Susan Willis and Comcare
[2014] AATA 603
[2014] AATA 603
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/4346
Re
Susan Willis
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Senior Member Bernard J McCabe
Date 27 August 2014 Place Brisbane The decision under review is affirmed.
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Senior Member Bernard J McCabe
CATCHWORDS
COMPENSATION – Dispute concerning calculation of Normal Weekly Earnings – Respondent accepts liability for applicant’s injury – Applicant continues to work reduced hours – Respondent pays difference of current earnings and previous Normal Weekly Earnings – Effect of Higher Duties Allowance and Work Location Allowance on calculation – Reviewable decision affirmed.
LEGISLATION
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 8(1); 8(6); 8(7); 8(9); 8(9A)
CASES
ASP Ship Management Pty Ltd v Wood (2007) 161 FCR 429
McDonald v Department of Defence [1999] FCA 882
REASONS FOR DECISION
Senior Member Bernard J McCabe
Susan Willis works for the Australian Customs and Border Protection Service (“Customs”). She was injured at work in 2009 and was incapacitated for a time. Comcare accepted it was liable to pay compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the Act”). Ms Willis commenced a graduated return-to-work program and was working 24 hours a week by 2011. That was less than her ordinary full-time load so Comcare “topped up” her pay under s 19 of the Act so it matched her pre-injury rate of pay, or her Normal Weekly Earnings (“NWE”), as calculated pursuant to s 8 of the Act. A dispute has arisen as to how the NWE should be calculated.
Ms Willis says the calculation of her NWE should be adjusted to reflect a Higher Duties Allowance and a Work Location Allowance (“location allowance”). Both allowances are provided for in the relevant enterprise agreement. Both allowances were paid to the applicant after she transferred to Brisbane in 2011.
The respondent disagrees. It says the amount it pays to the applicant pursuant to s 19 of the Act should actually go down when she is in receipt of these allowances because the difference should narrow between what she has actually earned and the amount of the NWE which was fixed without reference to those payments. The parties have asked the Tribunal to resolve the issue.
THE TWO ALLOWANCES
I shall begin by explaining the nature of the two allowances in questions here. The first is the higher duties allowance.
I was provided with a statement from Mr John Michael Drake, a Customs manager, who explained the hierarchy of positions within the Customs organisation (exhibit 5). He said there was a director and a number of senior managers in the area in which the applicant worked, and three levels of Customs officers. Ms Willis was a level one officer. The level two officers were more senior and did more complex work – and they were paid more. The level three officers were still more senior. Mr Drake said it was common for more junior officers to fill in for their senior colleagues when the need arose. He explained at paragraph 7 of exhibit 5:
It is common practice that when a Level 2 Customs Officer is absent for an extended period (i.e. more than 2-3 days) a Level 1 Customs Officer is temporarily assigned to the Level 2 Customs Officer’s position to perform their duties, taking the full responsibility of the position. The Officer is required to work at the Level 2 Customs Officer work level standard and they receive a Higher Duties Allowance. This situation is analogous to a temporary transfer but at a higher level. Subject to availability, the opportunity to perform temporary higher duties is shared around between the various Level 1 Customs Officers to give each of them more experience.
Mr Drake’s statement appears consistent with the provisions in the Enterprise Agreements that deal with higher duties allowance: see clause 17.21 of the 2010-2011 Enterprise Agreement (exhibit 2), and clause 18.17 of the 2011-2014 Enterprise Agreement (exhibit 3), which are, for present purposes, effectively the same. The 2011-2014 Enterprise Agreement provides (at clause 18.17.2):
Employees who are assigned all the duties of a higher classification for a continuous period of one day or more will be paid an allowance equal to the difference between the employee’s own salary and the salary the employee would receive if promoted to the higher classification. [Emphasis added]
The emphasised words in the 2011-2014 agreement are identical to the words in clause 17.71.2 of the 2010-2011 Enterprise Agreement. I will have more to say about the significance of this clause shortly. I note that in both agreements there is a clause stating the higher duties allowance is regarded as salary for the purpose of calculating other allowances and benefits.
Mr Drake added that Ms Willis had performed the duties of “a level 2 Customs Officer” on a number of occasions (exhibit 5 at [9]. He added she had never been employed as a Level 2 Customs Officer on a permanent basis (exhibit 5 at [9]).
The Work Location Allowance was introduced in the 2011-2014 Enterprise Agreement. It replaced all of the specific allowances that were available for working at particular locations. (Employees at Brisbane airport were previously entitled to a “Brisbane Airport Customs House Allowance” under the 2010-2011 Enterprise Agreement.) The 2011-2014 Enterprise Agreement explained at clause 18.30 that the location allowance was paid to offset the additional cost of working at locations like Brisbane airport that were poorly served by public transport (exhibit 3, p 69). The Enterprise Agreements do not suggest the location allowance is to be regarded as salary.
CALCULATING NORMAL WEEKLY EARNINGS, OR NWE
Section 8 of the Act explains how NWE are calculated. The basic formula is contained in s 8(1) but the other sub-sections contain specific rules that might affect the calculation in particular cases. Section 8(7) deals with the effect of pay rises consequent upon promotion. The sub-section provides:
(7) Subject to this section, if:
(a) an employee continues to be employed by the Commonwealth or a licensed corporation after the date of an injury; and
(b) the minimum amount per week payable to the employee in respect of that employment is increased because of the promotion of the employee;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased.
The applicant argues her higher duties allowance was a temporary promotion, so that the NWE should be adjusted in accordance with sub-section (7). I disagree. The terms of the 2011-2014 Enterprise Agreement I quoted above clearly distinguish between the effect of a promotion and assignment to higher duties. While the employee assigned to higher duties does the work and receives the pay of an employee on the higher classification, the agreement does not describe the assignment as a temporary promotion. I think that reflects a common sense understanding of the concept of promotion which applies to the interpretation of s 8(7): a promotion involves a substantive change in classification or rank. Ms Willis did not get promoted in that sense, so she cannot benefit from s 8(7) in relation to the higher duties allowance.
That interpretation makes sense for other reasons. Comcare pointed out in its submissions that it would be administratively difficult to calculate NWE afresh every time an employee in receipt of compensation was assigned higher duties, given it would also be necessary to undertake a further recalculation to account for an effective demotion when the higher duties concluded. That sort of volatility is not just costly; it also sits uneasily with the legislative objective of trying to tether an employee’s earnings to a benchmark calculated just before the employee became incapacitated.
The applicant says s 8(6) may also be relevant. That sub-section provides:
(6) Subject to this section, if the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth or a licensed corporation at the date of the injury is increased, or would have been increased if the employee had continued in that employment, because of:
(a) the attainment by the employee of a particular age;
(b) the completion by the employee of a particular period of service; or
(c) the receipt by the employee of an increase in salary, wages or pay by way of an increment in a range of salary, wages or pay applicable to the employee or to his or her office, position or appointment;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased, or would have been increased, as the case may be.
The applicant suggests s 8(6)(c) in particular is relevant here in relation to both the higher duties allowance and the location allowance. Comcare disagrees: it says neither allowance is an increment. Comcare is right. Neither allowance could be regarded as an increment according to the ordinary settled meaning of that term which the Australian Concise Oxford Dictionary says is: “an increase or addition, especially one of a series on a fixed scale” (Emphasis added).
I think Comcare is on particularly solid ground in relation to the location allowance. Whereas the Enterprise Agreements say the higher duties allowance should be treated as salary, the location allowance is pointedly not treated in that way. I do not see how the location allowance could be described as an increment to salary, wages or pay in those circumstances. But I think Comcare’s interpretation is preferable in relation to the higher duties allowance as well. While the higher duties allowance represents an additional amount of salary, that addition is not in the form of a stepped increase like that which is common in the pay scales of many public service roles. Put simply, it is an allowance, not an increment, and the words are not interchangeable for present purposes. I note the Federal Court appeared to take that approach in McDonald v Department of Defence [1999] FCA 882 per Sundberg J at [12].
That leaves only the applicant’s argument under ss 8(9) and 8(9A). It applies in particular to the location allowance. As I understand it, the applicant argues she is entitled to an increase in her NWE by the “relevant percentage”. That expression is defined in s 8(9A) in the following terms:
(9A) For the purposes of subsection (9), relevant percentage means the same percentage as the percentage of increase or reduction in the minimum amount per week payable in respect of employees included in a class of employees of which the employee was a member at the date of the injury as a result of:
(a) the operation of a law of the Commonwealth or of a State or Territory; or
(b) the making, alteration or operation of an award, order, determination or industrial agreement or the doing of any other act or thing, under such a law.
Ms Willis says she remains a member of a broad class that includes level one Customs officers. She says she has become entitled to the location allowance which is payable under an industrial agreement by virtue of the fact she is working in Brisbane – but that entitlement is available to any level one Customs officer who works at one of several locations. She says Brisbane-based officers do not form a separate class that she joined after she was injured. Comcare takes a different view. It argues level one Customs officers in Hobart are in a different class to the one Ms Willis joined when she started work in Brisbane because they are paid differently.
I think the applicant’s approach is right. Ms Willis is doing the same job at the same classification under the same industrial agreement. She has become entitled to a further payment because of where she is working, but that is all. The class should be drawn broadly to avoid arbitrary distinctions and anomalies, as the Full Court explained in ASP Ship Management Pty Ltd v Wood (2007) 161 FCR 429. In that case, which dealt with the equivalent provisions in the Seafarers Rehabilitation and Compensation Act 1992 (Cth), the Court emphasised the importance of preserving “relativity…between the compensation paid and the varying levels of remuneration over the post-injury period”: at 435 per French, Tamberlin and Rares JJ (at [21]). The Enterprise Agreements explain the location allowance (and its predecessor) were paid to reflect the higher cost of traveling to and from work in locations like Brisbane airport that were poorly served by public transport. I do not think the availability of that site-specific payment serves to thrust the recipients into a different class to their colleagues working at other locations, like Hobart. Having said that, the fact the allowance is available to members of the class who happen to be working in Brisbane airport (along with some other locations) means the location allowance can be used to calculate the “relevant percentage”, which is applicable to the applicant.
I do not think the same argument is available in relation to the higher duties allowance. When she is assigned to higher duties, the applicant is being paid at a different rate to her colleagues. Indeed, the Enterprise Agreements make it clear she is being paid at the same rate as employees in the higher classification. Being assigned higher duties is in that sense exceptional, in contrast to being paid a location allowance which is available as a matter of course to every Customs officer who happens to work in specified locations.
CONCLUSION
Comcare’s decision in relation to the Higher Duties allowance must be affirmed for the reasons I have explained. I note the reviewable decision dated 6 August 2013 does not refer to the work location allowance: I understand Comcare was, at an earlier stage, taking account of the location allowance in its calculation of NWE but now seeks to end that practice. It has asked for me to vary the decision to that effect, but – for reasons I have explained above – I decline to do so. It should continue the practice it previously followed in this regard.
I certify that the preceding 20 (twenty) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe. ........................................................................
Associate
Dated 27 August 2014
Date of hearing 15 May 2014 Date final submissions received 10 June 2014 Counsel for the Applicant Mr M Black Solicitors for the Applicant Maurice Blackburn Lawyers Counsel for the Respondent Miss E Ford Solicitors for the Respondent Sparke Helmore Lawyers
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