Re Sutton and Comcare - [1996] AATA 168

Sullivan and TNT Australia Pty Ltd (Compensation) [2016] AATA 643 (26 August 2016)

Division

GENERAL DIVISION

File Number

2015/4000

Re

Edward Sullivan

APPLICANT

And

TNT Australia Pty Ltd

RESPONDENT

DECISION

Tribunal
Senior Member J F Toohey

Date 26 August 2016

Place Sydney
The Tribunal varies the decision under review so that, for the purposes of calculating the compensation payable for his injury on 12 March 2015, Mr Sullivan’s NWE is $1339.30.

........................[sgd]................................................
Senior Member J F Toohey
CATCHWORDS
COMPENSATION – Normal Weekly Earnings – whether calculation of Normal Weekly Earnings correct – Industrial Agreement – Transport Industry Award – special expenses –

decision under review varied

LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 ss 8(1), 8(10)

CASES
Bortolazzo and Anor v Comcare (1997) 75 FCR 385

Comcare v Simmons [2014] FCAFC 4

Re Glen Edward Sutton and Comcare [1996] AATA 168

SECONDARY MATERIALS
Industrial Agreement between the Transport Workers’ Union of Australia New South Wales Branch on Behalf of Priority Contract Carriers Sydney and TNT Australia Pty Limited

TNT Australia – TWU New South Wales (Contract Carriers) Agreement 2014-2017
Transport Industry (State) Award - serial C7740

Transport Industry (State) Award - serial C8299
REASONS FOR DECISION
Senior Member J F Toohey
26 August 2016
Background

Mr Edward Sullivan works as a contract carrier for the respondent. On 12 March 2015, he injured his right knee at work. The respondent accepted liability under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) to compensate Mr Sullivan for his injury.
This decision concerns the calculation of compensation payable to Mr Sullivan for his injury.
Relevant legislation
The payment of compensation for an employee who is incapacitated for work as a result of an injury is determined according to the formula in s 19 of the SRC Act. Essentially, an employee is entitled to the difference between his or her Normal Weekly Earnings (NWE) and what he or she is able to earn.
Subsection 8(1) of the SRC Act provides that an employee’s NWE are calculated in accordance with the formula:
(NH x RP) + A
where:
"NH" is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
"RP" is the employee's average hourly ordinary time rate of pay during that period; and
"A" is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
Mr Sullivan’s terms of employment
Mr Sullivan’s contractual arrangement with the respondent is governed by an Industrial Agreement made in November 2000 between the Transport Workers’ Union of Australia New South Wales Branch on behalf of Priority Contract Carriers (Sydney) and TNT Australia Pty Ltd (the Agreement).
The Agreement is read together with TNT Australia TWU New South Wales (Contract Carriers) Agreement 2014 – 2017 which sets out,…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Re Sutton and Comcare

Details

AGLC: Re Sutton and Comcare [2016] AATA 643
Case: [1996] AATA 168
Decision Date: 26 August 2016

CaseChat Overview and Summary

This matter concerned an appeal before SM J F Toohey regarding the calculation of Mr Sullivan's Normal Weekly Earnings (NWE) for the purposes of workers' compensation under the SRC Act. The dispute arose from multiple revised determinations of Mr Sullivan's NWE by the respondent, Comcare, which Mr Sullivan contended were incorrect.

The primary legal issue before the Tribunal was to determine the correct calculation of Mr Sullivan's NWE, specifically whether his NWE should be calculated based on the hourly rate stipulated in the relevant Industrial Agreement and Award, or on higher historical contract carrier rates that included a vehicle expenses component. The Tribunal was required to interpret subsection 8(1) and subsection 8(10) of the SRC Act in relation to the calculation of NWE and the treatment of special expenses.

The Tribunal reasoned that subsection 8(1) of the SRC Act mandates that NWE be determined by reference to the terms and conditions of employment as set out in the relevant Industrial Agreement. In this instance, the Agreement stipulated that the ordinary hourly rate of pay was to be that provided in the Award. Despite evidence of historical practice where contract carriers like Mr Sullivan were paid higher hourly rates, the Tribunal found it had no discretion to apply a rate other than that specified in the Agreement and the Award. Furthermore, the Tribunal determined that the vehicle expenses component of Mr Sullivan's pay constituted reimbursement for special expenses incurred in respect of his employment and was therefore excluded from the calculation of NWE under subsection 8(1). The Tribunal calculated Mr Sullivan's NWE to be $1339.30, based on the Award rate of $19.99 per hour, incorporating overtime rates for his 11-hour days.

The Tribunal varied the reviewable decision to reflect the correct NWE of $1339.30.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The respondent submits that, whatever the historical reasons for Mr Sullivan’s pay, subsection 8(1) of the SRC Act requires that his NWE be calculated by reference to the terms and conditions of his employment as set out in the Agreement, which require that he be paid according to the Award, and there is no discretion to apply a different rate. The reviewable decision The complexities of calculating Mr Sullivan’s NWE can be seen in the somewhat confusing history of the reviewable decision. On 25 March 2015, the respondent issued a determination assessing Mr Sullivan’s NWE as $1552.49 on the basis of his normal working hours of 55 hours per week. It appears this calculation was based on Mr Sullivan’s actual rate of pay. Mr Sullivan had no argument with the determination and maintains it was correct. Approximately three weeks later, an officer of the respondent telephoned Mr Sullivan to say that information in the letter of 25 March 2015 was incorrect and he would receive a further letter shortly. In a second letter, also dated 25 March 2015, the respondent advised Mr Sullivan that his NWE was determined to be $1070.18. It appears this calculation may have been based on a superseded version of the Award. Mr Sullivan asked the respondent to reconsider its determination. He maintained that his hourly labour rate, which his employer’s payroll records would confirm, was $28.2270909. He added that he was also paid an hourly vehicle allowance of $15.7859091, giving a combined hourly rate of $44.0130. Payroll records confirm that these rates of pay. Mr Sullivan did not suggest he should be paid the vehicle allowance while fully incapacitated but said it should be paid during periods of partial incapacity. . In a reviewable decision dated 9 June 2015, the respondent’s insurer acknowledged an error in its first determination, although not for the reasons advanced by Mr Sullivan. It varied the NWE in the first determination in line with the NWE in the subsequent determination, but otherwise left the determination unchanged. In a statement of facts, issues and contentions filed in these proceedings, the respondent acknowledged a further error in its calculation of Mr Sullivan’s NWE in the reviewable decision, to do with periods of his leave. The respondent submitted that Mr Sullivan’s correct NWE was $1308.09. It appears this calculation may have been based on the rate in the unvaried Award. In these proceedings, the respondent has acknowledged a further error in the calculation of Mr Sullivan’s NWE. It submits that the correct NWE was $1339.29 and asks the Tribunal to vary the reviewable decision in that amount.Consideration It is not in dispute that the hourly rate of pay under the Award at the date of Mr Sullivan’s injury for an employee of his classification is $19.99 and that, if the Award is to be used to determine his NWE, his 11-hour days are payable in accordance with the overtime rates in clause 5.1. Mr Sullivan accepts that, if the Award rate is the correct rate for present purposes, then his NWE is $1339.29. (By the Tribunal’s calculation, it is $1339.30).

Ratio Decidendi

Legal Principle Established

In these proceedings, the respondent has acknowledged a further error in the calculation of Mr Sullivan’s NWE. It submits that the correct NWE was $1339.29 and asks the Tribunal to vary the reviewable decision in that amount.Consideration It is not in dispute that the hourly rate of pay under the Award at the date of Mr Sullivan’s injury for an employee of his classification is $19.99 and that, if the Award is to be used to determine his NWE, his 11-hour days are payable in accordance with the overtime rates in clause 5.1. Mr Sullivan accepts that, if the Award rate is the correct rate for present purposes, then his NWE is $1339.29. (By the Tribunal’s calculation, it is $1339.30). Mr Sullivan submits that clause 8.3 of the Agreement was not intended to deal with claims for workers’ compensation. Nothing on the face of the document supports that assertion. Mr Sullivan relies on a document apparently prepared by, or for, the respondent’s payroll staff that indicates that the “Labour Rate” for a driver of his classification is $28.2271, and the “Vehicle Rate” $14.8554, giving a total rate of $43.0824. It refers also the “Award Rate” of $19.4579 applicable at the time. The document is ambiguous in parts and its status is unclear but I accept Mr Sullivan’s evidence that, for historical reasons, contract carriers engaged by the respondent have been paid at hourly rates higher than the Award. The effect of subsection 8(1) of the SRC Act is clear. For the purposes of determining Mr Sullivan’s NWE, his average hourly ordinary time rate of pay is as per clause 8.3 of the Agreement which provides that it is payable at the rate in the Award. Subsection 8(10) reinforces this by acting as a “cap” on the calculation of NWE (see paragraph 37 below). Whatever the historical reasons for Mr Sullivan’s higher rate of pay, the Tribunal has no discretion to apply any rate other than that specified in the Agreement, which is that in the Award. For these reasons, I find that Mr Sullivan’s correct hourly rate for the purposes of calculating his NWE is the rate in the Award, which is the rate provided for in s 8 and which the Tribunal must apply. On this basis, his NWE is $1339.30 calculated as follows:$19.99 x 7.6 hours 151.92$19.99 x 2 hours x 1.5 59.97$19.99 x 1.4 hours x 2 55.97 267.86 x 5 = NWE $1339.30The vehicle expenses component It is common ground, and I am satisfied, that Mr Sullivan’s NWE is to be calculated by reference to the labour component only of his pay. For completeness, the reasons for this are as follow. Payroll records indicate that Mr Sullivan’s pay comprises labour and vehicle expenses components which are not disaggregated in pay records (but which appear to be in a document prepared by, or for, payroll staff for the purposes of their calculations). The vehicle expenses component of Mr Sullivan’s pay is by way of reimbursement for costs incurred in earning his hourly rate of pay. It is a form of special expenses incurred or likely to be incurred by him in respect of his employment and so excluded from “any allowance payable” for the purposes of the formula in subsection 8(1).

Division	GENERAL DIVISION
File Number	2015/4000
Re	Edward Sullivan
APPLICANT
And	TNT Australia Pty Ltd
RESPONDENT

Tribunal	Senior Member J F Toohey
Date	26 August 2016
Place	Sydney