Rail Corporation of New South Wales v B
[2009] NSWWCCPD 81
•17 July 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Rail Corporation of New South Wales v B [2009] NSWWCCPD 81 | |||||
| APPELLANT: | Rail Corporation of New South Wales | |||||
| RESPONDENT: | B | |||||
| INSURER: | Rail Corporation NSW Workers Compensation Services | |||||
| FILE NUMBER: | A1-6749/08 | |||||
| ARBITRATOR: | Mr R Whitelaw | |||||
| DATE OF ARBITRATOR’S DECISION: | 8 January 2009 | |||||
| DATE OF APPEAL DECISION: | 17 July 2009 | |||||
| DATE OF APPEAL HEARING: | 15 July 2009 | |||||
| SUBJECT MATTER OF DECISION: | Sections 40(1) and 40(2A) of the Workers Compensation Act 1987; whether worker unreasonably rejected suitable employment by resigning; exercise of the discretion in a claim for weekly compensation | |||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | |||||
| HEARING: | Oral | |||||
| REPRESENTATION: | Appellant: | Ms L Goodman, instructed by Moray & Agnew | ||||
| Respondent: | Mr S Marsh, instructed by Steve Masselos & Co | |||||
| ORDERS MADE ON APPEAL: | Paragraphs one and two of the Arbitrator’s determination of 8 January 2009 are revoked and the following orders made: “1. Award for the applicant worker under section 40 of the Workers Compensation Act 1987 in the sum of: (a) $259.50 from 18 March 2006 to 31 March 2006; (b) $289.40 from 1 April 2006 to 10 May 2006; (c) $340.90 from 11 May 2006 to 16 May 2006; (d) $289.40 from 17 May 2006 to 25 May 2006; (e) $340.90 from 26 May 2006 to 26 June 2006; (f) $289.40 from 27 June 2006 to 30 September 2006; (g) $316.90 from 1 October 2006 to 31 March 2007; (h) $345.90 from 1 April 2007 to 30 June 2007; (i) $219.90 from 1 July 2007 to 30 September 2007; (j) $247.50 from 1 October 2007 to 31 March 2008; (k) $278.00 from 1 April 2008 to 30 September 2008; (l) $305.60 from 1 October 2008 to 31 March 2009, and (m) $338.40 from 1 April 2009 to date and continuing.” | |||||
| Paragraphs three, four and five of the Arbitrator’s determination are confirmed. | ||||||
| The appellant employer is to pay the respondent worker’s costs of the appeal. | ||||||
BACKGROUND
The respondent worker, Mr B, started work with the appellant, Rail Corporation of New South Wales (‘RailCorp’), as a senior transit officer in January 2003. On 19 December 2003, Mr B injured his right shoulder and neck in the course of his employment with RailCorp. As a result of that injury he was off work for several months and underwent surgery to his right shoulder on 27 May 2004. He sustained a further injury to his neck and shoulder when a bus mirror struck him on his way home from work on 5 October 2005.
After eventually returning to full-time suitable employment with RailCorp in 2005, Mr B took extended leave from October to December 2005. When he failed to return from leave as expected on 22 December 2005, enquiries in early 2006 revealed that he had falsified several time sheets while on suitable duties and forged his supervisor’s signature on some of those time sheets. Arrangements were made for Mr B to attend a disciplinary interview on 15 March 2006, but before that interview was held, Mr B resigned by letter dated 8 March 2006.
Mr B obtained alternative employment for a few weeks in May and June 2006 before obtaining permanent employment with an insurance company on 14 July 2006, which he continues today. It is not disputed that, as a result of his injuries, Mr B continues to have pain and restrictions in his neck and right shoulder and that he is unfit for his pre-injury employment as a transit officer.
By an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 28 August 2008, Mr B sought weekly compensation in the sum of $1,625.00 from 18 March 2006 to date and continuing, medical expenses, and lump sum compensation in respect of his injuries.
By a Reply filed on 16 September 2008, RailCorp sought leave to dispute the claim for weekly compensation on the ground that Mr B had unreasonably rejected suitable employment and his entitlement to weekly compensation was to be calculated by reference to section 40(2A) of the Workers Compensation Act 1987 (‘the 1987 Act’). Under that subsection, if a worker has unreasonably rejected suitable employment the reduction in the worker’s weekly earnings is the difference between the current weekly wage rate for his pre-injury employment and the current weekly wage rate for some suitable employment from time to time after the injury.
RailCorp argues that the difference between those two figures is nil because Mr B suffered no loss of earnings whilst on suitable duties with it. In the alternative, RailCorp argues that Mr B is capable of earning an amount that is at least comparable to the amount he would probably have earned but for his injury and had he continued to be employed in the same or some comparable employment with it.
The matter was listed for hearing before a Commission arbitrator on 9 December 2008. No oral evidence was heard and the Arbitrator reserved his decision until 8 January 2009 when he made an award in favour of RailCorp in respect of the claim for weekly compensation from 18 March 2006 to 8 January 2009 and thereafter an award in favour of Mr B in the sum of $317.80 per week. The Commission’s certificate of determination dated 8 January 2009 records the following orders:
“The Commission determines:
1. Award for the Respondent in respect of weekly payments of compensation from 18 March 2006 to the date of this certificate.
2. That the Respondent pay to the Applicant weekly payments of compensation pursuant to s40 of $317.80 being the maximum statutory rate for a worker with no dependants from the date of this certificate.
3. That the Applicant's claim for lump sum benefits be remitted to the Registrar for referral to an Approved Medical Specialist.
4. That the Respondent pay the Applicant's reasonable and necessary expenses pursuant to s60 of the Workers Compensation Act 1987 upon production of accounts or receipts.
5. That the Respondent pay the Applicant's costs as agreed or assessed.”
By an appeal filed on 2 February 2009, RailCorp seeks leave to appeal the Arbitrator’s decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
It is not disputed that the monetary thresholds in section 352(2) of the 1998 Act are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
FRESH EVIDENCE
‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:
“(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Mr B seeks to rely on the medical assessment certificate (‘MAC’) issued by an approved medical specialist (‘AMS’), Dr Crocker, on 4 March 2009. It is submitted that the additional evidence should be admitted for two reasons. First, it was not available at the time of the arbitration. Second, it is evidence that directly addresses RailCorp’s submission that the section 40 discretion should not be exercised to benefit Mr B because of the relevance and impact of the video of Mr B which influenced Dr Patrick to reduce his whole person impairment from 14% to 8%. Basing his assessment on Mr B’s clinical presentation, Dr Crocker assessed Mr B to have a 13% whole person impairment. He made no reduction in that assessment because of the video.
RailCorp has made no submissions in opposition to the application to rely upon fresh evidence on appeal. Whilst I believe the MAC is of limited relevance to the issues I have to determine on appeal, I believe it is appropriate that it be admitted into evidence as there is no prejudice to RailCorp and it is in the interests of justice that all relevant material be available in the event that the matter has to be re-determined.
THE EVIDENCE
Mr B was born in 1974 and after completing year 12 obtained an honours degree in psychology from the University of Newcastle. During the course of his studies he worked as a sports administrator at a basketball stadium, consol operator at a service station, a statistics analyst at the University of Newcastle, and as a social worker for the Department of Juvenile Justice. After completing his degree he worked for a period at the Australian Institute of Sport and then returned to work in sports administration in Newcastle. He then worked for a period for the Australian Tax Office and then as a recruitment consultant for Adecco. He then worked for three years with the Australian Customs Service before starting with RailCorp in January 2003 as a senior transit officer, which he continued until his injury on 19 December 2003.
After his injury he was away from work for several months and required surgery on his right shoulder, which was performed by Dr Kirsh, orthopaedic surgeon, on 27 May 2004. Before that surgery, RailCorp put in place a rehabilitation programme with a goal that Mr B would return to his pre-injury duties. That goal proved to be unattainable and in 2005 Mr B was certified to be permanently unfit for his pre-injury duties and for duties that required repetitive lifting, pushing and pulling, and use of his right arm above shoulder height. His doctors assessed him to be fit for clerical work.
RailCorp provided clerical work to Mr B from 2004. Initially that work was performed part-time, but progressed to full-time in 2005. From April 2005 Mr B worked at RailCorp’s Pitt Street, Sydney, office under the supervision of Mr De La Motte, where he worked normal hours Monday to Friday. His duties included receiving phone calls, writing memos to apprentices on behalf of Mr De La Motte and, rarely, following up matters in the field. Mr B was required to submit fortnightly time sheets, checked and signed by his supervisor, Mr De La Motte, listing the days and hours on which he worked.
Mr B went on pre-arranged leave on 10 October 2005 and was due to return from that leave on 22 December 2005. Without explanation, Mr B failed to return from leave or contact RailCorp and on 9 January 2006 Ms Grant, Mr B’s injury management co-ordinator, wrote to him advising him that he was in breach of the workers’ compensation legislation by not notifying RailCorp why he had not returned to work. On 10 January 2006, Mr B contacted Ms Grant and stated that he had not returned to work because of family reasons but he would be returning to work the following day. On the afternoon of 10 January 2006 Ms Grant left messages for Mr B that he was to commence duties at the respondent’s premises at Spring Street, Sydney, as suitable duties with Mr De La Motte were no longer available. Whether Mr B received those messages is unclear.
Contrary to Ms Grant’s instructions, Mr B attended work at Pitt Street, Sydney on 11 January 2006. He telephoned Ms Dalton, manager assessment and administration, who directed him to start work at Spring Street where he would be doing data entry from 8am until 4pm because light duties with Mr De La Motte were no longer available (see memorandum from Ms Dalton to Mr Passmore 13 January 2006). Ms Dalton told Mr B that she considered the data entry work was “meaningful and necessary work” (see Ms Dalton’s file note 11 January 2006). Mr B remained at work at Pitt Street for the balance of 11 January 2006 and was advised to attend work at Spring Street on 12 January.
On 11 January 2006, the respondent became aware that there were serious discrepancies in Mr B’s time sheets and that he claimed to have been at work during periods when he was absent, and that Mr B had forged his supervisor’s signature on his time sheets. When Ms Dalton confronted Mr B with these allegations late on the morning of 11 January 2006 he allegedly admitted having signed his supervisor’s name. He has not returned to work with RailCorp since 11 January 2006.
On 12 January 2006, Mr B left a message on Ms Grant’s phone saying that he could not attend work because of family reasons. On 13 January 2006, Mr B left a message on Ms Grant’s phone saying he had a sore shoulder and would not be returning to work that day.
By letter addressed to Mr B on 13 January 2006, Ms Robin, RailCorp’s HR Manager Security, noted the medical advice that he would not return to work to his pre-injury duties and it was important that he be fully informed of his options. She said that she would meet with him to discuss his future career options “both internal and external to RailCorp” including RailCorp’s “Termination on Medical Advice Policy”. She also advised that a new security division had been approved and was being implemented and expressions of interest would be invited from all eligible employees. She strongly recommended Mr B to “take this opportunity to seek alternative positions within the Division that will accommodate your medical restrictions and suit your skills and experience.” She also encouraged Mr B to seek “career opportunities both internal and external to RailCorp” including positions in the wider public sector and the private sector. If he were unsuccessful in obtaining a position in the security division, she would meet with him again to consider termination on medical advice. There is no evidence that Mr B applied for a position in the security division and given the events that unfolded in and after January 2006, I infer that he did not.
Whether Ms Robin’s letter of 13 January 2006 was prompted by the irregularities in Mr B’s time sheets is not dealt with in the evidence. Given the general tone of the letter, it seems most unlikely that it was.
RailCorp conducted a formal investigation into the discrepancies in Mr B’s time sheets and handed him a letter (dated 7 March 2006) at his home on 8 March 2006 requesting him to attend for a disciplinary interview. No interview was conducted because Mr B tended his resignation immediately upon receiving the letter of 7 March 2006.
Medical Evidence
Mr B relies on medical reports from Dr Patrick, surgeon, dated 27 January 2005, 16 June 2006 and 26 May 2008. In his first report, Dr Patrick took a history of Mr B’s first accident and his subsequent surgery. He noted on examination that Mr B’s range of active movement of his right shoulder was significantly reduced with active flexion being up to 95º, extension 20º, reduction 85º and adduction 15º. External rotation was 30º with internal rotation of 50º. Notwithstanding these restrictions, Mr B did not have any significant muscle wasting. He assessed Mr B to have a 14% whole person impairment as a result of the injury to his right shoulder and cervical spine.
In his second report, Dr Patrick recorded that Mr B believed there had been little change in his symptoms and that he was now working in suitable employment with a different employer. On examination the range of motion of the right shoulder was similar to that demonstrated in 2005. Dr Patrick did not believe that the October 2005 accident had significantly altered the impairment assessment and reiterated that he thought Mr B had a 14% whole person impairment as a result of his injuries.
Dr Patrick saw the worker again in June 2006. Mr B continued to complain of pain in the neck and right shoulder and movements of the right shoulder were again significantly reduced.
Dr Patrick reviewed Mr B in March 2008 when he recorded that Mr B loved his new job and indicated that he was coming up for a service manager role with the possibility of working widely in technical training in computer software. On examination, Mr B again demonstrated a significantly reduced range of movement in his right shoulder.
On this occasion, Dr Patrick had available to him video surveillance of Mr B taken during September 2007. He considered that his findings on examination were inconsistent with the activities demonstrated in the video taken of Mr B on Saturday 29 September 2007. On that day Mr B demonstrated elevation of his right upper limb at the shoulder of about 140º. The active range of motion demonstrated on the surveillance video was “considerably more than [Mr B] was able to demonstrate” at Dr Patrick’s examination in March 2008. Mr B told the doctor that he had taken pain relief before hand.
Dr Patrick concluded that, after viewing the surveillance video, it was appropriate to modify Mr B’s impairment assessment and he reduced that assessment to 8%. His opinion regarding Mr B’s fitness for work remained unchanged. He thought that Mr B should avoid physical work involving the right arm or significant use of the right arm outstretched or overhead.
Dr Barrett examined Mr B on behalf of RailCorp in November 2004, April 2005, and July 2007. He also prepared a further report on 31 October 2007 commenting on the video surveillance referred to by Dr Patrick.
In his first report of 17 November 2004, Dr Barrett accepted that the worker suffered a rotator cuff injury to his right shoulder requiring arthroscopic surgery. In his second report, Dr Barrett noted that Mr B was making slow progress, but he thought that gradual improvement was possible over the following twelve to eighteen months.
In his third report, Dr Barrett recorded that Mr B resigned from RailCorp in April 2006 and then travelled overseas. On examination, Mr B demonstrated very little active movement of his right arm and he undressed cautiously, holding his right elbow by his side. When Mr B thought he was not being observed, Dr Barrett noticed that he had more movement in his right shoulder than he had demonstrated when being formally examined. When Dr Barrett pointed out that inconsistency, Mr B was unable to improve upon the active range of movement of his right arm and shoulder. The formal examination revealed Mr B to have less active movement of his right shoulder than he had when he was assessed two years earlier. Dr Barrett confirmed that Mr B remained unfit for his pre-injury employment and unfit for work that involved the likelihood of sudden movements of his right arm or work that involved restraining people. Mr B was, however, fit for clerical or sedentary duties eight hours a day five days a week but should avoid lifting weights above ten kilograms at waist level and avoid lifting above shoulder height. Mr Barrett assessed a 12% whole person impairment.
In his report of 31 October 2007, Dr Barrett commented on the video surveillance taken of Mr B in September 2007. Under “Summary”, Dr Barrett recorded:
“In summary, the video material [has] demonstrated marked inconsistencies. When Mr B presented to me on the last occasion on 31 July 2007, he demonstrated very little active movement of his right arm. He undressed cautiously holding his right elbow by his side.
When the inconsistencies were pointed out to him he was unable to improve upon the active range of movement. He complained of right shoulder pain which radiated to the right side of his neck. He stated that he had difficulty dressing.
In the impairment assessment which I provided on 31 July 2007, I commented upon the inconsistencies which were reported in the primary report.”
Dr Barrett then added that the video confirmed his clinical impressions. In view of the inconsistencies present, he felt unable to assess Mr B’s impairment. In response to a request from RailCorp, Dr Barrett stated in a supplementary report dated 13 November 2007 that he thought Mr B’s whole person impairment was in the range of 0 to 3%.
Dr Crocker took a history of Mr B’s accidents and of his return to work on clerical duties and that he ceased employment with RailCorp in April 2006. After working for a few weeks in customer service with Cannon, Mr B took up employment as a “technical trainee”. On examination, Dr Crocker noted Mr B to have limitation with active range of motion in his right arm and shoulder, which appeared to be as a consequence of discomfort in the region of the right shoulder joint. Dr Crocker noted the documentation referring to the video surveillance and that the surveillance was “suggestive of greater than expected range of motion to the region of the right shoulder compared to times of clinical evaluation” (page 8). He also referred to possible inconsistencies raised in Dr Barrett’s reports that caused him to modify his opinion in respect to his assessment of permanent impairment. Dr Crocker did not consider that there were any “overt features of embellishment on history or augmentation on the physical examination” and, as such, it was his opinion that, at the time of his examination, “reasonable consistency was evident”. He also noted that Dr Patrick altered his whole person impairment assessment after considering the video surveillance report. Dr Crocker assessed Mr B to have a 13% whole person impairment as a result of his injuries.
Rehabilitation Reports
RailCorp referred Mr B to Rehabilitation Services Pty Ltd on 17 March 2004. He saw Ms Summerton, occupational therapist and rehabilitation consultant, on 23 March 2004. In her Initial/Workplace Assessment Report, dated 23 March 2004, Ms Summerton stated that the goal was for Mr B to return to his pre-injury duties.
He initially returned to work on full-time office based duties in February 2004. Those hours were reduced to four hours per day due to ongoing shoulder symptoms affecting his ability to work. After surgery to his right shoulder on 27 May 2004, Mr B returned to work on light duties on 13 September 2004 working two hours per day three days per week in the recruitment division and at the security control centre.
In her report of 19 October 2004, Ms Summerton noted that Mr B would be placed in an alternative position within RailCorp as he would not be able to return to his pre-injury duties as a transit officer.
In her report of 16 November 2004, Ms Summerton recorded that Mr B had met with “recruitment” and indicated that he was positive “regarding potential job opportunities within RailCorp”. He also said that he was able to job seek independently and prepare his résumé without assistance. His hours had been upgraded to four per day three days per week.
By 14 December 2004, his hours had increased to six per day three days per week. He was participating in a gym-based strengthening program to increase his shoulder strength and range of movement. On 13 December 2004, Mr B attended a meeting with Ms Dalton from human resources and Ms Wetherall, injury management advisor. It was agreed that clarification of Mr B’s ability to return to his pre-injury duties would be discussed with Dr Kirsh on 16 December 2004. Mr B’s résumé would be forwarded to Ken Cook from the Ministerial department to locate appropriate transitional duties for commencement on 4 January 2005. Ms Dalton advised that it was important to determine the potential availability of permanent vacancies in a department when engaging suitable duties.
As at 12 January 2005 Mr B continued to perform transitional duties completing statements for court submissions as per stage four of his return to work plan and had upgraded to working six hours per day four days per week. Ms Summerton noted that the treating doctors had provided written advice that Mr B would not be able to return to his pre-injury duties. Therefore the agreed goal was for him to return to an alternative position with RailCorp. Ms Wetherall advised that two potential “transitional duties options were being investigated for [Mr B]”.
On 9 February 2005 Ms Summerton recorded that Mr B was performing light duties in the security division for seven hours per day four days per week and he continued with his gym program. He reported functional gains with an improvement in his shoulder range of movement and a reduction in pain. He continued to submit his résumés and follow up on leads to locate transitional duties that would potentially lead to permanent alternative employment.
Ms Summerton stated in her Rehabilitation Closure Report of 10 March 2005 that Ms Wetherall had referred Mr B to a rehabilitation counsellor for vocational rehabilitation.
According to a report headed “Return to Work Plan” prepared by Ms Garlick, rehabilitation consultant with Recovre Pty Ltd, on 26 May 2005 Mr B was certified fit to continue clerical duties for eight hours per day four days per week from 19 March 2005. I assume that his hours were increased accordingly. Though it is not clear from the evidence, I assume that Mr B returned to full-time light duties in or about April 2005, when he came under Mr De La Motte’s supervision at Pitt Street (see Ms Dalton’s memorandum of 13 January 2006 to Mr Passmore, general manager of the security division).
Ms Garlick met with Mr B on 15 April 2005 to conduct a vocational assessment. That assessment is not in evidence, though Ms Garlick states that the following career goals were discussed:
(a)customer service manager/team leader/supervisor;
(b)recruitment officer;
(c)training officer, or
(d)human resource administrator.
Mr B confirmed he was interested in pursuing these options.
In her report of 16 September 2005, Ms Garlick also identified a suitable position for Mr B as a client services adviser with Railcorp. Though he agreed to obtain a full description and apply for the position of client services adviser, it is not known if he did as he went on leave on 9 October 2005 and resigned on 8 March 2006.
ARBITRATOR’S FINDINGS
The Arbitrator made the following findings:
(a)after his injury, Mr B engaged in suitable employment with RailCorp and subsequently rejected that employment by his actions (Reasons, at [31]);
(b)the current weekly wage rate for Mr B’s pre-injury employment was set out in the wage schedule in the Application and the current weekly wage rate “for some suitable employment for the worker from time to time after the injury is the same amount” (Reasons, at [32]);
(c)deducting Mr B’s current weekly wage rate for some suitable employment from his current weekly wage rate for his pre-injury employment gave a “reduction of earnings of nil” (Reasons, at [33]);
(d)section 40(1) gives a discretion “to provide, in money terms, for the economic measure of a continuing physical disability resulting from a work injury” (per Kirby A-CJ in Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25 at 32F (‘Novello’)) (Reasons, at [35]);
(e)in the exercise of the discretion conferred by section 40(1), Mr B was entitled to no weekly compensation up to and including the date of the Commission’s arbitration order (8 January 2009) and thereafter he was to be paid “the mathematical difference between the current weekly wage rate for his pre-injury employment (subject to the statutory maximum) and the amount that he is currently earning (subject to the statutory maximum)” (Reasons, at [38]);
(f)taking the figures from the wage schedule in the Application, the Arbitrator calculated Mr B’s entitlement to be as follows:
“(i)current weekly wage rate for pre-injury employment (formula ceiling) - $1,221.60;
(ii)current weekly wage rate in current suitable employment - $613.00;
(iii)difference - $1,008.60;
(iv)statutory maximum single worker, no dependants (s40(5) - $317.80).”
(g)the Arbitrator then made orders consistent with the above figures and findings.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)failing to properly apply the provisions of section 40(2A) of the 1987 Act in circumstances where he found that Mr B had unreasonably rejected suitable employment offered by RailCorp, (‘application of section 40(2A)’) and
(b)in exercising a discretion to grant Mr B weekly compensation benefits from 8 January 2009 in circumstances where he found that Mr B had unreasonably rejected suitable employment offered by RailCorp (‘entitlement to weekly compensation from 14 July 2006’).
SUBMISSIONS, DISCUSSION AND FINDINGS
Application of section 40(2A)
Subsections (2A) and (2B) of section 40 provide:
“(2A) Calculation of reduction in earnings of worker – workers rejecting suitable employment.
If the worker has unreasonably rejected suitable employment, the reduction in the worker’s weekly earnings is the difference between:
(a) the current weekly wage rate for the worker’s pre-injury employment (but not exceeding $1,000), and
(b) the current weekly wage rate for some suitable employment for the worker from time to time after the injury (but not exceeding $1,000).
(2B) For the purposes of subsection (2A), a worker unreasonably rejects suitable employment if:
(a) a period of 28 days has elapsed since the worker was offered suitable employment by any person and the worker has unreasonably refused or not accepted the offer (whether or not the offer was available during the whole of that period), or
(b) the worker obtains suitable employment with any person but subsequently unreasonably discontinues that employment.”
It is also relevant to consider the terms of subsection 4 of section 43A, which provides:
“(4) A worker is to be regarded as suitably employed if:
(a) the worker’s employer provides the worker with, or the worker obtains, suitable employment, or
(b) the worker has been reinstated to the worker’s former employment under Part 7 of Chapter 2 of the Industrial Relations Act 1996 .”
Two preliminary points must be mentioned. First, as section 40(2A) is a disentitling provision in beneficial legislation the employer carries the onus of proof (see Burdens and Standards in Civil Litigation by C R Williams [2003] SydLRev 9; citing Darling Island Stevedoring and Lighterage Company Limited v Jacobsen (1945) 70 CLR 635; [1946] ALR 119; (1945) 19 ALJR 237.
Second, RailCorp submits that, as the Arbitrator found against Mr B on the issue of reasonableness and, as Mr B has not filed a ‘cross appeal’, he is precluded from arguing that issue on review. That is not correct. There is no provision in the legislation or rules for a cross appeal in the Commission and where a factual finding is at issue on review and each party has had an opportunity to make submissions on it, as has happened in the present case, it is open for that issue to be re-determined by a Presidential member conducting a section 352 review.
The first question to be determined is whether Mr B was engaged in suitable employment and, if so, whether he unreasonably rejected that employment.
The evidence is that Mr B’s duties up to October 2005 and on 11 January 2006 were clerical duties that were within his physical and mental capacity and were consistent with the last medical certificate in evidence from Dr Parissis, Mr B’s general practitioner, dated 4 August 2005. Those duties were assessed by the rehabilitation providers and, after extensive adjustments to his workstation (see Ms Summerton’s report of 17 September 2004), were determined to be suitable. Mr B does not suggest that the clerical work he performed in the months leading up to his going on leave in October 2005 and on 11 January 2006 was not “suitable employment” within the meaning of section 43A and I accept that it was suitable employment.
There is, however, no evidence about the nature of the data entry work Mr B was directed to commence on 11 and 12 January 2006. Neither the rehabilitation providers nor the medical experts assessed that work and Mr B did not attempt it. The only evidence that touches on its potential suitability is from Ms Summerton in her report of 17 September 2004 where she recommended that Mr B should avoid using the right hand numeric keypad. Whether that restriction was still applicable in January 2006 is not addressed in the evidence, but it raises a doubt as to whether data entry work was suitable employment for a person with an injured dominant right shoulder.
Ms Goodman submits that Mr B abandoned his employment by not returning to work on 22 December 2005, he did not attempt the data entry work, and that he lost his job because of his misconduct. Therefore, I should find that he has unreasonably rejected suitable employment.
I do not accept that Mr B abandoned his employment when he failed to return to work on 22 December 2005. To abandon something is to “leave completely and finally; forsake utterly” (The Macquarie Dictionary, second edition). Mr B failed to return to work when he should have. He returned to work on 11 January 2006 and continued his approved light duties at Pitt Street. I am comfortably satisfied that he had not abandoned the suitable employment at Pitt Street.
Given that RailCorp carries the onus of establishing that it offered suitable employment, I am not satisfied that the data entry work Mr B was directed to perform on 11 January 2006 was suitable employment within the terms of the legislation. Mr B sustained a serious injury to his right shoulder and the AMS has assessed him to have a permanent whole person impairment of 13% as a result of that injury. Ms Summerton thought that, as at September 2004, he should avoid using the right hand numeric keypad. Though Mr B’s shoulder improved after that date, in the absence of evidence as to the suitability of the data entry work, I am not satisfied that it was suitable employment within the terms of section 43A.
It is not to the point that Mr B did not attempt that work. Whilst that is relevant to whether his conduct was reasonable, it does not determine the preliminary question of whether the job offered was suitable employment. It is not sufficient that “other suitable duties personnel were working in the area” (see Ms Dalton’s file note of 11 January 2006). What is necessary is evidence that the employment was suitable employment for Mr B. Though there is no direct medical evidence on the question, a “briefing note” from Kerry Messenger, general manager of human resources, to Fran Simons, group manager of human resources, dated 13 March 2006 states that the last WorkCover medical certificate from Mr B certified that he was totally unfit until 7 March 2006. That evidence, though it is far from ideal, raises a further doubt as to the suitability of the data entry work. In all the circumstances, I am not satisfied that RailCorp has established that the data entry work offered on 11 and 12 January 2006 was suitable employment within the terms of section 43A of the 1987 Act. Therefore, the question of whether Mr B unreasonably rejected that suitable employment by resigning does not arise.
If I am wrong on the issue of whether the data entry work was suitable employment, I do not accept that Mr B unreasonably rejected that employment. The employer relies principally on the resignation, but also on Mr B’s conduct up to 8 March 2006. That conduct includes his failure to return to work on 22 December 2005, his failure to attend at Spring Street when directed to do so on 11 or 12 January 2006, and his dishonest conduct relating to his time sheets. I have already dealt with the abandonment of employment argument so far as it relates to the clerical duties performed in 2005 and on 11 January 2006.
Mr B disputes that by resigning he “unreasonably rejected suitable employment”. He argues that he was entitled to have regard to “all of the circumstances known to him and affecting him” (Fazlic v Milingimbi Community Inc [1982] HCA 3 at [13]; (1982) 150 CLR 345 (‘Fazlic’)). As the evidence is that RailCorp was likely to terminate Mr B’s employment in any event, the perception that he had to “jump before he was pushed” (T3.53) was not, it is submitted, unreasonable.
Any assessment of whether Mr B’s conduct was unreasonable depends on an assessment of his state of knowledge at that time (per Davies A-JA, Handley and Beazley JJA agreeing, in Freightcorp v Duncan [2000] NSWCA 309 at [19], citing Fazlic). The South Australian Workers Compensation Tribunal took a similar approach in Hines v WorkCover/HIH (Transfer Maintenance Pty Ltd) Corporation [2000] SAWCT 171 (‘Hines’), where Deputy President Gilchrist held that though a worker’s personal circumstances were not paramount they had to be taken into account.
These principles were applied by his Honour Judge Keating in McDonald v North Coast Area Health Service [2009] NSWWCCPD 50 (‘McDonald’). In that case it was held that the worker, a nurse, had not unreasonably refused suitable employment when he resigned because his employer had been unable to accommodate his need to have Mondays and Tuesdays off due to family commitments, though he was available to work on any shift from Tuesday night to Sunday evening.
At the time Mr B resigned on 8 March 2006, he believed, based on Ms Robin’s letter of 13 January 2006, that RailCorp was considering termination on medical advice. That belief was not unreasonable. He was also aware that it had instituted an investigation into the irregularities in his time sheets and that he was required to attend the office of “Internal Audit” for a disciplinary interview. His statement of 25 June 2007 makes no comment about the alleged discrepancies in the time sheets, but does refer to the letter of 13 January 2006. There is no evidence as to the likely outcome of the disciplinary interview. Nevertheless, he chose to resign rather than to wait for that outcome. He submits that that was, in his circumstances, a reasonable step to take.
The letter of 13 January 2006 is significant and appears to have been written without knowledge of the time sheet issue. It made it clear that Mr B’s time with RailCorp was running out in any event and that he should look for alternative employment, both in the public and private sectors. On its own, the letter provides an explanation for Mr B’s resignation that significantly diminishes the weight of the employer’s argument.
In all the circumstances, I am of the view that Mr B’s conduct did not amount to an unreasonable rejection of suitable employment. The critical factors that have influenced me in reaching this conclusion are:
(a)he actively participated in the rehabilitation program provided by RailCorp through 2004 and 2005;
(b)though I am unable, given the limited evidence on this issue, to determine if his explanation for failing to return to work on 22 December 2005 was reasonable, that is not determinative because I am satisfied that he did not abandon his employment in the manner suggested by RailCorp;
(c)the suitable duties Mr B performed at Pitt Street under Mr De Le Motte’s supervision up to and including 11 January 2006 were no longer available after that date;
(d)the letter of 13 January 2006 made it crystal clear that Mr B’s time with RailCorp was running out, regardless of his conduct with respect to the time sheets, and that termination on medical advice was being considered. The other job options referred to in that letter were not offers of suitable employment, but merely suggestions of possible alternative employment options, and
(e)it was not unreasonable for him to resign and seek alternative suitable employment, rather than await the outcome of the disciplinary process.
It follows that I am not satisfied that Mr B unreasonably rejected suitable employment and, therefore, section 40(2A) does not apply.
If I am wrong in reaching this conclusion, it is appropriate, given the submissions made on appeal, that I consider the arguments dealing with section 40(2A). RailCorp argues that, once it is found that Mr B unreasonably rejected suitable employment, section 40(2A) limits for all time the benefits that a worker would otherwise receive by providing that the reduction in the worker’s earnings is the difference between the current weekly wage rate for the worker’s pre-injury employment and the current weekly wage rate for some suitable employment from time to time after the injury. As the Arbitrator found that the difference between those two rates is nil, it is submitted that Mr B has no entitlement to weekly compensation.
RailCorp says that subsection 2A of section 40 was inserted following Novello so that if a worker, by folly, irresponsibility, or misconduct, throws away suitable post-injury employment, the worker’s entitlement to weekly compensation is calculated according to the terms of the subsection. The purpose of the subsection, so it is argued, is to limit benefits that a worker would otherwise be entitled to receive and to prevent an injustice to an employer who has provided suitable employment as part of a rehabilitation program. The Arbitrator found that, on applying the section 40(2A) formula, there was no loss and that is therefore the end of the analysis and there is no need to consider the other provisions in section 40. It is submitted that, if it were otherwise, section 40(2A) would have no work to do.
Mr B argues that section 40(2A) does not crystallise a worker’s entitlement at a moment in time and section 40(2A)(b) specifically refers to a worker’s “current weekly wage rate for some suitable employment from time to time after the injury” (emphasis added). Therefore, the Arbitrator was not bound to ignore the suitable employment subsequently obtained by Mr B, but he should have calculated his entitlement from the time he obtained suitable employment on 14 July 2006 by reference to the five steps in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’).
I do not accept that once a worker is found to have unreasonably rejected suitable employment that rejection determines the method of calculating weekly compensation for all time. Workers’ circumstances change. That fact is expressly acknowledged in section 55 of the 1987 Act, which permits awards of weekly compensation to be reviewed in the event of a change in circumstances. The legislation also acknowledges that a worker may be provided with suitable employment by his or her pre-injury employer or may obtain such employment elsewhere (section 40(2B)(b) and section 43A(4)). The legislation does not require that an injured worker must stay with his or her pre-injury employer forever under pain of having his or her compensation permanently reduced to the amount thrown up by the section 40(2A) formula. Such a requirement would make a worker a slave to the employer.
Section 40(2A) is a restricting provision in beneficial legislation and it should be construed according to its terms. Entitlements under beneficial legislation should not depend on “distinctions which are too nice” (per Mahony JA in Articulate Restorations & Developments Pty Ltd v Crawford (1994) 10 NSWCCR 751 at 765). At the same time, the principle that beneficial legislation should be given a liberal construction does not entitle a court to give it a construction that is unreasonable or unnatural (per McColl JA in Amaca Pty Ltd v Cremer & ors [2006] NSWCA 164, citing IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1 (at 11 – 12) per Brennan CJ and McHugh J). The subsection provides a method for calculating weekly compensation in circumstances where a worker has unreasonably rejected suitable employment. If it were intended to operate to the exclusion of subsections (1) and (2) of section 40 when the worker is in suitable employment one would have expected the legislature to have used clear words to that effect. No such words have been used.
That the section 40(2A) formula is not intended to be applied in circumstances where a worker is in suitable employment at the time compensation is sought, though he or she has previously unreasonably rejected suitable employment, is consistent with section 52A(1)(b) of the 1987 Act. That subsection provides that weekly compensation is not payable for any period beyond 104 weeks of partial incapacity where a worker is not suitably employed and has previously rejected suitable employment. The use of the conjunctive “and” in the circumstances set out in section 52A(1)(b) strongly suggests that, for there to be consistency between the provisions, the section 40(2A) formula only applies to the situation where the worker has unreasonably rejected suitable employment and is not suitably employed, but does not apply if the worker is suitably employed.
The interpretation urged by RailCorp leads to the following anomaly. While a worker is in suitable employment with the pre-injury employer and being paid the current weekly wage rate (the award rate) for the pre-injury employment, he or she is entitled to be paid the difference between that pay and his or her average weekly earnings (the actual earnings) in the pre-injury employment (‘make up pay’). If, however, the worker unreasonably rejects suitable employment with the pre-injury employer but later obtains suitable employment with another employer, the pre-injury employer pays only the difference between the current weekly wage rate for the pre-injury employment and the current weekly wage rate for the new suitable employment. Thus, though the worker has met one of the key objectives of the legislation, namely, rehabilitation back into the workforce in suitable employment, he would be liable to receive either no or minimal compensation.
There is a further flaw in RailCorp’s submissions. The submissions have incorrectly assumed that while on light duties Mr B was paid his “usual wage” (T7.42-54), that is, his normal pre-injury average weekly earnings, and that by resigning he gave up the suitable employment that paid him that rate. As is demonstrated at [89] and [90] below, that is not correct. He was, quite correctly, authorised to be paid his “base rate” and make up pay while on light duties with RailCorp. Therefore, what RailCorp is seeking is that, notwithstanding that Mr B is in suitable employment earning an amount similar to his “base rate” in his pre-injury job, he is now not entitled to make up pay.
In the present case, the reduction in Mr B’s weekly earnings while he was not employed in suitable employment is therefore the difference in the relevant current weekly wage rates for his pre-injury employment and his suitable employment. However, once he obtains suitable employment his entitlements are calculated according to the terms of subsections (1) and (2) of section 40 and the relevant authorities. This still leaves section 40(2A) to cover the situation where a worker has unreasonably rejected suitable employment and is unemployed.
It was agreed at the arbitration that the difference between the two current weekly wage rates was nil and that Mr B had no entitlement to compensation while not suitably employed. That concession may have been made in error because of the confusing state of the evidence dealing with wages and an apparent misunderstanding of section 40(2A).
The wage material from RailCorp establishes that while Mr B was on light duties RailCorp agreed to pay his “base rate” (presumably his current weekly wage rate) for his pre-injury job as a senior transit officer. There is, however, no evidence of the current weekly wage rate for the clerical work he performed. Ms Goodman submits that because RailCorp paid Mr B his pre-injury “base rate” while he was on light duties that is the current weekly wage rate for his suitable employment. That is not correct. The current weekly wage rate is the rate set out in section 42 of the 1987 Act, not the rate actually paid by the employer. It is usually the award rate for the particular job. There is no evidence of the award rate for the clerical work Mr B performed. If an employer seeks to rely on section 40(2A) it will be required to provide evidence of the relevant current weekly wage rates for the pre-injury employment and the alleged suitable employment. RailCorp did not do that.
Entitlement to Weekly Compensation
It is agreed that Mr B’s probable earnings but for his injuries (step 1 in Mitchell) are as set out in the wage schedule in Part 5.2 of the Application and that those figures exceed the statutory maximum in section 40(2)(a). As at 18 March 2006, the statutory maximum was $1,449.50. Since then, the figure has been adjusted as follows:
(a)1 April 2006 $1,479.40
(b)1 October 2006 $1,506.90
(c)1 April 2007 $1,535.90
(d)1 October 2007 $1,563.50
(e)1 April 2008 $1,594.00
(f)1 October 2008 $1,621.60
(g)1 April 2009 $1,654.40
Based on the decision of Morgan v Commissioner for Railways [1972] WCR 33 (‘Morgan’), RailCorp submits that Mr B’s ability to earn in some suitable employment (step 2 in Mitchell) is the same as the step 1 figure.
In Morgan, the worker suffered a partial incapacity as a result of two low back injuries. He returned to work on suitable employment and his salary was, when necessary, “made up to that payable from time to time to officers with the same classification as the applicant had at the time of injury” (Sugerman P at 34). He was later convicted of an offence under the Government Railways Act 1912 and, as a result, the Commissioner terminated his employment. The trial judge made an award for the respondent, but also made an alternative finding under section 11 of the Workers Compensation Act 1926 (‘the 1926 Act’) after exercising the discretion in that section.
Sugerman P held that the trial judge erred in making an award for the respondent. His Honour referred to an English decision where it had been held that compensation was not payable to a worker on strike because his incapacity “resulted from” the strike and not the injury, and stated that he would find it impossible to adopt similar reasoning in a case where a worker had been dismissed or had resigned because to do so would impose a permanent disability upon the worker (at 35). His Honour observed (at 36) that the “essence of the matter in these cases” is the avoidance of injustice to an employer “as a result of an arbitrary resignation of an employee or his misconduct causing his dismissal, by the imposition of a greater financial burden upon the employer that he had hitherto had to bear solely as a result of one of these causes.”
His Honour added that the words “able to earn” in section 11(1)(a) of the Workers Compensation Act 1926 (‘the 1926 Act’) should be construed “as including a continuing ability to earn in a job which the injured worker had, and could have retained, but for his own folly, irresponsibility, or misconduct in throwing it up, or leading to his dismissal from it.” Asprey JA agreed with Sugerman P’s orders but noted there was a “judicial discretion of a very wide order” in section 11(1) of the 1926 Act (now in section 40(1) of the 1987 Act). Mason JA agreed with Sugerman P’s reasons and Asprey JA’s observations about the judicial discretion.
The Court of Appeal considered Morgan in Steggles Pty Ltd v Aguirre (1998) 12 NSWLR 693 (‘Aguirre’), where Priestly JA (Hope and McHugh JJA agreeing) observed (at 703-704):
“Sugerman P… discussed the situation of the worker, partially
incapacitated in the employ of an employer who continued to employ the
worker at the wage the worker would probably have been earning as a worker
but for the injury in the same employment. He referred to the wages paid to
such a worker as consisting of two amounts, one being ‘the wages
appropriate to a worker in his injured condition’, the other as an amount
over and above what was appropriate for a worker in his injured condition.
He said the latter amount was in reality a substitute for workers’ compensation.
In the same context, he related what a worker ‘is able to earn’ within
the meaning of s 11(1)(a) to the wages appropriate to a worker in his injured
condition, that is he took what a worker ‘is able to earn’ to refer only to an
ability to earn wages which do not include any element representing a
substitute for workers’ compensation. Thus, when a little later he said (at 36)
that the words ‘able to earn’ should be construed:‘… as including a continuing ability to earn in a job which the
injured worker had, and could have retained, but for his own folly,
irresponsibility, or misconduct in throwing it up, or leading to his
dismissal from it’;the ability to earn he was referring to in a job which the injured worker could have retained but did not, can only have been directed to the ability to earn
what he had earlier referred to as being ‘appropriate for a worker in his
injured condition’ and as excluding the amount which represented a
substitute for worker’s compensation.” (emphasis added)
Priestley JA concluded (at 704):
“My conclusion is that in cases requiring the tribunal of fact to decide what a worker was able to earn at a stated time for purposes of s11(1) what the tribunal must decide is what the worker was able to earn simply by his own ability as a worker and not taking into account amounts he might be paid for other reasons.”
Having regard to Aguirre, I do not accept RailCorp’s argument as to the application of Morgan. Whilst Mr B resigned his employment with RailCorp, as noted by Sugerman P, that does not mean that there should be an award for the employer. What is required is an application of the terms of the legislation to the facts. That reveals that Mr B’s remuneration while on light duties with Railcorp was not the same as his pre-injury remuneration. As in Morgan, his remuneration while on light duties was authorised to be made up of two components, his pre-injury “base rate” plus compensation payments. The second amount was an amount “paid [or, authorised to be paid] for other reasons” (per Priestley JA in Aguirre), namely, compensation.
It is therefore incorrect to suggest that Mr B’s remuneration whilst on light duties with RailCorp was an accurate reflection of his ability to earn in his injured state. His “base rate” of $2,233.91 per fortnight ($1,116.96 per week) as at August 2005 was his pre-injury base rate (see email from Maria Verteouris to Neil Parsons dated 17 February 2006). Whether that was the same as the actual “base rate” (award rate) for the light duties he performed is not known, but the parties conducted the arbitration on the basis that it was. He was also entitled to receive workers compensation payments and Ms Verteouris “approved to build him up to the amount of $2,602.68 per fortnight” ($1,301.34 per week). How Ms Verteouris arrived at the figure of $2,602.68 is not known. She added, “he should of [sic] been paid in total including workers comp $2,602.68”. She further stated that, because of the false time sheets, he had in fact been paid more than that figure. That does not diminish the fact that RailCorp had a legal obligation, as Ms Verteouris rightly acknowledged, to pay the difference between Mr B’s “base rate” and his pre-injury average weekly earnings. If workers performing Mr B’s pre-injury job were earning in excess of the section 40 maximum (and the evidence is that they were), he should have been paid ‘make up pay’ up to that figure. As at August 2005, the section 40 maximum was $1,420.50 ($2,841.00 per fortnight).
Therefore, the “base rate” paid to Mr B while on light duties with RailCorp in August 2005 was $76.96 per week more than the wage of $1,040.00 he commenced on in his suitable employment with his new employer in July 2006, but it was $49.04 per week less than the wage of $1,166.00 he received in July 2007. The end result is that, based on the figures I have analysed, Mr B’s resignation has not resulted in any “injustice” to RailCorp. In fact, it is arguable that since Mr B obtained employment in July 2006, RailCorp’s potential liability to pay make up pay has been reduced.
Mr B’s earnings since 18 March 2006 to date are set out in the wage schedule in the Application:
(a)18 March 2006 to 10 May 2006 nil
(b)11 May 2006 to 16 May 2006 $711.00 per week
(c)17 May 2006 to 25 May 2006 nil
(d)26 May 2006 to 26 June 2006 $675.00 per week
(e)27 June 2006 to 13 July 2006 nil
(f)14 July 2006 to 30 June 2007 $1,040.00 per week
(g)1 July 2007 to date and continuing $1,166.00 per week
Where a worker is employed, his or her earnings are prima facie evidence of ability to earn (Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20, applied in Pira Pty Limited t/as Langdon & Bartley v Tucker (1996) 14 NSWCCR 26). There is no evidence that Mr B is avoiding work, or has deliberately taken lower paid work. Therefore, while he has been employed, his actual earnings should be taken to represent his ability to earn under section 40(2)(b) (step 2 in Mitchell).
In respect of the periods when he was unemployed, I find that, having regard to the nature of Mr B’s incapacity and pre-injury employment, his age, education, skills and work experience, his place of residence, the injury management plan and his rehabilitation, his ability to earn in some suitable employment in the open labour market from March till July 2006 was $1,040.00 per week. This figure is arrived at on the basis of his proven capacity to successfully retrain into suitable clerical duties.
The difference between the step 1 and step 2 figures (step 3 in Mitchell) is:
(a)$409.50 ($1,449.50 less $1,040.00) from 18 March 2006 to 31 March 2006;
(b)$439.40 ($1,479.40 less $1,040.00) from 1 April 2006 to 10 May 2006;
(c)$768.40 ($1,479.40 less $711.00) from 11 May 2006 to 16 May 2006;
(d)$439.40 ($1,479.40 less $1,040.00) from 17 May 2006 to 25 May 2006;
(e)$804.40 ($1,479.40 less $675.00) from 26 May 2006 to 26 June 2006;
(f)$439.40 ($1,479.40 less $1,040.00) from 27 June 2006 to 30 September 2006;
(g)$466.90 ($1,506.90 less $1,040.00) from 1 October 2006 to 30 March 2007;
(h)$495.90 ($1,535.90 less $1,040.00) from 1 April 2007 to 30 June 2007;
(i)$369.90 ($1,535.90 less $1,166.00) from 1 July 2007 to 30 September 2007;
(j)$397.50 ($1,563.50 less $1,166.00) from 1 October 2007 to 31 March 2008;
(k)$428.00 ($1,594.00 less $1,166.00) from 1 April 2008 to 30 September 2008;
(l)$455.60 ($1,621.60 less $1,166.00) from 1 October 2008 to 31 March 2009, and
(m)$488.40 ($1654.40 less $1,166.00) from 1 April 2009 to date and continuing.
Relying on Mitchell, Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (‘Nicholson’), and Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91 (‘Stranlund’), RailCorp argues that the discretion in section 40(1) (step 4 in Mitchell) should be used to reduce the above figures to a nominal amount.
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.”
The exercise of the discretion has been considered in many cases and was expressly referred to in Morgan where Asprey JA observed (at 38) that the trial judge in that case was “not bound to determine the amount of compensation” to be the amount of the difference between steps 1 and 2.
In Nicholson, 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.” (emphasis added)
In Mitchell, the Court described the discretion as a “broad one” (at 534F) and declined to define its outer limits.
In the exercise of the discretion, it is appropriate to consider all of the worker’s circumstances to determine if there are any factors extraneous to the work injury that are affecting the worker’s ability to earn. Mr B voluntarily abandoned any opportunity he had of securing other suitable positions with Railcorp at appropriate rates of pay, given his training, experience and education (see Rooney v State Transit Authority of New South Wales [2001] NSWCC 104 at [23]). As that is a matter directly related to his “employment history” (McHugh JA in Nicholson), it is a relevant factor to take into account in the exercise of the discretion under section 40(1) in determining the amount of compensation that is “proper” in the circumstances of the case (see also Asprey JA in Morgan).
In assessing the weight to be given to the resignation, it is appropriate to consider Ms Robin’s letter of 13 January 2006 (see [22] above), which suggests that there were other avenues of employment for Mr B to pursue with RailCorp, which are now denied to him because of his resignation, not because of his injury. The letter adds, however, that Mr B’s employment with RailCorp may have been terminated on medical advice in any event. Whilst the employment “goals” identified by Ms Garlick (see [46] above) were all positions within Mr B’s capacity, there is no evidence of the availability of such positions, either within or outside Railcorp, or of the likely wages for those positions. The lack of relevant evidence has made the determination of the case much more difficult than should have been the case.
Given that Mr B’s “base rate” with RailCorp was higher than his starting salary with his new employer and, presumably, would have been adjusted over time, and given that he abandoned the opportunity to seek alternative suitable employment within RailCorp and the opportunity to obtain job seeking assistance from RailCorp’s rehabilitation providers, I determine that the weekly figures set out at [94] above should be reduced by $150.00. The second factor is partly counter balanced because Mr B may have faced the prospect of termination on medical advice in any event.
This conclusion involves no injustice or unfairness to the employer. Mr B sustained a serious injury to his right shoulder that required surgery, has been left with a significant whole person impairment as a result, and is permanently unfit for his pre-injury duties. The evidence is that his light duties employment with RailCorp did not pay him the same as his pre-injury employment and RailCorp was therefore liable to pay make up pay. Having obtained suitable employment in July 2006, he is suffering a loss of income compared to his pre-injury earnings and is entitled to be compensated according to the terms of the legislation.
It follows that Mr B is entitled to an award of weekly compensation at the following rates (step 5 in Mitchell):
(a)$259.50 ($409.50 less $150.00) from 18 March 2006 to 31 March 2006;
(b)$289.40 ($439.40 less $150.00) from 1 April 2006 to 10 May 2006;
(c)$340.90 ($768.40 less $150.00 being above the maximum statutory rate) from 11 May 2006 to 16 May 2006;
(d)$289.40 ($439.40 less $150.00) from 17 May 2006 to 25 May 2006;
(e)$340.90 ($804.40 less $150.00 being above the maximum statutory rate) from 26 May 2006 to 26 June 2006;
(f)$289.40 ($439.40 less $150.00) from 27 June 2006 to 30 September 2006;
(g)$316.90 ($466.90 less $150.00) from 1 October 2006 to 31 March 2007;
(h)$345.90 ($495.90 less $150.00) from 1 April 2007 to 30 June 2007;
(i)$219.90 ($369.90 less $150.00) from 1 July 2007 to 30 September 2007;
(j)$247.50 ($397.50 less $150.00) from 1 October 2007 to 31 March 2008;
(k)$278.00 ($428.00 less $150.00) from 1 April 2008 to 30 September 2008;
(l)$305.60 ($455.60 less $150.00) from 1 October 2008 to 31 March 2009, and
(m)$338.40 ($488.40 less $150.00) from 1 April 2009 to date and continuing.
The worker is reminded of his obligation under section 57 of the 1987 Act to advise RailCorp immediately of any change in his employment that affects his earnings.
CONCLUSION
Having conducted a review on the merits (per Spigelman CJ in State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 at [28]), I am of the view that the Arbitrator erred in his approach to, and assessment of, this matter and I have determined the true and correct position to be as set out above.
DECISION
Paragraphs one and two of the Arbitrator’s determination of 8 January 2009 are revoked and the following orders made:
“1.Award for the applicant worker under section 40 of the Workers Compensation Act 1987 in the sum of:
(a) $259.50 from 18 March 2006 to 31 March 2006;
(b) $289.40 from 1 April 2006 to 10 May 2006;
(c) $340.90 from 11 May 2006 to 16 May 2006;
(d) $289.40 from 17 May 2006 to 25 May 2006;
(e) $340.90 from 26 May 2006 to 26 June 2006;
(f) $289.40 from 27 June 2006 to 30 September 2006;
(g) $316.90 from 1 October 2006 to 31 March 2007;
(h) $345.90 from 1 April 2007 to 30 June 2007;
(i) $219.90 from 1 July 2007 to 30 September 2007;
(j) $247.50 from 1 October 2007 to 31 March 2008;
(k) $278.00 from 1 April 2008 to 30 September 2008;
(l) $305.60 from 1 October 2008 to 31 March 2009, and
(m) $338.40 from 1 April 2009 to date and continuing.”
Paragraphs three, four and five of the Arbitrator’s determination are confirmed.
COSTS
The appellant employer is to pay the respondent worker’s costs of the appeal.
Bill Roche
Deputy President
17 July 2009
I, TUYET WALLIS, 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
45