Robertson and John Holland Group Pty Ltd
[2009] AATA 443
•19 June 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 443
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/0463, 4098
GENERAL ADMINISTRATIVE DIVISION ) Re DAVID ROBERTSON Applicant
And
JOHN HOLLAND GROUP PTY LTD
Respondent
DECISION
Tribunal Deputy President P E Hack SC Date19 June 2009
PlaceBrisbane
Decision 1. In application 2008/0463 the Tribunal:
a) sets aside the decision under review;
b) remits the matter to the respondent for reconsideration in accordance with a direction that section 8(10) of the Safety Rehabilitation and Compensation Act 1988 (Cth) has no application to the applicant’s circumstances;
c) orders the respondent to pay the applicant’s costs of and incidental to the application, to the taxed.
2. In application 2008/4098 the Tribunal:
a) sets aside so much of the respondent’s reviewable decision of 7 August 2008 as varied the decision of 8 July 2008;
b) remits that part of the reviewable decision of 7 August 2008 to the respondent for reconsideration in accordance with a direction that section 8(10) of the Safety Rehabilitation and Compensation Act 1988 (Cth) has no application to the applicant’s circumstances;
c) otherwise affirms the reviewable decision of 7 August 2008; and
d) orders the respondent to pay the applicant’s costs of and incidental to the application so far as those costs relate to the issue of the rate of compensation payable for incapacity, to be taxed.
................Signed................
Deputy President
CATCHWORDS
WORKERS’ COMPENSATION – worker contracted for uncertain period contingent upon completion of a project – project completed and contract therefore ended while worker remained incapacitated – s 8(10) Safety, Rehabilitation and Compensation Act 1988 has no application to a situation where it was not contemplated that the employment at the time of injury would continue nor that it was possible for that employment to continue – decision set aside and remitted with the direction that s 8(10) of the Act has no application to the applicant’s circumstances.
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 8(1), 8(2), 8(10), 19, 19(5) 108A
Bortolazzo v Comcare [1997] FCA 515; 75 FCR 385
Comcare v Burgess [2007] FCA 1663; 164 FCR 66
Comcare v Thompson [2000] FCA 790; 100 FCR 375
Re Lower and Comcare [2008] AATA 352; 102 ALD 195
Re Whitby and Telstra Corporation Limited [2009] AATA 316
Rieson v SST Consulting Services Pty Ltd [2005] FCAFC 6; 142 FCR 482
REASONS FOR DECISION
19 June 2009 Deputy President P E Hack SC Introduction
1.The applicant in these matters, Mr David Robertson, was injured in the course of his employment on a building project in Gladstone. He was incapacitated for work as a result of his injury and was paid weekly compensation pursuant to s 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth).
2.At a time when Mr Robertson was still incapacitated the project on which he was employed was completed. It is not in issue that the respondent, John Holland Group Pty Ltd (JH Group), was liable to pay him compensation in accordance with the Act in respect of the period of his incapacity; what is in issue in each application is the rate at which that compensation is payable.
The legislation
3.It is desirable to start with a brief explanation of the statutory framework. By virtue of s 19(2) of the Act (read in conjunction with s 108A) JH Group is liable to pay Mr Robertson compensation for incapacity worked out in accordance with a formula that includes an amount described as “normal weekly earnings”. Neither the formula nor the other provisions of s 19 are presently relevant; it is enough to note that the determination of normal weekly earnings is of critical importance in determining the entitlement to compensation for incapacity.
4.Section 8 deals with the calculation of normal weekly earnings. It will suffice for present purposes to say that the enquiry under s 8 of the Act focuses upon the earnings in the period of two weeks prior to the injury. Ordinarily, the normal weekly earnings are the sum of the average number of hours by the hourly rate of pay plus allowances. Where an employee is required to work overtime on a regular basis an additional amount, calculated in accordance with s 8(2) of the Act, is added to the amount determined under s 8(1) of the Act to determine normal weekly earnings. Within s 8 are mechanisms for making adjustments to the calculation of normal weekly earnings to ensure that the determination of normal weekly earnings remains accurate. Finn J described the scheme in this way in Comcare v Thompson[1]:
“Where the incapacitated employee no longer is employed by the Commonwealth, a purpose of the Act is to make some provision (reflected in the compensation payable) for the employee's participation in what I will loosely describe as changes in remuneration that the employee would have enjoyed had he or she remained in the Commonwealth's employment. Section 8 of the Act evidences that purpose in the manner in which it allows for adjustments to be made to normal weekly earnings to take account of types of predictable salary increases and payments.”
[1][2000] FCA 790; 100 FCR 375, at [3].
5.Similarly, the Act contains a mechanism to reduce normal weekly earnings to take account of reductions in earnings. The key provision in the present case is s 8(10) of the Act. It provides:
“(10)If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:
(a)where the employee continues to be employed by the Commonwealth or a licensed corporation—the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or
(b)where the employee has ceased to be employed by the Commonwealth or a licensed corporation—whichever is the greater of the following amounts:
(i)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury;
(ii)the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;
the amount so calculated shall be reduced by the amount of the excess.”
Background
6.There is no dispute about the underlying facts. Mr Robertson has been employed in the construction industry since 1996. He gained experience as a rigger and now holds an advanced ticket in rigging. The task of a rigger such as Mr Robertson is to move building materials and other equipment around the construction site using cranes and other mechanical aids.
7.More recently Mr Robertson has been employed as a leading hand rigger and has been responsible for the work of a small crew of riggers.
8.It is the nature of the construction industry that employees like Mr Robertson are not employed for long periods of time with the one employer, rather they follow the work. Thus, in the case of Mr Robertson, he started work on a project at Gladstone in about October 2004. Then in June 2005 he started employment with a different employer on a different project. That lasted until September 2005 when he accepted employment on a project in Chinchilla. He moved his family to Dalby.
9.That employment ceased in the middle of 2006 when Mr Robertson (and his family) moved to Gladstone so that he could accept the employment that is in issue in these proceedings. That employment was with John Holland Engineering Pty Ltd[2] (JH Engineering), and is evidenced by a letter of offer dated 13 July 2006 and executed by Mr Robertson, by way of acceptance, on the following day.
[2]It is an unexplained curiosity of the case that the employer is not the respondent, JH Group, however as the parties did not raise this as an issue I assume it to be irrelevant.
10.The letter notes Mr Robertson’s classification as “Scaffolder/ Rigger/ Dogger” and describes the location of the employment in this way:
“LOCATION
You will initially be located at the CQPA RG Tanna Coal Terminal Berth 4 Expansion Project Gladstone located in Queensland; however you may be required to travel to work at other locations from time to time.”
The letter noted that the employment “will commence on 13th July 2006 unless further agreed with you”. Under the heading “Period or Task Employment” the letter reads:
“Your employment is for the period from 13th July 2006, and will cease on the completion of the task assigned to you and agreed between you and [JH Engineering] associated with the CQPA RG Tanna Coal Terminal Berth 4 Expansion Project.”
The letter, by clause 24 makes provision for summary dismissal in a variety of circumstances. Additionally, clause 25 allowed for termination by notice or, in the case of JH Engineering, pay in lieu of notice.
11.On 26 March 2007 Mr Robertson sustained a back injury whilst at work. He made a claim for compensation and on 9 May 2007 it was determined:
“that John Holland Pty Ltd[[3]] [was] liable to pay … compensation … in respect of “aggravation of pre existing prolapse at L5/S1” …”
[3]Again, no issue has been taken about the discordance between the identity of the entity determined to be liable and the respondent.
Following the acceptance of liability it was determined that Mr Robertson was entitled to be paid compensation for incapacity on the basis of normal weekly earnings of $2572.57.
12.On 15 September 2007 the work of JH Engineering on the Tanna Coal Terminal Project was completed. I infer that the contracts of employment of the other employees of JH Engineering on the Tanna Coal Terminal Project were terminated. It would appear that there was never any express termination of Mr Robertson’s contract of employment.
13.On 21 September 2007 a determination was made that, with effect from 16 September 2007, Mr Robertson’s normal weekly earnings should be reduced to $1182.50 on the basis that the overtime of 23.64 hours weekly and a weekly allowance of $4.48 per week were not being earned by employees at Mr Robertson’s level in the business unit. Reliance was placed upon s 8(10) of the Act.
14.Mr Robertson sought a reconsideration of this decision, arguing that, had he not been incapacitated, he would have gone to another project where similar employees were working overtime. On reconsideration, evidenced by a letter dated 2 November 2007, the earlier decision was varied so that normal weekly earnings from 16 September 2007 were assessed at $1820.26.
15.Mr Robertson seeks a review of that decision. That is the subject matter of application 2008/0463.
16.On 8 July 2008 a further determination was made which reduced Mr Robertson’s normal weekly earnings to $1182.50 with effect from 13 July 2008. Then on 30 July 2008 a further determination was made that from 8 August 2008 Mr Robertson was no longer incapacitated for work as a result of his accepted condition and would have no entitlement to compensation for incapacity.
17.Thereafter, on 7 August 2008, the decision of 8 July 2008 was varied on reconsideration to alter the date of commencement of the reduction in normal weekly earnings to 1 April 2008 in lieu of 13 July 2008 but otherwise remained unchanged. At the same time the decision of 30 July 2008 was affirmed on reconsideration. These decisions are the subject matter of application 2008/4098. In the course of the hearing I was informed by Ms Scott-McKenzie, counsel for Mr Robertson, that he no longer persisted with his application so far as it related to the determination of 30 July 2008 and that he agreed to that part of the decision being affirmed, leaving for consideration only the question of the rate of Mr Robertson’s normal weekly earnings from 16 September 2007 to 7 August 2008.
18.From 16 September 2008 Mr Robertson was employed by JH Group on the John Holland Yarwan 2 Project.
The issues
19.I should observe that neither party articulated fully the arguments relied upon at the hearing in the Statements of Facts and Contentions lodged in advance of the hearing. That practice presents obvious difficulties and ought be discouraged. Nonetheless, and given the way in which the parties developed their arguments, there are two broad issues that fall to be decided:
(a)did Mr Robertson continue to be employed by JH Engineering during the relevant period or had he ceased to be employed;
(b)does s 8(10) of the Act operate in Mr Robertson’s circumstances and, if it does, how does it operate.
The duration of employment
20.What needs to be determined is Mr Robertson’s entitlement to incapacity payments in the period from 16 September 2007 (the day following the completion of the Tanna Coal Terminal Project) to 7 August 2008 when it is now accepted that Mr Robertson’s entitlement to incapacity payments ceased.
21.Mr Clark, counsel for JH Group, submitted that Mr Robertson continued to be employed by JH Engineering throughout the period in issue with the result, he submitted, that s 8(10)(a) of the Act applied. Ms Scott-McKenzie, counsel for Mr Robertson, submitted (for reasons dealt with below) that s 8(10) of the Act was not engaged in the present circumstances but that if it were, Mr Robertson had ceased to be employed by JH Engineering and that s 8(10)(b) of the Act applied. There is no evidence of any overt act of the parties during the relevant period that would have the effect of terminating the contract of employment.
22.The general position with respect to the duration of employment contracts has been expressed in this way by academic authors[4]:
“Many contracts of employment contain terms which set a duration for the engagement. This duration may be a fixed term, such as six months or three years. Or it may be an uncertain period which is contingent upon a particular event (for example, the completion of the task on which the employee is working). When the agreed end date is reached, the contract will automatically expire without the need for either party to terminate it.” [footnotes have been omitted]
[4]Creighton, B, and Stewart, A., Labour Law, 4th ed., The Federation Press, 2005 at [15.06].
23.As it seems to me the question is to be decided by reference to the terms of the letter of 13 July 2006 and, in particular, the text under the heading “Period or Task/Employment”. Whilst the language is somewhat vague I consider that the proper construction of that clause is that the parties intended that the employment contract come to an end upon completion of the Tanna Coal Terminal Project. That is, it was a contract of employment for an uncertain period, contingent upon the completion of the Project. Once the Project was completed the contingency was met and the contract of employment was at an end.
24.Once the contract was at an end Mr Robertson’s entitlements to compensation were not dependant upon his continuing employment; it is sufficient that the contract of employment was in existence at the time of the injury. Thus I am satisfied that Mr Robertson’s contract of employment came to an end on 15 September 2007 and that if s 8(10) of the Act otherwise has application it is paragraph (b) of the subsection that would govern Mr Robertson’s circumstances.
Subsection 8(10)
25.In Bortolazzo v Comcare[5] Heerey J said of the Act’s provisions regarding compensation for incapacity:
[5][1997] FCA 515; 75 FCR 385 at 388.
“The underlying policy is that an injured employee should not be worse off during the period of incapacity as a result of work-related injury. However, it follows conversely that the injured employee should not be better off.”
The ordinary operation of s 8(10) of the Act is neatly illustrated by the facts of that case. The applicants had been injured in the course of their employment as catering attendants at an Army Mess. Whilst employed by the Commonwealth in that capacity they had been paid shift allowances. However during the period of incapacity the Commonwealth had privatised the services to Army Messes and all catering attendants had ceased to be paid penalty allowances for shift work. Comcare’s decision to reduce the amount of incapacity payments in reliance on s 8(10) of the Act was affirmed by the Tribunal. The reasoning adopted by the Tribunal was recorded in the reasons for judgment of Heerey J in these terms:
“... the normal weekly earnings of Mrs Saffron and Mrs Bortolazzo, calculated as required by s 8(1) of the Act to include shift penalties, would exceed the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo, who continued to be employed by the Commonwealth, would receive if they were not incapacitated for work. On the evidence we are satisfied that the applicants, if they were not incapacitated for work, would not have received shift penalties after 10 March 1994, because there were no duties or catering attendants GSO 2 or GSO 3 which required shift work ...
We find that the amount of normal weekly earnings of Mrs Saffron and Mrs Bortolazzo as calculated under s 8(1) is required by s 8(10)(a) to be reduced by the amount by which it exceeds the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo would have received after 10 March 1994 if they were not incapacitated for work. We find further that if they had not been incapacitated for work after 10 March 1994 Mrs Saffron would have received a salary of a GSO 2 without shift penalties and Mrs Bortolazzo would have received the salary of a GSO 3 without shift penalties."
Heerey J concluded that that construction was correct.
26.Ms Scott-McKenzie put Mr Robertson’s case forward upon four distinct and alternative bases. As I understood the arguments they were these:
(1)that s 8(10) of the Act has no application and cannot be engaged where the undertaking that underpins the employment contract has ceased to exist;
(2)if s 8(10) of the Act had been engaged, then because Mr Robertson would not have been engaged in any employment, as the undertaking had ceased, he would have not earned anything hence the figure determined by reference to paragraph (b) must be zero with the result, it was said, that the amount calculated for normal weekly earnings could not be reduced;
(3)if s 8(10) of the Act had been engaged, it does not permit comparison with the earnings of other employees (the task undertaken by JH Group here), the subsection is directed to the actual and hypothetical position of the particular employee;
(4)if s 8(10) of the Act had been engaged, it is wrong to merely have regard to the overtime hours of other employees, what must be considered is the gross earning of other employees and there was insufficient evidence of those earnings to enable the Tribunal to determine the entitlements of Mr Robertson.
27.Mr Clark submitted that in the present circumstances s 8(10) of the Act was engaged and required a comparison with what the employee would have been likely to have done at the conclusion of the project. Thus, it was said, it was most likely that Mr Robertson would have been engaged in the “Rail Link Project” at Gladstone and that accordingly the amount that Mr Robertson would have received for the purposes of the s 8(10)(b) calculation was to be determined by reference to the position of comparable employees.
28.The question is one of statutory construction and the modern approach requires that a provision be construed in its context so that it is construed consistently with the language and purpose of all the provisions of the statute[6]. The liability to pay an employee compensation for incapacity is created by s 19 of the Act. The amount of that entitlement is worked out by reference to s 8(1) and (2) of the Act however s 8(10) of the Act allows for a reduction of the amount so calculated in the circumstances postulated by the sub-section.
[6]See e.g. Rieson and Another v SST Consulting Services Pty Ltd [2005] FCAFC 6; 142 FCR 482 at [14] and the cases there cited.
29.The first argument, that s 8(10) of the Act was not engaged, appears to derive its inspiration from the decision of Greenwood J in Comcare v Burgess[7]. There the applicant had been suspended without pay some time after suffering an incapacitating injury. Comcare had relied upon the fact of that suspension to determine that the amount of earnings that the applicant
would have received had she not been incapacitated was nil. Thus, by application of s 8(10) of the Act, the normal weekly earnings were reduced to nil.
[7][2007] FCA 1663; 164 FCR 66.
30.His Honour analysed the operation of s 8(10) of the Act in this way[8]:
“[25] It seems to me that s 8(10)(a) contemplates a circumstance in which an employee (that is, relevantly here, ‘a person who is employed by the Commonwealth’, s 5(1) of the SRC Act) ‘continues to be employed by the Commonwealth’ in the sense that such a person continues to provide service to the Commonwealth and correspondingly continues to receive earnings from the Commonwealth. In those circumstances, s 8(10)(a) seeks to compare the normal weekly earnings (as determined) with the quantum of those corresponding earnings and reduce the normal weekly earnings for the purposes of the s 19(3) formula by the amount of the excess.
[26] Had the legislature intended that suspension of employment would bring about a reduction of normal weekly earnings to nil for the purposes of a formula quantifying the amount of weekly compensation under s 19(3) during a period of incapacity for work, the legislature would have expressly provided for that result. It did not do so. Although Ms Burgess continues to be employed by the Commonwealth in the sense that the contract of employment is ‘on foot’ and employment has not been terminated nor ‘ceased’ (see s 8(10)(b)), the continuity of employment contemplated by s 8(10)(a) is continuity of provision of service and receipt of earnings not simply a subsisting employer/employee relationship. A suspension of employment is not an event contemplated by the section as an element of its operation or purpose. Its purpose is to strike a comparison of pre-injury normal weekly earnings (otherwise determined by the earlier subsections of s 8) with continuity of earnings that would have been received based upon Ms Burgess's provision of service and receipt of earnings.”
[8]At [25] – [26].
31.Here, so the argument goes, the completion of the project for which Mr Robertson had been engaged was not an event contemplated by s 8(10) of the Act and thus the sub-section could have no application. Perhaps another way of expressing the argument is to say that s 8(10) of the Act contemplates a situation where it is possible to postulate a continuation of the employment in which the employee was engaged at the time of injury. Where, as here, there could not have been a continuation of that employment the
subsection has no work to perform.
32.In my view that argument must be accepted even though the result produced has about it a degree of artificiality. But that artificiality arises because the Act seems not to contemplate the situation where it was impossible for the earlier employment contract to continue. There is a far greater degree of artificiality involved in the alternative suggested by JH Group that involves a consideration of what comparable employees have done subsequent to the completion of the project on which the injured employee was engaged and thus the termination of the contract of employment. Is the licensed corporation (or the Tribunal) required to undertake an enquiry into the work histories of all of the employees on the project in a comparable position or is it sufficient to examine the circumstances of only those who have commenced further employment with the same employer on a different project? And if all employees are to be considered how is the licensed corporation to ascertain the earnings of those other employees?
33.It is, I think, preferable to construe s 8(10) of the Act as being confined to situations where it is possible to say that an injured employee could have continued to be employed by the Commonwealth or a licensed corporation. Viewed that way the subsection operates to reduce the entitlement to compensation in line with the reality of the fact of continued employment. Thus adjustments may be made where shift allowances are no longer being paid[9] or a work re-structure brings about a substantial alteration to entitlements[10]. Those cases are ones where it is possible to undertake a calculation of the earnings that the employee would receive if not incapacitated or would have received had the employment at the time of injury continued. But the subsection has no application to a situation where it was not contemplated that the employment at the time of injury would continue nor possible for that employment to continue. As Greenwood J observed in Burgess[11], the continuity of employment contemplated by s 8(10)(a) of the Act is ”continuity of service and receipt of earnings not simply a subsisting employer/employee relationship”. Similarly, in my opinion, s 8(10)(b) of the Act contemplates the possibility of the continuity of service and receipt of earnings in the employment in which the employee had been engaged at the time of the injury.
[9]As in Bortolazzo and in Re Lower and Comcare [2008] AATA 352; 102 ALD 195.
[10]As in Re Whitby and Telstra Corporation Limited [2009] AATA 316.
[11]At [26].
34.I would add that no different result would flow had Mr Robertson continued to be employed by JH Engineering during the period in issue here.
35.In these circumstances I conclude that s 8(10) of the Act had no application to Mr Robertson’s circumstances and that JH Group was wrong to reduce his normal weekly earnings. It is unnecessary to consider Mr Robertson’s alternative arguments based upon the applicability of s 8(10) of the Act.
36.Ordinarily, that would simply require that the reviewable decisions of 2 November 2007 and 7 August 2008 (in part) be set aside. However I note that by a late amendment to the Statement of Facts and Contentions, lodged on 29 April 2009, JH Group contends as follows in relation to the period from 4 January 2008 to 31 March 2008:
“4.15If the tribunal does not accept the Respondent’s position [sic] regarding the application of section 8(10), it should be noted that pursuant to section 19(5), the Applicant cannot receive more than 150% of the Average Weekly Ordinary Time Earnings of Full Time Adults during this period which at the relevant time was $1,669.05 per week.”
A similar contention, with slightly different figures, is advanced in relation to the period from 13 July 2008.
37.No submissions were made by either party at the hearing about the substance or effect of these contentions, indeed I am not aware that there is even evidence of the Average Weekly Ordinary Time Earnings of Full Time Adults during the periods in question. Against the possibility that there is some substance in the point and that Mr Robertson may wish to make submissions about the matter it seems to me that the desirable course would be to set aside the decision (or part of the decision) and remit the matter to the decision-maker for reconsideration with a direction that s 8(10) of the Act has no application to Mr Robertson’s circumstances. If a decision is made on the basis articulated above Mr Robertson will have the opportunity to seek internal and external review of the decision.
38.It was accepted that there was no reason why costs ought not follow the event if Mr Robertson succeeded. Accordingly he ought have his costs of Application 2008/0463 and so much of his costs of Application 2008/4098 as relate to the issue of the rate of compensation payable for incapacity.
I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed: .....................Signed................................................
Melissa Hamblin, AssociateDate of Hearing 1 May 2009
Date of Decision 19 June 2009
Counsel for the Applicant Ms S Scott-McKenzie
Solicitor for the Applicant Slater & Gordon
Counsel for the Respondent Mr CJ Clark
Solicitor for the Respondent Sparke Helmore
0
6
0