Pulitano, Rocco v Telstra Corp Ltd [1998] FCA 212

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 974 of 1996

BETWEEN: ROCCO PULITANO

Applicant

AND: TELSTRA CORPORATION LIMITED

Respondent

JUDGE: EMMETT J

DATE: 16 FEBRUARY 1998

PLACE: SYDNEY

THE COURT ORDERS:

1. That the application be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 974 of 1996

BETWEEN: ROCCO PULITANO

Applicant

AND: TELSTRA CORPORATION LIMITED

Respondent

JUDGE: EMMETT J

DATE: 16 FEBRUARY 1998

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT HIS HONOUR: There is before the court an appeal brought under the Administrative Appeals Tribunal Act 1975 (Cth) from a determination of the Administrative Appeals Tribunal of 15 November 1996. The decision concerns the entitlement of Rocco Pulitano ("the Applicant") to compensation under the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the Act") from Telstra Corporation ("Telstra"). The dispute between the Applicant and Telstra is of some long standing. It arises out of an injury suffered by the Applicant to his shoulder on 2 January 1980 after slipping on a polished floor at the Annandale depot of Telstra. Liability for incapacity resulting from the injury was accepted by Telstra for a limited period. However, a delegate of Telstra determined on 8 February 1989 that liability in respect of the sprained left shoulder ceased on 29 July 1988. That determination was revoked on 22 December 1989 and a determination was made that the effects of the injury of 2 January 1980 and a further injury which occured on 19 November 1987 ceased to exist not later than 28 July 1988. That decision was the subject of review by the Tribunal in respect of which a decision was given on 7 October 1994. By that decision, the Tribunal set aside the decision under review and made a number of findings. The findings were that the effects of the work related left shoulder injury suffered by the Applicant had not ceased, that as a result of such injury the Applicant is unable to perform his pre-injury duties as a linesman and that the Applicant is fit to undertake work as a bowser attendant, work of a supervisory nature and work that does not require excessive use of the left arm or shoulder. In the course of its reasons the Tribunal made a number of additional findings. On 8 December 1986 the Applicant was offered light duties as a bowser attendant. He was advised by letter that the work would involve serving petrol, dispensing oil and completing associated dockets. He apparently continued as a bowser attendant for four days before ceasing work on 12 December 1986. He then provided medical certificates certifying him unfit for work until 23 January 1987 as a result of an aggravated shoulder injury. He was directed to return to work on 8 January 1987 and on 27 May 1987 a Commonwealth Medical Officer reported the Applicant was fit to continue in his then present employment as a bowser attendant. On 27 November 1987 the Applicant lodged an accident report stating that on 19 November 1987 he aggravated his shoulder. Following that incident the Applicant did not return to work. On 15 June 1988 his solicitors received a letter from Telstra indicating that it was proposed to retire the Applicant due to his left shoulder injury under the provisions of Section 56(1)(c) of the Telecommunications Act 1991 (Cth). The Tribunal said that it was satisfied that the Applicant had an injury with which there was a causal relationship with the fall sustained in 1980 and concluded further that, at the very least, the Applicant was then able to perform light duties or work of a supervisory nature and that work as a bowser attendant would be within the Applicant's capabilities if such work involved the serving of petrol, dispensing oil, completing associated dockets, supervision of stores and maintenance of coal mix and sand. The Tribunal found that work as a bowser attendant, work not requiring excessive use of the left arm and shoulder and work of a supervisory nature constituted suitable employment within the context of the Act. The Tribunal noted that there was conflict in the evidence as to the duties which the Applicant performed in his capacity as a bowser attendant. The Tribunal concluded that, whether or not the Applicant actually undertook such physical work, the weight of the evidence suggested to the Tribunal that he was not required by Telstra to perform such demanding physical duties as he alleged. In the light of his physical restrictions the Tribunal had considered that such work would clearly not be suitable. The Tribunal then went on to find that whilst the Applicant was suited to a variety of work the Tribunal was not satisfied that the Applicant had reasonably sought such work. The evidence was not considered by the Tribunal sufficient to establish that the Applicant had reasonably sought suitable employment since July 1988. However, the Tribunal considered that on the evidence before it, it was unable to make a finding that the amount which the Applicant earned was not less than his normal weekly earnings. It concluded that to make such a finding further evidence would be required as to the amount per week payable in suitable occupations. The matter was remitted to Telstra with the direction that assessment of compensation payable pursuant to section 19 of the Act be made in accordance with the findings of the Tribunal. There is in the findings some element of ambiguity and confusion. In order to explain that, it is necessary to consider the legislation which was applicable to the Applicant's entitlement to compensation. Section 19 of the Act applies to an employee who is incapacitated for work as a result of an injury. There are some exceptions which, for present purposes, do not appear to be relevant. Section 19(3) in substance provides that Telstra would be liable to pay to an employee in respect of such an injury, for each week during which the employee is incapacitated, compensation of an amount that, when added to the amount that he was able to earn during that week in suitable employment, results in an amount equal to eighty per cent of his normal weekly earnings. Section 19(4) relevantly provides that, in determining for the purposes of subsection (3) the amount per week that an employee is able to earn in suitable employment, Telstra must have regard to: (c) where...the employee received an offer of suitable employment and, having accepted that offer, failed to engage, or to continue to engage, in that employment - the amount per week that the employee would be earning in that employment if he or she were engaged in that employment; ........................................................................................................................... (e) where, after becoming incapacitated for work, the employee has failed to seek suitable employment - the amount per week that, having regard to the state of the labour-market at the relevant time, the employee could be reasonably be expected to earn in such employment if he or she were engaged in such employment; (f) where paragraph (c) or (e) applies to the employee - whether the employee's failure to accept an offer of employment, to engage, or to continue to engage, in employment, ... or to seek employment, as the case may be, was, in [Telstra's] opinion, reasonable in all the circumstances. The Tribunal had been asked by Telstra to make a finding that, pursuant to section 19(4) of the Act, the Applicant had failed to continue to engage in a suitable offer of employment when placed on light duties. The submission which had been made to the Tribunal by Telstra was an invitation to consider the matters referred to in section 19(4)(c). On the other hand, the language of the finding to which I have referred above is reminiscent of section 19(4)(e). Pursuant to the direction given by the Tribunal, the question of the Applicant's entitlement was considered by a delegate of Telstra, who made a determination on 27 March 1995. The determination was that the delegate was satisfied that the Applicant failed to carry out suitable duties offered to him by Telstra and determined that Telstra is not liable to make any payments of compensation beyond 29 July 1988, in accordance with the provisions of section 19(4)(c). In his reasons the delegate said: ...the actual requirements of the duties provided to the claimant by the Corporation are considered to have been within the claimant's capabilities. The delegate had regard to the Tribunal's specific finding that the Applicant is fit to undertake work as a bowser attendant. On the basis of that finding the delegate concluded that the actual requirements of the duties provided to the Applicant by Telstra were considered to have been within his capabilities. Inasmuch as the Applicant failed to continue to carry out the duties, that failure was considered by the delegate to have been unreasonable. He therefore concluded that in accordance with section 19(4)(c) he must determine that compensation is not payable in view of that failure. The conclusion that the Tribunal was intending to apply section 19(4)(c) is at least consistent with the reasons of the Tribunal to which I have referred. The decision of 27 March 1995 was the subject of reconsideration by a delegate on 22 January 1996. In reasons of that date, Telstra's delegate recorded that in a letter dated 5 December 1995 the Applicant's solicitors had formally requested a review of the earlier determination in accordance with section 62 of the Act. While that request was lodged well after time, the delegate considered nevertheless that it was appropriate to deal with it. The tribunal dealt with the question on the basis that the matter concerned only the Applicant's entitlement to compensation payments pursuant to the decision of the Tribunal given on 7 October 1994. The delegate set out verbatim a substantial part of the reasons for decision of the Tribunal, being the whole of the material under the heading "Conclusions". The delegate noted the finding which had been made by the Tribunal that the Applicant is fit to undertake work as a bowser attendant. The delegate noted that the Tribunal, on the basis of the evidence before it, had made a specific finding to that effect. The delegate concluded, therefore, that section 19(4)(c) of the Act would operate to enable the Applicant's ability to earn to be assessed as being commensurate with the amount the Applicant would have continued to earn had he remained in the employ of the corporation carrying out light duties offered to him as a bowser attendant. The delegate's view of the Tribunal's findings that the effects of the Applicant's work related left shoulder injury had not ceased was that Telstra was also liable in respect of any medical treatment expenses reasonably related to the injury. The delegate then made calculations which were attached to the reasons which demonstrated that when the amount which the Applicant would have continued to earn had he remained in the employ of Telstra was taken into account, the amount of compensation for the relevant periods was reduced to nil. From that determination a further application for review was made to the Tribunal. That matter was decided by the Tribunal on 15 November 1996 and that is the decision under review by me. After recounting briefly the history to which I have referred above, the Tribunal stated that the ultimate question which it had to consider was the effect of the previous Tribunal's finding that the Applicant was able to work as a bowser attendant and that that was considered suitable employment. Reference was made to the circumstances of the Applicant's employment termination. The critical conclusions in the reasons of the Tribunal were that in the present case the Applicant had been found by the Tribunal to be fit to undertake work as a bowser attendant, et cetera, and that such work constituted suitable employment within the context of the Act. Given those facts, the Tribunal was satisfied that the Applicant was able to earn an amount per week in suitable employment. The second Tribunal said that the findings of the first Tribunal clearly indicated that the Applicant would be able to earn income with the Commonwealth as a bowser attendant. He had been found by the Tribunal to be capable of working in such a position. The Tribunal placed emphasis on the word "able". It is here that the argument for the Applicant on the hearing of the appeal to this court is founded. There is an illogicality in the literal application of what is said by the Tribunal in the passage to which I have just referred. That was the essence of the argument advanced before me on behalf of the Applicant, namely, that the Applicant was not able to earn income with the Commonwealth as a bowser attendant because his employment had been terminated. The argument was based on the language of section 19(3)(b) having regard to the definition of the expression "suitable employment" in section 4 of the Act. The definition is as follows: "Suitable employment", in relation to an employee who has suffered an injury in respect of which compensation is payable under the Act, means: (a) in the case of an employee who, on the day on which he or she was injured was a permanent employee of the Commonwealth or a licensed corporation and who did not subsequently terminate that employment - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to: (i) the employee's age, experience, training, language and other skills; (ii) the employee's suitability for rehabilitation or vocational retraining; (iii) where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or her place of residence; and (iv) any other relevant matter; and (b) in any other case - any employment (including self-employment) having regard to the matters specified in subparagraphs (a) (i), (ii), (iii), and (iv). The argument on behalf of the Applicant was that when section 19(3)(b) speaks in terms of compensation of an amount that, when added to the amount that the employee was able to earn during the relevant week in suitable employment, the section is intending to refer to ability to earn in a practical sense. It was said, however, that once employment was terminated, it was no longer possible for such an employee to earn anything in suitable employment when the expression suitable employment is defined as employment by the Commonwealth. The contention was that since the Applicant in the present case could not earn anything with the Commonwealth once his employment had been terminated, there was nothing in effect to be deducted for the purposes of the calculation required by section 19(3)(b). It was said that such a construction of the provisions was justified by a policy which is to be gleaned from the Act to the effect that unless the Commonwealth is prepared to make an offer of suitable employment, then the capacity or ability of an injured employee to earn income from work outside the Commonwealth is irrelevant. Reliance was also placed on the decision of Heerey J in Comcare v Chenhall (1996) 139 ALR 380. That decision was referred to by the Tribunal but distinguished on the basis that the circumstances in that case were different from those presently under consideration. In that case an employee who had been incapacitated was in fact able to derive income after his services had been terminated. Section 19(4)(a) requires that in determining, for the purpose of subsection 19(3), the amount that an employee is able to earn in suitable employment, regard must be had, where the employee is in employment, to the amount per week that the employee is earning in that employment. The Commonwealth's argument had been that section 19(4)(a) required the Tribunal to have regard to the amount earned in actual employment by such an employee. However, Heerey J considered that such a contention misunderstands the function of section 19(4). He considered that the provision is concerned with the amount the employee is able to earn in suitable employment. The amount the employee is in fact earning in any employment, whether suitable or otherwise, is only relevant insofar as it assists in that determination. If the intention had been to deduct from compensation entitlements all actual earnings that object could have been achieved very simply. I agree with the approach taken by Heerey J. I do not consider, however, that that decision really bears on the issue before me. I consider that, having regard to the history of the dispute and the determinations which have been made in respect of it, the question which has been argued on behalf of the Applicant does not really arise. As I have said, I accept that there is a lack of logic in a finding, if it is in fact the Tribunal's finding, that the Applicant was able to earn income with the Commonwealth as a bowser attendant after his employment had been terminated. I consider, however, that the Tribunal was doing no more than confirming what was stated explicitly by the delegate whose decision was under review, namely that the findings made by the first Tribunal were, in effect, that the Applicant had failed to continue to engage in employment. While the matter is not totally free from doubt, it is desirable that reasons be construed in a way that makes sense of them rather than in a way that makes the conclusion to which they come untenable. I consider therefore that, on a fair reading of the reasons of the Tribunal, it has done no more than conclude that the findings of fact made by the original Tribunal are to the effect that the Applicant was capable of performing work as a bowser attendant. That was suitable employment and the Applicant had failed to continue to engage in that employment albeit for reasons which are not totally clear. I consider that such a reading of the first Tribunal's reasons is a fair one. Alternatively, the Tribunal was, in effect, making a finding in relation to section 19(4)(e) of the Act. That is certainly consistent with the language employed by the first Tribunal in so far as there is a finding that the Tribunal was not satisfied that the Applicant had reasonably sought alternative employment since July 1988. The conclusion that the Tribunal was unable to make a finding that the amount which the Applicant earned was not less than his normal weekly earnings and to remit the matter for determination is indicative of an acceptance that paragraph (e) was applicable because the Applicant had failed to seek suitable employment. If that were a relevant consideration it would be necessary to take into account the amount per week that, having regard to the state of the labour market, the Applicant could reasonably be expected to earn in such employment. It is evidence as to that matter which the Tribunal did not have before it. If that were the only finding which the Tribunal had made it would have been appropriate for evidence to be called before the delegate in the proceedings which were decided on 27 March 1995 and in the proceedings before the delegate when that decision was under review on 22 January 1996. However, that does not appear to be the basis upon which the matter proceeded on those occasions. If I were of the view that paragraph (c) had not been applicable I would have rejected the contention on behalf of the Applicant that once employment has been terminated there is nothing to be deducted in making the calculation under section 19(3)(b). It would, however, have been appropriate to consider then the evidence as to what the Applicant could reasonably be expected to have earned in suitable employment. Indeed it is the language of paragraph (e) itself which leads me to the conclusion that the primary contention of the Applicant ought to be rejected. Paragraph (e) would simply have no application in relation to circumstances where the appropriate limb of the definition of suitable employment was that in paragraph (a). The Tribunal concluded that paragraph (a) applied where employment was terminated by the Commonwealth. There was no dispute to that conclusion on the part of Telstra. However, I consider that the term "suitable employment" where it is used in section 19 is, as Heerey J says (at 384): ...concerned with the amount which the employee is able to earn in "suitable employment". Thus the term refers to employment of the nature concerned with the Commonwealth and not simply employment by the Commonwealth alone. However, for the reasons which I have indicated I do not consider that on a fair reading of all of the material, the matter goes beyond a determination of the Tribunal in accordance with section 19(4)(c). For those reasons I consider that the appeal should be dismissed. The history of the matter is not totally satisfactory. However, the decision of the delegate which was under review by the Tribunal is quite explicit in its determination and while some doubt arises in relation to the reasoning of the first Tribunal, there has been no attempt to seek review of that decision. In the circumstances, I do not consider that there is any justification for departing from the usual rule that costs should follow the event. Accordingly I order that the application be dismissed with costs.