Reihana v Accident Rehabilitation and Compensation Insurance Corporation

IN THE DISTRICT COURT HELD AT CHRISTCHURCH Decision No. 72 /98 IN THE MATTER of The Accident Rehabilitation and Compensation Insurance Act 1992 AND IN THE MATTER of an Appeal pursuant to Section 91 of the Act BETWEEN TONI COLIN REIHANA DCA 116/97 Appellant AND ACCIDENT REHABILITATION AND COMPENSATION INSURANCE CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARD on the 26th day of March 1998 APPEARANCES: Mr T C Reihana in person Mr S Condie for respondent DECISION OF JUDGE M J BEATTIE The issue in this appeal is whether the Corporation was correct in its ruling that the appellant did not qualify for a reassessment of the quantum of weekly compensation as a consequence of the 1996 amendment to section 40 of the Act, whereby the criteria for assessing the level of weekly compensation was broadened. 2 Background The appellant suffered an injury to his left foot on the 30th of August 1993 as a result of it being crushed by a forklift. As a consequence of that injury he became eligible for weekly compensation and his entitlement to same was calculated in accordance with the formula then provided by section 40 of the Act. That provision as originally enacted required the calculation of entitlement to be based on the income received by that person for a full 52 weeks immediately before the accident whether or not that person had in fact been employed for those 52 weeks. At the time of the accident the appellant had been employed for some two months as a forklift driver by Downer Construction through an employment agency named ADIA Personnel. His earnings from that employment and from previous employment within the preceding 52 weeks was assessed to calculate his entitlement to weekly compensation. It is a fact that he has not worked for the full 52 preceding weeks and therefore when it came to calculating his earnings the sum to which he was entitled under the formula then pertaining was less than would have been the case if it had been determined by the number of weeks actually worked. In 1996 section 40 of the Act was amended, that amendment coming into force on the 2nd of September 1996 and it provided a fairer method of compensating a person who had not worked for a full 52 weeks immediately before the commencement of incapacity. As a policy decision the Corporation sought to give those persons who may have been disadvantaged under the original provision the opportunity of having their entitlement recalculated. It forwarded to the appellant an application for recalculation of weekly compensation. That form contained parts to be completed by the employer and in answer to the question on the form "If it were not for the 3 injury would the claimant have continued to receive earnings from you for another 52 weeks?" the employer answered "yes" and as a comment it wrote the words "more than likely". The Corporation sought clarification of what Mr Hurley, industrial manager of the employer had meant and Mr Hurley replied on 20th December 1996 as follows: "1) Mr Reihana was employed as a temporary employee to undertake various assignments on behalf of our company on an ongoing basis. He was not employed on a time based contract. With his skills and background I believe he would have gained a permanent position through Adia. I would also like to point out that I ticked the 'Yes' box and that the 'More than Likely' refers to the nature of our business of providing employees for clients on demand and cannot say in hindsight what would have happened. No employer can for that matter. 2 ) As to job descriptions, temporaries as such, cannot receive job descriptions. They are expected to be flexible in the type of work they undertake. They are assessed as to their suitability for each position and offered the job based on that. As such job descriptions are irrelevant. " The Corporation considered that reply and in the course of that consideration two memoranda on the file were noted. The first of these memoranda is dated the 13th of December 1993 addressed to " Angela" and it states: "I phoned ADIA Personnel re Mr Reihana's employment. I was advised that it was of a temporary nature and would be terminating between now and Christmas anyway." 4 The second memorandum is dated 9th of March 1994 made by Angela Reimer and it states: "Phoned ADIA - spoke to industrial consultant. They place people on temporary work. Light duties are difficult. Employed Toni as a 'trades asst' rigging and scaffolding. Has a proficiency certificate in forklift driving. Toni caused so much trouble with ADIA and Downer Construction over the accident - he threatened to sue unless they gave him more money over and above his ACC - ADIA will not take him back." On the basis of the information that the Corporation had, it advised the appellant by letter of the 23rd January that in its opinion the appellant did not qualify for reassessment of weekly compensation because it was not satisfied that the appellant was in permanent employment at the time of his incapacity. It is noted that the amended provision of section 40(2A) states: "For the purposes of this section a person shall be regarded as having been in permanent employment if, in the opinion of the Corporation, that person would have continued to receive earnings from that employment for a continuous period of more than twelve months after the commencement of incapacity if the personal injury had not occurred." That decision was upheld on review. In particular the Review Officer preferred the information contained in the memoranda of 13 December 1993 and 9 March 1994 rather than the later statements by Mr Hurley on behalf of the employer, the reason being that those memoranda were closer to the date of the accident and therefore more likely to be indicative of the situation at that time rather than a statement made more than three years after the date of the accident. 5 The determination of the issue in this appeal involves a consideration of the provisions of section 40(2A) of the Act which was enacted by the 1996 amendment. Also relevant is the definition of "employment" in section 2 which means "work engaged in or carried out for the purposes of pecuniary gain or profit; and in the case of an employee include any period of paid leave other than paid leave on the termination of employment." At the hearing of this appeal the appellant gave further clarification of the nature of his pre-accident employment. He advised that he had a contract with ADIA which contract included their undertaking to arrange employment and he undertaking to carry out such work as they may arrange. It was ADIA who paid him when he worked and it was they who received payment from the organisation for whom he worked. In the case of the appellant he had only been placed for the one job, that was the Downers contract and it was during that contract that he suffered his injury. ADIA was a personnel employment agency supplying labour to the market as that market required. There was no evidence that the appellant's placement with Downers would have lasted for a period of twelve months or more. In fact the file note of 13 December 1993 I interpret as being a direct reference to the likely duration of the job with Downers. If one looks at those two earlier memoranda in the context of the file it is clear that both enquiries were being made for the purposes of determining availability of any light duties and a general enquiry as to rehabilitation prospects. The enquiries were certainly not made for any purposes connected with considerations now raised under section 40(2A). 6 However even if those memoranda are left to one side as not being particularly on point, the facts as I find them are that the appellant was available for hire for temporary work on an ad hoc basis. It is a fact that he had been on the books of ADIA for some twelve months and the Downer job, which he commenced on 30th June, was his first assignment from them. The job with Downers was going to come to an end, as it was only for a particular contract that they were undertaking, and it would then have been a question of whether or not there were some other suitable employment into which he could be placed thereafter. Mr Hurley's letter of 20th December talks of the belief that he would have gained permanent employment through his ADIA connections but I interpret that as it being only a possibility and certainly not a certainty. In so far as his contract with ADIA is concerned, I find that that cannot disclose an employer/ employee relationship or that the appellant could be regarded as being in the employment of ADIA. The appellant could not bring himself within the definition of employment and thus at most the contract between he and ADIA was one of agency with no pecuniary gain or profit coming to the appellant unless he was working for a third party by virtue of placement through ADIA. It was the appellant's submission that the provisions of this section should be given a fair, large and liberal interpretation and that the spirit of the provision must be to cover all categories of employment. That latter submission I find does not accord with the plain meaning of the words of the section. In that regard I agree with the commentary by the editors of Brookers Accident Compensation in New Zealand para. AC40-.4 which states "This provision does not apply to casual, temporary, or seasonal workers who do not come within the description of "permanent employment" in subsection (2A). 7 In every respect I find that the appellant at the time of his incapacity was only in temporary or casual employment and could not be said to have been in permanent employment within the meaning of those words in section 40(2A) of the Act. Accordingly this appeal must be dismissed. DATED at WELLINGTON this 20" day of April 1998 Bethe M J Beattie District Court Judge Reihana.doc KD