Spencer v State of New South Wales
[2015] NSWWCCPD 37
•26 June 2015
| WORKERS COMPENSATION COMMISSION | |||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||
| CITATION: | Spencer v State of New South Wales [2015] NSWWCCPD 37 | ||
| APPELLANT: | Gary Spencer | ||
| RESPONDENT: | State of New South Wales | ||
| INSURER: | Employers Mutual NSW Ltd | ||
| FILE NUMBER: | A1-6854/14 | ||
| ARBITRATOR: | Ms C McDonald | ||
| DATE OF ARBITRATOR’S DECISION: | 31 March 2015 | ||
| DATE OF APPEAL DECISION: | 26 June 2015 | ||
| SUBJECT MATTER OF DECISION: | Assessment of probable earnings but for injury; s 40(2)(a) of the Workers Compensation Act 1987, as it stood prior to the amendments introduced by the Workers Compensation Legislation Amendment Act 2012 | ||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||
| HEARING: | On the papers | ||
| REPRESENTATION: | Appellant: | Taylor & Scott Lawyers | |
| Respondent: | TurksLegal | ||
| ORDERS MADE ON APPEAL: | 1. By consent, the respondent’s name is amended to be State of New South Wales. 2. The Arbitrator’s determination of 31 March 2015, as amended on 22 April 2015, is confirmed. | ||
INTRODUCTION
This appeal concerns a claim for weekly compensation by a worker under the provisions of s 40 of the Workers Compensation Act 1987, as it stood prior to the amendments introduced by the Workers Compensation Legislation Amendment Act 2012.
The issue before the Arbitrator, and on appeal, concerns the determination of the amount the worker would probably have been earning as a worker but for his injury and had he continued to be employed in the same or some comparable employment (s 40(2)(a)), that is, probable earnings but for injury (probable earnings). The dispute is whether, as the Arbitrator found, the worker’s probable earnings were those as a cleaner, or, as the worker contended, the much higher amount as a security guard.
For the reasons explained below, the appeal is unsuccessful and the Arbitrator’s determination is confirmed.
BACKGROUND
The appellant worker, Gary Spencer, started work as a casual security guard with the respondent employer at Wollongong Hospital in or about 1998. Though the respondent was sued as the Illawarra Shoalhaven Local Health District, the parties have agreed that its correct legal identity is the State of New South Wales and the Commission’s file has been amended to reflect that fact.
On 6 October 2000, Mr Spencer injured his right knee while restraining a patient. He took no time off work and continued to perform his usual duties.
In January 2001, Mr Spencer was demoted to the position of hospital assistant grade 2 (cleaner) because of disciplinary reasons unrelated to his injury. This was significant and is considered later in this decision.
On 22 August 2002, Mr Spencer injured his left knee while squatting to connect a hose.
On 12 November 2002, the respondent terminated Mr Spencer’s employment on medical grounds, effective on 20 November 2002.
The parties do not dispute that, as a result of his injuries, Mr Spencer is partially incapacitated for work as a cleaner and as a security guard. Nor is it disputed that, between 2003 and 2013, Mr Spencer had various periods of partial and total incapacity. During those periods, he was paid voluntary weekly compensation.
On 4 March 2013, Mr Spencer’s voluntary weekly compensation payments were reduced on the basis that he had returned to full-time employment (in fact he had commenced part-time employment in June 2012). A work capacity decision took effect on 10 March 2014 and the parties have agreed that the Commission’s jurisdiction to determine his entitlement to weekly compensation ceased on that date.
The claim before the Commission therefore concerns Mr Spencer’s entitlement to weekly compensation under s 40 from 4 March 2013 until 9 March 2014. That claim turns on the calculation of Mr Spencer’s probable earnings but for injury.
Counsel for Mr Spencer, Mr Austin, argued that probable earnings should be determined by reference to Mr Spencer’s previous employment as a security guard because, but for his injury, he would have worked in that role following the termination of his employment. At the relevant time, that job paid $1,281 per week.
The respondent’s legal representative submitted that as Mr Spencer’s classification had changed in 2001, for reasons unrelated to his first injury, his loss should be assessed by reference to the wage payable for a cleaner, which was $677.81 per week.
The Arbitrator identified (at [46]) her task to be “to determine the weekly amount [Mr Spencer] would probably have been earning if uninjured” (Mitchell v Central West Health Service (1997) 14 NSWCCR 526 at 529–530 (Mitchell)). She said (at [47]) that there was “no evidence Mr Spencer would have worked as a security guard after his employment was terminated if not for the injury”. There was therefore no basis for finding there was a “real prospect” that he would have done so and she could “disregard that possibility in making an assessment under s 40(2)(a)” ([47]).
The Arbitrator added (at [48]) that she assessed Mr Spencer’s incapacity by reference to the amount he was earning at the time his injury resulted in an incapacity for work and by reference to his job at that time. That job was as a cleaner. She therefore found probable earnings to be $677.81 per week. As there were no discretionary factors to take into account, the Arbitrator awarded Mr Spencer the difference between his actual earnings ($562.94 from 4 March 2013 to 30 June 2013 and $617.07 from 1 July 2013 to 9 March 2014) and $677.81, the amount he would have earned as a cleaner but for his injury.
Consistent with the Arbitrator’s determination, the Commission issued a Certificate of Determination on 31 March 2015, which the Arbitrator amended on 22 April 2015 to correct a typing error. The Amended Certificate of Determination made the following orders:
“1.Pursuant to section 54(2)(a) of the Workers Compensation Act 1987, the respondent is to pay the applicant weekly compensation from 4 March 2013 to 15 April 2013 at the rate at which he had been paid immediately prior to 4 March 2013 or $114.87, whichever is the greater.
2.Pursuant to section 40, the respondent is to pay the applicant $114.87 per week from 16 April 2013 to 30 June 2013 and $76.23 per week from 1 July 2013 to 9 March 2014.
3.By consent, the respondent is to pay the applicant $8,500 under section 67 and I note the parties will execute a complying agreement.”
Mr Spencer has appealed.
ON THE PAPERS
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (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.”
Having regard to Practice Directions Nos 1 and 6, 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.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a) finding that there was no evidence that, but for injury, Mr Spencer would have worked as a security guard after his termination (no evidence), and
(b) finding that Mr Spencer’s incapacity for work should be assessed by reference to the amount he was earning at the time of his injury resulting in his incapacity for work and by reference to his job (as a cleaner) at that time (assessment of incapacity for work).
NO EVIDENCE
Submissions
Mr Austin submitted that the determination of probable earnings (identified as step one in Mitchell) is necessarily a hypothetical determination, based on all the known facts and circumstances. The fact that Mr Spencer was working in the demoted position of a cleaner at the time he became incapacitated was not conclusive.
Mr Austin pointed to the following evidence:
(a) Mr Spencer commenced work with the respondent as a security guard;
(b) Mr Spencer worked in that “chosen” (emphasis in the submission) capacity for approximately three years, longer than he worked as a cleaner, that later position not being one of his choosing;
(c) Mr Spencer was first injured in 2000, while working as a security guard;
(d) prior to June 2011, Mr Spencer had had ongoing treatment, including two arthroscopies and a high tibial osteotomy;
(e) Mr Spencer earned far more money as a security guard, and
(f) Mr Spencer’s employment was terminated in December 2002 following his second injury on 22 August 2002, which occurred when he was working as a cleaner.
Discussion and findings
Mr Austin’s submissions have not even attempted to establish relevant error by the Arbitrator.
I accept that the determination of probable earnings is a hypothetical exercise (Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50). The exercise assumes that, but for the injury, the worker’s pre-injury employment would have continued. The complication in the present case is that Mr Spencer had two quite different pre-injury jobs. Each side relied on the job that best suited his or its interests, but neither provided the Arbitrator with any real assistance on why one or the other should be preferred.
At the arbitration, Mr Austin submitted that:
(a) in the circumstances, given that Mr Spencer was originally employed as a security guard, it would be “highly artificial” (T6.28) to find that, but for the injury, he would have worked as a cleaner;
(b) the Arbitrator would find on the evidence that, but for the injury, Mr Spencer would have worked as a security guard following his termination on 12 November 2002 (T8.9);
(c) it was more likely than not that, but for the injury, Mr Spencer would have gone back to find work as a security guard (T8.17), and
(d) Mr Spencer was employed as a security guard, he was transferred to a position as a cleaner, earning less money, and he was then terminated. Consistent with common sense, Mr Spencer “would’ve[,] but for the injury[,] gone out there and found work as a security guard” (T8.34) and the wage of a security guard should be used as the figure for probable earnings.
The difficulty with the above submissions is that Mr Austin took the Arbitrator to no evidence in support of them (I note that the parties agreed that Mr Spencer was originally employed as a security guard). On appeal, Mr Austin has attempted to overcome that deficiency by referring to the matters listed at [22] above. There are two main difficulties with the submissions now made by Mr Austin. First, an appeal is not a rehearing. It is restricted to the identification and correction of error (s 352(5) of the 1998 Act; Raulston v Toll Pty Ltd [2011] NSWWCCPD 25). Second, the submissions have not attempted to establish relevant error by the Arbitrator. Nevertheless, I will deal with each of the points raised in the order in which Mr Austin presented them.
First, the fact that Mr Spencer commenced work with the respondent as a security guard is of limited relevance to whether, in the circumstances, he would have continued to work in that role after the respondent terminated his employment. One would have thought that, if Mr Spencer wanted to continue to work as a security guard, he would have sought out such a position after he was demoted in January 2001. There is no evidence that he did so.
Second, the fact that Mr Spencer worked as a security guard, his “chosen” capacity, for longer than he worked as a cleaner is irrelevant. The question is what he would have earned, but for his injury, had he continued to be employed in the “same or some comparable employment” (s 40(2)(a)). On that issue, the critical evidence was that Mr Spencer’s demotion was unrelated to his first injury. In other words, looking at the situation that would have existed had he not been injured, he would still have lost his position as a security guard and been employed, if he chose to stay with the respondent, as a cleaner.
Third, it follows from the last point in the preceding paragraph that the fact that Mr Spencer was a security guard at the time of the first injury is of limited relevance. Mr Austin’s submission might have some relevance – to the exercise of the s 40 discretion – if Mr Spencer had only received the first injury. That is not the case. His incapacity has resulted from two injuries. At the time he stopped work, he was employed as a cleaner and, on the evidence presented, scant as it was, the Arbitrator was entitled to conclude that his probable earnings were the earnings he would have received as a cleaner.
Fourth, the nature and extent of Mr Spencer’s ongoing treatment is irrelevant to the determination of probable earnings.
Fifth, it is also irrelevant that Mr Spencer earned more as a security guard. The question for the Arbitrator was, as she stated (at [46]), to determine the weekly amount Mr Spencer would probably have been earning if uninjured.
Last, the relevance of the fact that Mr Spencer’s employment was terminated after his second injury, which occurred while he was employed as a cleaner, was not explained. The fact that Mr Spencer was employed as a cleaner at the time the respondent terminated his employment was evidence that supported the Arbitrator’s conclusion and does not assist Mr Spencer. That is because work as a cleaner was the last work performed by Mr Spencer prior to ceasing work. In the absence of evidence to the contrary, that is the work Mr Spencer would have continued to perform but for his injury.
If it were to be seriously argued that Mr Spencer’s probable earnings should have been assessed by reference to his work as a security guard, one would have expected that, at a minimum, evidence would have been led from Mr Spencer as to his intentions regarding his employment had he not been injured. Mr Spencer gave no evidence on that important matter.
It would also have been helpful if, as well as giving evidence about his intentions, evidence had been led about Mr Spencer’s work history, qualifications and experience. His evidence was silent on all these matters. Thus, the Arbitrator was justified in stating that there was no evidence that, but for his injury, Mr Spencer would have worked as a security guard after the respondent terminated his employment. Though it may have been more accurate to say that there was no persuasive evidence on the point, the Arbitrator’s statement that there was no evidence does not amount to a relevant error and makes no difference to the result.
ASSESSMENT OF INCAPACITY FOR WORK
Submissions
Mr Austin submitted that the Arbitrator “erred in finding [at [48]] that [Mr Spencer’s] incapacity for work should be assessed by reference to the amount he was earning at the time of his injury resulting in his incapacity for work and by reference to his job at the time”. He said there should be a logical, coherent and reasonable basis for the inferences drawn from the primary facts and conclusions reached by a trier of fact.
Mr Austin submitted that “the employment transfer” was against Mr Spencer’s wishes and that “[o]rdinarily people are not apt to work in demoted roles on far less pay unless there are circumstances for doing so” (emphasis included in the submission).
Mr Austin drew attention to the fact that Mr Spencer underwent a number of surgeries “from the date of his first injury to June 2011, including a high tibial osteotomy”. He only commenced work as a cleaner in January 2001. Had Mr Spencer remained employed as a cleaner, but on restricted duties, “then the fact that he continued working as a cleaner would be telling and conclusive to [sic] any claim for make up pay under s 40”. The difference here, Mr Austin contended, was that his employment was terminated.
Mr Austin argued that the phrase “but for injury” includes consideration of the circumstances surrounding the injury, such as “undergoing three operations whilst ostensibly maintaining his employment as a cleaner”. To suggest that, in these circumstances, Mr Spencer’s “continuance in the role as a cleaner in some way reflects his probable career path is unreasonable”.
Discussion and findings
Mr Austin’s submissions are untenable and are rejected.
The Arbitrator’s statement (at [48]) that Mr Spencer’s “incapacity should be assessed by reference to the amount he was earning at the time his injury resulted in incapacity for work and by reference to his job at the time” must be read in the context of the issue in dispute. That issue was the determination of the correct amount for probable earnings but for the injury. For the reasons explained earlier, it was open to the Arbitrator to determine that Mr Spencer’s probable earnings were those for a cleaner.
It would have been more accurate to say that the quantification of Mr Spencer’s award of weekly compensation should be assessed by reference to the wage of a cleaner, rather than saying, as the Arbitrator said, that his “incapacity” should be assessed by reference to the amount he was earning at the time his injury resulted in incapacity for work. That is because “incapacity” is usually determined on the medical evidence, not wage rates. However, the meaning of the Arbitrator’s statement is clear. Mr Spencer’s entitlement to weekly compensation was to be assessed by reference to his probable earnings as a cleaner and not as a security guard.
The submission that there should be a logical, coherent and reasonable basis for inferences drawn from the primary facts makes no sense and has no relevance to the case. The Arbitrator did not draw an inference from the primary facts. She did not accept Mr Austin’s submission that Mr Spencer’s probable earnings were those of a security guard. That conclusion was open and disclosed no error.
The Arbitrator’s reasoning was clear and logical. After correctly identifying the issue in dispute, namely, the determination of the weekly amount Mr Spencer would probably have been earning if uninjured, the Arbitrator said that there was no evidence that, but for the injury, Mr Spencer would have worked as a security guard after his employment was terminated. She added that there was, therefore, no basis for finding there was a “real prospect” ([47]) that Mr Spencer would have done so and that she could disregard that possibility in making an assessment under s 40(2)(a).
The Arbitrator’s reference to there being no basis for finding that there was a “real prospect” that, but for his injury, Mr Spencer would have worked as a security guard after the respondent terminated his employment was a reference to that phrase in the decision by Kirby P (as his Honour then was) in Australian Wheat Board v Pantaleo (1984) 3 NSWLR 530 at 540. While his Honour was talking about the prospect of a worker moving from the same employment (as he or she was doing at the time of injury) to some other employment, the Arbitrator’s reliance on that phrase in the circumstances of the present case did not involve any relevant error. That is because the basis for the decision is that the Arbitrator was not satisfied that Mr Spencer had established that his probable earnings were those of a security guard.
The submission that “the employment transfer” (which was a reference to the demotion to the job of cleaner) was against Mr Spencer’s wishes does not advance Mr Spencer’s position on appeal. Mr Spencer was demoted to the position of cleaner because of disciplinary reasons, which were entirely unrelated to his injury. In other words, had he not been injured, Mr Spencer would still have been demoted. This point supports the Arbitrator’s conclusion that probable earnings were those of a cleaner.
The relevance of the submission that, ordinarily, people are not apt to work in demoted roles on less pay, unless there are “circumstances” for doing so, is unclear. The fact is that, for reasons unrelated to his injury, the respondent demoted Mr Spencer to the position of cleaner. Rather than resigning, and seeking work elsewhere as a security guard, Mr Spencer continued to work as a cleaner. In these circumstances, it cannot be said that, but for the injury, Mr Spencer would have continued working as a security guard after the respondent terminated his employment. As previously noted, Mr Spencer gave no evidence that, but for his injury, he would have resumed work as a security guard.
The reference to the fact that Mr Spencer has had surgery to his knees is irrelevant to the issue of probable earnings. The correct approach to determining probable earnings has been considered in several authorities. Mr Austin referred to none of them.
The fact that the respondent terminated Mr Spencer’s employment while he was working as a cleaner was not determinative of the issue in dispute (NSW Harness Racing Club Ltd v Forrest (1995) 12 NSWCCR 217 at 220E) and the Arbitrator did not treat it as such. She did not accept Mr Austin’s submission that it was appropriate to accept the earnings as a security guard as the correct figure for probable earnings. She was not obliged to do so.
Contrary to Mr Austin’s submission, the use of the phrase “but for the injury” in s 40(2)(a) does not include consideration of the circumstances surrounding the injury. It merely indicates that the determination of probable earnings is a hypothetical exercise. One looks at what the worker would have earned if he or she had not been injured. In the present case, the evidence was that, regardless of Mr Spencer’s injury, the respondent would have demoted him to the position of cleaner. That was a matter the Arbitrator was entitled to consider, and did consider (at [42]), in determining probable earnings.
CONCLUSION
The Arbitrator’s conclusion was open on the evidence and disclosed no error.
DECISION
By consent the respondent’s name is amended to be State of New South Wales.
The Arbitrator’s determination of 31 March 2015, as amended on 22 April 2015, is confirmed.
Bill Roche
Deputy President
26 June 2015
I, STEVEN HAMPSON, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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