Case: J &amp; H Timbers Pty Ltd v Nelson [1972] HCA 12 ; (1972) 126 CLR 625
Outcome: followed
Section 19(2) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) relevantly provides as follows: Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula: NWE AE where: "AE" is the greater of the following amounts: (a) the amount per week (if any) that the employee is able to earn in suitable employment; (b) the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week. "NWE" is the amount of the employee's normal weekly earnings. That provision, by its terms, requires a calculation to be undertaken whereby there is deducted from an employee's normal weekly earnings an amount which is the greater of either the weekly amount that an employee is " able to earn in suitable employment " or the amount which an employee earns from " any employment (including self-employment) that is undertaken by the employee during that week ". The legislative intention of this provision is presumably to ensure that an employee is not entitled to retain the whole of his actual earnings and also to retain 100% of his normal weekly earnings: Comcare v Line [2002] FCA 553 at [60] per Carr J. And, the amount that an employee may be " able to earn " is not to be equated with profit: J &amp; H Timbers Pty Ltd v Nelson [1972] HCA 12 ; (1972) 126 CLR 625. Windeyer J there observed at 643: ... The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. It is not to be measured by the profits he derives by embarking his capital in a business or by his usual capital equipment in earning money... See also: Comcare Australia v Woodbridge (Unreported, Federal Court of Australia, O'Loughlin J, 13 February 1996). 37 In some circumstances actual net earnings might be seen as reflecting an ability to earn: Cage Developments Pty Ltd v Schubert [1983] HCA 37 ; (1983) 151 CLR 584. Gibbs CJ, Murphy, Brennan, Deane and Dawson JJ there observed at 587 8: . . . there may well be cases in which the actual earnings of a business either represent the actual or potential earnings of a former worker during a period of partial incapacity. Where, for example, a business consists essentially of the provision of personal services by the former worker (eg a business of a sole plumber or casual gardener) and no significant investment of capital is involved, the actual net earnings of the business might properly be seen as representing the actual "reward for [the] labour" of the former worker (see J &amp; H Timbers Pty Ltd v Nelson, at 652) during a period of partial incapacity. In such a case, if the former worker is carrying on business solely on his own account, the net earnings of the business might properly be seen as representing the "amount he is earning" in a business; if he is carrying on business in partnership or as an employee of a family company, the net earnings might properly be seen as representing the "amount he ... is able to earn" either in employment or in a business. The difficulty with the approach of the Tribunal in the present proceedings is that the evidence the Tribunal was relying upon to reach its conclusion has not been identified; nor have findings of facts been made or reasons provided. The Tribunal has set forth a conclusion but none of the processes by which it reached that conclusion.