Chambers and Comcare [2000] AATA 51 (1 February 2000)

Last Updated: 4 February 2000

DECISION AND REASONS FOR DECISION [2000] AATA 51

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V1998/1134

GENERAL ADMINISTRATIVE DIVISION )

Re KATHERINE LOUISE CHAMBERS

Applicant

And COMCARE

Respondent

DECISION

Tribunal Mr J.T.C. Brassil, AM, Member

Date 1 February 2000

Place Melbourne

Decision That the decision under review be set aside and substituted therefor a decision that the applicant had continuing service in the Australian Army and hence the Defence Force during which she gained promotion and that she was entitled to be paid the level of compensation payments that she was paid for the relevant periods of incapacity. The Tribunal orders that the applicant's costs be paid in accordance with the Practice Direction.

(Sgd) J.T.C. Brassil

Member

CATCHWORDS

COMPENSATION - whether the applicant remained a member of the Australian Defence Force - whether the applicant was continuously employed by the Commonwealth - appropriate level of NWE for payment of compensation

Safety Rehabilitation and Compensation Act 1988 - s5, s8

Defence Act 1903 - s30, 31, 32, 32A

West and Comcare [1999] AATA 159

Whitaker v Comcare, Federal Court, 7 September 1998, 1099/1998

REASONS FOR DECISION

1 February 2000 Mr J.T.C. Brassil, AM, Member

1. This is an application for review of a decision made by the respondent on 16 June 1998 and affirmed upon reconsideration on 7 August 1998 that the rate of Normal Weekly Earnings (NWE) to be paid for incapacity earnings by the Applicant was the rate paid on her discharge from the Australian Regular Army ("ARA"), being the rate of Private Proficient Pay Level 4.

2. The applicant was represented by Ms J. Bornstein of counsel and the respondent by Mr M. McInnis of counsel.

3. At the hearing on 23 March 1999 the Tribunal had before it the documents lodged pursuant to the Administrative Appeals Tribunal Act 1975 ("the T documents").

Issues

4. The threshold issue before the Tribunal was not to determine whether the applicant was eligible for payments (there was common ground on this), but to consider whether she continued to be a member of the Australian Defence Force up to the time that the compensation payments became due. Consequently it can be determined whether she should be paid at the rate to which she was entitled as a member of the Army Active Reserve, her Commonwealth employment activity at the time payments were being made, or at the rate she was paid when discharged from the ARA on 20 February 1994.

Facts

5. The applicant enlisted in the ARA on 31 August 1988 and served until her discharge on 20 February 1994. She held the rank of Private Proficient upon discharge and was paid at Pay Level 4 (T8).

6. She transferred to the Inactive Army Reserve on 21 February 1994 and on 6 September 1994 transferred to the General Reserve (T14). She was promoted to Lance Corporal in the Reserve. She was paid at Pay Group 3.

7. As a result of compensable injury to her knees, suffered during her ARA service, the respondent accepted liability for lateral patella instability of the right knee with arthroscopically debrided patella chrondosis and lateral instability of the left patella with incorrected patello-femoral chrondosis of the left knee, query meniscus tear left knee (T4).

8. She was incapacitated for work for two periods: 3 February 1997 to 14 March 1997 and 10 September 1997 to 25 October 1997. In correspondence dated 8 December 1997 the respondent set out compensation payments due as a result of her compensable injury, calculated at the rate applicable to her then rank Lance Corporal, namely Pay Group 3.

9. The respondent determined however on 16 June 1998 that the payments had been incorrectly calculated and should have been at the rate the applicant was eligible to be paid at the time of her discharge from full-time service, namely Private Proficient, Pay Level 4. It was determined there had been an overpayment of $130.98.

10. The decision was reviewed on 7 August 1998 following a request made on behalf of the applicant. This review (T24) affirmed the primary determination that the applicable rate was that of Private Proficient, Pay Level 4, the rate being paid at the time of the applicant's discharge from the ARA.

Legislation

11. The right for employees of the Commonwealth to be paid compensation is established in the Safety, Rehabilitation and Compensation Act 1988 ("the Act") and the subsections relevant in this matter are as follow:

"5(2) Without limiting the generality of subsection (1):

(a) a member or staff member of the Australian Federal Police;

(b) a member of the Defence Force; or

(c) ...

shall, for the purposes of this Act, be taken to be employed by the Commonwealth, and the person's employment shall, for those purposes, be taken to be constituted by the person's performance of duties as such a member or staff member of the Australian Federal Police or member of the Defence Force ... as the case may be.

8.(7) Subject to this section, if:

(a) an employee continues to be employed by the Commonwealth or a

licensed corporation after the date of an injury; and

(b) the minimum amount per week payable to the employee in respect

of that employment is increased because of the promotion of the

employee;

the normal weekly earnings of the employee before the injury, as

calculated under the preceding subsections, shall be increased by

the same percentage as the percentage by which that minimum amount

per week is increased.

14. (1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment."

12. In determining the threshold issue of whether the applicant was a continuing member of the Defence Force, the relevant sections from Part III of the Defence Act 1903 are as follow:

"30 The Defence Force consists of 3 arms, namely, the Australian Navy, the Australian Army and the Australian Air Force.

31 The Army consists of 2 parts, namely, the Permanent Military Forces and the Australian Army Reserve.

32(1) The Permanent Military Forces consist of 3 forces, namely, the Australian Regular Army, the Regular Army Supplement and the Regular Army Emergency Reserve.

32A (1) The Australian Army Reserve consists of 2 forces, namely, the Active Australian Army Reserve and the Inactive Australian Army Reserve.

(5) The Inactive Australian Army Reserve consists of:

...

(b) officers and soldiers transferred to that force from:

(i) the Permanent Military Forces; or

..."

Submissions

13. On behalf of the applicant, Ms Bornstein stated that that part of the Facts and Contentions relating to whether the applicant was promoted to the rank of Corporal in the Army Reserve, hence entitled to a higher rate of payment, would be withdrawn and she would be submitting only that Lance Corporal Chambers was entitled to be paid at the rate of Lance Corporal, Pay Group 3, to which she had been promoted prior to the periods of incapacity. That was the rate at which she had been paid and should be entitled to be paid.

14. She submitted there was no disagreement that the applicant was entitled to be compensated for an injury which resulted in an incapacity to work for two separate periods in 1997, 3 February to 14 March and 10 September to 25 October. The issue was only about the rate she was entitled to be paid.

15. She submitted that the applicant had been continuously a member of the Defence Force as a member of the Australian Army, including the time at which she sustained the accepted injury up to the time the compensation payment was made. That she had joined the Victoria Police simultaneously with the Army Reserve was not a consideration, it was common that members of the Army Reserve held another job.

16. Ms Bornstein said that the applicant had completed full-time service with the ARA (part of the Permanent Military Forces) and transferred immediately to the other part of the Australian Army, namely, the Army Reserve. She submitted further that there should be no distinction between the Inactive Australian Army Reserve and the Active Australian Army Reserve, both parts of the Army Reserve.

17. Ms Bornstein submitted that discharge from the ARA should not be read as a severance of her contract of employment in the Australian Army as she continued to be employed in another part of the Australian Army. She submitted that while the nature of the employment changed the contract remained and was ongoing. As she remained a member of the Australian Army it follows she remained a member of the Defence Force.

18. She submitted, as a matter of statutory construction, a statute does not oust the common law. The Act in this case does oust the right to proceed under common law for compensation, unless they elect to do so, but that does not ouster the principles of common law generally. She drew the attention of the Tribunal to the common law principle regarding compensation that it should put the person in a position that he or she would have been but for the injury.

19. She referred to the Full Federal Court decision in Whitaker v Comcare, Federal Court, 7 September 1998, 1099/1998, which considered the principles of statutory construction to be applied. She submitted that the decision supported the fundamental principle that legislation, such as the Act we are considering, is socially remedial legislation intended to benefit workers and such legislation should be given a construction which advanced its purposes as such. Where there are two constructions possible the one more favourable to the worker should be preferred.

20. On behalf of the respondent Mr McInnis submitted that the applicant had terminated her employment in the ARA voluntarily on 20 February 1994. In so terminating she was able to pick up her termination benefits, including superannuation. That she transferred to an Inactive Reserve the following day and some 7 months later to the Active Reserve does not in any way detract from the proposition that she was a regular Army solider who terminated her service.

21. The applicant had terminated and was discharged from her Commonwealth employment in the Regular Army so, submitted Mr McInnis, despite any analysis of the Defence Act 1903 that job cannot be regarded as the same job she took in the Inactive Reserve or the Active Reserve later. One is a full-time paid military position. The other is a part-time job with different characteristics.

22. Mr McInnis further submitted that the applicant had to resign her full-time position in the ARA before she could take, as she did, a full-time position in the Victoria Police. She had gone to an alternative full-time job.

23. Mr McInnis referred the Tribunal to a decision of Senior Member Burton, West and Comcare [1999] AATA 159, which considered the calculation of NWE earnings and rate of payment for an applicant who had been injured while in the ARA and was subsequently employed in the Australian Public Service for various periods. In particular he submitted that the Tribunal should adopt the view therein (para 16) that:

"The applicant's employment in the Army is the relevant employment to look at, not his subsequent employment with the Commonwealth."

He submitted that the applicant's subsequent employment commencing some 7 months later in the Active Army Reserve and her rank attained therein should not be the basis or method of calculating benefits.

24. He submitted in reference to construction of subsection 8(7)(b) of the Act that Senior Member Burton stated in paragraph 11 the respondent had put:

"To fall within the subsection an employee not only has to continue in his or her Commonwealth employment, but also has to be promoted in that employment."

This was an important concept he submitted and her employment to be considered is her employment in the Regular Army not that in the Reserve, earning a bit of extra money.

25. Further he submitted that Senior Member Burton had stated in paragraph 23:

"I therefore do not have to decide whether Commonwealth employment which has been terminated can be regarded as unbroken in circumstances where the employee is re-employed in the same Commonwealth employment within a short period of time."

He emphasised that while Senior Member Burton did not go on to consider the issue she had said "the same Commonwealth employment" and he stated that no superficial analysis of the Defence Act could say the applicant continued in the same Commonwealth employment, that is to say the Army is the Army but the respondent submits full-time Regular Army is not Army part-time Reserve.

26. On the matter of statutory construction as presented on behalf of the applicant, Mr McInnis referred the Tribunal to Senior Member Burton in West and, in particular, to the extract she takes from Burchett J in Commonwealth v Human Rights and Equal Opportunity Commission & Anor (1998) 76 FCR 513 at 520-521, that although remedial legislation should be construed liberally:

"It must be applied with a watchful eye. Sometimes the construction which is liberal to one person may be illiberal to others. Where remedial legislation contains exemptions to strike a careful and practical balance between competing interests, a Court which distorts that balance in the name of furthering the remedy risks usurping a political role, and in so doing, frustrating the will of Parliament."

27. In response Ms Bornstein submitted that West could be distinguished if the Tribunal found the applicant's Commonwealth employment was continuous because this was not the case in West and proved to be the difficulty facing the applicant in that matter.

28. She submitted that the applicant continued her employment with the Commonwealth and gained promotion or received an increment in that employment. She submitted that the decision under review denied the applicant her just benefits under the Act and should be set aside.

Consideration of the issues

29. The issue of whether the applicant had continuing Commonwealth employment is to be determined first as the other issues follow from that decision. The respondent had submitted that on 20 February 1994 the applicant left the ARA, joined the Victoria Police and thus terminated her Commonwealth employment. It is the respondent's submission that whatever happened after this day, namely her involvement in the Army Reserve, does not change the fact of termination. The submission of the applicant points to the provisions of the Defence Act which sets out the structure of the Defence Force and claims that the applicant for the whole of the relevant period was a member of the Australian Army and, hence, a member of the Defence Force.

30. The Tribunal has carefully analysed the provisions of the Defence Act in relation to the structure of the Defence Force and, particularly, the structure of the Australian Army. The Army has two parts, the Permanent Military Forces and the Army Reserve. On 20 February 1994 the applicant completed service in the ARA, a component of the Permanent Military Forces, and on 21 February 1994 she became a member of the Inactive Army Reserve, and subsequently a member of the Active Army Reserve, both components of the Army Reserve.

31. Although not put during the hearing it is in the knowledge of the Tribunal that members of the Army Reserve can and do render periods of full-time service and when they do their role can be indistinguishable from that of ARA members serving alongside.

32. While the respondent has characterised the completion of the applicant's ARA service as a termination of her contract of employment with the Commonwealth followed by taking up another contract with Victoria Police the Tribunal has difficulty in accepting this submission. The applicant did two things at the end of her service with the ARA, she joined the Victoria Police and the Army Reserve, albeit the Inactive Reserve. The Tribunal is of the view that if she had only done the first of these then the respondent's characterisation would be clearly acceptable.

33. But by transferring to the Inactive Army Reserve pursuant to s32A of the Defence Act the applicant seems to be committing herself to continuing Army service which is evident in that she transferred to the Active Reserve some months later and has served the Army with distinction, being promoted through the ranks since then.

34. The Tribunal is satisfied that the applicant remained in the Australian Army, and hence the Defence Force, throughout the relevant period as there is no conclusive evidence that service in the Army Reserve is not service in the Australian Army. While the Tribunal accepts that the nature of service in the ARA and that in the Army Reserve can be different the question to be determined is continuity of service in a broad sense rather than continuity of the same type of service and the Tribunal is satisfied that there was continuity of service within the Australian Army.

35. Hypothetically if the applicant had transferred on 21 February 1994 not to the Victoria Police and to an element of the Army Reserve, but to full-time service in the Australian Navy, a different Commonwealth employment position, this would surely be characterised as continued service in the Defence Force rather than a termination and a re-engagement.

36. The decision in West can be distinguished as there was no continuity of service with elements of the Commonwealth. The requirement of "same Commonwealth employment" put from West to the Tribunal is not persuasive as it appears to be in reference to the broken periods. The Tribunal does not perceive any requirement in the Act for "same Commonwealth employment".

37. Although argument was presented concerning statutory construction where beneficial legislation is being examined, the Tribunal did not need to go beyond the wording of the relevant legislation in coming to its conclusions.

38. The Tribunal also accepts that the applicant gained promotion to Lance Corporal during her service in the Army Reserve and that recognition of the increment thereby gained is appropriate in respect to sub-section 8(7) of the Act.

Decision

39. The Tribunal will set aside the decision under review and substitute therefor a decision that the applicant had continuing service in the Australian Army during which she gained promotion and that she was entitled to be paid the level of compensation payments that she was paid for the relevant periods of incapacity. It follows then there was no overpayment.

40. In view of this decision the Tribunal will order that the costs of the applicant be paid in accordance with the Practice Direction of the Tribunal.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J.T.C. Brassil, AM, Member

Signed: Judith Holt, Associate

Date of Hearing 23 March 1999

Date of Decision 1 February 2000

Counsel for the Applicant Ms J. Bornstein

Solicitor for the Applicant Ryan Carlisle Thomas

Counsel for the Respondent Mr M. McInnis

Solicitor for the Respondent Australian Government Solicitor