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WORKERS REHABILITATION AND COMPENSATION CORPORATION v JAMES HARLE No. SCGRG 92/2403 Judgment No. 4023 Number of pages - 15 Workers' compensation - computation of average weekly earnings (1994) 61 SASR 507; [1994] SASC 4023 (10 May 1994)

http://www.austlii.edu.au/au/cases/sa/SASC/1994/4023.html

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

LEGOE ACJ(1), PERRY(2) AND MULLIGHAN(3) JJ

CWDS

Workers' compensation - computation of average weekly earnings - Appeal by Workers' Rehabilitation and Compensation Corporation against decision of the Workers' Compensation Appeal Tribunal which in turn had upheld a finding by a review officer that there was no overtime component in the average weekly earnings of the worker who was employed as a casual welder - "notional weekly earnings" for the purposes of computation of weekly payments exclude "any component of the worker's earnings attributable to overtime" except where overtime is worked according to a regular and established pattern - the worker in question worked on a particular job for 12 hours a day, 7 days a week, but suffered an injury before the job was completed - held that the earnings did not include any component attributable to overtime - "overtime" means time spent working beyond a worker's normal hours of work, and despite the length of the hours worked, all of them were, having regard to the particular contract of employment, normal - observations as to the relevance of award provisions in characterising work as "overtime".

Workers' Rehabilitation and Compensation Act (1986) s4(8), s3(l) and s53(4).

State Transport Authority v Ettridge Workers Compensation Appeal Tribunal

Reports (1990) Vol 2 Part 2 at 264 and Kezich v Leighton Contractors Pty Ltd

(1974) 131 CLR 362, considered.

HRNG

ADELAIDE, 4 March 1994

#DATE 10:5:1994

Counsel for appellant: Mr D M Quick QC with him

Ms J. Grundy

Solicitors for appellant: Thomsons

Counsel for respondent: Mr T M Mcrae

Solicitors for respondent: Stanley and Partners

ORDER

Appeal dismissed.

JUDGE1

LEGOE ACJ Leave to appeal in this matter was granted by a judge on the sole ground that the Workers Compensation Tribunal "erred in law in finding that overtime in s.4(8) of the Act means time spent working beyond a worker's regular hours of work and payment therefore and not as overtime is defined in any award governing the worker's contract of employment".

2. In my opinion, "overtime" as defined in any award governing the worker's contract of employment was totally irrelevant to the issue of law which the Tribunal had to decide on the undisputed facts as found by the Review Officer and accepted by the Tribunal. The issue of law turns on the proper interpretation of s.4(8)(a) of the Workers Rehabilitation and Compensation Act (1986). That section reads:

"For the purposes of determining the average weekly earnings of a worker - (a) any component of the worker's earnings attributable to overtime will be disregarded ..."

3. First, it is to be noted that the sub-section is now worded differently to that which appeared at the time of the earlier decisions of this court as to whether overtime should be disregarded from the computation of the average weekly earnings; see Francese v The Corporation of the City of Adelaide (1989) 51 SASR 522, in particular at 526 per King CJ; and Ettridge v State Transport Authority; WorkCover Corporation (Intervenor) (1992) 163 LSJS 153. The undisputed facts as found by the review officer and adopted by the Tribunal were briefly: 1. That the worker had been employed on a casual basis by a firm called Rexco which was in the business of labour hire. 2. In March 1991 the worker was directed by Rexco to perform maintenance work on the MV Accolade II for Adelaide Brighton Cement. 3. That contract of casual employment required the worker who agreed to work from 6 p.m. to 6 a.m., seven days a week, including Easter, until the maintenance work was completed. 4. The worker was a boiler maker in the labour hire industry. 5. Rexco employed the worker for specific jobs in respect of which Rexco had contracts with different clients to provide the services of its employees, in this case, the respondent, James Harle. 6. The worker was engaged to perform boiler making work on and from 19 March 1991, for the hours specified above for seven days a week until the Accolade was ready.

7. The worker was, as found by the Review Officer and accepted by the Tribunal, a "true" casual in the industrial sense.

8. The job on which the worker was working when injured involved an engagement by him to work continuous 12 hour shifts.

4. In the course of the various appeals in this matter the facts and legal issues relevant to the claim were canvassed. The Corporation (the appellant herein) was unable to identify what the worker's ordinary hours of work were. Furthermore, the appellant conceded that the pay records described some of the worker's earnings as overtime, whereas in fact the remuneration in question was by way of shift penalty or loading. The appellant further conceded that it would be unreliable in any event to simply adopt what the employer describes as overtime. What in law is the "component of the worker's earnings attributable to overtime"?

5. As Mullighan J said in Workers Rehabilitation and Compensation Corporation v James (1991) 56 SASR 414 at 419, after discussing the change made by the 1986 Workers Rehabilitation and Compensation Act to the former provisions of the 1971 Workers Compensation Act:

"The Act provides that a disability is compensable if it arises from employment: s.30(1). ... A compensable disability entitles the worker to income maintenance where it results in incapacity for work: s.35. That section provides for the principles to be applied in determining the amount of weekly payments."

6. Further, the Act introduced the concept of "notional weekly earnings" which are defined in s.3(1) to mean:

"(a) the worker's average earnings."

7. Average weekly earnings are defined in s.3(1) to mean the average weekly earnings determined in accordance with s.4. The basic concept contained in s.4 are that the average weekly earnings of a disabled worker is the average amount that that worker "could reasonably be 4 expected to have earned for a week's work if the worker had not been disabled", see sub-s.(1). As King CJ observed in Francese v The Corporation of the City of Adelaide (supra) at 526: "... the concept of average weekly earnings which are the measure of the compensation which is payable, is directed to the future and not to the past. It is directed to 'the average amount which the worker could reasonably be expected to have earned for a week's work if the worker had not been disabled' - s.4(1). The average weekly earnings during the previous 12 months are relevant only as a factor which may be taken into account for the purpose of determining what could be expected to be earned during the period of disability - s.4(2). The underlying notion appears to be that of 'income maintenance', as the heading to Division IV, in which s.35 appears, suggests, that is to say the maintenance during disability of the income which the worker would reasonably have expected to earn during the period of disability. The overtime excluded from average weekly earnings other than 'overtime worked in accordance with a regular and established pattern' is therefore overtime which could reasonably be expected to have been worked during the period of disability if there had been no accident. Past overtime other than that worked in accordance with a regular and established pattern would also have to be excluded in the computation of past average weekly earnings in so far as they are taken into account in estimating future weekly earnings."

8. At the time of the decision in Francese (supra) and Ettridge (supra), sub-s.(8) read: "For the purposes of determining the average weekly earnings of a worker, any prescribed allowance shall be disregarded." "Prescribed allowance" was defined in s.3, sub-s.(c) of which read:

"By way of overtime, other than amounts paid in respect of overtime worked in accordance with a regular and established pattern."

9. Sub-section (8) now reads:

"For the purposes of determining the average weekly earnings of a worker - (a) any component of the worker's earnings, attributable to overtime will be disregarded unless ... "

10. Further provisions in the sub-section relate to overtime worked in accordance with a regular or established pattern, so that the pattern be substantially uniform as to the number of overtime hours worked, and the worker would have continued to work overtime in accordance with the established pattern if he or she had not been disabled.

11. The issue in this case is whether there was any component of the worker's earnings which could be said to be attributable to overtime for the purpose of determining this worker's average weekly earnings so as to assess the future income maintenance after the disability. In my opinion, that is the plain and ordinary meaning to be applied to the particular facts as found by the Tribunal. Conclusion. In my judgment, the short answer and only answer which the Tribunal could give to this question was that provided by the Tribunal when it concluded that -

"... this worker was not engaged in working overtime at all. His regular or usual hours of work were those which he negotiated as part of his contract of employment. In the instance of the Accolade job that was from 6 pm to 6 am, 7 days per week."

12. In calculating the rate of remuneration for those negotiated hours, the parties have made reference to the 6 award prescriptions concerning casual employees, hours of work and overtime. But the use of rates specified in the award for that purpose does not establish that the worker was working overtime for the purposes of this Act. In my opinion, the Tribunal correctly interpreted and applied the provisions of s.4(8) of the Act, when on the facts as found and on the provisions of this particular worker's contract, the Tribunal concluded that there was no component of the worker's earnings attributable to overtime.

13. Further, I agree with the Tribunal that the statement of Mason J (as he then was) in Kezich v Leighton Contractors Pty Ltd (1974) 131 CLR 362 at 368, recognised the very problem which arose in this case when his Honour said:

"Special problems arise in the case of a casual or shift worker whose hours of work are remunerated otherwise than by reference to the ordinary rate of pay. Assuming that such a worker intended to continue casual or shift work it could not be said that, if he were not incapacitated, he would have worked any 'ordinary hours' in the sense which the respondent gives to that expression."

14. Accordingly, I am of the opinion that the appellant has failed to establish any error of law in the conclusion reached by the Tribunal on the only issue to be decided by this court. I would dismiss the appeal.

JUDGE2 PERRY J

The Workers Rehabilitation and Compensation Corporation ("the Corporation") appeals to this Court by leave granted pursuant to s.100 of the Workers Rehabilitation and Compensation Act 1986 ("the Act") against a decision of the Workers Compensation Appeal Tribunal ("the Tribunal"). The appeal is limited to a question of law (s.100(3) of the Act).

2. The essential question raised by the appeal is as to the meaning to be attributed to the word "overtime" where it appears in s.4(8) of the Act, that section being concerned with the computation of the average weekly earnings of a disabled worker.

3. The relevant facts fall within a small compass, and are not the subject of dispute.

4. The respondent is a qualified boilermaker. He was employed from time to time by Rexco Pty Ltd ("Rexco") on a casual basis. Rexco carries on a business of hiring out labour. In the financial year commencing 1 July 1990 until 27 March 1991, the respondent was employed on a casual basis not only by Rexco, but also by other companies including Complete Scaffold Services Pty Ltd, Western Personnel Services Pty Ltd, and AIR Installation Services. The respondent's casual employment with those employers was not continuous but was interrupted by periods during which he did not work.

5. On 19 March 1991, the respondent began performing maintenance work on a vessel MV Accolade II ("the Accolade"), having been contracted by Rexco to perform the work for Adelaide Brighton Cement Ltd. The terms of the contract between Rexco and Adelaide Brighton Cement pursuant to which the respondent's services were supplied, were not proved in evidence. However, it is common ground that the respondent agreed to work from 6 pm to 6 am, seven days per week, including Easter, until the job was completed.

6. Before work on the Accolade was completed, on 27 March 1991, during the course of the employment, the respondent sustained a compensable disability. As a result, he was in receipt of weekly payments of income maintenance until 24 September 1991.

7. Work on the Accolade, at least work in which the respondent, had it not been for his injury, would have participated, concluded on 10 April 1991. In the week prior to his injury, the respondent earned $2,556.80 gross. A question arose as to the quantum of the weekly payments to be paid to the respondent during the period of his incapacity for work, pursuant to s.35 of the Act. It appears that the respondent was, within the meaning of that section, totally incapacitated for work during the period in question, that is to say, until 24 September 1991. It follows that during that period he was entitled to weekly payments equal to his "notional weekly earnings" within the meaning of s.35(1)(a)(i) of the Act.