Dinkha v Insurance Australia Limited t/as NRMA Insurance
[2022] NSWPICMR 33
•15 March 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Dinkha v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 33 |
| CLAIMANT: | Fadi Dinkha |
| INSURER: | Insurance Australia Limited t/as NRMA Insurance |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 15 March 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017; meaning of earner schedule 1, clause 2 of the MAI Act; short work trial; whether an earner by reason of employment on a trial basis; pre-accident weekly earnings; schedule 1, clause 4 of the MAI Act; Held– the reviewable decision is affirmed. |
| DETERMINATIONS MADE: | The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the MAI Act and is therefore a merit review matter under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017 (the MAI Act). 1. The reviewable decision is set aside, and in its place the following determination is made: (a) the claimant is an earner pursuant to schedule 1(2)(a)(i) of the MAI Act; (b) the insurer is to calculate the claimant’s pre-accident weekly earnings (PAWE) under clause 4 of schedule1 and is to issue a PAWE determination on the basis the claimant meets the definition of earner. |
BACKGROUND
There is a dispute between Fadi Dinkha (the claimant) and the insurer about whether the claimant is an earner under schedule 1, clause 2 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 this decision.
On 14 December 2021 the insurer issued their internal review decision which affirmed the original decision that the claimant is not an earner and therefore not entitlement to payment of weekly benefits.
The claimant seeks a merit review of the insurer’s internal review decision dated 14 December 2021.
SUBMISSIONS
The claimant submits he is an earner under schedule 1(2)(a)(i) of the MAI Act because he had undertaken employment as an assistant painter on a trial basis for two weeks during the eight weeks immediately preceding the day of the accident.
The insurer submits the claimant is not an earner because:
(a) he had not entered into a formal arrangement with an employer to undertake employment, and the employment may have been contingent on training;
(b) the claimant’s employment was on a trial basis; and
(c) there is no evidence that the claimant and his potential employer had entered into or agreed to an undertaking with a view to commencing employment.
REASONS
Issue
The question for determination in this merit review is whether the claimant is an earner on the basis he had undertaken a two-week work trial during the eight-week period immediately prior to the motor accident.
Legislation
The definition of “earner” is set out in schedule 1(2) of the MAI Act as follows:
“2 Meaning of "earner"
A person who is injured as a result of a motor accident is an "earner" if the person is at least 15 years of age and who--
(a) was employed or self-employed (whether or not full-time)--
(i) at any time during the 8 weeks immediately preceding themotor accident, or
(ii)during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii)during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract)—
(i) with an employer or other person to undertake employment, or
(ii) to commence business as a self-employed person, at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or theWorkers Compensation Act 1987. ”
(emphasis added) Consideration
The evidence of employment comprises the following:
(a) the claimant’s application for personal injury benefits in which he declares he was employed by Laho Pty Limited (Laho) earning $2,000 per fortnight
($1,000 per week) gross;
(b) the claimant’s signed statement dated 20 December 2021 in which he states he was employed by Laho as a painter’s labourer/assistant for 2 weeks in October 2021 and was paid $2,000 gross;
(c) a handwritten statement (undated) from Mr Esho, a director of Laho which states the claimant was employed by Laho 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 Laho for a trial period from 4 to 16 October
2021 as a painter’s labourer; and
(e) a screenshot of the claimant’s bank account which depicts a payment of $2,000 to the claimant from Mr Esho on 22 October 2021.
There is no evidence to rebut the claimant’s evidence he was employed by Laho on a trial basis from 4 to 16 October 2021. There is no evidence to support the insurer’s contention that such employment “may have been contingent on training”.
The insurer is concerned that there is no “formal” employment arrangement. However, the meaning of “earner” under schedule 1(2) does not require there to be a “formal” arrangement. It is sufficient for the injured person to have been “employed” at any time during the 8 weeks immediately preceding the motor accident, regardless of whether the employment was pursuant to an oral arrangement or a formal written contract and regardless of whether it was for a trial period.
A probation period is often implemented at the start of the employment relationship to give an employer and employee an opportunity to check that the employee is suitable for the role they've been hired to do. While on probation employees continue to receive the same entitlements as someone who is not in a probation period and are considered employees (see
In other cases, rather than engaging an employee on terms that include a probationary period the employer may engage the employee to complete a short work trial to see how one or more applicants fit into their business. A work trial is different to a probation period, as a work trial is for a discreet period with further employment yet to be determined. In contrast, a probation period is part of a more permanent form of employment contract, which provides for a probation period allowing either party to terminate the contract during the probation period without reason. Employment which includes a probation period automatically continues beyond the probation period, unless a party exercises their contractual right to terminate the employment contract before or at the end of the probation period. In contrast, a short work trial is not an offer of permanent or ongoing employment and is for a restricted 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.
A short work trial is nonetheless a valid employment arrangement. The employer must pay anyone who completes a short work trial. Whilst completing a short work trial the worker is considered a casual employee and must be paid for a specific number of hours of work pursuant to the minimum engagement requirements prescribed by the applicable award. Accordingly, a person completing a short work trial is an employee for the duration of the short work trial (see
The evidence outlined above clearly establishes on balance that the claimant was not employed under any form of ongoing employment contract, including that he was not employed subject to a probation period which is different to a trial period. Rather, the evidence establishes he was employed to complete a short work trial for two weeks in return for which he would be paid $25 per hour for the duration of the trial. For the reasons outlined above the claimant is considered to have been employed during the two-week short work trial. As this short work trial took place during the 8-week period immediately preceding the date of the accident the claimant is an earner pursuant to schedule 1(2)(a)(i).
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 schedule
1(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 Laho were not received before the date of the motor accident, but were received after, they are excluded from calculation of PAWE under schedule 1(4)(1).
As to whether any of the exceptions in clause 4(2) or 4(3) of schedule 1 apply I make the below observations on the evidence available to me.
Clause 4(2)(a)
I am not satisfied that clause 4(2)(a) applies. For this clause to apply the claimant must have been earning continuously on the day of the motor accident. The claimant was not earning continuously on the day of the motor accident, as he had completed his two-week short work trial prior to this, on 16 October 2021 and had not been offered permanent or ongoing employment as at the date of the accident. The director of Laho, Mr Esho, simply states in his fist 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 Fadi 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 Fadi 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 short work trial had come to an end two days prior and the claimant had not been offered further work by Mr Esho. This is also consistent with Mr Esho’s initial statement that the claimant only worked for him on a trial basis for two weeks. On balance, I consider Mr Esho’s original handwritten statement likely represents the correct position that the claimant had worked a two-week trial period only and as at the date of the motor accident, had not been offered further employment. Further employment may have been contemplated or intended by Mr Esho, as suggested in his later statement, but contemplation or an intention is not sufficient for the purpose of clause 4(2)(a).
Pursuant to clause 4(4) an earner is only considered to have been earning continuously if they obtained “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”. A short work trial is not permanent employment. As noted above, this is considered casual (not permanent) employment. As the short work trial had ended and the claimant had not been offered permanent or ongoing employment for a period of at least 6 months (or at all), the claimant was not earning continuously as at the date of the accident and clause 4(2)(a) would not apply.
Clause 4(2)(a1)
There is no evidence to suggest clause 4(2)(a1) applies to the claimant’s circumstances. This clause applies if the claimant was 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 two-year preaccident period.
It is understood from the claimant’s statement that prior to the two week work trial in October 2021 he had not worked since 2014 due to a workplace injury in 2014.
Clause 4(2)(b)
26. I do not consider clause 4(3) and in turn, clause 4(2)(b) apply for similar reasons outlined above in relation to clause 4(2)(a). For subclause 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 Laho. As noted, the evidence is limited to a possible intention of Mr Esho to extend the claimant’s employment. The evidence confirms there was no offer of ongoing employment prior to the accident and accordingly, no extension of employment beyond the trial period prior to the accident. As the work trial was for a discreet, two-week period the claimant did not become entitled to “regularly” earn more.
Clause 4(2)(c)
For the same reasons above in relation to clause 4(2)(a) and 4(2)(b) I do not think clause 4(2)(c) applies to the claimant’s circumstances. Clause 4(2)(c) requires the claimant to have entered into an arrangement with an employer to undertake employment. The only arrangement the claimant had entered into was for the two-week
short work trial. Under that arrangement the claimant could not reasonably have expected to earn anything more than the $2,000 he was paid for the short work trial.
Based on the information before me and the above analysis I am of the view the claimant’s PAWE assessment falls under clause 4(1) of schedule 1. Under clause 4(1) the 12 month pre-accident period is 18 October 2020 to 17 October 2021. As noted, the $2,000 payment by Laho was received by the claimant on 22 October 2021. As it falls outside the pre-accident period it is 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 due to a prior work-related injury. The claimant’s PAWE would therefore be 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 sections 3.6 and 3.7 of the MAI Act.
Whilst workers compensation payments or work injury damages are not earnings for the purpose of calculating PAWE this information is likely to be relevant to any calculation of weekly benefits under section 3.8 of the MAI Act. Under section 3.8 weekly benefits are calculated based on the difference between the claimant’s pre and post-accident earning capacity. The extent to which the claimant received workers compensation weekly benefits and/or work injury damages (whether a settlement or judgment) may be relevant to assessment of pre-accident earning capacity. Accordingly, it would be prudent for the insurer to request this information for the purpose of any claim for weekly benefits under section 3.8.
In the meantime, although I have expressed a view above regarding calculation of PAWE the insurer has not had the opportunity to determine PAWE. A merit review regarding the amount of the claimant’s PAWE is therefore premature. It is appropriate that the insurer first have the opportunity to consider the documents and other information from the claimant, request further information or documents as may be appropriate and to then determine PAWE. If the insurer’s PAWE decision is disputed the claimant must first make an application for internal review by the insurer before being entitled to seek a merit review in relation to PAWE.
For the above reasons, this current merit review is limited to a decision on whether the claimant is an earner for the purpose of the MAI Act and does not make a final determination on PAWE.
CONCLUSION
32. The reviewable decision is set aside, and in its place the following determination is made:
(a) the claimant is an earner pursuant to schedule 1(2)(a)(i) of the MAI Act;
(b) the insurer is to calculate the claimant’s pre-accident weekly earnings (PAWE) under clause 4 of schedule 1 and is to issue a PAWE determination on the basis the claimant meets the definition of earner.
LEGISLATION AND GUIDELINES
33. 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.
Katherine Ruschen
Merit Reviewer
Personal Injury Commission
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