s favour is that she is capable of working 32 hours per week. At the rate of $19 per hour, the worker’s ability to earn is $608 per week, which reveals a difference between her probable earnings of only $92, and
(i)      the Arbitrator failed to take into account the fact that the worker had voluntarily resigned her employment without further consultation with the appellant employer about the provision of more suitable duties and had removed herself from the area.
Ms Kitto submitted in response that there was “sufficient evidence” to support the Arbitrator’s finding that she was restricted to working 20 hours per week. She submitted that the appellant employer’s approach to step two of the Mitchell test must be incorrect and quite clearly is “unfair in all the circumstances”. The Arbitrator was bound, so it was argued, to look at all matters relevant to an assessment of a worker’s ability to work and to look at the totality of the evidence. Accordingly, he was entitled to conclude that she was only capable of working as a shop assistant for 20 hours per week.
Ms Kitto referred to Dr Currie’s report, which noted that she ceased work because of her inability to handle heavier work and longer hours, and submitted that the reference to “longer work hours” was “an obvious reference to the Applicant’s pre-injury regime of 32 hours per week”. It was submitted that, looking at the totality of the evidence, the Arbitrator was “quite entitled to arrive at the view that she was only capable of working 20 hours per week”.
Ms Kitto’s submissions are incorrect in several respects. There is no medical evidence that Ms Kitto is only fit to perform light duties for 20 hours per week. The submission that Dr Currie’s report referred to the “pre-injury regime of 32 hours per week” is patently wrong. Dr Currie’s reference to the worker’s inability to handle “heavier work and longer work hours” was a reference to the duties performed in March 2009 and not a reference to the light duties performed for 32 hours per week up until that time.
However, I accept that the Arbitrator was required to look at, and did look at, the totality of the evidence in concluding that, because of her injuries, Ms Kitto would have difficulty working full-time as a shop assistant because that work requires “physical work and lifting”. The assessment of a worker’s ability to earn is not purely a medical question (Guthrie v Spence [2009] NSWCA 369 at [196]–[197]).
Though the Arbitrator said he accepted Mr Keesing’s submission that Ms Kitto has a capacity to be employed as a shop assistant, he did not accept that she was fit for unrestricted work in that area. His reasons were more consistent with an acceptance of the submissions by Mr Willis. Those submissions were that work as a shop assistant would “perhaps” be suitable if it was part-time and if she was not required to use her arm above shoulder height.
The appellant employer’s submissions on appeal have wrongly assumed that Ms Kitto is fit for unrestricted work as a shop assistant for at least 32 hours per week, that that work is available to her, and that, therefore, her ability to earn is $608. There is no basis for any of these assumptions.
Ms Kitto has never worked as a shop assistant and has never been assessed to determine if such work would be suitable with her restrictions. The submission by Mr Keesing that she “regarded herself as capable of doing the work that Woolworths could provide” was of limited (if any) weight in the absence of evidence of the physical requirements of the job or its hours. It was conceded that stacking shelves would not be suitable. Given that Ms Kitto is unfit for repetitive work, I doubt that she would be fit for work as a check-out operator.
That Ms Kitto applied for work at Woolworths demonstrates that, to her credit, she has sought employment. However, merely applying for a particular job provides little relevant guidance about her ability to earn. More important is the fact that she has been unsuccessful in obtaining employment because every job for which she has applied has required her medical history and that has meant, in her view, she has “had no chance of finding a job”. This evidence is uncontested and I accept it.
The physical requirements of work as a shop assistant vary greatly depending on the particular job. However, all such jobs require some degree of lifting and handling of goods. That is not a requirement restricted to hardware stores. Work in a clothing store requires regular lifting of clothes onto and off racks or shelves at or above shoulder height. Ms Kitto is not fit for that work. Work in a delicatessen requires regular lifting of meat and other food. Work in a pharmacy requires lifting and stacking stock. I therefore do not accept that Ms Kitto is fit for unrestricted work as a shop assistant.
I do not accept that there is no “skill requirement” for work as a shop assistant. It involves handling cash and meeting and dealing with customers. Not all workers have those skills. Employers invariably seek workers with experience, or juniors straight from school. The worker is now 47 years old and has no experience as a shop assistant. These factors, together with her injury and disability, will tell heavily against her in her attempts to obtain suitable employment as a shop assistant.
I accept Ms Kitto’s evidence that, because of her experience and training, the only work she can do involves physical work, and her injury prevents her from performing such work. If work as a shop assistant were to be suitable, it would have to be work within the restrictions in her WorkCover certificates: no lifting over 7.5 kg, restricted pushing and pulling, restricted overhead duties, and not repetitive. It may be theoretically possible that such a shop assistant jobs exist, but determining a worker’s incapacity is a “practical exercise” that “involves the assessment of a capacity ‘for work’ having regard to the realities of the labour market in which he [or she] is to be engaged” (Mahony JA in Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 at 213). The Arbitrator did not accept that Ms Kitto is fit to perform unrestricted duties as a shop assistant and I agree with that conclusion.
The fact that Ms Kitto worked on selected duties for 32 hours per week with the appellant employer for a long period provides little guidance as to her ability to earn in the open labour market. There is no evidence that that work is available in the open labour market, or that those duties have given her any transferable skills. The appellant employer provided suitable employment under its obligations under the legislation. It was a special situation. That does not establish the worker’s fitness for work as a shop assistant, or in the open labour market. Work as a meatpacker may well be heavier than work as a shop assistant, but as it is not disputed that Ms Kitto is unfit to work as a meat-packer, that is irrelevant. I reject the submission that, because Ms Kitto worked on selected duties for the appellant employer for a period, she “must” be fit to work at least 32 hours per week in the open labour market. The question is what work she would be able to perform in the open labour market and the availability of that work.
The assessment of a worker’s ability to earn requires more than the identification of a particular job or jobs that a worker might be able to do. In Mangion v Visy Board Pty Ltd [1991] NSWCC 1; 8 NSWCCR 175, a Commissioner of the former Compensation Court of NSW (the Court) found an injured worker to be partially incapacitated, but did not award any weekly compensation on the ground that the worker was able to earn more as a security guard (suitable light duties) than he had in his pre-injury job. On appeal to a judge of the Court, Burke CCJ held that the Commissioner had fallen into error in his approach to calculating compensation under s 40 of the 1987 Act. His Honour said at 180:
“When assessing a capacity to earn under section 40(2), it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man’s capacity to earn. Allowance must be made for the availability of work – availability, not so much in the sense of a presently depressed labour market but in the sense of the general availability in any labour market. A rarely available niche in the labour market which carries, perhaps, substantial remuneration, does not serve as a sole criterion of capacity to earn.”
His Honour added:
“When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.”
In Cowra Shire Council v Quinn (1996) 13 NSWCCR 175, the Court of Appeal expressly approved Burke CCJ’s approach.
In assessing Ms Kitto’s ability to earn, the Commission must take into account “the practical realities of the worker, in his or her injured condition and with his or her actual age, abilities, limitations and circumstances in life, being able to get and keep employment” (Ric Developments Pty Ltd t/as Lane Cove Poolmart v Muir [2008] NSWCA 155; 6 DDCR 339 at [50]). The Commission must also consider the matters in s 43A of the 1987 Act.
Ms Kitto left school at the age of 16. She attended technical college, trained as a hairdresser, and worked in that field for several years until she took several years out of the workforce to raise her family. Her only other work experience is as a meat-packer in the job she had with the appellant employer. I accept that, as a result of her injury, she is now unfit for her pre-injury employment with the appellant employer and unfit to work as a hairdresser.
Since December 2009, she has lived in Ormeau, a town about 49 km south of Brisbane. In the absence of evidence, I assume (in favour of the appellant employer) that the labour market in Ormeau is at least as favourable as the labour market in Casino.
Whilst Ms Kitto may theoretically be able to work in some suitable shop assistant positions, she is not fit for unrestricted work as a shop assistant. Given her age, disabilities, work experience, and lack of training, her prospects of obtaining and retaining suitable employment as a shop assistant are remote, and that is a significant factor to be taken into account in determining her ability to earn. Though there might be suitable light duties jobs as a full-time or 32-hour per week shop assistant, that does not mean that the wage for such a job is the measure of Ms Kitto’s ability to earn.
There will most likely be long periods when she is unable to find any suitable work, or only find part-time suitable work. It is therefore appropriate to consider a “weighted average” in determining her ability to earn. In adopting such an approach, it is reasonable to determine her earning capacity based on an average of 20 hours per week in suitable employment as a shop assistant. That is not because the doctors have restricted Ms Kitto to work as a shop assistant for 20 hours per week, but because of her injury, education and training, her prospects of obtaining and retaining suitable employment as a shop assistant are severely restricted and the best she can hope to achieve over time is an average of 20 hours of suitable work per week.
As to the submission at the arbitration that Ms Kitto could perform clerical work (not pressed on appeal), given Ms Kitto’s level of education and her work experience, I do not accept she could perform such work without retraining.
Having regard to the worker’s incapacity (unfit for heavy work, repetitive work or work above shoulder height), her pre-injury employment (work as a meat-packer), her age (47), education, skills and work experience (high school with completion of a hairdressing apprenticeship at college with work as a hairdresser and meat-packer), her place of residence (Ormeau, a town 49 kms south of Brisbane), the details of the restrictions in her medical certificates (see [37]), the suitable employment for which Ms Kitto has received rehabilitation training (none), and the demonstrated difficulty Ms Kitto will have in obtaining and retaining suitable employment (all her job applications to date have been unsuccessful), I agree with the Arbitrator that her ability to earn in some suitable employment is $380 per week.
This represents a weighted average taking into account all the evidence and allowing for a capacity to work in suitable employment as a shop assistant, but also allowing a significant allowance for the fact that she will, because of her injury, have difficulty obtaining and retaining such employment. In other words, I have assessed that, as a result of her injury, she has suffered a reduction in her earning capacity of about 45 per cent. Given the worker’s evidence of the difficulty she has had in obtaining suitable employment to date, this figure is arguably generous to the appellant employer. However, Ms Kitto has not sought an increase in the Arbitrator’s award.
Deducting $380 from the agreed probable earnings but for the injury of $700 gives a difference of $320. The next question is the exercise of the s 40(1) discretion.
The appellant employer has submitted that, in the exercise of the discretion, the Arbitrator failed to take into account the worker’s voluntary resignation without further consultation about the provision of further light duties, and the fact that she “removed herself from the area”. At the arbitration, Mr Keesing made no submissions on use of the discretion and it is unsatisfactory that the appellant employer should raise it for the first time on appeal. Nevertheless, as Ms Kitto has not objected, I will deal with the appellant employer’s submissions.
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.”
In Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50, McHugh JA (Kirby P and Mahony JA agreeing) stated at 54F–55A:
“The third step [step 4 in Mitchell] in the process requires the Compensation Court to look at the circumstances of the case. The weekly payment awarded must bear such relationship to the differential amount – which is the result of the exercise under the first and second steps – as under the circumstances of the case is proper. This third step therefore calls for the exercise of a judicial discretion of a kind with which courts have long been familiar.
It is at this stage that the Compensation Court can and must examine all the facts. The matters which can be examined include such matters as retirement, other supervening illnesses or injuries, the personal employment history of the worker, and so on.”
In Mitchell, the Court described the discretion as a “broad one” (at 534F) but declined to define its outer limits.
For the following reasons, I do not accept that the matters relied on by the appellant employer require the exercise of the discretion in the present case.
Other than the assertions set out at [71], the appellant employer has not presented any argument in support of its position. I assume that it relies on Ms Formaggin’s statement that, if Ms Kitto was unable to work in accordance with her return to work plan, other suitable duties could have been arranged and it was not necessary for her to resign. There is no evidence of what those other duties were, what they would have paid or how long they would have been provided.
Given that the appellant employer gave Ms Kitto the wrong “suitable” duties in her new position on 2 March 2009, and given that even the correct duties caused a significant increase in her symptoms, it was understandable that she felt she had no alternative but to resign. I accept her evidence that she felt “physically and mentally broken”.
Ms Kitto’s decision to resign was not an act of “folly” or “irresponsibility”, or an unreasonable rejection of suitable employment. Therefore, once she resigned, Ms Kitto was entitled to have her ability to earn determined on the basis of her ability to earn in the labour market reasonably accessible to her (Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25).
Ms Formaggin did not explain what other suitable duties could have been arranged and, given that the laboratory duties were only temporary (see [25]), I do not believe Ms Kitto’s resignation provides any ground for reducing the difference between her ability to earn and probable earnings in the exercise of the s 40 discretion. I am satisfied that the figure of $320 is “proper in the circumstances of the case”.
The point about Ms Kitto having removed herself from the area is equally without merit. The worker’s place of residence was a factor I took into account, as required by s 43A(c), in determining Ms Kitto’s ability to earn. I assumed (in the appellant employer’s favour) that the labour market in Ormeau is at least as favourable as the labour market in Casino. The appellant employer’s argument is baseless.

CONCLUSION

Having conducted a review on the merits, I have determined that, for the reasons given in this decision, the correct position is that Ms Kitto is entitled to weekly compensation under s 40 in the sum of $320 per week from 3 April 2009 to date and continuing.

DECISION

For the reasons given in this decision, the Arbitrator’s determination of 24 November 2010 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal, assessed at $600 plus GST.

Bill Roche

Deputy President
16 March 2011

I, MARGOT UNDERCLIFFE, 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