OneSteel Ltd v Salman

[2005] NSWWCCPD 136

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:OneSteel Ltd v Salman [2005] NSW WCC PD 136

APPELLANT:  OneSteel Ltd

RESPONDENT:  Nihal Salman

INSURER:OneSteel Ltd

FILE NUMBER:  WCC16174-03

DATE OF ARBITRATOR’S DECISION:          8 September 2004

DATE OF APPEAL DECISION:  18 November 2005

SUBJECT MATTER OF DECISION: Partial incapacity for work, entitlement to weekly compensation pursuant to sections 38 and 40 of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Rankin Nathan, Lawyers

Respondent: Markham Geikie Farrugia, Solicitors

ORDERS MADE ON APPEAL:  1. Subclause 1(i) of the decision of the Arbitrator dated 8 September 2004 is revoked and the following clause is substituted:

“(i) from 21 October 2002 to 20 April 2003 at the rate of $576.92 per week, and from 21 April 2003 to 20 October 2003 at the rate of $461.54 per week, pursuant to section 38 of the Workers Compensation Act 1987.”

2. Subclause 1(ii) of the decision of the Arbitrator dated 8 September 2004 is revoked and the matter is remitted to the Registrar for referral to a different arbitrator for determination of Ms Salman’s entitlement, if any, to compensation pursuant to section 40 of the Workers Compensation Act 1987, in respect of her partial incapacity for work from 21 October 2003.

3. Clauses 2 and 3 of the Arbitrator’s decision are confirmed.

4. No order is made as to the costs of this appeal.

BACKGROUND TO THE APPEAL

1. On 6 October 2004, OneSteel Ltd sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 8 September 2004.

1. The Respondent to the Appeal is Nihal (Nicole) Salman. Ms Salman was born on 24 April 1980 and is aged 25. She is single with one child who was born on 3 February 2004. From 19 January 2001, OneSteel employed Ms Salman as a data entry and dispatch clerk at its depot at Wetherill Park in Sydney. On 23 March 2001, she injured her neck and left arm in a motor vehicle accident on the way to work. She notified OneSteel of her injury on that day. Ms Salman returned to work the following Monday and persisted with her work, despite finding that it aggravated her condition for which she continued to seek treatment. On 9 August 2002, she was made redundant. At that time, Ms Salman was working her normal hours, albeit with frequent rest breaks. Her average weekly earnings were $623.92 gross. After taking a holiday, she obtained clerical work with another employer but ceased working after two days when she found that her duties aggravated her condition.

1. Ms Salman lodged a claim for workers compensation with OneSteel claiming weekly compensation from 21 October 2002 to date and continuing, together with medical, hospital or related expenses, and compensation for permanent impairment and pain and suffering. OneSteel denied liability and, on 14 October 2003, Ms Salman’s ‘Application to Resolve a Dispute’ was registered in the Commission. OneSteel’s ‘Reply’ was lodged on 28 October 2003. The Arbitrator conducted a teleconference with the parties on 15 March 2004 following which she referred Ms Salman for assessment by an Approved Medical Specialist, Dr Peter Isbister, Orthopaedic Surgeon. Dr Isbister examined Ms Salman on 20 April 2004 and his Medical Assessment Certificate was issued on 26 May 2004. Dr Isbister said, in his opinion, Ms Salman was partially incapacitated for work because of her injury, and would be fit to return to work part-time in selected duties, initially on two to three days a week. He assessed the degree of permanent impairment attributable to the injury as 5% in respect of both her neck and her left arm at or above the elbow.

1. The Arbitrator held a further teleconference with the parties on 14 July 2004 when she was advised that the outstanding issue between the parties was Ms Salman’s claim for weekly compensation, the other matters having been resolved. On 6 August 2004, conciliation having been unsuccessful, the Arbitrator conducted an arbitration hearing. On 8 September 2004, she made the determination set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 8 September 2004, records the Arbitrator’s orders as follows:

“1. That the Respondent pay the Applicant weekly benefits as follows:

i. from 21 October, 2002 to 20 April, 2003 at the rate of $623.92 per week (total $16,221.92) and from 21 April, 2003 to 20 October, 2003 at the rate of $499.13 per week (total $12,977.38) pursuant to section 38 of the Workers Compensation Act, 1987,
AND
ii. from 21 October, 2003 to 3 December, 2003 at the statutory rate of $317.20 per week and from 4 May, 2004, to date and continuing at the rate of $350.00 per week pursuant to section 40 of the Workers Compensation Act, 1987 and otherwise in accordance with the Act.

2. That pursuant to section 60 of the Workers Compensation Act, 1987 the Respondent pay the Applicant’s reasonable medical expenses on presentation of accounts and/or receipts.

3. That the Respondent pay the Applicant’s costs as agreed or assessed.”

1. In her ‘Statement of Reasons for Decision’, the Arbitrator found Ms Salman was partially incapacitated for work as a result of the injury on 23 March 2001. In so finding, the Arbitrator relied on the evidence of her treating rehabilitation specialist, Dr David Manohar, the opinion of Dr Garry Scarf, Surgeon, and that of the Approved Medical Specialist, Dr Isbister. Despite the fact that Ms Salman returned to work after the injury, the Arbitrator found the period of incapacity commenced on the day of the accident and is continuing.

1. The Arbitrator found Ms Salman had supplied the appropriate medical certificates, had looked for suitable work after returning from a holiday in Turkey on 22 September 2002, and was ready, willing and able to accept suitable work up until her pregnancy prevented this in early December 2003. She attempted to return to work in a clerical position with Wormwald Fire Extinguishers but left after two days because the company would not allow her rest breaks.

1. The Arbitrator found Ms Salman (Statement of Reasons, paragraph 33):

“has ongoing neck and shoulder pain which spreads to her arm across her shoulder … There is evidence that she is depressed and her demeanour is flat. These matters would affect her employment prospects. She, herself is of the view she could do some work which is within the restrictions imposed on her. That is to say she must avoid heavy lifting and take frequent breaks. She also gave evidence that she cannot stand for long periods.”

1. The Arbitrator noted the parties had agreed Ms Salman’s weekly wage at the time she was made redundant was $623.92. She found that if Ms Salman had not been injured, she could have found alternative full-time work earning a minimum of $500 per week. Accepting Dr Isbister’s opinion that she is now capable of part-time work in a suitable position for 12 hours per week, she would earn $150 per week.

1. The Arbitrator summarised the resolution of issues in dispute as follows:

“Weekly Benefits Claim:

• Nihal Salman was partially incapacitated for work as a result of her injuries from 23 March, 2001 to date and continuing.
• Nihal Salman’s probable weekly earnings, but for the injury, had she continued to be employed in the same or some comparable employment, are $500.00 per week.
• During Nihal Salman’s period of partial incapacity for work the average weekly amount she was earning or would be able to earn in some suitable employment from time to time after the injury was $150.00.
• She sought suitable employment, and was not able to obtain it, from 21 October, 2002 to 3 December, 2003 …”

ISSUES IN DISPUTE

1. The issues in dispute in the appeal concern Ms Salman’s entitlement to weekly compensation. OneSteel submits the Arbitrator made errors of law in calculating Ms Salman’s entitlement to weekly compensation under both sections 38 and 40 of the Workers Cpmpensation Act 1987 (‘ the 1987 Act’). It also submits the Arbitrator made an error of fact in interpreting the opinion of the Approved Medical Specialist, Dr Isbister. The parties’ submissions on these matters are discussed more fully below.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(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.”

1. I have had regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions of the parties, who both agree to the appeal being determined ‘on the papers’. Having considered this material, 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.

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The Appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), OneSteel states the amount of compensation at issue is $37,593.13, which comprises 100% of the amount awarded in the decision appealed against. I am therefore satisfied that the section 352 threshold has been met, and I grant leave to appeal.

EVIDENCE AND SUBMISSIONS

1. The parties provided the Arbitrator with a ‘Statement of Agreed Facts and Issues’. OneSteel does not dispute the Arbitrator’s finding that Ms Salman is partially incapacitated for work. Essentially, with regard to the facts, it is the Arbitrator’s finding as to the level of her incapacity for work that is at issue. Ms Salman provided statements dated 4 September 2003 and 6 August 2004. She also gave oral evidence at the hearing. The medical reports filed by the parties all predate Dr Isbister’s Medical Assessment Certificate issued on 26 May 2004.

1. OneSteel identifies three specific errors made by the Arbitrator in her decision. First, it submits she made an error of law in calculating Ms Salman’s entitlement to weekly compensation under section 38 of the 1987 Act:

“The Arbitrator was advised prior to the Arbitration that the parties had agreed that the Applicant’s Award rate of pay was $576.92 per week and her average weekly earnings were $623.92 per week. The Arbitrator ordered the Appellant to pay the Applicant $499.13 per week from 21 April 2003 to 20 October 2003 under Section 38 of the WC Act, which equals 80% of her average weekly earnings. Under Section 38 of the WC Act, the Applicant is only entitled to 80% of her current weekly wage rate, which is 80% of her Award rate, ie $461.54 per week. The Appellant submits that the Applicant’s Award under Section 38 of the Act should be reduced to $461.54 per week.”

1. Ms Salman’s solicitors concede that the Arbitrator miscalculated Ms Salman’s entitlement under section 38.

1. Second, OneSteel submits the Arbitrator made an error of fact by misinterpreting the opinion of the Approved Medical Specialist, Dr Isbister. While OneSteel does not dispute the finding that Ms Salman is partially incapacitated for work, it disputes the level of incapacity found by the Arbitrator. At paragraph 33 of her Statement of Reasons, the Arbitrator states, “Dr Isbister, whom I accept would limit her to working 12 hours per week”. OneSteel submits this is a clear error of fact. Dr Isbister recognised that Ms Salman was able to continue performing her work for some 16 months until she was made redundant. He said that at the time of her redundancy, she remained partially incapacitated for work until she would have been due to take maternity leave. Dr Isbister’s response to a question about her situation at the time of his examination, was that she could commence working between two and four hours a day, initially working for two or three days a week. OneSteel emphasises that Dr Isbister did not state these were permanent restrictions as the use of the words “commencing” and “initially” make clear. A correct interpretation indicates a gradual return to work and an upgrading of her hours to 38 hours a week. The Arbitrator, however, assumed that Ms Salman was only fit to work 12 hours a week.

1. OneSteel notes that Ms Salman conceded in evidence that she could work full-time in suitable employment provided she had frequent rest breaks. Moreover, her solicitor conceded that her entitlement to section 40 payments “would be somewhere between $150 and $250 per week” (arbitration hearing transcript page 20). OneSteel submits that if the Arbitrator had correctly interpreted Dr Isbister’s report, she would have found Ms Salman could work full-time in suitable employment earning in the range $489.00 to $663.50 per week. Ms Salman would then only be entitled to a small ongoing award of weekly compensation under section 40, if any.

1. Ms Salman’s solicitors contend that it was open to the Arbitrator to find as she did on the evidence before her. As at 20 April 2004 - the date of examination, Dr Isbister considered Ms Salman could not work more than 12 hours per week. This was the latest medical evidence available to the Arbitrator. Ms Salman’s solicitors acknowledge that any future incapacity may vary after time but suggest this can be dealt with by way of application to vary the award.

1. Third, OneSteel submits the Arbitrator made an error of law by awarding Ms Salman weekly compensation under section 40 of the 1987 Act in excess of the applicable statutory rate. If Ms Salman is found to be entitled to weekly compensation under section 40, it should be to an ongoing award at the statutory rate for a single worker. Ms Salman gave no evidence at the hearing that her child was dependent.

1. Ms Salman’s solicitors submit the proper calculation under section 40 should be average weekly earnings agreed at $621.92 per week less Ms Salman’s ability to earn of $150 per week, giving rise to a differential of $473.92 per week. Therefore, Ms Salman is entitled to the maximum statutory rate for a single worker with one dependent child, ie $383.80 per week from 4 May 2004 to date and continuing. Ms Salman’s solicitors note Ms Salman gave evidence that she is separated from her husband. She was asked, “Do you get child payments off him?” to which she responded, “Yes, I do. He helps out when he can.” The fact that the husband contributes to the child’s upkeep from time to time would not disentitle her to benefits.

DISCUSSION AND FINDINGS

1. With regard to the first error of law alleged by OneSteel, which Ms Salman’s solicitors concede, I agree the Arbitrator made an error of law. Section 42(1) of the 1987 Act provides relevantly that a reference in Division 2 of the Act (dealing with weekly compensation) to the current weekly wage rate of a worker where, immediately before being incapacitated, that worker was remunerated under an award, is a reference to the rate of remuneration under that award for one week. In the case of Ms Salman, the parties agreed that as at 21 October 2002, her award rate of pay was $576.92 gross per week. Therefore, her entitlement under section 38(1) of the 1987 Act for the first 26 weeks of incapacity from 21 October 2002 to 20 April 2003, will be as if her incapacity was total (see sections 36 and 42), and at the rate of $576.92 per week. After the first 26 weeks of incapacity, being partially incapacitated as a result of her injury and not suitably employed, pursuant to section 38(3)(a), she is entitled to 80% of her award rate, that is to 80% of $576.92 being $461.54.

1. Secondly, with regard to the error of fact alleged by OneSteel, I note that it does not dispute that Ms Salman is partially incapacitated for work. The alleged error by the Arbitrator is that she misinterpreted Dr Isbister’s opinion as to the level of incapacity. Dr Isbister stated, at page 9 of his report, that in his opinion, Ms Salman was “partially incapacitated for work as a result of the accident which occurred on 28 March 2001”. In answer to the question “When did the Applicant become totally incapacitated?” Dr Isbister answered:

“In my opinion, Ms Salman became totally incapacitated six weeks prior to the delivery of her child, approximately three months ago.

For all intents and purposes she is currently on maternity leave.

Ms Salman had been able to return to work following the injury and continued to do so for some 16 months until her position was made redundant. In my opinion at that time she was fit to carry out her work with restrictions despite the fact she no longer had a job.

She remained partially incapacitated until it was time for her to be in a situation to take maternity leave.”

1. In answer to the question, “What if any restrictions should be placed on the worker and the duration of those restrictions?” Dr Isbister answered:

“In my opinion Ms Salman would be fit to work in selected duties in data entry commencing between two to four hours per day having a five-minute break every half hour and possibly a 10-minute break on the hour, initially working for two or three days a week.”

1. At paragraph 25 of her Statement of Reasons, the Arbitrator said:

“The period of partial incapacity commenced on the day of her accident and it is to her credit that she returned to work for 16 months after her injury when she was made redundant on 9 August, 2002. Dr Manohar and Dr Isbister agree that she had an ongoing incapacity for work and Dr Isbister sees that as continuing. As Dr Isbister examined the Applicant on behalf of the Commission and was the last to see the Applicant I prefer his evidence to that tendered by the Respondent, and I find that her partial incapacity for work is continuing.”

1. At paragraph 33, the Arbitrator discussed the extent of Ms Salman’s incapacity for work. In the final sentence, the Arbitrator stated: “Dr Isbister, whom I accept would limit her to working 12 hours per week.” In her summary of the resolution of issues at paragraph 36, the Arbitrator stated:

“• During Nihal Salman’s period of partial incapacity for work the average weekly amount she was earning or would be able to earn in some suitable employment from time to time after the injury was $150.00.”

1. Did the Arbitrator make an error of fact? In my view, she did. It seems to me implicit in what Dr Isbister said that he had in mind that Ms Salman should make a graduated return to work, commencing with two to four hours a day on two or three days a week, with regular half hourly breaks, and gradually increasing her hours and the number of days worked. In cross-examination at the arbitration hearing, Ms Salman was asked about her capacity for work. She answered “yes” to the question, “So it’s the position now that if you could find some suitable work you could work full time subject to you having frequent rest breaks?” (arbitration hearing transcript page 7). She had previously indicated that any employer would need to accept the restrictions on her capacity to work – for example, avoiding activities such as lifting and standing that would aggravate her neck. With regard to what breaks she would need, Ms Salman said, in re-examination (arbitration hearing transcript page 9), “I think every half hour to an hour just stop, have a few stretches, go for a little walk, maybe take a headache tablet.”

1. Thirdly, OneSteel allege a second error of law by the Arbitrator, an error in the award of weekly compensation to Ms Salman under section 40 of the 1987 Act. An application of section 40 to the period from 21 October 2003 to date and continuing, requires a consideration of the steps prescribed by the NSW Court of Appeal in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’). Although the Arbitrator made no reference to the steps prescribed in Mitchell, in relation to step one, she found Ms Salman’s “probable weekly earnings, but for the injury, had she continued to be employed in the same or some comparable employment, are $500.00 per week”. In relation to step two, the Arbitrator found Ms Salman was capable of earning $150 per week in some suitable employment from time to time after the injury. In relation to step three, the subtraction of $150 from $500 gives a figure of $350. In relation to step four, there is no evidence that the Arbitrator applied her mind to the exercise of the section 40(1) discretion, and she thereby made an error of law.

1. However, assuming the Arbitrator did apply her mind to the exercise of the section 40(1) discretion, in relation to step five, the Arbitrator, commenting on the figure calculated at step three, stated that, where appropriate, the statutory rate prevails (see section 40(5)). In respect of the period 21 October 2003 to 3 December 2003, the reduction in Ms Salman’s earnings of $350 was greater than the applicable statutory rate for single worker of $317.20 per week. Thus, the Arbitrator’s award of $317.20 for this period was correct. However, in respect of the period from 4 May 2004, the reduction in Ms Salman’s earnings of $350.00 was less than the applicable statutory rate for a single worker with one dependent child of $383.80. (The statutory rate for a single worker without dependants was $323.00.) Thus, the Arbitrator’s award of $350.00 for this period was correct if Ms Salman was a single worker with one dependent child.

1. In respect of the period from 4 May 2004, OneSteel notes that Ms Salman listed “nil” dependants in her ‘Application to Resolve a Dispute’ and “gave no evidence that her child was dependent”. Whilst it is true she listed no dependents in her Application, this was, of course, correct at the time, since the Application was registered by the Commission on 14 October 2003, before her child was born. At the arbitration hearing, Ms Salman was asked in cross-examination whether she receives child payments from her husband, from whom she is separated. She answered (arbitration hearing transcript page 7), “Yes, I do. He helps out when he can”. It is also clear both from her statement dated 6 August 2004 and from her oral evidence at the hearing, that Ms Salman is living with her mother and child and that she cares for and supports her child. I am therefore reasonably satisfied on the evidence that Ms Salman’s child is “totally or mainly dependent for support” on Ms Salman (section 37(4)), and that the Arbitrator should have made a finding to this effect.

1. My conclusion from the above discussion is that while I am not persuaded the Arbitrator made the second error of law alleged by OneSteel, she did, however, make an error of law by failing to exercise the section 40(1) discretion. Given my determination that the Arbitrator also made an error of fact in relation to the level of Ms Salman’s partial incapacity for work from 4 May 2004, and given the lack of recent evidence on this issue, the appropriate course is for me to revoke subclause 1(ii) of the Arbitrator’s decision and remit the matter to a different arbitrator for determination of Ms Salman’s entitlement, if any, to compensation pursuant to section 40 of the 1987 Act. There will, therefore, be a need for further evidence and submissions on this matter.

DECISION

1. Subclause 1(i) of the decision of the Arbitrator dated 8 September 2004 is revoked and the following clause is substituted:

“(i) from 21 October 2002 to 20 April 2003 at the rate of $576.92 per week, and from 21 April 2003 to 20 October 2003 at the rate of $461.54 per week, pursuant to section 38 of the Workers Compensation Act 1987.”

1. Subclause 1(ii) of the decision of the Arbitrator dated 8 September 2004 is revoked and the matter is remitted to the Registrar for referral to a different arbitrator for determination of Ms Salman’s entitlement, if any, to compensation pursuant to section 40 of the Workers Compensation Act 1987, in respect of her partial incapacity for work from 21 October 2003.

1. Clauses 2 and 3 of the Arbitrator’s decision are confirmed.

COSTS

1. No order is made as to the costs of this appeal.

Robin Handley

Acting Deputy President  

18 November 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE