William Payne v McArthur River Mining Pty Ltd [2004] NTMC 22 (25 March 2004)
PARTIES: WILLIAM PAYNE
v
MCARTHUR RIVER MINING PTY LTD
TITLE OF COURT: WORK HEALTH COURT
JURISDICTION: WORK HEALTH
FILE NO(s): 20305659
DELIVERED ON: 25 March 2004
DELIVERED AT: Darwin
HEARING DATE(s): 18-19 November 2003
JUDGMENT OF: MR H BRADLEY
CATCHWORDS:
WORKERS COMPENSATION -- WORK HEALTH -- NORMAL WEEKLY --EARNINGS -- REMUNERATION
Normal Weekly Earnings - what benefits other than salary are to be included - basis for valuation of benefits other than salary
The Work Health Act 1986 (NT) s 49,
Pulumpa Station v Fox (1999) NTSC 144
Fox v Pulumpa Station Pty Ltd (1999) NTMC 024
Muwangi Community Aboriginal Corporation v Carroll [2002] NTCA 9
Sedco Forex Pty Ltd v Sjoberg (1997) 7 NTLR 50
Plewright v Passman SCNT 4 April 1997
R v Postmaster General 1 Q.B.D. 663, 664
Dothie & Others v Robert MacAndrew and Co. (1908) 1 KB 803
Skailes v Blue anchor Line Ltd (1911) 1 KB 360
Connally v The Victorian Railways Commissioner [1957] VicRp 62; [1957] VR 466
Dawson v Bankers and Traders Insurance Co Ltd [1957] VicRp 65; [1957] VR 491
Leighton v Australian Telecommunications Commission [1990] 34 IR 250
Butler v Egg & Eggpulp Marketing Board [1966] HCA 38; [1996] 114 CLR 185
K.P. Welding Construction Pty Ltd v Herbert (SCNT)
Cooper Brookes (Wollongong) Pty Ltd v The Commissioner of Taxation [1981] HCA 26; (1980-81) 147 CLR 297
Hughes v AAT Kings Tours Pty Ltd (NTSC 29 April 1994)
AAT Kings Tours P/L v Hughes 99 NTR 33
Francese v Corporation of the City of Adelaide [1989] SASC 1796; [1989] 51 SASR 522
Thomas v Francis Creek Iron Mining Corporation (unreported)
Smith v Hastings Deering (Australia) Ltd [2003] NTMC 029
McFarland v NT Drilling Pty Ltd [2003] NTMC 62
Turner v The Granites Goldmine (unreported 15 April 2003)
Normandy NFM Ltd t/a The Granites Goldmine v Turner [2003] NTSC 112
Sharpe v Midland Railway Co (1903) 2 KB 26
Great Northern Railways Ry.Co. v Dawson [1905] 1 KB 331
Abram Coal Co Ltd v Southern [1903] AC 306
REPRESENTATION:
Counsel:
Worker: Mr Southwood QC
Employer: Ms Robertson
Solicitors:
Worker: Priestly Walsh
Employer: Cridlands
Judgment category classification: A
Judgment ID number: [2004] NTMC 22
Number of paragraphs: 78
IN THE LOCAL COURT
AT DARWIN IN THE NORTHERN
TERRITORY OF AUSTRALIA
No. 20305659
BETWEEN:
WILLIAM PAYNE
Worker
AND:
MCARTHUR RIVER MINING PTY LTD
Employer
REASONS FOR DECISION
(Delivered 25 March 2004)
Mr H B BRADLEY CM:
Background
1. Mr Payne was injured in the course of his employment with McArthur River Mining Pty Ltd (McArthur River) on 13 January 2000. He claims compensation for his partial loss of earning capacity.
2. Mr Payne commenced his employment with McArthur River in 1997 as a result of an invitation to do so expressed in a letter dated 14 March 1997 (Exhibit E2). The letter of offer set out his commencing salary and generally set out the nature and terms of his employment. There is no evidence to suggest other than that those general terms and conditions of employment continued to apply up until the date upon which Mr Payne sustained his injury namely 13 January 2000.
3. In the period leading up to the hearing there were substantial matters in dispute including the question as to whether Mr Payne was entitled to compensation at all. Just prior to the hearing commencing the parties largely resolved the issues between them and as a consequence a Further Amended Statement of Claim and an Amended Defence were filed in court during the conduct of the hearing. These fresh pleadings indicate that the employer has accepted liability to continue to pay weekly compensation under The Work Health Act 1986 (NT) (the Act) for partial incapacity. Although the admissions contained in the Amended Defence are sometimes differently expressed from the Statement of Claim (and there are some matters of past history denied) the issue is to determine "normal weekly earnings", in particular the court needs to decide: -
3.1 Whether the Workers weekly salary was $1,429.48 or $1436.54 per week. Somewhat ironically it is the Worker who asserts the former and the Employer the later.
3.2 Whether the Worker is entitled to include in the calculation of his "normal weekly earnings" an amount representing the value of remuneration other than that salary and if so how much that should be.
4. It is this later question which has generated the most heat and upon which the parties have devoted their attention in argument. The parties did not ask the court to adjudicate on question of superannuation which would in ordinary circumstances have formed part of this argument.
Salary
5. Looking at the conditions of employment (Exhibit 2) I note that Mr Payne was to be employed on the basis of an annualised salary paid on a calendar monthly basis. He was to work twelve-hour shifts on a seven days on - seven days off roster. He was to be responsible for travelling to and from the Darwin Airport to connect with a plane to fly him into the mine site and out again each alternate week. The conditions also provide "as your role is task rather that time oriented, you will be expected to work the hours as are required for the satisfactory performance of your duties. Your salary allows for such hours".
6. The Act defines Normal Weekly Earning's in s 49. The relevant provisions of which are:
"s 49…
"normal weekly earnings", in relation to a worker means -
(a) subject to paragraphs (b), (c) and (d), remuneration for the worker's normal weekly number of hours of work calculated at his or her ordinary time rate of pay;
(d) where -
(i) by reason of the shortness of time during which the worker has been in the employment of his or her employer, it is impracticable at the date of the relevant injury to calculate the rate of the relevant remuneration in accordance with paragraph (a), (b) or (c); or
(ii) subject to paragraph (b) or (c), the worker is remunerated in whole or in part other than by reference to the number of hours worked,
the average gross weekly remuneration which, during the 12 months immediately preceding the date of the relevant injury, was earned by the worker during the weeks that he of she was engaged in paid employment."(Paragraphs (b) and (c) are not relevant here).
7. When one considers the salary component of his remuneration therefore it seems to me that the approach adopted by the Court of Appeal in Sedco Forex Australia Pty Ltd v Sjoberg 1997 7NTLR 50 is to be preferred. That case also involved a worker who was flown to and from his employment although on a two week cycle rather than a one week cycle. At page 11 His Honour Mr Justice Bailey (with whom the balance of the court concurred) said of the definition of normal weekly earnings in s 49(1) that:
"Paragraph (a) of that definition is directed at a worker whose remuneration can be assessed by reference to his normal weekly number of hours of work calculated at his ordinary time rate of pay. It is implicit that this paragraph can only apply to workers whose weekly remuneration bears a direct relationship to the number of hours actually worked by the worker.
(d)(ii) on the other hand, is applicable to a worker whose remuneration is fixed in whole or in part by reference to some factor other than the number of hours worked."
8. Given the matters I have identified above particularly the relevance of the number of hours he has to work and the fact that he is paid monthly whether or not he works for two weeks or two and a half weeks in any calendar month, I hold that the correct approach is to adopt the definition in paragraph (d)(ii) of the definition of normal weekly earnings. I understand the parties are agreed that in the twelve months to 13 January 2000 Mr Payne earned $74,333.08. When this is divided by 365 and multiplied by 7 a weekly salary of $1425.57 is achieved.
9. I therefore hold that the relevant salary component of the normal weekly earnings of Mr Payne is the sum of $1,425.57.
Earnings other that salary
10. When one then approaches the second and more critical issue, the issues are a little more complicated. Evidence was given by Mr Payne, and a Mr Latham who is the person in charge of Occupation, Health and Safety for McArthur River. On the basis of their evidence, which was mostly uncontroversial I find that Mr Payne was employed by McArthur River on the basis that he worked to a roster of day and night shifts on a seven day on and seven day off basis. In addition to rostered time off Mr Payne was separately entitled to 28 days annual leave. Mr Payne was ordinarily a resident in Darwin where he occupied a flat rented by him on a permanent basis. He got himself to and from the airport each week and flew, at the employer's expense, to and from the McArthur River Mine Site for the purposes of carrying out his work duties. Whilst in Darwin he received no benefits from his employer other than the salary component as calculated above.
11. On the weeks however when he was at work at the McArthur River Mine Site he was provided with a number of things which in his evidence he identified as benefits accruing to him. His evidence was and there is no reason to dispute that he was provided with:
11.1 Camp accommodation in a self contained air-conditioned room approximately four metres by five metres with an ensuite. This room was part of a demountable unit set-up and in it he had a bed, a wardrobe for his own use, table, chair and television with programs via the cable. He shared the room with a person who worked on the alternate seven-day roster; that being the explanation for his own lock up wardrobe, otherwise, I assume the room facilities were shared. In association with this accommodation he had the share of a fridge with four other rooms.
11.2 The room was cleaned by the employer during the period of his service twice per week, and the linen changed, although this was reduced to once a week after he had sustained his injury.
11.3 He was provided three meals a day free of charge. Breakfast consisted of a choice of a hot or cold meal plus tea, coffee and juices. A variety of makings were available for lunch which the worker made up himself and took to work with him. The workers evidence indicates that he made up his own sandwich. The evening meal consisted of a choice of three main courses plus salads with fruit and desserts etc. No charges what so ever were made in respect of these meals.
11.4 At work he was provided with morning and afternoon tea including pies, sausage rolls and biscuits etc.
11.5 In addition to the accommodation on site the facilities had a number of amenities including, swimming pool, gymnasium, canteen, tennis courts, basketball courts and a dry mess including a pool table and table tennis table. He indicated that he was able to access these facilities without payment. There is no evidence however whether or not the worker ever accessed such facilities nor indeed, given that he was working twelve hours a day, when he would have much time to do so.
11.6 The workers work clothes were laundered by the employer and a washing machine was made available to him for washing his own clothes.
11.7 The cost of Mr Payne's air travel to and from Darwin each week was paid for by the employer and he was bussed each day approximately two kilometres to the work site.
12. There is little or no evidence in relation to the value to be placed on some of these benefits. It may be that if they are to be allowable some estimate would need to be made by the court having regard to its own resources.
13. The Darwin premises consisted of a rental property which he regarded as his permanent place of residence. He resided there with a de facto partner and kept all his personal chattels there. He advised the court that he took very little in the way of his personal effects to work other than toiletries and clothes for work. These in any event he tended to keep on site. He told the court that he used the room provided by the employer for the purpose of resting and sleep. When in Darwin the evidence indicated that his habits varied but that he usually shopped each week to have meals at home and occasionally ate out. When he entered his employment he was told that meals and accommodation would be supplied in camp/motel style accommodation with facilities. There was a code of conduct for people residing on site. The room on site was shared with another worker who worked on the alternate seven-day roster. I gather the two occupants seldom if ever saw one another.
14. Mr Latham's evidence basically confirmed that of Mr Payne as to the nature of the facilities and he identified the camp rules as being basically that there was to be no unnecessary noise and no visitors without permission. If these rules were broken the employee may have to source their own accommodation. The Company's attitude was that there was nil provision in the contract for the value of accommodation on the basis that the Company supplied it for its own convenience. The mine is a twenty-four hour seven day operation and it was important for the Company to have the workers on site. He said the cost of a return airfare was $220.
15. Through Mr Latham, a document (Exhibit 6) was tendered indicating the billed costs to the employer for providing accommodation, management and catering services to the mine. The company, referred to as Eurest, billed the employer it would seem on a monthly basis. Separate costs are identifiable for management fees, catering costs, cleaning costs, freight and other incidentals. The document in summary shows for example at line 23 that the cost per man-day of catering for the period March 2001 - June 2002 was equated to $12.83 plus $7.80 for associated labour costs. It does not seem to me to be possible to otherwise break down any of the other costs specifically to the services which were provided to the workers and in particular to Mr Payne. Even the catering costs would, I imagine, include a cost for Eurests own staff and at best the table can only give an indication of the price of food acquired on a commercial basis for the purposes of provisioning the canteen in a remote location. From the schedule in Exhibit 6 it would seem that for the period 1 July 2001 - 30 June 2002 the costs of providing bed and board for mine staff ranged from $22.05 to $29.66 per day, an average of $25.76 a day or $180.32 per week. This is shown by the figures in lines 29 - 40 of the schedule. The total including management costs charged by Eurest to McArther River would seem to be in the order of $38 - $40 as shown in column Q of the Exhibit. In my view these show the commercial cost of the provision of camp accommodation and may not necessarily show the value of such services to the worker. That may be more or less depending on other findings and the test to be applied.
16. Mr Payne has provided a valuation of the accommodation and daily meals. This is contained in the valuation report - Exhibit w4. This report relied on a description of facilities provided rather than an inspection. The accommodation description, comments and valuation methodology are set out on pages 3 - 7 of the valuation report. It can be seen that the valuation is based on an assumption that the accommodation was a single en-suite style room with sole occupancy rights. I have concluded from the evidence that room is in fact shared with another person who is on the alternate roster week and for this reason each occupant is provided with a lockable closet for their personal effects, likewise the valuation proceeds to compare the charges made for commercially available one bedroom rental premises and motel accommodation and meals. No allowance is made for the camp rules relating to noise and guests. One question is whether these premises are an appropriate comparison. The valuer while mentioning several facilities available to the workman does not appear to have separately valued them. It is desirable that each item be valued so that the court can decide what weight to attach to the value and includes such items as are by law to be included.
17. The valuation calculation is then expressed as follows:
"By direct comparison to the above, and after due consideration of the rental evidence, the value attributable to the described benefits is considered to be as follows: -
Accommodation (one single serviced, A/C room, with en-suite)
$50 per day ($350 per week)
Breakfast $10 per day
Lunch (sandwich/salad/meats) $10 per day
Dinner (3 course) $20 per day
Total value per day $90 per day ($630 per week)
Fair market value: As at January 2000. The value attributable to the described benefits is $630 per week for the service provided at the McArthur River mine for the one bedroom demountable unit and rent (sic) as described.
The above valuation has been made on the basis of a well informed service provider and a well informed beneficiary both acting at arms length on a bona fide transaction."
18. It is well settled in the workers compensation field and in particular in the Work Health Act that there are benefits other than salary that may be included in the expression "earnings" or "remuneration". In s 65 the Act provides that after the first 26 weeks of incapacity the worker is entitled to 75 per cent of his loss of earning capacity or 150 per cent of average weekly earnings at the time the payment is made, which ever is the lesser. Loss of earning capacity is then defined as being the difference between the workers "normal weekly earnings" and the amount he or she is reasonably capable of earning. The pleadings have agreed that at the time of the hearing the worker was reasonably capable of earning $850.00 per week and so it is incumbent only upon the court to determine what the "normal weekly earnings" of the worker were at the time of his injury. The salary component has already been determined (see above) and the task now is to determine what additional benefits are to be added to the salary component and valued for the purposes of establishing "the average gross weekly remuneration" of the worker during the preceding 12 months.
19. It appears from above that the worker has claimed a substantial number of benefits from his employment. He has quantified the value of a number of them and some assistance as to valuation is provided by the evidence of the employer.
20. Mr Southwood QC's submissions were very brief and did not assist me on the issue as to any distinction that should be drawn between the various kinds of benefits which the worker was led through in his evidence in chief. I suspect that he believes that the principles will finally be determined elsewhere - a matter with which I have no argument - but it would have been of more help to me if he had addressed me on more than the two decisions in Pulumpa Station v Fox 1999 NTSC 144 and Murwangi Community v Carrol1 [2002] NTCA 9 which are referred to in more detail later. (Refer to the Supreme Court's comments generally on the obligations of counsel in Works Social Club v Rozycki [1998] NTCA 6; 120 NTR 9 at 16).
21. As I perceive it the issue of benefits over and above salary is an emerging issue in Work Health Law. Recently argument has been addressed in this court and in the Supreme Court on such issues and in particular relating to superannuation, board and lodging. Generally in cases like the present the value of accommodation and meals has not been addressed until recent times, see for example Sedco Forex Pty Ltd v Sjoberg (1997) 7 NTLR 50. In that case the value of board on the drilling rig was not even raised. It seems therefore appropriate that I explore the issues so that certain principles can be adopted or the need for same determined if necessary by this or a superior court to guide the parties in the future.