COWRA SHIRE COUNCIL v QUINN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER, HANDLEY and COLE JJA 21 May 1996, 21 May 1996 [1996] NSWCA 127 WORKERS' COMPENSATION — earning capacity — accessible labour market. On 23 July 1993 and subsequent to a compensable injury, the respondent was made redundant by the appellant. The trial judge found that the worker's probable earnings uninjured were $813.55 per week comprising $583.20 from the Council and $230.21 from a weekend contracting business. He found that in his partially incapacitated condition he would earn in suitable employment $500 per week. He awarded the statutory maximum of $292.60. His Honour held that the worker's injuries left him with an inhibition on the general labour market. The appellant contended that the amount assessed for the worker S post-injury earning capacity was manifestly inadequate and that the matter should be returned to the Compensation Court to determine the proper earnings figure. It was further argued that compensation should not be increased because of inability to earn caused by the non-availability of work. HELD: dismissing the appeal: (1) Capacity to earn is to be determined by reference to the worker's ability to earn in the general labour market accessible to the worker: Workers Compensation Act 1987 s40 (3): Mangion v Visy Board Pty Ltd (1991) 8 NSWCCR 175 followed; (2) The judge made no error in the assessment and was well placed to make the determination: Australian Iron and Steel v Elliot [1967] NSWLR 87 followed. Handley JA This is an appeal by the Cowra Shire Council against an award by Bishop CCJ made under s40 of the Workers' Compensation Act 1987. The issues which have been argued in the appeal fall within a narrow compass. Employment, injury and incapacity were not disputed. The issues which arose for his Honours consideration were those posed by s40. He found that the worker's probable earnings, if uninjured, were $813.55 per week, comprising $583.20 which he had been earning with the Council as a supervisor, and $230.21 a week he had been earning on average in a contracting business which he operated at weekends. These findings were not in dispute. The worker was made redundant by the Council on 23 July 1993. The Judge found that his probable earnings thereafter in suitable employment in his partially incapacitated condition were $500 per week. This produced a differential of $313.55 per week which was reduced because of the statutory cap to $292.60 per week. He held that no discretionary matters arose for his consideration under s40(1) and made an award in favour of the worker for the statutory maximum. Council's appeal was directed to his Honour's finding under s40(2)(b) of the Act in its present form, which was agreed might be applied in the determination of this appeal, that the average weekly amount that the worker was able to earn in some suitable employment after the injury was $500 per week. The worker's services with the Council were terminated because he had become redundant and not because of his injuries. He said that he was coping with his job at the time he was terminated and could still have coped with it at the time of trial two years later. 2 UNREPORTED JUDGMENTS His Honour found that at the time his employment with the Council ceased the worker was suffering problems in his elbows and back sufficient to restrict him on the open labour market. He rejected a claim on behalf of the worker that his condition had been steadily worsening. His ultimate finding was that the worker was able to manage reasonable activities, provided he kept within his predetermined limitations. These, his Honour considered, arose as a, result of his employment and left him with an inhibition on the general labour market. In 1991, prior to his termination, the worker established a contracting business, which he operated on weekends in partnership with his wife. Since his redundancy he had succeeded in building up that business to some extent and had also done some work for wages. The Judge accepted the worker's evidence that he would do more work if he could. The worker's records established that he was doing about 15 hours work per week in that business at the time of his redundancy. The Judge found that as a matter of principle, this work had to be taken into account in establishing his probable earnings if uninjured and his current ability to earn in his injured condition. He also found that in the 1994 financial year immediately following his termination the worker only worked on average six hours a week in this business, but noted that this had been reduced because of other factors. In the 1995 financial year the worker was able to work on average about 25 hours per week. On one particular contracting job, which lasted for a few weeks, he had actually made $550 per week. The Judge's findings as to the worker's post-injury earning capacity were as follows: "T am satisfied with my assessment of the appellant as a witness that, were work similar to that which he did with Mr Manley available, he would do it. However, I am satisfied that in the labour market in which he is placed those jobs will not be frequently available and the applicant will have to turn his hand to many things. Despite his disabilities, he is a hard-working man of some application". Counsel for the appellant submitted that his Honour erred in failing to give proper weight to his finding that the worker's condition had not deteriorated further since his redundancy. The Judge had found that the worker had been able to earn an average of $230.21 per week from his contracting business working at weekends. The submission, therefore, was that the worker should have been able to continue earning at the same rate after his redundancy. The Judge's function, therefore, was simply to assess the workers post-termination earning capacity during the ordinary working week. The submission was that his Honour had only allowed $269.79 for this, which was manifestly inadequate. So the submission went, the Court should therefore intervene and the matter should be returned to the Compensation Court to determine the proper earnings figure for this worker during the ordinary working week. Counsel for the appellant also submitted that the compensation payable to the worker should not be increased because of any inability to earn caused by the non-availability of work, and we were referred to the decision in Aitken v Goodyear (1945) 46 SR (NSW) 20 at 25 per Jordan CJ. The question has not been fully argued in this appeal, but I am prepared to assume that this submission is correct in that s40 does not provide a form of insurance or protection against unemployment as such. URJ COWRA SHIRE COUNCIL v QUINN (Handley JA) 3 The question, however, is not entirely at large. The Act has at all times contained a definition of suitable employment. In the Act as amended to the end of 1990 these provisions were found in s38A and s40(1)A. The relevant provisions in the Act as amended to the end of 1994 are to be found in s43A, which is picked up by s40(2)(b) and s40(3). Counsel agreed that nothing turns in this case on the rearrangement of these provisions and that the appeal may be disposed of on the basis of the current definition in s43A. This provides that suitable employment means employment for which the worker is suited, having regard amongst other things to his skills and work experience and his place of residence. Moreover, s40(3)(a) provides: "The determination of the amount that an injured worker would be able to earn in some suitable employment is subject to the following: (a) the determination is to be based on the worker's ability to earn in the general labour market reasonably accessible to the worker'. In my judgment the learned trial Judge did not fall into error in assessing the injured worker's probable earning figures at the rate of $500 per week for the whole of the period since he had been made redundant. It will be recalled that in the first year after his redundancy he had only in fact worked six hours a week and in the following year only about 25 hours per week. His Honour clearly has treated the worker as having a capacity to earn, which he is not able to fully exploit in the Cowra district at the present time. But this of course is the general labour market reasonably accessible to him for the purposes of s40(3)(a). There was no evidence from the Council of the existence of any full-time job reasonably available to the worker in the district which he had been unable or unwilling to take up. The case in my judgment falls within a well-established principle applied by this Court in Australian Iron and Steel v Elliott (1967) NSWLR 87 at 94 and recognised by the High Court in J and H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 at 633 where Barwick CJ said "the value of described work in the labour market is a matter well within the general knowledge and experience of the Commission", which was the predecessor of the Compensation Court. It was therefore open to the trial Judge to find that this worker's diminished ability to earn in the general labour market in the Cowra district was no greater than as assessed by him. I would also refer to and with respect adopt the statement of principle by Burke CCJ in Mangion v Visy Board Pty Ltd [1991] 8 NSWCCR at 180 where his Honour said: "When assessing a capacity to earn under s40(2) it is not sufficient to merely identify a particular potential avenue of employment and attribute the income from such a job as a man's capacity to earn. Allowance must be made for the availability of work - availability not so much in the sense of a presently depressed labour market, but in the sense of the general availability in any labour market... to someone in Brewarrina or Mungindi there is little point in considering jobs such as console operator in a self service garage or a lift driver in a department store. Whether the man has the capacity to do such a job or not, it doesn't constitute any part of his accessible labour market. One always seeks to assess the capacity to earn of this particular worker in his particular circumstances". 4 UNREPORTED JUDGMENTS Judged by these tests, endorsed by the High Court, and as explained by Burke CCJ, in my opinion the trial Judge did not fall into error in his assessment of this injured worker's capacity to earn. I would therefore propose that the appeal be dismissed with costs. Meagher JA I agree. Cole JA I also agree. I also would wish to reserve my opinion regarding the correctness of the decision in Aitken v Goodyear Tyre and Rubber Company (Australia) Ltd (1945) 46 SR (NSW) 20, that matter not having been argued before this Court. It is to be noted that that decision was based - or at least supported by the decision in Jones vy Amalgamated Anthracite Collieries Ltd (1944) AC 14, which has been distinguished in Illston and Robson Ltd v Smith (1948) AC 384. I agree with the orders proposed. Meagher JA: The orders of the Court will therefore be that the appeal is dismissed with costs. Counsel for the Appellant: BW Kops Solicitors for the Appellant: PW Turk and Associates Counsel for the Respondent: SG Campbell and DK Jordan Solicitors for the Respondent: Lamrocks