O'Brien v Workcover/Mmi

3 By separate determinations dated 14 July 1999, one determination for each disability, the Corporation increased the original (and erroneous) rate of average weekly earnings by 3.1 per cent to $1422.16 following a review of weekly payments pursuant to s 39 of the Act. The adjusted rate was in each case belatedly disputed by the worker. It is agreed that the determinations now need to be varied to correct the erroneous base rate of average weekly earnings used, but in addition to this the worker disputes the Corporation's methodology, and outcome, in carrying out its review under s 39.

4 The worker's Notice of Dispute in each matter was filed out of time. I was informed that the Corporation did not oppose the granting of the requisite extensions of time and in the interests of justice I allow same.

5 It is the worker's case that his weekly payments, upon s 39 review in July 1999, should have been adjusted to $1479.80, this being twice the then applicable State average earnings of $739.90. Mr Black, for the worker, submitted that this result is achieved by either of two arguments. Firstly, he submitted, a worker whose average weekly earnings are well in excess of twice State average weekly earnings and capped at twice State average weekly earnings only by the operation of s 4(7)(c) of the Act ought always be adjusted to twice State weekly earnings on any subsequent review of his weekly payments pursuant to s 39. Secondly, he submitted, the Corporation's reliance in this instance on Wage Cost Index figures published by the Australian Bureau of Statistics (Catalogue No 6345.0) was wrong, and it should instead have used Average Weekly Earnings figures published by the Australian Bureau of Statistics (Catalogue No 6302.0). These latter figures indicated a 3.8 per cent increase for the relevant period and applying this percentage increase to the corrected average weekly earnings figure gives a figure above the prescribed maximum of twice State average weekly earnings.

6 The worker's first argument is predicated on s 39 obligating the Corporation to reconsider and in effect reset average weekly earnings. This obligation is to be gleaned, Mr Black submitted, from s 39(1's) direction to the Corporation to review a worker's "weekly payments". That is done, he said, by reconsidering or resetting his average weekly earnings.

7 Mr Black submitted that if an initially fixed average weekly earnings figure is used as the base figure for all subsequent adjustments there is the possibility of a worker's weekly payments being gradually eroded over time whenever the percentage adjustment applied under s 39 is less than the percentage increase in State average weekly earnings.

8 The short answer to Mr Black's argument is that whilst the scenario he put is indeed possible, it is nevertheless a consequence of the clear wording of s 39. S 39(2) provides:-

(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."

9 It is clear that any adjustment under s 39 is limited to those changes in circumstances as are prescribed by sub-s (a)(i) and (ii). The Full Bench of this Tribunal in Peter Giancaspro v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (SHRM Australia Pty Ltd) JD83/1999 determined as much, noting at 5:-

"As for section 39, the scope of a review under that section is limited to those changes in circumstances prescribed by subsections 39(2)(a)(i) and (ii)."

10 There is, in my view, no scope for resetting the rate of average weekly earnings or notional weekly earnings in the conduct of a s 39 review. To do this would, as noted by Mr Stanley, render the necessity for an adjustment otiose because the resetting of average weekly earnings or notional weekly earnings would presumably encompass the adjustment that is otherwise mandated by s 39. It is in my view clear from the language used in s 39 that Parliament did not intend the scope of the review and adjustment to be wider than it has specifically stipulated.

11 I do not agree with Mr Black that this interpretation results in unfairness to the worker. Any unfairness there may be to the worker is a consequence of the arbitrary capping of average weekly earnings imposed by s 4(7)(c). Nevertheless, the expression and intent of s 4(7)(c) is clear enough. Both s 4(7)(c) and s 39 must be read in the context of the overall scheme and objects of the Act as set out in s 2. Doyle CJ's observation in WorkCover Corporation of SA v Marina (1996) 66 SASR 241 at 250 is apt:-

"... the Act is one which necessarily involves sacrifices of flexibility in favour of certainty, and is one which does not attempt to match exactly entitlements and current events."

12 In relation to the worker's second argument, I heard oral evidence from Mr D Beckwith who is now employed as a project officer by the Corporation but was, as at July 1999, a policy and training officer with the Corporation. Mr Beckwith described how the Corporation went about reviewing weekly payments under s 39 with particular reference to what published wage data it relied on to do this. Mr Beckwith said that for s 39 adjustments the Corporation had, to his belief from the inception of the Act, used figures published monthly by the Australian Bureau of Statistics as the Minimum Award Rates Index (Catalogue No 6312.0). This Index detailed percentage changes in minimum awards rates over a 12 month period, adjusted monthly.

13 Mr Beckwith said that as from August 1997 the aforesaid Index ceased to be published. The Corporation was advised by the Australian Bureau of Statistics that publication ceased because it was considered that this Index no longer reflected changes in workers remuneration on account of the influx of Enterprise Bargaining Agreements and Australian Workplace Agreements.

14 The Corporation sought advice from the Australian Bureau of Statistics about a replacement index for use in s 39 reviews and was advised that a new index it would be publishing, the Wage Cost Index (Catalogue No 6345.0), would "probably be the best tool to capture all of that information" sought by the Corporation to be included. The problem for the Corporation was that at the time it made this inquiry the new Wage Cost Index contained only three months of data and so could not be used for s 39 purposes as at least twelve months data was needed to get year-on-year changes. The Corporation thus decided, as an interim measure, to use the wage data put out by the Australian Bureau of Statistics in its publication Average Weekly Earnings for All Employed Units in South Australia (Catalogue No 6302.0). Mr Beckwith said that he researched what else was available and concluded that this Average Weekly Earnings Index constituted a fair representation of changes in rates of remuneration payable to workers generally and was appropriate for use in s 39 reviews. He thought that the use of this Index was consistent with the observations of the Workers Compensation Appeal Tribunal in Kevin Phillip Smith v The Corporation (Howard Nominees Pty Ltd) A6/1992. He said that the Corporation's chief adviser of operations approved this Index for use as the relevant percentage adjustment figure on an interim basis.

15 In February 1999 Mr Beckwith ascertained that the new Wage Cost Index by then had 12 months data available. The Corporation then issued an instruction effective from 1 February 1999 that the percentage increase indicated by that Index (then 3.2 per cent) was to be applied in all s 39 adjustments. As at July 1999 the percentage increase under this Index was 3.1 per cent and thus it came to be that this percentage increase was applied when the worker's weekly payments came to be reviewed then.

16 Mr Black submitted that the Average Weekly Earnings Index was the better measure for the task under s 39 and he attempted to demonstrate why this was so.

17 Mr Stanley argued that the Wage Cost Index used by the Corporation provided the better measure of changes in the rates of remuneration payable to workers generally, but his principal submission was that it did not really matter which of the two Indices was to be preferred because for the worker to succeed the Tribunal had to find that the Corporation's reliance on the Wage Cost Index was invalid, viz that the Wage Cost Index was an invalid measurement of "changes in the rates of remuneration payable to workers generally ..." this being the relevant criteria set by s 39(2)(a)(i).

18 I have pondered over the paperwork put before me with respect to the two Australian Bureau of Statistics publications, and in particular the explanatory notes thereto, and I have had regard to the evidence of Mr Beckwith and the submissions of counsel. I am unable on the evidence before me to say which Index provides the better measure of "changes in the rates of remuneration payable to workers generally". Both Indices appear to provide a valid basis for the task.

19 It is not, however, necessary for me to choose between the Indices in order to determine the matter at hand. This is so because I am satisfied on the evidence that the Wage Cost Index used by the Corporation was an appropriate basis upon which to determine "changes in the rates of remuneration payable to workers generally" within s 39(2)(a)(i). That there might be one or more alternative bases for making this determination is of no consequence. S 39 relevantly requires that adjustments "must be based on - (i) changes in the rates of remuneration payable to workers generally" and I am satisfied that the adjustments made in this instance as per the determinations dated 14 July 1999 were so based.

20 I find that the Corporation has satisfied its onus of showing that its reviews of the worker's weekly payments were carried out in accordance with the requirements of s 39. It follows that the Corporation's two determinations of 14 July 1999 are to be confirmed.

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.