Hanley and Comcare [2003] AATA 102 (4 February 2003)

Last Updated: 5 February 2003

DECISION AND REASONS FOR DECISION [2003] AATA 102

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/220

GENERAL ADMINISTRATIVE DIVISION	)
	Re	KEVIN HANLEY

Applicant

And

COMCARE

Respondent

DECISION

Tribunal

Deputy President Don Muller

Date 4 February 2003

Place Brisbane

Decision

The Tribunal affirms the decision under review.

.............(Signed).................................

D.W. MULLER

DEPUTY PRESIDENT

CATCHWORDS

WORKERS COMPENSATION - amount per week employee "able to earn" - effect of being made redundant - whether employee incapacitated for work as a result of work related injury

Safety Rehabilitation and Compensation Act 1988: s19(3)

REASONS FOR DECISION

Deputy President Don Muller

1. This is an application to review a reconsideration dated 28 February 2001, affirming a decision of the Delegate of Military Compensation and Rehabilitation Service, dated 12 December 2000, that during a three month period from 16 November 2000, when the Applicant was made redundant, until 16 February 2001, when the Applicant secured a new job, his ability to earn was at the rate of $490.39 per week, and that consequently his entitlement to compensation for incapacity was $71.46 per week.

2. The Applicant has some degree of incapacity for work due to a back injury which he suffered while he was serving in the Australia Army.

3. The following background facts are not in dispute and the Tribunal finds that:

(i) The Applicant was born on 8 December 1955 and is currently 48 years old.

(ii) The Applicant enlisted in the Army on 1 August 1984 and he served as a Second Field Ambulance Officer until his voluntary discharge on medical grounds on 1 June 1990.

(iii) On 28 February 1990, the Applicant lodged a claim for rehabilitation and compensation. He claimed to have injured his lower back on 18 July 1986. He further claimed that the injury to his back had caused him to suffer from a degenerative lower back condition.

(iv) On 14 May 1990 a determination was issued by the Department of Defence admitting liability for the Applicant's internal disc disruption at L4-5 disc space under the Safety Rehabilitation and Compenstion Act 1988 ("the Act").

(v) The Applicant has been receiving "top-up" payments from the Department during the period between the original injury and the present.

(vi) On 25 November 1998 the Applicant commenced employment with St. John's Ambulance as a First Aid Kit Servicing Officer. The Applicant's responsibilities included driving and delivering first aid kits to various industrial and commercial areas. The Applicant had to carry a backpack and resupply the first aid kits.

(vii) On 28 July 2000 the Applicant suffered a flare-up of his back condition while carrying out his duties for St. John's Ambulance. He was off work for two weeks.

(viii) The Applicant received maximum incapacity payments from 27 July 2000 to 11 August 2000, the two weeks he was off work.

(ix) On 12 August 2000 the Applicant returned to St. John's Ambulance where a sedentary position of Sales Consultant of First Aid Kits was created for him.

(x) His wage was $490.39 per week.

(xi) On 16 November 2000, the Applicant telephoned Ms. Sharon Elliott of Military Compensation and Rehabilitation Services, to tell her that his employment had ceased due to his back condition. Ms. Elliott told the Applicant that he would have to provide medical evidence along with a letter from his employer confirming that he had been put off work due to being unable to perform work duties due to his back. Ms. Elliottt also told the Applicant that he should submit a request for vocational rehabilitation again and explain in detail the reasons he was having trouble performing his duties.

(xii) On 23 November 2000, the Applicant wrote the following letter to Ms. Elliott.

"As I informed you on Thursday the 16 November I have been made Redundant due to my back injuries.

On the 28^th of July I suffered a severe recurrence of my back injury while talking to a client in Milton. I was unable to move for some time and informed St John Ambulance of the incident. I was told that they would arrange for someone to come and pick me up but would not be able to do so for some time.

I then informed them that I was in a lot of pain and was going to make my way to Dr Silburns Clinic at Redhill and could they meet me there.

Dr Silburn saw me immediately and administered a pethidine injection and arrange for an M.R.I. to be done. I was then picked up by my work colleagues and taken home. I was off work for two weeks.

When I returned to work I informed Mr Errol Carey that I could no longer carry the backpack of First Aid Equipment and was unable to drive long distances as advised by my doctor and previous Specialist Reports (eg Brisbane to Noosa). As a result I was offered a position in the office as the Consultant in charge of First Aid Kit Sales with which I continued up until my redundancy.

When I was informed of my redundancy it was explained that the position was created especially for me and the position now no longer existed.

I am still waiting on a letter of redundancy from my employer and have been informed that it should arrive on Thursday 23 Nov. 00 as soon as I receive it I will pass it on to you."

(xiii) On 6 December 2000, the Department of Veterans Affairs received from the Applicant the following letter written to him by Errol Carey, CEO of St. John Ambulance Australia:

"It is with regret that we have to terminate your services, effective November 16 2000.

This is not a reflection of your loyalty, competence, application or performance, but is necessitated by a decision to streamline operations, and that your position is one of a number that will be made redundant. Your position was created due to the fact that your back injury prevented you from working in your original position, as a Kit Servicing representative.

I'd like to put on record my personal appreciation for the work you have done. I wish there could have been another way, but the times do demand some tough decisions.

Please feel free to use me as a referee in any job application."

(xiv) On 12 December 2000, a Delegate of the Military Compensation and Rehabilitation Service made the following determination:

"I refer to your claim for compensation for a Back condition and in particular your incapacity payments.

I have reassessed your entitlement to compensation now that you have ceased employment from 17 November 2000. Your employer states that the position you were working in along with several other positions was made redundant.

The letter from St John Ambulance Australia indicates that the position of Consultant in charge of First Aid Kit Sales was created for you because of your back condition. As this position has been made redundant and as you have not lost your employment because of your compensable condition, I have determined that your payments will be based on 75% of Corporal 2/1 less your `Able to Earn' figure.

75% Cpl 2/1 less `able to earn' figure = `top up'

$561.85 ($749.14) less $490.39 = $71.46.

Your new fortnightly entitlement will be $142.92 and commences from 7 December 2000."

(xv) This determination was affirmed on reconsideration on 28 February 2001.

(xvi) The Applicant secured a new position in the "protection services" industry on 16 February 2001.

(xvii) The Applicant earned no money while he was looking for a job between 16 November 2000 and 16 February 2001.

4. The relevant sub sections of the Act, as they stood at the time of the determination, were:

"19 Compensation for injuries resulting in incapacity

(1) This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.

(2) Subject to this Part, Comcare is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount calculated under the formula:

NWE - AE

Where:

NEW is the amount of the employee's normal weekly earnings; and

AE is the amount per week (if any) that the employee is able to earn in suitable employment.

(3) Subject to this Part, Comcare is liable to pay to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in subsection (2), compensation:

(a) where the employee is not employed during that week - of an amount equal to 75% of his or her normal weekly earnings less the amount (if any) that he or she was able to earn during that week in suitable employment;

(4) In determining, for the purposes of subsection (2) and (3), the amount per week that an employee is able to earn in suitable employment, Comcare shall have regard to:

(g) any other matter that Comcare considers relevant."

5. The case put on behalf of Mr. Hanley may be summarised as follows:

(i) Mr. Hanley was not able to continue to deliver first aid kits because of his accepted back condition.

(ii) He was transferred from the job he could not do because of his back condition to a sedentary job that he could do.

(iii) The sedentary job turned out to be more vulnerable to the vagaries of the economic state of the employer than the previous job. He was more vulnerable to being made redundant.'

(iv) He was in fact made redundant.

(v) His redundancy was caused by a combination of the transfer in jobs which had been precipitated by his back condition and the state of his employer's finances.

(vi) It took him three months to find another job.

(vii) During that three month period he earned no money - that is, he was able to earn nothing. Therefore the component in the formula AE in s.19 set out above, should have been zero, not $490.39.

6. The Tribunal received a statement into evidence from Errol Carey, CEO of St. John Ambulance, and heard oral evidence from Mr. Carey. Mr. Carey's statement contained the following:

"4. On or around 27 July 2000 Mr Hanley injured his back whilst walking down some stairs. Once he returned from sick leave for his back condition on that occasion I arranged to transfer him to an administrative position in the office. I specifically created this position for him doing phone sales of first aid kits and general office administration. Mr Hanley was coping well in that position.

5. Unfortunately, in November 2000, due to economic circumstances, I had to streamline the operations of the Queensland office and I made three employees redundant. I identified Mr Hanley's position as one which could be eliminated and consequently I terminated his services. Mr Hanley lost his position on that occasion purely as a result of economic circumstances."

In his oral evidence Mr. Carey said that by mid 2000 his organisation was $½M in the red, heading for a $250,000 loss and he had to take steps to reduce it. He said that if it had not been for the parlous financial situation, Mr. Hanley would still be employed there. He also said that there had been no certainty about any position at St. John's.

7. The so-called "top-up" amount provided for in the Act, is payable to employees who are incapacitated for work, when the incapacity is the result of a work-related injury. If the employee is not in fact incapacitated for work, or if the incapacity for work is not due to a work-related injury, then compensation is not payable.

8. In the case of Mr. Hanley, the Delegate decided that his degree of incapacity for work due to his accepted back injury, was the same during his three months off work as it had been before he was made redundant. That is, he was "able to earn", so far as his incapacity for work was concerned, the same amount per week while he was off work as he had been earning before he was made redundant, $490.39 per week.

9. Mr. Hanley's inability to earn income during his three months off work was not because of an incapacity for work due to his back injury. It was because he had been made redundant due to the economic circumstances of St. John's Ambulance.

10. The Tribunal is not satisfied that Mr. Hanley would definitely have retained his job if he had remained in his position as a servicing officer. Mr. Carey gave evidence that there had been no certainty about any position at St. John's during the re-organisation.

11. In any event, the change in positions within St. John's did not have any effect on Mr. Hanley's degree of incapacity for work. Nor did the redundancy.

12. The decision under review is affirmed.

I certify that the 12 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller

Signed: .......................................................................................

C. O'Donovan, Associate

Date/s of Hearing 11 June 2002

Date of Decision 4 February 2003

Counsel for the Applicant Mr. A. Harding

Solicitor for the Applicant Gilshenan and Luton

Counsel for the Respondent Mr. C. Clark

Solicitor for the Respondent Australian Government Solicitor