CSR Limited v Busbridge [2015] NSWSC 1268

Judgment Date: 11 September 2015

Judgment of: Hamill J

Background

Mr Busbridge (the worker) worked for 17 years as a production operator. He sustained a work related injury and was unfit to work in the job he had held for 17 years. He was paid weekly payments of compensation by the Insurer. In the meantime, the worker obtained alternative employment as an assistant miller.

The work capacity decision/ Internal review

On 10 June 2014the Insurer conducted a work capacity assessment and made work capacity decisions reducing the worker’s entitlement to weekly payments. The Insurer determinedthat the worker was able to return to suitable employment in roles including that of a production operator and an assistant miller. The Insurer made decisions as to the amount of the worker’s pre injury average weekly earnings (PIAWE), and the amount the worker was able to earn in suitable employment. The worker sought internal review and the Insurer maintained its decisions on internal review.

The worker then sought a merit review by the Authority. In his merit review application to the Authority, the worker did not dispute the calculation of his PIAWE, however submitted that his current earnings should be used to calculate his ability to earn in suitable employment.

The merit review

A delegate of the Authority found that the roles of production operator, and the worker’s current role as an assistant miller, were both suitable employment roles for the worker as defined in section 32A of the 1987 Act. In giving reasons for her findings and recommendations, the delegate stated that in view of “vastly differing amounts” that had been provided by the Insurer in an earning capacity assessment report, in respect to the role of a production operator (being an award rate of $670.20 per week, a local labour market rate of $1000, and “Job Markets Australia” figure of $1389 per week) that the best information before her as to the worker’s ability to earn in suitable employment, was the amount the worker was earning in his current employment as an assistant miller.

The Insurer sought judicial review of the delegate’s findings and recommendations, and argued that the delegate fell into jurisdictional error with respect to the delegate’s assessment of the worker’s ability to earn in suitable employment.

Arguments

In judicial review proceedings, the plaintiff Insurer sought review on three grounds:

  1. That the delegate misunderstood the statutory test to be applied in assessing weekly payments, erred as to her jurisdiction, and misconceived the task she had to perform.
  1. That the delegate took into account irrelevant considerations in making references to the award wage and the local labour market wage in assessing the worker’s ability to earn in suitable employment, and
  1. That the plaintiff was denied procedural fairness, in that the delegate was mandated by the Guidelines for Work Capacity Decision, Internal Reviews by Insurers and Merit Reviews by the Authority (the review guidelines) to request further information where a deficiency in the evidence had been identified.

The worker submitted that the delegate performed the function required of her and that the figures in the earning capacity assessment report were meaningless and without substantive content. The worker submitted that the only reliable figure to use for the assessment was the amount the worker was actually earning in his current employment.

Judgment

Decision:The Court dismissed the summons on all grounds.

Reasons:

With respect to the impact of the 2012 weekly payments amendments as to a worker’s “post-injury earning capacity”, the Courtreasoned that:

“The definition of suitable employment was inserted by the 2012 amendments to the Act and constituted a significant change to the manner in which such payments are calculated. Prior to the amendments, the post-injury earning capacity was essentially determined by the amount that the worker was actually earning. It will be seen by the matters that are now to be disregarded (such as whether the work or employment is available and the worker’s place of residence) that the calculation is now based upon the worker’s capacity to undertake suitable work rather than their ability to find such work” [7].

The Courtnoted that the delegate, in finding that a variety of roles were suitable employment roles for the worker had a number of sources of information available to her, and quoted extensively from the delegate’s reasons in making such findings. The Court went on to state that the delegate “analysed those options in her comprehensive and cogent reasons”, and noted that the delegate found that the role of a assistant miller, the role the worker was currently undertaking, was found to be suitable employment for the worker [12].

The Court set out the delegate’s consideration of the worker’s pre-injury average weekly earnings (which was not in dispute) and held that it was clear that the delegate “identified and applied correctly the legislative parameters of her statutory function” [14]. The Court noted that the delegate identified three apparently conflicting bases upon which to determine the amount the worker was able to earn in suitable employment as a production operator (being an award rate of $670.20 per week, a local labour market rate of $1000, and “Job Markets Australia” figure of $1389 per week) [15].

The Court reasoned that the position now advanced by the plaintiff (Insurer) was that the award rate and local labour market rates were not relevant considerations, and that the plaintiff now submitted that the “Job Markets Australia” figure was the appropriate figure by which to determine the worker’s ability to earn in the role of a production operator. This was “different to the position it took in its internal review and in its submissions to the delegate” [18]. The Court noted that in its reply to the application for merit review, the plaintiff submitted that the worker was capable of earning $1413.00 per week, which was a figure based upon a single week of his current employment, which was “one particularly high earning week and contended that this represented his weekly earnings” [19-24].

The Court noted that the “basis upon which the delegate disregarded the Job Markets Australia figure was that the AW workwise report contained “vastly differing amounts”, and that the Plaintiff (Insurer) “did not make any submission to the delegate as to how to reconcile those varying figures because it sought to rely on an actual pay period where Mr Busbridge earned more than $1389 (i.e. $1413.00)” [30].

The Court commented that “The delegate was placed in a difficult position in coming to a conclusion as to the worker’s earnings after the injury (“E”) for the purposes of section 35. Neither party addressed the Labour Market Analysis contained in appendix 1 of the AW Workwise reports or contended that it was relevant. The unrepresented worker left an assessment of his weekly earnings after injury to the delegate (“whatever that may be”) [33].

The Court found that the delegate was “aware of the Job Markets Australia figure but concluded that it was difficult to use that figure in view of the “vastly differing amounts in the same report concerning the average wage and local labour market”. The Court held that the plaintiff’s (insurer) submission on judicial review that the average wage was irrelevant altogether and that the local labour market was not relevant because of the definition of suitable employment was in many, if not most circumstances correct, but that there was a “real difficulty in asserting jurisdictional error on the part of the delegate in circumstances where the Job Markets Australia figure was not referred to” in the internal review decision or in its reply to the application for merit review [34].

The Court noted that the starting point for consideration of ground 1 of the summons was that “not all factual or legal errors give rise to an appropriate case for judicial review” [36]. The court held that “the workers Compensation Scheme, and the legislative framework under which it operates casts the responsibility of the merits review of the employer’s decision upon the WorkCover Authority and not on this Court” [36]. The Court noted it was not appropriate to “parse the language of the delegate or examine her reasons with a critical eye attuned to error” (Minister for Immigration and Ethnic Affairs v Wu Shan Ling [1995] HCA 6; 185 CLR 259 at 271-272, Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; 43 FCR 280 at 287) [36].

The Court noted that while to fulfil a minimum legal standard, the reasons of a delegate need not be extensive, but where more than one conclusion is open , it will be necessary for the [decision-maker] to give some explanation of its preference for one conclusion over another (Campbelltown City Council v Vegan [2006] NSWCA 284 at 121-122) [40].

Held:

Ground one

The delegate was “keenly aware of the statutory requirements of her jurisdiction”. In spite of the fact that neither party sought to draw the delegate’s attention to the Job Markets Australia Wage (or even refer to it) the delegate did make reference to it and explained her reason for concluding that it should not be used in the calculus [41].

Whilst a different decision-maker may have taken a different approach, the fact that the delegate did not simply find the highest possible wage, having correctly (if implicitly) dismissed the plaintiff’s urging to take into account the amount the worker earned in a single pay period, did not constitute a misconception of her task or a failure to exercise her jurisdiction lawfully [42].

Insofar as there was more than one conclusion open of the evidence, the decision-maker explained her reasons for preferring the actual weekly earnings [43].

Ground two

The delegate’s use of the award wage and local labour market wage was simply to highlight the anomaly in the earning capacity assessment report provided by the Insurer. The delegate’s reasons were transparent and the figure that she used as “E” in the equation was a figure contemplated by the terms of s35(1)E(b).

Ground three

Guideline 10.6 of the Review Guidelines allows a Merit Reviewer to determine their own procedures and provides that the rules of evidence do not apply. However the guideline provides that the merits review is subject to procedural fairness and to a substantial degree the content of procedural fairness in set out in the guidelines [49].

Clause 10.2 of the Review guidelines did not require the delegate to seek further evidence or that she ought to have embarked on an evidence gathering exercise of her own [53]. There was no suggestion that further information was required from the parties and nothing to suggest that the plaintiff (Insurer) did not understand the process or was denied the opportunity to be heard [53]. The reply to merit review form was an “opportunity for the plaintiff (Insurer) to put its case, including an alternative case” based on the earning capacity assessment report but elected to rely on figure based upon a single week’s income [55].

Procedural fairness did not require the decision-maker to disclose what she is minded to decide or to invite comment on her process of reasoning [57]. The delegate was not required to disclose her mental processes or provisional views for the comment of the parties [58].

Commentary

The Court noted that the calculation of a worker’s ability to earn in suitable employment, in contrast to the previous legislative scheme, is now based on the worker’s capacity to undertake suitable work rather than their ability to find such work.

In assessing a worker’s ability to earn in suitable employment under section 35 of the 1987 Act, where there is more than one conclusion open on the information, a decision-maker can, with reasons, prefer certain information in reaching a view about that issue. If information contains “anomalies” about the amount a worker is able to earn in suitable employment, it is open to the reviewer to not accept the information, and rely upon an amount that the worker is actually earning in a role that has been identified as suitable employment, as evidence of the worker’s ability to earn in suitable employment.

The court was critical of the fact that the Insurer took a different position in the Internal Review decision and reply to the merit review to that taken in judicial review proceedings. The decision emphasises that an Insurer shouldaddress issues and informationupon which it wishes to rely in its owninternal review decision and in the reply to an application for merit review, in the event that it wishes to avail itself of further review rights.

In relation to procedural fairness, the decision affirms that the reply to the application for merit review is the Insurer’s opportunity to put its case. An insurer’s failure to make proper use of an opportunity to be heard cannot be used to support a claim of procedural unfairness, and the Authority is not required to disclose its provisional views for the comment of the parties before reaching a decision.

It is not mandatory for a merit reviewer to seek further information where the evidence and submissions are not ambiguous,and in circumstances where further information is not required in order for the delegate to undertake the review.

The decision also provides guidance as to the nature of the reasons to be provided by the Authority in conducting merit reviews. In order to fulfil a minimum legal standard, the reasons of a delegate need not be extensive, but where more than one conclusion is open , it will be necessary for the [decision-maker] to give some explanation of its preference for one conclusion over another (Campbelltown City Council v Vegan [2006] NSWCA 284 at 121-122) [40].

Page | 1