Sirijovski v BlueScope Steel (AIS) Pty Ltd - [2021] NSWPICPD 41

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	Sirijovski v BlueScope Steel (AIS) Pty Ltd [2021] NSWPICPD 41
APPELLANT:	Peter Sirijovski
RESPONDENT:	BlueScope Steel (AIS) Pty Ltd
INSURER:	Self-insured
FILE NUMBER:	A1-7456/20
PRESIDENTIAL MEMBER:	Deputy President Michael Snell
DATE OF APPEAL DECISION:	17 November 2021
ORDERS MADE ON APPEAL:	1. The Certificate of Determination dated 19 March 2021 is amended. Paragraph 2(h) is revoked, and in substitution the following is inserted: “(h) for the period 1 January 2008 to 31 December 2012, at a rate of $295.98 per week.”
CATCHWORDS:	WORKERS COMPENSATION – Section 40 of the Workers Compensation Act 1987 in its form prior to commencement of the Workers Compensation Legislation Amendment Act 2012; the discretion in s 40(1)
HEARING:	On the papers
REPRESENTATION:	Appellant:
Mr P Stockley, counsel
Acorn Lawyers
Respondent:
Mr P Lichaa, solicitor Bartier Perry Lawyers
DECISION UNDER APPEAL
MEMBER:	Mr N Read
DATE OF MEMBER’S DECISION:	19 March 2021

INTRODUCTION AND BACKGROUND

Peter Sirijovski (the appellant) emigrated from his native Macedonia to Australia in 1975. Following two years of high school education in Australia he commenced working with BlueScope Steel (AIS) Pty Ltd (the respondent) in about 1977. His work was heavy and repetitive. The appellant suffered pleaded employment injuries to his lumbar spine and cervical spine on 16 August 1999, 16 April 2002, 24 January 2005, 3 December 2008, 30 April 2010 and 14 August 2010.[1] His employment was terminated in May 2013.[2]
[1] Appellant’s statement 30/9/19, Application to Resolve a Dispute (ARD), pp 1–2.
[2] Sirijovski v BlueScope Steel (AIS) Pty Ltd [2021] NSWPIC 34 (reasons), [58].
The appellant states that prior to his back injury in April 2002 he worked three or four overtime shifts per week, each of eight hours, known as ‘doublers’. He did not continue these, on medical advice. In about September 2014, the appellant commenced part-time work stacking shelves at Coles, working an average of 20 hours per week.[3] The appellant’s solicitors made a claim for the loss of overtime in a letter dated 18 November 2020,[4] which the respondent’s solicitors disputed in email correspondence dated 11 December 2020.[5] The current proceedings lodged in the then Workers Compensation Commission seek weekly compensation pursuant to the former s 40 of the Workers Compensation Act 1987, from 16 April 2002 to 31 December 2012.
[3] Appellant’s statements 30/9/19 and 10/10/20, ARD, pp 3, 4, 19–20.
[4] ARD, pp 24–25.
[5] ARD, p 26.
The matter was listed for hearing before Arbitrator Read (as he then was) on 22 February 2021. Mr Stockley appeared for the appellant and Mr Lichaa appeared for the respondent. The Arbitrator noted that the appellant withdrew reliance on injury resulting from the nature and conditions of his employment. The injuries relied on were those in April 2002, January 2005, April 2010 and August 2010 (to the lumbar spine) and January 2005 and December 2008 (to the cervical spine).[6] Mr Stockley and Mr Lichaa addressed. Mr Stockley indicated that the losses sought were those “set out in the wage schedule”, subject to the statutory cap applicable to a worker with a dependent wife and two children.[7]
[6] Transcript of hearing 22/2/21 (T), T 2.30–3.6.
[7] T 15.15–21.
The Arbitrator reserved his decision. On 1 March 2021, before the Arbitrator issued his Certificate of Determination, the Workers Compensation Commission was abolished by operation of Clause 3 of Div 2 of Pt 2 of Sch 1 to the Personal Injury Commission Act 2020 (the 2020 Act). The matter then became one within the Workers Compensation Division of the Personal Injury Commission (the Commission) from that date,[8] and the Arbitrator became a non-presidential member of the Personal Injury Commission. In his capacity as a member of the Commission, the Member issued a Certificate of Determination dated 19 March 2021, accompanied by 13 pages of reasons.
[8] Clause 12(1) of Div 2.3 of Pt 2 of the 2020 Act.

ON THE PAPERS

Section 52(3) of the 2020 Act provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
Having regard to Procedural Directions PIC2 and WC3; the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE MEMBER’S REASONS

The Member noted the weekly claim related to the appellant “being unable to perform overtime and/or ‘doubler’ shifts”. The Member noted the respondent had failed to issue a relevant dispute notice pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). Previous dispute notices had dealt with lump sum entitlements and “did not contain any relevant information to the claim for weekly benefits compensation and medical expenses”. The Member said that leave was granted to the respondent at the hearing “to raise the following previously unnotified issues pursuant to section 289A of the 1998 Act”:
(a) whether the appellant suffered a partial incapacity for work in the period 16 April 2002 and 31 December 2012 as a result of his injuries;
(b) if so, what is the appellant’s entitlement to compensation having regard to the evidence adduced as to his probable earnings but for injury and his ability to earn in terms of section 40 of the 1987 Act, and
(c) whether the claimed medical expenses were reasonably necessary as requested by section 60 of the 1987 Act.[9]
[9] Reasons, [6]–[9].
The Member summarised the appellant’s evidence in his statements dated 30 September 2019 and 10 October 2020. The appellant stated that prior to his back injury on 16 April 2002 “he would work three to four overtime shifts per week of eight hours each (and paid at double time)”. These were known as “doublers”. He said that following this back injury he might work eight hour shifts on Saturdays and Sundays, which may have been classified as overtime. He said his certificates restricted him to “working no more than 8-hour shifts”, so he could not work the “doublers” which involved him working 16 consecutive hours. He said there may, around the time of the Global Financial Crisis (GFC), have been periods when overtime was reduced or not offered.[10]
[10] Reasons, [16]–[22].
The Member referred to the evidence, in the respondent’s case, of Mr Kimber, who previously supervised the appellant. Mr Kimber said that from 2002 to about 2008 regular overtime, including ‘doublers’, was available. There was an overtime sharing arrangement so that overtime was allocated fairly across the employees. He said that from 2008 to 2012 there was a “significant decrease” in overtime due to the GFC and an associated downturn in business, overtime was then offered “very sporadically”. Mr Kimber said there was a restructure. Mr Kimber said that the appellant had a “poor work ethic and would only do overtime when it suited him”.[11]
[11] Reasons, [23]–[25].
The Member summarised the medical reports, certificates, and work capability forms relating to the appellant. This does not need repeating. The Member said the appellant carried the onus of proving an incapacity for work. The Member described the test as being whether, “having regard to the whole of evidence that, as a result of the work injury (or injuries), the [appellant] had an incapacity in the labour market reasonably accessible to him”, referring to McCabe Terrill Lawyers v A.[12] The Member noted the appellant’s submission that “from 16 April 2002 to 31 December 2012 he was partially incapacitated for work by reason of the fact that he was under medical certification to work no more than 40 hours per week”. The Member said the effect of this was that the appellant was “unable to do overtime and doubler shifts at the level he had done prior to his injury on 16 April 2002”. He said the weight of the evidence supported a finding of partial incapacity. He said the work capability forms supported an inability to work the doubler shifts. He said he gave weight to Dr Sokolovska’s opinion in her report dated 15 December 2020, that the appellant was “unable to participate in doubler shifts following the injury to his back on 16 April 2002”.[13]
[12] [2009] NSWWCCPD 46, [70].
[13] Reasons, [66]–[72].
The Member said there was not medical evidence to adequately contradict the evidence of the appellant and Dr Sokolovska. The reports of Drs Giblin, Silva and Wallace said the appellant was fit for normal duties but did not address incapacity for overtime or doublers. The Member said the work capabilities forms showed ongoing physical restrictions as a result of the injury on 16 April 2002.[14] He made a finding:
“I am therefore satisfied on the balance of probabilities that the [appellant] suffered a partial incapacity for work in the period claimed, in particular a reduced capacity resulting from an inability to undertake overtime work including doublers at a level [he] had undertaken prior to the April 2002 injury.”[15]
[14] Reasons, [73]–[74].
[15] Reasons, [76].
The Member turned to quantification of the entitlement. This was approached on the basis that the entitlement was to be quantified pursuant to the former s 40 of the 1987 Act, in its form prior to commencement of the Workers Compensation Legislation Amendment Act 2012 (the 2012 Amending Act). The Member said that the appellant had lodged a wages schedule “which purports to show the loss”. It set out the difference in earnings between the appellant and the nominated comparable employee, Mr Wojdyla. The Member said the difference between these figures was said to result from the appellant’s loss of overtime and/or ‘doublers’. The Member noted the appellant’s submission that “the accuracy of the [wages schedule] had not been disputed by way of a competing schedule”, and accordingly it was “deemed to be admitted”. The Member said it was not clear “how r 15.5 [was] intended to operate in the context of a claim under s 40 of the pre-2012 amended 1987 Act”.[16]
[16] Reasons, [81]–[83].
The Member said that the weekly claim was made on the basis that Mr Wojdyla was a comparable employee. The respondent had not denied this in a dispute notice nor had it provided evidence to the contrary. He said that Mr Kimber “would have been in a good position to provide evidence”. There was no reason “to dispense with r 15.5 as it applies to an allegation [that] Mr Wojdyla was a comparator”.[17]
[17] Reasons, [84]–[86].
The Member referred to a submission by the respondent that the wages schedule was not “reflective” of the appellant’s probable earnings as there was no breakdown of ordinary hours, overtime and doublers, there were no payslips, it was not possible to determine “any reduced capacity to undertake overtime and/or doublers”. The Member noted there was not evidence to contradict the validity of the appellant’s assertions.[18] He made a finding:
“I am satisfied on the balance of probabilities that the [appellant’s] probable earnings are consistent with those of Mr Wojdyla. I accept the [appellant’s] submission that the most likely explanation for the difference between his and Mr Wojdyla’s income is his inability to participate in overtime and/or doublers during the relevant period.”[19]
[18] Reasons, [87]–[90].
[19] Reasons, [91].
The Member referred to the lack of available figures for some of the periods. He accepted the “averaging method” in the wages schedule was “an appropriate method for calculating the loss during these periods”. He found the loss from 16 April 2002 to 30 June 2002 was $300 per week. He accepted this “averaging method” applied also during the periods when the appellant’s earnings exceeded those of the comparable employee.[20]
[20] Reasons, [92]–[97].
The Member accepted the appellant’s actual earnings during the relevant period were those recorded in the wages schedule. He accepted that, save for the period 16 April 2002 to 30 June 2002, the difference between probable and actual earnings was that calculated in the wages schedule.[21]
[21] Reasons, [98]–[100].
The Member then dealt with the exercise of discretion in the former s 40. He referred to Australian Wire Industries v Nicholson.[22] He described factors relevant to application of the discretion as the impact of the GFC on the availability of overtime, and the appellant’s purportedly poor work ethic. The Member said he was not satisfied the appellant’s alleged poor work ethic was a reason to reduce the entitlement on a discretionary basis. The appellant had taken advantage of available overtime prior to the April 2002 injury. The Member said it was common sense that the GFC would have resulted in a downturn that impacted the respondent’s operations. He accepted Mr Kimber’s evidence that there was a downturn in overtime and doublers from at least 2008 to 2012. The Member said this was supported by the earnings of the comparable employee, which significantly reduced from the financial year 2009/2010. The Member referred to the evidence of Mr Kimber, that overtime and/or doubler shifts during this period were “offered sporadically”.[23]
[22] (1985) 1 NSWCCR 50 (Nicholson), 54–57.
[23] Reasons, [101]–[107].
The Member said that “a substantial deduction is warranted from the difference in gross weekly earnings claimed in the Wages Schedule [for] the period 1 January 2008 to 31 December 2012”. He said:
“The [appellant] cannot be compensated for money that he was not likely to earn. In my view, the amount awarded to the [appellant] for the period 1 January 2008 to 31 December 2012 ought to be reduced to $25 per week, which equates to roughly six doubler shifts per year. In reducing the figure to this amount, I have also taken into account that the [appellant] earned more than the identified comparative employee and that there is no comparable wage date. Also, it may well have been that during this period the [appellant] would have lost his job in the restructure of the respondent’s business (see for example, Harding v Transfield Pty Ltd (2003) 25 NSWCCR 86; Goktas v Goodyear Australia Pty Ltd [2007] NSWWCCPD 1 at [63]–[64]).”[24]
[24] Reasons, [108].
The Member rejected the respondent’s submission that the discretion should additionally be exercised because the appellant was terminated in May 2013. This was outside the closed period claimed, which expired on 31 December 2012.[25]
[25] Reasons, [109].

THE NATURE OF AN APPEAL PURSUANT TO SECTION 352(5)

Section 352(5) of the 1998 Act provides:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
In Raulston v Toll Pty Ltd Roche DP, applying Whiteley Muir & Zwanenberg Ltd v Kerr[26] to the appeal process pursuant to s 352, said:
“(a)    A [member], though not basing his or her findings on credit, may have preferred one view of the primary facts to another as being more probable. Such a finding may only be disturbed by a Presidential member if ‘other probabilities so outweigh that chosen by the [member] that it can be said that his [or her] conclusion was wrong’.
(b)     Having found the primary facts, the [member] may draw a particular inference from them. Even here the ‘fact of the [member’s] decision must be displaced’. It is not enough that the Presidential member would have drawn a different inference. It must be shown that the [member] was wrong.
(c)     It may be shown that [a member] was wrong ‘by showing that material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the [member] is so preponderant in the opinion of the appellate court that the [member’s] decision is wrong’.”[27]
[26] (1966) 39 ALJR 505 (Whiteley Muir), 506.
[27] [2011] NSWWCCPD 25; 10 DDCR 156 (Raulston), [19].
In Workers Compensation Nominal Insurer v Hill, Basten JA said:
“With respect to errors of fact finding, the line between preferring a different result and identifying error is by no means easy to draw, but that is clearly what the Deputy President sought to do by adopting the language complained of. It was also what Barwick CJ sought to do in Whiteley Muir in using such language to identify the difference between an appeal based on a finding of error and a hearing de novo (and, one must now add, a rehearing). If, on an appeal by way of rehearing, the court asked whether the findings of fact were ‘open’ to the trial judge, that might demonstrate an unduly limited understanding of the court’s function; however, that language is not out of place in determining an appeal from factual findings under s 352(5).”[28]
[28] [2020] NSWCA 54, [20].
In Northern New South Wales Health Network v Heggie, Sackville AJA, dealing with the scope of such appeals, said:
“A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519”.[29]
[29] [2013] NSWCA 255, [72].

THE GROUND OF APPEAL

The appellant raises a single ground of appeal:
“The [Member] erred in the application and exercise of his discretion pursuant to s 40 of the [1987 Act]”.

Appellant’s submissions

The appellant submits his case was that he would have worked ‘doubler’ shifts if uninjured. His incapacity prevented him working longer than eight hours in a day, which prevented him working ‘doubler’ shifts. He submits that his attempts to provide accurate earnings figures for comparable employees were hampered by the data supplied to him by the respondent. The respondent failed to supply records of employees who the appellant considered comparable. This left the appellant relying on material relating to Mr Wojdyla, whose direct comparability the appellant did not accept, and whose earnings “unaccountably” fell below those of the appellant in the 2011 year, and which were not available for the periods ending June 2009 and December 2012.[30]
[30] Appellant’s submissions, [1]–[3].
The appellant states he accepted in principle that overtime based on ‘doubler’ shifts decreased at the time of the GFC. This decreased the wages of Mr Wojdyla from $89,794 in 2007 to $76,611 in 2010, which correspondingly decreased the value of the appellant’s claim from 2008. The appellant submits the wages schedule was based on data and logical inferences, as opposed to being a speculative claim. The appellant submits the above was accepted in the reasons at [84] to [95]. The appellant says that during the financial year 2009/2010 he earned $61,220 and Mr Wojdyla earned $76,611, a weekly difference of $295.98. “[I]f the diminished availability of doubler overtime due to the GFC were reflected in wage rates, this was concrete and reliable evidence which permitted an accurate evaluation.”[31]
[31] Appellant’s submissions, [4]–[8].
The appellant says the Member found the earnings of the comparable employee, Mr Wojdyla, reflected probable earnings if not for injury. For periods when the comparable earnings were not available he accepted the averaging methodology was a reasonable assessment of the loss. The Member had satisfied himself as to the difference between probable and actual earnings. While he did not identify the figure, he indicated it by reference to the wages schedule. For the period 2008 to 2012 the wages schedule identified two weekly figures for the actual loss, $295.98 during 2009/2010, and $509.15 for each of the other years.[32]
[32] Appellant’s submissions, [9]–[10].

The appellant submits that, despite having made these findings, the Member proceeded to apply the s 40 discretion to each of these years, on the basis that the arithmetical difference did not properly reflect the appellant’s loss. The appellant says he accepts that an adjustment on the basis of the discretion is proper where the “arithmetical difference is not properly reflective of the worker’s loss”. He submits there were two specific errors. The first was that the reduction was applied to the year 2009/2010, a period in which there had already been a reduction because of the post GFC earnings reduction. He submits the discretion should not have applied to this year at all.[33]
[33] Appellant’s submissions, [11]–[13].
The appellant submits there was one piece of empirical evidence going to the effect of the GFC on wages. This was its effect on wages during the year 2009/2010. This was not referred to, was relevant to exercise of the discretion, and constituted a failure to take into account a material consideration: House v The King.[34]
[34] [1936] HCA 40; 55 CLR 499.
The appellant refers to Farrell v Metromix,[35] a decision of the Court of Appeal involving application of the s 40 discretion to a claim for loss or reduction in overtime. The appellant argues this decision can be distinguished from the current matter, in Farrell a “non injury related reduction in overtime” was not reflected in the wages schedule. The appellant argues that, had the Member applied correct principles, he should have:
(a) accepted the post GFC probable earnings were consistent with the 2009/2010 figure for probable earnings, which showed an arithmetical difference of $295.98 for the years 2008 to 2012, in which case he did not need to consider discretionary matters, or
(b) found probable earnings using the averaging method, which he had endorsed as reasonable, and then used the statutory discretion to reduce the difference to $295.98 per week for the years 2008 to 2012.
[35] [2001] NSWCA 166 (Farrell).
The appellant submits that the Member’s reduction, on a discretionary basis, of the arithmetical difference of $295.98 “constituted an impermissible doubling-up of consideration of factors under s.40(2)(a) and the s.40(1) discretion, as identified by Stein JA in Farrell v Metromix para [23] on p 66”.[36]
[36] Appellant’s submissions, [15]–[20].

Respondent’s submissions

The respondent summarises the Members findings at [101] to [109] of the reasons. The respondent notes the Member’s reasons at [108] where it was said that “the appellant could not be compensated for money that he was not likely to earn”. The respondent notes that in reducing the compensation to $25.00 per week (about six doublers per year) the Member took account of the fact that the appellant had “earned more than the identified comparative employee”, the fact that there was “no comparable wage data”, and that the appellant could have “lost his job in the restructure of the business”. It submits the reduction “was based on the evidence of Mr Kimber and the impact of the GFC on availability of overtime at BlueScope”. The respondent submits the matter is “distinct and removed from the case of Farrell”.[37]
[37] Respondent’s submissions, [4]–[12], [14].
The respondent makes a general submission:
“The respondent submits Member [R]ead properly applied the discretion in accordance with the law and the available evidence; and he referenced the available evidence and provided plausible reasoning and explanation for the approach adopted; and there were no errors committed in the exercise of the discretion.”[38]
[38] Respondent’s submissions, [13].

Appellant’s submissions in reply

The appellant refers to the respondent’s submissions. The appellant submits that the respondent “does not advance any reasoning and does not engage with the appellant’s grounds of appeal”. It submits the respondent has “nothing to say in reply”.[39]
[39] Appellant’s submissions in reply.

LEGISLATION

Section 40 of the 1987 Act, prior to relevant commencement of the 2012 Amending Act (27 June 2012), relevantly provided:
“40    Weekly payments during partial incapacity—general
(cf former ss 9, 11)
(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.
Note—
Section 35 limits the maximum weekly payment of compensation under this section.
(2)     Calculation of reduction in earnings of worker—general The reduction in the worker’s weekly earnings is (except as provided by this section) the difference between:
(a) the weekly amount which the worker would probably have been earning as a worker but for the injury and had the worker continued to be employed in the same or some comparable employment, and
(b) the average weekly amount that the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury.”
The claim has been conducted between the parties on the basis that it is common ground the appellant’s weekly entitlements at issue are governed by s 40 of the 1987 Act, unaffected by the 2012 Amending Act.[40]
[40] See generally, Kilic v Kmart Australia Ltd [2013] NSWWCCPD 37, [10].

CONSIDERATION

In Mitchell v Central West Health Service[41] the Court of Appeal described the steps in determining an award pursuant to s 40:
[41] (1997) 14 NSWCCR 526 (Mitchell).
“For present purposes, it is sufficient to observe that the Court is required:
1.      To determine the weekly amount the worker would probably have been earning if uninjured (s 40(2)(a)) ...
2. To determine ‘the average weekly amount that the worker is earning or would be able to earn in some suitable employment from time to time after the injury’ (s 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following:
‘(a) the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(b) the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A.’ ...
3.      To subtract the figure derived from (2) from the figure derived from (1) (s 40(2)).
4.      To decide whether and to what extent the reduction calculated as above bears ‘such relation to the amount of that reduction as may appear proper in the circumstances of the case’ (s 40(1)).”[42]
[42] Mitchell, 529–530.
In Nicholson, McHugh JA (in the context of the former s 11(1) of the Workers’ Compensation Act 1926 (the 1926 Act)) described the nature of the discretion:
“The third step 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.”[43]
[43] Nicholson, 54–55.
His Honour also said:
“Compensation for lost earnings as the result of work injuries remains the primary purpose of the statute. Money which was not likely to be earned cannot be regarded as lost earnings for that purpose.”[44]
[44] Nicholson, 57.
There have been a multitude of circumstances which have resulted in the exercise of the discretion in s 40 (or the former s 11(1) of the 1926 Act). These have included retirement or supervening illness,[45] imprisonment,[46] pregnancy,[47] and changes to a worker’s visa status.[48]
[45] Nicholson.
[46] Stranlund v The Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91.
[47] Wrigley Co Pty Ltd v Holland [2002] NSWCA 109; 23 NSWCCR 463.
[48] Singh v Taj (Sydney) Pty Ltd [2006] NSWCA 330.
The parties have referred to Farrell. That case involved a claim pursuant to s 40 of the 1987 Act based on reduced overtime earnings following an injury. At first instance the Commissioner who heard the case found “as a combination of both of those matters, that is, the attitudinal change [of the employer towards the worker] and the effects of the injuries that he did lose some money after July 1997”.
Stein JA (Hodgson JA and Ipp AJA agreeing) said:
“24. The issue in the appeal is whether the loss of overtime caused by the change in attitude of the employer to offer the worker overtime was a matter which could only be addressed under the calculation in s 40(2)(a) and is not to be considered in the discretion to be exercised under s 40(1). I do not see that the particular factor comes within the words used in subsection (2)(a). It does not appear to have been taken into account in the wages schedule tendered to the Commissioner. In my opinion, it was a matter which could be taken into account in the exercise of the wide discretion imposed by s 40(1) while the worker continued to be employed by the respondent. The ultimate purpose of the exercise under s 40(1) is to determine what award of weekly payments should be made for the worker’s partial incapacity. It is the ascertainment of the financial loss sustained by the worker by reason of the incapacity (Australian Iron and Steel v Elliott (1966) 67 SR (NSW) 87). Putting it another way, it is to value ‘the diminution in the earning capacity of the worker which he suffered as a result of the relevant injury’ (Malco Engineering v Ferreira (1994) 10 NSWLR 117). It cannot be more than the difference between the figures produced from s 40(2)(b) and (a), but it may be less if there are discretionary factors which dictate this course. Further, there may not be a doubling-up of consideration of factors under s 40(2)(a) and the s 40(1) discretion. There was no doubling-up here. Finally, the reduction arrived at must be proper in the circumstances of the case and ‘proper’ given the incapacity in question. See Australian Wheat Board v Pantaleo at 538, 541.
25. The circumstance of an employer reducing a worker’s overtime because of animosity or attitudinal change which has nothing to do with a workers’ injury or his physical ability to carry out the job is, in my opinion, a proper factor to take into account under s 40(1). It assists in ascertaining the applicant’s loss of earning capacity which is due to the work injury, as opposed to what loss might be due to other circumstances.” (emphasis added)
In Goktas v Goodyear Australia Pty Ltd[49] the Workers Compensation Commission of New South Wales dealt with a claim for weekly compensation extending over many years, with limited evidence to assist in quantification of any entitlement. A Commission Arbitrator dismissed the claim, on the basis that she was unable to calculate the entitlement in the absence of appropriate evidence, including award rates and comparable earnings. On appeal, Roche DP said:
“It is certainly not appropriate that an Arbitrator guess at probable earnings. However, there was some evidence of both the award under which Mr Goktas was employed and his actual rate of pay as at 1990. It was appropriate for the Arbitrator to use that evidence as a basis for calculating probable earnings from August 2000.”[50]
[49] [2007] NSWWCCPD 1 (Goktas).
[50] Goktas, [31].
In the current matter, the Member made a finding that the difference between the appellant’s earnings and the earnings of the comparable employee, Mr Wojdyla, resulted from the appellant’s inability to participate in overtime and/or doublers during the relevant period (see [15] above). The Member rejected an explanation offered by the respondent, that the appellant’s “alleged poor work ethic” was a factor in reducing his earnings, noting the appellant performed available overtime prior to the 2002 injury (see [18] above). Difficulties with the adequacy of the material produced, to permit quantification of the alleged loss, are referred to in the following paragraph. The appellant’s wages schedule suggested an alternative method of calculation, the averaging of the earnings of both the appellant and Mr Wojdyla for the years 2002/2003 to 2009/2010 (excluding 2008/2009 which was unavailable). The Member accepted the appropriateness of this during periods when figures were not otherwise available (see [16] above).
The annual earnings of Mr Wojdyla were $99,790 during 2007/2008. The evidence of probable earnings after 2007/2008 is regrettably incomplete. The wages schedule states that no figure for the comparable earner was provided by the respondent for the year 2008/2009. The earnings of Mr Wojdyla for 2009/2010 were $76,611. The figures of the comparable employee, Mr Wojdyla, are described as not “representative” for the years 2010/2011 and 2011/2012 (he is said to have been terminated on 29 October 2011). The appellant requested earnings information relevant to the earnings of three named comparable employees (of which Mr Wojdyla was one) including overtime earnings by email correspondence dated 29 May 2018.[51] The respondent replied on 6 June 2018 by email. That correspondence enclosed group certificates and pay dockets for the appellant and Mr Wojdyla. It did not deal with the other comparable earners suggested by the appellant’s solicitors. The email stated that no payment summaries were available for 2001, 2002 and 2009. The email stated that Mr Wojdyla’s employment was terminated on 29 October 2011.[52]
[51] Reply, pp 370–371.
[52] Reply, pp 372–373.
The earnings of Mr Wojdyla reduced from $99,790 in 2007/2008 to $76,611 in 2009/2010. The appellant’s submissions describe this as being consistent with the impact of the “global financial crisis in 2008”.[53] The appellant’s submissions correctly describe this reduction (to the upper limb of the s 40 equation) as reducing “the quantum of the appellant’s claim”.[54] The Member awarded the full arithmetical difference between the appellant’s earnings and the earnings of Mr Wojdyla, for periods up to 31 December 2007. He applied the discretion to reduce the weekly award to $25 from 1 January 2008. The appellant submits the reduction should not have been applied to periods where the effects of the GFC were reflected in the probable earnings that constituted the upper limb of the s 40 equation.
[53] Appellant’s submissions, [4].
[54] Appellant’s submissions, [4].
In the passage of Farrell quoted at [43] above, Stein JA stated there “may not be a doubling-up of consideration of factors under s 40(2)(a) and the s 40(1) discretion”. The logic of this is clear. The exercise of the function under s 40(1), described by his Honour, is “the ascertainment of the financial loss sustained by the worker by reason of the incapacity”. The exercise of the discretion may reduce the relevant compensation to take account of “money which was not likely to be earned” (see Nicholson quoted at [40] above). If the upper limb of the equation is reduced (as here) by circumstances which are fully reflected by the reduction in compensation payable pursuant to the s 40 equation, reduction on the basis of the discretion should not be made. This would result in the “doubling-up” referred to in Farrell. In the current circumstances, it has the effect that the entitlement under s 40 is reduced by the reduction in probable earnings due to the GFC, and then is reduced again by application of the discretion. The situation in Farrell was different. In that case application of the discretion was found to be appropriate because the full reduction in the worker’s earnings was not referable to his injury, but also to “animosity or attitudinal change which has nothing to do with a workers’ injury or his physical ability to carry out the job”.
I do not accept the submissions of the respondent. The appellant is correct, the respondent’s submissions fail to engage with the ground of appeal and the arguments that the appellant makes.
It follows that error as described at [30] above is made out. The single pleaded ground of appeal succeeds.
It is appropriate that the decision, in respect of the period from 1 January 2008, be revoked and a fresh decision be made in its place, pursuant to s 352(6A) of the 1998 Act. The appellant has made submissions regarding the fresh decision that should be made. The respondent has had an opportunity to respond to those in its submissions, had it wished.
The effects of the GFC in 2008 are not obviously reflected in the comparable earnings figure for 2007/2008, which is $99,790, the highest such figure. The s 40 discretion was, however, applied to the arithmetical loss in respect of periods from 1 January 2008 onwards. The year 2008/2009 has “Not provided” by way of details of comparable earnings. The year 2009/2010 has comparable earnings of $76,611. The year 2010/2011 states it was “not a representative year for the comparable employee”, who in that year earned $57,076, a figure which for unexplained reasons was less that the appellant (who earned $70,387). The comparable earnings figure for 2011/2012 was $46,713, a figure apparently reduced by the termination of the comparable employee, Mr Wojdyla on 29 October 2011.
The appellant, in its submissions, seeks to use this information which was supplied, and which is not ideal, as a basis for the calculation of probable earnings. This is consistent with the approach which was taken in Goktas, it is some evidence which can be used as a basis for the calculation. I accept the approach described above in the appellant’s submissions at (a) of [31] as being appropriate. The appellant submits, of the calculation for the year 2009/2010, “If the diminished availability of doubler overtime due to the GFC were reflected in wage rates, this was concrete and reliable evidence which permitted an accurate evaluation.”[55] This involves acceptance of the comparable earnings supplied for the financial year of 2009/2010, as the most reliable guide to the upper limb of the s 40 equation for the period from 1 January 2008 onwards. It consequently involves acceptance of the appellant’s economic incapacity during the period from 1 January 2008 onwards as the rate of $295.98. Although it involves working from imperfect evidence, it represents a reasonable and acceptable approach on the wages material supplied by the respondent. The respondent has made no argument to the contrary, relating to the re-determination of the matter should the appeal succeed. It simply argues that the appeal should fail in its entirety.
[55] Appellant’s submissions, [8].

DECISION

The Certificate of Determination dated 19 March 2021 is amended. Paragraph 2(h) is revoked, and in substitution the following is inserted:
“(h) for the period 1 January 2008 to 31 December 2012, at a rate of $295.98 per week.”

Michael Snell
DEPUTY PRESIDENT

17 November 2021