Dinkha v Insurance Australia Limited t/as NRMA Insurance
[2022] NSWPICMR 67
•25 November 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Dinkha v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 67 |
| ClaimanT: | Fadi Dinkha |
| Insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Merit Reviewer: | Katherine Ruschen |
| DATE OF DECISION: | 25 November 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Merit review; dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (2017 Act); meaning of pre-accident weekly earnings (PAWE); schedule 1, clause 4 of the 2017 Act; meaning of earns continuously; schedule 1, clause 4(4) and clause 4(2)(a) of the 2017 Act; significant change in earning circumstances; schedule 1, clause 4(3) and clause 4(2)(b) of the 2017 Act; Held – the reviewable decision is affirmed. |
| Determinations made: | Certificate Issued under s 7.13(4) of the Motor Accident Injuries Act2017 Determination The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act2017 (MAI Act) and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reviewable decision is affirmed. 2. The claimant’s entitlement to costs is nil. |
STATEMENT OF REASONS
BACKGROUND
There is a dispute between Fadi Dinkha (the claimant) and the insurer about the amount of weekly benefits payable under Division 3.3 of the MAI Act.
The claimant was involved in a motor accident on 18 October 2021.
The claimant lodged an application for statutory benefits on 3 November 2021.
On 11 November 2021 the insurer declined the claim for weekly statutory benefits on the basis the claimant was not an earner within the meaning of “earner” in the MAI Act.
The claimant requested an internal review of that decision.
On 14 December 2021 the insurer issued their internal review decision which affirmed the original decision that the claimant is not an earner for the purpose of the MAI Act.
The claimant sought a merit review of the insurer’s internal review decision dated 14 December 2021.
On 15 March 2022 I issued a merit review decision in M10477700/21 in which I determined the claimant was an earner within the meaning of “earner” in the MAI Act.
The insurer commenced interim weekly benefits payments to the claimant under s 3.6 of the MAI Act.
On 28 June 2022 the insurer determined the claimant’s pre-accident weekly earnings (PAWE) as nil.
On 20 July 2022 the claimant requested an internal review of the PAWE decision of 28 June 2022.
On 16 August 2022 the insurer refused to conduct an internal review of the PAWE decision.
The claimant has made an application for a merit review regarding the insurer’s PAWE decision.
SUBMISSIONS
Prior to the motor accident the claimant had completed a two week trial with a painting business run by La Ho Pty Limited (La Ho). The director of La Ho is Mr Esho.
The claimant submits PAWE falls under Sch 1, cl 4(2)(a) of the MAI Act on the basis he contends his source of earnings in the two weeks prior to the motor accident was likely to continue for a period of at least six months and would provide earnings on the same or similar basis to that which he had been provided as at the day of the accident. The claimant submits that if the accident had not occurred, he would have continued working as a painter’s labourer for La Ho.
In the alternative, the claimant submits the two week work trial amounted to a change of circumstances and that the arrangement with the employer in relation to this work was “that as long as there were no substantial problems within the initial 2 weeks, the employment would be extended indefinitely”. The claimant submits on this basis he became entitled to earn more than he was earning before he applied for the job and therefore PAWE falls under Sch 1, cl 4(2)(b).
The insurer submits that as the claimant’s pre-accident employment was limited to a discreet two week work trial the claimant was not earning continuously for the purpose of cl 4(2)(a) nor was there a significant change in circumstances for the purpose of cl 4(2)(b). The insurer submits that none of the exceptions under cl 4(2) apply and therefore cl 4(1) applies. Under cl 4(1) the claimant’s PAWE is nil, as no earnings were received in the 12 month period before the motor accident.
REASONS
Issue
The issue for determination is whether the claimant’s PAWE falls under Sch 1, cl 4(1) or under cl 4(2)(a) or (b).
Legislation
The meaning of PAWE is set out in Sch 1, cl 4 of the MAI Act as follows:
“(1) ‘Pre-accident weekly earnings’ , in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.
(2) In the following cases,’pre-accident weekly earnings’ , in relation to an earner who is injured as a result of a motor accident, means--
(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months--the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period--the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b) if subclause (3) applies--the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in the subclause occurred,
(c) if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person--the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.
(2A) The ‘pre-accident period’ , in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.
(3) This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.
Note : Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.
(4) For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.”
(emphasis added)
Evidence
The evidence of pre-accident employment comprises the following:
(a) the claimant’s application for personal injury benefits in which he declares he was employed by La Ho on a “casual” basis;
(b) the claimant’s signed statement dated 20 December 2021 in which he states he was employed by La Ho as a painter’s labourer/assistant for two weeks in October 2021 and was paid $2,000 gross;
(c) a handwritten statement (undated) from Mr Esho which states the claimant was employed by La Ho on a trial basis for two weeks;
(d) a further statement from Mr Esho dated 19 December 2021 which states the claimant was employed by La Ho for a trial period from 4 to 16 October 2021 as a painter’s labourer, and
(e) the claimant’s bank statement which shows he received payment of $2,000 from Mr Esho on 22 October 2021 said to be payment of wages for the trial period of employment with La Ho.
Additionally, the evidence establishes:
(a) the claimant had been on workers compensation for an extensive period (seven years) prior to the work trial with La Ho and had presumably therefore been unfit to work during this time;
(b) the claimant received a substantial settlement of $194,000 paid by solicitors, Carrol & O’Dea into his bank account on 15 October 2022. Whilst details of this settlement have not been provided presumably, Carrol & O’Dea represented the claimant in a workers compensation damages claim which resolved successfully in favour of the claimant for a not insignificant sum, indicating the claimant had a restricted ability to work prior to the date of the motor accident. This is consistent with the claimant’s own statement that he has been unable to work for the past seven years due to a workplace injury, and
(c) the claimant received Jobseeker payments from Centrelink from time to time prior to the motor accident.
The further evidence provided does not impact my previous factual findings in the merit review in M10477700/21. Based on all the material, I remain of the view for the reasons set out in M10477700/21 that the evidence establishes on balance that:
(a) the claimant completed a short work trial for a discreet period;
(b) it was not a probation period, and
(c) the claimant was not further employed at the end of the work trial nor had there been any offer of further employment or any indication that further work would be available to the claimant through La Ho as at the date of the motor accident.
The claimant submits the nature of his arrangement with La Ho was more akin to a probation period than a work trial and that he should not be penalised for Mr Esho’s choice of words. However, this submission is not supported by the evidence for the following reasons:
(a) the nature of an employment arrangement is typically dictated by the employer, not the employee. Mr Esho clearly states on two occasions that the arrangement was a “work trial”;
(b) it is not open to the claimant to alter Mr Esho’s evidence or otherwise coach Mr Esho into providing evidence that suits the claimant’s purposes. There appears to have been some attempt in getting Mr Esho to clarify his evidence by way of the second statement, but Mr Esho has maintained that the arrangement was a “work trial”. I do not accept an inference is available from Mr Esho’s evidence that it was a probation period;
(c) Mr Esho also states the arrangement was not formalised. The arrangement was clearly an informal arrangement, which is not consistent with a probation period;
(d) a probation period is not an employment arrangement in itself. A probation period is simply a term or condition of permanent employment. If it were a probation period rather than a work trial one would expect there to be evidence that the arrangement was permanent, not casual, and evidence of the terms on which either party could terminate employment during a stated probation period. There is no such evidence, and
(e) probation periods are not typically a term of a casual employment contract. This is because there is no utility in a probation period for casual employment as casual employment by its very nature allows either party to terminate the arrangement at any time, without reason and without notice to the other party.
The claimant submits the agreement was always such that the claimant would continue to work following the two week trial period, unless something extraordinary occurred within that trial period. However, there is no evidence to support this contention. Mr Esho has provided two statements yet neither statement suggests that prior to commencement (or completion) of the work trial there was an agreement for continuous employment, as contended by the claimant.
The claimant submits he applied for the job with La Ho but there is no evidence that Mr Esho advertised any position or that there was any formal application by the claimant. Mr Esho is clearly someone known to the claimant prior to the work trial arrangement as on 11 July 2021 Mr Esho transferred $100 to the claimant’s bank account with the description “thanks for the petrol money”. The claimant also continues to received money from Mr Esho from time to time after the motor accident with payments described as “credit to account”.
Given the apparent relationship between Mr Esho and the claimant some caution is to be exercised in considering Mr Esho’s evidence and the extent to which it is truly independent evidence. In any event, Mr Esho’s evidence does not support the claimant’s contention that continuous employment had been arranged prior to the date of the motor accident.
The claimant submits he was scheduled to work on 18 October 2021 for La Ho following completion of his work trial on 16 October 2021 but that this work was cancelled due to inclement weather, which the claimant notes is a common occurrence in the building industry. However, there is no evidence of any arrangement for work on 18 October 2021 and a basic historical weather data check on the Bureau of Meteorology website shows nil rainfall in Sydney on 18 October 2021. Further, this submission only serves to highlight the nature of casual employment that is, that there is no guarantee of work. Accordingly, the claimant could not expect to earn on a full time equivalent basis for each and every week after the two week work trial, even if there were evidence that he would have been further employed by La Ho. For example, presumably the claimant would not have worked on public holidays or during the traditional building industry Christmas/New Year shut down period. The claimant would not have received any sick leave or annual leave and would not have worked during periods of inclement weather, being a common occurrence in the building industry. Accordingly, the payment the claimant received for the work trial is artificial and not representative of what a person could expect to earn every week thereafter in circumstances where the employment arrangement is casual rather than permanent.
As noted in the merit review decision in M10477700/21, a work trial is distinct from a probation period. Employment which includes a probation period automatically continues beyond the probation period unless a party exercises their contractual right to terminate the employment before the end of the probation period. However, a short work trial is not an offer of permanent or ongoing employment and is for a restricted, closed period. Employment under a short work trial arrangement automatically ceases at the end of the trial period, unless there is an offer (and acceptance) of ongoing employment, after the trial period.
I am satisfied on balance that the claimant’s pre-accident employment was limited to a two week work trial and that as at the day of the motor accident the claimant had not been offered further employment by La Ho.
PAWE
Clause 4(1)
The claimant submits his PAWE is $1,000 based on the $2,000 he earned from the short work trial. However, this $2,000 payment for the work trial was paid on 22 October 2021, which is after the date of the motor accident. Pursuant to Sch 1, cl 4(1) PAWE means “the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred”. As earnings for the short work trial with La Ho were not received before the date of the motor accident, but were received after, they are excluded from calculation of PAWE under cl 4(1).
The claimant has not provided evidence of any earnings received in the pre-accident period applicable under cl 4(1) that is, in the period 18 October 2020 to 19 October 2021. Accordingly, as the claimant’s earnings in this period were nil the claimant’s PAWE is nil.
Clause 4(2)(a)
The claimant submits the exception to cl 4(1) under cl 4(2)(a) applies to his circumstances.
I am not satisfied that cl 4(2)(a) applies. For this clause to apply the claimant must have been earning continuously “on the day of the motor accident”.
The definition of earning continuously for the purposes of cl 4(2)(a) is contained in cl 4(4) and provides that an earner earns continuously if he or she obtains earnings:
(a) from permanent employment; or
(b) from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.
The claimant was employed by La Ho on a casual, trial basis. It was not permanent employment.
As to whether the claimant “obtains earnings from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings on the same or similar basis on which the earnings were provided as at that day”:
(a) the definition of earning continuously in cl 4(4) requires the claimant to have been obtaining earnings from a source “on the day of the motor accident”. However, the claimant’s work trial concluded on 16 October 2022, prior to the motor accident and for the reasons set out above, the evidence establishes the claimant was not obtaining earnings from any source on the day of the motor accident, as required by cl 4(4);
(b) Mr Esho may have had an intention to offer further work to the claimant at some point in the future, but as at the date of the accident he had not done so. Accordingly, having completed the work trial with no offer of further employment as yet the claimant was not obtaining earnings from any source on the day of the motor accident, and
(c) the claimant therefore does not meet the definition of earning continuously under cl 4(4) and accordingly, cl 4(2)(a) does not apply.
Even if an arrangement were made as at the day of the motor accident for further work (which is not established on the evidence) I am not satisfied on balance that the claimant was “likely to continue for a period of at least 6 months” to receive earnings “on the same or similar basis” on which he earned during the two week work trial for the following reasons:
(a) the claimant worked the equivalent of full time hours during the two week work trial but casual employment, by its very nature means there is no guarantee of a minimum number of hours each week or of any future work at all;
(b) whilst Mr Esho states he intended to “extend” the employment he does not state that employment would have been extended or available to the claimant for at least six months. It may be that Mr Esho’s intention regarding future employment was dependent on the availability of work from week to week, and
(c) the claimant is said to have been incapacitated for work for seven years prior to the motor accident by reason of a workplace injury. This raises questions about whether the claimant would have been fit to continue working with La Ho on an ongoing basis for at least 6 months, even if he had been offered further employment.
The claimant was not earning continuously on the day of the motor accident, as he had completed his two week work trial prior to this, on 16 October 2021 and had not been offered permanent, ongoing, or continuous employment of any kind as at the date of the accident. Mr Esho simply states in his first handwritten statement that he employed the claimant “for two weeks between 4/10/21 – 16/10/21” on a “trial basis”. In his further statement Mr Esho states:
“I intended to register him following the completion of his trial if his employment continued.
I paid [the claimant] on a casual basis of $25 per hour. Given his employment was a trial, and he was not yet a registered employee, he needed to manage his own taxation obligations. I paid him a total of $2,000.00 for the two weeks he worked with me.
I found [the claimant] to be reliable and trustworthy and I intended to extend his employment.”
(emphasis added)
The language of Mr Esho that “if” employment continued and that he “intended” to extend the employment supports the conclusion that as at the date of the accident the claimant’s work trial had ended and the claimant had not been offered further work by Mr Esho/La Ho. This is also consistent with Mr Esho’s initial statement that the claimant only worked for him on a trial basis for two weeks. Further employment may have been contemplated or intended by Mr Esho, as suggested in his second statement, but contemplation or an intention is not sufficient for the purpose of clause 4(2)(a). The definition of earning continuously for the purpose of cl 4(2)(a) found in cl 4(4) requires that the claimant was obtaining earnings from a source that, as of the date of the motor accident, was likely to continue for six months.
The claimant was not obtaining earnings from any source as at the date of the accident, as his work trial had ended, and he had not yet been offered further employment by La Ho. Further and/or in the alternative, the evidence does not establish on balance that the source of earnings was likely to continue on the same or similar basis for at least six months, even if the claimant and La Ho had arranged for the claimant’s employment to continue after the end of the work trial.
Clause 4(2)(b)
The claimant submits that in the alternative, cl 4(2)b) applies to his circumstances as commencement of employment with La Ho amounted to a significant change in circumstances for the purpose of cl 4(3). However, I do not consider cl 4(3) and in turn, cl 4(2)(b) applies for similar reasons outlined above in relation to cl 4(2)(a). For sub-cl 4(3) to apply the evidence would need to establish the claimant became entitled to “regularly” earn more on a weekly basis than he was earning before his short work trial with La Ho. As noted, the evidence is limited to an intention of Mr Esho to offer further work of some kind to the claimant, but he had not yet done so as of the day of the motor accident.
The evidence confirms there was no offer of ongoing employment prior to the accident and accordingly, no extension of employment beyond the trial period completed prior to the accident. As the work trial was for a closed period of two weeks, the claimant did not become entitled to “regularly” earn more than he had been earning prior to the work trial.
I also do not accept that a two week work trial is a “significant” change in earning circumstances. There needs to not only be a change, but a “significant” change under cl 4(3). The work trial limited the claimant’s entitlement to earn to an entitlement to earn for that two week period only, which is not significant. Nor does this amount to an entitlement to earn more on a “regular” basis given the restrictive nature of a work trial in terms of the period over which a person becomes entitled to earn.
Accordingly, the requirements of cl 4(3) are not satisfied and therefore cl 4(2)(b) does not apply.
CONCLUSION
For the reasons set out above, which should be read in conjunction with the merit review decision in M10477700/21, I remain of the view the claimant’s PAWE assessment falls under cl 4(1).
Under cl 4(1) the 12 month pre-accident period is 18 October 2020 to 17 October 2021. The $2,000 payment by Mr Esho said to be made on behalf of La Ho for the two week work trial was received by the claimant on 22 October 2021, which is outside the 12 month pre-accident period under cl 4(1). This payment is therefore excluded from calculation of PAWE.
On the evidence before me the claimant did not receive any earnings during the period 18 October 2020 to 17 October 2021. The claimant’s PAWE is therefore nil in which case he is entitled to be paid the minimum weekly statutory benefits amount less his post-accident earning capacity (if any) under ss 3.6 and 3.7 of the MAI Act.
Pursuant to Sch 1 of the Motor Accident Injuries Regulation (the Regulation) no costs are payable in respect of a merit review matter under Sch 2(1)(a) of the MAI Act.
Accordingly:
(a) the reviewable decision is affirmed, and
(b) the claimant’s entitlement to costs is nil.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· the application, reply and supporting documentation;
· the MAI Act;
· the Guidelines, and
· Motor Accident Injuries Regulation 2017.
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