Cain v Tamworth Aboriginal Medical Service
[2021] NSWPIC 193
•18 June 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Cain v Tamworth Aboriginal Medical Service [2021] NSWPIC 193 |
| APPLICANT: | Barry Richard Cain |
| RESPONDENT: | Tamworth Aboriginal Medical Service |
| MEMBER: | Michael Wright |
| DATE OF DECISION: | 18 June 2021 |
| CATCHWORDS: | WORKERS COMPENSATION- Calculation of PIAWE; application of regulation 8C of the Workers Compensation Regulation 2016; date of injury 4 August 2020; increase in hourly wage rate and wages from 25 June 2020; Held- regulation 8C applies and relevant period for PIAWE is from 25 June 2020. |
| DETERMINATIONS MADE: | 1. The applicant’s pre injury average weekly earnings is $988. 2. Liberty to apply in respect of an award for weekly compensation and section 60 expenses. |
STATEMENT OF REASONS
BACKGROUND
In an Application to Resolve a Dispute (ARD), Mr Barry Cain (the applicant) claims weekly compensation for the period 4 August 2020 to date and continuing arising from psychological injury on 4 August 2020 in the course of his employment with Tamworth Aboriginal Medical Service (the respondent).
In a section 78 notice dated 1 December 2020 liability was disputed for the claim for weekly compensation in which incapacity was disputed and section 11A of the Workers Compensation Act 1987 (the 1987 Act) was relied upon.
PROCEDURE BEFORE THE COMMISSION
At the conciliation/arbitration of this matter on 12 April 2021, the applicant was represented by Mr Hill, solicitor, and the respondent by Ms Prichard, solicitor.
Leave was granted to amend the ARD by consent to include a claim for past section 60 expenses.
The parties reached agreement that the applicant should have an award of weekly compensation for the period claimed.
However, the parties were unable to resolve their dispute as to the calculation of pre injury average weekly earnings. Directions were issued as to the lodgement of wage schedules.
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.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) ARD and attached documents;
(b) Reply and attached documents;
(c) applicant’s wage schedule with attached notations; and
(d) respondent’s wage schedule.
Oral evidence
There were no applications to give oral evidence or to cross examine the applicant.
FINDINGS AND REASONS
The only issue in dispute is the calculation of the applicant’s pre-injury average weekly earnings (PIAWE).
The date of injury is 4 August 2020.
It was not in dispute that the applicant’s hourly rate of pay increased from $24 to $26 with effect from 25 June 2020.
The applicant’s wage schedule stated that PIAWE is $1,005.29. However, in submissions, the applicant relied on a figure of $988. The amount of $988 was the amount specified as PIAWE in the ARD.
The respondent’s wage schedule stated that PIAWE is $929.80.
Schedule 3, clause 2 (3)(a) of the 1987 Act and clause 8C of the Workers Compensation Regulation 2016 (the 2016 Regulation) in their current form apply.
Schedule 3, clause 2 (3)(a) of the 1987 Act 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 earnings circumstances in the employment,”
Clause 8C of the 2016 Regulation provides
“8C Adjustment for financially material change to earnings—Schedule 3, clause 2(3)(a) of 1987 Act
(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.”
“Employment arrangement” is not defined in the 2016 Regulation.
The respondent submitted that regulation 8C of the 2016 Regulation does not refer to “wages”, rather it is a conjunction of the employment arrangement in which there is required to be an ongoing change. If it was the intention of the legislature to include a change in the wage rate then the legislation would have said so, but it did not. The example given in regulation 8C indicates what is required. The attachment to the applicant’s wage schedule, which is the iCare fact sheet, lists similar sorts of examples, such as promotion. The respondent submitted that for regulation 8C to apply to a change in the hourly rate it would be necessary to delete from that regulation the words “a change of an ongoing nature to the employment arrangement”. The respondent submitted that PIAWE should be calculated based on the relevant period of 52 weeks prior to the date of injury of 4 August 2020.
The applicant submitted that PIAWE should be calculated for the relevant period from 25 June 2020, being the date of effect of the wage increase.
In my view, the example listed in regulation 8C (“a change from full-time to part-time work”) does not place a limit on the content of the “employment arrangement”. The term “employment arrangement” in regulation 8C is not expressed to be limited by the example given. Even if this were so, a change from full-time to part-time work could also be characterised as a change in the employment contract, with the result that other changes to the employment contract would also be included in a change in the employment arrangements. In this case, a change to the hourly rate of pay, as evidenced by the payslips attached to the ARD and the Reply, and as specified in the Employment Agreement referred to below, also forms a change to the employment contract and hence the employment arrangements.
The definition of a “worker” is found in section 4 of the Workplace Injury Management and Workers Compensation Act 1998, (the 1998 Act):
“worker means a person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing). However, it does not include…”
In my view, the content of the “employment arrangement” should be considered with reference to the definition of a worker as relevantly being a person who has entered into or works under a contract of service. The contract of service in my view forms part of, although not necessarily all, of the employment arrangements. The wages paid to a worker is necessarily a part of the contract of service.
In Queensland Stations Pty Ltd v Federal Commissioner of Taxation[1], Latham CJ observed
“If the work to be done by one person for another is subject to the control and direction of the latter person in the manner of doing it, the person doing the work is a servant and not an independent contractor, and prima facie his reward would be wages.”
[1] [1945] HCA 13; (1945) 70 CLR 539 (Queensland Stations).
In Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance[2], after reviewing cases including Queensland Stations, the Court observed
[2] [1968] 2 QB 497, per Mackenna J.
"I must now consider what is meant by a contract of service.
A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.
I need say little about (i) and (ii).
As to (i). There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job either by one's own hands or by another's is inconsistent with a contract of service, though a limited or occasional power of delegation may not be: see Atiyah's Vicarious Liability in the Law of Torts (1967) pp. 59 to 61 and the cases cited by him…”Wages or other consideration are a condition of the contract of service. A change to the hourly rate of pay is a change in the wages paid to the worker. Hence, a change in the hourly rate of pay is a change of an ongoing nature to the employment arrangement.
If I am found to be wrong in this reasoning, then there is an additional reason for finding that employment arrangements are a broad category that includes the hourly rate of pay and thus wages.
The reply attached a factual investigation report of Insight Intelligence Group dated 20 October 2020. That report contained a number of annexures.
Annexure 1 was a statement of the applicant dated 28 September 2020. Relevantly, the applicant stated that he was paid an agreed hourly rate he thought of $26 per hour as he recently had a pay rise from $24 per hour. He stated that his normal working hours were 8:30 AM until 5 PM Monday to Friday with accrued 24 minutes per day in time in lieu accumulating to one rostered day off per month.
Annexure 11 was an “Employment Agreement” signed by the applicant on 12 September 2017 and also countersigned by authorised officers of the respondent (the employment agreement). The employment agreement set out “the terms and conditions of your ongoing employment” with the respondent. The applicant was employed as an administrative/transport officer on a full-time basis. Hours per week were specified as 38. Hourly rate of pay was specified as $24. Leave entitlements were in accordance with the Fair Work Act 2009 (Cth). Annual leave was specified to be in accordance with the Aboriginal Community Controlled Health Services Award 2010.
Annexure 7 was the Aboriginal Community Controlled Health Services Award 2010. This was specified to be a Fair Work Commission consolidated modern award. Among other matters, it provided for minimum wage rates, classifications and ordinary hours of work. This award also provided that an employee may request a change in working arrangements in accordance with section 65 of the Fair Work Act 2009 and the processes to be followed. This award is specified to cover employers throughout Australia in the Aboriginal community controlled health services industry and their employees.
Section 5 of the Fair Work Act 2009 provides for the terms and conditions of employment of national system employees. Section 5 provides that the main terms and conditions of employment include the National Employment Standards, modern awards and enterprise agreements and workplace determinations.
The applicant’s hourly rate of pay was one of the terms and conditions of the applicant’s employment that was agreed under the employment agreement. The applicant’s hourly rate of pay in my view probably was also part of the main terms and conditions of employment as provided by section 5 of the Fair Work Act 2009.
In my view, the applicant’s hourly rate of pay as specified by the employment agreement, and later varied, was one of the terms and conditions of the applicant’s employment contract, which formed part of the applicant’s employment arrangements. Similarly, the hourly rate of pay in my view probably formed part of the main terms and conditions of the applicant’s employment with the respondent, and within the statutory framework of the Fair Work Act 2009, and therefore became part of the statutory framework for employment arrangements.
To put this in another way, for “employment arrangements” not to include the contract of employment or the statutory framework in which the terms and conditions of employment are regulated would in my view remove the causal nexus between the required change and the material change to the earnings of the worker.
I do not accept the respondent’s submission that regulation 8C does not include wages or the hourly rate of pay. In my view the term “employment arrangements” is broad and includes the applicant’s employment agreement and terms and conditions of employment. On this reading, it is not necessary to delete reference to an ongoing change to employment arrangements, as the term “employment arrangements” is broad and includes wages, hourly rates of pay and matters such as a change from part-time to full-time work and promotion.
Accordingly, I find that the change in the applicant’s hourly rate of pay from $24 to $26 with effect from 25 June 2020 was, pursuant to regulation 8C, a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the applicant. Pursuant to regulation 8C(2) the relevant earning period is from 25 June 2020 to 3 August 2020. I accept the applicant’s submission that the payslips for this period disclose that the applicant’s PIAWE were $988, being $26 per hour for a 38 hour week.
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