What does "education, training or experience" really mean?

by Stanley Drummond and Lawrence Leung*

The Federal Court has dismissed an appeal by a super fund member claiming a total and permanent disablement (TPD) benefit from a determination of the Superannuation Complaints Tribunal (SCT).

SCT had affirmed the trustee’s decision to reject the claim. In dismissing the appeal, the court rejected Farid Ahmad Aslami’s contention the date for assessing whether he was “unlikely ever to be able to work again in a job for which [he was] reasonably qualified by education, training or experience” was the date when he first stopped work due to the sickness or injury causing the TPD, which was more than a year earlier than when he last ceased to be at work.

The case is Aslami v Board of Trustees of the State Public Sector Superannuation Scheme as Trustee for the QSuper Fund [2019] FCA 1560.

The trust deed

Clause 4.4 of the fund’s trust deed described the TPD insurance benefit to which a member was entitled and the date on which a member was considered to have had suffered TPD for the purposes of calculating the benefit. Clause 4.4 said:

An amount equivalent to the Insured Member’s death and TPD insurance benefit shall become payable upon the Insured Member’s death or TPD.

The date on which an Insured Member shall be considered by the [trustee] to have suffered TPD, for the purposes of calculating a benefit, will be the later of the dates on which:

(a)       the sickness or injury causing the TPD commenced or occurred; or

(b)       the member ceased to be at work due to the sickness or injury causing the TPD.

Clause 4 of the trust deed defined TPD as “disablement of a degree which, in the opinion of the [trustee] after obtaining the advice of not fewer than two medical practitioners, is such as to render the member unlikely ever to be able to work again in a job for which the member is reasonably qualified by education, training or experience”.

The TPD definition did not include a waiting period. Many policies have a waiting period of three or six months.

Background

Mr Aslami had obtained a certificate III as an electrical fitter mechanic in 1999. In 2005, he suffered a back injury while working as an electrician.

In 2007, he changed his occupation and started working as an electrical teacher with Technical and Further Education (TAFE). On 23 June 2007, he joined the super fund.

In 2008, he obtained a certificate III in teaching and assessment and, in 2011, a certificate III in photovoltaic system design & installation.

From 2010, he had begun to suffer from a psychological condition which was later diagnosed as “chronic adjustment disorder with mixed depression and anxiety symptoms”. In June 2012, he first stopped working with TAFE due to that condition. His last day of work with TAFE was 30 May 2014.

In March 2013, Mr Aslami had registered a business name, “Can Do Solar and Electrical”. He began to operate a business under that name.

In November 2014, he was “ill health retired” from TAFE due to his psychological condition. That same month he claimed a TPD benefit.

SCT found Mr Aslami’s income tax returns for FY2013, FY2014 and FY2015 included reference to income and expenses for his own business in the electrical field.

He described the work in his own business as “solar panel installation and sales”. He said that, from 2014 onwards, he worked only as a salesman and “did not do much hands-on installation”.

In 2016, the trustee rejected Mr Aslami’s TPD claim. He complained to SCT, but in 2018 it affirmed the trustee’s decision.

The appeal

Mr Aslami appealed from the SCT’s determination to the Federal Court.

His main argument was the trust deed’s TPD definition required consideration of his education, training or experience at the date he first stopped working with TAFE due to his psychological condition, which was in June 2012. The trustee and SCT had therefore erred in considering his education, training or experience at the date he last worked with TAFE, which was in May 2014.

He claimed adopting the May 2014 date operated unfairly against him because it “impermissibly” considered his efforts to establish a new business, retrain himself  to operate the business and be “a salesperson after the occurrence of disablement from his prior occupation as a teacher”.

He claimed adopting the earlier June 2012 date was fair because it did not take account of his self-motivated retraining.

The Federal Court decision

The Federal Court dismissed Mr Aslami’s appeal.

In his amended notice of appeal Mr Aslami stated three questions of law. The first and main question was whether  SCT had adopted the correct approach in determining his education, training and experience at May 2014 rather than at June/September 2012.

The court held that question provided no basis for interfering with the SCT’s determination. The kernel of the court’s reasoning was the trust deed’s clause 4 definition of TPD.

It found the second sentence in clause 4.4 of the trust deed (above) was not part of the TPD definition. Rather, that sentence “concerns the date from which [a] member is entitled to be paid the TPD benefit”, once it is determined the member has suffered TPD.

Consequently, neither the date Mr Adlami stopped working at TAFE nor the date when he began to suffer from his sickness had any relevant bearing on the assessment of his education, training or experience for the purposes of the trust deed’s TPD definition.

The court said SCT: “... made no error in its review of the fairness and reasonableness of the trustee’s decision. Specifically, it made no error in having regard to [Mr Adlami’s] existing education, training or experience as he employed that in his business in determining whether he had a TPD within the terms of the definition ... in clause 4 of the trust deed.”

*Stanley Drummond (sdrummond@tglaw.com.au) is a partner and Lawrence Leung a law graduate at Thomson Geer.