Woolworths Limited v Alali
[2006] NSWWCCPD 174
•2 August 2005
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Woolworths Limited v Alali [2006] NSWWCCPD 174
APPELLANT: Woolworths Limited
RESPONDENT: Layth Alali
INSURER:Woolworths Limited
FILE NUMBER: WCC2839-05
DATE OF ARBITRATOR’S DECISION: 29 August 2005
DATE OF APPEAL DECISION: 2 August 2005
SUBJECT MATTER OF DECISION: Section 40 of the Workers Compensation Act 1987; concurrent employment; incapacity and the adequacy of reasons.
PRESIDENTIAL MEMBER: Acting Deputy President Elizabeth Tydd
HEARING:Determined on the Papers
REPRESENTATION: Appellant: Bartier Perry
Respondent: Teakle, Ormsby, Conn
ORDERS MADE ON APPEAL: Paragraphs 1, 2 and 3 of the Arbitrator’s decision dated 29 August 2005 are revoked and the following orders made in their place:
“The amount of weekly compensation pursuant to section 40 Workers Compensation Act 1987 and refund of overpayments pursuant to section 58 of the 1987 Act are remitted to another Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for conciliation or determination if the parties are unable to come to a settlement in accordance with the findings contained in this decision.
A copy of this decision is to be served on Perfection Fresh who is to be given the opportunity to make further submissions on remitter as they relate to the issue of overpayment in accordance with section 58 of the 1987 Act.”
Order number 4 of the Arbitrator’s decision dated 29 August 2004 is confirmed.
No order as to costs of the Appeal.
BACKGROUND TO THE APPEAL
Employment and injuries
From 15 October 2000 until 2 July 2004 Mr Layth Alali (‘Mr Alali’) was concurrently employed as a store man by both Perfection Fresh Pty Limited (‘Perfection Fresh’) and Woolworths Limited (‘Woolworths’). Mr Alali worked 40 hours per week with Perfection Fresh and 29 hours per week with Woolworths.
Between March 2001 and June 2004 Mr Alali sustained three injuries relevant to these proceedings. These injuries are summarised as follows:
· on 27 March 2001 Mr Alali was driving a forklift for Woolworths when the brakes failed and he sustained a crush fracture to his left ankle. Mr Alali was totally incapacitated for work until July 2001 when he returned to modified duties with Woolworths and Perfection Fresh.
· in March 2002 Mr Alali was taking the door off a forklift for Woolworths and developed low back pain. Mr Alali was totally incapacitated for a period of three weeks. He then returned to modified duties with Woolworths and Perfection Fresh.
· on 28 June 2004 Mr Alali was diagnosed with an undisplaced spiral fracture of his right fifth toe. Mr Alali claimed that this injury developed as a result of his left ankle injury which caused him to place most of his weight on his right foot. Mr Alali took three weeks off work using accrued leave and following that period returned to modified duties with Woolworths. Upon his return to work with Perfection Fresh, Mr Alali was required to provide certification that he was fit for pre-injury duties in respect of injuries to his left ankle (emphasis added) and right fifth toe. He was unable to do so and remains on leave without pay from Perfection Fresh.
The Application to Resolve a Dispute
On 24 February 2005 Mr Alali’s solicitor lodged an ‘Application to Resolve a Dispute’ with the Workers Compensation Commission (‘the Commission’) naming, Perfection Fresh, First Respondent and Woolworths, Second Respondent.
Against Perfection Fresh Mr Alali sought compensation in accordance with section 40 of the Workers Compensation Act 1987 (‘the 1987 Act’) from 2 July 2004 to date and continuing in the sum of $880.00 per week. Mr Alali claimed that his incapacity arose from the fracture to his right fifth toe which occurred as a result of the nature and conditions of his employment with Perfection Fresh from 27 March 2001 to 2 July 2004.
Against Woolworths Mr Alali sought weekly benefits compensation in the amount of $636.68 per week from 2 July 2004 to 30 July 2004 and $880.00 per week from 1 August 2004 to date and continuing. Mr Alali claimed his incapacity arose from the frank injury to his left ankle which occurred in the course of his employment with Woolworths and that the nature and conditions of his employment with Woolworths resulted in the fracture to his right fifth toe.
On 17 March 2005 Perfection Fresh lodged a Reply to the ‘Application to Resolve a Dispute’ denying that Mr Alali was injured in the course of his employment with Perfection Fresh and that Mr Alali was incapacitated as alleged. Perfection Fresh also alleged that Mr Alali’s injuries were sustained with a different employer.
On 17 March 2005 Woolworths lodged a Reply to the ‘Application to Resolve a Dispute’ in which it confirmed acceptance of liability in respect of Mr Alali’s injury to his left ankle and back. However, Woolworths disputed liability in respect of the injury to Mr Alali’s right fifth toe. Woolworths relied on a factual investigation which concluded that this injury was sustained in the course of employment with Perfection Fresh where Mr Alali was required to resume more onerous work in June 2004 when his two assistants were redeployed.
Conciliation and Arbitration Proceedings
A teleconference was conducted on 5 May 2005. During the course of the teleconference the Arbitrator determined that the opinion of an Approved Medical Specialist (‘AMS’) was required to assist in the determination of incapacity arising from Mr Alali’s three injuries.
A further teleconference was conducted on 14 July 2005. The matter was not resolved and further Directions were made by the Arbitrator requiring the parties to file and exchange written submissions and for Mr Alali’s solicitor to provide a draft of the orders sought.
A conciliation/arbitration hearing was conducted before the Arbitrator on 9 August 2005 and a transcript of proceedings was provided to the parties.
The transcript reveals that the injury to the right toe was “not being pressed” against both Perfection Fresh and Woolworths and confirms that Mr Alali’s legal representative agreed to discontinue proceedings against Perfection Fresh. The transcript also shows that the Arbitrator excused Perfection Fresh’s representative from the hearing prior to dealing with the amended application.
In accordance with the amendments to the application outlined above the Arbitrator proceeded to hear and determine the claim in respect of the injury to Mr Alali’s left ankle sustained whilst in the employ of Woolworths.
The Arbitrator provided a ‘Certificate of Determination’ and ‘Statement of Reasons’ dated 29 August 2004.
Lodgement of the Appeal
On 30 September 2005 Woolworths sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Commission against the Arbitrator’s decision.
The Respondent to the Appeal is Mr Alali. On 27 October 2005, Mr Alali’s solicitor filed a ‘Notice of Opposition to the Appeal’.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 29 August 2005 records the Arbitrator’s orders as follows:
“1. That the Respondent pay the Applicant weekly compensation under section 40 of the Workers Compensation Act 1987 as follows:
a. from 2 July 2004 to 30 September 2004 $474.81 per week;
b. from 1 October 2004 to 30 March 2005 $500.10 per week; and
c. from 1 April 2005 to date $512.40 per week.
2. That the Second Respondent is entitled to credits for payments of $2,234.88 made by it and $1,949.60 made by the First Respondent.
3. That such weekly payments continue in accordance with the provisions of the Act.
4. That the Respondent pay the Applicant’s costs as agreed or assessed.”
Following my review of the transcript, I have formed the view that order number 2, made pursuant to section 58 of the 1987 Act, was made after Perfection Fresh had been excused. Accordingly Perfection Fresh was not provided with an opportunity to make submissions. I will deal with this issue in my decision.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
· finding that Mr Alali suffered incapacity as a result of the injury to his left ankle;
· applying section 40(2)(b) of the 1987 Act, and
· failing to provide adequate reasons for the award made pursuant to section 40 of the 1987 Act.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Woolworths submits that the appeal is capable of being determined on the papers. However, this submission is qualified as follows: “In the event that an award is not substituted in favour of Woolworths on the papers, Woolworths would wish to develop this argument orally.” Mr Alali’s solicitor submits that the appeal is capable of being determined on the papers.
Both parties are legally represented and have provided lengthy submissions addressing the issues raised on appeal. Neither party has sought to submit further documents. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me and the submissions that the appeal can proceed ‘on the papers’, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount of compensation at issue on the appeal is determined by reference to the amount of any monetary award made by the Arbitrator (Grimson v Integral Energy [2003] NSWWCCPD 29). The amount of compensation in dispute involves a claim of $636.68 per week from 2 July 2004 to 30 July 2004 and $880.00 per week from 1 August 2004 to date and continuing. I am satisfied that the amount of compensation at issue on appeal is both at least $5,000.00 and 20% of the amount awarded in the decision appealed against.
I am satisfied that the requirements of Section 352(2) of the 1998 Act have been met.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
SUBMISSIONS
The substantive issues raised on appeal are broad ranging. In my assessment they can be categorised as relating to the Arbitrator’s finding of ‘incapacity’, the Arbitrator’s application of section 40(2)(b) of the 1987 Act and the adequacy of the reasons in respect of the section 40 findings and award.
Incapacity
In relation to ‘incapacity’ Woolworths submits that:
· the factual evidence shows that following his left ankle injury Mr Alali was promoted by Perfection Fresh and therefore, Mr Alali was not incapacitated for his pre-injury duties by reason of this injury;
· the Arbitrator did not avert to, or discuss the significance of the right toe and back injury in relation to the question of incapacity which were relevant and should have been discussed in the Arbitrator’s reasons;
· even if Mr Alali was precluded from performing his pre-injury duties with Perfection Fresh by reason of his left ankle injury he had the capacity to earn a similar income by performing alternative duties with Perfection Fresh, and
· Mr Alali has no entitlement to compensation in accordance with section 40 of the 1987 Act because he was capable of earning his pre-injury income.
Mr Alali’s solicitor submits that:
· following his left ankle injury Perfection Fresh provided Mr Alali with two workers to assist him. Perfection Fresh did not promote Mr Alali;
· the Arbitrator relied upon the report of Dr Bodel, AMS in finding that there was no incapacity as a result of the fracture to the right toe;
· the injury to Mr Alali’s back was accepted by Woolworths, and
· the Arbitrator properly considered all of these injuries in determining incapacity.
The Arbitrator's application of section 40(2)(b) of the 1987 Act and the adequacy of reasons.
In summary, in relation to Arbitrator's application of section 40(2)(b) of the 1987 Act and the adequacy of reasons, Woolworths submits that:
· the Arbitrator erred in applying a “ceiling” of income in respect of his determination that there would be “at least an additional 20 hours a week (of suitable employment) available” to Mr Alali. In doing so the Arbitrator failed to properly apply Mitchell v Central West Health Service (1997) 14 NSW CCR 527 (‘Mitchell’);
· the Arbitrator failed to calculate the amount Mr Alali was ‘able to earn’ and this flaw has so infected the decision that it must be redetermined by another Arbitrator (Damjanovic v Sharp Hume & Co [2001] NSWCA 407);
· in the alternative, the Arbitrator’s assessment of 20 hours per week of suitable employment is manifestly inadequate and against the weight of evidence for the purposes of determining ability to earn under section 40(2)(b) of the 1987 Act, and
· the Arbitrator failed to provide adequate reasons for his finding of “…an additional 20 hours…”. A failure to give proper reasons constitutes an error of law (HousingCommission NSW v Tatmar Pastoral Co Pty Limited [1983] 3 NSWLR 378 and Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247).
In summary, Mr Alali’s solicitor submits that:
· at paragraphs 90, 91 and 92 the Arbitrator applied the authority set down in Mitchell and found that Mr Alali was capable of working 20 hours per week. The Arbitrator’s words contained in paragraph 92 are an evaluation of Mr Alali’s ability to earn, which is exactly what the Court of Appeal found was required in Mitchell when applying section 40 of the 1987 Act;
· the Arbitrator also considered the general labour market reasonably accessible to Mr Alali and applied his knowledge and experience of the labour market in arriving at the finding of 20 hours additional work which, in the circumstances was reasonable, and
· the Arbitrator provided sound reasons for his decision.
EVIDENCE AND FINDINGS
Medical evidence
A significant number of medical reports were in evidence before the Arbitrator and it is necessary to set out this evidence in determining the issues raised on appeal.
As a result of the Arbitrator’s referral to an AMS for assessment of Mr Alali’s injuries, Dr Bodel, AMS examined Mr Alali on 31 May 2005. Dr Bodel’s undated medical assessment certificate was accepted by the parties as describing the injuries sustained by Mr Alali (transcript pages 3 and 4).
In summary, the report of Dr Bodel sets out the history of the three injuries and Mr Alali’s concurrent employment amounting to a total of 69 hours per week. In relation to incapacity Dr Bodel concluded that:
· “Ongoing pathology in the left foot [persists] and is entirely due to the specific event that occurred at work on 27 March 2001 while at Woolworths Limited.”;
· “Due to the right foot injury only this gentleman is fit for full time hours of work and near normal duties.”, and
· “This gentleman should be capable of full time modified duties from the point of view of the left foot and ankle injury. The main modification to work is that the work should be predominantly sedentary in nature although he can tolerate some standing and walking.”
Dr Bodel did not specifically state that Mr Alali was capable of working his pre-injury hours, being 69 hours per week. However given the history of concurrent employment taken by Dr Bodel, I am satisfied that he was cognisant of those pre-injury hours and his opinion that Mr Alali was capable of working full time hours, albeit in predominately sedentary employment, refers to Mr Alali’s pre-injury hours of 69 hours per week.
The reports of Dr Harrison, orthopaedic surgeon who treated Mr Alali for his fractured left ankle, were in evidence and considered by the Arbitrator. In summary, Dr Harrison noted in his report of 15 March 2002 that Mr Alali managed both jobs totalling 69 hours per week. However, he was uncertain about Mr Alali’s “…prospects of continuing in the long working hours he managed.” In his report of 5 April 2002 Dr Harrison observed that Mr Alali was not able to manage his “...current normal activities at present...” and strongly recommended that a workplace assessment be undertaken for Mr Alali’s benefit and protection. Dr Harrison concluded that “…on the assumption that this [assessment] is going to occur soon I have not suggested any immediate modification to working hours until this matter is determined a little more objectively.” The next available report of Dr Harrison is dated 6 December 2002, this report does not refer to any assessment or modification of duties and concluded that Mr Alali “…is fit enough to carry on work at present as he has demonstrated.”
Dr Crooks provided a medico-legal report for Mr Alali dated 25 May 2005. Dr Crooks noted Mr Alali’s concurrent employment which resulted in him working a total of 69 hours per week and the history of injuries to Mr Alali’s left ankle, back and right fifth toe. In Dr Crooks’ opinion, Mr Alali was coping with his forklift duties and should in the immediate short term be able to continue undertaking these duties. Additionally Dr Crooks considered that Mr Alali would be able to continue his work with Perfection Fresh if he was provided with the assistance he previously received from two other workers. Dr Crooks concluded that Mr Alali could continue to work his stated hours with Woolworths and “…29 hours with Perfection Fresh (emphasis added).” I consider Dr Crooks’ comments in this regard to be a typographical error resulting in the transposition of working hours with Perfection Fresh and Woolworths.
The report of Dr Powell, orthopaedic surgeon providing a medico-legal report for Perfection Fresh to address the claim relating to the fracture of Mr Alali’s right fifth toe, is dated 15 April 2005. Dr Powell concluded that:
· Mr Alali described a history of injuries to his left ankle, back and right fifth toe;
· following the left ankle injury Mr Alali returned to work on light duties “and has in fact remained on permanently modified duties whilst in his capacity at Woolworths.”;
· “Towards the end of June 2004 his job requirements changed at Perfection Fresh. Previously he had two staff members assigned to him that he was able to direct to perform the more physically demanding elements of his position. This left him with a more managerial position and being responsible for ordering produce, inspecting and despatching it.”;
· when the 2 staff members assigned to Mr Alali were redeployed in June 2004 he was required to return to “his previous work that was more physically demanding.” As a result, the symptoms in his left foot worsened and resulted in him “…taking more weight on his right side.”;
· Mr Alali’s employment with Perfection Fresh was not a substantial contributing factor to his right toe injury nor would “overload” give rise to such an injury;
· Mr Alali’s soft tissue injury to his back occurred while he was working for Woolworths. This injury caused Mr Alali to be incapacitated for three weeks. He was then able to return to work but he experiences intermittent symptoms from his lower back and “…is currently receiving physiotherapy on that basis.”,and
· Mr Alali’s suitability for work “is determined by the left ankle injury.”
The medical certificate provided by Dr Ahmad, Mr Alali’s general practitioner dated 6 February 2004 was in evidence. Dr Ahmad certified Mr Alali as having reached maximum medical improvement and as a result of his left ankle injury, fit for permanently modified duties from 6 February 2004. Dr Ahmad’s recommended modification of Mr Alali duties were that he not lift more than 5 kilograms and avoid prolonged standing, repetitive use of stairs and ladders and cold environments.
Lay evidence
Mr Alali’s statement of 21 July 2004 confirmed that, following the injury to his left ankle he was provided with assistants by Perfection Fresh until approximately May or June in 2004. Mr Alali stated that:
“… after my ankle and back injury Perfection Fresh gave me a promotion. This occurred after I told them that I could not continue working because of the back and ankle injuries. They said that because I was a long time employee and because they were getting more orders from clients like McDonalds, they wanted to attach two workers to me, to perform the manual side of my works, and that I would only have to do the ordering, checking and paperwork. I accepted this and thereafter worked in this capacity.”
Further, in his unsigned statement of 21 February 2005, Mr Alali confirmed that following his left ankle injury he had two helpers in his job at Perfection Fresh but that after a while Perfection Fresh took those helpers away.
The statement of Sanjay Kinger, chief accountant with Perfection Fresh dated 9 March 2005 detailed Mr Alali’s pre-injury duties in his role as packer as sorting through vegetables and preparing orders for customers. The orders were packed and loaded into cartons weighing a maximum of 10.5 kilograms. According to Mr Kinger, these were the heaviest objects Mr Alali would be required to lift as the cartons were then loaded on to a forklift. Mr Kinger stated that, following his left ankle injury Mr Alali returned to work on his normal pre-injury duties in accordance with Dr Moussa’s medical certificate dated 10 August 2001. In Mr Kinger’s opinion, Mr Alali did not appear to experience difficulty resuming these duties.
The statement of Mr Doug King, maintenance manager Perfection Fresh, dated 9 March 2005 confirmed the duties referred to above and indicated that Mr Alali would usually work with other packers. No further details are provided by Mr King regarding the other packers working with Mr Alali.
In relation to the provision of assistants by Perfection Fresh, the statement of Emir Solbudak, Shift Manager, Woolworths dated 20 July 2004 concluded that Mr Alali advised him “…that he could no longer work with Perfection Fresh because the manager at Perfection Fresh had taken three (emphasis added) workers away from him and given the nature of his left ankle injury he could no longer perform the work of that company.”
At the hearing Mr Alali’s representative sought to elicit a response from Mr Alali in relation to his return to work in 2001 with Perfection Fresh and the removal of his two assistants in 2004. Mr Alali replied that this occurred in about June. However, he was unable to provide a specific date (transcript page 9 lines 16 – 39).
The Arbitrator’s Statement of Reasons
The Arbitrator set out the medical evidence at paragraphs 55 to 66 of his Statement of Reasons. The Arbitrator summarised each medical report in evidence (with the exception of the report of Dr Powell). In relation to ‘incapacity’ he referred to the reports of Dr Bodel and Dr Powell and the oral evidence of Mr Alali. The Arbitrator noted the consistent history of injury as described by Mr Alali.
In concluding that Mr Alali was incapacitated as a result of his injury to his left ankle the Arbitrator relied upon the medical evidence of Drs Bodel and Powell.
Paragraphs 74 and 75 of the Arbitrator’s Statement of Reasons deal with Perfection Fresh’s provision of two assistants to enable Mr Alali to return to full-time work. The Arbitrator found that Mr Alali was able to carry out suitable duties with Perfection Fresh “while he was able to direct the efforts of the two staff members who were assigned to him until late June 2004.” The Arbitrator then found that the incapacity “did not have any economic consequences until 2 July 2004 when [Mr Alali] had to undertake his normal physical duties with [Perfection Fresh] without the help of his two assistants.”
The Arbitrator relied upon the medical evidence of Drs Bodel and Powell and in addition, the evidence of Emir Solbudak in concluding that the economic consequences of Mr Alali’s incapacity arose when his two assistants were redeployed in June 2004.
Review of the Arbitrator’s decision
Interference with the decision of an Arbitrator has been considered by the Commission in Aluminium Louvres & Ceilings Pty Ltd v Zheng [2004] NSWWCCPD 26). The relative weight and relevance to be given to evidence is a matter for the discretion of the Arbitrator. As discussed in South Western Sydney Area Health Service v Edmonds [2005] NSWWCCPD 18 (at paragraph 25):
“..it is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has acted upon a wrong legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts or failed to take into account relevant and material considerations (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, Re National Roads and Motorists Association Ltd [2003] FCAFC 206 ).”
I am required to apply this authority in reviewing the Arbitrator’s decision as it relates to incapacity and the application of section 40(2)(b) of the 1987 Act.
Incapacity
The Arbitrator referred to all of the medical evidence before him. On balance, that medical evidence concluded that Mr Alali’s injuries to his back and right fifth toe had resolved and that his incapacity arose because of his left ankle injury. In his reasons the Arbitrator expressed his reliance on the medical reports of Drs Bodel and Powell who concluded that Mr Alali’s incapacity arose because of his left ankle injury. In my view, it was not necessary for the Arbitrator to arrive at a finding that Mr Alali’s injuries to his back and fifth toe had resolved when the medical evidence concluded that Mr Alali’s incapacity arose as a result of his injury to his left ankle only.
I find that the Arbitrator properly considered the evidence before him as it related to all three injuries sustained by Mr Alali. I find that his reasons are sufficient to convey to the parties his reliance upon the evidence of Dr Bodel and Powell in arriving at his finding of incapacity. I also find that the Arbitrator’s finding that Mr Alali’s incapacity arose from the injury to his left ankle, accords with the weight of medical evidence.
Woolworths’ remaining submissions in relation to the Arbitrator’s finding of incapacity are based upon the assumption that because Perfection Fresh promoted Mr Alali and provided him with two assistants, it was not open to the Arbitrator to find that Mr Alali was incapacitated as a result of his left ankle injury. In my view, these submissions fail to recognise the law on incapacity and its economic consequences as set out in Commonwealth v Murature (1978) 141 CLR 296 at 300-3001 in which Jacobs J stated “It has always been recognised that ‘incapacity for work’, those words being taken to refer to physical incapacity, is only relevant where it produces an economic incapacity (emphasis added).” The facts of this case demonstrate that Mr Alali suffered an injury to his left ankle in 2002 but, because of the provision of two assistants by Perfection Fresh, the economic incapacity did not arise until 2004 when the two assistants were redeployed.
The statement of Mr Kinger does not refer to Mr Alali being assisted in undertaking his duties at Perfection Fresh. However the statement of Mr King did provide evidence that Mr Alali worked with co-workers as opposed to having the benefit of assistants. Mr King’s evidence must be preferred over Mr Kinger’s, as Mr King occupied the position of supervisor and had a direct knowledge of Mr Alali’s working conditions. Further there was evidence of Mr Alali working with three assistants, as opposed to two (statement of Emir Solbudak). Irrespective of whether Mr Alali received assistance from two or three co-workers or whether these staff members were, in fact employed to assist Mr Alali, in my view the evidence on balance, supports a finding that Mr Alali was assisted in undertaking his duties, and when this assistance was withdrawn he was no longer able to perform his duties with Perfection Fresh.
The Arbitrator referred to the medical and lay evidence before him in determining that the economic consequences of Mr Alali’s incapacity became relevant in July 2004 after his two assistants were removed. The medical and lay evidence before the Arbitrator consistently described Mr Alali as no longer able to perform his duties with Perfection Fresh when this assistance was removed and he was required to undertake more onerous work which, because of the injury to his left ankle he was no longer able to perform. The Arbitrator found that Mr Alali’s incapacity arose when his physical incapacity produced economic consequences.
I find the Arbitrator considered all of the evidence and properly applied the law in arriving at his finding that the economic consequences of Mr Alali’s incapacity arose in July 2004 when the two assistants were redeployed. The evidence clearly demonstrates that the ‘physical incapacity’ became ‘relevant’ by producing ‘economic incapacity’ in July 2004. I find nothing to disturb the Arbitrator’s finding in relation to incapacity.
The Arbitrator's application of section 40(2)(b) of the 1987 Act.
Woolworths submits that the Arbitrator erred in applying section 40(2)(b) of the 1987 Act for the purposes of calculating the ‘the average weekly amount [Mr Alali] is earning, or would be able to earn in some suitable employment, from time to time after the injury’.
The Arbitrator’s Statement of Reasons sets out the factors he considered in determining the amount Mr Alali would be able to earn in ‘suitable employment’ and his application of the factors required to be considered in accordance with section 43A of the 1987 Act. At paragraph 91 the Arbitrator found that the duties provided by Woolworths, being forklift driving, general cleaning and charging batteries, were suitable in the context of Mr Alali’s profile. Additionally, the Arbitrator found the duties Mr Alali had undertaken at Perfection Fresh, of ordering stock, stamping stock and arranging its distribution were also ‘suitable employment’.
In my view, the Arbitrator’s findings that these duties were ‘suitable’ accords with the weight of medical evidence, and I refer to the certificates of Dr Soliman and report of Dr Crooks in this regard. Further, the Arbitrator’s findings in relation to suitable employment demonstrate that he properly applied section 43A of the 1987 Act. In my view, the Arbitrator’s findings were based on logically probative evidence and I see no reason to disturb the Arbitrator’s findings in relation to ‘suitable employment’.
The Arbitrator proceeded, at paragraph 92, to determine the amount Mr Alali would be able to earn in ‘suitable employment’. The Arbitrator found that Mr Alali could work “…at least an additional 20 hours per week of [sic] the types of suitable employment identified … in the general labour market reasonably accessible to him.”
The Arbitrator then established an hourly rate with reference to Mr Alali’s actual earnings with Woolworths and arrived at the sum of $366.60 for an additional 20 hours work per week in suitable employment. The Arbitrator added this amount to Mr Alali’s actual earnings and found that Mr Alali would be able to earn $898.29 per week in suitable employment.
I find that there was no evidence before the Arbitrator to support the finding of an additional 20 hours work in suitable employment. In evidence were eight medical certificates provided by Dr Soliman covering the period from 2 July 2004 to 9 November 2004 and one from Dr Ahmad, dated 6 February 2004. None of the certificates contained a restriction on the number of hours Mr Alali could work. Further neither Dr Bodel nor Dr Crooks recommended placing a restriction on Mr Alali’s working hours. I accept Woolworths’ submission that the Arbitrator erred in placing a “ceiling” on the amount Mr Alali would be able to earn in suitable employment.
I find that there was no logically probative evidence upon which the Arbitrator could reasonably make his findings in calculating the amount Mr Alali would probably earn in suitable employment pursuant to section 40(2)(b) of the 1987 Act. I accept Woolworths’ submissions that the decision is fatally flawed as a result of the Arbitrator’s determination in relation to ‘suitable employment’.
Further, I accept Woolworths’ submission in relation to inadequate reasons. I find that the Arbitrator’s reasons do not adequately disclose the basis upon which he made findings regarding the additional 20 hours in ‘suitable employment’ sufficient to “convey to the parties who are acquainted with the circumstances of this matter, the basis upon which the Arbitrator came to [his] decision.” (NSW Department of Education and Training v Sanders [2004] NSWWCCPD 89 (paragraph 13).
Redetermination of the Application
Having found error sufficient to revoke the decision I will now proceed to consider if I have sufficient evidence before me to redetermine Mr Alali’s claim for weekly compensation.
I note the minor error in the Arbitrator’s calculation of the amount Mr Alali would probably have been earning but for the injury in accordance with section 40(2)(a) of the 1987 Act. In combining Mr Alali’s weekly pre-injury earnings of $880.00 (Perfection Fresh) and $531.69 (Woolworths) the Arbitrator arrived at $1410.69. I find the correct calculation is $1411.69.
In determining the amount Mr Alali would be able to earn in suitable employment in accordance with section 40(2)(b) of the 1987 Act the commencement point must be Mr Alali’s actual earnings (Aitken v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20; WCR (NSW) 107 (‘Aitken’). However, if proved that Mr Alali’s earnings are not the proper test “unconnected with his earning power which makes them lower than they should be, the other alternative, what he is ‘able to earn’, must be adopted.” (Aitken at109). The test of what Mr Alali is able to earn would only be applied:
“..where it is shown that he is deliberately taking lower paid work than he could get, or is idling and on this account receiving less than he could be reasonably expected to obtain, or where his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power: Jones v Amalgamated Anthracite Colleries Ltd., ([1944] A.C. 14 at 25)...” (Aitken at 109).
There is no evidence before me that Mr Alali was idling or deliberately taking lower paid work and accordingly I apply the authority in Aitken in determining Mr Alali’s ability to earning suitable employment. Mr Alali was, prior to his injury concurrently employed by Woolworths and Perfection Fresh. His total working hours in concurrent employment was 69 hrs per week. As held by Walker J in Cartner v Barclay[2002] NSWCC 9 (‘Cartner’) both contracts must be considered in applying section 40(2)(b) of the 1987 Act.
In Cartner Walker J (at paragraph 141) referred to the authority provided by the Court of Appeal in Palese v Ciba-Geigy Australia Ltd (1973) 1 NSWLR 146 (‘Palese’). That case concerned a worker who worked as a labourer during the week and a part time taxi driver on weekends. Walker J noted that the Court of Appeal held in Palese that “…actual and probable earnings from all concurrent contracts of employment…” must be considered in applying section 40 of the 1987Act.
In accordance with the authority of Palese I must consider all of Mr Alali’s contracts of employment in determining Mr Alali’s entitlement pursuant to section 40 of the 1987 Act. In the present circumstances Mr Alali’s pre-injury earnings were $1411.69 because he worked 69 hours per week. In applying section 40, I must have regard to the limit on weekly compensation payable in accordance with section 40(5).
Section 40(5) of the 1987 Act provides that the weekly compensation payable to an injured worker during a period of partial incapacity is not to exceed the weekly payment that would be payable to the worker if it were a period of total incapacity for work. In turning to total incapacity, section 36 provides that the weekly payment of compensation is the amount of the worker’s ‘current weekly wage rate’. In accordance with section 42(1)(a) the ‘current weekly wage rate’ is referable to the award (emphasis added) under which Mr Alali was employed, assuming that he was employed under an award. Further, section 42(7)(d) is also applicable to this case as it provides the method for calculating the current weekly wage rate in circumstances where a worker’s concurrent employment results in him working more than 40 hours per week.
In evidence is correspondence from Cheryl Upton, Claims Specialist Woolworths to Derrick Belan dated 8 October 2004 indicating that Mr Alali’s payments have been processed “…at $487.40 gross per week (being the applicable award rate).” This is the only evidence that Mr Alali was employed by Woolworths under an award. I do not have before me the award or evidence in relation any award under which Mr Alali was employed by Perfection Fresh.
In light of Mr Alali’s concurrent employment and given the lack of evidence regarding the award under which he was employed by Perfection Fresh I find that I do not have sufficient evidence before me to proceed to redetermine the application. Accordingly, the matter must be remitted to another Arbitrator for determination.
Conclusion and findings
The powers of a Presidential Member to revoke a decision of an Arbitrator pursuant to section 352(7) of the 1998 Act are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error [see Allesch v Maunz (2000) 203 CLR 172].
I find that the Arbitrator erred in:
·his application of section 40(2)(b) of the 1987; and
·failing to provide adequate reasons for the award made pursuant to section 40 of the 1987 Act.
DECISION
Orders numbered 1, 2 and 3 of the Arbitrator’s determination are revoked and the following orders made in their place:
1. The amount of weekly compensation pursuant to section 40 Workers Compensation Act 1987 and the refund of overpayments pursuant to section 58 of the 1987 Act are remitted to another Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for conciliation or determination, if the parties are unable to come to a settlement, in accordance with the findings contained in this decision.
2. A copy of this decision is to be served on Perfection Fresh who is to be given the opportunity to make further submissions at the rehearing as they relate to the issue of overpayment in accordance with section 58 of the 1987 Act.
3. Order number 4 of the Arbitrator’s determination is confirmed.
COSTS
The Appellant has sought costs in relation to the Appeal. The Respondent has not made submissions on this issue. Having regard to the circumstances of the case and sections 341(4) and 354(5) of the 1998 Act, in my view, it is appropriate that I make no order as to the costs of this appeal.
Elizabeth Tydd
Acting Deputy President
2 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ELIZABETH TYDD, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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