Benten v William Campbell Foundation
[2021] NSWPIC 15
•11 March 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Benten v William Campbell Foundation [2021] NSWPIC 15 |
| APPLICANT: | Natasha Benten |
| RESPONDENT: | William Campbell Foundation |
| MEMBER: | Mr William Dalley |
| DATE OF DECISION: | 11 March 2021 |
| CATCHWORDS: | WORKERS COMPENSATION- Preliminary point; meaning of “employment” in Schedule 3 to the 1987 Act; worker employed by the respondent but also deriving income from her own business as a clinician one day per week; insurer asserts that income from the worker’s business should not be included in calculation of the PIAWE; insurer submits “employment” in Schedule 3 is limited to contract of service/master and servant relationship; Held- dictionary definitions of “employment” include business or occupation; the term potentially therefore includes income from self-employment; context demonstrates that there is a mathematical relationship between weekly payments following injury and PIAWE; weekly payments are subject to reduction from earnings from all forms of personal exertion therefore inconsistent to calculate the PIAWE without inclusion of such earnings; conclusion is that “employment” in Schedule 3 includes self-employment for the purposes of calculation of the PIAWE; leave to apply with respect to outstanding issue of quantum. |
| DETERMINATIONS MADE: | 1. The Commission determines that the expression “employment” where used in Schedule 3 to the Workers Compensation Act 1987 includes personal exertion in a worker’s own business and the expression “pre-injury average weekly earnings” is to be interpreted accordingly. 2. Leave is granted to the parties to apply for a further telephone conference should the parties be unable to resolve the remaining issue of the quantum of the applicant’s pre-injury average weekly earnings. |
STATEMENT OF REASONS
BACKGROUND
The applicant, Natasha Benten, suffered a psychological injury on 14 April 2020 in the course of her employment with the William Campbell Foundation (the respondent). At the time of her injury Ms Benten was employed by the respondent as a clinician working four days per week. She also derived income from her own practice as a clinician on one further day each week. As a result of her injury Ms Benten was not able to work.
The insurer accepted a claim for weekly payments, but assessed Ms Benten’s pre-injury average weekly earnings by reference only to her earnings from employment with the respondent. The insurer excluded earnings from Ms Benten’s business and issued a dispute notice stating:
“Based on the information provided by your legal representative, we are of the view that you are not a ‘worker’ when performing services in your private clinic. Accordingly, the income from the services cannot be included in the calculation of your PIAWE.
Having excluded your income from your private practice services, the calculation of your PIAWE he has been based only on your earnings from WCF.”
Ms Benten’s legal representatives filed an Application for Expedited Assessment seeking weekly benefits calculated on the basis of Ms Benten’s earnings from her employment with the respondent and her additional earnings from Ms Benten’s own practice as a clinician.
At the telephone conference I determined that the issue between the parties was not an appropriate issue for expedited assessment and, as a delegate of the Registrar, referred the matter for determination by myself as an arbitrator. The parties agreed with this course and a direction was issued accordingly.
A direction was issued for written submissions. Those submissions were filed and served. Upon consideration of those submissions further submissions were requested which have been received and considered.
ISSUES FOR DETERMINATION
The issue to be determined at present is whether the term “employment” where used in Schedule 3 to the Workers Compensation Act 1987 (the 1987 Act) is limited to employment by another person or corporation or whether it is to be interpreted as also including employment in the business conducted by the applicant prior to the subject injury.
PROCEDURE BEFORE THE COMMISSION
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
The parties agreed that it was appropriate that the dispute as to the meaning of the term “employment” in Schedule 3 to the 1987 Act should be determined as a preliminary point.
This decision is limited to determination of the preliminary point and leave will be granted to the parties to apply for a further determination if the parties are unable to reach agreement in accordance with this determination or any subsequent determination of the issue upon appeal.
DETERMINATION
The parties agree that Ms Benten derived income from her own business in addition to income received from the respondent.
Part 3, Division 2 of the 1987 Act makes provision with respect to weekly compensation by way of income support. Section 32A(2) of the 1987 Act provides:
“(2) Words and expressions in this Division that are defined in Schedule 3 have the meanings provided by that Schedule. The regulations may amend Schedule 3.”
Schedule 3 provides:
“SCHEDULE 3 – EARNINGS FOR PURPOSES OF WEEKLY PAYMENTS OF COMPENSATION UNDER DIVISION 2 OF PART 3
(Section 32A)
1 APPLICATION
The words and expressions defined in this Schedule apply for the purposes of Division 2 of Part 3 of this Act.
2 MEANING OF ‘PRE-INJURY AVERAGE WEEKLY EARNINGS’
(1) ‘Pre-injury average weekly earnings’, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note : See also clauses 3-5 relating to modifications of pre-injury average weekly earnings by agreement and in relation to apprentices, trainees and persons aged under 21 years.
(2) Except as provided by this clause (or by regulations made under this clause), in calculating the ‘pre-injury earnings’ received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (‘the relevant earning period’).
(3) The regulations may provide for the adjustment of the relevant earning period for a worker in employment (including, for example, by extending or reducing the period)--
(a) to take into account any period of unpaid leave or other change in earnings circumstances in the employment, or
(b) to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.
(4) If the amount of a worker's pre-injury average weekly earnings is less than any minimum amount prescribed by the regulations as applicable to the worker, the amount of the worker's pre-injury average weekly earnings is taken to be that minimum amount. Different minimum amounts may be prescribed for different classes of workers, including part-time and full-time workers.
3 AGREEMENTS RELATING TO PRE-INJURY AVERAGE WEEKLY EARNINGS
(1) An injured worker and the employer may agree, in accordance with any requirements of the regulations, as to the amount of pre-injury average weekly earnings that is to apply to the worker for the purposes of Division 2 of Part 3 of this Act.
(2) If a worker enters into an agreement under this clause, the amount of pre-injury average weekly earnings that applies to the worker for the purposes of that Division is, subject to the regulations, the amount so agreed.
(3) Any decision of the insurer authorised or required by the regulations to be made in relation to an agreement under this clause before the agreement can take effect is, subject to the regulations, taken not to be a work capacity decision for the purposes of that Division.
4 PRE-INJURY AVERAGE WEEKLY EARNINGS FOR SHORT-TERM WORKERS
(1) If, at the time of the injury, the injured worker had been continuously employed in employment for less than 4 weeks, the ‘pre-injury average weekly earnings’ in relation to the worker may be calculated having regard to the weekly average of the earnings that the worker could reasonably have been expected to have earned in the employment, but for the injury, during the period of 52 weeks after the injury.
(2) The regulations may make provision for the matters to be taken into account for the purposes of determining the earnings that the worker could reasonably have been expected to have earned in the employment, but for the injury, during the period of 52 weeks after the injury.
5 PRE-INJURY AVERAGE WEEKLY EARNINGS OF APPRENTICES, TRAINEES AND YOUNG PEOPLE
(1) This clause applies to an injured worker who, at the time of the injury, is--
(a) under the age of 21 years, or
(b) an apprentice, or
(c) working under a contract of employment under which the worker is required to undergo training, instruction or examination in order to become qualified to carry on an occupation to which the contract of employment relates.
(2) This clause applies to an injured worker under subclause (1) only if the worker would, but for the injury, have been entitled to increments in earnings at certain ages or stages during the course of employment to become qualified.
(3) The ‘pre-injury average weekly earnings’, in relation to an injured worker to whom this clause applies, means--
(a) until the day on which the worker attains the age or stage or would, but for the injury, have attained the stage at which the highest rate is payable--the amount of earnings that the worker would have been entitled to receive in respect of a relevant week if the worker had not sustained the injury and had continued in the employment, or
(b) on and after the day on which the worker attains the age or stage or would, but for the injury, have attained the age or stage at which the highest rate is payable--the amount of pre-injury average weekly earnings calculated under clause 6 as if, at the time of the injury, the worker were being paid at the highest rate applicable to that age or stage, or
(c) if paragraph (a) or (b) applies but there is no rate applicable to a worker who has attained the age of 21 years, the worker's pre-injury average weekly earnings are to be determined in accordance with the regulations.
(4) The Workers Compensation Guidelines may make provision for the matters to be taken into account for the purposes of determining the weekly earnings that it is likely that a worker would have been entitled to in a week had the injury not occurred and had he or she continued in the employment concerned.
6 MEANING OF ‘EARNINGS’
(1) The ‘earnings’ received by a worker in respect of a week means the amount that is the income of the worker received by the worker for work performed in any employment during the week.
(2) The ‘income’ of a worker does not include--
(a) any minimum amount paid to a superannuation fund or scheme in respect of the week to avoid an individual superannuation guarantee shortfall, within the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth, for the worker, or
(b)the monetary value of any non-monetary benefit provided to the worker for the performance of work by the worker, or
(c) any payment in respect of loss of earnings under a scheme to which the workers compensation legislation relates or under any other insurance or compensation scheme, or
(d) any payment made without obligation by the employer.
(3) However, the monetary value of a non-monetary benefit of a worker is to be included as part of the income of the worker for the purposes of the calculation of the weekly payments of compensation payable to the worker if the worker is not entitled to the use of the benefit.
(4) The Workers Compensation Guidelines may make provision for or with respect to the matters to be taken into account for the purposes of determining whether a benefit has been provided to a worker or whether the worker is entitled to the use of a benefit.”
The applicant submitted that the term “employment” where used in Schedule 3 was not limited to employment by the respondent (or presumably any other employer) but was sufficiently wide to mean “any remunerative activity performed by the worker prior to injury, regardless of the legal construct surrounding those earnings.” The statutory definition of “worker” was irrelevant to the consideration of the meaning of the term “employment”.
The respondent submitted that the term “employment” where used in Schedule 3 is unambiguous. The respondent submitted “the employment contemplated in the clause is employment in the traditional sense, namely situation where there are separate entities, namely a master and servant or employer and employee.” Self-employment was neither “deemed employment” or employment at common law, as submitted by the applicant.
The respondent submitted that expression “earnings” referred to in Schedule 3 (6) (1) was unambiguously a reference to earnings from employment by another, noting that subparagraph (d) referred to “any payment made without obligation by the employer” it indicated an intention to restrain the meaning of the term “employment” to situations where a contract of service exists between a worker and employer.
I do not accept that the use of the term “employment” in Schedule 3 is unambiguous. The respondent in its submissions noted that the Cambridge Online Dictionary offered the following definition of employment: “the fact of someone being paid to work for a company or organisation”. Examples of this usage were cited. The respondent also noted definitions of employment from publications dealing with employment.
I accept that the Cambridge Online Dictionary may supply the definition noted by the respondent, but I note that it also offers a further definition: “work, esp. for someone else, for which you are paid, or a period of work”.
That definition suggests that employment is not necessarily limited to work performed for another. A number of other dictionary definitions suggest a wider meaning. The Oxford English Dictionary[1] defines the word (etymology and usage omitted):
[1] Volume V, Second edition, Clarendon Press. Oxford 1989.
“Employment:
1. a The action or process of employing; the state of being employed. Also in the phrase, (man, etc) of much, little, et cetera, employment.
b.The service (of a person). Phrase, at your employment (Obs).
2. a. That on which (one) is employed; business; occupation; a special errand or commission.
b.The use or purpose to which a thing is devoted. (Obs).
c.A person’s regular occupational business; a trade or profession.
3. An official position in the public service; a ‘place’. (Obs).”
The Macquarie Concise Dictionary[2] provides:
[2] Sixth Edition 2013. Macquarie Dictionary Publishers Pty Ltd Sydney Australia.
“Employment
1. The act of employing.
2. The state of being employed; employ; services.
3. That on which someone is employed; work; occupation; business.”
while the online Macquarie Dictionary[3] has:
“employment
noun 1. the act of employing.
2. the state of being employed; employ; service: *her niece's decision to accept employment as a school mistress –PATRICK WHITE, 1957.
3. that on which one is employed; work; occupation; business.”
[3] Macquarie Dictionary Online, 2021, Macquarie Dictionary Publishers, an imprint of Pan Macmillan Australia Pty Ltd, >
The Collins Dictionary[4] has:
“Employment
1 the act of employing or state of being employed
2 a person’s work or occupation
3 the availability of jobs for the population of the town, country et cetera;”
[4] Collins Dictionary of the English Language 2010 Harper Collins publishers, Glasgow Great Britain.
Each of those definitions recognises the usage of the word “employment” as including work, occupation or business as well as the relationship between the parties to a contract of service. I do not accept that the term, in its ordinary meaning, excludes work performed by a person in their own business to derive income. It is necessary to construe the legislation in order to determine the meaning to be ascribed to the term in the present context.
I bear in mind that workers compensation legislation is generally accepted as being beneficial[5] and should be construed beneficially, giving fullest relief that the fair meaning of its language will allow “within the confines of the actual language employed in what is fairly open on the words used”[6]. The approach to such legislation was discussed by Tracey J in Simos v Repatriation Commission[7] where His Honour said, in relation to the Veterans Entitlements Act 1986 (Cth):
“As its name suggests the Act has, in many cases, been characterised as being remedial or beneficial legislation: see, for example, Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225; Repatriation Commission v Hawkins [1993] FCA 479; (1993) 45 FCR 205 at 211. Such legislation (and subordinate instruments made under it) is to be construed as generously as the language of a particular provision allows: see Khoury v Government Insurance Office (NSW) [1984] HCA 55; (1984) 165 CLR 622 at 638. That general proposition was, however, qualified by the plurality in Khoury when it said (at 638) that ‘the rule that remedial provisions are to be beneficially construed so as to provide the most complete remedy of the situation with which they are intended to deal must ... be restrained within the confines of ‘the actual language employed’ and what is ‘fairly open’ on the words used’.”
[5] J Odlin Shopfitting International Pty Ltd v Kaljanak (1993) 29 NSWLR 632.
[6] Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638.
[7] [2013] FCA 607 at [41].
I further bear in mind the comment by Neilson J in Kushwaha v Queanbeyan City Council[8]: “However, the word used in an Act of Parliament must be given its full meaning, unless the context otherwise requires.”
[8] [2002] NSWCC 25 at 152.
In Project Blue Sky Inc v Australian Broadcasting Authority[9] the High Court said:
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court ‘to determine which is the leading provision and which the subordinate provision, and which must give way to the other’. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.”
[9] [1998] HCA 28; (1998) 153 ALR 490; 72 ALJR 841 at [69 - 70] per McHugh, Gummow, Kirby and Hayne JJ.
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT)[10] the High Court said (at [64]):
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”
[10] (2009) 239 CLR 27 at 46 (per Hayne, Heydon, Crennan and Keiffel JJ).
The 1987 Act together with the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provide the overall context and Part 3, Division 2 of the 1987 Act provides the particular context within which the words of Schedule 3 are to be interpreted.
Section 3 of the 1998 Act sets out the purposes of that Act and includes:
“3(c) to provide injured workers and their dependents with income support during incapacity, payment for permanent impairment or death and payment for reasonable treatment and other related expenses,
(d)to be fair, affordable, and financially viable”
Section 2A of the 1987 Act provides that the 1987 Act is to be construed with the 1998 Act and the extent of any inconsistency, the 1998 Act is to prevail.
Part 3, Division 2 of the 1987 Act makes provision for weekly compensation by way of income support. Subdivision 2 provides for the payment of income support during the first and second entitlement periods by reference to a mathematical proportion of the injured worker’s “pre-injury average weekly earnings”. The present dispute arises as to the intention of the legislature as to what income is to be taken into account in calculating the pre-injury average weekly earnings.
Provision is made for the payment to the injured worker to be reduced by reference to the workers “current weekly earnings”[11]. The term “current weekly earnings” is also defined in Schedule 3:
“‘Current weekly earnings’ of an injured worker in relation to a week, means whichever of the following is the greater amount--
(a) the worker's actual gross earnings in respect of that week,
(b) the weekly amount that the worker is able to earn in suitable employment.”
That definition is clearly wide enough to include income from personal exertion in a worker’s own business.
[11] Sections 36 and 37 of the 1987 Act.
There is a clear relationship between the quantum of weekly payments to an injured worker and that worker’s pre-injury average weekly earnings. The interpretation of the term “employment” sought to be applied by the respondent would result in pre-injury average weekly earnings being calculated without reference to additional earnings from self-employment, notwithstanding that earnings from self-employment, following injury, would clearly be deducted from the worker’s entitlement to weekly payments.
If the respondent’s submission is accepted there would be an imbalance between the pre-injury average weekly earnings of a worker and the worker’s entitlement to weekly payments. The resulting payment would not reflect the worker’s pre-injury income from personal exertion. A worker who supplemented earnings from his or her own business by a few hours casual employment would be severely disadvantaged if the worker was injured while performing the casual employment so as to be unable to carry on his or her business. The mere fact that a worker adopted a business model so that he was employed by his own family company or a family trust would, on the respondent’s contention, result in income from that employment being included in the calculation of pre-injury average weekly earnings but a worker who did not interpose a corporation or trust in the business model would be penalised.
The interrelationship between pre-injury average weekly earnings and the provision for weekly payments following injury suggests that the term “pre-injury weekly earnings” was intended to include “employment” within a worker’s own business. That interpretation maintains the proportionate relationship between the worker’s income from personal exertion prior to injury and the capacity to earn following injury. That interpretation is consistent with the beneficial effect of the legislation and gives the term “employment” a well understood meaning.
For those reasons I am satisfied that the term “employment” in Schedule 3 to the 1987 Act includes income derived from personal exertion in a worker’s own business and the calculation of pre-injury average weekly earnings should include earnings from that source.
In the event that the parties are unable to reach agreement as to the quantum of pre-injury average weekly earnings calculated in accordance with this determination, leave is granted to the parties to apply for a further telephone conference to advance resolution of that dispute.
William Dalley
MEMBER11 March 2021
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