Somerset v Schefenacker Vision Systems Pty Ltd [2001] SAWCT 81

Workers Compensation Tribunal (SA)|2001-07-18

1 For reasons published by me on 9 April 2001 I set aside various determinations made by the employer rejecting the worker's claims for weekly payments of income maintenance and medical expenses and in lieu thereof I determined as follows:-

* that the worker had suffered a compensable disability in the nature of an aggravation to a pre-existing asthmatic condition which arose out of and in the course of her employment with the employer on 1 May 1991;

* that she had incurred medical expenses pursuant to s 32 of the Act and that she was entitled to recover from the employer the cost of such expenses;

* that she had a prima facie entitlement to weekly payments of income maintenance;

* that she had not breached mutuality as a result of her failure to take up an offer of alternate duties.

I then adjourned further consideration of the determination of what entitlement, if any, the worker had to weekly payments of income maintenance to a date to be fixed.

2 In due course I heard oral argument from the parties, which was supplemented by written submissions.

3 This matter involves a difficult calculation of the quantum of the worker's entitlement to weekly payments of income maintenance.

4 The Act contains a number of provisions that deal with that calculation. The primary right to weekly payments is conferred by s 35(1). That provision declares that the entitlement is to be determined in accordance with various stipulated principles. In this case two of these are of particular significance. The first is the principle that "notional weekly earnings" provide the framework from which all determinations of weekly payments are based. The second is the principle that after the end of the first two years of incapacity a worker no longer has the benefit of the deeming provision provided for by s 35(2)(b). At that point a partially incapacitated worker is entitled "to 80 per cent of the difference between the worker's notional weekly earnings and the weekly earnings that the worker is earning or could earn in suitable employment that the worker has a reasonable prospect of obtaining".

5 The expression "notional weekly earnings" is defined in the Act and for present purposes it means "average weekly earnings". That expression is also defined and it means average weekly earnings as determined in accordance with s 4. That section relevantly provides as follows:-

4. (1) Subject to this section, the average weekly earnings of a disabled worker 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 of 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

(i) a reference to the date of the commencement of the period of the worker's incapacity for work or, where the worker has been incapacitated for work as a result of the same disability for a number of separate periods, a reference to the date of the commencement of the last such period of incapacity; or ..."

6 The calculation in this case is difficult because for all periods in respect of which weekly payments of income maintenance are claimed more than two years has elapsed since the date of the commencement of the worker's incapacity for work, namely 1 May 1991. Complicating this is the fact that since that date, namely since 10 November 1995, she has, at her initiative, been job sharing and has only been working half-time. Her average weekly earnings from that date are therefore much less than what they were as at 1 May 1991. As a result at the time from which weekly payments are sought and for some time before then, the worker was earning much less that she was when she first became incapacitated.

7 A further potential complication arises because of certain findings that I made. In the course of my earlier reasons in par 47 I made the following findings:-

"It cannot, however, be said that the worker is totally incapacitated for work. Despite the fact that there is the potential for any working environment to aggravate her underlying asthmatic condition and to bring on an asthmatic attack, that does not in my view make her unemployable. Again, I find the observations of Dr Byrant on the issue of the worker's capability of performing work persuasive. I take the following exchange form the evidence (tr 320):-

`Q. Perhaps you can indicate, what sort of work do you think she's capable of performing.

A. At the present time I think Rosalie's been through a very enlightening experience and she ahs probably become quite - a lot more aware of the industrial relations system and I think she'd be an excellent person to perform that role. I think she also would be able to perform anything which doesn't require heavy physical exertion and which, in a clean work environment, she could do physical work of a non-arduous nature but I think she also would be able to contribute in an administrative role, a clerical role - many, many roles. I don't think she's precluded from that.'"

8 These matters raise the following issues. First, in respect of the periods for which compensation is claimed, are the worker's notional weekly earnings to be reckoned by reference to what they were as at the commencement of the incapacity, namely as at 1 May 1991, or should the fact that the worker voluntary reduced her hours to half-time from 10 November 1995 be taken into account? Secondly, in determining the quantum of any such entitlement should the Tribunal factor the worker's capacity to earn money from suitable employment as contemplated by s 35(2)(c) or is it the case that it should simply determine that the worker is entitled to 80 per cent of her notional weekly earnings and leave it for the employer, if it wishes, to invoke the procedures prescribed by s 38, to seek a review of those weekly payments in line with the worker's undoubted residual earning capacity?

9 In WorkCover Corporation of SA v Marina (1996) 66 SASR 241, the Supreme Court discussed the meaning of the expression "period of incapacity" as it appears in s 4 (9)(a)(i). Doyle CJ, with whom the other members of the Court agreed, said at 248:-

"In the present case, the Tribunal found as a fact that at all material times after 26 October 1990 the worker was suffering an incapacity for work in the sense of a physical disability or limitation upon his capacity to perform work. It so found, because the return to work after 26 October 1990 merely masked the continuance of that incapacity (as the Tribunal put it at p 10 of the reasons) and, (as it said at p 9 of the reasons) because the return to work merely relieved:-

`the Corporation of the obligation to make weekly payments in respect of the subject incapacity for the duration of the return to the extent that the worker's weekly earnings were equal to or in excess of the notional weekly earnings hitherto determined by the Corporation".

In my opinion, that analysis of the situations is correct, given the factual finding that the physical disability continued and the fact that certificates of incapacity were provided throughout that period. In my opinion s 35, when it refers to incapacity for work, refers to a physical incapacity for doing work, a reduced ability by reason of a physical deficiency to sell work for wages or a reduction in the saleability of labour (these are some of the expressions found in the authorities), but recognises that a worker may be working yet incapacitated for work: see Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171. The amount which he is able to earn my be such that the provisions under which weekly payments are calculated produce no entitlement for a time, but there may remain an underlying incapacity for work. In my opinion the language of s 35 distinguishes between incapacity to work and an entitlement to weekly payments. The former conditions the entitlement to the latter, but incapacity for work can exist when there is no entitlement to weekly payments.

That suggests to me that the reference to "the period of the worker's incapacity for work" in s 4(9)(a)(i) of the Act is to be interpreted in the same sense. That period begins when it is determined under the Act, as it was in October 1990, that the worker is incapacitated for work. That will occur if a claim has been made for payment of income maintenance and the claim is determined in the worker's favour. The period of incapacity continues while certificates of incapacity continue to be provided in respect of the same injury. It does so whether there is a succession of claims for compensation by the worker (as the Corporation would analyse the situation) or a single claim followed by, if necessary, later decisions in relation to the claim. The period of incapacity may continue even though, for part of it, the worker is not entitled to weekly payments because of the operation of the provisions relating to the quantification of weekly payments.

A period of incapacity ends if the worker recovers. It may be that it ends if the worker ceases to assert incapacity in an appropriate manner, that is, it is not necessarily coincident with the fact of incapacity. I do not need to decide that. It may be that it ends or terminates in other ways. I do not wish to decide that."

10 The obiter remarks of Doyle CJ contained in this last paragraph were explored by the Full Bench of the Tribunal in WorkCover/MMI Workers Compensation (SA) Ltd (Griffin Press Pty Ltd) v Gibson [2000] SAWCT 33 at pars 29, 30 and 31. It said:-

"The learned Deputy President cited this dicta in reaching the conclusion that she came to. With respect to the learned Deputy President, we think that if Parliament had intended the period of a worker's incapacity for work not to be co-incident with the fact of his incapacity then it would have made this clear. The uncertainty engendered by the proposition that the two are not co-incident is immediately apparent, and the distinction hitherto drawn by the legislation and case authorities, including Marina's Case, between incapacity for work and entitlement to weekly payments is extinguished.

It would be odd and would lead to considerable uncertainty if a period of incapacity, as recognised by the Act, commenced and ended upon a worker's assertion or non-assertion of incapacity, whether this be done by the provision or non-provision of a medical certificate or otherwise. A certificate can at best be evidence of incapacity...

If a period of incapacity ends because a worker ceases to assert incapacity in the appropriate manner, eg does not present a certificate of incapacity, it seems that this would inevitably lead to the possibility of frequent recalculations of the amount of average weekly earnings. As noted by Doyle CJ in Marina's Case (supra) this seems an unlikely result because of its unwieldy nature."

11 For the reasons expressed by the Supreme Court in Marina and by the Full Tribunal in Gibson, in my opinion, there has only been one relevant period of incapacity and that commenced on 1 May 1991. Accordingly, the relevant date for the purposes of determining the worker's notional weekly earnings is 1 May 1991. It follows that the worker's average weekly earnings as at that date provide the framework from which her entitlement to weekly payments for the periods claimed is to be determined.

12 I appreciate that the amount that the worker was actually earning when she stopped working was much less than this, but as was noted in Marina (supra) at 238 and in Gibson (supra) at par 32, the amount to which the worker is entitled to by way of weekly payments does not necessarily match the amount that he or she was presently entitled to by way of wages.

13 I was advised by counsel during the course of submissions that agreement could be reached as to what that figure was. I do not appear to have that evidence before me at the moment. I assume it can be agreed. I shall return to this later.

14 As to the second issue it has previously been held that the identification of suitable employment and the ascertainment of what could be earned from that employment can, in an appropriate case, be issues that call for determination in a case in which the Tribunal is reviewing a rejected claim for compensation. See, for example: Petric v WorkCover Corporation/Mercantile Mutual Insurance (SA) Workers Compensation Limited (Consulting and Development Engineers) [2000] SAWCT 108, Adderton v WorkCover Corporation/Royal and Sun Alliance Workers Compensation (SA) Ltd (Rising Sun Imports (Samang Nominees Pty Ltd)) [2000] SAWCT 119 and Hornhardt v WorkCover/HIH Workers Compensation (SA) Ltd (NTP Pty Ltd) [2000] SAWCT 157.

15 In both Petric (supra) and Adderton (supra) at the time of the lodging of the worker's claim for compensation two years had elapsed since the commencement of the incapacity. It was held in both cases that the Corporation was obliged in determining the amount of compensation to which the worker was entitled to turn its mind to s 35(2)(c) of the Act and if as a result of that enquiry it was revealed that the worker had a nil entitlement then the Corporation was entitled to reject the worker's claim.

16 In Hornhardt (supra) when the worker lodged his claim for compensation he had an entitlement to weekly payments of income maintenance to which he had the benefit of the deeming provisions provided for by s 35, but by the time the claim came to be determined by the Tribunal, two years had elapsed since the commencement of his incapacity. The issue that arose for the consideration of the Tribunal was whether in those circumstances a consideration of the identification of suitable employment and the ascertainment of what could be earned from that employment could be undertaken to the intent that if that enquiry revealed that the amount capable of being earned by the worker was equal to or greater than his notional weekly earnings the Tribunal would make an order for weekly payments for a closed period.

17 It was held in Hornhardt that as a matter of law it was permissible for that to be argued.

18 Mr Apps submitted that Hornhardt could be distinguished because at the time when these claims were made the two year period had well and truly elapsed such that if the employer intended to rely upon the worker's residual earning capacity to defeat or limit its liability to pay weekly payments of income maintenance it should have raised this in its determination and that as a matter of procedural fairness it is not open for it to raise it now.

19 Principles such as procedural fairness and the right to natural justice are of critical importance. If I thought for a moment that the worker was being caught by surprise by the arguments that have been put by the employer or that it was otherwise unfair for her to have to meet them I would not entertain them. But the issue about the potential application of the so called two year review provisions to this claim has been a live issue for the duration of this trial and indeed I deferred making a final ruling on the last occasion to give both of the parties ample opportunity to reconsider their positions in respect of this issue. Had an application be made to reopen the case to call further evidence I would have considered it. In my view, issues of natural justice and procedural fairness do not arise here.

20 In the end I think it comes down to a question of law as to whether or not it is open to the employer to raise these arguments now, and if so how the evidence pans out.

21 In Timeny v Santos Limited (A80/1995) the Workers Compensation Appeals Tribunal made the point in the context of a review by a Review Officer, that it is the rejection of the worker's claim for compensation that is the subject of the review, and not the reasons for the rejection. In my opinion, subject to the important caveats about procedural fairness, natural justice, and overall fairness, just because a compensating authority rejects a claim on a certain ground or grounds does not preclude it in any subsequent proceedings arising out of that rejection from relying upon some other ground or grounds. I think that this is consistent with the approach suggested by the Supreme Court in Cristea v WorkCover Corporation (CCA Snackfoods (Smith Food Co)) [1993] SASC 4356; (1993) 61 SASR 487.

22 In my opinion, Hornhardt cannot be distinguished. I think that my task in determining the quantum of the worker's entitlements to weekly payments requires me to consider what amount the worker could earn in suitable employment. I now turn to consider that.

23 Amongst the materials placed before me were extracts from the Clerks' (SA) Award ("the award") which contains a classification structure that provide details of the characteristics, typical duties and skills of various levels of clerks covered by that award. For present purposes I think that level 1 and 2 are relevant. They provide as follows:-

Employees at this level may include the initial recruit who may have limited relevant experience. Initially work is performed under close direction using established practices, procedures and instructions. Such employees perform routine clerical and office functions requiring an understanding of clear, straightforward rules or procedures and may be required to operate certain office equipment. Problems can usually be solved by reference to established practices, procedures and instructions.

Employees at this level are responsible and accountable for their own work within established routines, methods and procedures and the less experienced employee's work may be subject to checking at all stages. The more experienced employee may be required to give assistance to less experienced employees in the same classification.

Indicative typical duties and skills at this level may include:

* Reception/switchboard, eg. directing telephone callers to appropriate staff, issuing and receiving standard forms, relaying internal information and initial greeting of visitors.

* Handling or distributing mail including messenger service.

* Recording, matching, checking and batching of accounts, invoices, orders, store requisitions, etc.

* The operation of keyboard and other allied equipment in order to achieve competency as prescribed in Level 2.

This level caters for the employees who have had sufficient experience and/or training to enable them to carry out their assigned duties under general direction. Employees at this level are responsible and accountable for their own work which is performed within established guidelines. In some situations detailed instructions may be necessary. This may require the employee to exercise limited judgement and initiative within the range of their skills and knowledge.

The work of these employees may be subject to final checking and as required progress checking. Such employees may be required to check the work and/or provide guidance to other employees at a lower level and/or provide assistance to less experienced employees at the same level.

Indicative typical duties and skills at this level may include:

* Reception/switchboard duties as in Level 1 and in addition responding to enquiries as appropriate, consistent with the acquired knowledge of the organisation's operations and services, and/or where presentation, and use of interpersonal skills are a key aspect of the position.

* Operation of computerised radio/telephone equipment, micro personal computer, printing devices attached to personal computer, dictaphone equipment, typewriter.

* Word processing, eg. the use of a word processing software package to create, format, edit, correct, print and save text documents, eg. standard correspondence and business documents.

* Stenographer/person solely employed to take shorthand and to transcribe by means of appropriate keyboard equipment.

* Maintenance of records and/or journals including initial processing and recording relating to the following:

* Computer application involving use of a software package which may include one or more of the following functions:

- following standard procedures and using existing models/fields of information.

* Arrange routine travel bookings and itineraries, make appointments.

* Provide general advice and information on the organisation's products and services, eg. front counter/telephone."

24 For the reasons previously delivered by me, I find that the worker is capable of working as a clerk. I think that the level 2 classification contemplates a degree of experience that the worker does not presently possess. Although I am sure that in time, with appropriate training and experience the worker would be capable of working at much higher levels, for the moment, absent that training and experience I find that she is only capable of working as a level 1 clerk. The level 1 classification prescribed by the award for first year of adult service is $454.70 per week. Based on the material placed before me I find that this is the amount that the worker could earn by way of suitable employment.

25 As I have said earlier, I have not been provided with evidence of the worker's average weekly earnings as at 1 May 1991. For the reasons discussed herein that is the base figure from which I think the worker's entitlements must be assessed.

26 I have not received submissions as to whether I should base my calculations simply on the average weekly earnings as at 1 May 1991 or whether that amount should be as adjusted pursuant to s 39 of the Act to take into account wage movements since that date. If there is to be an argument about this I grant the parties liberty to apply.

27 Subject to that and to the receipt of evidence of the actual average weekly earings as at 1 May 1991, I determine that the worker is entitled to 80 per cent of the difference between that figure and $454.70 per week.

28 I will now adjourn further consideration of this judicial determination to enable the parties to reach agreement as to the precise quantum of the

worker's entitlements. If the parties cannot reach agreement I grant them liberty to apply to place such evidence before me and make such submissions as are necessary to resolve this outstanding issue.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to Section 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.

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