FEDERAL COURT OF AUSTRALIA Slater v Telstra Corporation Limited [2001] FCA 1417 Administrative Law – worker's compensation – compensation under Safety Rehabilitation and Compensation Act 1988 – calculation of liability to pay compensation – whether decision-maker failed to undertake calculation required by ss 14 and 19 of Act – whether decision-maker either failed to make a determination or remit matter to decision-maker – whether failure to do so amounted to error of law – whether s 37 of Safety Rehabilitation and Compensation Act 1988 creates obligation for decision-maker to make determination for vocational counselling and rehabilitation Safety Rehabilitation and Compensation Act 1988 (Cth) ss 14, 19, 37 Administrative Appeals Tribunal Act 1975 (Cth) s 44 GORDON SLATER v TELSTRA CORPORATION LIMITED Q52 OF 2001 TAMBERLIN, MANSFIELD & EMMETT JJ 11 OCTOBER 2001 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q52 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: GORDON SLATER APPELLANT AND: TELSTRA CORPORATION LIMITED RESPONDENT JUDGES: TAMBERLIN, MANSFIELD & EMMETT JJ DATE OF ORDER: 11 OCTOBER 2001 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be upheld in part. 2. Order 2 made on 28 February 2001, that the application to the Administrative Appeals Tribunal be dismissed, be set aside. 3. The matter be remitted to the Administrative Appeals Tribunal for reconsideration according to law and in accordance with these reasons. 4. The respondent pay the appellant's costs of the appeal. 5. The costs order made on 4 April 2001 be set aside and in lieu thereof, there be no order as to the costs of the proceeding. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q52 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: GORDON SLATER APPELLANT AND: TELSTRA CORPORATION LIMITED RESPONDENT JUDGES: TAMBERLIN, MANSFIELD & EMMETT JJ DATE: 11 OCTOBER 2001 PLACE: BRISBANE REASONS FOR JUDGMENT THE COURT: BACKGROUND 1 The appellant, Mr Gordon Slater ("the appellant"), was an employee of the respondent, Telstra Corporation Limited ("Telstra"), on a fixed term contract for the period 4 July 1996 to 4 January 1997. On 11 July 1996, the appellant sustained an injury to his left knee in the course of his employment with Telstra. On 19 July 1996, he made a claim for compensation under the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the Act"). Except for two days work on light duties in late July 1996, the appellant has not returned to work. 2 On 6 August 1996, Telstra accepted liability for incapacity payments to the appellant from 1 August 1996. On 17 March 1997, Telstra determined that, as of 9 January 1997, the appellant was capable of returning to full time work duties, with restrictions, and that it was not liable to pay compensation in respect of any period after that date. The appellant requested reconsideration of that determination. On 16 April 1997, Telstra affirmed the decision, although it also determined that liability still existed for certain medical expenses, such as future physiotherapy, until early May 1997 and for medical monitoring of the appellant's condition for a further period of approximately 18 months. 3 The appellant applied to the Administrative Appeals Tribunal ("the Tribunal") for review of the decision as affirmed. On 13 March 1998, the Tribunal decided that the appellant was partially incapacitated for work, but fit for full-time work in suitable employment. The Tribunal remitted the matter to Telstra, with a direction that Telstra determine what would be suitable employment for the purposes of s 19 of the Act. 4 Sections 14(1) and 19(1), (2) and (4) of the Act relevantly provide as follows: "14. (1) Subject to this Part, [Telstra] 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. ……………………… 19. (1) This section applies to an employee who is incapacitated for work as a result of an injury… (2) Subject to this Part, [Telstra] 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: NWE 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." …………. (4) In determining, for the purposes of subsections (2) and (3), the amount per week that an employee is able to earn in suitable employment, [Telstra] shall have regard to: (a) where the employee is in employment - the amount per week that the employee is earning in that employment; (b) where, after becoming incapacitated for work, the employee received an offer of suitable employment and failed to accept that offer - the amount per week that the employee would be earning in that employment if he or she were engaged in that employment; c) where, after becoming incapacitated for work, 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; (d) where, after becoming incapacitated for work, the employee received an offer of suitable employment on condition that the employee completed a reasonable rehabilitation or vocational retraining program and the employee failed to fulfil that condition - the amount 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 reasonably be expected to earn in such employment if he or she were engaged in such employment; (f) where paragraph (b), (c), (d) 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, to undertake, or to complete, a rehabilitation or vocational retraining program or to seek employment, as the case may be, was, in [Telstra's] opinion, reasonable in all the circumstances; and (g) any other matter that [Telstra] considers relevant. 5 Following the direction by the Tribunal, Telstra had the appellant assessed by Work Directions Australia Pty Ltd ("WDA"). In a report dated 4 September 1998, WDA assessed the appellant to be suitable for the following occupations: · Console Operator (for petrol/service station) · Real Estate Salesperson · Occupational Health and Safety Officer · Teacher of Technical and Further Education/TAFE Teacher · Engineering Associate Professional eg Mechanical Engineering Technician · Engineering Associate Professional eg Mechanical Engineering Associate · Building Inspector/Surveyor 6 On 14 October 1998, Telstra determined that suitable employment of the appellant, for the purposes of s 19 of the Act, was: · Console Operator · Real Estate Sales Person · Occupational Health and Safety Officer · Teacher of Technical and Further Education / TAFE Teacher · Mechanical Engineering Technician · Mechanical Engineering Associate · Building Inspector / Surveyor · Clerical Position 7 The appellant then requested reconsideration of that decision. On 10 November 1998, the determination of 14 October 1998 was affirmed. The reasons for the affirmation included the following: "… it is apparent that the claimant has the attributes to efficiently and effectively perform the duties of a clerical type position, and that it is reasonable for the claimant to undertake such employment with the physical restrictions imposed by his left knee condition. ……………………… The claimant has subsequently opined that… none of the occupational pursuits detailed in the determination of 14 October 1998, are suitable due to his not having the training, qualifications, or experience required. ……………………… … the claimant has shown himself to be an individual of above average intelligence, who would be able to fulfil the requirements of a clerical based position, with the potential of advancement. It is not a requirement of such a role that formal training having been taken, or that formal qualifications be obtained… the claimant has not pursued work of this nature previously because of a desire to work out of doors in a manual capacity, rather than indoors. This desire does not however preclude the expectation of the claimant undertaking work which is deemed suitable in light of physical restrictions. ……………………… …the claimant was not a permanent employee of Telstra …and was … in fact employed on a fixed contract basis. There was no expectation by the claimant of continued employment beyond the expiration date of the contract. Similarly there was no expectation by the claimant to maintaining salary beyond the expiration date of the contract and he would have been seeking employment in the open market commensurate with his skills and abilities. Accordingly, there is no evidence to suggest that the claimant's earning capacity would have been less than, equal to, or greater than that received whilst in the employ of Telstra. I am satisfied that the claimant is fit for employment in duties of a clerical nature, which may well attract financial remuneration equal to, or greater than that earned as a Communications Officer Grade 2 with Telstra. Furthermore, I find that such duties would be deemed suitable in accordance with the Act, and that it is a reasonable expectation for the claimant to undertake such duties. ……………………… I find that the claimant's ability to earn is such that there would be no entitlement to compensation in accordance with section 19 of the Act." 8 The appellant then sought review by the Tribunal of that decision as affirmed. In its reasons of 12 November 1999, the Tribunal found that the appellant had shown no inclination to return into the workforce and had "sat on his hands waiting" for Telstra to take the initiative in complying with the requirements of the Act. The Tribunal considered it likely that the appellant would fail to take full advantage of any rehabilitation provided in order to seek suitable employment in Australia. The Tribunal said that it was "far from impressed" with the appellant and his demeanour in the witness box. 9 However, having said that, the Tribunal then said that it was "equally apparent" that Telstra had failed to comply with the Act and had neglected its statutory obligation. The Tribunal recorded Telstra's submission that it had been unable to undertake the calculation provided by s 19 of the Act because the appellant had been "obstructionist" and had rejected the occupations that were listed in the WDA report. The Tribunal said that Telstra had made it clear to the appellant, in its decision of 10 November 1998, that it "felt" the appellant was not entitled to payment under s 19 of the Act. The Tribunal said that that was "a basic and fundamental misconception of the requirements of the Act." 10 The Tribunal decided to vary the decision then under review and determined that suitable employment for the appellant was limited to the occupations listed by WDA in its report of 4 September 1998. That excluded "clerical position", apparently because that occupation was not mentioned by WDA in its report. The Tribunal remitted the matter to Telstra again, in order for Telstra to calculate compensation payments payable by Telstra to the appellant in accordance with s 19 of the Act. 11 In addition, the Tribunal directed that: · compensation payments as calculated in accordance with s 19 of the Act be payable from some date in October 1997 to be agreed on by the parties; · Telstra provide vocational counselling for the appellant to select an occupation from the list provided in the WDA Report; and · Telstra provide a rehabilitation program pursuant to s 37 of the Act, or some other form of program, with the aim of retraining the appellant for his chosen occupation. 12 Section 37(1) and (3) of the Act provides as follows: " (1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee. ……………………… (3) In making a determination under subsection (1), a rehabilitation authority shall have regard to: (a) any written assessment given under subsection 36(8); (b) any reduction in the future liability to pay compensation if the program is undertaken; (c) the cost of the program; (d) any improvement in the employee's opportunity to be employed after completing the program; (e) the likely psychological effect on the employee of not providing the program; (f) the employee's attitude to the program; (g) the relative merits of any alternative and appropriate rehabilitation program; and (h) any other relevant matter." 13 Telstra then appealed to the Federal Court under s 44 of the Administrative Appeals Tribunal Act 1975 ("the Cth")("the AAT Act"). Section 44 provides as follows: "(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding." 14 On 28 February 2001, the primary judge ordered that: · Telstra's appeal be allowed; · The orders of the Tribunal of 12 November 1999 be set aside; · The appellant's application for an order of review to the Tribunal of the decision of 10 November 1998 be dismissed. On 4 April 2001, the primary judge ordered the appellant to pay Telstra's costs of the proceeding before him. The appellant now appeals to the Full Court from the orders made by the primary judge. the reasons of the primary judge 15 The primary judge concluded that the Tribunal's decision of 12 November 1999 involved legal error in the application of the provisions of the Act, having regard to the decision that was under review by the Tribunal. His Honour considered that, in its decision on review of 10 November 1998, Telstra correctly, if inelegantly, performed its task under the Act. His Honour considered that the decision-maker had: · determined that the appellant was able to earn some amount in suitable employment, · affirmed the earlier list of eight suitable employment options, emphasising the clerical one, · determined that clerical "may well attract remuneration equal to or greater than" the appellant's normal earnings, and · concluded that the appellant's ability to earn was such that he had no entitlement to compensation. 16 His Honour construed the decision-maker's language, which his Honour characterised as "imprecise", as a conclusion that the appellant was able to earn an unspecified amount in suitable employment of sufficient magnitude, such that compensation to be calculated in accordance with s 19 of the Act was nil. His Honour considered that the Act does not require of a decision-maker applying s 19 of the Act that he or she should always determine a precise amount for the figure "AE" in the formula provided in s 19(2), at least where the decision-maker is satisfied that the amount able to be earned from suitable employment is greater than what was previously earned. His Honour considered that that was certainly so where none of the specific matters listed in s 19(4) of the Act to assist in calculation of the relevant amount is applicable. His Honour considered that that was the situation in the present case and that, in such a situation, the decision-maker would be left with an obligation merely to have regard to "any other matter that [it] considers relevant" pursuant to s 19(4)(g). His Honour concluded that Telstra's finding that the appellant was not entitled to payments under s 19 of the Act did not demonstrate any misunderstanding of the requirements of the Act. 17 His Honour also concluded that the Tribunal's directions concerning vocational counselling and provision of a rehabilitation program reflected a misunderstanding on the part of the Tribunal of the relevant provisions of the Act. His Honour was of the view that, under s 37 of the Act, Telstra had an obligation to consider whether to provide a rehabilitation program to Mr Slater. Such a program may, under the Act, include vocational training. However, his Honour considered that s 37 did not require the provision of any such program but merely required that, in deciding whether an employee should undertake a rehabilitation program, the decision-maker should have regard to matters that included the employee's attitude to the program and any other relevant matter. His Honour concluded that, if there is in truth suitable employment available to the appellant and if the calculation called for by s 19 of the Act results in a nil entitlement, Telstra was not in breach of its obligations under the Act. RESOLUTION OF THE appeal 18 The decision-maker in respect of the decision of 10 November 1998 failed to undertake the exercise required by ss 14 and 19 of the Act. In order to determine whether Telstra had a liability to pay compensation, it was necessary to compare two amounts as follows: · the amount of the appellant's normal weekly earnings with Telstra, as calculated under s 8 of the Act; and · the amount per week (if any) that the appellant is able to earn in suitable employment. 19 There is no indication that the decision-maker undertook such a comparison. The decision-maker simply concluded that she was satisfied that the appellant was fit for employment in duties of a clerical nature, which may well attract financial remuneration equal to or greater than that earned by the appellant with Telstra. 20 The Tribunal concluded that Telstra's determination evidenced a basic and fundamental misconception of the requirements of the Act. In so far as the decision-maker failed to make such a determination, that was so. The appropriate course for the Tribunal, therefore, was either to make such a determination itself or to remit the matter to Telstra to enquire into and determine those two amounts in order to make a determination in accordance with s 19 of the Act. However, it does not appear to have adopted either course. To that extent, it erred in law. 21 In so far as the Tribunal directed Telstra to provide vocational counselling and to provide a rehabilitation program, the Tribunal appears to have misconceived the operation of s 37 of the Act. Section 37 confers a discretion on Telstra to make a determination that an employee should undertake a rehabilitation program and, where it so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee. It is not obliged to do so. Mere failure to do so was not a neglect by Telstra of its statutory obligation. 22 On the other hand, there is no indication that the decision-maker turned her mind to the exercise of the discretion conferred by s 37 of the Act. The appropriate course for the Tribunal was to give consideration to that question and decide whether to exercise the discretion vested in Telstra or to remit the matters to Telstra to consider whether the discretion should be exercised. The Tribunal erred in so far as it found that Telstra had an obligation to provide a program. CONCLUSION 23 The appeal should be upheld in part. The order made by the primary judge, that the application to the Tribunal be dismissed, should be set aside. In lieu thereof, there should be an order that the matter be remitted to the Tribunal for decision according to law and in accordance with these reasons. Telstra should pay the appellant's costs of the appeal. The primary judge's order for costs should be set aside. In lieu thereof, there should be no order for the costs of the hearing before the primary judge. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tamberlin, Mansfield & Emmett. Associate: Dated: 9 October 2001 Solicitors for the Appellant: Evans & Co Solicitors Solicitors for the Respondent Standish Partners Date of Judgment: 11 October 2001