Comcare v Nicolas

In the matter of Comcare v Nicolas, the Federal Court was asked to consider the appropriate method for calculating an employee's normal weekly earnings (NWE) for the purposes of determining worker's compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth). The case involved Ms Nicolas, an employee of Centrelink who had been involved in two separate injuries, one in December 2008 and another in May 2011. The dispute centred on how to determine her NWE for the calculation of compensation for the injury sustained in May 2011, particularly whether the two weeks immediately preceding the injury or a longer period should be considered representative of her pre-injury earnings.

The key legal issue before the court was whether the Administrative Appeals Tribunal (AAT) had correctly applied the statutory framework when it determined Ms Nicolas's average working week hours for the calculation of her NWE. Section 8 of the SRC Act provides a formula for calculating NWE, and section 9(1) defines the "relevant period" for this calculation as the latest two weeks before the date of injury during which the employee was continuously employed. The AAT had determined that Ms Nicolas's average working week should be regarded as 20 hours, rather than the two weeks of 12 hours per week she worked immediately before her injury, which Comcare had used.

The Court found that the AAT had misapplied the statutory scheme in determining Ms Nicolas's average working week. It held that the AAT was not entitled to reject the two-week period prior to the injury as the period to be used for the calculation under section 8(1). The Court set aside the AAT's order and affirmed the original decision by Comcare that Ms Nicolas's NWE should be calculated based on the two weeks of 12 hours per week she worked before her injury. The Court emphasised that the AAT should have adhered to the statutory definition of "normal weekly hours" and the specified "relevant period" as outlined in the SRC Act.

In conclusion, the Court upheld Comcare's appeal, affirming that the decision under review should stand. The Court ordered that the AAT's order be set aside and replaced with an order affirming Comcare's original decision regarding the calculation of Ms Nicolas's NWE. This decision underscores the importance of strictly adhering to statutory definitions and periods when calculating worker's compensation under the SRC Act.