WFJF and Comcare (Compensation)

[2022] AATA 346

WFJF and Comcare (Compensation) [2022] AATA 346 (1 March 2022)

Division:GENERAL DIVISION

File Numbers:         2016/4791, 2016/6200, 2016/6269-6279, 2017/0779, 2017/0967, 2017/0970-0976

Re:WFJF  

APPLICANT

AndComcare

RESPONDENT

DECISION

Tribunal:Senior Member A Poljak
Dr I Alexander, Senior Member

Date:1 March 2022

Place:Sydney

address

The decisions under review are set aside and remitted to the respondent to quantify the applicant’s entitlements to weekly payments in the period from 26 August 2013 to 24 August 2017 inclusive, under the formula in s 19(2) of the SRC Act and in accordance with these reasons for decision.

....................................[sgd]....................................

Senior Member A Poljak

CATCHWORDS

COMPENSATION – calculation of incapacity payments – what compensation the applicant is entitled to under s 19 – date of increase of the applicant’s normal weekly earnings – whether the applicant is entitled to a further increase after increase due to Enterprise Bargaining Agreement – decisions under review set aside and remitted

LEGISLATION

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 8, 9, 14, 19

REASONS FOR DECISION

Senior Member A Poljak
Dr I Alexander, Senior Member

1 March 2022

1. The applicant was employed by the Australian Taxation Office (ATO) from 2007 until August 2011. The applicant was then employed by the Department of Defence (Defence) from 22 August 2011 to 28 August 2018.

2. The applicant has an accepted claim under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) for specified sites of sprains and strains (bilateral) (neck and shoulder) and secondary major depressive disorder, with date of injury deemed to be 21 May 2009 (the 2009 injury).

3. By Tribunal consent decision dated 16 June 2020 in AAT application 2017/7172 it was decided, in part, in relation to the 2009 injury, that from 2 July 2015 to the current date, and as at the current date, the applicant has not been entitled to receive compensation for incapacity under Part II Division 3 of the SRC Act for the 2009 injury.

4. By Tribunal consent decision dated 16 June 2020 in AAT application 2018/5574 it was decided that the applicant is entitled to compensation under s 14 of the SRC Act for ‘an aggravation of a Major Depressive Disorder’, with date of injury deemed to be 19 April 2012 (the 2012 injury).

5. Applications 2016/4791, 2016/6200, 2016/6269-6279, 2017/0779, 2017/0967, 2017/0970-0976 (the Applications) involve disputes about the calculation of the applicant’s entitlements to compensation for incapacity for various periods from 12 January 2012 to 15 September 2017. The decisions under review in the applications are the reviewable decisions dated 23 August 2016, 1 November 2016, and 31 January 2017 (the Reviewable Decisions).

6. The parties have agreed on the applicant’s entitlement to compensation for incapacity in relation to either the 2009 injury or the 2012 injury except from 4 July 2013 to 15 September 2017 inclusive.

7. The respondent agrees with the applicant’s calculation of his entitlements to compensation under s 19(2) of the SRC Act for the period from 12 January 2012 to 26 September 2012 inclusive as set out at subparagraphs 2.3(a) to (c) of the applicant’s Submissions dated 7 January 2021.

8. In the period from 26 August 2013 to 15 September 2017, it is agreed that the applicant

   is entitled to compensation for incapacity in accordance with s 19(2) of the SRC Act:

   (a)For the 2009 injury in the period from 26 August 2013 up to and including 8 July 2015 for the times he was incapacitated for work due to the 2009 injury; and

   (b)For the 2012 injury in the period from 8 July 2015 up to and including 1 September 2017 for the times he was incapacitated for work due to the 2012 injury.

9. In the period from 27 August 2014 to 23 August 2017 inclusive, during which the applicant was employed by Defence, his salary remained the same and was not increased.

10. From 24 August 2017 Defence employees, including the applicant, received a wage increase due to the enactment of their Enterprise Bargaining Agreement (EBA).

11. It is agreed that pursuant to ss 8(9B) and 8(9F) of the SRC Act the Applicant’s normal weekly earnings (NWE) should be increased annually by reference to the Wage Price Index (WPI) during the period from 27 August 2014 to 23 August 2017 inclusive.

    Issues

12. The remaining issues for determination in the proceedings are:

    (a)What compensation the applicant is entitled to for incapacity under s 19 of the SRC Act in relation to either the 2009 injury or the 2012 injury in the period from 4 July 2013 to 15 September 2017 inclusive.

    (b)Whether the applicant’s NWE is to be increased pursuant to ss 8(9E) and (9F) of the SRC Act on 1 July 2014 or whether he is not entitled to an increase of the NWE in accordance with ss 8(9E) until 1 July 2015.

    (c)Whether the increase to the applicant’s NWE that followed the EBA increase on 24 August 2017 needs to be added on top of the increases to his NWE that had previously been made under ss 8(9E) and 8(9F) of the SRC Act.

    Contentions

13. This matter was heard on the papers. The parties’ contentions are summarised below.

14. The applicant agrees that the NWE is not to be increased from 1 July 2014. However, the applicant contends that his NWE must be increased for the first time from 1 July 2013 as the applicant’s minimum income from employment did not change from 1 July 2012 to 30 June 2013.

15. The applicant submits that, similar to other increases, the NWE increases, by reference to the WPI, pursuant to ss 8(9E) and 8(9F), once applied, cannot be removed or reversed and contends that there are no provisions in the SRC Act which warrant removing or reversing the NWE increases by reference to the WPI which have been made pursuant to ss 8(9E) and 8(9F).

16. The applicant contends that even if the salary increment increase is applied first, the indexation increase must be applied in addition to the salary increment increase whenever the applicant’s income from employment within any financial year (from 1 July to 30 June) remained unchanged. The indexation increase is a ‘further increase’. He states the normal weekly earnings increase pursuant to ss 8(9E) is a ‘further increase’ which must be added in addition to any other increase under the SRC Act.

17. He states that increases to the NWE including increases pursuant to ss 8(6), 8(9), 8(9E) and 8(9F) are percentage increases and such increases are not meant to make the NWE equal to the minimum weekly income.

18. The applicant further submits that s 8(6) was in operation before ss 8(9E), 8(9F) and 8(9G) were introduced to the SRC Act in 2007. As such when s 8(6) was written, an increase due to indexation was not anticipated. To remove any confusion, the Parliament has drafted ss 8(9E), 8(9F) and 8(9G) in a manner which makes the NWE increase by reference to the WPI mandatory. He contends that the NWE increase by reference to the WPI cannot be reversed due to a NWE increase due to a salary increment and that the only reason s 8(6) comes before ss 8(9E), 8(9F) and 8(9G) is that ss 8(9E), 8(9F) and 8(9G) were added to the SRC Act at a later date.

19. The applicant further asserts that s 8(10) of the SRC Act does not operate to reduce the applicant’s NWE calculated pursuant to ss 8(9E), 8(9F) and 8(9G). The applicant’s submissions in this regard address case law and statutory interpretation principles; the construction and operation of s 8(9E); the purpose and object of ss 8(9E), 8(9F) and 8(9G) as expressed in Parliamentary documents; and the interpretation of s 8(10) as explained in Parliamentary documents and case law. He contends, amongst other reasons, given that the Federal Court and this Tribunal have observed that s 8(10) is not to be used to reduce NWE adjusted by reference to the WPI under s 8(9B), therefore s 8(10) cannot be used to reduce the NWE which were adjusted by reference to the WPI under s 8(9E).

20. The applicant submits that for s 8(10)(a) to apply, it needs to be established that ‘what the applicant would have earned if he were not injured’ is less than the applicant’s NWE which has been increased by reference to the WPI pursuant to s 8(9E) of the SRC Act. He details numerous facts that he contends should be considered, if s 8(10) has any application, to help estimate ‘the amount per week of the earnings that the applicant would receive if he were not incapacitated for work’. Such factors include, details of the applicant’s salary increase between 26 February 2007 to 18 October 2010; higher duties which may have been available to the applicant if not for his injury; inability to work overtime due to his injury in the period from 2013 to 2017; he would have changed employment if not for his injury; and the effect of his injury on his work performance and function.

21. The respondent contends that during the period from 4 July 2013 to 23 August 2017 inclusive, during which the applicant’s salary remained the same, his NWE is to be increased for the first time pursuant to ss 8(9E) and (9F) of the SRC Act on 1 July 2015 and not on 1 July 2014 because the applicant had an NWE variation, due to an EBA increase, on 4 July 2013. Therefore, in the 12 months immediately preceding 1 July 2014 there was an increase in his NWE and he is not entitled to an increase in accordance with s 8(9E) until 1 July 2015.

22. The respondent contends that from 24 August 2017 (when Defence employees, including the applicant, received a wage increase due to the enactment of their EBA):

    (a)Subsections 8(9E) and 8(9F) of the SRC Act no longer apply;

    (b)The applicant’s NWE should be adjusted with reference to ss 8(6), 8(9) and 8(9A) of the SRC Act;

    (c)The applicant’s NWE therefore reverts back to the amount provided by the new EBA, increased by the ‘relevant percentage’ calculated in accordance with ss 8(9) to (9G) of the SRC Act.

23. The respondent contends that s 8(6) of the SRC Act is the primary provision in s 8 and has to be applied first, with any percentage increase then applied to the amount calculated under s 8(6), as per the provisions of s 8(9). To apply an EBA increase to an NWE that had previously been adjusted under ss 8(9E) and 8(9F) of the SRC Act would effectively reverse the order in which the s 8 provisions are to be applied.

24. The respondent submits that this is how Parliament intended s 8 to operate, as indicated by the fact that the applicant would be protected from an unfair outcome whilst the wage freeze was in place by the operation of ss 8(9E) and (9F) of the SRC Act; and if he was to receive that increase and then an EBA increase on top of that, the potential for ‘double dipping arises’ as wage increases can reasonably be expected to factor in any wage freeze that has been in place. The respondent further contends that the applicant’s suggested construction of s 8 is likely to leave an employee in a significantly better position than if they had not been injured. Such a result is inconsistent with the evident purpose of s 8 which is to as accurately as possible place an injured employee in the position they would have been if they had not been injured (subject to the reduction of compensation after 45 weeks which seeks to encourage an injured employee to rehabilitate and return to work).

    Consideration

25. Section 19 of the SRC Act provides for the amount of compensation that is payable to employees during the period in which they are incapacitated. Subsection 19(2) provides that compensation is to be calculated under the formula ‘NWE – AE’ (the Formula). Once an employee has been paid compensation in accordance with s 19(2) for a period of 45 times the employee’s normal weekly hours, Comcare’s liability to pay compensation in future weeks is assessed under s 19(3).

26. Subsection 8(1) of the SRC Act provides how the NWE of an employee before an injury shall be calculated in relation to the relevant period (s 9(1)).

27. Where an employee continues to be employed by the Commonwealth, the figure calculated as the applicant’s NWE before the injury may, subject to one qualification, increase or decrease. NWE may either increase or decrease to match the fluctuations in the minimum amount per week payable in respect of other employees in the same class as the injured employee. Subsections 8(9) and (9A) of the SRC Act should be read together. Subsection 8(9) provides:

    The normal weekly earnings of an employee before the date of the employee’s injury, as calculated under the preceding subsections, must, while the employee continues to be employed by the Commonwealth or a licensed corporation, be increased or reduced by the relevant percentage. [emphasis added]

28. Subsection 8(9A) provides:

    For the purposes of subsection (9), relevant percentage means the same percentage as the percentage 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.

29. There are several ways in which an employee’s NWE may be increased under s 8 of the SRC Act. Relevantly, subsection 8(6) of the SRC Act provides:

    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 ... 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.

30. Subsection 8(10) of the SRC Act imposes a ceiling on the amount of NWE calculated under the provisions as ss 8(6), (7) and (9) appear to be cumulative. This is to ensure that an injured employee would not be paid more than an uninjured employee. It relevantly provides:

    If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:

    (a)  where the employee continues to be employed by the Commonwealth or a licensed corporation – the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; …

    (b)  …

    the amount so calculated shall be reduced by the amount of the excess.

31. If, in the 12 months preceding 1 July each year, there has been no increase under ss 8(6), (7) or (9) of the SRC Act and no decrease in them under s 8(9), an employee’s NWE may be increased by s 8(9E) and the amount of the increase is calculated in accordance with s 8(9F). Subsection 8(9F) provides:

    If the normal weekly earnings of an employee before an injury must be increased because of subsection (9E), the amount by which they are increased is the percentage of increase (if any) in the index prescribed by the regulations for the purposes of this subsection over the period of 12 months ending on the 31 December immediately before the relevant 1 July.

32. The effect of s 8(9E) is that the normal weekly earnings of an employee will be further increased by an amount provided under s 8(9F) and in accordance with regulations made under s 8(9G) if, in the 12 months preceding 1 July in a particular year, there was no increase under ss 8(6), (7) and (9).

33. As such, an employee may not benefit from both an increment under s 8(6) and a percentage increase available under s 8(9E) as calculated according to ss 8(9F) and (9G).

34. During the period from 4 July 2013 to 23 August 2017, where the applicant’s salary remained the same, his NWE is to be increased pursuant to ss 8(9E) and (9F) of the SRC Act. However, as the applicant had an NWE variation, due to an EBA increase, on 4 July 2013, he is not entitled to an increase in his NWE in accordance with s 8(9E) of the SRC Act until 1 July 2015.

35. From 24 August 2017, when Defence employees, including the applicant, received a wage increase due to the enactment of an EBA, ss 8(9E) and 8(9F) of the SRC Act no longer apply and the applicant’s NWE is to be adjusted pursuant to ss 8(6), 8(9) and 8(9A) of the SRC Act. The applicant’s NWE therefore reverts back to the amount provided by the new EBA, increased by the ‘relevant percentage’ calculated in accordance with ss 8(9) to (9G) of the SRC Act.

36. Should the applicant receive an increase to his NWE and then an EBA increase, as he contends, there is the potential for ‘double dipping’ as wage increases can reasonably be expected to factor in any wage freeze that has been in place. The applicant’s construction of s 8 is likely to leave an employee in a significantly better position than if they had not been injured, which is inconsistent with the purpose of s 8.

37. For these reasons we accept the respondent’s submissions and application of ss 8(6), 8(9E), 8(9F) and 8(10) of the SRC Act.

38. The NWE amounts in the table below are those that were provided by the respondent. In the period from 26 August 2013 to 24 August 2017 inclusive the applicant’s NWE have been as follows:

Period	WPI	Salary rise (EBA)	NWE
18/04/2012 to 25/04/2012	$1,525.16
26/04/2012 to 30/06/2013	6.5%	$1,624.14
01/07/2013 to 03/07/2013	3.5%	$1,680.98
04/07/2013 to 30/06/2015	2.5%	$1,664.74
01/07/2015 to 30/06/2016	2.6%	$1,706.36
01/07/2016 to 30/06/2017	2.1%	$1,742.20
01/07/2017 to 23/08/2017	2%	$1,777.04
24/08/2017	3%	$1,714.68

Decision

1. The decisions under review are set aside and remitted to the respondent to quantify the applicant’s entitlements to weekly payments in the period from 26 August 2013 to 24 August 2017 inclusive, under the formula in s 19(2) of the SRC Act and in accordance with these reasons for decision.

I certify that the preceding 39 (thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak and Dr I Alexander, Senior Member

.................................[sgd].......................................

Associate

Dated: 1 March 2022

Dates of hearing:	22-23 July 2021
Applicant:	Self-represented
Solicitors for the Respondent:	K Miller, Sparke Helmore Lawyers