Plumbers Supplies Co-Operative Limited v Behnampirouz
[2008] NSWWCCPD 47
•24 April 2008
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE
COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Plumbers Supplies Co-Operative Limited v Behnampirouz [2008] NSWWCCPD 47
APPELLANT: Plumbers Supplies Co-Operative Limited
RESPONDENT: Morteza Behnampirouz
INSURER:CGU Workers Compensation (NSW) Limited
FILE NUMBER: WCC7211-07
DATE OF ARBITRATOR’S DECISION: 6 December 2007
DATE OF APPEAL DECISION: 24 April 2008
SUBJECT MATTER OF DECISION: section 40 of the Workers Compensation Act 1987; calculation of probable earnings
PRESIDENTIAL MEMBER: President Greg Keating, DCJ
HEARING:On the papers
REPRESENTATION: Appellant: Sparke Helmore
Respondent: RTW & Associates
ORDERS MADE ON APPEAL: Time to appeal is extended to 4 January 2008.
The decision of the Arbitrator, dated 6 December 2007, as amended by the decision dated 6 March 2008 is revoked and the following order made:
The matter is remitted to a different arbitrator for a determination of an award for compensation under section 40 of the Workers Compensation Act 1987, for the period of partial incapacity, in accordance with the reasons in this decision.
No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 11 January 2008 Plumbers Supplies Co-Operative Limited (‘the Appellant/Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 6 December 2007.
The Respondent to the Appeal is Mr Morteza Behnampirouz (‘the Worker’).
Mr Behnampirouz is a 54-year-old driver who alleges he sustained injury to his back and right knee on 17 June 2005 during the performance of his delivery duties when he was required to undertake heavy physical work including unloading a number of bags of pool salt weighing 25 kg each and manually moving a 80 kg hot water system.
Liability was initially accepted and after approximately ten days off work, the Worker returned to work on suitable duties. Mr Behnampirouz continued on light duties until 5 October 2005 when he resigned his employment and liability was declined thereafter.
On 21 September 2007 Mr Behnampirouz filed an ‘Application to Resolve a Dispute’ in the Commission claiming weekly compensation benefits from 9 June 2005 [sic- date of injury 17 June 2005] at various rates to 18 June 2006, an unspecified amount for medical expenses and lump sum compensation under section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) in respect of 24% whole person impairment and $35,000.00 for pain and suffering under section 67.
The Employer filed a Reply undercover of a letter dated 12 October 2007. In relation to the claim for weekly compensation benefits the Employer denied the Worker was incapacitated as alleged or at all and submitted that the Worker had been paid weekly compensation benefits at the appropriate rate. In the alternative the Employer claimed it had provided the Worker with suitable duties, which he had unreasonably rejected at the time of his resignation on 5 October 2005. At the hearing the Employer argued that as a consequence of his actions, the Worker had no entitlement to payment under section 38 and in relation to the calculation of any award under section 40, the Employer relied on section 40(2A) of the 1987 Act. The Employer disputed liability in respect of the claims under sections 66 and 67 and the medical expenses claim under section 60.
The parties were unable to settle the claim and the matter proceeded to an arbitration hearing on 16 November 2007. Both parties were represented and after hearing submissions from the parties the Arbitrator reserved his decision. A decision issued on 6 December 2007 together with a Statement of Reasons (‘Reasons’). It is from this decision that the Appellant seeks leave to appeal.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 6 December 2007 records the Arbitrator’s orders as follows:
“1. The Applicant is therefore entitled to an award for weekly payments for the closed period of the 9th June 2005 to the 18th June 2006 as follows:
a.From the 9th June 2005 to 3rd August 2005 under section 40 of the Workers Compensation Act 1987 at $297.64 per week.
b.From the 4th August 2005 to 5th October 2005 under section 40 of the Workers Compensation Act 1987 at $204.09 per week.
c.From the 6th October to the 4th November 2005 under section 40 of the Workers Compensation Act 1987 at the maximum statutory rate for a worker with one dependant spouse.
d.From the 5th November 2005 to the 18th June 2006 under section 40 of the Workers Compensation Act 1987 at $170.04 per week.
2. That the Applicants claim for lump sum compensation pursuant to Section 66 of the 1987 Act be remitted to the Registrar for referral to an Approved Medical Assessor for assessment.
3. The Respondent to pay the Applicants costs as agreed or assessed.”
On 2 January 2008, prior to lodging the current application for leave to appeal, the Appellant made application to the Commission that the Arbitrator reconsider his decision under section 350(3) of the 1998 Act.
The Arbitrator exercised jurisdiction conferred by section 350(3) and reconsidered his decision. He issued an Amended Certificate of Determination dated 6 March 2008, accompanied by a statement of reasons.
The Amended Certificate of Determination dated 6 March 2008 records the Arbitrator’s orders as follows:
“1. The Certificate of Determination issued by me on the 6th of December 2007 is vacated.
2. The Applicant is entitled to an award for weekly payments for the closed period of the 17th June 2005 to the 18th June 2006 as follows:
a.From the 17th June 2005 to 3rd August 2005 under section 40 of the Workers Compensation Act 1987 at $297.64 per week.
b.From the 4th August 2005 to 5th October 2005 under section 40 of the Workers Compensation Act 1987 at $204.09 per week.
c.From the 6th October to the 4th November 2005 under section 40 of the Workers Compensation Act 1987 at the maximum statutory rate for a worker with one dependant spouse.
d.From the 5th November 2005 to the 18th June 2006 under section 40 of the Workers Compensation Act 1987 at $170.04 per week.
3. The Statement of Reasons issued by me on the 6th of December 2007 is confirmed except for paragraph 30, which is deleted and replaced by the following paragraph:
30. The Respondent claims that the weekly amount which the Applicant would probably have been earning but for the injury had he continued to be employed in the same or comparable employment? (the 1987 Act ss 40(2)(a), 42, 43) was the award rate of $543.40.
4. That the Applicants claim for lump sum compensation pursuant to Section 66 of the 1987 Act be remitted to the Registrar for referral to an Approved Medical Assessor for assessment.
5. The Respondent to pay the Applicants costs as agreed or assessed.”
The amendments made to the decision of 6 December 2007 as detailed in the Amended Certificate of Determination dated 6 March 2008 were made by consent.
On reconsideration the Arbitrator withdrew the award of weekly compensation from 9 June 2005 to 16 June 2005, given that this period predated the date of injury on 17 June 2005. The other change made was to acknowledge the Appellant’s submission, correcting the relevant award rate from $552.56 to $543.40 in paragraph [30] of his Reasons.
Although the Appellant also sought reconsideration of the Arbitrator’s calculation of the section 40 award, this was opposed by the Worker and the Arbitrator declined to reconsider his decision in this regard.
ISSUES IN DISPUTE
The issues in dispute in the appeal as raised by the Appellant are that the Arbitrator erred in:
1) awarding compensation for the period prior to 17 June 2005, having accepted the date of injury as 17 June 2005;
2) referring to the award rate as $552.56 per week when the award rate was $543.40 per week;
3) the weight of evidence and his misapplication of the evidence and the law in finding that pursuant to section 40 the Worker’s probable earnings were $841.04 per week, and
4) failing to provide adequate reasons for his decision “particularly where there are contradictions in his findings and analysis.”
The Arbitrator’s decision on reconsideration dated 6 March 2008 rectified, by consent, the errors identified above in [15(1)] and [15(2)]. These grounds of appeal are otiose.
The grounds of appeal detailed in [15(3)] and [15(4)] remain in issue on appeal.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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 Numbers 1 and 6, the documents that are before me, and the submission 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.
LEAVE
Monetary threshold
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 quantum in issue on the appeal is in excess of $5000.00 and is at least 20% of the amount awarded in the decision appealed against and therefore the thresholds in section 352(2)(a) and (b) are satisfied.
Time
The appeal was initially lodged on 4 January 2008. The Employer, relying on the decision of Rewitu Pty Limited v Registrar of the Workers Compensation Commission and Harvey [2007] NSWSC 441 (7 May 2007) (‘Rewitu’), submitted that the appeal had been filed within 28 days of the “deemed date of service” of the decision, which was received by the Appellant on 7 December 2007.
On 9 January 2008 the Registrar’s delegate rejected the appeal on the basis that prima facie it was filed outside the 28-day period as required under section 352(4) of the 1998 Act stating inter alia:
“Application submitted out of time and failure to attach adequate submissions detailing the arguments in favour of granting the extension of time and the demonstrable and substantial injustice that would be caused if the Appellant were to lose the right of appeal.”
On 11 January 2008 the Appellant re-filed the appeal and in an accompanying letter dated 10 January 2008 restated its reliance on the decision of Rewitu but making alternative submissions in support of an application under Part 16, Rule 16.2(11) of the Workers Compensation Commission Rules 2006 (‘the 2006 Rules’) to extend the time for filing the appeal as follows:
a) a failure to grant the extension of time would cause substantial injustice and prejudice to the Appellant;
b) the 28 day period in which to appeal included three public holidays and one week in which the Appellant’s offices, the Appellant’s solicitor’s offices and the Worker’s solicitor’s offices were closed due to the Christmas and New Year period;
c) a full copy of the appeal was served on the Worker’s solicitor on 4 January 2008;
d) the appeal was filed as soon as practicable after reviewing the Arbitrator’s decision and obtaining instructions and taking into account the holiday period;
e) the solicitor with carriage of the matter and the solicitor who attended the arbitration hearing both left the employ of the Appellant’s solicitors prior to Christmas;
f) the Worker would not suffer any prejudice should leave to appeal be granted;
g) the Appellant however would suffer a substantial injustice if it lost the right to appeal because the appeal relates to a demonstrable error by the Arbitrator leading to a “sizable Award being made”, and
h) “our client and employer should not be prejudiced due to administrative happenings and closures over the Christmas period.”
On 2 March 2008 I caused inquiry to be made with the solicitor for the Appellant seeking confirmation that its submissions seeking leave to file the appeal out of time dated 10 January 2008, had been served on the solicitor for the Respondent.
On 2 April 2008 the solicitors for the Appellant forwarded to the Commission a letter to the Commission confirming that they had served the supplementary submissions on the Worker’s solicitor undercover of a letter dated 17 January 2008.
The Worker, in his ‘Notice of Opposition to Appeal’ filed on 22 February 2008, submitted the appeal was lodged within time. He made no submissions responding to the supplementary submissions in support of the application to extend time to appeal.
The first question is: Is the appeal filed within the time prescribed by section 352(4) of the 1998 Act? Section 352(4) of the 1998 Act is in the following terms:
“(4) An appeal can only be made within 28 days after the making of the decision appealed against.”
It is my view that the appeal has been lodged outside the statutory 28-day period, for the following reasons:
a) an arbitrator’s decision is made “when the Commission issues a certificate as to the determination of the dispute as required by section 294(1) of the 1998 Act”. (Rule 16.2(2));
b) a certificate under section 294 (“the certificate of determination”) was issued on 6 December 2007, therefore, the time prescribed by section 352(4) runs from that date;
c)section 36 of the Acts Interpretation Act 1901 is in these terms:
“(1) Where in an Act any period of time, dating from a given day, act, or event, is prescribed or allowed for any purpose, the time shall, unless the contrary intention appears, be reckoned exclusive of such day or of the day of such act or event.”
The “given day” for the reckoning of time under section 352 is 6 December 2007 and time to appeal is calculated “exclusive of that day”;
d) therefore in this matter time runs from 7 December 2007. Allowing 28 days from December 2007, including 7 December 2007, means that the last day to appeal within time was 3 January 2008, and
e)the appeal was lodged on 4 January 2008 and is therefore one day out of time.
In submitting that the appeal was filed within the 28 days prescribed by section 352, the Appellant relies on the decision of Associate Justice Harrison in the Supreme Court in Rewitu Pty Ltd v The Registrar of the WCC and another [2007] NSWSC 441 (7 May 2007)(‘Rewitu’). In that case her Honour was influenced by the Workers Compensation Commission Rules 2003 (‘the 2003 Rules’), in particular rule 19(6), which for all relevant purposes is in the same terms as rule 8.1(6) of the 2006 Rules, which apply in this case concerning ‘service’ of documents. As Deputy President Roche pointed out in Dennis v NSW Fire Brigades [2007] NSWWCCPD 165 (‘Dennis’), the decision in Rewitu involved a decision concerning the reckoning of time for the purposes of time for an appeal under section 327(5) of the 1998 Act and has no direct application to the reckoning of time for the purposes of appeals under section 352(4) of the 1998 Act.
Rule 8.1(6) provides that if the Commission serves a document by DX the document is served “on the day following the day of leaving in the DX box of the person to whom it was addressed” (Rule 8.1(6)(c)). It does not provide “the given date” under the Acts Interpretation Act 1901, is the date of service of the certificate of determination.
A Presidential member may by order extend the time for making of an appeal, in accordance with the Rules.
Rule 16.2(11) of the 2006 Rules is in the following terms:
“(11)The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
The principles relevant to the discretion to extend time were considered by the High Court in Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 where his Honour Justice McHugh said:
“This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.”
These principles have been discussed and applied in numerous decision of the Commission (see for example, Alexandru v State Rail Authority NSW [2004] NSWWCCPD 54).
Having regard to the particular facts of this case and the principles outlined above I am satisfied that the time to appeal should be extended in this matter for the following reasons:
a) the appeal is only one day out of time;
b) no prejudice has been identified by the Respondent Worker;
c) the Appellant Employer has a strongly arguable case;
d) the certificate of determination was forwarded to the parties by document exchange on 6 December 2007, and
e) in my view to lose the right to appeal would work a demonstrable and substantial injustice to the Appellant.
I therefore extend the time to appeal until 4 January 2008 and grant leave to appeal.
FRESH EVIDENCE
Neither party seeks to rely on fresh evidence.
REVIEW
The nature of a review and the role and function of a Presidential member on appeal has been considered in many cases in the Commission. In The King Island Company Ltd v Deery [2005] NSWWCCPD 1 it was held at [19]:
“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”
The nature of a review was considered by the Court of Appeal in Aluminium Louvres & Ceilings Pty Limited v Zheng [2006] NSWCA 34 where Bryson JA said at [38]:
“A review is a different process to an appeal and the matters which may be considered and the manner in which they may be considered are somewhat wider. See Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 584 (Kirby P). An attack, on review or otherwise, on an Arbitrator's discretionary decision in controlling procedure may be based on the test stated in House v. R (1936) 55 CLR 499 at 504 - 505; but that is not the only basis on which the Presidential member may act. The powers of a Presidential member on review are somewhat wider and extend to power to reopen consideration of a matter of which an Arbitrator has disposed; the manner in which the powers of the Presidential member are to be exercised is itself the subject of discretion of the Presidential member.”
This passage was recently quoted with approval by McColl JA in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [134] (‘Edmonds’). To describe the relative weight and relevance of the expert evidence as “a discretionary decision which could only be disturbed on House v The King principles” was described by McColl JA as “an over-generalisation” (at [133]).
The nature of a review was further considered by the Court of Appeal in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249 where Spigelman CJ said at [28] and [30]:
“28. The concept of a review on the merits is wider than the concept of an appeal in a judicial context. There is a well established line of authority on the use of the terminology of ‘review’ instead of ‘appeal’ with respect to the workers compensation system in this State which establishes the breadth of a review on the merits.
30. A Presidential member exercising a power to review a decision must decide whether the original decision is wrong or, as it is often put in the context of administrative appeals on merits, must decide what is the true and correct view. If s/he does so decide then s/he should substitute his or her own views, unless it is an appropriate case to remit. The power to remit is not constrained in the manner for which the Appellant contends.”
Before an Arbitrator’s decision will be revoked on review it must be demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247, and Absolon v NSW TAFE [1999] NSWCA 311).
I intend to apply the above principles in the matter before me.
SUBMISSIONS
The Appellant submits:
1) The Arbitrator failed to provide adequate reasons for his decision and there are contradictions in his findings and analysis.
2) The Arbitrator was in error in his interpretation of the evidence at paragraph [30] of his Statement of Reasons (‘Reasons’) in finding that the Employer had stated that the probable earnings were equivalent to the Award rate. On appeal the Employer submits this was an error and the Employer’s wage schedule identified an Award rate of $543.40 per week not $552.56 which was “the average gross weekly earnings of the Applicant for the pre-injury period.” As noted in paragraph [11] above, the Arbitrator corrected this error in his reconsidered decision dated 6 March 2008.
3) The Arbitrator erred in relying on the information in the letter from the Employer dated 29 November 2007 stating that $841.04 gross per week was the probable earnings for the entire period claimed. “Probable earnings are to be assessed at the time of injury or at the time the compensation is due, Section 42(8) of the Workers Compensation Act not assessed upon a figure applicable 18 months later”.
4) Whilst the Arbitrator noted at paragraph [36] of his Reasons that the parties had agreed that the Worker’s actual pre-injury earnings were $552.56 gross per week, he calculated the award of compensation from 9 June 2005 accepting that comparable earnings were $841.04.
5) The figure of $841.04 is the comparable earnings at 29 November 2006.
6) By applying the figure of $841.04 to calculation of compensation in 2005, meant that the Worker was compensated “above his pre-injury earnings quite substantially”.
7) The decision of Miller v A&R Pearson Pty Limited [2007] NSWWCCPD 111 (‘Miller’) demonstrates the appropriate way to calculate probable earnings when appropriate comparable figures are not provided.
8) The average weekly earning that should be applied are the gross actual earnings and any increase should align with CPI increases.
The relief sought by the Appellant is that the Arbitrator’s decision be revoked and a new award under section 40 entered based on probable earnings of $553.56 from 17 June 2005 to 3 August 2005 and there after at $569.14 per week calculated as follows:
· $9.16 per week from 17 June 2005 to 3 August 2005
· $nil per week from 4 August 2005 to 5 October 2005
· the maximum statutory rate for a worker with a dependant spouse from 6 October 2005 to 4 November 2005
· $nil per week from 5 November 2005 to 18 June 2006.
Mr Behnampirouz submits that:
1) The decision of Miller can be distinguished because it involved a situation where comparable earning could not be provided, as the relevant employer was no longer in business. In the present case the employer is in business and provided comparable earnings.
2) The Appellant’s submission that the probable earning figure of $841.04 would not apply before 29 November 2006 was incorrect and inconsistent with the Appellant’s wage schedule, which nominated the hourly award rate of $15.25 commencing from 5 November 2005 and therefore the probable earnings figure of $841.04 would apply at least from 5 November 2005 and possibly earlier.
3) He rejects the submission that his actual pre-injury earning should be used as the average weekly earnings figure in the absence of other evidence and that any increases should accord to CPI increases because “there is evidence given by the employer, of what the probable earnings would have been.”
4) The award should be confirmed and varied only to commence the award from 17 June 2005. As noted in paragraph [11] above, the Arbitrator corrected this error on reconsideration and I make no further comment on it.
EVIDENCE
At the arbitration hearing it was conceded by the Employer that the Worker suffered a partial incapacity during the period claimed. Injury, causation and incapacity were not in issue before the Arbitrator or on appeal.
The appeal is limited to the Arbitrator’s assessment of the Worker’s probable earnings but for the injury, had he continued to be employed in the same or some comparable employment (section 40(2)(a)).
The evidence relevant to the issues on appeal is summarized below.
Mr Behnampirouz
Mr Behnampirouz relied on a signed statement dated 5 September 2007. He stated that he was employed as a delivery driver and his duties involved loading and unloading goods and material and making deliveries to clients. He worked on average a 45-hour week, which included 7 hours overtime, and he earned on average $693.55 per week. He stated that on 17 June 2005, after he unloaded 25kg bags and a hot water system without the assistance of a side lift on the truck, he experienced pain in both knees and his lower back. He stated that he continued to work until 20 June 2005 after which he was off work for 10 days and returned to selected duties. He was paid compensation payment during the period that he was off work.
The Worker sated that on 19 September 2005 he was transferred for the Eastwood branch to the Blacktown branch and at the Blacktown branch was given
“lots of deliveries that involved some heavy lifting and I was asked to do more deliveries than I was able to cope with” (Worker’s statement paragraph [9]).
The Worker also stated “My employer would abuse me because of this.” He stated after four weeks at the Blacktown branch he began to experience chronic pain in his knees and as a result of the pain he could not continue working and resigned on 5 October 2005.
Mr Behnampirouz stated that he had not received any weekly compensation since his resignation. From 13 November 2005 to June 2006, he worked casually driving a coach and earned on average less than he earned at Plumber’s Supplies. He returned to Iran in June 2006. After he returned to Australia, in January 2007 he commenced work at ‘Amity Grand’ as a driver. He stated that as a result of his injuries he cannot jog, walk long distances, play sport, stand for too long or garden.
Mr Behnampirouz also relied on WorkCover medical certificates from Dr Ebrahimi, who diagnosed a soft tissue injury to the back and both knees and certified the Worker unfit for work from 20 June 2005 to 30 June 2005. Thereafter the doctor certified the Worker fit for suitable duties. These restrictions are gradually lifted and by 10 November 2005 the doctor certified that Mr Behnampirouz, had reached maximum medical improvement. In the certificate dated 10 November 2005 the doctor referred only to the soft tissue injury to the knee and the meniscal tear and certified that from 10 November 2005 the Worker was fit for 8 hours per week, five days a week with a lifting limit of 15 kg and no repetitive squatting.
Dr Ebrahimi in a certificate dated 23 January 2006, certified the Worker fit for suitable duties at 40 hours per week, but with a lifting limit of 15 kg from 24 November 2005 to 15 December 2005. Three certificates from Dr Ebrahimi certified the Worker fit for suitable duties with the 15 kg lifting limit and avoiding pushing and pulling in respect of periods from 22 February 2006 to 19 July 2007 and from 22 November 2006 to 22 February 2007.
The Worker relied on a wages schedule dated 15 November 2007, handed up at the Arbitration hearing, which differed from the schedule contained in the Application. The schedule dated 15 November 2005 stated that the Worker was employed under the NSW Transport Industry (State) Award as a driver, grade 2. The award rate for the entire period 2 August 2004 to 4 November 2005 was particularised at $543.30 and thereafter at$579.50. The Worker’s ‘actual earning’ were listed week by week at various rates and ‘comparable earnings’ listed at $552.56 for the period 2 August 2004 to 15 June 2005 and thereafter at $841.04.
Plumber’s Supplies’ evidence
Konekt Australia Pty Ltd, the rehabilitation provider prepared a report dated 28 October 2005. This report noted that the outcome achieved was that Mr Behnampirouz was performing suitable duties at full time hours with Plumbers Supplies prior to his resignation.
The report noted that on 15 September 2005 the Worker’s employment was transferred from the Eastwood branch to the Blacktown branch because Eastwood was over staffed. The Worker stated that his travelling time to work had tripled from 10 minutes to 30 to 35 minutes. He stated that he was managing the duties without difficulty and his pain was reducing. The report notes that on 7 October 2005 the Worker resigned after a disagreement when the refused to undertake sweeping duties requested of him, although sweeping was within his restrictions and he was required to perform it
Annexed to the Reply was a copy of the letter of appointment addressed to the Worker detailing the conditions of his employment as a “driver/storeperson” at the Eastwood premises but noting that his location of employment may alter depending on the operational requirements of the company. The Worker signed this document confirming that he had read and accepting the terms and conditions of employment.
A copy of the Position Description for a “store person” dated June 2003 and the Position Description for a “Driver” dated June 2003 was also annexed to the Reply.
The Employer relied on the Worker’s letter of resignation dated 6 October 2005 in which the Worker stated that he tendered his resignation on 12 October 2005.
A letter from Ms Carbonaro, the Appellant’s human resources manager, addressed to the claims officer at CGU dated 5 October 2005 stated that the Worker had resigned on 5 October 2005 and was paid a week in lieu of notice. At the time of his resignation he was working full hours with a 10 kg lifting restriction. The letter stated that the Worker resigned of his own volition after refusing to perform work asked of him as a driver/storeman arguing that he was employed as a driver.
A wage schedule dated 14 November 2007 was handed up on behalf of the Employer at the hearing. For the period August 2004 to 30 June 2005 the award rate is nominated at $543.00 per week and the Worker’s actual and probable earnings are nominated at $552.56 per week. For the period 1 July 2005 to 20 October 2005 no award rate is nominated, the probable earnings are stated at $552.56 and the actual earnings, $636.95. In the period 21 October 2005 to 5 November 2005 the Worker’s actual earnings are nominated as $nil and the probable earnings at $552.56. In the period 6 November 2005 to 18 June 2006, (after the Worker left the employ of the Appellant and secured work as a coach driver), the schedule nominates the award rate at $579.50, the probable earnings at $552.56 and the Worker’s actual earnings at $697.43.
ARBITRAL PROCEEDINGS
The parties relied on documentary evidence of the Application, the Reply and wage schedules prepared by each party. No oral evidence was called but the parties made oral submissions to the Arbitrator, which were recorded and transcribed. The parties have been provided with a copy of the transcript and I have a copy of the documentary evidence referred to above and the transcript before me.
Before the Arbitrator the parties could not however agree on the calculation of the award, if any, under sections 38 and/or 40 of the 1987 Act for the closed period from the date of injury (incorrectly claimed from 9 June 2005) to 18 June 2006, when the Worker resigned employment as a coach driver and returned to Iran for family reasons.
The Arbitrator in his Reasons stated that the Worker was claiming weekly compensation benefits under section 38 for the period 6 October 2005 to 4 November 2005, and under section 40 for the balance of the period from the date of injury to 18 June 2006. In reply the Employer denied the Worker was entitled to compensation under section 38 and in relation to the calculation of the award of compensation under section 40, section 40(2A) should apply on the basis that the Worker unreasonably refused suitable duties. The Employer challenged the probable earnings claimed in the Worker’s wage schedule.
The Arbitrator’s finding that the Worker had not established his case for payment of compensation under section 38 is not challenged on appeal and I make no comment on this part of the Arbitrator’s decision.
The Arbitrator’s finding that the Worker had not ‘unreasonably rejected suitable duties’ such as to invoke the provisions of section 40(2A) is not challenged on appeal and I make no comment on that part of the Arbitrator’s decision.
DISCUSSION AND FINDINGS
The central thrust of the appeal is that the Arbitrator erred in finding that the Worker’s probable earnings under section 40(2)(a) of the 1987 Act were in the sum of $841.04 per week. The Employer also submits that the Arbitrator failed to provide adequate reasons for his decision.
In the preparation of the matter prior to commencing proceedings in the Commission, the Worker’s solicitor made a request for particulars in a letter dated 17 November 2006 addressed to the Employer. The particulars requested included the following question:
“…would you please advise…Gross (i.e. before tax) weekly earnings, inclusive of bonuses, other special allowances and over time, that the injured worker would now be receiving had the worker remained uninjured in your employ.”
In a letter dated 29 November 2006, the Employer responded to the above question as follows:
“Based on Grade 2 driver in the NSW Transport Industry (State) Award, Mr Behnampirouz’s rate of pay would currently be $15.25 per hour. Including average overtime worked Gross Pay would be $841.04 per week.”
No further details were provided, particularly as to the amount of overtime and how such overtime was calculated.
At the arbitration hearing the Worker’s solicitor conceded that a request for comparable wage records under section 43(2) was made only three days before the hearing and the Employer had not complied with the request at the date of the hearing. Section 43(2) of the 1987 Act reads:
“Computation of average weekly earnings
(2)An employer shall, within 28 days, or such other period as may be prescribed, after a request from the employer’s injured worker, supply to the worker, in writing and in accordance with any requirements of the regulations:
(a)such details of the relevant award (“award” having the same meaning as in section 42) and such classification details as will enable the worker to determine his or her current weekly wage rate for the purposes of this Act,
(b) such details of the earnings of the worker as will enable the worker to determine his or her weekly earnings for the purposes of this Act, or
(c) such details of the earnings of at least 2 persons employed by the employer at the same or a comparable grade and work as the worker as will enable the worker to determine, for the purposes of section 36, 37, 40 or 55, the amount which the worker would probably have been earning if the worker had remained uninjured and continued to be employed in the same or some comparable employment.”
The Arbitration hearing was allowed to proceed in the absence of the earning records of comparable employees.
The Worker’s solicitor therefore relied on the wage schedule referred to in paragraph [56] above, which nominated the figure of $841.04 as the ‘comparable earnings’ figure for the period from 16 June 2005 to 18 June 2006. The basis for this reliance was articulated by Mr Winarczyk, the Worker’s solicitor at [T4.51]:
“We say Mr Arbitrator, his probable earnings, if not for the injury, are exactly what the respondent has told us they would be - $841 per week. You couldn’t get stronger evidence than that.”
At the arbitration hearing the Employer relied on a wage schedule dated 14 November 2007. The schedule listed average weekly earnings for the period from August 2004 to 30 June 2005 at $552.56 and the “probable earnings” at $552.56 per week for the entire period from August 2004 to June 2006.
Before the Arbitrator, the Employer’s solicitor submitted that the figure of $552.56 was “…the average computation…for various periods, from August ’04 to 30 June ’05…”
In response to a request by the Arbitrator to submit on the figures contained in the Employer’s wage schedule, Mr Winarczyk submitted at [T.29-35]:
“Well, they just say that it should be $552 a week, which is the average he was earning in the 12‑month period prior to the accident. Now, that's not how you should calculate probable earnings. I mean, earnings do go up over time. And that's not consistent with how much he actually earned after the injury from the respondent. He was earning more than that.”
The Arbitrator prepared a written statement of reasons and his findings and reasons in relation to the amount the Worker would probably have been earning but for the injury (section 40 (2)(a)) are set out at paragraphs [30] to [34] as follows:
“30.The Respondent claims that the weekly amount which the Applicant would probably have been earning but for the injury had he continued to be employed in the same or comparable employment? (the 1987 Act ss 40(2)(a), 42, 43) was the award rate of $552.56 [sic-amended in the reconsideration decision dated 6 March 2008 to read $543.40.].
31. The Applicant claims this amount should be $841.04. The Applicant wrote to the Respondent on the 17th November 2006 seeking advice on the “Gross (ie. Before tax) weekly earnings, inclusive of bonuses, other special allowances and overtime, that an injured worker would now be receiving had the worker remained uninjured in his employ.” The Respondent replied in a letter dated 29th November 2006 at paragraph 10 as follows: “Based on a grade 2 driver in the NSW Transport Industry (state) Award, Mr Benhampirouz’s rate of pay would currently be $15.25 per hour. Including averaged overtime worked Gross Pay would be $841.04 per week”. The Applicant relies on this letter from the Respondent as evidence of the weekly amount which the Applicant would probably have been earning but for the injury had he continued to be employed in the same or comparable employment.
32. The written response from the Respondent refers to the Applicant by name and gives the figure of $841.04 and the reasons for arriving at that figure. The Respondent has put no evidence before me that challenges the accuracy of the assertions made in its said letter of reply to the Applicant. Evidence before the Commission has to be logical and probative. I am satisfied that the written response for the Respondent meets that test.
33. The Respondents submission that the award rate should apply to Section 40 (2) (a) is not borne out by the words in the subsection. There is no reference in Section 40 (2) (a) to the award rate. It is the weekly amount that the worker would have been earning but for the injury. The restrictions set out in Section 42(6) do not apply to partial incapacity.
34. I therefore find that the weekly amount that the worker would have been earning but for the injury is $841.04.”
On appeal the Employer submits that the Arbitrator erred in relying exclusively on the earnings figure of $841.04 detailed in the letter dated 29 November 2006 as representing the probable earnings for the Worker had he remained employed and uninjured. It submits that to rely on this figure as representative of probable earnings from the date of injury and throughout the entire period claimed (17 June 2005 to 18 June 2006), a period entirely pre-dating the date of the letter was an error. The Employer submits that the information contained in the letter of 29 November 2006 nominating the figure of $841.04 was not reliable evidence of probable earnings prior to the date of the letter. The nominated $841.04 is clearly in excess of the Worker’s earnings prior to the injury, which the Employer submits were agreed at $552.56 per week.
On appeal the Worker’s solicitor referred to the Appellant’s wage schedule dated “19.11.07” [sic-15.11.07], which referred to an the hourly award rate of $15.25 nominated in the schedule as applying from 6 November 2005. The Worker argued that the probable earnings of $841.04 based on an award rate of $15.25 per hour, should therefore apply from at least 6 November 2005, rather than 29 November 2006, the date of the letter. The Worker submits on appeal that it was that it was open to the Arbitrator to accept the Worker’s schedule of earnings nominating $841.04 as the Worker’s probable earnings from the date of injury to the 18 June 2006 and the award under section 40 should not be disturbed.
I have reviewed the payroll records attached to both the Application and the Reply, the figure of $841.04, which the Arbitrator accepted as probable earnings from the date of injury to 18 June 2006 was clearly inconsistent with:
a) the Worker’s actual earnings shortly before the injury. In the six weeks prior to the injury, his earnings inclusive of overtime ranged between $682.83 and $704.28 per week;
b) the Worker’s statement of evidence dated 5 September 2007, in which he stated that he worked on average 45 hours per week which included 7 hours over time and he earned on average $693.55; and
c) the “Schedule of Wages claimed” on page 5 of the Application, in which the Worker initially nominated probable earnings in the sum $693.55.
The figure of $552.56 referred to in both parties’ wage schedules as the average weekly earning from 2 August 2004 to the date of injury appears to have been derived by dividing actual earnings over the entire period of his employment prior to the date of injury. This calculation however includes a period commencing in September 2004 when the Worker was on unpaid leave for five weeks. If this five week period of leave is excised from the calculation, the Worker’s pre-injury average weekly earnings including overtime were $623.88 per week, a figure more consistent with his earnings in the six weeks pre-injury and with his statement of evidence, than the finding by the Arbitrator of probable earnings at $841.04.
The Employer’s schedule listed the Worker’s “probable earnings” at $552.56 per week for from August 2004 to June 2006. This is highly unlikely given that in the period from 6 November 2005 to 18 June 2006, these “probable earnings” at $552.56 are less than the award rate of $579.50 nominated by the Employer and given the Employer’s submission that the Worker at the time of injury was earning in excess of his award rate.
In contrast to these probable earning figures relied on before the Arbitrator, on appeal, the Employer now submits that the probable earning but for injury for the period 2 August 2005 to 18 June 2006 are $569.14 per week. This figure does not appear to reflect the relevant award rate, particularly noting that wage schedule relied on by the Employer at the arbitration hearing nominated the award rate for the period from 6 November 2005 to 18 June 2006 at $579.50 per week.
Given that the Employer also submits that in the absence of other evidence to determine probable earnings, the average weekly earning pre–injury should be applied and any increase should be in accordance with the CPI increases, I assume that the figure of $569.14 now proposed as the “probable earnings’ figure for the period from 4 August 2005 to 16 June 2006, is arrived at by adding a 3% CPI adjustment to the figure of $552.56.
The Employer has referred me to the decision of Deputy President Roche in Miller v A & R Pearson Pty Limited [2007] NSWCCPD 111 as demonstrating “an appropriate way to calculate probable earnings when an appropriate comparable earning figure has not been provided.” The Appellant did not rely expressly on this case at the arbitration hearing.
In Miller the worker sustained injury to his back on 23 February 2004, whilst employed by the Pearsons Pty Ltd, the respondent employer. Following the injury, Mr Miller had a short period of incapacity and by May 2004 had resumed normal duties, which he continued until the employer, ceased operating in December 2005. Mr Miller then established his own business in January 2005. He experienced further back pain and had a further period of incapacity whilst self employed. The Deputy President noted at [20] the following principles applicable to the calculation of probable earnings under section 40(2)(a):
“20. In determining probable earnings the following principles are applicable:
a)it must be assumed that the worker’s pre-injury job continued, even if that is not in fact the case (Nicholson at 54, applied in Singh v TAJ (Sydney) Pty Limited [2006] NSWCA 330. It is a hypothetical calculation;
b)a determination must be made of the worker’s probable earnings “as a worker” had he or she remained uninjured and remained employed in the “same or some comparable employment”, and
c)regard must be had to the whole of the evidence.”
The Deputy President in Miller found that in the absence of comparable employee wage records from the respondent, to assist in the determination of the worker’s probable earnings but for injury, that Mr Miller’s actual earnings in the 2005 tax year post-dating his injury were an appropriate guide to his probable earnings. At [27] the Deputy President held:
“In respect of Mr Miller’s argument on appeal that his earnings in 2005 are not relevant, it should be noted that after a short period on light duties after the February 2004 injury he was declared fit for his pre-injury duties from 25 May 2004 (medical certificate from Dr Fagg, 24 May 2004) and he continued to work for Pearson doing the full duties of a carpenter (see Mr Miller’s statement 13 July 2006, paragraph 24) until Pearson ceased trading in December 2005. Whilst Mr Miller’s earnings in the 2005 tax year did post date his injury, the evidence is clear that until May 2006 he had no incapacity in either a physical or economic sense. Therefore, the earnings in the 2005 tax return were an appropriate guide as to Mr Miller’s probable earnings and were in fact higher than in his 2004 tax return because for half of that year he was paid at the much lower rate applicable for an apprentice.”
The Deputy President noted that the parties had agreed that a 3% adjustment was appropriate to bring the figures up to a 2006 level and he adopted such an approach.
I agree with the principles set out by Deputy President Roche in paragraph [88] above. In calculating a worker’s probable earnings an assumption is made that the worker would have continued in the same employment she/he was in at the time of injury and would have earned income at the level she/he was earning at the time of injury (see Johnston v Commissioner of Railways (1973) 128 CLR 632 and Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50).
Whilst clearly a calculation of a worker’s probable earning but for injury, is facilitated by the availability of earning details of comparable employees for the period claimed, as detailed in section 43(2)(c) of the 1987 Act, given that the Worker did not request such material from the Employer until only three days prior to the hearing, and the Employer did not produce the material it was not available to assist the determination of the Worker’s probable earnings but for injury.
I accept that in the absence of comparable employee earnings the calculation of probable earnings for a worker is a more difficult task and must be made taking into account all of the available evidence relevant to the assessment in each particular case. In the absence of specific earnings details for comparable employees over the period claimed, arbitrators are often required to make assessments of workers’ probable earnings on the available evidence. An approach similar to that adopted by the Deputy President in Miller was clearly available to be adopted but was not considered by the Arbitrator in the instant case.
In the instant case the Arbitrator in his reasons at paragraph [33] set out in paragraph [79] above, relied exclusively on the information contained in the Employer’s letter to the Worker’s solicitor dated 29 November 2006. He found the evidence was unchallenged by the Employer and was logical and probative and accepted that it represented the worker’s probable earnings from the date of injury to 18 June 2006.
Whilst it was open to the Arbitrator to accept the evidence contained in the letter dated 29 November 2006 as logical and probative evidence of the Worker’s “current” probable earnings had he remained employed with the Appellant and been uninjured, at a time on or around the date of the letter, it was neither logical or probative evidence of the Worker’s probable earnings uninjured for the entire period claimed from the date of injury to 18 June 2006.
In making a determination of “the average weekly amount which the worker is earning or is able to earning some suitable employment, from time to time after the injury” (see section 40(2)(b) of the 1987 Act), the Arbitrator, did not having the benefit of wage records for comparable employees of the Worker, but he did have before him in the documentary evidence attached to both the Worker’s Application and the Appellant’s Reply, the payroll records for the Worker from 2 August 2004 to 5 October 2006, the entire period of his employment with the Appellant, the Worker’s signed statement and details of the classification, grade and Award the Worker was employed under.
An examination of the payroll records confirms that the Worker performed regular overtime pre-injury. After he resumed work following the injury and the two-week period of total incapacity, he worked significantly reduced hours for approximately six weeks from 1 July 2005 to mid August 2005, when he resumed full time hours and also began performing regular overtime again. The claim from 1 July 2005 to mid August 2005 includes make up pay based on a loss of normal hours and overtime hours. The claim for compensation from mid August 2005, when the Worker recommenced full time hours appears limited to a possible loss of overtime, noting the Worker’s evidence was that he regularly performed approximately 7 hours over time per week pre-injury (see Worker’s statement dated 5 September 2007, paragraph [5]).
The Arbitrator’s decision and reasons fail to disclose that he relied on any of the evidence before him other than the letter dated 29 November 2006. He made no reference to, or analysis of, the payroll records, or the Award details, in his reasoning and determination of the Worker’s probable earnings.
In the absence of evidence of the earnings of comparable employees, the Arbitrator’s reliance on the earnings rate specified in the correspondence from the Employer dated 29 November 2006 was flawed from the outset, as there was no adequate explanation as to how the figure had been calculated and more importantly he ignored other more cogent evidence, the actual earnings records from the commencement of the Worker’s employment with the Appellant. The weight attached to the letter dated 29 November 2006 was disproportionate having regard to the other evidence available to the Arbitrator and his reliance on it to the exclusion of other evidence demonstrated an error.
I am satisfied that the Appellant has established that the Arbitrator erred in his findings in relation to the Worker’s probable earnings under section 40(2)(a), and in turn the calculation of the award he made under section 40, based on this erroneous assessment of probable earnings, such that his decision and award under section 40 must be revoked.
Whilst it is, where possible, preferable, having revoked the Arbitrator’s decision to reconsider and substitute a new decision, I consider that in this case the most appropriate course is to remit the matter to a new arbitrator for determination of the section 40 award afresh. Both parties have significant internal inconsistencies in their submissions and evidence. On appeal, the Appellant has made submissions nominating a monetary amount for the Worker’s probable earnings inconsistent with submissions it made to the Arbitrator and there are marked inconsistencies in the Worker’s evidence and wage schedule in relation to his pre-injury earnings and probable earnings figures as compared with his actual earnings pre and post injury disclosed in the weekly the payroll records.
DECISION
The decision of the Arbitrator dated 6 December 2007, as amended by the decision dated 6 March 2008, is revoked and the following order made:
The matter is remitted to a different arbitrator for a determination of an award for compensation under section 40 of the Workers Compensation Act 1987, for the period of partial incapacity in accordance with the reasons in this decision.
COSTS
No order as to costs of the appeal.
His Hon. Judge Greg Keating
President
24 April 2007
I, MELANIE CURTIN CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF HIS HON. JUDGE GREG KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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