Mason v John Holland Pty Ltd

1. The appeal be dismissed.
2. The applicant pay the costs of the respondent including the costs of the objection to competency, to be assessed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 Mr Mason seeks to maintain his level of compensation payments consequent upon an injury as an employee of John Holland Pty Ltd. John Holland is a licensed corporation under the Safety, Rehabilitation and Compensation Act 1988 (Cth). As a result of his injury, Mr Mason had an entitlement to weekly compensation that was governed by the provisions of the Act. A reduction in the amount of Mr Mason's ongoing compensation was determined by a decision made by John Holland on 9 December 2016. The reduction was made on the basis of s 8(10)(b) of the Act, to which I will return. 2 On 6 September 2017, Mr Mason applied to the Administrative Appeals Tribunal for an extension of time to review the decision by John Holland. The Tribunal refused his application. It did so taking into account the lack of any explanation for the delay in making the application, the length of the delay (which it calculated as being 193 days out of time), the weakness of the substantive application and the need to prevent disruption to established practices. As to the merits of the substantive application for review that Mr Mason sought to bring, the Tribunal found that the reduction in payments had been calculated by John Holland in accordance with s 8(10)(b). 3 In this court, an appeal is available from the Tribunal on a question of law. The notice of appeal stated the question of law as being whether the time for making an application for review of the decisions made 9 December 2016 ought to have been extended. John Holland raised an objection to the competency of the appeal. Submissions filed on behalf of Mr Mason in response to the objection made clear that despite the form of the application he did not seek to contest the conclusions by the Tribunal as to the length and reasons for delay. Rather, the only ground raised was that it was an error of law by the Tribunal in its interpretation of s 8(10)(b) and it is argued that if s 8(10)(b) had been correctly interpreted, then the merit of the substantive application for review that Mr Mason sought to bring would have resulted in the extension of time being granted. An amendment to reflect that position was allowed. 4 On that basis, I ordered that the objection to competency and the appeal be heard together. The sole question for my determination today is whether the Tribunal erred in its interpretation of s 8(10)(b). 5 Section 8(10) of the Act provides as follows: (10) If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed: (a) where the employee continues to be employed by the Commonwealth or a licensed corporation - the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or (b) where the employee has ceased to be employed by the Commonwealth or a licensed corporation -whichever is the greater of the following amounts: (i) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury; (ii) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased; the amount so calculated shall be reduced by the amount of the excess. 6 The submission advanced to the Tribunal and before me was that the amount to be reduced from weekly compensation in a case where an employee ceases to be employed is the excess between s 8(10)(b)(i) and (ii) in a case where the employment has been brought to an end. Further, if the amount that the employee would have received in the employment at the date of injury was the same as that which the employee would have received when employment ceased, then there is no excess to apply in the reduction of the calculation of normal weekly earnings for the purposes of determining compensation. For the following reasons, I do not accept the interpretation advanced on behalf of Mr Mason. It follows that the appeal should be dismissed. 7 The contextual meaning of s 8(10) was considered in detail by Dowsett J (with whom Spender J agreed), in John Holland Group Pty Ltd v Robertson [2010] FCAFC 88; (2010) 185 FCR 566. Although the issue in that case was not the same as that which is raised in this appeal, it was necessary for the court to form a view as to the meaning of s 8(10) in order to determine the issue before the court on that occasion. Dowsett J stated at [19]-[20] as follows: Section 8(10) differentiates between employees who continue to be employed by the Commonwealth or a licensed corporation (to whom s 8(10)(a) applies) and employees who have ceased to be so employed (to whom s 8(10)(b) applies). However the section does not expressly identify the point in time at which a relevant employee's employment status is to be determined. The compensation payable pursuant to s 19 is weekly compensation, being the amount of the NWE less the amount which the employee earns in the week for which he or she is to be compensated, or the amount which he or she is capable of earning in suitable employment. I infer that s 8(10) is to operate according to the circumstances which obtain in each week in respect of which compensation is otherwise payable. In Bortolazzo v Comcare (1997) 75 FCR 385 at 388, Heerey J took that approach. The amounts identified in ss 8(10)(a) and (b) are hypothetical amounts. In s 8(10)(a) the identified amount is the amount of weekly earnings which the employee "would receive if he or she were not incapacitated for work". In the context of s 8(10) this provision contemplates the possibility that the employee, even if not injured, may, in the week in question, have received less than his or her NWE as otherwise calculated. Section 8(10)(b) prescribes reduction of that figure by the difference between it and the greater of two other amounts. The first amount is the weekly earnings which the employee would have received if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury. The second amount is the amount which the employee would have received if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which employment by the Commonwealth or the licensed corporation ceased. 8 Later at [74]-[76] Dowsett J stated: Clearly, s 8(10) seeks to limit the compensation payable to an injured employee by reference to his or her notional earnings derived from employment with the same employer had he or she not been injured. Section 8(10)(a) demands a notional enquiry which commences with the employee's actual current employment. The enquiry is as to his or her earnings in that employment had he or she not been injured. Such enquiry would involve consideration of how, in those circumstances, the employee would have been employed, including consideration of whether he or she would have continued to perform the same duties as were being performed at the time of the accident. Section 8(10)(b) involves different considerations. It assumes continuation of either the pre-injury employment or other actual employment undertaken subsequent to the injury with the same employer. The decision-maker is not directed to assume that the employee was not incapacitated. The enquiry pursuant to s 8(10)(b)(ii) involves only consideration of the employee's actual employment at the date at which he or she ceased to be employed by the employer and of the earnings which would have been derived had the employee been in such employment in the week for which he or she is to be compensated. It seems unlikely that the basis for comparison was meant to be anything other than the actual earnings, adjusted to reflect changes in circumstances between the cessation of employment and the date of calculation. In particular, it seems unlikely that it was intended that the actual terms of employment were to be ignored, and the calculation based on the notional employment at rates payable to persons in a particular trade, calling or classification. I also see no reason for requiring such a notional exercise in connection with s 8(10)(b)(i). The section contemplates the notional continuation of the previous employment. The purpose of the notional extension is to identify likely earnings in the event that such employment had been so extended. The section does not contemplate the notional formulation of conditions of employment which had never existed. The decision-maker must simply take the terms of employment applicable to the employee at the date of injury and enquire as to likely earnings pursuant to those terms as at the date of calculation. 9 In the context of those reasons, the argument advanced from Mr Mason fails to have regard to three aspects of the language in s 8(10). First, s 8(10) requires the calculation of the difference between the normal weekly earnings before the injury, on the one hand, and an amount calculated in accordance with (a) or (b), whichever is applicable. Where the employee continues to be employed by the employer, it is the amount under (a). Where the employment has ceased, it is the amount under (b). If normal weekly earnings before the injury exceed the applicable amount under (a) or (b), then the calculation of normal weekly earnings is to be reduced by the amount of the excess. 10 Second, in the case of s 8(10)(b), it is not the difference between subsections (i) and (ii) that is relevant; rather, it is the difference between the greater of (i) and (ii), on the one hand, and normal weekly earnings on the other hand. 11 Third, in the case of s 8(10)(b), the amounts are not static amounts determined at the date of injury and the date that employment by the relevant employer ceased. They are amounts to be calculated as at the time of the weekly compensation. Calculations are to be made by reference to the greater of the earnings that would apply to the employee in two hypothetical possibilities: first, continuation in the same employment the employee was in at the time of injury; and, second, continuation in the same employment the employer was in at the time that employment by the relevant employer ceased. These amounts will depend upon the payment for that position at the time that the normal weekly earnings are being calculated for the purposes of payment of weekly compensation. 12 The construction contended for by Mr Mason would see normal weekly earnings at the time of injury reduced by the extent to which that amount was exceeded by the amount paid at the time of termination of that employment. In the context of a provision designed to calculate an appropriate weekly compensation amount, there is no logic in such an outcome. 13 In addition, it would result in a calculation that would not advance the evident purpose of ensuring that weekly compensation does not exceed an amount calculated by reference to contemporaneous measures of payment in equivalent employment. 14 For those reasons, I dismiss the appeal. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Colvin.