Boreland v The GEO Group Australia Pty Ltd
[2024] NSWPIC 465
•23 August 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Boreland v The GEO Group Australia Pty Ltd [2024] NSWPIC 465 |
| APPLICANT: | Lucinda Jayne Boreland |
| RESPONDENT: | The GEO Group Australia Pty Limited |
| MEMBER: | Jill Toohey |
| DATE OF DECISION: | 23 August 2024 |
| CATCHWORDS: | WORKERS COMPENSATION - Calculation of applicant’s pre-injury average weekly earnings (PIAWE); application of Workers Compensation Regulation 2016; application of regulation 8E concerning unpaid leave; no dispute that application had three periods of unpaid leave during the relevant earning period; no dispute that each period was less than seven consecutive calendar days; submissions for the applicant that fairness and justice requires adjustment of the relevant earning period to take account of the unpaid leave; Held – applicant’s submissions rejected; the respondent has correctly calculated the applicant’s PIAWE. |
DETERMINATIONS MADE: | The Commission determines: 1. The applicant’s pre-injury average weekly earnings in the relevant earning period 2. The respondent is to pay the applicant weekly compensation for the period 31 July 2023 to 22 October 2023 accordingly. The Commission notes: 1. By consent the applicant’s claim for weekly payments for the period 16 November 2023 to |
STATEMENT OF REASONS
BACKGROUND
The applicant, Lucinda Boreland, was employed by the respondent, GEO Group Australia Pty Limited, as a health promotions nurse. In the course of her employment, she suffered a psychological injury for which the respondent accepted liability.
The issue for determination in these proceedings is narrow. It concerns the calculation of the applicant’s pre-injury average weekly earnings (PIAWE) in the period 31 July 2023 to
22 October 2023.In dispute notices dated 28 May 2024 and 5 June 2024, the respondent calculated the applicant’s PIAWE in the relevant period as $1868.79. The applicant contends that calculation is incorrect and that, calculated correctly, her PIAWE is $2076.43.
The dispute centres on the application of the Workers Compensation Regulation 2016 (the 2016 Regulation) to the calculation of the applicant’s PIAWE, in particular the effect of periods of unpaid leave on the following dates:
(a) 16 August 2023 – 17 August 2023 (2 days);
(b) 22 September 2023 – 25 September 2023 (2 days), and
(c) 9 October 2023 – 11 October 2023 (3 days).
There is no dispute that the relevant period is 31 July 2023 to 22 October 2023 and no dispute that the applicant took unpaid leave on the dates above.
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
The parties attended a preliminary conference on 17 July 2024 at which the applicant discontinued her claim for weekly payments for the period 16 November 2023 to
27 December 2023.Parties were unable to come to agreement as to the calculation of the applicant’s PIAWE for the period 31 July 2023 to 22 October 2023 and have agreed to the determination of the matter by way of written submissions, without a conference or formal hearing.
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.
RELEVANT LEGISLATION
Clause 2 of Sch 3 of the Workers Compensation Act 1987 (the 1987 Act) defines the term PIAWE and sets out the relevant earning period by which it is to be calculated.
By cl 2(3), the regulations may provide for the adjustment of the relevant earning period for a worker in employment. There is no dispute that the adjustments may have the effect of increasing or decreasing a worker’s PIAWE.
Clause 2(3) provides:
“(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 earning circumstances in the employment, or
(b) to align the relevant earning period with any regular intervals at which the worker is entitled to receive payment of earnings for work performed in the employment.”
Regulation 8A of the 2016 Regulation sets out the bases for any adjustment of the relevant earning period of the employment. Regulation 8A(2) provides that the relevant earning period is to be adjusted in the following order:
(a) clause 8B (Adjustment for workers not continuously employed);
(b) clause 8C (Adjustment for financially material change to earnings);
(c) clause 8D (Alignment of relevant earning period with pay period);
(d) clause 8E (Adjustment for unpaid leave), and
(e) clause 8EA (Adjustment for prescribed periods relating to COVID-19).
Regulation 8A(3) provides that a reference in a relevant provision:
(a) to the relevant earning period is a reference to the relevant earning period as adjusted in accordance with any preceding provision applicable to the worker, or
(b) to the unadjusted earning period is a reference to the relevant earning period, as so adjusted, but without regard to any adjustment under the provision in which the expression is used.”
The applicant relies on regulations 8C (adjustment for financially material change to earnings) and 8E (adjustment for unpaid leave).
Regulation 8C provides:
“(1) The relevant earning period for a worker is to be adjusted in accordance with this clause if, during the unadjusted earning period, there was a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker (for example, a change from full-time to part-time work).
(2) The relevant earning period is to be adjusted by excluding from the period any period before the change to the earnings of the worker occurred.”
There is no dispute that the applicant underwent “a change of an ongoing nature to the employment arrangement resulting in a financially material change to earnings” when she assumed the position of a Health Promotions Nurse with the respondent pursuant to an employment contract signed on 31 July 2023. In doing so, she agreed to remuneration of $105,310, thus enlivening cl 8C.
The practical effect of regulation 8C in the present circumstances is that the period preceding the financial material change is excluded from any calculation of the applicant’s PIAWE. So much is agreed.
Regulation 8E provides:
“(1) The relevant earning period for a worker is to be adjusted in accordance with this clause if, during any period of not less than seven consecutive calendar days within the unadjusted earning period--
(a) no earnings in the employment were paid or payable to the worker, and
(b) the worker took a period of unpaid leave (‘the unpaid leave period’) commencing on the first day of that consecutive period.
(2) The relevant earning period is to be adjusted by excluding each day (whether or not the day was a usual work day for the worker) of the period commencing on the first day of the unpaid leave period and ending immediately before the day on which earnings in the employment once again became payable to the worker.”
SUBMISSIONS
The applicant’s submissions
Counsel for the applicant, Mr Necovski, submits that, pursuant to her employment contract, she was entitled to annual leave and personal leave which accrued progressively during a year and was cumulative. The respondent does not take issue with this description of her leave entitlements.
Mr Necovski submits that it will be gleaned from the employment contract that the applicant had little to no personal leave because it was yet to accumulate. He submits that, in practical terms, the impact of cl 8E in this case is there any unpaid leave taken by the applicant ought to be excluded from the calculation of PIAWE by reason of cl 8E(2) which specifically provides for the exclusion of “each day” during any “unpaid leave period”. He submits that, importantly, the terms “unpaid leave period” and “leave” are undefined in the Act.
Mr Necovski refers to the decision of Deputy President Wood in Secretary, Department of Communities and Justice v Stewart[1] where she said at [94] that “an unjust outcome would result if a narrow view was taken to the term ‘unpaid leave’”, and “the intention of legislation is clearly to apply fairness to the calculation of pre-injury average weekly earnings”.
[1] [2023] NSWPICPD (Stewart).
It is submitted that the same applies to the requirement for the “leave period” to consist of seven days consecutively. It is submitted that the insurer “latches onto this” as a means to reduce the applicant’s PIAWE and that, where the regulations are inconsistent with the Act, the Act is to be preferred.
Mr Necovski refers to the decision of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory)[2] where the Court said at [47]:
“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.”
[2] [2009] HCA 41; (2009) 239 CLR 27 (Alcan).
Mr Necovski refers also to the second reading speech of the Workers Compensation Legislation Amendment Bill 2018 which, it is submitted, sets out “the mischief” sought to be remedied by cl 8E:
“Consistent with this adaptable and flexible approach is a regulation-making power to adjust the relevant earning period to accommodate changes in the worker’s earning circumstances and the ability to align the calculation of weekly payments with an injured worker’s normal pay cycles.”
It is submitted that a narrow interpretation of the regulations leads to injustice, and that the provision should be interpreted beneficially in the present case.
Mr Necovski refers to the decision in Wake v State Emergency Services[3] in which the member decided that any periods not worked should be excluded from the calculation of PIAWE. Mr Necovski acknowledges that Wake focused on casual workers but submits that the principles remain the same. It is submitted that, applying Wake and cl 2 of Schedule 3, only the periods that the applicant worked are to be taken into account, and this must lead to the exclusion of days that she did not work due to taking unpaid leave.
[3] [2022] NSWPIC 50 (Wake).
Mr Necovski submits that Wake was followed in Field v Secretary, Department of Education[4] and Nounou v Allstaff Australia Sydney Pty Limited.[5]
[4] [2023] NSWPIC 214.
[5] [2023] NSWPIC 234 (Nounou).
Mr Necovski submits, the insurer has assessed the applicant’s PIAWE on the basis of a 10-week period when it should be calculated on the basis of nine weeks by virtue of the applicable adjustment in cl 8E(2). Calculated correctly based on nine weeks, it is submitted the applicant’s PIAWE is $2,076.43 for the reduced earning period of nine weeks.
The respondent’s submissions
The respondent agrees that “unpaid leave” has an impact upon the applicant’s PIAWE but submits only to the extent allowed by the plain reading of regulation 8E.
Counsel for the respondent, Mr Grimes, submits that to say that regulation 8E(2) means any unpaid leave taken by the applicant ought to be excluded from the calculation of PIAWE is to completely ignore regulation 8E(1). Mr Grimes submits that, for the relevant earning period to be adjusted, is contingent on the unpaid leave period being “not less than seven consecutive calendar days”.
Mr Grimes submits that there are no periods of unpaid leave “not less than seven calendar days” during the relevant earning period of 31 July 2023 to 22 October 2023, and that so mucb is conceded by the applicant.
Mr Grimes submits that, without a sufficient period of unpaid leave, there should be no adjustment to the relevant earning period. He submits that, applied to full-time workers, the applicant’s submissions would lead to the perverse outcome that most full-time workers’ PIAWE would be dramatically increased by reason of excluding unpaid leave on weekends.
With respect to the decision in Wake, Mr Grimes refers to the decision in Secretary, Department of Education v Field[6] where Deputy President Wood said at [82]:
“The observation made by the Court of Appeal in respect to the notice of contention in Stewart indicate that the approach taken by Member Wright in Wake […] was wrong. It follows that the Member’s conclusion that Wake was not “plainly wrong” was erroneous and the Member’s conclusion to follow that case was affected by legal error.”
[6] [2024] NSWPICPD 23.
With respect to the decisions in Field v Secretary, Department of Education and Nounou,
Mr Grimes submits that Field was overturned on appeal in Secretary, Department of Education v Field in which Deputy President Wood stated at [86]:“Therefore, in order to determine whether the period of 52 weeks can be adjusted In the respondent’s case, he must establish that one of the regs 8A to 8E apply. He relies on regs 8B, 8C and 8E.”
Mr Grimes submits that that the relevant earning period cannot be adjusted as contended for by the applicant because she has not established the condition of regulation 8E, namely, that there has been an unpaid leave period “not less than seven consecutive calendar days”.
Mr Grimes admits that the calculation of PIAWE in the dispute notices should be upheld.
Submissions in reply
In reply, Mr Necovski submits that the applicant relies on its previous submissions as to the reading and interpretation of the legislation and that, applying Alcan, it is necessary to give consideration to the operation of the legislation and its intention.
Mr Necovski submits that the respondent’s submissions exclude any consideration being given to what is a permissible construction of cl 2 of schedule 3 of the 1987 Act when combined with regulation 8E and the decision in Wake. Importantly, he submits, Field is distinguishable because it concerned casual worker earnings. As a consequence, it is permissible to find that the hours of unpaid leave should be excluded from any calculation of the PIAWE.
CONSIDERATION
Clause 2(3) of Schedule 3 makes clear that the regulations may provide for the adjustment of the relevant earning period to take into account a period of unpaid leave. There is no dispute that the adjustment may have the effect of reducing or extending the relevant earning period.
Regulation 8E(1) states clearly that the relevant earning period for a worker is to be adjusted if, during any period of not less than seven consecutive calendar days within the unadjusted earning period (my emphasis), no earnings in the employment were paid or payable to the worker, and the worker took a period of unpaid leave commencing on the first day of that consecutive period.
If regulation 8E(1) is enlivened, regulation 8E(2) sets out the method by which the relevant earning period is to be adjusted.
There is no dispute as to the applicant’s unadjusted earning period and no dispute that she had three periods of unpaid leave during that time. There is no dispute that the periods were, respectively, for two days, two days and three days.
It is not clear to me what significance is said to attach to the fact (if is it a fact) that the applicant had little to no personal leave because it was yet to accumulate. Mr Necovski submits that the impact of regulation 8E is there any unpaid leave taken by the applicant ought to be excluded from the calculation of PIAWE by reason of cl 8E(2) which specifically provides for the exclusion of “each day” during any “unpaid leave period”. He submits that, importantly, the terms “unpaid leave period” and “leave” are undefined in the Act. With respect, I do not follow that submission.
I do not agree with the submission that the requirement in the regulations for the unpaid leave period to consist of seven days consecutively is inconsistent with the Act. It is not clear to me how it is inconsistent other than that “leave period” is undefined in the Act. If that is the basis of the submission, the regulation refers to “unpaid leave”. There is no suggestion by the applicant that she did not take “unpaid leave” during the relevant period. If the inconsistency is said to be because the Act is beneficial legislation, I do not agree that it is a relevant “inconsistency”.
The High Court said in Alcan that “the task of statutory construction must begin with a consideration of the text itself” and the language which has actually been employed in the text of legislation “is the surest guide to legislative intention.” In this case, the language is clear: only periods of unpaid leave of at least seven consecutive days are relevant to an adjustment under regulation 8E.
I do not agree that the decision in Stewart assists the applicant. The issue in dispute in that case was whether regulations 8C, 8D or 8E applied to exclude from the relevant period a period when the worker received workers compensation payments in respect of an earlier injury.
The full text of [94] of Deputy President Wood’s decision in Stewart is:
“In my view, an unjust outcome would result if a narrow view was taken to the term ‘unpaid leave.’ If it was construed as referring only to a period during which a worker took leave without pay, for example for personal reasons, such a construction would entitle the worker to have the ‘relevant earning period’ adjusted to discard the period of unpaid leave. On the other hand, a worker in the circumstances of the respondent in this case, who was not in receipt of ‘earnings’ because he had suffered a work-related injury and the weekly payments were not included in ‘earnings’, would be unable to have the “relevant earning period” adjusted. Such an outcome would be plainly unfair and contrary to the intention of legislation, which was clearly to apply fairness to the calculation of the pre-injury average weekly earnings.”
The question with respect to regulation 8E was whether the periods while on workers compensation could be considered as periods of unpaid leave. That is a different issue from the issue in the present case where there is no dispute that the applicant had periods of unpaid leave.
Mr Necovski relies on the decision of the Member in Wake. The case concerned a worker in casual employment. The Member decided that any periods not worked should be excluded from the calculation of PIAWE. Mr Necovski submits that the principles remain the same in this case. It is submitted that, applying Wake and cl 2 of Schedule 3, only the periods that the applicant worked are to be taken into account, and this must lead to the exclusion of days that she did not work due to taking unpaid leave.
In Secretary of Department of Education v Field, the worker was in casual employment. The dispute concerned how his PIAWE was to be calculated given that, as a casual teacher, there were periods when he did not work. The worker relied in particular on regulation 8E and the reasoning in Wake. The Member at first instance concluded that he would follow Wake because it was “not plainly wrong”.
Deputy President Wood referred to the observations of the Court of Appeal in Stewart which indicated that the approach taken by the Member in Wake was wrong, and the decision of the Member that Wake was not “plainly wrong” was erroneous and his conclusion to follow that case was affected by legal error.
In effect, the submission for the applicant is that it is unfair that her PIAWE is reduced by the application of regulation 8E, and the Personal Injury Commission should therefore disregard the clear words of the provision.
The fact that the applicant’s PIAWE is reduced because the relevant earning period is not adjusted to take account of the periods of unpaid leave is not “plainly unfair and contrary to the intention of the legislation”. The intention of the legislation is clear. The fact that workers compensation legislation is beneficial does not allow the interpretation of a provision contrary to its clear meaning.
For these reasons I find that the calculation of the applicant’s PIAWE as set out in the dispute notices is correct. There is no ground for adjusting the relevant earning period. It follows that the applicant’s PIAWE during the period 31 July 2023 to 22 October 2023 is $1,868.79. The respondent is to pay her weekly compensation accordingly.
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