Spencer v Arthur Tzaneros Discretionary Trust & Luke Webber Trust

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Spencer v Arthur Tzaneros Discretionary Trust & Luke Webber Trust [2023] NSWPIC 225
APPLICANT:	Michael Spencer
RESPONDENT:	The Trustee for Arthur Tzaneros Discretionary Trust and the Trustee for Luke Webber Trust trading as Labourpower Recruitment Services Joint Venture
Member:	Cameron Burge
DATE OF DECISION:	16 May 2023
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; weekly benefits; calculation of pre-injury average weekly earnings (PIAWE) in accordance with clauses 5(1)(c) and 5(3)(b); applicant working as a trainee for the respondent and suffered injury while a trainee; post-injury but before the period the subject of the claim; the applicant completed his training and attained a higher level; the parties agreed he therefore achieved a higher base rate of pay for the purposes of calculating his PIAWE in accordance with clause 5(3)(b); parties disagree as to whether the higher base rate of pay should be applied to those shifts in the period of the PIAWE where the applicant had earned penalty rates at the lower rate of pay while a trainee; Held – the higher rate applies to those shifts where the applicant previously earned penalty rates as a trainee; clause 5(3)(b) applies to the rate of the earnings which the applicant would have achieved, not merely to a base rate of pay; To limit the operation of the clause to only a base rate of pay is contrary to the wording of the clause and would lead to an outcome which would not accurately reflect the uplift in income to which the clause applies; capacity; whether applicant continues to suffer incapacity; applicant has ongoing partial incapacity and has at all times during the period claimed worked to the best of his capacity; respondent ordered to pay weekly compensation in accordance with the applicant’s wages schedule; medical expenses; whether the proposed reconstruction of the applicant’s injured finger is reasonably necessary; finding that the surgery is reasonably necessary as a result of the injury; respondent ordered to pay the costs of and incidental to the surgery.
determinations made:

The applicant suffered an injury in the course of his employment to his right hand on
31 July 2021.
As a result of the injury referred to in [1] above, the applicant was from time to time and remains incapacitated for employment from 12 June 2022 to date and continuing.
The applicant's pre-injury average weekly earnings at the date of injury were $1,569.54, subject to indexation from time to time.
The respondent is to pay the applicant weekly compensation as follows:
Week ending   Amount payable
19 June 2022   $1,296
26 June 2022   $412.60
3 July 2022   $76.60
10 July 2022   $342.20
17 July 2022   $1,296
24 July 2022   $1,296
31 July 2022   $643
7 August 2022   $294.20
11 August 2022   $1,008.82
18 August 2022   $282.59
25 August 2022   $139
1 September 2022   $237.72
8 September 2022   $480.03
15 September 2022 to 29 September 2022                   $1,296
6 October 2022 to 10 November 2022   $1,336
20 November 2022   $837.70
27 November 2022 to date and continuing                    $338.50
As a result of his injury, the surgery proposed by Dr Smith by way of Boutonniere reconstruction and central slip reconstruction are reasonably necessary.
The respondent is to pay the costs of and incidental to the surgery proposed by Dr Smith.

STATEMENT OF REASONS

BACKGROUND

The applicant, who is right-hand dominant, was employed by the respondent which is a labour hiring company and worked as a warehouse picker and packer in a Coles Distribution Centre.
On 31 July 2021, the applicant was carrying out his usual picking duties when he picked a carton from a shelf. As the applicant turned around, his foot slipped on some spillage, causing him to fall onto his right hand, bending his right ring finger back.
The applicant notified his employer of the injury and took two days away from work. He underwent an X-ray and returned to his normal duties; however, he noticed the pain in his right ring finger was getting worse over time meaning he could not lift more than one crate of vegetables or milk at a time, causing his rate of work to suffer. The applicant states his finger began getting more painful, the inflammation did not ease and a lump around his knuckle began to calcify.
The applicant gradually began to call in sick for work on multiple occasions owing to the condition of his finger. He then consulted his regular general practitioner, Dr Ogut, who said the top of his finger was beginning to atrophy. The applicant was referred to orthopaedic surgeon Dr Baba.
During the applicant's recovery, the respondent offered work at a different location where the applicant was asked to collect a clipboard and pen and write down truck registration numbers. He states he found it difficult to write due to the injury to his right hand, and only lasted approximately 20 minutes before he had to ask his supervisor for alternative work as he was unable to carry out the duties. The applicant then consulted his general practitioner again and was certified unfit for work until 3 March 2022, after which he was certified fit for suitable duties for 12 hours per week.
The applicant brings these proceedings seeking payment of weekly compensation and the payment of proposed surgery to his right ring finger. The respondent disputes liability for the proposed surgery, and additionally disputes the degree of incapacity claimed by the applicant together with his calculation of his pre-injury average weekly earnings (PIAWE). An earlier dispute notice relating to s 4(b) of the Workers Compensation Act 1987 (the 1987 Act) was withdrawn.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:
(a)    the applicant’s PIAWE;
(b)    the applicant’s incapacity for employment, and
(c)    whether the surgery proposed by Dr Smith is reasonably necessary.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
The parties attended a hearing on 2 February 2023. At the hearing, the applicant was represented by Mr Stockley of counsel. The respondent was represented by Mr Gaitanis of counsel. The matter was subject to a lengthy period of conciliation; however, it was unable to resolve. At the conclusion of the conciliation phase, the parties were informed of my intention to determine the dispute without holding an arbitration hearing. The parties have agreed to the determination of the matter without a conference or formal hearing, subject to the direction for submissions which I issued on 2 February 2023.
The parties lodged written submissions in accordance with the timetable set out in my Direction dated 2 February 2023.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Personal Injury Commission (Commission) and considered in making this determination:
(a)    Application to Resolve a Dispute (the Application) and attached documents;
(b)    Reply and attached documents;
(c)    applicant’s Application to Admit Late Documents (AALD) and attached documents dated 27 January 2023;
(d)    respondent’s AALD and attached documents dated 30 January 2023, and
(e)    applicant’s wages schedule dated 25 January 2023, and respondent's wages schedule dated 27 January 2023.

Oral evidence

There was no oral evidence called at the hearing.

FINDINGS AND REASONS

The applicant's pre-injury average weekly earnings

By their written submissions, the parties agree the determination of the applicant's PIAWE is to be calculated in accordance with cl 5(1)(c) of Schedule 3 of the 1987 Act, which provides:
“(a) this clause applies to an injured worker who, at the time of injury, is
…
(c) working under a contract of employment under which the worker is required to undergo training, instruction or examination in order to become qualified to carry on an occupation to which the contract of employment relates.”
There is no issue that as at the date of injury the applicant was in training. That much is demonstrated by the pay advice issued to him dated 5 August 2021, found at his AALD at page 30, which covers the date of injury. The applicant's trainee status remained in place until 21 August 2021, from which time he was classified as a “team member” (see applicant’s AALD, page 35). At that time, the applicant’s base hourly rate was increased from $33.61 to $37.37.
The parties agree the effect of the change in the applicant’s status was to bring into operation cl 5(3)(b) of the 1987 Act which provides the relevant PIAWE means:
“1. On and after the day on which the worker attains the…stage or would, but for the injury, have attained the…stage at which the highest rate is payable–the amount of pre-injury average weekly earnings calculated under clause 6 as if, at the time of the injury, the worker were being paid at the highest rate applicable to that…stage.”
It is common ground that the relevant “stage” was attained by the applicant on 21 August 2021.
The applicant calculates his PIAWE on this basis in the amount of $1,569.54, subject to indexation under the relevant legislation.
For its part, the respondent also noted the applicant's hourly rate increased to $37.37 per hour from approximately 22 August 2021 when he attained the role of “team member” instead of “team member in training”. It calculates the applicant's PIAWE at $1,147.26.
The variance in the pay rates relied upon by the parties is a simple but significant one. The respondent applies a notional hourly base rate to the period of an average working week of 30.7 hours. The applicant, however, notes his pre-injury earnings included significant penalty rates. That is, even as a team member in training he received payments of up to double his base rate, and those penalty rates ought to be applied to the higher applicable rate on and from 22 August 2021.
The applicant submits a simple and literal application that the language contained in
cl 5(3)(b) requires the substitution of the higher rate, in this case the hourly base rate, to the calculation of the PIAWE. Once substituted in that formula, the calculation results in the figure argued for by the applicant, including where applicable the inclusion of double time and Sunday rates.
In my view, the applicant's submission must be correct. The simple meaning of “earnings” received by a worker in respect of a week as set out in cl 6 of Schedule 3 of the 1987 Act is the income of the worker received for work performed in any employment during the week. It is not limited to the base rate but rather is a calculation of a worker's actual earnings.
Once the higher rate is substituted as required under cl 5(3)(b), that rate must in my view, also provide for the inclusion of double time and Sunday rates, or other such overtime and penalty hours as the applicant in fact worked, calculated at the higher rate. Were this not the case, the PIAWE as calculated at the higher rate would not reflect the amount of work in fact carried out by an injured worker. Such an outcome would, in my view, be contrary to the wording in the relevant clause of the Schedule. Rather, the higher rate would only apply to the base hours and not to any hours the subject of shift allowance or other penalty rates. To adopt such an approach would obviate the effect of the clause itself.
For these reasons, I accept the applicant's submissions in relation to the amount of his PIAWE to be calculated and find the amount of the applicant's PIAWE at the date of injury to be $1,561.54, which from the time of commencement of the period claimed, namely 3 June 2022 was indexed to $1,619.26, and from 1 October 2022 was indexed to $1,674.59.
There is no issue that during the period claimed, from 30 June 2022 to date, the applicant’s actual earnings averaged $759.03 per week. That figure is set out in the respondent's wages schedule and is also representative of an averaging of the applicant's total actual earnings of $26,566.24 over the 35-week period up to the lodging of the wages schedules.
The respondent correctly submits the applicant is required to establish he suffers a total or partial incapacity for employment as a result of his injury pursuant to s 33 of the 1987 Act. The respondent submits the applicant has had capacity since 3 June 2022 and no compensation should be paid. It notes the applicant has, since November 2022, been able to earn approximately $1,248 per week, representing a loss of $338.50 per week based on his PIAWE as I have found.
In my view, the applicant does have ongoing incapacity for employment. I have little difficulty in accepting his evidence that he is working to the best of his capabilities, and earning as much income as he is able. I accept the view of Dr Stephenson in his report dated
6 June 2022 together with treating surgeon Dr Smith that the applicant is suffering ongoing incapacity for employment consistent with the nature and extent of his injury. A/Prof Miniter, IME for the respondent, provides a contrary opinion, however it stands alone and is contrary to that of the applicant's treating surgeon and his IME. Dr Smith, being a treating doctor, is entitled to have his opinion given substantial weight unless it can be shown it contains a readily identifiable error. In my view it does not.
Former treating surgeon Dr Baba provided an opinion in which he noted a Boutonniere deformity was usually not a very functionally limiting deformity. I accept that opinion at face value, however, it stands in contrast to the actual evidence of the applicant and the limitations which he states he continues to experience, which in my view are of particular significance in a physically demanding occupation such as that in which he was previously engaged. I have no difficulty in accepting the applicant’s evidence as to the problems he had carrying out even simple tasks such as writing and recording truck registration details, carrying more than one tray of vegetables, and pain and discomfort on opening bags of meat and placing them into tubs. There is no evidence to contradict the applicant’s statements, and I accept him as a witness of truth, noting he has attempted several different jobs since his injury in what I find to be a genuine attempt to return to the workforce to the best of his ability and capacity.
The applicant's account is of continuing discomfort and disability of the right ring finger. I accept that evidence, consistent as it is with IME Dr Stephenson's opinion as to capacity. The applicant's work history is largely consistent with Dr Stephenson’s opinion, and with the findings of the treating surgeon, Dr Smith. Relevantly, the only periods during which the applicant did not earn income were those when he was certified as having no capacity, in accordance with the WorkCover Certificates found at pages 119, 122 and 125 of the Application. For those periods, in my view the applicant is entitled to 80% of the relevant PIAWE for those periods.
In my view, the medical evidence as to ongoing incapacity in this claim is overwhelming. I find in favour of the applicant in accordance with his wages schedule. Accordingly, the Commission will make the findings and order set out on page 1 of the Certificate of Determination.

Requirement for surgery

The respondent disputes the reasonable necessity of the surgery proposed by Dr Smith. The respondent appropriately refers to the decision of Diab v NRMA [2014] NSWWCCPD 72 where Deputy President Roche sets out the relevant indicia for determining whether a proposed treatment is reasonably necessary.
In this matter, the applicant’s claim for the proposed surgery is somewhat complicated by his initial treating surgeon, Dr Baba expressing doubt as to the benefit of surgery. It should be noted that the applicant's diagnosis is not in doubt. Dr Baba’s initial report to the applicant’s GP noted the prospect of potential surgery. In his second report dated 15 December 2021, Dr baba indicated the applicant was having issues being fitted with an appropriate splint, which would be required regardless of whether surgery was carried out or not. In his last report dated 7 February 2022, Dr baba cautioned against the proposed surgery, opining the Boutonniere deformity should be fully correctible passively and noting the long and sometimes difficult recovery from surgical correction. Notwithstanding these issues, it is noteworthy that Dr Baba still made an urgent request for surgical correction on 9 February 2022. It is therefore apparent that whilst Dr Baba was cautious about the surgery, he had certainly not ruled it out given he had made a request to carry it out.
I also note the applicant’s ongoing difficulties as summarised at [27] above, which persist despite Dr Baba’s views surrounding the likelihood of passive recovery of the deformity.
After Dr Baba called into the question the utility of the proposed surgery, the applicant obtained a further report from Dr Smith who recommended the Boutonniere reconstruction and central slip reconstruction. That opinion is supported by Dr Stephenson, orthopaedic IME. Dr Stephenson's diagnostic conclusions were similar to those of both treating surgeons and he unequivocally supported the surgery proposed by Dr Smith, noting the deformity would persist unless the operation was undertaken, and that the surgery would afford the applicant a satisfactory result in removing the deformity, which has persisted notwithstanding physiotherapy and hand therapy.
A/Prof Miniter does not really address the question of whether the hyperflexion injury suffered by the applicant would be sufficient to cause the defect which necessitates the surgery proposed by Dr Smith. I do not prefer his opinion. Rather, I am persuaded by the views of the treating surgeon, Dr Smith and those of Dr Stephenson that the Boutonniere deformity has resulted from the accepted injury, and that the reconstruction is reasonably necessary.
On balance, I am of the view the proposed surgery is reasonably necessary as a result of the injury, and the applicant should have it rather than it be forborne. The applicant has tried conservative treatment to little effect, the surgery is a well-recognised procedure for injuries such as that suffered by the applicant, and it offers the prospect of curing the deformity in his finger. There is no suggestion the surgery is prohibitively expensive, and it is appropriate for the pathology which it seeks to treat.
There is no need for the proposed surgery to offer a guaranteed outcome, nor is it necessary for it to be the only reasonably available treatment modality. The simple question is whether the proposed surgery is reasonably necessary as a result of the applicant’s accepted injury, and for the above reasons I am of the view it is.
For these reasons, the Commission will order that the respondent pay the cost of and incidental to the proposed surgery.

SUMMARY

For the above reasons, the Commission will make the findings and order set out on page 1 of the Certificate of Determination .

[2023] NSWPIC 225

16 May 2023