Administrative Appeals Tribunal of Australia|2002-07-19

Slater and Telstra Corporation Limited [2002] AATA 597 (19 July 2002)

DECISION AND REASONS FOR DECISION [2002] AATA 597

Decision The Tribunal sets aside the decision under review and, in substitution therefore, decides that: (a) the respondent is liable, pursuant to section 14 of the Act, to pay compensation to the applicant in respect of his left knee injury; and (b) the respondent is liable, pursuant to section 19 of the Act, to pay to the applicant compensation in the amount of $19.82 per week for the period from 1 October 1997 until 31 August 1998.

COMPENSATION - workplace injury - partial incapacity for work - fitness for full time work in suitable employment - suitable employment - normal weekly earnings - amount able to earn - required to undertake overtime work on a regular basis - rehabilitation program

Department of Defence v Fox (1997) 24 AAR 171

Fox v Department of Defence (1995) 22 AAR 402

Re Zarb and Comcare (1997) 25 AAR 344

1. This matter was remitted, on 11 October 2001, by the Full Court of the Federal Court to the Administrative Appeals Tribunal (the Tribunal) for reconsideration of the determination of a claim by Gordon Slater (the applicant) for compensation for an injury to his left knee sustained in the course of his employment with Telstra Corporation Limited (Telstra - the respondent).

2. After the matter first came before it, the Tribunal determined, on 13 March 1998, that the applicant was partially incapacitated for work but fit for full time work in suitable employment. On that occasion, the Tribunal remitted the matter to the respondent with a direction that the respondent determine what would be suitable employment for the applicant pursuant to the terms of section 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act). On 14 October 1998, in reliance on a report, dated 4 September 1998, from Work Directions Australia (WDA), as well as other documentation from WDA, the respondent determined a list of what it considered to be suitable employment, for the purposes of section 19 of the Act, and advised the applicant accordingly.

3. The applicant requested a reconsideration and, on 10 November 1998, the decision was affirmed and the applicant was advised that he had no entitlement to compensation under section 19 of the Act.

4. The applicant requested further review by the Tribunal which, on 12 November 1999, varied the decision then under review and determined that suitable employment for the applicant was limited to the occupations listed by WDA in its report of 4 September 1998 and remitted the matter to the respondent again, in order for the respondent to calculate compensation payments payable to the applicant in accordance with section 19 of the Act. In addition, the Tribunal directed that:

"Compensation payments as calculated in accordance with s 19 of the Act be payable from some date in October 1997 to be agreed on by the parties;

Telstra provide vocational counselling for the appellant to select an occupation from the list provided in the WDA Report; and

Telstra provide a rehabilitation program pursuant to s 37 of the Act, or some other form of program, with the aim of retraining the appellant for his chosen occupation."

5. On 28 February 2001, an appeal by the respondent against the Tribunal's decision was upheld in the Federal Court which ordered that:

2. The orders of the Administrative Appeals Tribunal of 12 November 1999 be set aside.

3. The application for an order of review to the Administrative Appeals Tribunal of the decision of 10 November 1998 be dismissed."

6. The matter then came before the Full Court of the Federal Court which, on 11 October 2001, upheld the appeal in the following terms:

2. Order 2 made on 28 February 2001, that the application to the Administrative Appeals Tribunal be dismissed, be set aside.

3. The matter be remitted to the Administrative Appeals Tribunal for reconsideration according to law and in accordance with these reasons.

4. The respondent pay the appellant's costs of the appeal.

5. The costs order made on 4 April 2001 be set aside and in lieu thereof, there be no order as to the costs of the proceedings."

7. The applicant attended the hearing and was represented by Mr G Porter of Mahoney and Hesford, solicitors. Mr R Dickson, of counsel, instructed by Standish Partners, solicitors, appeared for the respondent.

8. At the hearing, the following material was taken into evidence from

Exhibit A1 volumes 1, 2 and 3 of the Full Court Appeal Books;

Exhibit A2 the decision of the Full Court of the Federal Court;

* a letter dated 23 August 1996 from the respondent to the applicant

* an e-mail message, dated 15 August 1996, from Sharon Coleman to Anthony Clark

* a statement of normal weekly earnings calculated by the applicant

Exhibit A4 calculations of normal weekly earnings re two awards;

Exhibit R1 decision of the Tribunal dated 13 March 1998;

* letters, dated 25 October 2001, from Queensland Government Department of Industrial Relations and Standish Partners, solicitors

* Clerical Employees' Award - State, dated 11 September 1997

9. The following summary of the background to this matter was set out in the decision of Spender J in the Federal Court and no challenge was made to it by either of the parties.

"10. Mr Slater was born in the United Kingdom on 9 May 1954. From 1974 to 1992 he was employed as a refrigeration mechanic, and came to Australia in 1992. After approximately 18 months in Australia, he returned to the UK for some thirteen months. He returned to Australia in February 1995, and in October 1995 he commenced employment with Telstra on a fixed term contract as a communications officer or cable TV installer. He was employed on a further fixed term contract for the period 4 July 1996 to 4 January 1997 when, on 11 July 1996, he sustained an injury to his left knee whilst installing a television cable at a private residence.

11. On 19 July 1996 Mr Slater completed a claim for compensation, attaching a medical certificate by Dr B. Geissmann dated 26 July 1996, which certified that Mr Slater suffered from a left knee injury but 'is fit to return to modified/alternative duties from 27.7.96 to 10.8.96', and specified work restrictions or limitations to be 'no lifting/squatting/heavy weights etc'. Mr Slater signed a rehabilitation plan and return to work programme on 30 July 1996, the latter of which specified tasks to be undertaken as 'driving and other light duties as required' on a full-time basis from 30 July 1996 to 31 August 1996. After two days work, Mr Slater apparently experienced further problems with his knee, and on 31 July 1996 was certified by Dr Geissman to be totally incapacitated for work from that date until 7 August 1996.

12. By letter dated 6 August 1996, Telstra determined that it was liable to pay compensation in respect of 'Left Knee Injury suffered as result of a work related incident on 11/7/96'. Telstra further determined that it would pay various medical expenses incurred, and that in accordance with s 19(2) of the Act, Mr Slater was entitled to full pay incapacity payments of $545.00 per week from the period 12 July 1996 to 26 July 1996 inclusive.

13. Further medical assessments followed, including by orthopaedic surgeon Dr S. Rackemann. He recommended surgery and reported on 10 October 1996 following an arthroscopy of Mr Slater's knee that 'In summary his pathology is an 80% rupture of the anterior cruciate ligament and condral damage to the medial femoral condyle'. Various determinations by Telstra extending the period of Mr Slater's entitlement to full incapacity payments, the amount of which was increased to $678.08 per week from 19 September 1996, followed. On 2 December 1996, however, Dr Rackemann certified that Mr Slater was fit to return to modified/alternative duties from 8 December 1996 to 8 January 1997 - specifying work restrictions or limitations as 'avoid squatting, climbing'. Dr Rackemann's certificate also stated that Mr Slater would be fit to return to work from 9 January 1997. By letter dated 17 December 1996, Telstra indicated its intention to issue a determination that incapacity payments therefore cease on 9 January 1997, and offered Mr Slater an opportunity to provide evidence supporting a contrary decision.

14. Additional medical certificates subsequently provided by Mr Slater noted that he was fit to return to work but required treatment for his injury, and that he was fit to return to modified/alternative duties from 6 February 1997 to 26 March 1997, with restrictions or limitations being 'no squatting/climbing etc'. On 17 March 1997, a delegate for Telstra wrote to Mr Slater stating 'on the evidence before me I have determined that Telstra Corporation Limited is ceasing liability for incapacity in respect of your claim for compensation'. On 27 March 1997, solicitors for Mr Slater wrote to Telstra requesting reconsideration of the determination to cease compensation payments.

15. On 16 April 1997, a delegate of Telstra issued a 'Determination (Reviewable Decision)':

'1. that the determination of 17.03.1997 be affirmed; and

2. that the available evidence has established that the Claimant is fit to return to full time work, with restrictions; and

3. that the available evidence has established that liability no longer exists in respect of incapacity payments; and

4. that the available evidence has established that liability still exists in respect of medical expenses as outlined in the statement of reasons.'

16. An application by Mr Slater for review of the decision of 17 March 1997 was received by the AAT on 30 April 1997. Mr Slater stated that his reasons for the application were 'I still am and always have been unable to resume full duties (see attached Clarification of Medical condition) and as such Telstra should still be liable for compensation'.

17. On 13 March 1998 at Brisbane the AAT made the following decision:

'The Tribunal sets aside the decision under review only in so far as it decided that the applicant was fit to return to full time normal duties with restrictions, and substitutes a decision that:

(1) the applicant was partially incapacitated for work, but fit for full time work in suitable employment; and

(2) remits the matter to Telstra, with a direction that the delegate determine what would be suitable employment for the purposes of s 19 of the Safety Rehabilitation and Compensation Act 1988.' [Emphasis added]

18. The reasons for this decision of the AAT (the first AAT decision) reveal that it treated Mr Slater's application for review as relating to the decision of 16 April 1997, rather than the earlier determination which Mr Slater specified, but nothing turns on this. The Tribunal outlined Mr Slater's medical history and the history of his claim at length and concluded inter alia:

'We are satisfied on the evidence that the applicant is not totally incapacitated for work. He has residual restrictions of movement ...[but is able] to walk considerable distances and to play 6 to 9 holes of golf, four times per week. We consider that he is capable of working full time with restrictions, such as no squatting, no heavy lifting, no pivotal movements. On the medical evidence, which we accept, he should not return to his duties as a cable TV installer.

The decision under review refers to the applicant being fit to return to "full time normal duties with restrictions". Although we are satisfied that the applicant is capable of undertaking full time work, we would not envisage him returning to his "normal duties'" as a cable TV installer. He is capable of undertaking suitable employment, which would take into account the restrictions contemplated by the decision under review.'

19. The AAT also commented at [3], in relation to Mr Slater's contention in his Statement of Issues and Contentions before the Tribunal 'that he had a permanent disability, and that Telstra was obliged, either to find him suitable employment, or to assist him to find suitable employment; and to provide him with a rehabilitation programme', that:

'The applicant has not lodged a claim for compensation for permanent impairment pursuant to section 24 of the Safety Rehabilitation and Compensation Act 1988 (the Act) nor has he lodged a formal claim for rehabilitation. We accepted Telstra's submission that there is no reviewable decision, and the Tribunal does not have jurisdiction to examine these issues. The applicant formally withdrew these two contentions.'

20. By letter dated 8 July 1998, solicitors for Telstra wrote to solicitors for Mr Slater noting that arrangements had been made for Mr Slater to be assessed by Work Directions Australia (WDA) on 21 July 1998, and that 'Subsequent to that assessment our client will then be in a position to comply with the Order of the Tribunal to determine what is suitable employment for the purposes of s 19 of the Safety Rehabilitation and Compensation Act 1988'. [Emphasis added]

21. After assessment of Mr Slater, WDA issued a report on 4 September 1998. The report outlined his personal history, including education, employment and health, the circumstances and effect of the injury in question, and his current status. It assessed his physical abilities and mental capacity, and the types of work he preferred to do. It concluded that he should not return to his previous occupation, but that he would be suited to seven specified types of employment on a full-time basis, stating:

'Potentially suitable occupations which are commensurate with his physical disability and requiring various lengths of training include:

s Teacher of Technical and Further Education/TAFE teacher

s Engineering Associate Professional, eg Mechanical Engineering Technician

s Engineering Associate Professional, eg Mechanical Engineering Associate

22. The report specified the training required for each of the employment options listed. All required university or TAFE training of various durations, with the exception of the console operator option, for which 'training is carried out via a traineeship with the respective employer'. The report also indicated that Mr Slater's IQ 'is in the range of approximately 118 to 120 (High-Average to Superior Ranges of intellectual functioning)', and that the assessment generally had 'indicated that Mr Slater has a high level of aptitude for further training at a tertiary level'.

23. Although it involves a departure from the chronological record, it is useful here to note the contents of a letter to Mr Slater dated 25 November 1998 from Margaret Kennedy, Occupational Therapist/Psychologist at WDA. Ms Kennedy was the author of the initial report referred to above, and was writing in response to a letter from Mr Slater which appears not to be in the material before the Court. Relevantly, Ms Kennedy writes:

'1. Clerical duties could well be included in the list of occupations which were identified in my report dated 4 September 1998.

2. Without further training or qualifications, the first occupation of Console Operator is achievable. Training is required (13 weeks) once a person is employed but this is sponsored by the employer under a traineeship scheme. Such an employer would be eg. Shell.' [Emphasis added]

Ms Kennedy noted in essence that she did not include a clerical occupation in her initial suggested list because of the preferences Mr Slater expressed during the assessment for other types of work, and continued:

'To just nominate clerical work for any person who can no longer carry out heavier work would be an easy outcome from my assessments - however we do make carefully considered and researched opinions when making recommendations for an individual's future.'

24. Consequent upon the first AAT decision, Telstra then determined on 14 October 1998 'that suitable employment' for the purposes of Section 19 of the Safety, Rehabilitation and Compensation Act 1988 is:-

Teacher of Technical and Further Education/TAFE Teacher

For convenience, this will be referred to as the 'primary determination'.

25. The statement of reasons for the primary determination stated inter alia that this list of eight suitable options was based on the report from WDA. Clearly, this list of eight is not the same list as that of seven provided in the WDA report. That the inclusion of 'clerical position' as an eighth option was based on the report is, however, equally clear: such a position can easily be seen to be commensurate with Mr Slater's identified level of intelligence, capacity for retraining, and ability to perform the tasks involved in the other positions identified. The 25 November 1998 letter from Mrs Kennedy, apparently responding to a letter from Mr Slater which asked inter alia why a clerical role had not been included in her WDA report, confirms this.

26. Mr Slater subsequently made a request for reconsideration of the primary determination, and on 10 November 1998 Senior Claims Officer Sharon Coleman issued a 'Determination (Reviewable Decision)' affirming the primary determination. Ms Coleman's statement of reasons recounted that the primary determination 'found that the claimant was fit for suitable employment in a number of fields, inclusive of: [the eight employment options listed above]. On this basis it was determined that the claimant was able to earn in suitable employment, and consequently not entitled to payment under Section 19 of the Act' [Emphasis added]. This reviewable determination did not specifically address any of the eight suitable employment options other than the clerical one (see below), but since it affirmed the primary determination it may be taken as having affirmed the entire list.

'Having perused the available information it is apparent that the claimant has the attributes to efficiently and effectively perform the duties of a clerical type position, and that it is reasonable for the claimant to undertake such employment with the physical restrictions imposed by his left knee condition.

The claimant has subsequently opined that in accordance with the above definition, none of the occupational pursuits detailed in the determination of 14 October 1998, are suitable due to his not having the training, qualifications, or experience required.

Having regard to the findings of Work Directions Australia, the claimant has shown himself to be an individual of above average intelligence, who would be able to fulfil the requirements of a clerical based position, with the potential of advancement. It is not a requirement of such a role that formal training having been undertaken, or that formal qualifications be obtained. From the work directions report findings it would appear that the claimant has not pursued work of this nature previously because of a desire to work out of doors in a manual capacity, rather than indoors. This desire does not however preclude the expectation of the claimant undertaking work which is deemed suitable in light of physical restrictions.

The other matter raised by the claimant in his request for reconsideration concerns a failure by the primary decision maker to define an amount of compensation under Section 19 of the Act.

I note that the claimant was not a permanent employee of Telstra, and was in fact employed on a fixed contract basis. There was no expectation by the claimant of continued employment beyond the expiration date of the contract. Similarly there was no expectation by the claimant to maintaining salary beyond the expiration date of the contract, and he would have been seeking employment in the open market commensurate with his skills and abilities.

Accordingly there is no evidence to suggest that the claimant's earning capacity would have been less than, equal to, or greater than that received whilst in the employ of Telstra.

I am satisfied that the claimant is fit for employment in duties of a clerical nature, which may well attract financial remuneration equal to, or greater than that earned as a Communications Officer Grade 2 with Telstra. Furthermore, I find that such duties would be deemed suitable in accordance with the Act, and that it is a reasonable expectation for the claimant to undertake such duties.

In closing therefore, I find that the claimant's ability to earn is such that there would be no entitlement to compensation in accordance with Section 19 of the Act.' [Emphasis added]

28. A letter to the AAT from Mr Slater dated 8 December 1998 is agreed to constitute the application for review which was before the AAT, although it is not in the form provided for by the AAT Act. The application is in the following terms:

Decision reference T0097659 dated 10 November 1998 reason for application: the occupation identified as suitable employment by the decision maker is not suitable.

No amount of earnings has been identified as being able to earn in suitable employment

No amount of compensation has been identified as being liable to pay under section 19

Several requests for a determination following a request for a rehabilitation program has resulted in no determination being forthcoming.

Failure to provide a determination is in itself a determination and as such I rquest [sic] that this determination be reviewed with a view to obtaining a rehabilitation program to include retraining

Enclosures: i) Reconsideration of determination dated 10.11.98

ii) Letters dated 24.4.98 and 25.1.98 requesting rehabilitation program.'

29. For completeness it is sufficient for current purposes to note the contents of Mr Slater's enclosed letter dated 24 April 1998, which read inter alia:

'I refer you to my letters dated 15.10.97, 27.10.97, 5.11.97, 17.11.97, and 25.1.98 formally requesting that you supply me with a rehabilitation program.

It is your duty under the CRC Act 1988 to issue me with a formal determination to include a statement of reasons and informing me of my rights if I do not agree with your decision.

Your letter of 16.2.98 is not a determination and therefore constitutes a breach of my rights under the CRC Act 1988, I therefore request that you address this within the next seven days ...'

30. Telstra's letter dated 16 February 1998 referred to an earlier request by Mr Slater for a rehabilitation program, and to the WDA report dated 11 February 1998, a copy of which was attached. The letter stated inter alia:

'The rehabilitation assessment outcome was no further recommendations with regard to any physical intervention that would be of assistance.

The rehabilitation plan included job seeking assistance and you attended a Work Directions ´Job Seeking Workshop' on 03 July 1997.

Further comments from Work Directions Australia indicated Job seeking services were declined by you until after your appeal had been determined.

In line with relevant provisions of the SRC Act 1988, you were assessed as capable of undertaking a Rehabilitation program and that was initiated under Work Directions Australia.

The rehabilitation program was closed in September 1997 after consideration that further physical intervention would be of no assistance and that job seeking services that had been included in that plan were declined.

After having examined circumstances of the case, the rehabilitation assessment [having] been exhausted, there is no additional benefit in having you re-assessed.' [Emphasis added]

31. The report from WDA dated 11 February 1998 is entitled 'Case Summary' and was provided to Telstra as an outline of 'the progress of the case as detailed in the Work Directions Australia rehabilitation file'. The document notes that the report, prepared following an initial rehabilitation assessment of Mr Slater and review of the various medical reports, recommended that no further physical intervention would assist Mr Slater, but that Mr Slater 'be assisted with job seeking and a rehabilitation plan was developed to address this recommendation'. The plan was stated to include six hours job-seeking assistance and four hours for case management, and was estimated to run from 1 June 1997 to 1 September 1997. Mr Slater attended a workshop to which he was referred in relation to job application skills on 3 July 1997, and attended a later meeting to discuss further assistance that could be provided with job seeking as per the rehabilitation plan. The WDA case manager then received a letter from Mr Slater dated 26 August 1997 which stated that:

'Until the issue of suitable employment is resolved any job leads which you supply may be inappropriate, unless you address the issue of suitable employment first.'

32. Upon receipt of this letter WDA contacted Telstra to discuss the ongoing rehabilitation plans. Telstra requested WDA to close the rehabilitation file, and this was done.

33. Mr Slater's letter dated 26 August 1997 is to the effect noted in the WDA summary. Relevantly, Mr Slater also wrote to Telstra on 2 September 1997, referring to the WDA job-seeking assistance and requesting:

'In an effort not to waste these resources on job leads which may not be classed as "suitable employment" as defined by the CRC Act 1998 please confirm that all efforts will be made to determine suitable employment prior to using these services.' "

10. In its decision of 12 November 1999, the Tribunal varied the decision under review, determining that suitable employment for the applicant included the seven occupations listed by WDA in their report dated 4 September 1998. That did not include the reference to clerical position, an occupation not mentioned by WDA in its initial report but referred to in the subsequent letter sent to the applicant by WDA. The Tribunal also remitted the matter to the respondent to calculate compensation payments in accordance with section 19 of the Act, for the respondent to provide vocational counselling for selecting an occupation from the list provided in the WDA report and for the respondent to provide a rehabilitation program pursuant to section 37 of the Act.

11. In the Federal Court, Spender J understood that the initial finding by the Tribunal on 13 March 1998 of the applicant's partial incapacity, but fitness for full-time work in suitable employment, was not in question and that the effect of that decision was to have required the respondent, in making the decision under review, not just to determine a list of suitable employment options but, in fact, to calculate the amount of compensation, if any, that was payable. His Honour concluded that this had not been done in the respondent's primary determination of 14 October 1998, as this merely provided a list of suitable employment options and failed to consider the amount of compensation payable. However, His Honour was also of the opinion that the second of those tasks had been carried out by the decision maker in the decision of 10 November 1998 in that, although a precise sum was not determined as being able to be earned by the applicant, it was determined that it may well have been a sufficient level of remuneration equal to or greater than the applicant's normal weekly earnings and that, therefore, compensation was not payable to him. As the calculation had been done in that way, the Tribunal decision of 12 November 1999 was set aside.

12. Spender J also referred to the Tribunal's direction that the respondent provide vocational counselling to the applicant for selection of an occupation from the list provided in the WDA report, and the direction that the respondent provide a rehabilitation program pursuant to section 37 of the Act, or some other form of program to retrain the applicant for his chosen occupation. His Honour was of the opinion that, under section 37 of the Act, there was an obligation for the respondent to consider whether to provide a rehabilitation program such as vocational training but that there was no duty to provide any such program.

13. The Full Court of the Federal Court did not accept Spender J's conclusion that the decision maker on 10 November 1998 had complied with the obligation under section 19 of the Act to make the appropriate calculation. The Full Court said:

"16. His Honour construed the decision-maker's language, which his Honour characterised as 'imprecise', as a conclusion that the appellant was able to earn an unspecified amount in suitable employment of sufficient magnitude, such that compensation to be calculated in accordance with s 19 of the Act was nil. His Honour considered that the Act does not require of a decision-maker applying s 19 of the Act that he or she should always determine a precise amount for the figure 'AE' in the formula provided in s 19(2), at least where the decision-maker is satisfied that the amount able to be earned from suitable employment is greater than what was previously earned. His Honour considered that that was certainly so where none of the specific matters listed in s 19(4) of the Act to assist in calculation of the relevant amount is applicable. His Honour considered that that was the situation in the present case and that, in such a situation, the decision-maker would be left with an obligation merely to have regard to 'any other matter that [it] considers relevant' pursuant to s 19(4)(g). His Honour concluded that Telstra's finding that the appellant was not entitled to payments under s 19 of the Act did not demonstrate any misunderstanding of the requirements of the Act."

14. The Full Court found that there had been a failure to undertake the exercise required by sections 14 and 19 of the Act and that, in order to determine whether the respondent had a liability to pay compensation, it was necessary to compare two amounts:

(a) the amount of the appellant's normal weekly earnings with Telstra, as calculated under section 8 of the Act; and

(b) the amount per week (if any) that the appellant is able to earn in suitable employment.

15. The Full Court said that there was no indication that the decision maker had undertaken such a comparison other than simply to conclude that she was satisfied that the applicant was fit for employment in duties of a clerical nature which may well attract financial remuneration equal to or greater than that earned by him with the respondent. In so far as the role of the Tribunal at this rehearing is concerned, the Full Court continued:

"20. The Tribunal concluded that Telstra's determination evidenced a basic and fundamental misconception of the requirements of the Act. In so far as the decision-maker failed to make such a determination, that was so. The appropriate course for the Tribunal, therefore, was either to make such a determination itself or to remit the matter to Telstra to enquire into and determine those two amounts in order to make a determination in accordance with s 19 of the Act. However, it does not appear to have adopted either course. To that extent, it erred in law."

16. In relation to Spender J's observations about the provision of vocational counselling and a rehabilitation program, the Full Court said:

"17. His Honour also concluded that the Tribunal's directions concerning vocational counselling and provision of a rehabilitation program reflected a misunderstanding on the part of the Tribunal of the relevant provisions of the Act. His Honour was of the view that, under s 37 of the Act, Telstra had an obligation to consider whether to provide a rehabilitation program to Mr Slater. Such a program may, under the Act, include vocational training. However, his Honour considered that s 37 did not require the provision of any such program but merely required that, in deciding whether an employee should undertake a rehabilitation program, the decision-maker should have regard to matters that included the employee's attitude to the program and any other relevant matter. His Honour concluded that, if there is in truth suitable employment available to the appellant and if the calculation called for by s 19 of the Act results in a nil entitlement, Telstra was not in breach of its obligations under the Act."

"21. In so far as the Tribunal directed Telstra to provide vocational counselling and to provide a rehabilitation program, the Tribunal appears to have misconceived the operation of s 37 of the Act. Section 37 confers a discretion on Telstra to make a determination that an employee should undertake a rehabilitation program and, where it so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee. It is not obliged to do so. Mere failure to do so was not a neglect by Telstra of its statutory obligation.

22. On the other hand, there is no indication that the decision-maker turned her mind to the exercise of the discretion conferred by s 37 of the Act. The appropriate course for the Tribunal was to give consideration to that question and decide whether to exercise the discretion vested in Telstra or to remit the matters to Telstra to consider whether the discretion should be exercised. The Tribunal erred in so far as it found that Telstra had an obligation to provide a program."

18. Matters relating to compensation are set out in Part II of the Act. Sections 14 and 19 of the Act relevantly provide:

(1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

(1) This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.

(2) Subject to this Part, Comcare is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount under the formula:

NWE is the amount of the employee's normal weekly earnings; and

AE is the amount per week (if any) that the employee is able to earn in suitable employment.

(3) Subject to this Part, Comcare is liable to pay 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), compensation:

(a) where the employee is not employed during that week - of an amount equal to 75% of his or her normal weekly earnings less the amount (if any) that he or she was able to earn during that week in suitable employment;

(4) In determining, for the purposes of subsections (2) and (3), the amount per week that an employee is able to earn in suitable employment, Comcare shall have regard to:

(a) where the employee is in employment - the amount per week that the employee is earning in that employment;

(b) where, after becoming incapacitated for work, the employee received an offer of suitable employment and failed to accept that offer - the amount per week that the employee would be earning in that employment if he or she were engaged in that employment;

(c) where, after becoming incapacitated for work, the employee received an offer of suitable employment and, having accepted that offer, failed to engage, or to continue to engage, in that employment - the amount per week that the employee would be earning in that employment if he or she were engaged in that employment;

(d) where, after becoming incapacitated for work, the employee received an offer of suitable employment on condition that the employee completed a reasonable rehabilitation or vocational retraining program and the employee failed to fulfil that condition - the amount that the employee would be earning in that employment if he or she were engaged in that employment;

(e) where, after becoming incapacitated for work, the employee has failed to seek suitable employment - the amount per week that, having regard to the state of the labour-market at the relevant time, the employee could reasonably be expected to earn in such employment if he or she were engaged in such employment;

(f) where paragraph (b), (c), (d) or (e) applies to the employee - whether the employee's failure to accept an offer of employment, to engage, or to continue to engage, in employment, to undertake, or to complete, a rehabilitation or vocational retraining program or to seek employment, as the case may be, was, in Comcare] opinion, reasonable in all the circumstances; and

(g) any other matter that [the Tribunal] considers relevant."

19. Sub-section 4(1) of the Act defines the term suitable employment, in relation to an employee who has suffered an injury in respect of which compensation is payable under the Act, to mean:

"(a) in the case of an employee who, on the day on which he or she was injured was a permanent employee of the Commonwealth or a licensed corporation and who did not subsequently terminate that employment - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to:

(i) the employee's age, experience, training, language and other skills;

(ii the employee's suitability for rehabilitation or vocational retraining;

(iii) where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or her place of residence; and

(b) in any other case - any employment (including self-employment), having regard to the matters specified in subparagraphs (a) (i), (ii), (iii) and (iv)"

20. In this case, it is not disputed that the applicant was employed on a contract basis and that, therefore, part (b) of that definition applies so that suitable employment is not limited to employment with the respondent.

21. Sub-section 23(1) of the Act provides that compensation is not payable under sections 19, 20, 21, 21A or 22 to a person who has reached age 65 years.

22. Normal weekly earnings are calculated in accordance with section 8 of the Act which relevantly reads:

(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 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 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."

23. Part III of the Act relates to rehabilitation matters. Section 37 relevantly provides:

"(1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee.

(3) In making a determination under subsection (1), a rehabilitation authority shall have regard to:

(b) any reduction in the future liability to pay compensation if the program is undertaken;

(d) any improvement in the employee's opportunity to be employed after completing the program;

(7) Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program."

24. Section 40 of the Act is headed "Duty to provide suitable employment" and sub-section 40(1) provides:

"Where an employee is undertaking, or has completed, a rehabilitation program, the relevant employer shall take all reasonable steps to provide the employee with suitable employment or to assist the employee to find such employment."

25. This reconsideration of the respondent's decision is not concerned with the initial finding by the Tribunal on 13 March 1998 that the applicant has partial incapacity and fitness for full-time work in suitable employment. On that occasion, the Tribunal remitted to the respondent the issue of what constitutes suitable employment and, as indicated by Spender J in the Federal Court and the Full Court of the Federal Court, there was also an obligation to make a determination under section 19 of the Act.

26. The first issue for determination by the Tribunal is what constitutes suitable employment for the applicant.

27. The second issue for the Tribunal relates to section 19 of the Act. In accordance with the direction of the Full Court, the Tribunal must either make a determination by applying the formula in that provision or remit the matter to the respondent to do so. This will involve an enquiry into and determination of the amount of the applicant's normal weekly earnings with the respondent, as calculated under section 8 of the Act; and the amount per week that the appellant is able to earn in suitable employment, as calculated in accordance with sub-section 19(4) of the Act.

28. The third issue for the Tribunal relates to section 37 of the Act. In accordance with the direction of the Full Court, the Tribunal must exercise the discretion conferred under that provision or remit the matter to the respondent to consider whether the discretion should be exercised.

29. In relation to suitable employment, Mr Porter submitted that none of the seven forms of work listed in the WDA report or the additional clerical work were suitable in this case. This was because, although the applicant was physically capable of doing each of those forms of work, they could only be done if there was retraining. He submitted that, where there is such a need for retraining, the employment is not suitable. In that regard, he referred to the following comment by Spender J in the Federal Court decision (folio 534 of exhibit A1):

"60. If retraining was necessary for suitable employment to be available to an injured employee, compensation would be payable until the time at which such retraining would reasonably be concluded."

30. Mr Porter referred to the WDA report of 4 September 1998 and to the clear references therein to the need for the applicant to undergo retraining for each of the seven occupations listed. He also referred to a letter, dated 24 November 1998 (exhibit A7) written by Margaret Kennedy who was the the author of the original WDA report. He submitted that this letter, whilst indicating that clerical occupations may well have been included in the list of identified occupations suitable for the applicant, also declared that, in order for him to compete in the labour market for a clerical position, the applicant would need to complete a formal clerical-related program such as a TAFE course or an office administration course. Mr Porter referred to another letter written by Margaret Kennedy on 25 November 1998 (folio 38 of exhibit A1) to the applicant in which, again, she described clerical work as an occupation that could have been listed in her initial report and where she reiterated the need for the applicant to undergo a TAFE or office administration course in order for him to enter such a position.

31. In relation to the employment option of console operator, Mr Porter noted that the retraining relevant to that position was "on the job" in format. However, he submitted that such work was not commensurate with the applicant's age, experience and suitability for retraining as required by the definition of suitable employment in sub-section 4(1) of the Act. In support, he referred to Fox v Department of Defence (1997) 24 AAR 171.

32. Mr Porter referred to the report, dated 7 July 1998, by rehabilitation consultant, Chiu Teh (folio 150 of exhibit A1) where Mr Teh nominated the following as being suitable employment for the applicant: clerical/administration work, customer service officer, service station attendant or sales representative. However, Mr Porter also noted the following qualification given by Mr Teh.

"...Mr Slater lacks transferable skills and relavant work experiences to access these jobs. He is likely to have a better chance of re-accessing the workforce either within or outside Telstra if he is provided with some form of vocational rehabilitation assistance with the following interventions:

(a) Mr Slater should be given the opportunity to be retrained in either clerical/office skills or customer service/data entry skills area or sales work;

(b) a worksite assessment with ergonomics intervention should be carried out to determine suitability of duties and appropriate use of aids or modifications;

(c) sustainable part-time work hours should be negotiated with employers to accommodate Mr Slater's physical limitations and pain levels."

33. In relation to the application of section 19 of the Act, Mr Porter agreed that the relevant component was paragrapgh 19(3)(a) which is applicable in the situation where a person is not employed. He submitted that, as there was no suitable employment identified, the formula of NWE - AE should be applied with AE being treated as zero so that the amount of compensation to be paid to the applicant was 75% of NWE as provided for in paragraph 19(3)(a) of the Act.

34. Mr Porter submitted that NWE in this case should take account of overtime payments in accordance with sub-section 8(2) of the Act. He referred to the calculations of compensation payments to the applicant as being $545 per week for the period 12 July 1996 to 26 July 1996 (folio 331 of exhibit A1); $661.55 for the period 1 August 1996 to 18 September 1996 (folio 334 of exhibit A1); and $678.08 for the period 19 September 1996 until 16 October 1996 (folio 337 of exhibit A1). He submitted that these higher sums correctly reflected the inclusion of overtime payments for rostered Saturdays as indicated in exhibit A3 and that they should have been utilised for making the calculations of NWE under section 8 for the purposes of determining the amount of 75% NWE as required in paragraph 19(2)(a) of the Act. He referred to the schedule of payments made to the applicant (exhibit A4) as not reflecting that level of payment.

35. In relation to section 37 of the Act, Mr Porter submitted that the Tribunal should exercise the discretion available and order that a rehabilitation program be provided to the applicant. He described the applicant as having a positive attitude such that he would benefit from a program of retraining which would enable him to take up an employment option in the future. He also described Telstra as a class 3 licence holder under Part VIIIA of the Act and, as such, was an entity obliged to make reahabilitation programs available.

36. In response to Mr Dickson's submissions (see below), Mr Porter noted the references to adverse comment about the applicant after the earlier Tribunal hearings but pointed out that, nonetheless, favourable outcomes had been achieved by him in the Tribunal decisions. Mr Porter also submitted that the applicant should not be perceived as a labourer but as a qualified tradesperson when consideration is given to suitable employment options.

37. Mr Dickson submitted that it was significant that the applicant had not given evidence despite being present at the hearing. He referred to adverse comments about the applicant that had been made in the previous Tribunal hearings. This included the observation by the Tribunal, in the 1998 decision, that some of the activities the applicant performed such as playing six to nine holes of golf four times per week were inconsistent with the level of instability of the left knee, and the level of pain he allegedly experienced (para 17 of exhibit R1). He also referred to the decision of the applicant not to take up an option offered in 1997 of a session with WDA for investigation of tangible job leads and to the following observation on that matter by the Tribunal in the 1998 decision (paragraph 31 of exhibit R1):

"In June 1997 Telstra provided funding for a Rehabilitation Plan through Work Directions Australia to assist the applicant to return to full time work, and to investigate possible job opportunities. We do not consider that either Telstra or Work Directions Australia have acted unreasonably. We accept the applicant's evidence to the effect that he understood that Work Directions Australia would need to be satisfied that any prospective employment would be 'suitable employment' in accordance with the Act, and in the light of the applicant's assertion that he was not capable of performing full time work with restrictions. Whatever the perceptions of the situation from the viewpoint of the applicant, or Work Directions Australia, the Rehabilitation Plan was not implemented, and we have no evidence, therefore, of the type of employment that could be undertaken by the applicant, and could be regarded as 'suitable employment' for the purposes of the Act."

38. Mr Dickson submitted that the effect of the 1998 decision was that the applicant was able to return to the workforce but had chosen not to do so for his own reasons. He also noted the following comment of the Tribunal in its 1999 decision (folio 293 of exhibit A1):

"29. We agree with the submission that the applicant has shown no inclination to return into the workforce and sat on his hands waiting for the respondent to take the initiative in complying with the requirements of the Act. Indeed, we think it likely that the applicant will fail to take full advantage of any rehabilitation provided in order to seek suitable employment in this country. He has again made his life back in England and we feel he is likely to return there when his rights under the Act are exhausted. In short, we were far from impressed with the applicant and his demeanour in the witness box. He knows his rights and is determined to exhaust them to the end."

39. Mr Dickson submitted that the applicant could have given evidence to explain these matters.

40. In relation to the compensation payments made to the applicant, Mr Dickson submitted that these had continued until 1 October 1997.

41. In relation to suitable employment, Mr Dickson said that it was common ground that the applicant was not able to return to work involving strenuous physical activity but submitted that this left open the undertaking of sedentary work, many forms of which are carried out indoors. In that context, he noted the reservation that the applicant had expressed to WDA and recorded in the WDA report that he was "not keen to work indoors or in office or computer work" and that he liked "variety and to be able to move about" (folio 26 of exhibit A1). He submitted that this was a "spurious claim" calculated by the applicant to remove many employment options available to him.

42. Mr Dickson noted the letters of Margaret Kennedy (exhibit A7 and folio 38 of exhibit A1) in which she advised that clerical work could have been included in the WDA list of suitable employment options and submitted that, indeed, it should be included because of the comments in those letters.

43. Of the suitable employment options nominated by WDA, Mr Dickson submitted that console operator was one that the applicant could have undertaken at any time without the need for any preliminary training because, as the WDA report advised, relevant training was incorporated into the position through on-the-job training (folio 27 of exhibit A1). Also, he submitted that the applicant was not in a position under the Act where he had some right of veto over particular employment options and referred to the following comment of Spender J in the Federal Court:

"While an injured employee might genuinely dispute whether employment suggested by the delegate of Telstra as suitable was suitable, the obligation to pay compensation is not conditional on the acceptance by an employee of what is in truth suitable employment. In those circumstances, an employee does not have a subjective right of veto in respect of what is suitable employment."

44. Mr Dickson submitted that the work that the applicant was undertaking with Telstra was in the nature of labouring work rather than that associated with a skilled trade such as refrigeration mechanic for which the applicant had qualified in the United Kingdom. Because he had made the decision to move into a labouring field, it was not the case that it was necessary for the respondent to provide training which would lead to professional work.

45. It was submitted by Mr Dickson that there had been an opportunity for the applicant to provide evidence to the Tribunal of what he was able to earn. This had not been done and this placed the Tribunal in a position where it was more difficult to make a finding on that part of the formula in section 19 of the Act denoted by AE. However, he submitted that the Tribunal should make such a finding, at the very least, at the level of the earnings applicable to a console operator or, because of the absence of evidence, at the level appropriate to a clerical worker.

46. In relation to rehabilitation, Mr Dickson submitted that it was not mandatory that this be provided and that there was discretion in section 37 in respect of this. Further, the decision on whether or not the discretion was to be exercised was to be made in accordance with the terms of that provision rather than on the basis of any licensing considerations that might arise under part VIIIA of the Act. Mr Dickson also submitted that the discretion to provide rehabilitation should not be exercised in this case.

47. In respect of paragraph 37(3)(b) of the Act, he submitted that the applicant had already demonstrated that he was not willing to take part in assistance programs so there could be no reduction in future liability to pay compensation because of the offering of a program to him.

48. As to the costs of any program referred to in paragraph 37(3)(c) of the Act, Mr Dickson referred to the costings provided in paragraph 8.5 of the WDA report (folio 29 of exhibit A1). There, the cost estimate of vocational counselling to the applicant was $660, being for six hours at $110 per hour. He submitted that this did not refer to vocational training which would be substantially more expensive and for which no cost estimates have been provided by the applicant. Moreover, he submitted that a program had been offered to the applicant in 1997 and he had chosen not to accept it.

49. In relation to paragraphs 37(3)(d) to (g) of the Act, Mr Dickson submitted that the applicant's attitude had been summed up in the previous Tribunal reasons for decision and that the provision of any rehabilitation program would not realistically improve the applicant's prospects of employment.

50. In the decision under review, eight entries were included in the list of suitable employment options. These were:

Teacher of Technical and Further Education/TAFE Teacher;

51. Only the first seven of those were nominated in the WDA report dated 4 September 1998. The reference to the clerical position was noted by Spender J as being included because of the terms of the letter by Margaret Kennedy of WDA to the applicant on 25 November 1997. His Honour expressed the opinion that it was clear that the inclusion of clerical position as an eighth option was based on the report because "such a position can easily be seen to be commensurate with Mr Slater's identified level of intelligence, capacity for retraining, and ability to perform the tasks involved in the other positions identified" (folio 520 of exhibit A1). The letter which comprises exhibit A7 was not before the Tribunal at the previous hearing or the Federal Court. It is headed "APPENDIX TO MEDICO-LEGAL/EMPLOYABILITY REPORT DATED 4 SEPTEMBER 1998" and I am satisfied that the WDA report comprises both the initial document of 4 September 1998 and the appendix. In that appendix, Ms Kennedy noted that "clerical occupations may well have been included in the list of identified occupations". She continued by stating that, because of the applicant's "interests, preferences, transferable skills, and aptitude", the other options were seen to be better matches for him.

52. The term "suitable employment" is defined in sub-section 4(1) of the Act and it is not disputed in this case that paragraph (b) is the relevant component of that provision. It provides that suitable employment is any employment (including self-employment), having regard to the following matters:

"(i) the employee's age, experience, training, language and other skills;

(ii) the employee's suitability for rehabilitation or vocational retraining;

53. The WDA report is very comprehensive. As Spender J said in the Federal Court decision (folio 518 of exhibit A1), it outlined the applicant's personal history, including his education, employment and health background, the circumstances and effect on him of his injury and his status at the time of the report. It assessed his physical abilities and mental capacity, and the types of work he preferred to do. It concluded that he should not return to his previous occupation, but that he would be suited to the specified types of employment on a full-time basis, noting that these were potentially suitable occupations which were commensurate with his physical disability and which required various lengths of training.

54. The applicant is aged 48 years and that may well impact on his willingness to undergo significant levels of retraining that would be associated with some of the employment options in the list. However, that would not be the situation with others, in particular, that of console operator where the training is relatively short and part of the job itself. The applicant does not have direct experience with the nominated employment options but has demonstrated in his working life a willingness and ability to embrace change. In particular, this is seen in the decision to leave work in the area of his trade as a refrigeration mechanic when he came to Australia. In his evidence at the 1999 Tribunal hearing (folios 160-161 of exhibit A1), he said that had worked for a few months at Power's Brewery near Brisbane as a brewery technician where his duties were related to the repair and maintenance of beer kegs. This flexibility was also seen in his decision to take up the cable installation work with Telstra. In his evidence at the 1999 Tribunal hearing (folio 161 of exhibit A1), he described his Telstra duties in the following way:

Department of Defence v Fox

At a glance

Court

Decision date

Source

Judgment (270 paragraphs)

Slater and Telstra Corporation Limited [2002] AATA 597 (19 July 2002)

Parties

Legislation Cited (4)