Rajcevic v Workcover/Nzi

3 Having seen and heard the witnesses, considered all of the material that was placed before me and having noted certain concessions made by counsel in the course of the proceedings, I find the following facts.

4 The worker is presently aged 53 years and is single having separated from her husband in 1992. For some 21 years she worked full time as a cleaner at the Queen Elizabeth Hospital but accepted redundancy in April 1996. I add that in addition to her work at the Hospital the worker did cleaning and other work for other employers "out of hours". Whilst it was always the worker's intention to rejoin the workforce on a full time basis initially she did not immediately seek employment believing that she "deserved a little break after so many years of work". In addition, at that time, her two daughters were in the throes of completing University courses and it was her wish to be home to relieve them of their household responsibilities in order that they might concentrate on their studies.

5 It appears however that at some time probably in late 1996 the worker began seeking work. In that year she was offered part time (or casual) work by two potential employers but declined same on the basis that she desired full time work (BD 97 - 98). Moreover, it would seem that in early 1997 (probably in March) she was offered work as a part time cleaner by the principals of JKRM Cleaners Mr and Mrs Jocik who were long time and close family friends of hers. However she declined the offer because she wanted full time work; see in this regard inter alia BD 96. In any event at the time the offer was made by JKRM the worker had secured full time work (albeit on a limited term basis) with the employer.

6 Turning then to the worker's employment with the employer.

7 By the time the matter was argued before me there was no dispute that the worker worked for the employer over the period Wednesday 19 March to Saturday 5 April 1997 as a casual fruit picker. The evidence suggests and I find that generally employees of the employer worked nine hour days Monday to Saturday inclusive. In the worker's case she worked two nine hour days in the pay week ending 20 March 1997, four nine hour days in the pay week ending 27 March 1997, five nine hour days in the pay week ending 3 April 1997 and seven hours on 5 April 1997 the day she suffered the compensable disability. I note for what it is worth that over the period she was employed the worker did not work on two days when she otherwise would have worked because of her need to attend the offices of the Department of Social Security. The days on which she attended the Department were never identified. Had the worker not been injured her employment with the employer would have come to an end by late April 1997. WorkCover's determination as to the quantum of weekly income maintenance was arrived at by dividing the total hours worked by her as a fruit picker (106) by the number of pay periods in which she worked (4). This resulted in an average of 26.5 hours per pay period worked which at $9.50 per hour amounted to $251.75.

8 It is convenient at this point to turn to the evidence of Ms Jocik. The essence of her evidence was that she and her husband were close friends of the worker and had great respect for her as a worker and her knowledge of the cleaning industry. Mr Jocik accepted a Targeted Voluntary Separation Package from SA Water in 1996 at the age of 54 years and was determined to start his own cleaning business. To that end the business name of JKRM Cleaners was registered in about August 1996 and their first contract which involved cleaning offices of the Department of Social Security which involved about 20 hours work per week commenced in July 1997. The cleaning work was done by the couple. Their idea was to expand the business in order that Mr Jocik who was not a well man could ensure the financial wellbeing of his family. In late 1997 the firm refused contracts for two office blocks which would have involved in the order of 25 hours cleaning work (the office block contract) because no satisfactory staff were available to do the work. However in May 1998 the firm purchased the contracts of another cleaning company with the result that the firm had in the order of 50 hours cleaning work per week (the Department of Social Security contract having come to an end in March 1998).

9 It was the evidence of Mrs Jocik that the worker was keen to work for the firm when she finished work with the employer and that although in the initial stages the firm would not have had sufficient work to give her full time work they would have paid her full time wages because of her ability to teach them and the belief of Mrs Jocik that with the worker available the firm would be able to secure more contracts.

10 Thus at 112 her evidence in cross-examination was:-

"Q You didn't tell Mrs Rajcevic that you would employ her full-time straightaway, did you.

A Well, I mean, naturally, if you start a business, I'm not going to say to her, `I'll employ you from tomorrow full-time', because I didn't know whether I'd get another contract after I started. I said, `You definitely will start with us on a part-time basis', hoping that I would give her full-time, providing that I got another couple of extra contracts. She would have been a full-time worker if all went as planned, for sure by the end of the year - six months after at least."

11 And later in answer to a question regarding the firm's ability to employ the worker given its financial position at the end of June 1998:-

"Q In the financial year ended 30 June 1998, Mrs Jocic, your business made a loss of $254 without employing Mrs Rajcevic. Had you employed her and paid her $400 a week, your business would have made a loss of over $20,000.

A Well, if I'd employed her and had her, I would have hoped that I'd had five contracts, big ones."

12 Pursuant to the Act a worker who suffers a compensable disability that results in incapacity for work, is entitled to weekly payments "equal to the worker's notional weekly earnings: s 35(1)(a). S 3(1) of the Act defines "notional weekly earnings" to mean relevantly, "the worker's average weekly earnings". S 4(1) provides insofar as may be relevant to the case at hand:-

4. (1) Subject to this section, the average weekly earnings of a disabled worked are the average amount that the worker could reasonably be expected to have earned for a week's work if the worker had not been disabled.

(2) For the purpose of determining the average weekly earnings for a worker -

(a) where the worker was, immediately before the relevant date, employed by more than one employer - aggregate earnings from all employment shall be taken into account; and

(i) the actual weekly earnings of the worker over a period of up to 12 months before the relevant date may be taken into account; and

(ii) if by reason of the shortness of time during which the worker has been in employment, the terms of the worker's employment or for any other reason, it is not possible to arrive at a fair average, the worker's average weekly earnings may be determined by reference to the average weekly amount being earned by other persons in the same employment who perform similar work at the same grade as the worker or, if there is no person so employed, by other persons in the same class of employment who perform similar work at the same grade as the worker.

(5) The average weekly earnings of a disabled worker who -

(a) was not a full-time worker immediately prior to the relevant date; and

(b) immediately prior to the relevant date had been seeking full-time employment; and

(c) had been predominantly during the preceding 18 months a full-time worker,

shall be determined as if the worker had been a full-time worker.

(7) Notwithstanding the foregoing provisions of this section -

(a) where a disabled worker's remuneration was, at the relevant date, covered by an award or industrial agreement, the worker's average weekly earnings shall not be less than the weekly wage to which the worker was then entitled under the award or industrial agreement;"

13 It is now well settled that the "dominant principle" of the Act "is to provide to the worker during disability amounts by way of compensation equivalent to the earnings which he would have counted upon receiving if there had been no disability": Francese v Corporation of the City of Adelaide (1989) 51 SASR 522 at 526; BHAS v Gray (1993) 169 LSJS 297 per Legoe J at 301. As Gilchrist DP noted in Garvey v The WorkCover Corporation A25/1996 however, simple as that concept may seem, in some instances it is extremely difficult to fix upon what rate of notional weekly earnings should be set and given the material before me this is such a case.

14 In this case assistance in setting the average weekly earnings of the worker cannot be obtained from s 4(5) (for obvious reasons) nor from s 4(7) given that no award or industrial agreement applied to the employment of the worker at the date of injury. In those circumstances it is necessary to strike a rate based on the evidence tendered on the hearing which is not particularly satisfactory. I say this because the worker's time with the employer was comparatively short (and very soon to end) and in any event was not the type of work she had hitherto done. Moreover, the evidence of Mrs Jocik was in my view unsatisfactory in some respects. Whilst I have no doubt that she and her husband would have been able to offer the worker some cleaning work I am not satisfied bearing in mind the financial position of the business as disclosed by its annual tax returns tendered on the hearing and all of the circumstances of the case that they would have paid the worker as if she were a full time employee from the time she finished work with the employer pending the gaining of contracts which would have enabled them to give her full time hours. In addition, whilst I have no doubt that the Jociks would have strenuously endeavoured to expand their business with a view to their own advancement and, as a result, be in a position to offer the worker full time hours, in my view whether or not this would have been achieved is open to question.

15 Finally, whilst I accept that it was the intention of the worker to work full time and her background and work ethic would suggest that there was reason for optimism that her goal would be achieved in this regard, her early attempts to find such work did not prove fruitful. I add that there was no other evidence which might assist in reaching a conclusion as to whether in the circumstances of the worker it was likely or probable that full time work in the cleaning industry would become available to her within a reasonable time.

16 That said however on the material before me I consider that the determination of the Corporation under challenge is difficult to justify in all of the circumstances. In particular in my view to use four pay periods as a divisor in the total number of hours worked for the employer does not do the worker justice and does not produce a result in accord with the dominant principle. All in all in my view such a result would be achieved if the hours worked by the worker in the two completed weeks of employment with the employer (namely 36 and 45 - to give a total of 81) were averaged. This would yield a result of an average of 40.5 weekly hours at $9.50 per hour or $384.75 per week which to my mind would satisfy the statutory criteria. I note that as a check against that figure had the worker been successful in obtaining full-time work with the Jociks during the ordinary hours of work prescribed by the Award pursuant to the Award the weekly rate for a weekly employed Cleaner Grade 1 (from 15 July 1998) is $412.60 per week which is about the mark of the rate I have set being a little over 7 per cent higher. I add that on the evidence available I am not able to conclude that the worker would have performed a level of work sufficient to entitle her to the higher classifications of cleaner under the award. Further had the worker been available for employment with JKRM the firm surely would have been in a position to accept the office block contract which would have yielded 25 hours work per week. I think it probable in all of the circumstances that if the worker had not secured full-time employment by the time that contract was in the offing had that work been on offer she would have accepted it. At casual rates of $13.03 per hour this would have yielded a notional weekly income of $325.75 per week which is a little over 15 per cent less than the rate I consider appropriate. Of course that amount would be higher if her starting and finishing times were to attract the penalty rates set out in Exhibit A3 at p.1.

17 However that may be, as I have said in my view a weekly rate of $384.75 satisfies the statutory criteria. In the circumstances then the determination of WorkCover is set aside and in lieu thereof I set the worker's notional weekly earnings at $384.75 per week. I order accordingly.

18 I will hear the parties as to any ancillary matters should it be necessary.

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.