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Accident Compensation Cases

Lynch v Accident Rehabilitation and Compensation Insurance Corporation (DC, 03/03/99)

Judgment Text

RESERVED JUDGMENT OF JUDGE A W MIDDLETON 
Judge A W Middleton
The issue in this appeal is the decision of the respondent issued on 1 April 1998 that the appellant was not entitled to receive weekly compensation in respect of injuries sustained in a skiing accident on 1 October 1997. 
At the time of her accident the appellant was on maternity leave from her employment and was due to return to work in January 1998. It appears from the file that the appellant was granted cover under the Act and on 13 December 1997 applied to the respondent for payment of weekly earnings. The respondent then made inquiries from the appellant's employer who reported that the appellant had ceased work on 4 November 1996 and that she commenced maternity leave from 1 January 1997. The employer also stated that the appellant's contract of employment did not end while she was on maternity leave and that it had been arranged that she would return to her employment on 5 January 1998. After it had received that information the respondent notified the appellant on 1 April 1998 that she was not entitled to receive weekly compensation as she was not an earner immediately prior to the commencement of her incapacity. The appellant applied for a review of that decision. 
The appellant gave evidence before the review officer in which she confirmed the arrangements made with her employer and the fact that she had recommenced employment on 5 April 1998. She told the review officer that she only requested weekly compensation from the date she was to return to work, being 5 January 1998, and not from the date of accident. She also told the review officer that her employment was terminated on 30 June 1998. She considered that she was entitled to weekly compensation between 5 January 1998 and 30 June 1998. The review officer referred to the various sections in the Act and the definitions of “earner”, “employee” and “employment” and also to the decision of the Court in Vasquez (146/96) and held that as the appellant was not an earner immediately prior to the commencement of her incapacity she was not entitled to weekly compensation. It is against that decision which the appellant now appeals. 
The appellant submitted that she considered that she was being unfairly discriminated against, particularly having regard to the fact that the respondent advertised itself as providing fair treatment for all workers. She considered that it was unfair that she should be treated in this way merely because she was on maternity leave. 
In his submissions Mr Tui referred to the decision in Chamberlain (115/98) in which that appellant had sustained a severe head injury and sought weekly compensation. He was a freezing worker who was injured during the period of the “off season”. While freezing workers were covered by a collective employment contract under which he would have been re-engaged at the commencement of the next season, the Court held that he was not entitled to weekly compensation because he was not an earner immediately prior to the commencement of his incapacity. In reaching that decision the Court confirmed the finding of the Judge in Vasquez that the word “immediately” had to be strictly interpreted. 
The relevant provisions of the Act are s 39 which states: 
“39.
Compensation for loss of earnings payable to earners for incapacity generally — 
(1)
The weekly compensation for loss of earnings payable to an earner who is incapacitated as a result of personal injury in respect of any period to which section 38 of this Act does not apply is 80 percent of the earner's weekly earnings. ”
And s 40(1) which states: 
“40.
Calculation of weekly earnings where earner had earnings solely as an employee during the 12 months before commencement of incapacity — 
(1)
This section applies only to earners who are earners immediately before the commencement of the incapacity and who, during the 12 months immediately preceding the commencement of the period of incapacity, had earnings as an employee and who did not also have earnings other than as an employee. ”
And s 44 which states: 
“44.
Extension of entitlement to compensation for loss of earnings — 
(1)
Where a person has ceased to be an employee, the person shall be deemed to continue to be an employee for the purposes of this Part of this Act if — 
(a)
The person had been an employee within 14 days before the commencement of the incapacity; and 
(b)
The person had been an employee for a continuous period of not less than 12 months immediately before that 14-day period; and 
(c)
But for the incapacity, the person would have been an employee within 3 months after the commencement of the incapacity. 
(2)
Where an employee is entitled to receive any payment on ceasing employment and earner premium is payable in respect of that payment, that person shall be deemed to continue to be an employee for the purposes of this Act for so long as those payments constitute earnings by virtue of subsection (4)(a) of this section. 
(3)
Subsection (1) of this section shall not apply in any case where the effect of subsection 
(2)
of this section is to extend the person's status as an employee for more than 14 days after the employment ceases. 
(4)
Where this section applies — 
(a)
The person concerned shall be deemed to be deriving earnings at the same rate as that person derived earnings while in employment immediately before the employment terminated; and 
(b)
For the purposes of calculation of weekly earnings, the date of commencement of incapacity shall be deemed to be the last date of employment. 
(5)
Nothing in this section shall cause any personal injury suffered by a person who is deemed to continue to be an employee under this section to be regarded as a work injury. ”
The Act provides definitions of “earner”, “employee” and “employment” being: 
‘Earner’ means any natural person who engages in employment, whether or not as an employee; and includes any person to whom section 44 of this Act applies: 
‘Employee’ means a natural person who receives or is entitled to receive any amount that is treated as income from employment, as defined in paragraph (a) of the definition of “employee” in section OB 1 of the Income Tax Act 1994, and any salary, wages, or other gross income to which section OB 2(2) or section OB 2(3) of the Income Tax Act 1994 applies: 
‘Employment’ means work engaged in or carried out for the purposes of pecuniary gain or profit; and, in the case of an employee, includes any period of paid leave other than paid leave on the termination of employment: ”
The definition of “earner” refers to a natural person who is engaged in employment whether or not as an employee and under the definition of “employment” it means “work engaged in or carried out for the purposes of pecuniary gain or profit”. In certain circumstances this also includes any period of paid leave. I accept Mr Tui's submission that immediately prior to 1 October 1997 this appellant was not engaged in work for the purpose of pecuniary gain or profit nor was she on paid leave so that, within the definitions, she was not engaged in employment immediately prior to 1 October 1997. 
While s 44(2) extends the definition of an employee in certain circumstances, those circumstances do not apply to this appellant as her last day of work was 4 November 1996. She received her annual leave entitlement until 31 December 1996 so that under the provisions of s 44 she was deemed to be an employee until 31 December 1996. 
It must therefore follow that the appellant was not an employee immediately prior to her incapacity on 1 October 1997 and the appeal is dismissed. 

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