Wood and ASP Ship Management Pty Ltd - [2010] AATA 437

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION

[2010] AATA 437

ADMINISTRATIVE APPEALS TRIBUNAL )

) No: 2007/3986

GENERAL DIVISION )
ReSteven Sidney Wood

Applicant

And ASP Ship Management Pty Ltd

Respondent

DECISION

TribunalMr R P Handley, Deputy President
Date11 June 2010
PlaceSydney

Decision The Tribunal sets aside the decision under review and:

(a)    The Tribunal finds that for the purposes of s 13(6) of the Seafarers Rehabilitation and Compensation Act 1992 (the Act), the Applicant belonged to a class of employees namely that of ‘catering assistant’, a class that continues to exist in the ‘offshore’ shipping industry, albeit not in companies operating in the ‘bluewater’ shipping industry’ such as the Respondent. The parties are encouraged to come to an agreement on the annual percentage increase of normal weekly earnings for the class of catering assistant over the relevant period. In the absence of agreement, the Tribunal will invite further submissions from the parties on what this figure should be with a view to making the requisite determination.
(b)    Section 34 of the Act applies for the purpose of calculating the Applicant’s entitlement to incapacity payments commencing on 10 October 1997. The parties are encouraged to come to an agreement on the application of s 34. In the absence of agreement, the Tribunal will invite further submissions from the parties on this issue with a view to making the requisite determination.
(c)    The Respondent is to pay the Applicant’s costs in these proceedings pursuant to s 92(2) of the Act.
....................[sgd]...................
Mr R P Handley
  Deputy President

CATCHWORDS

COMPENSATION – seamen's compensation - superannuation – lump sum benefit - proper calculation and adjustment of weekly earnings – determination of the class of employees to which applicant belonged – relevant matters for consideration - decision under review set aside and proper calculation of adjustment remitted to parties

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RELEVANT ACT

Seafarers Rehabilitation Compensation Act 1992: ss 13(6), 34, 35, 36, 92(2)

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CITATIONS

Wood v ASP Ship Management Pty Ltd (2007) 94 ALD 597; [2007] FCA 459
ASP Ship Management Pty Ltd v Wood [2007] FCAFC 142; (2007) 161 FCR 429; (2007) 97 ALD 581
Lees v Comcare (1999) 56 ALD 84; (1999) 29 AAR 350; [1999] FCA 753

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REASONS FOR DECISION

11 June 2010

Mr R P Handley, Deputy President

Steven Wood was a seafarer who was employed by ASP Ship Management Pty Ltd (ASP) as a catering attendant (also variously described as a catering assistant or assistant caterer) until he became incapacitated for work as a result of the onset of viral cardiomyopathy connected with his employment. He ceased work on 25 January 1997 and was medically discharged on 2 July 1997. He has not worked since.
Mr Wood made a claim for compensation for incapacity which was declined by ASP. He applied to the Tribunal for a review of this decision which, on 24 December 1998, determined that his condition was work-related and that ASP was liable to pay incapacity payments together with medical expenses and costs. An appeal by ASP to the Federal Court was dismissed on 25 June 1999.
While working as a seafarer, Mr Wood contributed weekly to the Seafarers’ Retirement Fund. On being medically discharged, Mr Wood exited the Fund and, on 24 September 1997, the Board of Directors of the Fund resolved that he qualified for a total and permanent disablement benefit. As a result, he became entitled to a benefit of $283,171.84. Mr Wood decided to withdraw $70,000 from the Fund and to transfer the remainder into an Approved Deposit Facility account with the Seafarers’ Retirement Fund. This transfer took place on 10 October 1997. Over subsequent years, Mr Wood drew on this account which, it appears, has now been exhausted.
Since October 1997, ASP has taken into account Mr Wood’s withdrawals from the Seafarers’ Retirement Fund in calculating his entitlement to incapacity payments. The parties are in dispute as to whether ASP applied the correct formula under the Seafarers Rehabilitation and Compensation Act 1992 (the Act) in doing so.
At the time Mr Wood ceased employment, he was employed as a catering attendant on a cargo vessel in the ‘bluewater’ industry - that is, the coastal cargo trade (as opposed to the ‘offshore’ segment of the shipping industry which is concerned with gas, oil and other marine operations). Since Mr Wood ceased employment, the position of catering attendant has been abolished in the ‘bluewater’ industry and, as a result, ASP has not adjusted the normal weekly earnings used in the calculation of his incapacity payments. ASP contends that the class of employees to which Mr Wood belonged no longer exists and so there is no provision for an adjustment of the normal weekly earnings to which he would have been entitled before the injury. Mr Wood contests this and states that the class of employees to which he belonged was, broadly defined, that of catering assistants and that this class continues to exist.
In 2003, Mr Wood asked for a review of the amount of the incapacity payments he was receiving. On 14 October 2003, ASP informed him of the basis on which his incapacity payments were calculated and on 7 January 2004, Mr Wood applied to the Tribunal for a review of this decision. The Tribunal conducted a hearing in this matter on five different occasions between August 2004 and December 2005 and published its decision on 30 June 2006. The Tribunal decided to remit the matter to ASP for reconsideration with specific directions as to the class of employees to which Mr Wood belonged and as to the effect of his superannuation on his incapacity payments. In particular, the Tribunal found that the class of employees to which Mr Wood belonged no longer existed and therefore the amount of normal weekly earnings used in the calculation of his incapacity payments should not be adjusted under s 13(6) of the Act.
Mr Wood appealed against this decision to the Federal Court which set aside the decision and remitted the matter to the Tribunal for reconsideration according to law. Emmett J found that the Tribunal had misdirected itself in determining whether the class of employees to which Mr Wood belonged still existed:
28 Nevertheless, the purpose of both s 13(5) and s 13(6) is to ensure that the compensation payable to a seafarer does not remain static but is to be adjusted in much the same way as the salary of the employee would have been adjusted but for the incapacity. It follows that the reference to class in s 13(6) must be construed broadly as a reference to the type of work that was being performed by a seafarer at the time of incapacity. That involves an enquiry as to the salary being paid to seafarers who perform that or similar work from time to time.
29 …
30 In making a finding as to a class of employees whose remuneration is to be the comparator for adjustment under s 13(6), the Tribunal is engaged in a fact finding exercise. It is a question of fact as to whether there is a class of employees presently performing work of the same kind or type as and in a context and such conditions sufficiently similar to the work being performed by the Seafarer at the time of his incapacity. The Tribunal rejected the Seafarer’s contention that caterers working under enterprise agreements on vessels engaged in the offshore segment of the Australian shipping industry are performing work of a kind or type sufficiently similar to that being performed by the Seafarer prior to his incapacity.
31 As a matter of principle, in determining whether the work is of a kind or type that is sufficiently similar, the Tribunal ought to have regard to the context in which, and the conditions under which, work was performed by the Seafarer and under which work is being performed by the putative class. However, the Tribunal does not appear to have directed proper attention to that question. The Tribunal identified the class to which the Seafarer belonged by reference to the Award. It did not undertake an enquiry as to whether the work performed by caterers on vessels engaged in the offshore segment, and the context in which and conditions under which that work is performed, is sufficiently similar to the circumstances in which the Seafarer worked as a catering assistant prior to his incapacity.
32 The amount per week payable to employees is a factor to be considered in determining whether work is of a type or kind that is sufficiently similar. However, it is not decisive and factors other than remuneration are also relevant. There is nothing in s 13(6) that requires a class to be identified only by the amount of remuneration as the Tribunal appears to have concluded.
33 I consider that the Tribunal misdirected itself by treating the remuneration received by the Seafarer on the one hand and caterers engaged under enterprise agreements on vessels in the offshore segment on the other hand, as paramount to the question required to be addressed by it. The Tribunal accepted that by identifying the relevant class of employees as "catering assistants", a class whose continuation is beyond doubt would be identified. Quite clearly, the Seafarer was a catering assistant and must therefore be taken to have been a member of class whose continuation is beyond doubt.
34 While remuneration is a relevant, and no doubt an important consideration, in determining whether there is a class of employee, it should not have been given the paramountcy given by the Tribunal. The Act does not limit the investigation called for by s 13(6) to employees of a single employer. As I have said, the evidence before the Tribunal indicated a degree of commonality among enterprise agreements. To suggest that the task of identifying a percentage increase was impossible indicates a misapprehension on the part of the Tribunal of the task that it should have undertaken. The conclusion of the Tribunal that there is no class of employees still in existence of which the Seafarer had been a member involves an error of law.
ASP appealed against this decision to the Full Federal Court, which dismissed the appeal. The Full Court stated:
21 Section 13(6) of the Act does not express any specific criteria or relative importance of considerations which prescribe the way in which a class of employee must be selected or any indication that the class must be a narrow one. The reference to "a" class rather than "the" class points to a range of possible classes at different levels of generality. In order to determine the appropriate class and its relevant characteristics, regard must be had to the context and purpose of the provision, which in this case is to ensure that relativity is preserved between the compensation paid and the varying levels of remuneration over the post-injury period. The legislation is beneficial in nature, which, as noted by the primary judge, suggests a broader and more liberal interpretation than might otherwise be the case. Accordingly, it is in our view incorrect in the present case to select as the "class of employees" only those employees covered by a relevant industrial award on the basis that remuneration could not otherwise be ascertained.
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32 The purpose of s 13(6) is to ensure that a person entitled to compensation because he or she has been injured while in employment regulated by the Act should maintain a level of compensation on par with what is paid later to persons who did similar work at the time the injury was sustained. …
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34 When it treated remuneration received by the employee concerned as the identifying feature or primary determinant of the class, the Tribunal unduly confined its consideration of the matters which the Act required in selecting the class. Section 13(6) required the Tribunal also to consider the work which the employee did at the time of the injury and to see whether others did similar work which could be used as a yardstick to identify, at a time later than that of the injury, what similar employees now do and the variety of industrial arrangements (awards, determinations or certified agreements) which now provide remuneration for that work.
…
38 … In terms of s 13(6), the percentage increase is a matter to be determined after the class has been selected in the light of a careful consideration of the similarities and differences between the position held by the employee at the time of the injury, and the class which is said to be continuing after the injury. The Tribunal failed to properly address this task and did not consider and make findings on the evidence to justify its determination of the narrow class. The Tribunal did not compare relevant features between the categories of catering assistants in the ‘bluewater segment’ and ‘offshore segment’. Relevant matters for consideration and comparison include the nature of the work, specific duties, working conditions, hours of work, remuneration, promotion, accommodation and holidays. Only when such a comparison is conducted will a decision maker be able to determine, for example, whether the differences are sufficiently great to give rise to a "discontinuity" in the classification. As a consequence of its erroneous approach, the Tribunal did not carry out this exercise.
…
44 For these reasons we find that the narrow focus by the Tribunal on a perceived inability to fix a percentage increase distracted it from properly determining the question of class by an analysis of the respective duties and other characteristics of the position in the ‘blue water segment’ and the features and duties of a ‘catering assistant’ in the ‘offshore segment’. The Tribunal accepted that there was a continuing, albeit broad, class of ‘catering assistants’, but notwithstanding this and on the basis of an unwarranted assumption that it would be impossible to fix a figure, the Tribunal selected the narrower class. It is difficult to see why, having accepted the class of "catering assistants" and having acknowledged that it continued in the ‘offshore segment’, the Tribunal proceeded to decide that it was not able to apply a percentage figure to Mr Wood’s position in the ‘blue water segment’.
45 Accordingly we consider that the Tribunal erred in law. The decision and reasoning of the primary judge is correct and this appeal is dismissed with costs.

The Relevant Issues and Legislation

Mr Wood’s application raises two principal issues. The first issue is whether he is entitled to a percentage adjustment of the figure for his normal weekly earnings used in calculating his incapacity payments. Section 13(6) of the Act in effect at the time of the Tribunal hearing, provided:
(6)If the amount per week payable to employees in a class to which the employee belonged when the injury happened is later increased or reduced 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, determination or certified agreement, or the doing of any other act or thing under such a law;
the normal weekly earnings of the employee before the injury, as worked out under the preceding subsections, must be increased or reduced by the same percentage as that by which that amount per week was so increased or reduced, as the case may be. [Emphasis added.]
This provision raises the question whether the class of employees to which Mr Wood belonged at the time of his injury continues to exist. The Tribunal now has the benefit of the observations of the Federal Court on this issue, quoted above. In particular, as Emmett J said, at [30]:
It is a question of fact as to whether there is a class of employees presently performing work of the same kind or type as and in a context and such conditions sufficiently similar to the work being performed by the Seafarer at the time of his incapacity.
The Full Court said, at [34], that it is not only the remuneration received by the employee that must be considered, but also,
the work which the employee did at the time of the injury … to see whether others did similar work which could be used as a yardstick to identify, at a time later than that of the injury, what similar employees now do and the variety of industrial arrangements (awards, determinations or certified agreements) which now provide remuneration for that work.
The Full Court commented, at [38], that the Tribunal,
did not compare relevant features between the categories of catering assistants in the ‘blue water segment’ and ‘offshore segment’. Relevant matters for consideration and comparison include the nature of the work, specific duties, working conditions, hours of work, remuneration, promotion, accommodation and holidays.
I also note in particular the final comment of the Full Court, at [44]:
It is difficult to see why, having accepted the class of "catering assistants" and having acknowledged that it continued in the ‘offshore segment’, the Tribunal proceeded to decide that it was not able to apply a percentage figure to Mr Wood’s position in the ‘blue water segment’.
The second issue is how the benefit received by Mr Wood from the Seafarers’ Retirement Fund on his being medically discharged should be treated for the purpose of calculating his entitlement to incapacity payments. ASP now contends that s 34 of the Act is the applicable provision, having previously relied on s 35, while Mr Wood maintains that s 35 is applicable. At the relevant time in 1997, these sections stated as follows:
34Compensation for injuries resulting in incapacity where employee is in receipt of a lump sum benefit
(1)   This section applies to an employee who:
(a)    is incapacitated for work as a result of an injury; and
(b)retires (whether voluntarily or otherwise) from his or her employment at any time after the commencement of this section; and
(c)as a result of the retirement, receives a lump sum benefit under a superannuation scheme; and
(d)has not rolled-over the lump sum benefit into another superannuation fund or an approved deposit fund.
(2)Compensation is payable to the employee for the injury under this section for each week after the date of the retirement during which the employee is incapacitated.
(3)The amount of compensation is an amount worked out using the formula:
where:
Unadjusted amount of compensation means the amount of compensation that would have been payable to the employee for a week if:
(a)section 31, other than subsection 31 (8), had applied to the employee; and
(b)    the week were a week referred to in subsection 31 (4);
Superannuation amount means the superannuation amount received by the employee as a lump sum;
Superannuation contributions means the amount of superannuation contributions that would have been required to be paid by the employee in that week if he or she were still contributing to the superannuation scheme.
(4) In this section:
approved deposit fund has the same meaning as in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936;
rolled-over has the same meaning as in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936;
superannuation fund has the same meaning as in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act 1936.
35Compensation for injuries resulting in incapacity where employee rolled-over part of a lump sum benefit
(1) This section applies to an employee who:
(a)    has been incapacitated for work as a result of an injury; and
(b)    retired (whether voluntarily or otherwise) from his or her employment at any time after the commencement of this section; and
(c)    as a result of the retirement, receives a lump sum benefit under a superannuation scheme; and
(d)rolled-over part of the lump sum benefit into a superannuation fund or an approved deposit fund.
(2)Compensation is payable to the employee for the injury under this section for each week after the date of the retirement during which the employee is incapacitated.
(3)The amount of compensation is an amount worked out using the formula:
where:
Unadjusted amount of compensation means the amount of compensation that would have been payable to the employee for a week if:
(a)   section 31, other than subsection 31 (8), had applied to the employee; and
(b)   the week were a week referred to in subsection 31 (4);
Amount not rolled-over means the amount not rolled-over or withdrawn from the superannuation fund or approved deposit fund to which the lump sum benefit was rolled-over;
Lump sum benefit means the amount of the lump sum benefit received by the employee;
Superannuation amount means the superannuation amount received by the employee as a lump sum.
(4) In this section:
approved deposit fund has the same meaning as in section 34;
rolled-over has the same meaning as in section 34;
superannuation fund has the same meaning as in section 34.

Is there a class of employees presently performing similar work to that which Mr Wood performed?

The Evidence

The Applicant provided a statement from Christine Nicholson dated 20 August 2009, from Robert Turner dated 9 November 2009 and from Shane Kelk dated 8 October 2009. Ms Nicholson and Mr Turner gave evidence at the hearing on 7 April 2010. Mr Kelk was away at sea and not available.
Ms Nicholson stated she has been working variously as a steward, caterer, chief caterer and second cook in the shipping industry since the early 1990s. She has worked in the bluewater industry and in the offshore industry both on a permanent and casual basis. Her work has largely involved cleaning and catering work and, sometimes, laundry work (on a dredger, and in the annual shut down on an offshore platform). The cleaning work includes washing dishes, cleaning the kitchen and dining area, mopping floors and emptying bins, and cleaning the cabins of crew and other personnel. The catering work includes stocking food stores and basic food preparation such as salads. A chief caterer may have an additional supervisory role and is responsible for the kitchen and for ordering food supplies, although sometimes this work is also done by the caterer. She also worked as a second cook when no-one else could be found, preparing soups, fruits, salads and vegetables, supervised by the chief cook.
Ms Nicholson said conditions on board vary from one vessel to another. Every vessel has subtle differences. In the offshore industry, where the vessel is stationary, cabins for crew are sometimes shared, whereas in the bluewater industry, where the vessel is travelling between ports, she has had her own cabin. In both cases, the shifts Ms Nicholson described were of about 12 hours duration with breaks. Working on a casual basis, she is engaged for ‘swings’, and is paid a casual loading because of the uncertainty of the availability of work. In the offshore industry, swings are usually of four or five weeks duration. In the bluewater industry, swings are usually of four weeks duration but these can last up to three months depending on the destination. You can drink alcohol in the bluewater industry but not in the offshore industry, where the rates of pay are known to be better.
Mr Turner stated that he worked as a seafarer in the bluewater industry from 1970 until he retired in 1996. He also did one six‑week swing in the offshore industry in 1997. Mr Turner was initially employed as a crew attendant, which involved looking after the mess room, recreation areas and alleyways, and included mopping floors, emptying bins, cleaning up after meals, cleaning the laundry and stocking cabins with linen. He also cleaned the officers’ cabins and served food. Sometimes there was cleaning work in the kitchen but usually the cooks did this, and there was no food preparation.
Mr Turner said crew manning levels were reduced from about the late 1980s as new technology became available, labour saving devices were introduced, and the crew’s and officers’ mess rooms were combined. Ships in both the bluewater and offshore industries also grew bigger. The position of crew attendant was phased out and the new position of catering assistant was created, combining the functions of crew attendants and those of stewards such as assisting in cleaning the kitchen, washing up after meals and assisting in ordering kitchen stores. Catering assistants performed a similar job to that of the chief caterer, although the chief caterer was also responsible for keeping records.
Mr Turner said in the bluewater industry, he had his own cabin and worked 12‑hour shifts with breaks during the day. For the six week swing in the offshore industry in 1997, he also had his own cabin but the accommodation was not as good as on the bluewater vessels on which he had served. The shifts were much the same, as were his duties as caterer, cleaning crew mess areas and alleyways, mopping floors, emptying bins, and assisting the chief caterer with stocking food stores and washing up after meals. He also had laundry duties for which he was paid $10 per day extra. Rates of pay were better than what he had experienced in the bluewater industry. Mr Turner said the shift from the bluewater to offshore work was relatively easy because the work was very similar.
While Mr Kelk was not available for cross-examination, I have included reference to his evidence here because in broad terms it is similar to that of Ms Nicholson and Mr Turner. I note from Mr Kelk’s statement that over the last 30 years, he has had a broad experience in both the bluewater and offshore industries, working as a cook, chief cook, caterer and chief caterer. He described the work as chief caterer, now his usual role, as similar to that of caterer except for the additional responsibilities of a managerial/administrative nature. He said the work is similar in both industries. A caterer’s duties include a lot of cleaning during the day – cleaning the amenities, common areas and mess areas. Cleaning includes mopping floors, emptying bins and general cleaning and tidying up. During meals, the caterer helps with scullery duties such as cleaning plates, dishes and cutlery. In the offshore industry, the caterer also does laundry once a week on most vessels.
Mr Kelk stated the living conditions are better in the bluewater industry where he has his own cabin, whereas in the offshore industry the cabins tend to be smaller and shared. In his experience, while the core hours in both industries are a 12 hour shift, the working day is little longer and more demanding in the offshore industry. On the other hand, the pay in the offshore industry is better.
The evidence before the Tribunal in the original proceedings was that at the time of his injury in January 1997, Mr Wood was working as what was variously described as a catering attendant or assistant caterer on the Australian Endeavour, a container ship of over 39,000 tonnes, with a crew of more than 18, operating mainly between South East Asian ports. He was paid under an award as a catering attendant on a Category 3 Dry Cargo vessel with a crew of more than 18. Mr Wood was asked about his work as an “assistant steward” and described this as “mainly helping prepare meals, cleaning the vessel, loading stores, assisting the chief steward; those sort of things and the cook …” (transcript 2 August 2004, p 21). Mr Wood knew the work of a chief steward well having worked for seven years as a chief steward “on and off”. He said the “chief steward was normally in charge of all the catering, of the chefs, the galley, all the ordering and the catering section of the ship”. He said he started work at 6.00 am and normally finished at about 6.30 pm.
Robert Coombs, the Sydney Branch Secretary of the Maritime Union of Australia, provided a statement in the original proceedings, undated, but received by the Tribunal on 2 November 2004, in which he said that as a result of a rationalisation in 1997 or 1998 affecting Australian cargo vessels, the position of catering assistant was “lost” and the position of chief steward was reclassified as chief caterer. ASP no longer employed catering assistants and those affected by the rationalisation either took voluntary redundancy or were retrained and found employment as chief caterers. Mr Coombs said (paragraph 6 ff):
6. … This rationalisation was largely confined to the cargo fleet. Other vessels in the Australian fleet including liquid gas vessels, tankers, seismic survey, drill ships and offshore support vessels maintained their existing manning.
7. As a result ASP, as operators of mainly cargo vessels no longer employed catering assistants. Catering assistants affected by the rationalisation either took voluntary redundancy or were retrained and found employment as chief caterers. The redundancies were not compulsory and accordingly catering assistants who wished to remain in the industry were found employment either as chief caterers or as catering assistants on other vessels.
8. In my opinion if Mr Wood had wished to remain in the industry, he would have had very good prospects of obtaining further employment as a chief caterer.
In evidence, Mr Coombs said about a third of catering assistants took redundancy and about a two thirds were retrained for chief caterer positions or found employment elsewhere, for example in the offshore industry which was undergoing an expansion at that time (transcript 19 May 2005, p 13),
Mr Coombs also said that in the Australian industry, “as a general rule once manning levels go above 20 then you will find an extra caterer is employed” (transcript 19 May 2005, p 34). This appears to be a reference to the offshore industry which, according to Mr Coombs, employed 50% of Australian seafarers in 2005 (transcript 19 May 2005, p 46). Thus, it appears that catering assistants (perhaps described as caterers) did continue to be employed on vessels with larger crews in the offshore industry.
Mr Coombs confirmed that while the bluewater industry has contracted, the offshore industry has expanded. Some employees in the bluewater industry have therefore taken redundancies and moved to the offshore industry as a result (transcript 19 May 2005, p 56). He acknowledged that there is less employment security in the offshore industry and the cabins are smaller, but said the pay is better, often as a result of loadings paid over and above an employee’s salary (transcript 19 May 2005, p 40ff).
Anthony Rowe, Fleet Personnel Co-ordinator of ASP Ship Management, also gave evidence at the hearing. From his use of the Australian Shipowners Association’s electronic database, which is the employment database for both the bluewater and offshore industries, he said he doubted that any of the 35 catering assistants employed by ASP in January 1997 were still working in the industry because he had not seen their names in the database recently (transcript 15 August 2005, pp 9-10). However, in cross-examination, he acknowledged that he had not cross-referenced these names with other employers (transcript 15 August 2005, p 17).

Discussion

In the Tribunal’s view, it is clear that work of a similar nature to that undertaken by Mr Wood at the time he was injured in January 1997 continues to be performed in the bluewater industry. Undoubtedly, over time, there has been a rationalisation of the manning of bluewater vessels both as a result of the introduction of new labour‑saving technology and management initiatives to streamline the use of labour. Nevertheless, certain basic tasks need to continue to be performed, including cleaning, preparing meals, serving meals and cleaning up afterwards, ordering kitchen provisions and loading stores, together with attendant administrative and managerial functions. New machinery will have assisted in tasks such as food preparation, cooking, washing up and the like, and the introduction of computers will have facilitated the conduct of administrative functions, but common sense suggests that basic tasks still have to be performed. The question, therefore, is whether there a class of employees presently performing similar work to that which Mr Wood performed?
In my view, the evidence of Ms Nicholson and Mr Turner, which is supported by the untested evidence of Mr Kelk, indicates that there is. Answering this question is not assisted by the different job titles which are variously used to label the relevant positions, nor by the fact that conditions inevitably vary from one vessel to another and according to the particular requirements of that vessel and its crew. This has obviously always been the case and is likely to remain so.
The evidence is clear that there are differences between the bluewater and offshore industries. The former involves vessels travelling from one port to another and is long established; the latter involves vessels in static or near static situations and is largely of relatively recent origin. The offshore industry by its nature involves different risks by reason of the activities undertaken – mineral exploration, drilling, dredging, cable laying etc – and how these are managed. In general, a stationary vessel is likely to be more uncomfortable than a moving ship and supplying that vessel will usually be undertaken differently: for example, an oil rig is supplied by sea or by air whereas a bluewater vessel is supplied while docked in port. The exploration and mining of oil and gas also poses dangers by reason of the volatility of these substances.
The evidence of Ms Nicholson, Mr Turner, Mr Kelk and Mr Coombs indicates that living conditions are not as good in the offshore industry (for example, smaller cabins, sometimes shared) as in the bluewater industry, more of the work is of a short-term nature, and there is less employment security. On the other hand, the pay is better.
However, the evidence of Ms Nicholson, Mr Turner and Mr Kelk establishes that the actual work undertaken by a catering assistant/attendant or a caterer or chief caterer – in terms of cleaning, assisting in food preparation, serving meals and cleaning up afterwards, ordering and loading stores, together with the attendant administrative tasks – is similar.
Emmett J said, at [28], that the reference to class of employee in s 13(6) “must be construed broadly as a reference to the type of work that was being performed by the seafarer at the time of incapacity”. He said, “It is a question of fact as to whether there is a class of employees presently performing work of the same kind or type as and in a context and such conditions sufficiently similar to the work being performed by a Seafarer at the time of his incapacity.” The context and conditions in which the work was performed by the seafarer and is performed by the putative class must be considered, remuneration being an important but not a paramount consideration.
On appeal, the Full Federal Court said the reasoning of Emmett J was correct (at [45]), noting, at [21], that the legislation is beneficial in nature suggesting, as recognised by Emmett J, “a broader and more liberal interpretation than might otherwise be the case”. The work which the employee did at the time of the injury must be considered in order to see whether others did similar work which could be used as a yardstick to identify what similar employees do now and the variety of industrial arrangements which now provide remuneration for that work (at [34]). The Court said, at [38], that “Relevant matters for consideration and comparison include the nature of the work, specific duties, working conditions, hours of work, remuneration, promotion, accommodation and holidays”.
The Full Court commented, at [44], that it is difficult to see why the Tribunal, having at first instance accepted that there was a continuing, albeit broad, class of ‘catering assistants’, and that this class continued in the ‘offshore segment’, proceeded to decide that it was not able to apply a percentage figure to Mr Wood’s position in the ‘bluewater segment’.
In my view, the difficulty in this case is that while the work that Mr Wood formerly undertook is still performed, because of rationalisation in the bluewater industry that work appears to be undertaken by employees classified as chief caterer who also have some additional duties in terms of administration when compared to the duties that Mr Wood performed. The evidence of the Applicant’s witnesses indicates that in the offshore industry the situation is different and varies from one ship to another. However, the same kind of work still has to be done and Mr Coombs’ evidence indicates that in larger vessels with manning levels of over 20, an additional person equivalent to a catering assistant is employed. Mr Coombs’ evidence is that more than 50% of seafarers are employed in the offshore industry.
Specifically with regard to Mr Wood, Mr Coombs’ evidence was that if he had chosen to remain in the bluewater industry, he would have had very good prospects of obtaining further employment as a chief caterer. I note Mr Wood’s evidence that he knew the work of a chief steward well, having worked for seven years as a chief steward “on and off”. Thus, I think it is fair to assume that if Mr Wood had chosen to remain in the bluewater industry he could have retrained and probably would have found employment as a chief caterer. If he had chosen not to remain in the bluewater industry, positions as a catering assistant or caterer, however labelled, would have been open to him in the offshore industry.
With regard to the conditions under which catering assistants in the offshore industry are employed when compared to those that formerly applied to catering assistants in the bluewater industry, the evidence of the Applicant’s witnesses indicates that the nature of the work and duties are similar, the hours of work are much the same (a 12‑hour shift seems to be the norm), the duration of swings (for example, four weeks) appears to be similar in the offshore industry but varies in the bluewater industry according to the distance travelled, and remuneration in the offshore industry seems to be better because of the environment in which the work is performed (for example, a stationary oil rig, rather than a moving vessel) and the risks involved with that environment (for example, reprovisioning, crew changeovers, the volatility of the substances mined).
Overall, having regard to the beneficial nature of the Act and the Federal Court’s direction that a broader and more liberal interpretation be given to what constitutes a ‘class’ than might otherwise be the case, I am satisfied that there are sufficient similarities to support a finding that the class of employees to which Mr Wood belonged, namely that of catering assistant, however labelled, continues to exist in the offshore industry, albeit not in companies such as ASP operating in the bluewater industry. In terms of s 13(6) of the Act, having found that Mr Wood belonged to the class of catering assistant, it is necessary to identify if there has been a variation in the normal weekly earnings of such an employee as a result of the operation of the law of the Commonwealth or of a State or a Territory, or as a result of an award, determination or certified agreement.
It appears that catering assistants in maritime work are remunerated either pursuant to an award, determination or certified industrial agreement. Mr King submits that the evidence filed by the Applicant establishes that over the relevant period there has been an average 4% increase in the normal weekly earnings of employees belonging to his class. Mr Lenczner, for ASP, disputes this. Having reviewed the material filed by the parties in these proceedings, I am not satisfied that I have sufficient information available to me to make a finding of the kind suggested by Mr King, although in terms of my general knowledge of how normal weekly earnings have increased over the period since Mr Wood’s injury, a figure of 4% per annum sounds not unreasonable. Given the length of time these proceedings have been on foot, with all the attendant costs both financial and otherwise, I would encourage the parties to come to an agreement on the annual percentage increase of normal weekly earnings for the class of catering assistant over the relevant period. In the absence of agreement, I will invite further submissions from the parties on what this figure should be with a view to making the requisite determination.

How should the benefit received by Mr Wood on being medically discharged be treated for the purpose of calculating his entitlement to incapacity payments?

As noted above, ASP now contends that s 34 of the Act is the applicable provision for the purpose of calculating Mr Wood’s entitlement to incapacity payments. The Applicant complains that for a period of nearly seven years since the commencement of these proceedings in 2003 and until the close of the Applicant’s case before the Tribunal on 7 April 2010, ASP contended that s 35 was the applicable provision. In such a special case, the jurisdiction of the Tribunal should be treated as having “been refined or isolated at the instigation of the respondent to s 35 of the Act”.

At the resumed hearing on 28 April 2010, the Tribunal heard evidence from Valerie Manning, the Governance and Risk Manager of Maritime Financial Services Pty Ltd, which administers the ‘Maritime Super’ superannuation fund, created by the merger of the Seafarers’ Retirement Fund and the Stevedoring Employees Retirement Fund. Ms Manning had provided a statement dated 13 April 2010 in which she said that at the relevant time in 1997, the Seafarers’ Retirement Fund was not an Approved Deposit Fund.
The facts of this case establish that when Mr Wood was medically discharged by ASP, he exited the Seafarers’ Retirement Fund and, on 24 September 1997, the Board of Directors of the Fund resolved that he qualified for a total and permanent disablement benefit. As a result, he became entitled to a benefit of $283,171.84. Mr Wood decided to withdraw $70,000 from the Fund and to transfer the remainder into an Approved Deposit Facility account with the Seafarers’ Retirement Fund. This transfer took place on 10 October 1997. Over subsequent years, Mr Wood drew on this account which, it appears, has now been exhausted.
Thus, Ms Manning’s evidence established that Mr Wood did not roll-over part of his lump sum benefit into a superannuation fund or an approved deposit fund. He merely moved part of his lump sum benefit within the Seafarers’ Retirement Fund. Having heard Ms Manning’s evidence, Mr King conceded that because there was no roll-over, s 34 is the applicable provision, a concession he confirmed in subsequent written submissions dated 13 May 2010.
Mr Lenczner submitted that the Tribunal is not precluded from considering the application of s 34 of the Act because whether s 34 or s 35 is applied is not concerned with a different head of claim (see Lees v Comcare (1999) 56 ALD 84).
While I am sympathetic to the Applicant’s complaint about ASP now seeking to rely on s 34 rather than s 35 so late in these proceedings, this is not a situation where there is a different head of claim, the treatment of Mr Wood’s lump sum benefit for the purpose of calculating his entitlement to incapacity payments having been a matter addressed by the original decision-maker and on review. Thus, in my view, the Tribunal is not without jurisdiction on this issue.
It follows from what I said above, that I am satisfied from Ms Manning’s evidence that the applicable provision is s 34 of the Act, a matter not disputed by the Applicant. This raises a question as to what is the correct or preferable decision in circumstances where Mr Wood’s normal weekly earnings during the relevant period are yet to be determined. I have considered the parties’ submissions on this and, in my view, the preferable decision is that proposed by the Applicant, which is to encourage the parties to endeavour to reach agreement on the application of s 34 and, in the event that agreement is not reached, to invite further submissions on this issue with a view to the Tribunal making the requisite determination.
I agree with the parties that the period in respect of which s 34 is to be applied should commence on 10 October 1997, the date on which the transfer of Mr Wood’s superannuation funds took place.

Decision

The Tribunal sets aside the decision under review and:
(a) The Tribunal finds that for the purposes of s 13(6) of the Seafarers Rehabilitation and Compensation Act 1992 (the Act), the Applicant belonged to a class of employees namely that of ‘catering assistant’, a class that continues to exist in the ‘offshore’ shipping industry, albeit not in companies operating in the ‘bluewater’ shipping industry such as the Respondent. The parties are encouraged to come to an agreement on the annual percentage increase of normal weekly earnings for the class of catering assistant over the relevant period. In the absence of agreement, the Tribunal will invite further submissions from the parties on what this figure should be with a view to making the requisite determination.
(b) Section 34 of the Act applies for the purpose of calculating the Applicant’s entitlement to incapacity payments commencing on 10 October 1997. The parties are encouraged to come to an agreement on the application of s 34. In the absence of agreement, the Tribunal will invite further submissions from the parties on this issue with a view to making the requisite determination.
(c) The Respondent is to pay the Applicant’s costs in these proceedings pursuant to s 92(2) of the Act.

I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R P Handley, Deputy President.

Signed: ........[sgd]...............................................................
Associate

Dates of Hearing:  8, 14, 28 April 2010
Date of Decision:  11 June 2010
Applicant representative:                   Mr D Hill, W G McNally Jones Staff
Applicant counsel:  Mr L King SC with Mr Halligan
Respondent representative:              Mr P Leslie, Holman Fenwick & Willan

Respondent counsel: Mr J Lenczner