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Gruzlovic v. Giovanni's Trattoria


April 15, 2010


On appeal from the Department of Labor and Workforce Development, Division of Workers' Compensation, Case No. 2005-25507.

Per curiam.


Argued October 6, 2009

Before Judges Grall and LeWinn.

An employer, Giovanni's Trattoria, appeals from an award of workers' compensation to its part-time employee, Rose Gruzlovic. Prior to her work-related accident Gruzlovic, who was about seventy-seven years of age at that time, had worked one day a week for thirteen years. The employer contends that the Workers' Compensation Court erred in calculating compensation as if Gruzlovic worked forty hours per week. We agree and reverse.

The employer also contends that the evidence does not support a finding of twenty-five percent partial total disability. We affirm that determination because it is supported by "sufficient credible evidence on the record as a whole." R. 2:11-3(e)(1)(D).

Giovanni's Trattoria is a cafeteria situated on a property used for auto auctions on Wednesdays. Wednesday is the only day the cafeteria is open. Gruzlovic's job entailed serving the food and keeping the cafeteria clean. On April 27, 2005, Gruzlovic tripped and fell while cleaning up. She had been working in the same cafeteria for eight to nine hours every Wednesday since 1993. She was paid an hourly wage, which was $10.50 at the time of the accident.

During the thirteen years Gruzolvic worked in the cafeteria, she did not have or seek either full-time or additional part-time employment. After the accident, Gruzlovic did not go back to work or seek other work. She explained, "I thought I had my share."

Workers' compensation is awarded pursuant to a "'longstanding and comprehensive statutory scheme.'" Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33, 42 (2008) (quoting Fitzgerald v. Tom Coddington Stables, 186 N.J. 21, 30 (2006)). The act, N.J.S.A. 34:15-1 to -142, "is remedial social legislation and should be given liberal construction in order that its beneficent purposes may be accomplished." Id. at 42 (quoting Torres v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974)).

The calculation of compensation for an employee with a permanent disability is governed by N.J.S.A. 34:15-37, which in pertinent part provides:

"Wages," when used in this chapter shall be construed to mean the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the accident. . . . When the rate of wages is fixed by the hour, the daily wage shall be found by multiplying the hourly rate by the customary number of working hours constituting an ordinary day in the character of the work involved. In any case the weekly wage shall be found by multiplying the daily wage by the customary number of working days constituting an ordinary week in the character of the work involved . . . .

A different method of calculation is required in cases involving temporary disability for a part-time employee. In that circumstance, if the employee worked less than the customary number of working days constituting an ordinary week in the character of the work involved, the weekly wage for the purposes of compensation under provisions of [N.J.S.A. 34:15-12a (which address temporary disability)] only shall be found by multiplying the hourly rate by the number of hours of work regularly performed by that employee in the character of the work involved. [N.J.S.A. 34:15-37.]

In Katsoris v. S. Jersey Publ'g Co., 131 N.J. 535, 541 (1993), the Supreme Court interpreted the statute. Accordingly, our role is to apply the statute in conformity with Katsoris.

Both passages of the statute quoted above were amended in 1979 and Katsoris discusses the significance of the amendments.

L. 1979, c. 283, § 37. Prior to the 1979 amendment, weekly wage was found "by multiplying the daily wages by 5, or if the employee worked a greater proportion of the week regularly, then by 5 1/2, 6, 6 1/2 or 7," a minimum work week was five days and there was no special formula for calculating compensation for temporarily disabled workers who worked less than five days. See Katsoris, supra, 131 N.J. at 541 n.2 (quoting prior law and reflecting the Legislature's alterations made in L. 1979, c. 283, § 37).

The Court considered the impact of those amendments on compensation for part-time employees who are permanently disabled and concluded: "No implication arises that persons who work significantly fewer days each week or fewer hours each day than the norm of a five-day or forty-hour week cannot be considered part-time workers." Id. at 546. Reasoning that the amended formula for calculation of weekly wages and the special formula for part-time workers with a temporary disability did not give "the slightest hint that the Legislature intended to alter the character or categorization of all such employment . . . from part-time to full-time employment," ibid., the Court determined that the amendments were "not intend[ed] to alter the practice with respect to the calculation of compensation benefits for part-time, permanently injured employees," and "had no effect on calculation of benefits for those part-time employees who suffer disabilities that are permanent in nature," id. at 544-45.

Thus, Katsoris directs courts confronted with a permanently disabled worker to consider - as courts had for decades prior to the amendment, see, e.g., Torres, supra, 64 N.J. at 461 - whether it is appropriate in the particular case to "reconstruct" the work week and wages of a part-time employee to provide compensation that would have been awarded for "full-time" employment. See Katsoris, supra, 131 N.J. at 543-46. "The use of a reconstructed work week to calculate the compensation award of a part-time employee had never been considered automatic," and is not automatic under the current statute as construed in Katsoris. Id. at 546.

Reconstruction is appropriate when consistent with the purpose of workers' compensation, which is "to compensate [the worker] for . . . loss of earning capacity, i.e., diminution of future earning power." Id. at 546 (quoting Torres, supra, 64 N.J. at 460-61). "[P]rinciples of fairness and equity" govern the decision to use a "reconstructed work week for disabled part-time employees [and] turn on the diminishment of future earning capacity." Id. at 548. Thus the "key" inquiry is "whether the disability represents a 'loss of earning capacity, i.e., a diminution of future earning power,'" that includes loss of "potential for full employment." Id. at 547-48 (quoting Torres, supra, 64 N.J. at 460-61).

The importance of the impact of the disabling injury on "potential for full employment" is illustrated by Katsoris and prior decisions. Where an employee, permanently disabled due to an injury on a part-time job, also has a full-time job, use of a reconstructed work week is appropriate if there is an impact on the employee's ability to return to the full-time job. Mahoney v. Nitroform Co., 20 N.J. 499, 509-10 (1956) (death benefit for person killed in accident on part-time job should be calculated on the basis of their full-time employment in recognition of the act's purpose - "to arrive at a fair approximation of claimant's probable future economic capacity"). In contrast, where a worker with part-time and full-time employment is permanently and partially disabled from the part-time employment but able to return to the full-time employment, reconstruction of the work week as if the part-time employment were full-time employment is improper. Katsoris, supra, 131 N.J. at 548.

Cases involving part-time employees who have no full-time employment are more instructive in evaluating the relevance of diminution of future earning capacity to the "fairness and equity" of calculating wages on the basis of part-time employment in this case. Torres, supra, 64 N.J. at 461 (noting that the statute does not address the issue and that the reconstruction has been invoked by our courts to avoid "an injustice").

Torres involved a "minor who work[ed] only a few hours a week in a part-time job and suffer[ed] . . . a permanent disability as a result of a work-connected accident." Ibid. The Court determined that reconstruction of wages based on full-time employment was necessary to serve "[t]he entire objective of wage calculation," which the Court viewed as "arriv[ing] at a fair approximation of claimant's probable future earning capacity." Id. at 462 (internal quotations omitted). The Court concluded that "minors engaged in part-time employment outside school hours possess a unique status," "must be presumed to have a potential for full employment," and to serve the purpose of the act their status as part-time workers at the time of accident must be deemed "immaterial." Ibid.

Our courts have also addressed the diminution of future earning capacity with respect to adults employed in one part-time job at the time of the accident. In a case involving a sixty-eight-year-old employee working part-time, there was evidence to support a finding that his part-time status was attributable to a series of hernia operations and evidence suggesting that prior to the accident the employee did not expect to resume full-time employment due to his condition. Krogman v. Krogman Filter Co., 89 N.J. Super. 16, 22-23 (App. Div. 1965). The court reasoned that "the right to reconstruct the pay base has been assumed to be dependent on the assumption that the injured workmen would, absent the accident, have been able to earn full-time wages during a hypothetical future work career." Id. at 24. Due to the evidence suggesting that the employee's pre-accident condition precluded full-time employment, this court remanded to permit the employee to come forward with additional evidence relevant to the question of the significance of the work-related accident relevant to full-time or part-time employment. Id. at 26. Following remand, this court determined that the employee's failure to "com[e] forward with affirmative proof that by any determinable date after the accident he would have been capable of full-time work" precluded reconstruction of his wages "on a full-time basis." Krogman v. Krogman Filter Co., 91 N.J. Super. 1, 3-4 (App. Div. 1966).

In different circumstances, on recognizing that an "ordinary part-time worker today may have full-time employment tomorrow or that a part-time worker . . . may have four or five such jobs each week," this court has concluded that reconstruction of the employee's work week is appropriate when the permanently disabling accident "prevents or interferes with later full-time employment." Engelbretson v. Am. Stores, 49 N.J. Super. 19, 25 (App. Div. 1957), aff'd, 26 N.J. 106 (1958). In Engelbretson, the majority noted the absence of evidence that the sixty-eight-year-old employee "was in poor health or unable to work a full week or for additional days for another employer." Ibid. The evidence in that case demonstrated that the employee's hours had been reduced by her employer about six months prior to the accident in 1954. Id. at 22. From 1951 to 1953, she was expected to work when needed and worked as many as nine hours a day on several days each week; between January and June 1954, however, she worked for four hours on two days per week. Ibid.

In our view, Krogman and Engelbretson are both consistent with the principles of equity and fairness relevant to reconstruction of wages articulated in Katsoris. Katsoris requires consideration of the relationship between the accident and the potential for future employment in determining whether "fairness and equity" in the circumstance warrant reconstruction of a part-time worker's wages. 131 N.J. at 548.

In this case, the judge of compensation misunderstood Katsoris. Although the judge recognized that Katsoris rests on the fact that there was no impact on the employee's ability to return to full-time employment, she concluded that Katsoris had no relevance to reconstruction in this case because Gruzlovic did not have full-time employment. The error in this reasoning is that it overlooks the fundamental reason for reconstruction of wages under the current statute as interpreted in Katsoris, which is fairness and equity in light of the diminution of potential future earning capacity. The compensation award under review is inconsistent with Katsoris, because it ignores the distinction between part-time and full-time employment, which the Legislature intended to maintain, 131 N.J. at 546, and assumes that reconstruction is automatic, a proposition that the Supreme Court rejected in Katsoris, id. at 549.

This record does not permit an inference that the accident and resulting disability had any impact on Gruzlovic's capacity or inclination to work full-time as opposed to part-time. For thirteen years Gruzlovic had worked one day a week in a cafeteria that was open for business one day a week. During that period, she had not looked for an additional part-time job or a full-time job. The evidence in this case defeats any basis for an inference that but for the accident and resulting partial, permanent disability, Gruzlovic would have pursued either full-time employment or additional part-time jobs. When an inference of a loss of potential full-time employment attributable to the accident is not available from the evidence presented, principles of fairness and equity developed to compensate for that lost potential are not implicated and reconstruction of wages is not appropriate. See generally 5 Larson's Workers' Compensation Law § 93.02 (2009) (discussing the question of part-time employment and appropriate compensation with reference to the purpose of compensation for diminution of earning capacity).

Reversed and remanded for modification of the compensation award in conformity with this decision.


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