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Accident Compensation Cases

Willetts v Accident Compensation Corporation (DC, 07/06/00)

Judgment Text

RESERVED JUDGMENT OF JUDGE A W MIDDLETON 
Judge A W Middleton
The issue in this appeal is whether the appellant had been an employee within the 14 days before he crushed his hand on 16 May 1999 and had been an employee for a continuous period of not less than 12 months immediately before that 14 day period. 
The appellant worked at Waitane Meat Works since 1995 as a seasonal worker. His employment history is: 
16 April 1998 to 20 June 1998 
With Waitane 
21 June 1998 to 30 August 1998 
Not in employment but helped an injured neighbour on his farm. 
31 August 1998 to 16 April 1999 
Waitane + 12 days holiday pay. 
7 April 1998 to 28 April 1998 
Holiday pay. 
29 April 1999 to 5 May 1999 
No employment. 
5 May 1999 to 11 May 1999 
Worked for Wilson Carnie. 
A letter from Mr M D Craig dated 17 November 1999 stated that the appellant worked for his sharemilker, M A Schreurs, from 1 July 1998 to 3 September 1998 on a full time basis during which time he “was paid in kind (e.g. meat, milk and fuel).” 
A letter from Mr Carnie stated that had it not been for his accident he would have continued to employ him in the lambing season commencing 28 August 1999. 
On 11 August 1999 the respondent notified the appellant that his claim for weekly compensation had been declined pursuant to section 40 of the Accident Rehabilitation and Compensation Insurance Act 1992. This was based on the fact that as the appellant had ceased work with Mr Carnie, he was not in paid employment at the time of the injury. The letter also stated that under section 44 the appellant had no entitlement because he had not been in continuous employment in the 12 months prior to his injury. The appellant applied for a review of that decision. 
In submissions to the Review Officer the respondent conceded that the appellant had been an employee within 14 days before the commencement of the incapacity and that he would have been an employee within three months after its commencement. 
In his decision, the Review Officer concluded that the appellant had not been an employee for a continuous period of not less than 12 months immediately before that fourteen day period before the commencement of his incapacity. It is against that decision which the appellant now appeals. 
Mr Miller submitted: 
1.
That the position of workers in the freezing industry is of a “unique nature” and that this should be taken into account in considering whether or not the appellant was in continuous employment with the same employer since 1995. 
2.
That in support of his submission he provided a copy of the Collective Employment Contract with PPCS Waitane. That in the freezing industry seasonal employment is regarded as continuous employment. 
3.
That whether or not the appellant engaged in alternative off season work it was regarded in this industry that he was considered to be an employee for a continuous period not only for the 12 months preceding the accident but from 1995. 
4.
That the evidence was that the appellant had been remunerated in kind for some of his off season work which should not detract from the issue of whether or not he was in employment. 
5.
That by an elaborate calculation involving a division of the holiday payments by his assessment of the average daily rate of earnings and making allowances for “normal rest days” Mr Miller endeavoured to demonstrate that it could be accepted that the appellant had been in continuous employment for the preceding period of 12 months. 
Mr Richards submitted: 
1.
That the appellant's situation did not meet the requirements of the statute. That any extension of cover could only be granted by doing “violence” to the words of the statute. 
The relevant law applicable in this appeal is: 
(a)
Section 44(1) of the Accident Rehabilitation and Compensation Insurance Act 1992 which states: 
“(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 the 14 day period; and 
(c)
But for the incapacity, the person would have been an employee within three months after the commencement of the incapacity. ”
(b)
Section 3 of the Act which defines an employee as: 
‘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 OB1 of the Income Tax Act 1994, and any salary, wages or other gross income to which section OB2(2) or section OB2(3) of the Income Tax Act 1994 applies: ”
(c)
Section OB1(a) of the Income Tax Act 1994 states 
“Except in the provisions to which paragraphs (c) and (d) apply, means a person who receives or is entitled to receive a source deduction payment. ”
(d)
Section OB2(1) of the Income Tax Act 1994 states: 
“(1)
In this Act, but subject to subsections (2) to (4), ‘source deduction payment’ means a payment by way of salary or wages, an extra emolument, or a withholding payment. ”
(e)
Section OB1 of the Income Tax Act 1994 defines 
‘Salary or wages’, in relation to any person, means salary, wages, or allowances including all sums received or receivable by way of overtime pay, bonus, gratuity, extra salary, commission, or other remuneration of any kind, in respect of or in relation to the employment of that person; and includes- 
(a)
The value of any benefits to which subparagraph (iii) of the definition of ‘monetary remuneration’ applies, determined in case of dispute as provided in that subparagraph; and 
 ”
(f)
“Monetary Remuneration” is defined in section OB1 of the Income Tax Act 1994 as: 
“In the case of a taxpayer who in any income year has been provided in respect of any office or position held by the taxpayer with board or lodging, or the use of a house or quarters, or has been paid an allowance instead of being so provided with board or lodging or the use of a house or quarters, the value of those benefits; and the value of the benefits shall be determined in case of dispute by the Commissioner …  ”
The Court is required to ascertain whether the appellant was an “employee” for a continuous period of 12 months preceding 2 May 1999. I do not consider, on the basis of the Chamberlain (115/98) decision, that the PPCS Waitane Collective Employment Contract in any way alters the position. In order to qualify for entitlements under the Act the appellant must demonstrate that he was receiving source deduction payments continuously for the 12 month period prior to 2 May 1999. 
I agree with Mr Richards' submission that the provision of meat, milk and fuel in the period when he assisted Schreurs did not amount to a source deduction payment so that during that period it could not be said that he was an employee. The definitions in the Income Tax Act 1994 which are incorporated into Accident Rehabilitation and Compensation Insurance Act 1992 make it clear that the only type of payment which will qualify the appellant to be an employee in continuous employment for 12 months are those defined in the Income Tax Act as “source deduction payments”. Notwithstanding Mr Miller's careful arithmetical calculations I do not consider that the appellant was an employee between 21 June and 30 August and between 29 April and 4 May 1999 because he was not then in receipt of source deduction payments. Consequently I do not consider that the appellant was in continuous employment for the 12 months preceding 16 May 1999. 
I agree with Mr Miller's submission that it is a sad commentary on the legislation that a person such as this appellant who had worked in regular employment since the age of 15 merely because of the technicalities of the nature of his employment should now be denied compensation under an Act which is specifically designed to assist persons in this position. 
I request the respondent to bring to the notice of its Minister the plight in which seasonal workers can find themselves if they suffer an accident and at the time are in the laid off period. This is particularly applicable to workers employed in the freezing works industry and it may also apply to others but I do consider that where a worker has been under a Collective Employment Contract such as that to which this appellant was a party there should be some discretion which would enable cover to be granted for personal injury sustained in the off-season. 
For the reasons I have already given, the appeal is dismissed. 

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