Khammash v Royal Adelaide Hospital [2000] SAWCT 128

"(1) Pursuant to section 39(1), your notional weekly earnings must be reviewed in the course of each year of incapacity for the purpose of making an adjustment to the amount of those payments under this section.

(2) Pursuant to section 39(2), such an adjustment must be based on changes in the rates of remuneration payable to workers engaged in the kind of employment from which your disability arose.

(3) As at 14 April 1997, the Royal Adelaide Hospital outsourced the work of orderlies to an outside contractor. Following the said outsourcing, all orderlies were given the choice, inter alia, of seeking work with the outside contractor or electing to remain employed by the Royal Adelaide Hospital as a redeployee.

(4) Redeployed employees of the Royal Adelaide Hospital work a five day week and are not paid any shift penalties. The base rate for a redeployee of your classification is $446.50.

(5) Accordingly your notional weekly earnings are adjusted to $446.50 per week."

4 S 39 of the Act provides:-

39. (1) Where a worker to whom weekly payments are payable is incapacitated for work or appears likely to be incapacitated for work for more than one year, the Corporation shall, during the course of each year of incapacity, review the weekly payments for the purpose of making an adjustment to the amount of those payments under this section.

(i) changes in the rates of remuneration payable to workers generally or to workers engaged in the kind of employment from which the worker's disability arose; or

(ii) if the worker applies, in accordance with the regulations, for the adjustment to be made on the basis of changes in rates of remuneration prescribed by an award or enterprise agreement payable to a group of workers of which the worker was a member at the time of the occurrence of the disability - changes in those rates of remuneration; and

(b) operates from the end of the year of incapacity in which the review is made."

5 The undisputed facts are that the worker was employed by the Royal Adelaide Hospital as an orderly. Under the applicable award, the South Australian Government Health Etc Ancillary Employees Award, he was classified as a Health Ancillary Employee, level 2 ("HAE2"). As such he could have been allocated duties as an orderly or a porter, but was in fact allocated duties as an orderly. The tasks required of a HAE2 level employee are only very generally described in the award. There is no specific mention of an orderly's duties or of a porter's duties, but the evidence indicates that a HAE2 level employee could be allocated, inter alia, the work of an orderly or a porter.

6 In July 1995 and in December 1996 the worker injured his back. He was partially incapacitated and lost time from work as a result. His injuries were accepted as compensable disabilities. He returned to work initially on light duties, helping on a computer and answering the telephone, for restricted hours. He thereafter worked a six hour day on a five day roster. Since January 1999 he has worked full-time in the medical records section. It is agreed that the worker has been and remains partially incapacitated for his former work duties as an orderly at the RAH.

7 Early in 1997 the RAH outsourced the work of its orderlies to Tempo Health Support Services ("Tempo"). The hospital's orderlies were given the option of seeking employment with Tempo, becoming a redeployee within the hospital or seeking a separation package. The worker became a redeployee at the hospital by default as he did not advise of his decision to take up either of the other two options. He said that but for his back condition he would have applied for work at Tempo. Only five hospital orderlies were employed by Tempo.

8 The Corporation argues that the "kind of employment from which the worker's disability arose" was the worker's employment as a HAE2 level employee of the hospital, and given that on the balance of probabilities the worker would in any event have become a redeployee of the hospital his weekly payments should be reduced to reflect the reduced earnings of such redeployees (attributable principally to the loss of shift penalties).

9 It is the worker's submission that the Corporation has misused s 39 in that it has purported to recalculate the worker's notional weekly earnings based on the anticipated changes in his employment and earnings consequent on the outsourcing of services in early 1997. The worker says that s 39 does not permit this. The Corporation can only adjust weekly payments based on changes in the rates of remuneration paid to workers engaged in the kind of employment from which the worker's disability arose and the kind of employment from which his disability arose was his employment as a hospital orderly. Accordingly, s 39 requires the ascertainment of the rates of remuneration payable to hospital orderlies at the time of the worker's disability and at the time of the review to see what if any changes in the rates had occurred.

10 Mr Crawley's argument proceeds on the erroneous assumption that s 39 enables a worker's notional weekly earnings to be recalculated in order to reflect changes in the kind of employment that a worker would likely have been performing but for his injury. S 39 does not permit this. The scope of a review under s 39 is limited to the adjustment of weekly payments based on those changes in circumstances prescribed by s 39(2)(a)(i) and (ii): Giancaspro v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (SHRM Australia Pty Ltd) JD83/1999, O'Brien v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (Andrecco-Hurll Refractory Services Pty Ltd) [2000] SAWCT 72.

11 Thus, for the purposes of s 39 it does not matter what changes there might or inevitably would have been in the kind of employment the worker would have been engaged for the period of his disability. Indeed, it matters nothing that his employment would have come to an end. The Act is not concerned to assess the worker's future loss of earning capacity, but rather his notional weekly earnings in accordance with a statutory formula that renders it irrelevant that his employment is about to change or end: Loades v WorkCover Corporation/Mercantile Mutual (SA) Ltd (McLaren Hills Vineyard Contractors) [2000] SAWCT 16; Casey v WorkCover Corporation/Mercantile Mutual Workers Compensation (SA) Ltd (Minson Constructions Pty Ltd) [2000] SAWCT 67.

12 The task under s 39(2) is to identify "the kind of employment from which the worker's disability arose". Giving the words their plain and ordinary meaning, the kind of employment the worker was engaged in was employment as a hospital orderly. That seems to me to be an indisputable description of the kind of employment that he was engaged in at the time of his disability.

13 Mr Crawley contends that the kind of employment from which the worker's disability arose was the work performed by HAE2 level employees of the Royal Adelaide Hospital. He acknowledges that this award classification for pay rate purposes might involve several different occupations, eg orderly, porter.

14 "Kind of employment" in this context refers to the type or species of employment. The word "kind" connotes an element of specificity, ie by way of describing one type or species of employment from another. An employee's award classification is, as here, commonly not specific as to the kind, type or species of employment.

15 It is interesting, albeit not surprising, to note that the Corporation's determination refers to the worker's pre-outsourcing employment by the hospital as that of an orderly, not as that of a HAE2 level employee.

16 I find that the kind of employment from which the worker's disability arose was that of a hospital orderly. It follows that any adjustment of weekly payments must be based on changes in the rates of remuneration payable to workers engaged in work as hospital orderlies.

17 The Corporation's adjustment of the worker's notional weekly earnings did not proceed on this basis, but rather was based on the post-outsourcing earnings of hospital redeployees. Its determination must be set aside.

18 The documents and calculations that were tendered on behalf of the worker and received into evidence as Exhibit A2 indicate an increase in the rates of remuneration payable to hospital orderlies. No other evidence was put before me to indicate otherwise.

19 Whether the Tribunal does or does not have the power to correct an erroneous adjustment of a worker's weekly payments pursuant to s 39 I need not decide at this stage given the way in which the matter has been argued before me and given the expectation that the parties will likely now be able to agree the adjustment following this clarification of the operation of s 39. If the parties cannot agree I will need to hear further from them.

20 I therefore adjourn further consideration of this judicial determination to give the parties an opportunity to consider these reasons and endeavour to reach agreement with respect to the disputed determinations. If agreement cannot be reached, I will relist the matter for further argument.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with Form 11 within 14 days of the delivery of this decision and must be served on all parties.