West and Telstra Corporation Ltd - [2002] AATA 852

DECISION AND REASONS FOR DECISION [2002] AATA 852

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2002/256

GENERAL ADMINISTRATIVE DIVISION          )
           Re      MARTIN WEST
  Applicant
           And    TELSTRA CORPORATION LTD
  Respondent

DECISION

Tribunal Ms N Bell, Member

Date27 September 2002
PlaceSydney

Decision The Tribunal sets aside the decision under review and in substitution therefor remits the matter to the Respondent to calculate the Applicant's normal weekly earnings in relation to, pursuant to section 8(5) of the Safety, Rehabilitation and Compensation Act 1988, a relevant period of the latest 12 months before the date of the Applicant's injury.

[SGD] Ms N Bell
Member
CATCHWORDS
COMPENSATION – method of calculation of normal weekly earnings – penalty allowances – fair representation of weekly rate of pay – correct "relevant period" prior to date of injury – 12 months
Safety, Rehabilitation and Compensation Act 1988 – ss. 8, 9
Re Zarb and Comcare (1997) 48 ALD 718
Re Zegura and Comcare (AAT 12740, 25 March 1998)
Re Zegura and Comcare (AAT 11555, 13 January 1997)

REASONS FOR DECISION

27 September 2002 Ms N Bell

This is an application by Mr Martin West ("the Applicant") for review of a decision by GIO for Telstra Corporation Ltd ("the Respondent") dated 14 January 2002, to determine the Applicant's compensation by calculating the Applicant's normal weekly earnings having regard to the Applicant's earnings for the period of 12 weeks prior to the Applicant's injury.
The decision under review arose out of a decision of the Tribunal dated 13 October 2000 which was in accordance with minutes of consent signed by the solicitors for both parties to the effect that the Respondent would pay the Applicant compensation for a closed period from 13 September 1999 to 10 October 2000.
The issue for the Tribunal to consider is the correct "relevant period" to which regard should be had by the Respondent in calculating the Applicant's normal weekly earnings. This involves consideration of the provisions of sections 8 and 9 of the Safety, Rehabilitation and Compensation Act 1988 ("the Act").
The Applicant was represented by Mr Leo Grey of Counsel and the Respondent was represented by Mr Brendan Kelly of Counsel. The following documentary evidence was before the Tribunal:
Exhibit          Document    Date
TD1     T-Documents T1-T72
TD2     T-Documents (N2000/343)
A1      Applicant's Group Certificate        1998-99
A2      Applicant's pay slips          January 1999-September 1999

The Applicant says, in respect of the decision under review, that calculation by the Respondent of the Applicant's normal weekly earnings by reference to the Applicant's earnings for the period of 12 weeks prior to the date of injury is not a fair basis on which to make that calculation and that a fair basis on which to make the calculation would be by reference to the Applicant's earnings over a period of 12 months before the date of the Applicant's injury.
It is not in dispute that the Applicant suffered a condition of aggravation of major depression and anxiety, with the date of injury being 13 September 1999. It is…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] AATA 852
Decision Date: 27 September 2002

CaseChat Overview and Summary

In the case of West and Telstra Corporation Ltd, the applicant, Mr West, contested the calculation of his normal weekly earnings for the purposes of compensation under the Safety, Rehabilitation and Compensation Act 1988. The dispute arose due to the significant seasonal variations in Mr West's earnings, particularly in shift allowances, which the respondent, Telstra Corporation Ltd, had not adequately accounted for in its calculation. The case was heard by the Administrative Appeals Tribunal (AAT).

The primary legal issue before the tribunal was whether the respondent's method of calculating Mr West's normal weekly earnings adequately represented his earnings prior to his injury. Specifically, the tribunal had to determine whether the statutory definition of "relevant period" in section 9(1) of the Act required adherence to a strict two-week period or if a longer period could be considered under section 8(5) if it more accurately reflected the employee's earnings.

The tribunal found that the respondent had already determined to calculate the applicant's normal weekly earnings using a period of 12 weeks, rather than the statutory two weeks. The tribunal noted that while the statutory definition generally provides for a two-week period, it also allows for a longer period if it would more accurately represent the employee's earnings. Given the seasonal variations in Mr West's earnings, the tribunal held that a 12-week period would provide a fairer representation of his weekly rate of pay. Consequently, the tribunal set aside the decision under review and remitted the matter to the respondent to recalculate Mr West's normal weekly earnings based on a 12-month period.

The tribunal's decision emphasized the importance of accurately reflecting an employee's earnings when calculating compensation, particularly in cases involving significant seasonal variations. The tribunal directed the respondent to use a period that would fairly represent Mr West's earnings, ensuring that the compensation provided was just and appropriate.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The Applicant said that it had been the practice in his workplace to assign an individual consultant to a customer, some of whose problems lasted over months, but that this practice had changed. He agreed that when on sick leave he would not attract any penalty rates. He also agreed that from 20 March 1999 he had five days annual leave and from 5 June 1999 he had five days annual leave but said that he would have received a leave loading for these periods. He did not know how much that loading was. The Applicant also said that it was very rare for him to work overtime.Other evidence Exhibit A1 is the Applicant's group certificate for the financial year 1998/ 1999. The certificate shows a gross income of $48,019.88. That annual gross income, when divided by 52, yields a gross average weekly income of $923.46. By contrast, the normal weekly earnings calculated by the Respondent were, from 13 September 1999, $856.68 and, from 23 December 1999, $873.82. Exhibit A2 is the Applicant's pay slips for the period ended 6 January 1999 to the period ended 15 September 1999. The two payslips for January 1999 show fortnightly shift allowance payments of $346.69 and $507.08 respectively. Thereafter, the following fortnightly shift allowance payments are shown in the following months:February $944.66 ending 3/2/99 $00.00 ending 17/2/99March $301.55 ending 3/3/99 $329.80 ending 17/3/99 $360.56 ending 31/3/99April $227.04 ending 14/4/99 May $596.10 ending 12/5/99 $374.06 ending 26/5/99June $204.53 ending 9/6/99 $182.78 ending 23/6/99July $527.83 ending 7/7/99 $176.28 ending 21/7/99 August $308.05 ending 4/8/99 $132.02 ending 18/8/99September $351.55 ending 1/9/99 $220.54 ending 15/9/99 The above figures show that the Applicant, in the first three-quarters of 1999, received the most shift allowance in the first quarter of 1999, being $2790.34. In the second quarter of 1999 he received $1584.51 (although the payslip for the fortnight ending 28/4/99 was not included in the bundle of payslips handed to the Tribunal) and in the third quarter, being the period used by the Respondent to calculate the Applicant's normal weekly earnings, he received $1716.27 in shift allowance. No figures were available to the Tribunal in respect of the last quarter of 1998.Submissions Mr Grey for the Applicant submitted that the Applicant will have suffered a substantial drop in income if his normal weekly earnings are calculated so as to ignore the seasonal changes in shift allowance earnings evidenced by the Applicant's payslips. Mr Grey referred the Tribunal to the definition of "relevant period" in section 9(1) of the Act and submitted that in many cases that definition will create no difficulties. He submitted that the Respondent is not in error in using a period of 12 weeks rather than the two weeks provided for in section 9(1) of the Act but if the Respondent chooses to take itself outside the statutory two week period, then it should choose a period that fairly represents the Applicant's earnings.

Decision

Reasons for decision

I note that, by calculating normal weekly earnings by reference to a period of 12 weeks rather than to the period of two weeks provided for in section 9(1) of the Act, the Respondent has already determined to calculate the Applicant's normal weekly earnings pursuant to section 8(5). It is therefore unnecessary for the Respondent to embark on the exercise of comparison between a calculation under section 9(1) and calculation under section 8(5) that was directed by Senior Member Allen in Zegura (AAT 11555, 13 January 1997).Decision The Tribunal sets aside the decision under review and in substitution therefor remits the matter to the Respondent to calculate the Applicant's normal weekly earnings in relation to, pursuant to section 8(5) of the Safety, Rehabilitation andCompensation Act 1988, a relevant period of the latest 12 months before the date of the Applicant's injury.

Ratio Decidendi

Legal Principle Established

In reply Mr Grey noted that in the Applicant's case a long period of 13 months incapacity must be calculated and that that period involves significant seasonal variations. He also noted that this application involves no question of overtime.Consideration Section 8 of the Act provides relevantly:Normal weekly earnings8. (1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula: (NH x RP) + Awhere: NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period; RP is the employee's average hourly ordinary time rate of pay during that period; and A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.(2) Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula: NH x ORwhere: NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and OR is the employee's average hourly overtime rate of pay during that period.(3) Where an employee was, at the date of the injury, employed by the Commonwealth or a licensed corporation in part-time employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth or the licensed corporation.(4) Where, because of the shortness of the relevant period, it is impracticable to calculate the normal weekly earnings of an employee before an injury under subsection (1) or (2), the normal weekly earnings of the employee before the date of injury shall be taken to be the normal weekly earnings before that date of another employee performing comparable work, being normal weekly earnings from employment by the Commonwealth or a licensed corporation and calculated under subsection (1) or (2), as the case requires.(5) Where, because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.