Roads & Traffic Authority of NSW v Zattin
[2010] NSWWCCPD 29
•22 March 2010
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Roads & Traffic Authority of NSW v Zattin [2010] NSWWCCPD 29 | |||||
| APPELLANT: | Roads & Traffic Authority of NSW | |||||
| RESPONDENT: | David Zattin | |||||
| INSURER: | Allianz Australia Workers Compensation (NSW) Limited/Treasury Managed Fund | |||||
| FILE NUMBER: | A1-6571/09 | |||||
| ARBITRATOR: | Mr M Oldfield | |||||
| DATE OF ARBITRATOR’S DECISION: | 16 November 2009 | |||||
| DATE OF APPEAL DECISION: | 22 March 2010 | |||||
| SUBJECT MATTER OF DECISION: | Section 40 Workers Compensation Act 1987; Ability to earn; exercise of discretion. | |||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’Grady | |||||
| REPRESENTATION: | Appellant: | Leitch Hasson Dent | ||||
| Respondent: | Stacks The Law Firm | |||||
| ORDERS MADE ON APPEAL: | Paragraph 1 of the Arbitrator’s Certificate of Determination dated 16 November 2009 is revoked and the following order is made in its place: | |||||
| “1. The Respondent is to pay to the Applicant $442.12 per week from 22 July 2009 to date and continuing pursuant to section 40 of the Workers Compensation Act 1987.” | ||||||
| Paragraphs 2, 3, 4, 5 and 6 of the Arbitrator’s Certificate of Determination are confirmed. | ||||||
| The Appellant is to pay the worker’s cost of this appeal. | ||||||
BACKGROUND TO THE APPEAL
David Zattin (‘the worker’) commenced employment with Roads & Traffic Authority of NSW (‘the Appellant’) as a driver/tester in May 2006. In mid 2007 the worker was transferred to the Dubbo office where he took up a position, on secondment, as an account officer at his employer’s Cashback Office. That secondment had commenced in June of 2007 and was to end in December of 2007 at which time permanent appointment to the position of accounts officer would follow successful completion of the trial period.
On 19 November 2007 the worker received injury in circumstances which have been accepted by the Appellant as being compensable. On that occasion, as the worker was walking in a Council Car park, he tripped on a concrete border, lost balance causing a twisting of his right knee and fell to the ground.
By reason of incapacity the worker ceased work and was paid compensation benefits.
The worker’s employment was terminated on 22 January 2008. That termination followed a number of warnings concerning his conduct which were contained in correspondence as early as April 2007.
The Appellant continued to pay weekly compensation to the worker following termination of his employment until 21 July 2009. The Appellant asserts that it was at about that time that the insurer first became aware that the worker had earlier been gainfully employed whilst receiving weekly benefits. Compensation payments ceased following service upon the worker of a notice pursuant to section 54 of the Workers Compensation Act 1987 (‘the 1987 Act’) and section 74 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The worker disputed the Appellant’s entitlement to terminate weekly payments of compensation and an Application to Resolve a Dispute (‘ARD’) was filed on his behalf in the Workers Compensation Commission (‘the Commission’) on 17 August 2009. The injury alleged at Part 4 of that document was “Injury to right leg; worsening of pre-existing depression”. That application came before an Arbitrator for conciliation/arbitration on 13 October 2009 at which time both parties were represented by counsel. Those proceedings were recorded, a transcript has been produced (‘T’) and a copy provided to each party. The Arbitrator reserved his decision on that day and a Certificate of Determination issued on 16 November 2009. That determination was accompanied by a Statement of Reasons (‘Reasons’).
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 16 November 2009 records the Arbitrator’s orders as follows:
“The Commission determines:
1. That the Respondent pays the Applicant weekly payments of compensation of $350.00 per week pursuant to s40 of the Workers Compensation Act 1987 from 22 July 2009 to date and continuing.
2. That the Respondent pays the Applicant’s reasonable necessary medical and related expenses pursuant to s60 of the Workers Compensation Act 1987 upon production of accounts and/or receipts or valid Medicare Notice of Charge.
3. That the dispute concerning permanent impairment of the Applicant’s right lower extremity be referred to the Registrar to assign an Approved Medical Specialist to assess under the whole person impairment regime.
4. That the date of injury is 19 November 2007. The Application to Resolve a Dispute and attached documents, the Reply and attached documents, the Application to Admit Late Documents lodged by the Respondent dated 11 September 2009 and attached documents and the Application to Admit Late Documents lodged by the Applicant dated 23 September 2009 and attached documents are admitted into the proceedings and are to be disclosed to the Approved Medical Specialist.
5. That the Applicant resides in Dubbo and if possible an Approved Medical Specialist in that region be appointed.
6. That the Respondent pays the Applicant’s costs as agreed or assessed. The Commission certifies the matter as complex in accordance with Item 5 of Table 4 of Schedule 6 of the Workers Compensation Regulations 2003 and orders an uplift of 20% to affect costs in columns 5 & 6.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
An application seeking leave to appeal against the Arbitrator’s decision was filed on behalf of the Appellant with the Commission on 8 December 2009.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred:
(i)in the manner of determining the worker’s ability to earn in terms of section 40(2)(b) of the 1987 Act;
(ii)in failing to exercise discretion granted to the Commission by section 40 of the 1987 Act to reduce the quantum of weekly benefits to which the worker is entitled, and
(iii)in failing to give reasons, or any adequate reasons, for refusal to exercise discretion as permitted by the terms of section 40 of the 1987 Act.
The issues as enumerated above have been taken from the written submissions provided in support of the appeal.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
It should be noted that, upon a reading of the papers including the transcript, there appeared to be a degree of uncertainty with respect to two discrete matters. The first concerned the terms of agreement, if any, between the parties concerning the question of probable earnings but for injury (section 40(2)(a) of the 1987 Act). The second matter related to the uncertain state of the evidence which led the Arbitrator to make factual findings that the worker was “undertaking rehabilitation” at the time of termination of his employment (at Reasons [1.6]). In the circumstances, a teleconference was conducted on 4 March 2010 at which time those matters were each addressed by the parties. Written submissions were subsequently made by each party. The outcome of the teleconference was such as to permit a hearing of the appeal on the papers.
LEAVE
There is no dispute between the parties concerning threshold requirements as prescribed by section 352 of the 1998 Act.
The appeal having been lodged within the time prescribed by that section and the fact that the monetary threshold prescribed by that section has been met, together with a consideration of the arguments raised on appeal, lead me to conclude that it is appropriate that leave be granted to proceed with the appeal and I so order.
EVIDENCE
The documentary evidence before the Commission is summarised at [4.1] of Reasons. As noted by the Arbitrator no oral evidence was adduced.
The worker relied upon the contents of four written statements made by him dated 12 June 2008, 3 July 2009, 7 August 2009 and 23 September 2009.
The worker states that he completed his schooling at the end of year 12 following which he was employed doing odd jobs being office work then, in February 1986, commenced employment with the State Rail Authority as a rail patrol officer. He performed that work for approximately 5 years following which he travelled to Western Australia and had approximately 6 months off work. Upon his return to NSW he conducted a car detailing business for about 18 months. Between 1994 and May 2006 the worker gained employment in a variety of occupations; his employers included NSW Fisheries, NSW WaterWays and, for a second period of employment, the State Rail Authority as a Transit officer. Thereafter he conducted a concrete cleaning business and later was employed as a truck driver. As noted above he commenced employment with the Appellant in May 2006.
The worker describes in his statement the occurrence of the subject injury on 19 November 2007. He immediately sought treatment from his general practitioner and an x-ray examination was arranged. An MRI scan was conducted approximately one week later following which the worker was referred to Dr Ruff for specialist opinion. In early 2008 the worker was referred to Dr Papadimitriou who conducted a surgical procedure on 19 March 2008.
The worker remained off work from the date of injury and was paid weekly benefits following lodgement of a claim. The worker states that his employment with the Appellant was terminated in January 2008 for “alleged poor work performance”. This termination was challenged in the Industrial Relations Commission of NSW. Proceedings between the worker and his former employer were settled without proceeding to hearing.
The worker describes his disability and the difficulties he experiences having regard to the condition of his right knee. It is also stated that, before the subject injury, he had been prescribed medication for depression. Since the subject injury his experience of depression has worsened and there has been a need to increase his medication. The worker states that he has suffered no previous injury or accident involving his right knee. It is stated that he has four dependent children.
The second statement made by the worker notes that both he and his wife were given a “job transfer” in June 2007. The worker’s new position was in the cash-back (toll rebates) section and involved mainly office/clerical duties. That placement was by way of secondment, and other evidence establishes that section is located in Dubbo, NSW.
The worker states that he obtained work with an organisation described as “Contract Advantage” (sic) in November 2008. The worker was engaged as a “planner”. The work involved drawing up home improvement plans using a computer program for the purpose of obtaining council approvals. The worker was able to take breaks in the course of that work to make allowance for discomfort experienced in his knee. That contract came to an end on 13 April 2009. The work varied from week to week and hours ranged between 20 and 35 hours per week. The worker states that since that work came to an end he has been seeking employment.
The worker states that he felt that he could do his old job, being that of a driver/tester, but there would need to be “some modifications and understanding on the part of my employer”. He would be restricted, it is stated, in activities involving squatting, kneeling and walking up or down steps.
The third statement made by the worker records that he continues to suffer from depression and that weekly compensation payments had been terminated. Other evidence establishes that those payments ceased on 21 July 2009.
Expert medical evidence relied upon by the worker includes a report by Dr Nigel Hope, orthopaedic surgeon, who had been qualified by the worker’s solicitors to provide a report in support of a claim for lump sum compensation. That report is dated 10 March 2009. Dr Hope records that the surgical procedure conducted in March 2008 was an arthroscopic partial medial meniscectomy. It was Dr Hope’s opinion that the worker’s pre-accident employment was “permanently inappropriate due to the inability to repetitively get into and out of motor vehicles”. That practitioner assessed the worker’s whole person impairment by reason of the knee injury and its consequences as being 16%.
There are two certificates issued by Dr Sean Tari, general practitioner. The first is a WorkCover NSW medical certificate dated 15 June 2009 which certifies the worker as being fit for suitable duties from that dated until 15 September 2009. The second certificate concerns Dr Tari’s treatment of the worker with respect to his depression. Medication is detailed in that certificate and it is noted that the worker had been referred for specialist psychiatric treatment to Dr Bardon. It was Dr Tari’s opinion that the worker’s depression “is due to the injury and not being able to work in full capacity”.
A fourth statement made by the worker is in evidence. That statement had been attached to An Application to Admit Late Documents dated 23 September 2009. The worker provides details of his notification to the Appellant of his employment with Contracting Advantage.
The Appellant relies upon two reports each dated 17 May 2009 of Dr David Macauley, consultant physician in musculoskeletal medicine and rheumatology. Those reports are stated to be “supplementary medico-legal” reports concerning the worker. One of those reports addresses the assessment of the worker’s whole person impairment which is expressed as being 6 per cent (4 per cent for the partial medial and lateral meniscectomies and 2 per cent for the lateral tibial plateau fracture).
The second report by Dr Macauley makes reference to “video surveillance” concerning a person recognised by Dr Macauley as being the worker. I note that the Appellant has not relied upon any video surveillance evidence in its defence of the worker’s claim.
The Appellant relies upon a copy of notice issued pursuant to section 74 of the 1998 Act and section 54 of the 1987 Act dated 11 June 2009 addressed to the worker. That notice states a number of “reasons” for the decision to terminate payments of weekly benefits including a suggested “breach” of section 40(2A) of the 1987 Act. I note that section 40(2A) has not been raised in argument either before the Arbitrator or on this appeal.
A number of reports by Dr David Macauley, including those mentioned at [28] above, were attached to the Appellant’s notice. Those further reports were dated 19 February 2008, 26 May 2008, 19 August 2008 and 1 April 2009. Dr Macauley, in his report of 19 February 2008, expressed the view that the worker was fit to resume his normal pre-injury duties which he described as being of “a clerical nature”. Restrictions noted by Dr Macauley included unfitness to undertake any stair or ladder climbing and inability to squat. Dr Macauley’s view as expressed in the report of 26 May 2008 was that the worker was fit to return to the workforce in sedentary work. That practitioner suggested a graduated return to work and it was noted that the worker would have “difficulty driving a car at this time due to the pain and restriction of movement of the knee”. Dr Macauley, in his report of 19 August 2008, expressed the view that the worker was then fit to undertake sedentary duties for 4 hours per day 5 days per week. In the report dated 1 April 2009 Dr Macauley expressed the view that the worker was fit for full time clerical and sedentary duties. It was further stated “he is not fit to undertake any form of employment that involves climbing ladders or stairs, repetitive bending, squatting or kneeling. As his pre-injury duties did not involve tasks beyond these restrictions he is fit for his pre-injury duties”.
The Appellant relied upon a report by MJM Investigations Australia Pty Ltd dated 24 April 2009. That report detailed investigations conducted concerning post-injury employment of the worker. Included were details of surveillance of the worker during the month of February 2009. That report makes reference to two annexures. The first is said to be a draft statement of Mr Les Picton and the second is described as “details of all wages payments made to (the worker) for the period of [sic] week ending 2 November 2008 to week ending 13 April 2009”. Neither of those annexures is attached to the copy of the report which has been included among the documents annexed to the Appellant’s Reply.
A copy of an Earning Capacity Assessment compiled by CRS Australia dated 15 June 2009 was attached to the Reply. That report contains a summary of what is stated to be suitable employment for the worker having regard to his physical restrictions and other consequences of the subject injury. The detail of this report is addressed hereunder.
The Appellant relies upon those documents which were attached to An Application to Admit Late Documents filed with the Commission on 14 September 2009. A great many of those documents relate to a suggested failure on the part of the worker to notify the Appellant or its insurer of the fact that he was employed by an organisation described as Contracting Advantage NSW (‘Contracting Advantage’) at a time when he was receiving voluntary payments of weekly compensation benefits at the maximum rate. Those documents include a form of written statement by Shobha Shankar who is a Claims Analyst with the Appellant’s Injury Management and Claim Service Unit. Ms Shankar states that the first advice concerning employment with Contracting Advantage was received by the Appellant on 18 June 2009 per email communication. The balance of the statement and a number of the other documents attached relate to other communications between the Appellant, the worker and others concerning omission to give notice of employment with that entity.
A two-page document is attached headed ‘Payment Summary’ which appears to be a summary of payments made in respect of post-injury work performed by the worker between 10 November 2008 and 4 January 2009. It is reasonable to infer that this document relates to those payments noted in the document said to have been annexed to the report referred to in [32] above. Other evidence suggests that the worker had contracted to perform work with Contracting Advantage until a date in April 2009, but that he last performed such work on 4 January of that year.
Also attached to that application were copies of correspondence addressed to the worker from the Appellant, some of which are undated. One of those documents dated 31 May 2007 relates to the Appellant’s approval of a transfer of the worker, on secondment, to the Dubbo Cashback office. It is there stated that the worker was to be paid his “current rate of pay” during secondment. It was also stated “on successful completion of this trial period, you will be appointed permanently at the top level of this position, USS 4/3.” Another document is a copy of undated correspondence headed ‘Private and Confidential’ giving notice to the worker of termination of his employment. Also attached to the application is a ‘Separation Check List’ which relates to the termination of the worker’s employment. It is to be noted that the document appears to confirm that the worker was “on duty” on his last day of employment, the separation date being 22 January 2008.
The copies of correspondence also included items which may be described as warning letters which had been forwarded to the worker by the Appellant prior to termination of his employment.
PRELIMINARY MATTERS
As noted at [12] above a teleconference was conducted on 4 March 2010 at which time submissions were put by the parties concerning two matters that had given rise to uncertainty.
The first of those matters concerned the Arbitrator’s finding at [1.6] of his Reasons:
“1.6 Mr Zattin was terminated from his employment in January 2008 for disciplinary reasons unrelated to his injury. At the time of termination Mr Zattin was undertaking rehabilitation.”
The uncertainty concerned that finding stated in the second sentence as above quoted. It had been submitted on behalf of the Appellant at the hearing before the Arbitrator that, post-injury, the worker had resumed employment on “some form of rehabilitation-type program” (T 3). A similar submission was put in written submissions in support of this appeal (at [48]). Given that there was little, if any, evidence to support the matter put in submissions the Commission was uncertain as to whether such fact had been the subject of agreement between the parties or rather that there had been some misapprehension of the state of the evidence by those representing the Appellant. Following exchanges during the course of the teleconference the Appellant fairly conceded that at the time of his termination the worker had not resumed duties with the Appellant.
The second matter which gave rise to some uncertainty was the existence and terms of any agreement between the parties made at the hearing concerning the quantum of probable earnings but for injury. The transcript (at T4.45) appears to record an agreement between the parties that probable earnings were as alleged in the ARD, that being $1,192.12 per week (misstated by counsel, as recorded, being $1.193.12 per week). The Arbitrator at [5.5] of Reasons made a finding that relevant probable earnings were in the sum of $1.100.00 per week. The apparent contradiction between that which was recorded as having been agreed and the Arbitrator’s finding was raised during the course of the teleconference and submissions have been put on behalf of each party. Those submissions and the need or otherwise to review the Arbitrator’s finding with respect to “probable earnings” is addressed hereunder.
SUBMISSIONS
Submissions before the Arbitrator
The general thrust of the Appellant’s submissions concerned the manner of determining any entitlement pursuant to section 40 of the 1987 Act. Those submissions addressed the five steps required to be taken as stated by the Court of Appeal in Mitchell v Central West Health Service [1997] 14 NSWCCR 527 (‘Mitchell’).
In the course of those submissions counsel put to the Arbitrator, as was subsequently found by him, that the worker’s probable earnings but for injury were $1,100.00 per week.
The Appellant’s submissions before the Arbitrator concerning the worker’s ability to earn in his injured state were founded upon two particular aspects of the evidence. The first matter addressed by counsel was the evidence of the worker’s earnings whilst employed by Contracting Advantage. It was argued that the documents in evidence supported an argument that on occasions a “spike” or peak in earnings demonstrates that the worker could earn more than his suggested probable earnings but for injury. It was put that post injury earnings, if “averaged” over the relevant period, demonstrated average weekly earnings of $624.00 (T4.14). The “spike” to which counsel referred demonstrated the sum of $1,370.00 per week earnt in December 2008. It was later suggested that the worker’s average weekly earnings during that employment was “something like $800.00-odd per week” (T.5).
The second approach adopted during submissions concerning “ability to earn” involved an analysis of the worker’s vocational background. The point was made that the worker was an educated man and had a “wide variety of employment since leaving school in various capacities.” It was argued that the worker’s skills were “transferable”. It was suggested that, taking into account his considerable work experience and skills, there should be a finding that he has the “ability … to earn the same that he was earning pre-injury” (T 8).
During the course of these submissions the Arbitrator’s attention was drawn to the evidence of the numerous warnings that had been given to the worker by the Appellant concerning his work performance. There also appears to be a challenge made to the credit of the worker in the course of submissions where the Arbitrator’s attention was drawn to the evidence concerning the worker’s employment with Contracting Advantage at a time when he was in receipt of full weekly benefits.
An argument was put by counsel that by reason of the termination of the worker’s employment, for reasons not connected with his injury, there should be a reduction of any mathematical difference found between probable earnings and ability to earn. It was put that the worker was, at the time of termination, earning the equivalent of his pre-injury earnings whilst on a rehabilitation program. That submission was not founded upon the evidence and, as conceded by the Appellant during the teleconference referred to at [40] above, the worker had not returned to the workplace on a rehabilitation program or otherwise following his injury. It is unfortunate that this error as to the state of the evidence has been repeated in submissions in support of this appeal.
Counsel representing the worker submitted before the Arbitrator that the “probable earnings” as had been earlier announced were “not in issue”. With respect to the question of ability to earn reference was made to the terms of section 43A of the 1987 Act. It was put that the worker suffered an “acknowledged injury” and that he lives in the city of Dubbo which is to be treated as the labour market reasonably available to him. The point was made in the course of argument that the circumstances of the worker’s dismissal gave rise to a dispute which was “settled in the appropriate industrial forum”. The dismissal and its circumstances required no determination on the application before the Arbitrator nor are those matters relevant, it was put, to the question of entitlement pursuant to section 40. Reference was made to the worker’s vocational history and it was put that many of his earlier occupations were “jobs that he wouldn’t be able to contemplate given the injury to his right knee”. It was put that the worker’s ability to earn should be found to be in the region of between $500.00 and $600.00, being the base rate for a clerical job. Careful attention was given in the course of those submissions to an arithmetic calculation of average earnings whilst employed with Contracting Advantage. It was put that the average weekly earnings during that employment amounted to $624.94 per week. The point was made that such employment was of a “relatively casual nature where (the worker) is not getting any of the other benefits of sick leave, holidays and so on”.
Reference was made in the course of submissions to the assessment from CRS and the suggested earnings which the worker may expect as there stated being between $452.00 and $650.00 per week.
It was put that there is no basis upon which any reduction of arithmetical difference should be made in exercise of the discretion granted by section 40. It was argued that the matter is “simply a case of a worker who is no longer employed in the occupation in which he was injured. [Thus] you would award him the arithmetical difference between $1,192.12 per week and a capacity, as the Applicant puts it, of $600.00 per week”.
The Arbitrator’s decision
The Arbitrator (at [5.16]) made a finding that the worker had suffered injury on 19 November 2007 and that he “remains partially incapacitated for employment due to the continuing knee injury”. Reference was made to the evidence of Dr Hope who had identified particular restrictions concerning the worker’s capacity for employment which the Arbitrator accepted. Reference was also made to the evidence of Dr Macauley whose opinion concerning restriction of capacity was accepted however Dr Macauley’s view as expressed that the worker was fit for his pre-injury duties without restrictions was rejected.
The Arbitrator, following a summary of relevant evidence, at [5.20] of Reasons, made a finding that the worker at relevant times had the ability to earn $750.00 per week. The Arbitrator proceeded to state that the worker’s probable earnings but for injury “is the amount agreed to by the parties at the hearing - $1,100.00 per week”. This finding is addressed hereunder.
The Arbitrator calculated the arithmetical difference between probable earnings and ability to earn being the sum of $350.00 per week. The Arbitrator proceeded to state that he could see no reason to exercise discretion to reduce that arithmetical difference. I note that he had earlier in his reasons (at [5.6] and [5.7]) summarised the arguments put with respect to this latter question on behalf of the Appellant. In the circumstances an award was entered in the sum of $350.00 per week from the commencement date of the claim to date and continuing. No finding was made by the Arbitrator concerning the alleged depressive condition suffered by the worker. No submission concerning that allegation had been made by the parties.
Submissions on this appeal
The Appellant asserts error on the part of the Arbitrator in determining the question as to the worker’s ability to earn in some suitable employment in terms of section 40(2)(b) of the 1987 Act. It is put that, having regard to the totality of the evidence, the worker’s ability to earn “is either equal to, or close to, his probable earnings but for injury with the Appellant”. The submissions note that probable earnings had been agreed at $1,100.00 per week. This assertion is discussed hereunder. It is further argued that the Arbitrator has made an “arbitrary and erroneous assessment of (the worker’s) ability to earn”. It is suggested that the worker’s earnings with Contracting Advantage demonstrate that the worker had an ability to earn “as much as $1,370.00 per week and that the average weekly earnings were $800.00”. With respect to the last figure, reference is made by the Appellant to the Arbitrator’s determination at [5.4] of Reasons. It should be noted that the Arbitrator at that paragraph of Reasons was merely recording the Appellant’s submissions put on its behalf by counsel.
It is argued by the Appellant that there is “no evidence” that the worker was unable to perform all the duties required of him whilst working at Contracting Advantage Pty Ltd and that matter should have been addressed by the Arbitrator when determining the worker’s ability to earn. Reference is also made in the course of submissions to the CRS report which summarises the worker’s vocational background and it is argued that, notwithstanding ongoing problems with the worker’s injured knee, his experience would enable him to earn “either the same or very close to his probable earnings but for injury”. It is argued that if there is any reduction in earning capacity, it would be “a nominal sum only”.
The Appellant makes reference to the evidence of Ms Shankar concerning a telephone conversation which she had with the worker, and two emails he had forwarded to her in May 2009. Those communications contain representations by the worker that he had not received any payments other than worker’s compensation weekly benefits. It is argued that the worker’s representations were untruthful and, upon the basis of that evidence, it is argued that the worker’s credit was such that his evidence should not be regarded as either reliable or honest.
The second ground put on behalf of the Appellant is that the Arbitrator had erred in failing to exercise his discretion to reduce the mathematical difference between probable earnings and ability to earn. It is, in particular, argued that the Arbitrator had failed to give reasons for his refusal to exercise the discretion in the manner as suggested in submissions on hearing. It is put that failure to provide any, or any adequate reasons concerning the discretion constituted a denial of procedural fairness.
The Appellant places reliance upon the decision of NSW Police Service v Teofilo [2007] NSWWCCPD 190 (‘Teofilo’). The written submissions in support of this appeal assert that the worker was “gainfully employed by the Appellant on suitable duties (similarly to Mr Teofilo) and earning $1,100.00 per week”. That submission must, on this appeal, be disregarded having regard to the concession made during the course of the teleconference that the worker was not so employed at that time. It was made clear at the teleconference that the Appellant continues to rely upon the circumstances of termination of the worker’s employment as a basis for the argument that the Commission’s discretion should be exercised to reduce any arithmetical difference between probable and actual earnings.
Worker’s submissions on this appeal
The worker in his submissions on appeal seeks to rely upon the decision of the High Court of Australia in Arnotts Snack Products Pty Limited v Yacob (185) 155 CLR 171 (‘Yacob’) concerning the meaning of “partial incapacity”. It is argued that there is a need to consider the labour market in which the worker was working or might reasonably be expected to work and that such matters of principle are now to be found in the provisions of section 43A of the 1987 Act. The worker seeks to support the Arbitrator’s conclusion that in his incapacitated state he has an ability to earn $750.00 per week. In the alternative, it is suggested that should the Arbitrator’s conclusion require a review, a finding should be made that the worker’s ability to earn is in the sum of $650.00 per week. That alternative argument is put upon the basis of those submissions advanced before the Arbitrator.
The worker notes the Appellant’s apparent challenge to his credit made in the course of submissions on this appeal. It is argued that nothing has been put either on hearing or on this appeal concerning the relevance of “his credit” to the assessment of his capacity to earn in suitable employment.
The worker again seeks to support the Arbitrator’s conclusion that the evidence did not demonstrate a basis requiring exercise of his discretion as sought by the Appellant. The evidence concerning the warnings communicated to the worker about his conduct and his ultimate termination from the Appellant’s employ is summarised, following which it is put:
“What this evidence discloses on balance is that the employer had complained about the worker’s performance, had warned him and had dismissed him. He challenged the basis for dismissal and compromised his claim. In these circumstances, it was not open to the arbitrator to find, nor did he do so, that the respondent’s own actions caused him to be on the open labour market. It is undoubtedly a [sic] case that his employment was terminated and he found himself on the open labour market. The evidence is simply not sufficient to make a finding as to the merits of his dismissal. Accordingly, it was open to the arbitrator to consider this feature of the evidence in the same manner as if he would any injured worker thrown onto the open labour market.”
The worker submits that, upon proper analysis, the decision of Teofilo does not identify any relevant principle that may be applied to the facts of the present case when a consideration concerning the exercise of discretion is being made. It is put that the Commission’s reasons in Teofilo demonstrate a focus on those matters provided by the provisions of section 40(2)(b) and section 43A of the 1987 Act. It is put that the Commission in Teofilo did not “identify” the sum found in accordance with the provisions of section 40(2)(b) and that the determination does not “truly involve an exercise of discretion, let alone identify any guiding principal”.
DISCUSSION AND FINDINGS
The concession properly made by the Appellant during teleconference, that the worker did not resume work post injury, resolves the uncertainty raised by earlier argument and the Arbitrator’s finding.
The second factual matter in respect of which there existed uncertainty was the quantum of the worker’s probable earnings but for injury. The uncertainty concerning this matter arose by reason of the apparent agreement reached between the parties as recorded in the transcript that such weekly rate was, as alleged in the ARD, $1,192.12 per week.
At the teleconference, the Appellant suggested that there had been no agreement concerning the quantum of probable earnings. It was submitted that the evidence was that as at the date of injury, the worker was on secondment in a clerical position and that the appropriate rate for such work may be found within the Schedule of Salary Rates which was annexed to the worker’s ARD. It was conceded that the evidence was scant, however it was put that reference should be made to the appropriate rates for a grade 3 employee to which rate an increase of 4 per cent would be appropriate having regard to the fact that that Schedule was dated July 2008. It was stated that such a calculation leads to a figure of $1,003.03 per week as being the appropriate level of probable earnings. This argument was challenged by the worker and the agreement as recorded in the transcript was relied upon.
Both parties have provided supplementary submissions concerning this matter since the teleconference. The worker again asserts that agreement had been reached and relies upon that agreement.
Part of the Appellants’ argument concerning probable earnings involved an assertion that the worker, in taking up the position on secondment, was to be paid in accordance with rates for a clerical position once that position was confirmed. There are two letters concerning this secondment in the Appellant’s case. Each is in different terms. One is undated and unsigned. I conclude that the document signed by Mr Richard Boggon and dated 13 May 2008 is a copy of the correspondence as sent. That included the following proposal:
“1. an offer of a secondment (at your current rate of pay) to end-December 2007 as a processing officer in the Dubbo Cashback Office;
2. on successful completion of this trial period, you will be appointed permanently at the top level of this position, USS 4/3.”
The worker was being paid as a driver/tester at the date of his injury. His future prospects included confirmation of his position and payment as stated in correspondence. Hypothetical calculation of probable earnings includes, as put by the worker, prospects of promotion and I find that determination of the level of such earnings is not restricted in the manner as suggested by the Appellant. However a determination of such issue is unnecessary. Having regard to the exchange between the parties and the Arbitrator which is recorded at T4, I am comfortably satisfied that the parties reached an agreement that probable earnings were as stated in the ARD, that being the sum of $1,192.12 per week. It is plain that the Arbitrator has erred in finding probable earnings at the rate of $1,100.00 per week and it appears that such finding is founded upon the erroneous submission put on behalf of the Appellant. In the circumstances, the Arbitrator’s decision requires review.
Probable Earnings But for Injury
For the reasons earlier expressed, I find that the worker’s probable earnings but for injury at all relevant times are in the sum of $1,192.12 per week. Whilst there is no appeal brought by the worker, I note that this matter has been fully ventilated on this review.
Ground one - the Worker’s Ability to Earn
The Arbitrator’s finding (at [5.20]) that the worker had the ability to earn $750.00 per week was made following a consideration of the evidence of Dr Hope who had outlined those physical limitations which had arisen by reason of the subject injury. It was Dr Hope’s evidence that led the Arbitrator to make a finding of partial incapacity and in so doing he rejected the evidence of Dr Macauley who had expressed the view that the worker was fit for his pre-injury duties. The Arbitrator’s reasons also reveal that he has taken into account the evidence contained in the CRS Australia report dated 2 July 2009, which summarised the worker’s physical limitations following injury and which identified three occupations for which the worker was qualified and, by reason of his physical disability, would be able to perform part-time. The Arbitrator proceeded, correctly in my view, to reject any suggestion that the termination of the worker’s employment with the Appellant was in any way relevant to the inquiry as to his ability to earn in terms of section 40(2)(b).
The Appellant’s reliance upon the evidence concerning earnings of the worker whilst employed with Contracting Advantage must, in my view, be rejected. The first reason for rejection of that argument is that those matters asserted at [26] of written submissions are misleading. It is there stated “if (the workers) earnings with Contract (sic) Advantage are averaged over the period 10/11/08 and 4/1/09 they are $800.00 per week (Decision 5.4)”. It must be understood that the Arbitrator at [5.4] of reasons was summarising the Appellant’s argument with respect to this issue. The summary of payments made to the worker by Contracting Advantage relates to the period 10 November 2008 to 4 January 2009 and the gross sum paid is $5,632.00. It may be seen that the average weekly income over that 8-week period is in the sum of $704.00.
The Appellant’s argument which seeks to highlight what were described as “spikes” of earnings as a basis to challenge the Arbitrator’s finding concerning ability to earn should not be accepted. I accept the worker’s argument that the Commission in determining this issue is required, as provided by the sub-section, to determine the average weekly amount which the worker would be able to earn in some suitable employment from time to time. The work with Contracting Advantage was available for a limited period of time, and during its currency the availability of work fluctuated. It is upon this basis that I reject the Appellant’s argument that isolated incidents of high earnings are a true or correct measure of the worker’s ability to earn in his injured state.
The Appellant in the course of submissions emphasises the breadth of the worker’s vocational experience and his qualifications when criticising the Arbitrator’s determination of ability to earn. The difficulty which confronts the Appellant in relying upon such an argument is that it is clear from the reasons as expressed by the Arbitrator that those matters have been taken into account by him when determining the issue.
The issue of the worker’s credit which is raised in written submissions between [34] and [36] can have no relevance to the question of the worker’s ability to earn. Such an inquiry is a hypothetical exercise: See Singh v Taj(Sydney) Pty Ltd [2006] NSWCA 330.
I accept the worker’s submission that the Appellant has not advanced an argument as to “how his credit is relevant to the assessment of his capacity in suitable employment”.
The Arbitrator’s finding concerning the worker’s ability to earn as being $750.00 per week was founded upon those matters summarised by him at [5.19] and [5.20] of Reasons. The Arbitrator expressed his conclusion, following a summary of the evidence, that the worker in his injured state would be able to work as a base rate clerk for 30 hours per week. He ascribed to such work a value at the rate of $25.00 per hour and it was upon that basis that the figure of $750.00 per week was calculated. The Arbitrator’s conclusion concerning the issue of “ability to earn” was, in my view, open to him on the evidence and his conclusion is one with which I respectfully agree.
Ground two - exercise of discretion
It is the Appellant’s complaint that the Arbitrator has erred in refusing to exercise his discretion pursuant to section 40 to reduce the worker’s entitlement to weekly compensation from that which is calculated by determining the mathematical difference between probable earnings and ability to earn. In particular, the Appellant argues that the Arbitrator has failed to give any or any adequate reasons for declining to exercise that discretion.
The Appellant acknowledges that the Arbitrator has at [5.6] of Reasons correctly summarised its submissions concerning this issue. The complaint on this appeal is that no reasons are stated by the Arbitrator for his rejection of the Appellant’s submissions. Attention is drawn to the Arbitrator’s observation made at [5.21] that “the Commission does not see any reason to exercise discretion in this particular matter”. I accept the Appellant’s argument that, given the matters raised at the hearing, there has been a failure on the part of the Arbitrator to state his reasons. In the circumstances, the Arbitrator’s decision with respect to this matter requires review.
The Appellant faces a fundamental difficulty in relying upon this ground of appeal. As noted at [47] above, the argument advanced before the Arbitrator, which was reiterated in the written submissions presented in support of this appeal prior to the teleconference, is founded upon the false assertion that the worker’s employment was terminated for reasons unrelated to the subject injury at a time when he was working on suitable duties earning what was said to be a sum equivalent to his probable earnings. It is correct, as asserted, that the evidence establishes that the termination of employment which occurred in January 2008 occurred by reason of alleged poor work performance.
The evidence plainly establishes that the worker’s employment was terminated in January 2008 following a series of warnings concerning his conduct in the workplace and that such termination was challenged in the appropriate forum. The employment dispute between the parties was settled. The state of the evidence and the manner in which the parties have conducted the proceedings prevent, in my view, a determination as to whether the termination of the worker’s employment was justified having regard to his conduct. In that respect, I accept the worker’s submission put on this appeal that the evidence discloses, on balance, that the employer had complained about the worker’s performance and warned him and had dismissed him. This circumstance is of little consequence given my view that, even upon an assumption that the termination of employment was justified by reason of misconduct as alleged in the correspondence, such fact would have no relevance to the question as to whether discretion should be exercised to reduce the mathematical difference determined in accordance with section 40. Had the facts been otherwise, and the worker at the relevant time been employed on suitable duties, an argument would clearly be available to the Appellant founded upon both section 40(2A) and the ‘discretion’ provision under section 40.
It may be seen that I agree with the Arbitrator’s finding that the evidence does not disclose any basis on which the discretion granted under section 40 should be exercised. I have earlier expressed my view that the Arbitrator’s determination concerning the worker’s ability to earn in terms of section 40 was made without error and that the conclusion was one with which I respectfully agree. Having regard to my finding on review that the worker’s probable earnings at all relevant times have been in the sum of $1,192.12 per week, the Arbitrator’s orders concerning entitlement to weekly benefits must be revoked and orders as appear hereunder made in their place. I note that notwithstanding the fact that the worker has not brought an appeal against the Arbitrator’s determination, it has been put in the course of submissions (at [4]) that on review, it is open to the Commission to vary the weekly award by way of an increase. Whilst that submission was not founded upon a suggested variation of the finding as to probable earnings, I note that the parties have had an opportunity to address the consequences of any correction concerning such finding. The worker’s entitlement is to be calculated taking into account the unchallenged evidence that he has four dependent children. The balance of the Arbitrator’s orders are to be confirmed. No submission has been put on this appeal concerning the absence of any finding concerning the alleged aggravation of the worker’s depressive condition. The appeal fails and is dismissed.
DECISION
Paragraph 1 of the Arbitrator’s Certificate of Determination dated 16 November 2009 is revoked and the following order is made in its place:
“1. The Respondent is to pay to the Applicant $442.12 per week from 22 July 2009 to date and continuing pursuant to section 40 of the Workers Compensation Act 1987.”
Paragraphs 2, 3, 4, 5 and 6 of the Arbitrator’s Certificate of Determination are confirmed.
COSTS
The Appellant is to pay the worker’s cost of this appeal.
Kevin O’Grady
Deputy President
22 March 2010
I, RAMON LOYOLA, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT, OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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