Biga Wide Bay Pty Ltd v Review Unit, Q-COMP [2006] QIRC 62 (2006) 182 QGIG 34

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Workers' Compensation and Rehabilitation Act 2003 - s. 550 - procedure for appeal Biga Wide Bay Pty Ltd AND Review Unit, Q-COMP (WC/2005/9) DEPUTY PRESIDENT BLOOMFIELD 3 May 2006 Workers' compensation - Calculation of normal weekly earnings - Exercise of discretion under Regulation 47 - Appeal - Appropriate case to exercise discretion but claimant misled Q-COMP Review Officer - Exercise of discretion produced an atypical normal weekly earnings calculation - New calculation to be performed. DECISION Background This decision relates to an appeal by Biga Wide Bay Pty Ltd (the appellant) against a decision of Q-COMP, dated 17 October 2005, in which Q-COMP made a decision pursuant to s. 47 of the WorkCover Queensland Regulation 1997 that it would be unfair to make compensation payments to Mr Michael Linton-Helliar (the claimant) calculated at the time he originally injured his ankle, viz. 6 November 2002. Instead, Q-COMP determined that the appropriate rate should be the claimant's normal weekly earnings at the time he lodged an application for surgery to the ankle, viz. 26 May 2005. The facts relied upon in support of the grounds of appeal are: "a. The Appellant was at the employer of the Claimant on 6 November 2002 and the Claimant was seconded to work [as a fourth year mature age apprentice] for Ergon Energy. b. The Claimant injured his ankle on 6 November 2002 when a transformer tank slid off a trolley onto his right foot. c. The Appellant lodged an application for compensation, which was accepted by WorkCover Queensland (WorkCover) in 2002, and the claim was finalised. d. The Claimant lodged an application for a reopening of the compensation claim on 26 May 2005, which was accepted by WorkCover. e. WorkCover found that the Claimant's normal weekly earnings as defined by s 133 of the WorkCover Queensland Act 1996 were $590.43. f. The Claimant sought a review of WorkCover's decision. g. The Review Officer found that the calculation of normal weekly earnings as defined by s 133 of the WorkCover Queensland Act 1996 is unfair. h. The Review Officer decided that a fair calculation of the normal weekly earnings, pursuant to s 47 of the WorkCover Queensland Regulation 1997, should be calculated as at the time the Claimant lodged his application for surgery (26 May 2005).". The grounds of appeal are: "a. The Review Officer erred in law in deciding that: i. The Claimant had demonstrated grounds requiring a divergence from the calculation of normal weekly earnings under s 133 of the WorkCover Queensland Act 1996. ii. The Claimant had shown grounds requiring a fair calculation of the normal weekly earnings, calculated as at the time the Claimant lodged his application for surgery, under s 47 of the WorkCover Queensland Regulation 1997. b. The Review Officer erred: i. in taking into account pay advice from Broadspectrum (sic) for the period from 12 July 2005 to 10 September 2005; and ii. as there is no evidence to support the rate of pay claimed by the Claimant for a period of 12 months as required by s 133 of the WorkCover Queensland Act 1996. c. The Review Officer has: i. Assumed the injury reported upon by Dr Green is the injury as sustained by the Claimant on 6 November 2002; and ii. Failed to take into account any exacerbation caused by the Claimant failing to seek treatment in 2002.". The appellant, which accepted it carried the burden of proving its case on the balance of probabilities, sought the following decision: "a. The Review Officer's erred in law when deciding that a fair calculation of the normal weekly earnings should be calculated as at the time the Claimant lodged his application for surgery. b. A fair calculation of the normal weekly earnings would be the earnings of the worker from employment had by the worker as at the date that the Claimant lodged his application for compensation (21 November 2002).". -- 1 of 7 -- 2 Although the appeal was lodged pursuant to the provisions of the Workers' Compensation and Rehabilitation Act 2003 it was broadly accepted by Q-COMP that the relevant sections of the WorkCover Queensland Act 1996 applied and the case was argued on that basis. In any event, it was also noted that the relevant provisions of the earlier Act were essentially repeated in the latter Act and that the original issue before each of WorkCover Queensland (WorkCover), Q-COMP and on appeal were the same, whichever Act applies. In the circumstances, I am prepared to accept that the provisions of the WorkCover Queensland Act 1996 are relevant to my determination, without formally deciding the point. The relevant legislation and regulations For the purposes of this appeal, the relevant sections of the WorkCover Queensland Act 1996 are as follows: "CHAPTER 1 - PRELIMINARY PART 1 - INTRODUCTION 4 Objects of Act (1) This part states the main objects of this Act. (2) The objects are an aid to the interpretation of this Act. 5 Workers' compensation scheme ... (4) It is intended that the scheme should - (a) maintain a balance between - (i) providing fair and appropriate benefits for injured workers or dependants and persons other than workers; and (ii) ensuring reasonable premium levels for employers; and ... (7) Because it is in the State's interests that industry remain locally, nationally and internationally competitive, it is intended that compulsory insurance against injury in employment should not impose too heavy a burden on employers and the community. ... CHAPTER 3 - COMPENSATION PART 1 - INTERPRETATION FOR CHAPTER 3 132 Meaning of 'amount payable under an industrial instrument' (1) An amount payable under an industrial instrument to a worker is the weekly rate of wages to which the worker is entitled for the time being under the industrial instrument. (2) However, if a worker is employed in an industry that is seasonal in nature, the amount payable must reflect the relevant season under the industrial instrument. 133 Meaning of 'normal weekly earnings' (1) 'Normal weekly earnings' are the normal weekly earnings of a worker from employment (continuous or intermittent) had by the worker in the 12 months immediately before the day the worker sustained an injury. (2) If a worker has not had employment for the 12 months immediately before the day the worker sustained an injury, 'normal weekly earnings' are the normal weekly earnings of the worker from employment (continuous or intermittent) had by the worker in the period in which the worker has had the employment. (3) 'Normal weekly earnings' are calculated as prescribed under a regulation. ... PART 8 - WEEKLY PAYMENT OF COMPENSATION Division 1 - Application 169 Application and object of pt 8 (1) This part applies if a worker is totally or partially incapacitated because of injury for which compensation is payable. (2) The object of this part is to provide for weekly payments to the worker during the period of incapacity. ... Division 3 - Adjustment of entitlements under pt 8 171 Worker can not receive more than if injury had not been sustained (1) A worker must not receive an amount under this part that is more than the worker would have received from the worker's employment if the worker were at work and the injury had not been sustained. -- 2 of 7 -- 3 (2) Subsection (1) has effect despite any other provision of this part. ... Division 4 - Entitlement for total incapacity Subdivision 1 - Application of div 4 173 Entitlement to weekly payments Compensation payable to a totally incapacitated worker or person to whom subdivision 3 or 3A applies is a weekly payment under this division. Subdivision 2 - Workers 174 Total incapacity - workers whose employment is governed by an industrial instrument (1) The compensation payable to a totally incapacitated worker whose employment is governed by an industrial instrument is, for each week - (a) for the first 26 weeks of the incapacity, the greater of the following - (i) 85% of the worker's NWE; (ii) the amount payable under the worker's industrial instrument; and ... 177 Total incapacity - casual or part-time workers (1) The compensation payable to a totally incapacitated worker engaged in casual or part-time employment is a payment under section 174, 175 or 176. (2) However, the payment must not be more than the worker's NWE.". The relevant parts of the WorkCover Queensland Regulation 1997 are as follows: "CHAPTER 4 - COMPENSATION Division 1 - Calculation of NWE 43 Calculation of NWE Normal weekly earnings of a worker from employment are to be calculated under this division. 44 What amounts may or may not be taken into account (1) Amounts paid to the worker by way of overtime, higher duties, penalties and allowances (other than amounts mentioned in subsection (2)) that are of a regular nature, required by an employer and that would have continued if not for the injury may be taken into account. (2) Amounts mentioned in the Act, schedule 3, definition 'wages', paragraphs (a) to (d) are not to be taken into account. 45 NWE if impracticable to calculate rate of worker's remuneration (1) This section applies if it is impracticable, at the date of injury to the worker, to calculate the rate of the worker's remuneration because of - (a) the period of time for which a worker has been employed; or (b) the terms of the worker's employment. (2) Regard must be had to - (a) the normal weekly earnings during the 12 months immediately before the date of injury of a person in the same grade, employed in the same work, by the same employer, as that of the worker; or (b) if there is no such person - the normal weekly earnings of a person in the same grade, employed in the same class of employment, and in the same district as that of the worker. ... 47 NWE if WorkCover considers calculation unfair (1) This section applies if WorkCover considers that the calculation of normal weekly earnings under this division would be unfair. (2) The normal weekly earnings may be calculated in the way WorkCover considers to be fair, and the calculation under this subsection is taken to be the normal weekly earnings of the worker.". Amounts mentioned in the WorkCover Queensland Act 1996, schedule 3, definition "wages", paragraphs (a) to (d) are as follows: "'wages' means the total amount paid, or provided by, an employer to, or on account of, a worker as wages, salary or other earnings by way of money or entitlements having monetary value, but does not include - (a) allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses; and -- 3 of 7 -- 4 (b) contribution by an employer to a scheme for superannuation benefits for a worker, other than contribution made from money payable to the worker; and (c) lump sum payments on termination of a worker's services for superannuation, accrued holidays, long service leave or any other purpose; and (d) an amount payable under section 70.". The Review Officer's decision, the subject of the appeal The decision of Q-COMP's Review Officer, which is the subject of this appeal, is conveniently set out in the following extract of the review decision dated 17 October 2005: "In our telephone conversation on 30 September 2005, you submitted that you have been working as an electrical shift supervisor for some months now, and you are being paid a wage much higher than that of a fourth year apprentice. You have provided payslips which show your base rate of pay is $40.00 per hour, and that you average 60 hours per week. I note that although you have not been with Broadspectrum for 12 months, I am satisfied that the payslips you have provided are indicative of the pattern of work, and amount of weekly pay you have received and can expect to receive in the future. The rate of pay and your position has also been confirmed by Broadspectrum. How the Legislation applies to the Evidence I have carefully read section 133 of the Act and section 47 of the Regulations. I accept that section 133 clearly states that normal weekly earnings are the normal weekly earnings had by the worker in the 12 months immediately before the day the worker sustained an injury. However, I consider that calculating your normal weekly earnings as at the time you sustained the injury, when you were a fourth year apprentice, is unfair. You are currently a fully qualified tradesman with extra qualifications in middle management and occupational health and safety. As such, and pursuant to section 47 of the Regulations, I consider it is more appropriate and fair to calculate your normal weekly earnings as at the time you lodged your application for surgery. I have set out my calculations pursuant to section 174 below. 85% of Normal Weekly Earnings Your normal weekly earnings were $40/hr x 60/hr week = $2400.00, making your entitlement at 85%, $2040.00/week. Industrial Instrument The applicable industrial instrument is the Electrical Contracting Industry Award - State 2003 (Mackay Division). As a supervisor you would be entitled to the casual, Grade 10, on site rate plus leading hand allowance. Grade 10 on-site casual rate / hour Hours/week Subtotal Leading Hand Allowance Subtotal Total $27.0179 38 1026.6802 5.90/day x 5 $29.50 1,056.18 As you are entitled to the greater of the amounts, I consider that your entitlement to compensation for the first 26 weeks of your incapacity is $2040.00 per week. Decision Summary I am satisfied that are entitled to compensation at a rate of $2040.00 per week for the first 26 weeks of your incapacity.". The evidence Evidence was given on behalf of the appellant by Mr Martin Kettleton, Group Risk Manager of the appellant, and by Mr Terry Rankin, Area Manager for Broadspectrum Australia (Qld) Pty Ltd (Broadspectrum), which employed the claimant between July 2005 and September 2005. Mr Kettleton briefly explained the process the appellant would normally have adopted to handle the case of an injured employee but said no similar opportunities were available to it in this case because the claimant completed his apprenticeship shortly after the original injury occurred. Mr Rankin indicated that the bulk of the claimant's employment with Broadspectrum was as a supervisor working on a casual basis for 60 hours each week at a rate of $40 per hour. He also indicated that the claimant had "self-demoted" from -- 4 of 7 -- 5 the supervisor's role and had been employed for approximately the final 1.5 weeks of employment as casual leading hand at the rate of $33.81 per hour. Q-COMP called the claimant who gave evidence about his previous employment history and the reasons why he had sought a re-opening of his original workers' compensation application in May 2005. In addition, the claimant indicated he had undergone ankle surgery on 24 October 2005, was still on crutches and would visit his orthopaedic surgeon for a review on 28 April 2006. During the course of his evidence the claimant also indicated:  he had held a number of positions in the approximate 2 years 9 months which had elapsed since he completed his mature aged apprenticeship with the appellant, as follows:  mid-2003 - RJC Powerlines  for approximately 3 months at a rate of $22.96 per hour  early 2004 - KLM Group, Brisbane  for approximately 2 months at a rate of "around" $23.00 per hour  early-2004 - Pearsons Electrical, Roma  for approximately 2.5 months, after which he returned to Brisbane and did not work for 5-6 months  mid to late 2004 - Pollocks  for approximately one month  late 2004 - Thomas & Coffey, Blackwater  for approximately 3 months at a rate of $23.00 per hour  late 2004 or early 2005 - Axelsen Electrical, Blackwater  for approximately 2.5 months  June 2005 - CSR Distillery, Sarina  For about a month at a rate which he could not recall but thought was $28.00 per hour  July 2005 - Broadspectrum;  during the above employment he had only worked in a supervisory role for 14-15 weeks in total; i.e. 6 weeks with Thomas & Coffey and 8-9 weeks with Broadspectrum;  after finishing work at Broadspectrum, and prior to his ankle operation, he had worked for approximately 2 weeks as a casual electrician for Grahams Electrics at Sarina working a 38 hour week at $28 per hour;  he could not accurately state his income for the financial year 2004-2005 because he had not filed a taxation return for this period, nor for several earlier years;  he had remarried in November 2005 and contributed approximately $250 per week towards schooling and expenses for his wife's children who were predominantly in the care of their father as well as approximately $340 per week to his former wife in respect of children in her care. Because of a dispute with his wife about access to his children he was "a couple of months" behind in family payments, in the amount of approximately $5,000;  he accepted that it was "not fair" that he was being paid workers' compensation as if he was still employed as a supervisor in circumstances where he had self-demoted;  he had informed Q-COMP's Review Officer, in the course of a telephone conversation with her, that if it was not for his ankle injury he would have continued to work for Broadspectrum as a supervisor; and  this statement to the Review Officer was not correct. The issue for the Commission's determination As it transpired, the appellant did not press grounds (a)(i) or (ii) nor grounds (c)(i) or (ii) of its grounds of appeal. Similarly, the appellant did not press item (b) of its claimed relief. Consequently, the only issue for the Commission's determination on appeal is the amount to be paid to the claimant during his period of convalescence. In this regard, the appellant conceded that payment of weekly earnings in the amount of $590.43 as determined by WorkCover, in its initial decision, would be unfair to the claimant. A more appropriate figure, according to the appellant, was the amount being earned by the claimant in his last position immediately before undertaking surgery (viz. $28 per hour on the basis of a 38 hour week = $1,064). Q-COMP also submitted that the weekly payment of $590.43 initially determined by WorkCover was unfair because "as at the time of incapacity" the claimant was a fully qualified tradesman earning a base rate of pay of $40 per hour as a supervisor or $33.81 per hour as a leading hand. Q-COMP submitted that the Review Officer had acted appropriately, and in accordance with the discretion vested in her pursuant to regulation 47, to determine that the compensation payable was $2,040. Mr Major, who represented Q-COMP, also indicated:  the appellant, contrary to its appeal documentation, now accepted that the initial decision of WorkCover was unfair; -- 5 of 7 -- 6  whilst the Review Officer had decided upon one method of calculating what she thought to be a fair compensation payment (pursuant to regulation 47) there were a number of other ways that the exercise of discretion might have been considered, for example: o $40 per hour on the basis of a 38 hour week = $1,510; or o the amount payable to a casual electrician under the Electrical Contracting Industry Award - State 2003 plus leading hand allowance = $1,056.18; or o the amount payable under the same industrial instrument for working 60 hours each week as a casual leading hand = $1,650.57; or o $33.81 per hour on the basis of a 60 hour week = $2028.60; and  the decision in this appeal would provide guidance to Q-COMP in the future. The objects of the WorkCover Queensland Act 1996 provide, inter alia, that the legislation is intended to maintain a balance between providing fair and appropriate benefits for injured workers whilst, at the same time, ensuring reasonable premium levels for employers. In this context, Q-COMP rightly, in my view, determined that the calculation of normal weekly earnings initially assessed by WorkCover was unfair. However, in deciding that the claimant was entitled to compensation at a rate of $2,040 per week for the first 26 weeks of his incapacity Q-COMP's Review Officer, in my opinion, fell into error. In this regard, the following points are relevant:  whilst determining, pursuant to s. 47 of the regulations, that it was more appropriate and fair to calculate the claimant's normal weekly earnings as at the time he lodged his application for surgery (viz. 26 May 2005) the Review Officer did not do this;  instead, the Review Officer calculated normal weekly earnings by reference to a pay advice from the applicant which recorded his rate of pay as at 6 September 2005, in his capacity as a supervisor with Broadspectrum, as $40 per hour for 60 hours each week in circumstances where: o this pay advice recorded one of the highest weekly earnings by the claimant in his entire working life; o the claimant ceased employment (on the information available to the Review Officer) with Broadspectrum on 10 September 2005; and o the claimant had also "self-demoted" to the position of leading hand (at $33.81 per hour) prior to leaving employment;  the Review Officer appears to have failed to have taken into consideration the following information contained in a facsimile from Broadspectrum of 11 October 2005: "Employment Period: 12/07/2005 to 10/09/2005 Classification: Supervisor / Leading Hand Rate: $40.00 Base / $33.81 Base Status of Employment: Casual Please note that due to self demotion Michael was a Leading Hand for the final week of his employment with Broadspectrum.";  the Review Officer was misled by the claimant (on his own admission in these proceedings) when he informed her that he would have still been in the supervisor role had it not been for the need to have surgery to his ankle; and  the Review Officer arguably "double counted" any casual loading built into the claimant's usual wage rates by failing to make any allowance for absences from work or hours not worked for other reasons. In this respect, the claimant's wages sheets from Broadspectrum (Exhibit 10) disclose he only worked an average of 51.8 hours during the 8 weeks covered by such wages sheets. Conclusion This is a case where: (a) some time has passed between the original injury and the need for compensation, or further compensation due to the injury; and (b) a determination has been made that it is unfair to use the calculation of normal weekly earnings provided in s. 133 of the WorkCover Queensland Act 1996, and that the discretion given under s. 47 of the WorkCover Queensland Regulation 1997 should therefore be exercised. In my view, one such situation in which the s. 133 calculation of normal weekly earnings could be unfair would be where a worker's actual earnings in the 12 months prior to the (original) injury are less than their earnings in the 12 months before the application for compensation, or further compensation. Another instance may be where the 12 months prior to the -- 6 of 7 -- 7 injury do not truly reflect the worker's earning potential for the future, and thus are not a real measure of their injury related lost income in their recuperation period. Such arguments are apposite in this case. Accordingly, accepting that looking to the 12 months prior to the (original) injury to determine normal weekly earnings in cases such as this may be unfair, what is an acceptable alternative? Where compensation is required significantly later than the time of the injury, an alternative reasonable timeframe to consider for the purpose of calculating normal weekly earnings may be the earnings in the 12 months prior to the application for compensation, or further compensation. This properly allows the focus to be on current earning potential, rather than old/superseded earning potential. It is, of course, simply another artificial construct, like s. 133, designed to try to best approximate a worker's expected loss during the period of their compensation and, like s. 133, it may not be completely accurate. Nonetheless, it strikes me as being more fair than considering (as the Q-COMP Review Officer did) an isolated snapshot of a claimant's work history, which, with its limited timeframe, has the potential to produce atypical results. (Indeed the legislature seems to have been attempting to mitigate against any such outcome in its framing of s. 133.). That said, I do not propose this alternate approach as an inflexible rule for all cases where there is a time lapse between injury and application for compensation. There may conceivably be cases where compensation is required at a later time than the injury, but looking at the 12 months preceding the application for compensation may also be unfair. The legislature has apparently seen fit in s. 47 of the WorkCover Queensland Regulation 1997 to moderate the strict effect of s. 133 by introducing a discretion based on overall fairness. That broad discretion should not be fettered with prescriptions as to how "fairness" must be achieved. This has to be a question for every individual case. In this particular case, the claimant's work history has been characterised by significant periods without work and large variations in hours worked, overtime worked and hourly wage. The supervisory position with Broadspectrum was held, in context, for a limited time, and was not the position held when he actually ceased work to have the operation on his ankle. In all the circumstances, I do not think that the conclusion can fairly be drawn that the limited higher value work with Broadspectrum represents the claimant's true earning potential (and therefore lost income) during his recuperation period. Further, the provisions of s. 171 must have relevance in any discretionary calculation. Here the claimant was earning $28 per hour immediately before his operation and $33.81 per hour before that, both figures well below the $40 per hour he was earning for a relatively short time in his stint as a supervisor. For this case, I think the fairest approach to determine the claimant's normal weekly earnings is to look to his actual earnings in his various periods of employment in the 12 months preceding his application for further compensation, viz. the 12 months prior to 26 May 2005. The Commission determines and orders accordingly. A.L. BLOOMFIELD, Deputy President. Hearing details: 2006 28 March 3 May Released: 3 May 2006 Appearances: Mr L. Dollar, Counsel, instructed by Ms S. Seamark, of Winchester Young & Maddern, for the appellant. Mr P.H.N. Major, Counsel, instructed by Ms A. Coulin, of Q-COMP, for the respondent. -- 7 of 7 --