State Rail Authority of NSW v Baker

[2005] NSWWCCPD 154

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:State Rail Authority of NSW v Baker [2005] NSW WCC PD 154

APPELLANT:  State Rail Authority of NSW

RESPONDENT:  Alan Baker

INSURER:State Rail Authority of NSW

FILE NUMBER:  WCC 8653-04

DATE OF ARBITRATOR’S DECISION:          19 October 2004

DATE OF APPEAL DECISION:  15 December 2005

SUBJECT MATTER OF DECISION: Leave to appeal, monetary threshold, interpretation of section 38 of the Workers Compensation Act 1987

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Hicksons Lawyers

Respondent: Lee, Peisley & Foley, Lawyers

ORDERS MADE ON APPEAL:  Leave to appeal is refused.

The Appellant, the State Rail Authority of NSW, is to pay Mr Baker’s costs in this appeal as agreed or assessed.

BACKGROUND TO THE APPEAL

1. On 19 November 2004, the State Rail Authority of NSW (‘the SRA’) sought leave in the Workers Compensation Commission (‘the Commission’) to bring an appeal against the decision of an arbitrator dated 19 October 2004.

1. The Respondent to the appeal is Alan Baker. Mr Baker was born on 26 February 1941 and is aged 64. He commenced employment with the SRA on 6 June 1956 and became a train driver in 1966. On 23 December 2003, Mr Baker lodged a claim for weekly compensation and medical expenses for a psychological injury arising from multiple traumatic experiences arising out of his employment.

1. On 19 August 2004, the Arbitrator held a teleconference with the parties. On 14 September 2004, conciliation having proved unsuccessful, the Arbitrator conducted an arbitration hearing and, on 19 October 2004, he delivered his decision, set out below.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 19 October 2004, records the Arbitrator’s orders as follows:

“1. That the Respondent pay the Applicant weekly compensation at the applicable award rate of $953.80 for a period of 26 weeks from 10 August, 2003, and thereafter at the rate of $763.04 for the period up to 27 March, 2004, under s 38 of the 1987 Act.
2. That the Respondent pay the Applicant’s costs as agreed or assessed.”

1. In his Statement of Reasons for Decision, the Arbitrator summarised the resolution of issues in dispute as follows:

“• On 23 December, 2002, Alan Baker received an injury in the form of Post Traumatic Stress Disorder arising out of or in the course of his employment as a train driver with the State Rail Authority.
• Mr Baker’s employment at that time and over a period of 46 years with the same employer was a substantial contributing factor to his injury.
• Mr Baker was totally incapacitated for work as a result of his injuries from 25 January, 2003.
• Mr Baker was partially incapacitated for work as a result of his injuries from 8 August, 2003.
• Mr Baker’s probable weekly earnings, but for the injury, had he continued to be employed in the same or some comparable employment, are $953.80 per week (Award rate).
• He sought suitable employment, and was not able to obtain it, as the respondent did not take appropriate steps to rehabilitate and return the applicant to work, despite him being ready, willing and able to do so.
• Alan Baker has already been paid compensation in respect of the period 21 January, 2003 to 9 August, 2003.
• Alan Baker is therefore entitled pursuant to s 38 of the Act to weekly payments for the period of partial incapacity for work from 10 August, 2003 for a period of 26 weeks at the rate of $953.80 per week, and thereafter for the period up to 27 March, 2004 at the rate of $763.04 per week.”

1. The Arbitrator also noted that Mr Baker’s medical expenses had been met, and Mr Baker no longer pressed that part of his application.

ISSUES IN DISPUTE

1. The issue disputed by the SRA in the appeal is the rate at which the Arbitrator awarded Mr Baker weekly compensation for 26 weeks from 10 August 2003. The SRA submits the Arbitrator made an error of law by incorrectly awarding Mr Baker weekly compensation pursuant to section 38(3) of the Workers Compensation Act 1987 (‘the 1987 Act’) at 100% rather than 80% of his current weekly wage rate. Mr Baker’s solicitor, however, submits the SRA should be denied leave to appeal. This is discussed below.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:

“(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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission 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. 

1. Neither party sought to adduce fresh evidence.

LEAVE

1. Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. While the appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act, there is also a monetary threshold. Section 352(2) requires:

“(2)     The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and

(b) at least 20% of the amount awarded in the decision appealed against.”

1. With regard to section 352(2), according to the SRA, the amount of compensation at issue is

   $24,798.80 and represents 82.7% of the amount awarded by the Arbitrator. However, Mr Baker’s solicitor submits the amount of compensation at issue is $4,959.04, which is both less than $5,000 and less than 20% of the total compensation awarded by the Arbitrator of $30,140.08, and, therefore, leave should not be granted.

2. The Arbitrator awarded Mr Baker weekly compensation of $953.80 from 10 August 2003 for 26 weeks (ie until 8 February 2004), a total of $24,798.80. For the period thereafter (ie from 9 February 2004) until 27 March 2004, a period of 7 weeks, he awarded Mr Baker weekly compensation of $763.04, a total of $5,341.28. Thus, the total weekly compensation awarded by the Arbitrator was $30,140.08.

1. The SRA submits the Arbitrator made an error of law by incorrectly awarding Mr Baker weekly compensation at 100% rather than 80% of his current weekly wage rate of $953.80 for the period of 26 weeks from 10 August 2004. As Mr Baker’s solicitor points out, and I agree, the difference between 100% and 80% of his current weekly wage rate of $953.80 for this period is $4,959.76, less than the required threshold of $5,000 required by section 352(2)(a), and also less than 20% of the total award of $30,140.08 required by section 352(2)(b). Indeed, I calculate that $4,959.76 is 16.45% of the amount awarded.

1. Thus, I am not satisfied that the threshold in section 352(2) has been met, and leave to appeal is refused.

COMMENTS ON THE ISSUE IN DISPUTE

1. The SRA’s ground of appeal is that the Arbitrator made an error of law by determining that Mr Baker was entitled to his current weekly wage rate of $953.80 for the 26 weeks from 10 August 2003, pursuant to section 38 of the 1987 Act. Section 38 states relevantly:

“38 Partially incapacitated workers not suitably employed—special initial payments while seeking employment

(1) Entitlement. If

(a) a worker is partially incapacitated for work as a result of an injury, and
(b) the worker is not suitably employed during any period of that partial incapacity for work,

the worker is to be compensated in accordance with this section during each such period as if the worker’s incapacity for work were total.
(2) Maximum period of entitlement. The maximum total period for which the worker may be so compensated is 52 weeks.
(3) Rate of compensation. When a worker is so compensated, the compensation is payable at the relevant rate prescribed by this Act for the period of incapacity concerned. However, after the first 26 weeks of incapacity, the rate is the greater of the following rates:

(a) 80% of the worker’s current weekly wage rate (that is, 80% of the rate prescribed by this Act for the first 26 weeks of incapacity),
(b) the statutory indexed rate (that is, the rate prescribed by this Act for a period of incapacity after the first 26 weeks).

(4) ...”

1. The SRA submits the Arbitrator should have made an award of 80% of Mr Baker’s current weekly wage rate of $953.80 for this period, as submitted by Mr Baker’s counsel in his written submissions to the Arbitrator. The SRA refers to the Arbitrator having relied on the decision of Walker J in the Compensation Court of NSW in Aughterlony v Hydrotech Scientific Services Pty Ltd (1997) 15 NSWCCR 587 (‘Aughterlony’), and suggests the Arbitrator misinterpreted that decision.

1. The SRA is correct in saying that Mr Baker’s counsel submitted that Mr Baker was entitled to an award of 80% of his current weekly wage rate of $953.80, ie $763.04, from 10 August 2003. I also note the Arbitrator found Mr Baker was paid weekly compensation for the period 21 January 2003 to 9 August 2003.

1. However, I am not clear whether the Arbitrator misinterpreted Walker J’s judgment in Aughterlony. In that case, His Honour held:

“The words ‘as if the worker’s capacity were total’ [in section 38(1)] clearly refers to payment that any applicant would otherwise receive for total incapacity during the first 26 weeks prescribed in the first sentence in section 38(3).”

Then, after the first 26 weeks, the worker is entitled to weekly compensation at whichever is greater of (a) 80% of his current weekly wage rate, or (b) the statutory indexed rate. (It should be remembered in reading Aughterlony that section 38(2) of the 1987 Act was amended after that decision, in 1998, to reduce the number of weeks from 104 to 52.)

1. In my view, what appears to have happened in Mr Baker’s case is that the Arbitrator overlooked the fact that Mr Baker had already received compensation for at least 26 weeks during the period 21 January 2003 to 9 August 2003 in respect of total incapacity. In the second sentence of subsection 38(3), the reference is to “the first 26 weeks of incapacity” – the word incapacity is not qualified by the adjectives ‘total’ or ‘partial’ and so should be interpreted as meaning any period of compensable incapacity, whether total or partial. However, subsections 38(1) and (2) specifically refer to an entitlement for ‘partial incapacity’. Thus any prior period of total incapacity in respect of which weekly compensation has been paid that must be taken into account as a result of subsection 38(3), whilst affecting the rate at which compensation is paid, does not affect the maximum total period of 52 weeks during which the worker has a section 38 entitlement.

1. It is therefore my opinion that in Mr Baker’s case, for the period from 10 August 2003 to 27 March 2004, during which he was partially incapacitated (a period less than the maximum 52 weeks during which a worker has a section 38 entitlement), he was only entitled to weekly compensation at 80% of his current weekly wage rate, ie at the rate of $763.04, because he had already received weekly compensation for incapacity for the period 21 January 2003 to 9 August 2003.

1. I note that by letter to the Commission dated 16 November 2004, the SRA’s lawyers requested that the matter be referred back to the Arbitrator for either correction of an obvious error pursuant to section 294(3) of the 1998 Act, or reconsideration of the decision in respect of the rate of compensation awarded for the period of 26 weeks from 10 August 2003 pursuant to section 350(3) of the 1998 Act. The SRA’s lawyers attached copies of correspondence with Mr Baker’s lawyers in which the matter was raised, but Mr Baker’s lawyers, while noting the SRA’s lawyers’ concerns about the Arbitrator’s determination, said their client did not consent to the request for a variation of the award for that period because “he feels he is ‘entitled’ to the amount awarded” (letter dated 11 November 2004).

1. The Commission overlooked responding to this letter until July 2005. The Commission then sought the views of the Arbitrator. The Arbitrator said that in view of the fact that Mr Baker did not consent to a variation, and because the matters sought to be reviewed involved an interpretation of section 38 of the 1987 Act, he considered it more appropriate for the issue to be dealt with on an appeal. He therefore declined to reconsider his decision.

1. My comments on this issue are not binding. However, in light of the fact that Mr Baker’s lawyers made written submissions to the Arbitrator that their client was only entitled to weekly compensation at 80% of his current weekly wage rate for the period from 10 August 2003, and that these submissions are consistent with the SRA’s submissions on appeal, it may be an appropriate case for the Arbitrator to reconsider his decision on the rate of payment for the period of 26 weeks from 10 August 2003. A further request for reconsideration could be made under section 350(3).

DECISION

1. Leave to appeal is refused.

COSTS

1. The Appellant, the SRA, is to pay Mr Baker’s costs in this appeal as agreed or assessed.

Robin Handley

Acting Deputy President  

15 December 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE