THE legislation
32 Weekly compensation for incapacitated employees is generally paid under s 19 of the Act. Sub-section 19(2) broadly provides for an incapacitated employee to be paid the worker's normal weekly earnings before injury less any actual earnings for "45 times the employee's normal weekly hours". Employees accordingly receive maximum compensation for roughly 45 weeks.
33 After the period of maximum compensation expires, incapacitated employees are compensated under sub-s 19(3). The sub-section is as follows:
(3) Subject to this Part, Comcare is liable to pay compensation to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in subsection (2), of an amount calculated under the formula:
(Adjustment percentage x NWE) - AE
Where:
adjustment percentage is a percentage equal to:
(a) If the employee is not employed during that week - 75%; or
(b) If the employee is employed for 25% or less of his or her normal weekly hours during that week - 80%; or
(c) If the employee is employed for more than 25% but not more that 50% of his or her normal weekly hours during that week - 85%; or
(d) If the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week - 90%; or
(e) If the employee is employed for more than 75% but less than 100% of his or her normal weekly hours during that week - 95%; or
(f) If the employee is employed for 100% of his or her normal weekly hours during that week - 100%
AE applies in relation to the whole of that particular week and has the same meaning as in subsection (2).
NWE is the amount of the employee's normal weekly earnings.
34 It can be seen that an employee who is unable to work is paid 75% of normal weekly earnings. An employee who works for 25% of normal weekly hours is paid 80% less actual earnings. An employee who works for 100% of normal weekly hours receives maximum compensation less actual earnings. The sliding scale provides for different percentages in between these percentages.
35 It is plain that the legislation has a purpose of encouraging incapacitated employees to return to work to the maximum extent possible. The question in this case is whether an incapacitated employee will achieve one hundred per cent by working one hundred per cent of normal working hours which are contemporaneous with the payments of compensation or whether the worker must work one hundred per cent of normal weekly hours prior to injury, even though the work may now be different and the earnings lower.
36 "Normal weekly hours" and "normal weekly earnings" are defined in s 4 of the Act. The definitions apply, however, as do all the definitions in s 4, "unless the contrary intention appears". The following are the definitions:
normal weekly earnings means the normal weekly earnings of an employee calculated under section 8.
normal weekly hours in relation to an employee, means the average number of hours (including hours of overtime) worked in each week by the employee in his or her employment during the relevant period as calculated for the purpose of applying the formula in subsection 8(1) or (2).
37 Section 8 relevantly provides as follows:
Normal weekly earnings
(1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:
(NH x RP) + A
Where:
NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RP is the employee's average hourly ordinary time rate of pay during that period; and
A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
(2) Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula:
NH x OR
Where:
NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and
OR is the employee's average hourly overtime rate of pay during that period.
38 It can be seen that the time the phrases relate to is to be determined, for both of them, by identifying the "relevant period". That phrase is defined in s 4, again "unless the contrary intention appears":
relevant period means the period calculated under section 9."
The relevant part of s 9 is as follows:
Relevant period
(1) For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.
39 It is to be noticed that NWH is used as part of a formula in both sub-ss 19(2C) and (2D) of the Act. In both cases NWH is defined in the sub-section to mean "the number of normal weekly hours worked by the employee before his or her injury" (sub-s 19(2C) or "… incapacity" (sub-s 19(2D)).
40 The issue in this case is to be resolved by reference to two questions. First, is the effect of the sections to define "normal weekly hours" as those hours before the injury? Secondly, if that is the literal effect of the sections, does the context in which the words appear or the circumstances surrounding the relevant provisions lead to the conclusion, that there is to be found, at least for their application to a case such as the present, a contrary intention?
41 The tangle of sections which must be unravelled to expose the thread of legislative reasoning is complicated. The use of a mix of definitions to cope with different circumstances does not lead to clarity in the process. This is not assisted by the fact that the legislation nowhere directly addresses the question which arises in this case, namely whether normal hours or earnings are to be determined before or after injury for the calculation of weekly compensation. In terms, s 9 assumes that what is being addressed is "earnings of an employee before an injury". It follows that the language in which the concept of "normal weekly hours" is expressed is not a model of clarity. Nevertheless, I find it impossible to read the concatenation of sections and definitions to provide other than that "normal weekly hours" means normal weekly hours before injury.
42 Although s 9 assumes, rather than directs, that the calculation shall be made by reference to before injury hours, that seems to be consistent with the thrust of the legislation. In nearly every case the comparator is earnings or hours before injury. There is a logic behind this. It seems natural that comparisons to provide a benchmark will logically be made with the position before injury rather than with a potentially changing comparator after injury, particularly where the determination of the comparator is, to some extent, within the control of the employee.
43 In the sub-sections of s 19 preceding sub-s 19(3) both normal weekly hours and normal weekly earnings clearly refer to the period before injury or incapacity. It is not immediately clear why that would change when the same language is used in sub-s 19(3).
44 Counsel for Mr Heffernan argue that the phrase in s 19 is used with its own meaning, to be determined from the context in which the words appear, understood in "the light of the purpose and underlying policy of the legislation". They argue that this approach compels a construction of the phrase to mean current normal weekly hours.
45 They placed significant emphasis on the phrase "normal weekly hours during that week" in sub-s 19(3), suggesting that the legislature has specified contemporary weekly hours. I do not, however, think that the phrase will bear that construction, appearing, as it does, in a longer phrase: "the employee is employed for [x]% of his or her normal weekly hours during that week". The phrase "during that week" clearly relates to the amount of time worked "during that week" which is to be compared to normal weekly hours.
46 The respondent also drew attention to the different uses of "normal weekly earnings" and "normal weekly hours". I do not see any significance in this. Normal weekly earnings refers to earnings before injury. There is every reason to expect that normal weekly hours will refer to the same time when both are used in an equation to arrive at an amount for weekly compensation. It would be usual to determine normal weekly hours at the same time as normal weekly earnings.
47 Counsel also relied upon the uncertainties created by the use of normal weekly hours "before injury" in sub-s 19(2C) and "before incapacity" in sub-s 19(2D). Those uncertainties do not, to my mind, carry over to the present issue which is whether the hours are to be measured after the employee's return to work. Both the alternatives giving rise to uncertainty relate to a period before any return to work.
48 The respondent also broadly relies on decisions of the Federal Court in Comcare Australia v Pires (2005) 143 FCR 104 and Telstra Corporation Ltd v Peisley (2006) 151 FCR 275. In Pires Jacobson J certainly said that the definition of "normal weekly hours" in s 4 did not assist, but that was with respect to the issue in that case which was how overtime should be treated. He also said that the concept of "normal weekly hours" and "normal weekly earnings" were different. That cannot be doubted. However, when he said that sub-s 19(2) "prescribes its own formula, which is 'normal weekly earnings' less other earnings defined as AE", I do not think, contrary to counsel's submission, that he was saying anything of particular relevance to this case. First, again, the literal statement cannot be doubted. Secondly, the phrase does have its own internal definition in sub-ss 19(2C) and (2D), by contrast with sub-s 19(3). Thirdly, the judge's observation was that sub-ss 19(2C) and (2D) prescribe their own formula, which they do, not what one component in the formula means. Even less does the judge say anything about the meaning of the phrases included in the formula, especially where no internal meaning appears. The limited endorsement which Pires received in Peisley does not add anything to the respondent's argument.
49 The respondent sought, late in the argument, to rely upon a claim in estoppel. Reliance on such a claim is problematic, apart from the fact that Mr Heffernan did not give the evidence which would be necessary to support an estoppel, in the proceedings before the Tribunal, or, at the least, that evidence is not in the material before us and was not referred to in argument. This is not a case in which issue estoppel is relied upon, or, indeed any estoppel arising out of a prior proceeding. What is relied upon is estoppel by representation or estoppel by conduct. There can, however, be no estoppel against a statute. Any such estoppel must be limited to areas of discretion (Roberts v Repatriation Commission (1992) 29 ALD 442; Bramwell and Repatriation Commission (1998) 51 ALD 56; Telstra Corp v Mahon [2004] FCA 1404; Re Jebb and Repatriation Commission (2005) 86 ALD 182). The Tribunal was bound to address the respondent's statutory rights, only exercising a discretion within those rights. Because those rights do not extend to an entitlement to have compensation under sub-s 19(3) calculated by reference to current normal weekly hours, there was no room for the Tribunal so to proceed.
50 The above factors compel me to conclude that, assuming the definition of "normal weekly hours" in s 4 to be applicable, on its proper construction the phrase "normal weekly hours" in sub-s 19(3) means normal weekly hours before injury.
51 That takes me to the second question, namely, whether the act demonstrates a contrary intention to the meaning of "normal weekly hours" as defined in s 4. However I look at the Act and the relevant provisions referred to above I cannot find any contrary intention. Indeed, I am unable to generate any doubt that the words were intended to have the meaning I have so far found them to have. That meaning is consistent with the meaning of the words used elsewhere in the Act. It is consistent with the overall object of the compensation provisions to provide compensation by reference to earnings before injury as the relevant comparator. Selecting some standard of the employee's earnings after the employee has returned to work would seem to me to give rise to anomalies because some incapacitated employees, if not all of them, would seek to arrange their duties and hours so that they were able always to work one hundred per cent of those hours each week. Rather than such a regime encouraging incapacitated workers to maximise their hours, which is undoubtedly an object of the legislation, it seems to me that it would do less to encourage that end than the operation of the legislation that I have found it to have.
52 It should not be forgotten that a contrary intention is not something readily to be inferred. It is not so easily found as a purposive meaning may be found in the face of ambiguity. This case is not one in which, in my opinion, there is any uncertainty. It is nevertheless apt to recall the words of the Privy Council (Lords Simonds, Normand, Morton of Henryton, MacDermott and Reid) in Slazengers (Australia) Pty. Limited v Burnett [1951] AC 13 at 21 in dealing with the NSW Workers Compensation Act 1926 - 1947:
The improbability of the word "injury" bearing a different meaning in successive paragraphs of the same sub-section is so great that any legitimate interpretation which avoids this result would appear preferable… As a matter of construction it covers the definition of "injury", but the improbability is great that the draftsman should have left the most important word in the whole Act to the hazard of the statutory definition being excluded and some other meaning or meanings, to which no clue is given, being substituted.
53 The result is that on its proper construction sub-s 19(3) has a meaning different to the construction which has been attributed to it by Comcare for some twenty years. The construction I have found the section to have will, in most cases, be less generous than the construction Comcare gave to it for so long. It will be more difficult for incapacitated employees to receive compensation of one hundred per cent of earnings before accident. This may lead to employees on compensation receiving less for the future than they have in the past.
54 The result in this case is simply the effect of the legislation as I have found it to be. The task of the Court is to determine what the meaning of the legislation is. It will be for the government and the parliament to consider whether a de facto regime which achieved a different result over a long period of time without apparent adverse effect should be changed to the detriment of most incapacitated employees.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Downes.