Eftimovski v Toll Global Express Courier

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Eftimovski v Toll Global Express Courier [2012] NSWPIC 288
APPLICANT:	Boro Eftimovski
RESPONDENT:	Toll Global Express Courier
MEMBER:	Rachel Homan
DATE OF DECISION:	12 August 2021
CATCHWORDS:	WORKERS COMPENSATION- Claim for ongoing weekly benefits; dispute as to proper calculation of PIAWE and quantification of incapacity; applicant found to have sustained an injury pursuant to sections 4 and 9A in previous Workers Compensation Commission proceedings; previous Certificate Of Determination indicated that the issue of “worker” was conceded; applicant paid through a partnership with his spouse which had an ABN; new information that spouse performed duties in the partnership at an hourly rate; Gerob Investments Ballina Pty Ltd t/as Beach Life Homes v Compton considered; Held- the issue of “worker” not disputed in these proceedings; other than the GST payments, all of the monies paid by the respondent was income received by the applicant for work performed in employment with the respondent; orders made for ongoing weekly compensation.
DETERMINATIONS MADE:	1. The pre-injury average weekly earnings figure is $1,803.
ORDERS MADE:	2. The respondent to pay the applicant weekly compensation as follows: (a) pursuant to s 36(1) from 22 May 2020 to 20 July 2020 at the rate of $1,713 ($1,803 x 0.95); (b) pursuant to s 37(1) from 21 July 2020 to 30 October 2020 at the rate of $1,442 ($1,803 x 0.80); (c) pursuant to s 37(3)(a) from 31 October 2020 to 3 December 2020 at the rate of $1,174 ($1,803 x 0.80 less $268); (d) pursuant to s 37(1) from 4 December 2021 to 4 January 2021 at the rate of $1,442 ($1,803 x 0.80); (e) pursuant to s 37(3)(a) from 5 January 2021 to 31 March 2021 at the rate of $1174 ($1,803 x 0.80 less $268); and (f) pursuant to s 37(3)(a) from 1 April 2021 to date and continuing at the rate of $1,216 ($1,855 x 0.80 less $268).

STATEMENT OF REASONS

BACKGROUND

Mr Boro Eftimovski (the applicant) was engaged as a “contract delivery driver” by Toll Global Express Courier (the respondent) from 2008 onwards. On 21 May 2020, the applicant injured his left shoulder when he slipped out of his van.

In previous proceedings before the Workers Compensation Commission[1], a Certificate of Determination was issued by Arbitrator Harris, as he then was, on 28 January 2021. It was determined that the applicant sustained an injury to his left shoulder within the meaning of
ss 4(a) and 9A of the Workers Compensation Act 1987 (the 1987 Act). A claim for weekly compensation was discontinued. A general order was made for the respondent to pay the applicant’s s 60 expenses. Arbitrator Harris noted that it was admitted at the arbitration hearing that the applicant was a “worker”.

[1] 5744/20

On 15 March 2021, the insurer notified the applicant of a Work Capacity Decision (WCD) made in accordance with s 43 of the 1987 Act. Amongst other things, it was decided:
(a) the applicant had a current work capacity for four hours a day three days a week from 5 January 2021; and
(b) the applicant’s pre-injury average weekly earnings (PIAWE) was calculated to be $457.15 per week.
An application for an Interim Payment Direction was lodged in the Commission but discontinued on 4 May 2021.
The present proceedings were commenced on 5 May 2021 by an Application to Resolve a Dispute (ARD). The applicant sought an order for weekly compensation from 21 May 2020 to date and continuing pursuant to ss 36 and 37 of the 1987 Act at the maximum weekly compensation rate[2].
[2] Section 34 of the Workers Compensation Act 1987.

PROCEDURE BEFORE THE COMMISSION

The parties appeared for teleconference on 3 June 2021. On that occasion, the issues in dispute were defined. The parties were unable to reach agreement and it was determined that the outstanding dispute would be determined following the lodgement of written submissions.
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.

ISSUES FOR DETERMINATION

The parties agree that the following issues remain in dispute:

(a) the proper calculation of PIAWE; and
(b) the quantum of the applicant’s entitlement to weekly compensation from 21 May 2020 to date and continuing.

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) written submissions lodged by the applicant on 1 July 2021;

(d) written submissions lodged by the respondent on 22 July 2021; and

(e) written submissions in reply lodged by the applicant on 29 July 2021.

Applicant’s evidence

The applicant’s evidence is set out in a written statement made by him on 29 July 2020. The applicant stated that he commenced employment as a contract delivery driver with the respondent sometime in 2008 and had been employed continuously on a full-time basis since then. The applicant had not been engaged in employment with any other employers.
The applicant described his work duties and the injury to his left shoulder on 21 May 2020.
The applicant was in the driveway of his home, laying carpet in the rear of his delivery van to prevent stock from slipping or tipping over during freightage.
The applicant’s wife, Mrs Linda Eftimovski, came out to assist in laying the carpet, then returned inside while the applicant finished the job.
When the applicant was finished, he walked backward out of the van with the doors open. As he stepped back out of the van, the applicant placed his foot on the rear step of the van, lost his footing, and fell backwards onto the concrete driveway.
Mrs Eftimovski administered first aid and drove the applicant to hospital. The applicant was discharged into the care of his general practitioner. After undergoing investigations and physiotherapy, the applicant was referred to surgeon, Dr Minas Petrelis, who performed a left shoulder rotator cuff repair and acromioplasty on 26 June 2020.
The applicant described his current symptoms and disabilities as:
“•      I am unable to drive and am fitted with a specialised sling 24/7.
•       I need assistance getting dressed and showering, which my wife helps me with.
•       I need to avoid using my left arm for anything. This is particularly difficult as I am left-handed.”

Request for further particulars

On 12 February 2021, the respondent forwarded a request for further particulars, in relation to the applicant’s partnership, "B & L Eftimovski Family Partnership". The particulars requested related to the applicant’s wife’s duties in the partnership; the number of hours she worked per week; and her hourly rate. Mrs Eftimovski’s individual tax return from 2019 and payment summaries for the partnership were requested.
The applicant’s solicitor responded to the request for further particulars on 2 March 2021 as follows:
“1. Duties included:
- Deliveries to select customers including weekends
- Reconciliation of delivery manifests
- Stocktake and online orders, including pickup
- Attending to bookings for the vehicle
- Office administration including coordination of insurances and tax preparation
2. Usually, 15 to 20 hours per week.
3. $34 per hour.”

Tax returns

The Partnership Tax Return for “B Eftimovski & L Eftimovski” for the 2018-19 tax year showed a total business income of $88,492. A total of $40,306 was deducted for business expenses including depreciation expenses of $24,446 and motor vehicle expenses of $10,362. This left a net income of $48,186. The return showed a distribution of $24,093 (50%) to the applicant and the same amount to Mrs Eftimovski.
The applicant’s individual tax return for the 2018-19 tax year showed a total income of $26,272 and a taxable income of $23,772. A sum of $24,093 was distributed to the applicant from the partnership.
Mrs Eftimovski’s individual tax return for the 2018-19 tax year showed a total income of $25,854 and a taxable income of $23,754. A sum of $24,093 was distributed to
Mrs Eftimovski from the partnership.

Pay Advice Summary

A “Pay Advice Summary” prepared by the respondent in respect of the applicant indicates that a total of $78,069.47 in “courier payments” was paid between 1 July 2018 and 30 June 2019. In addition, the applicant was paid $7,807.09 in GST payments as well as amounts for tax and GST allowances / deductions.

Bank records

Transaction summaries for a St George Bank account showing deposits from “Toll Transport” between 28 May 2019 and 28 May 2020 is attached to the ARD. A handwritten annotation on the document states “NB. This is records of our gross wages”.

Work Capacity Decision

The insurer made a WCD on 15 March 2021.
The WCD indicated that the following was taken into account in calculating the applicant’s PIAWE:
“…we have also taken into consideration that you are contracted to us via your partnership B & L EFTIMOVSKI (ABN 42 447 608 519). We have reviewed all your produced financial records, and your response to our request for particulars in relation to the circumstances/agreement in place regarding the shared income between yourself and your wife.
Your partnership generated an income of $88,492.00. Of this income, your partnership claimed $48,186 in expenses. Your total taxable income/wage totalled $23,772. Your wife's taxable income/wage totalled $23,776.00.
The factors relevant in the consideration of your PIAWE include your wife being a partner in your partnership. She is also drawing an income from it. This cannot be ‘undone’ for the purposes of your PIAWE calculation.
You have advised us that your wife's duties to draw an income from the earnings of the partnership include:
• Making deliveries to select customers including weekends;
• Reconciliations of delivery manifests;
• Stocktake and online orders, including pickup;
• Attending to bookings for the vehicle; and
• Office administration including coordination of insurances and tax preparation.
Your wife works 15 - 20 hours a week for $34.00 an hour. As noted above, last year she earned $23,754.00 from the partnership wage.
Partners are considered self-employed, but may be considered deemed workers if the required circumstances exist (as was determined in the WCC decision 5744/20). For a self-employed person who is deemed to be a worker under the legislation, PIAWE is based on the gross income/salary/wage of the worker for the 12 months prior to the injury. Therefore, in this instance, your records from the past financial year (prior to the injury) are being used to determine your PIAWE.
You work through a business name and an ABN. You pay GST as evidenced by the returns, and received additional GST payments from us based on the individual completion of your contracts of service. Your individual tax returns demonstrate your wage drawn from the partnership. The tax returns also disclose claiming business expenses not usually associated with employment such as large amounts for motor vehicle expenses, printing and stationery amongst other that may be termed "ordinary business expenses". - similar to Al Saedi v ST CH Products Pty Ltd [2016] NSWWCC 20.”
The insurer referred to the arbitral decision in Chalmers v Cadbury Schweppes Pty Ltd [3], where the applicant was also in a partnership.
[3] [2005] NSWWCC 157.
The applicant’s pre-injury earnings were said to have arisen from work undertaken by the applicant’s partnership pursuant to contracts made with the respondent and other apparent work, and not simply paid as wages.
It was determined that the applicant’s PIAWE was $457.15 per week.
It was noted that the applicant had not received any payments of weekly compensation to date. The applicant had provided Certificates of Capacity showing no current work capacity from 21 May 2020 to 30 October 2020 and, from 5 January 2021 to 5 March 2021, capacity for work at four hours a day, three days a week.
During the first entitlement period from 21 May 2020 to 20 August 2020 the applicant was paid $5,645.80 (being $457.15 x 0.95 x 13) pursuant to s 36(1) of the 1987 Act.
During the second entitlement period until 30 October 2020, the applicant was paid $3,657.20 (being $457.15 x 0.80 x 10) pursuant to s 37(1) of the 1987 Act.
From 5 January 2021 to 5 March 2021, the applicant was paid $2,925.76 (being $457.15 x 0.80 x 8) pursuant to s 37(3) of the 1987 Act.

Certificates of capacity

Amongst the materials in evidence are certificates of capacity certifying the following:
(a)    from 21 May 2020 to 30 October 2020 – no current work capacity;
(b)    from 22 July 2020 to 3 November 2020 - capacity for some type of work at unspecified days / hours;
(c)    from 4 November 2020 to 4 December 2020 – capacity for some type of work at unspecified days / hours;
(d)    from 27 November 2020 to 4 January 2021 – capacity for some type of work at unspecified days / hours;
(e)    from 4 December 2020[4] to 4 January 2021 – no current work capacity;
(f)    from 5 January 2021 to 5 March 2021 – four hours a day three days per week;
(g)    from 6 March 2021 to 6 April 2021 - four hours a day three days per week; and
(h)    from 7 April 2021 to 7 May 2021 - four hours a day three days per week.
[4] Incorrectly stated to be 4 December 2021 in the certificate.
The certificate covering the period 21 May 2020 to 30 October 2020 was issued by the applicant’s surgeon, Dr Petrelis, and indicates that the applicant was expected to undergo surgery and would have no current work capacity for “greater than 3 months”. The applicant had normal sitting and standing tolerances, no lifting or carrying capacity and limited or restricted tolerances in all other areas.
The other certificates were issued by the applicant’s general practitioner, Dr Singh. Those covering the period from 22 July 2020 onwards, in which the applicant is certified as having some work capacity, indicate that the applicant had a lifting / carrying capacity of 5 kg and no pushing / pulling ability. No restrictions were identified with respect to sitting, standing, bending / twisting or driving.

Applicant’s submissions

The applicant relies on written submissions prepared by Mr Craig Tanner of counsel, dated 1 July 2021. Mr Tanner noted that the applicant was a worker, employed by the respondent. There was no dispute that the applicant was entitled to receive weekly payments of compensation.
Reference was made to the definition of “pre-injury average weekly earnings” in cl 2(1) of Schedule 3 to the 1987 Act. The gross pre-injury earnings received by the applicant for work in employment with the respondent could be ascertained by examining the bank statement and noting the amounts paid by the respondent in the 52-week pre-injury period. It was submitted that the earnings received by the applicant in the relevant 52-week period totalled $103,158.16. This figure resulted in a weekly average of $1,983.81, which was the PIAWE amount contemplated by the definition in Sch 3.
The applicant submitted:
“The sole consideration is the quantum of earnings received prior to the injury. How a worker arranges his or her affairs, or accounts for his or her income, following receipt of each payment, cannot alter the reality as to earnings actually received in the pre-injury period. Depreciation of the applicant’s vehicle, or his decision to pay an amount to his wife (who is not an employee of the respondent) are not matters of any concern or relevance to the respondent, and have no bearing on the issue to be determined having regard to the statutory definition of pre-injury average weekly earnings.”
It was submitted that the applicant was dependent upon regular weekly income with a value of approximately $1,984 prior to the injury. The respondent’s approach to the calculation of PIAWE was said to:
“…frustrate one of the important system objectives set out at section 3 of the Workplace Injury Management and Workers Compensation Act 1998, i.e. ‘to provide injured workers and their dependants with income support during incapacity’.”

It was noted that the respondent’s PIAWE figure of $457.15 was less than the minimum wage at the date of injury, being $740.80 per week.
Attention was drawn to inconsistencies in the certificates of capacity issued in late 2020. The applicant was certified as having no current capacity between 21 May 2020 and 30 October 2020 and again from 4 December 2020 to 4 January 2021. In the circumstances, the applicant claimed that he had no current work capacity from the date of injury until 4 January 2021.
In the period from 5 January 2021, it was noted that the respondent had provided no evidence as to work for which the applicant was suited, and the respondent had not provided suitable duties to the applicant. It was submitted that, given his restrictions, the applicant could not work at a rate of remuneration higher than the minimum wage, which was $19.84 per hour. The applicant’s earning capacity, working 12 hours per week, would be $238.08.

Respondent’s submissions

The respondent relies on written submissions prepared by Mr Misha Hammond of counsel, dated 21 July 2021.
The respondent submitted that the applicant was a deemed worker. It was noted that the applicant worked in a partnership along with his wife. The applicant had provided evidence that his wife performed duties in the partnership including making deliveries to select customers including on weekends, reconciliation of delivery manifests, stock-take and online orders including pickup, attending to bookings for the vehicle, and office administration. The applicant’s wife worked up to 20 hours per week and was remunerated at a rate of $34 per hour.
It was noted that the applicant worked through the partnership and had an ABN. The applicant paid GST and received additional GST payments from the respondent based on the completion of individual contracts of service.

The applicant’s individual tax returns demonstrated that he drew a wage from the partnership.
The respondent submitted:
“The Applicant's pre-injury financial earnings have arisen from work undertaken by the Partnership pursuant to contracts made with the Respondent and other apparent work conducted by his partner, and not simply paid as wages earned from physical labour as a normal employee would be determined.”
Neither the applicant’s wife’s income from the partnership nor the additional 10% GST payments paid by the respondent should be taken into account in calculating the applicant’s income.
The applicant’s attempt to characterise the payments made into his bank account as being solely his income was said to be misconceived. The applicant’s wife did actual work and to submit otherwise would be to concede that the tax deductions claimed and/or the income derived by the applicant’s wife were sham devices to avoid tax.
The respondent submitted that the aggregate of earnings received by the applicant's partnership in the relevant period prior to the alleged injury (excluding GST payments) was $78,069.47. This resulted in pre-injury average weekly earnings of $1,501.33. This figure represented the value of the work performed by the partnership. The respondent submitted:
“It will be necessary for the Commission to look behind the corporate veil and to identify what the nature of the relationship truly was in the Partnership and that the arrangement has led to a derivative of income declared to the Australian Taxation Officer by each Partner. The Applicant's wife works 15 - 20 hours a week for $34.00 an hour. At the time of the Applicant's claimed injury, she was also assisting in the re-carpeting of their shared vehicle. As noted above, last year she earned $23,754.00 from the partnership wage.”

The respondent submitted that the applicant’s PIAWE figure was not the correct calculation for the weekly average of the gross earnings received by the worker for work and employment in which the worker was engaged at the time of the injury. The applicant’s attempt to include GST payments and his wife’s income in his PIAWE calculation was contrary to the legislation.
The facts of this case were said to be distinguishable from those in Gerob Investments Ballina Pty Limited t/as Beach Life Homes v Compton[5] which involved the alleged worker’s earnings being paid to a partnership involving him and his wife. The applicant’s wife in that case performed no work in the partnership save for keeping the books. The worker performed all of the income producing work. Without his work, the partnership would have had no practical existence. It was unlikely that the employer would have contracted with the partnership if the worker had not been part of it.
[5] [2007] NSWWCCPD 180.
In the present case, the applicant’s wife utilised the vehicle to make deliveries and was an active member in the partnership. The partnership was not merely an arrangement for the purposes of tax efficiency.
The respondent submitted that the applicant had supplied no evidence as to his capacity in the period between 30 October 2020 to 5 January 2021.
The respondent maintained that the applicant’s PIAWE was $457.15 per week based on the income declared to the Australian Tax Office.
The respondent submitted that the applicant had the same earning capacity as his wife. That is, $34 per hour for 12 hours work per week. No reason had been provided as to why the applicant’s wife was unable to assist the applicant in completing deliveries. The applicant’s earning capacity was quantified at $408 per week. This left a $0 entitlement to weekly compensation pursuant to s 37 of the 1987 Act.

Applicant’s submissions in reply

Mr Tanner prepared written submissions in reply, dated 29 July 2021.
The applicant submitted that the respondent, despite acknowledging the correct definition of PIAWE, had argued its case by reference to case law which preceded the enactment of that term.
The applicant submitted:
“The parties to this dispute are the applicant and the respondent. Their relationship is that of employee and employer. Having regard to the definition of pre-injury average weekly earnings, the applicant is the “injured worker” who received earnings from the respondent for employment in which he was engaged at the time of injury.
The applicant needed to attend to various administrative tasks in order to discharge his obligations to the respondent as a contract delivery driver, and earn the remuneration received each week. It was a matter for him whether to attend to those tasks himself, to engage and remunerate an administrative assistant, or to rely on support from his wife (whether allocating “profit” to her or not).
The applicant’s wife was not employed by the respondent. She was not a worker with rights or obligations in relation to the respondent. She had no contractual rights vis-à-vis the respondent, had no rights to be remunerated by the respondent for any tasks she performed, had no industrial rights enforceable against the respondent, and had no rights enforceable against the respondent under workers compensation legislation.
She assisted the applicant in miscellaneous respects, enabling the applicant to be more efficient in discharging his duties as a worker in the employ of the respondent, and relieving him of tasks he would otherwise be required to perform in order to earn the remuneration payable to him each week.
The respondent was bound to remunerate the applicant for the work he performed as a contract delivery driver. It did so each week in accordance with the rates of remuneration agreed upon and the extent of the deliveries attended to by the applicant.”
The applicant submitted that the remuneration payable to the applicant, pursuant to the contract between the applicant and the respondent, and received by him each week, was not affected, in any respect, by the extent of assistance that might have been provided, in that week, to the applicant by his wife.
It was submitted that an agreed (and actual) rate of remuneration cannot be deemed to be less because a worker elects to incur expenses in performing his duties. An employer cannot legitimately suggest that its obligation to remunerate a worker is diminished if the worker incurred expenses such as paying for administrative support, a more expensive vehicle, or repairs.
The applicant submitted the fact that the figure “distributed” to the applicant’s wife was the same figure as that “distributed” to the applicant confirmed that it did not represent actual remuneration earned by and payable to the applicant’s wife.
It also followed that accounting for depreciation, following the end of a financial year, could not affect the earnings that were payable by the respondent, or actually received by the applicant.
The cases on which the respondent relied were not relevant to determination of PIAWE, a defined statutory term which was introduced in 2012.
The applicant acknowledged that his PIAWE should exclude GST. The total earnings, excluding GST, were $93,780.
The revised pre-injury weekly average was therefore $1,803.

FINDINGS AND REASONS

Relevant law

Section 33 of the 1987 Act provides that if total or partial incapacity for work results from an injury, the compensation payable by the employer to the injured worker shall include a weekly payment during the incapacity.
Section 36 of the 1987 Act relevantly provides:
“36 Weekly payments during first entitlement period (first 13 weeks)
(1) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the first entitlement period is to be at the rate of 95% of the worker’s pre-injury average weekly earnings.”
Section 37 of the 1987 Act provides:
“37   Weekly payments during second entitlement period (weeks 14–130)
(1)    The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the second entitlement period is to be at the rate of 80% of the worker’s pre-injury average weekly earnings.
(2)    The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for not less than 15 hours per week is entitled during the second entitlement period is to be at the lesser of the following rates—
(a)  95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b)  the maximum weekly compensation amount, less the worker’s current weekly earnings.
(3)    The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the lesser of the following rates—
(a)  80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b)  the maximum weekly compensation amount, less the worker’s current weekly earnings.”
The expressions “current work capacity” and “no current work capacity” are defined in cl 9 of Sch 3 of the 1987 Act as:
“(1) An injured worker has current work capacity if the worker has a present inability arising from the injury such that the worker is able to return to the worker’s pre-injury employment, or is able to return to work in suitable employment, but the weekly amount that the worker has the capacity to earn in any such employment is less than the weekly amount that the worker had the capacity to earn in that employment immediately before the injury.
(2) An injured worker has no current work capacity if the worker has a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment.”
The expression “suitable employment” is defined in s 32A of the 1987 Act as:
“suitable employment, in relation to a worker, means employment in work for which the worker is currently suited—
(a)     having regard to—
(i)  the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii)  the worker’s age, education, skills and work experience, and
(iii)  any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv)  any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v)  such other matters as the Workers Compensation Guidelines may specify, and

(b)     regardless of—
(i)  whether the work or the employment is available, and
(ii)  whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii)  the nature of the worker’s pre-injury employment, and
(iv)  the worker’s place of residence.”

Pre-injury average weekly earnings

The expression, “pre-injury average weekly earnings” is defined for the purposes of ss 36 and 37 in cl 2 of Sch 3 to the 1987 Act:
“2   Meaning of “pre-injury average weekly earnings”
(1)     Pre-injury average weekly earnings, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note—
See also clauses 3–5 relating to modifications of pre-injury average weekly earnings by agreement and in relation to apprentices, trainees and persons aged under 21 years.
(2)    Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).

(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, or
(b)  to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.

(4) If the amount of a worker’s pre-injury average weekly earnings is less than any minimum amount prescribed by the regulations as applicable to the worker, the amount of the worker’s pre-injury average weekly earnings is taken to be that minimum amount. Different minimum amounts may be prescribed for different classes of workers, including part-time and full-time workers.”

The expression “earnings” is further defined in cl 6 of Sch 3 to the 1987 Act:
“6   Meaning of “earnings”
(1)    The earnings received by a worker in respect of a week means the amount that is the income of the worker received by the worker for work performed in any employment during the week.
(2)    The income of a worker does not include—
(a)  any minimum amount paid to a superannuation fund or scheme in respect of the week to avoid an individual superannuation guarantee shortfall, within the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth, for the worker, or
(b)  the monetary value of any non-monetary benefit provided to the worker for the performance of work by the worker, or
(c)  any payment in respect of loss of earnings under a scheme to which the workers compensation legislation relates or under any other insurance or compensation scheme, or
(d)  any payment made without obligation by the employer.

(3) However, the monetary value of a non-monetary benefit of a worker is to be included as part of the income of the worker for the purposes of the calculation of the weekly payments of compensation payable to the worker if the worker is not entitled to the use of the benefit.
(4) The Workers Compensation Guidelines may make provision for or with respect to the matters to be taken into account for the purposes of determining whether a benefit has been provided to a worker or whether the worker is entitled to the use of a benefit.”

The legislative framework described above applies to injuries received on or after 21 October 2019 and so applies in the circumstances of this case.
Applying the legislative framework to the facts of this case, it is necessary to determine what were the gross pre-injury earnings received by the applicant for work in any employment in which the applicant was engaged at the time of the injury. In making this determination, no regard is to be had to earnings in employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury.
The date of injury is 21 May 2020. The relevant period is therefore the 52 week period ending on 20 May 2020.
The pay advice summary attached to the Reply does not cover this entire period as it commences on 1 July 2019. Similarly, the tax returns in evidence do not cover the relevant period, as they relate to the period 1 July 2018 to 30 June 2019. The best evidence of the amounts paid by the respondent in the relevant period is that contained in the bank transaction statements. That has been calculated by the applicant to total $103,158.16. That calculation is not disputed by the respondent and I adopt it.
In the applicant’s submissions in reply, it was properly conceded that payments of GST should be deducted from that figure. Payments of GST are not earnings received by the applicant for work in any employment but tax payable to the government. The total of the payments in the relevant period, excluding GST, was calculated at $93,780.
The applicant ultimately submits, notwithstanding the earlier claim for weekly compensation at the maximum weekly compensation rate and the figure identified in his primary submissions, that the correct PIAWE is the weekly average of $93.780, being $1,803.
The respondent maintains that the PIAWE should be the figure set out in its WCD, being $457.15. That figure is the weekly average of the taxable income declared by the applicant to the Australian Tax Office for the 2018-19 financial year. Noting that the relevant period for the purposes of calculating PIAWE and the 2018-19 tax year are not one and the same, I accept that on this basis alone the respondent’s figure cannot be correct.
It is necessary to consider, however, whether any different method should be adopted for determining the gross pre-injury earnings received by the applicant for work in any employment having regard to the applicant’s partnership arrangement.
Having regard to the financial records in evidence it appears that the individual taxable income declared to the ATO by the applicant included the sum of $24,093 being an amount distributed to the applicant from the partnership with his wife. The same amount was distributed to Mrs Eftimovski. The balance of the partnership’s income, a total of $40,306, was deducted for expenses including depreciation expenses of $24,446 and motor vehicle expenses of $10,362 in the Partnership tax return.
I do not accept that the distribution to the applicant (and Mrs Eftimovski) from the partnership in the 2018-19 tax year necessarily equates to “earnings received by the worker for work in employment”.
I also see no basis for deducting the expenses identified in the Partnership tax return in determining the “earnings received by the worker for work in employment”. I note that with regard to this issue, the respondent has referred to the arbitral decision in Al Saedi v ST CH Products Pty Ltd[6]. In that case, however, it was found that no weekly compensation was payable as the applicant was not a “worker” or “deemed worker”. The business expenses were taken into account only in determining that issue.
[6] [2016] NSWWCC 20.
The issue of “worker” / “deemed worker” is not in dispute in these proceedings. Arbitrator Harris’ reasons state that it was conceded in the previous Workers Compensation Commission proceedings that the applicant was a “worker”. The respondent’s submissions and the WCD both seem to suggest, however, that the applicant is a “deemed worker”.
The expression “worker” is defined in s 4 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) as meaning “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)”.
The workers compensation legislation deems certain other people to be workers for the purposes of claiming workers compensation. Section 5 and Sch 1 of the 1998 Act deals with the concept of deemed employment of workers. Schedule 1, cl 2 provides as follows:
“Outworkers and other contractors
2 (1) Where a contract:
(a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) [Repealed]
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.”
In Gerob Investments Ballina Pty Ltd t/as Beach Life Homes v Compton[7], Mr Compton’s earnings were paid to a partnership involving him and his wife. The partnership had an ABN. Deputy President Roche observed at [52]:
“It was not disputed that Mr Compton was in partnership with his wife and that he split his income 50:50 with her. The Arbitrator’s finding was that Mr Compton did not employ labour. That finding was consistent with the evidence and is not challenged. The importance of the Appellant Employer’s submission that Mr Compton “conducted his business affairs in partnership with his wife” (emphasis added) is dependent on whether he conducted a business. For the reasons set out below in paragraphs [75] and [76] I do not believe Mr Compton conducted a business. The fact that he directed that his earnings be paid to a partnership was not determinative of the issue of worker (see paragraphs [59] and [60] below).”
[7] (2007) NSWWCCPD 18.
After reviewing a number of authorities going to “worker”, Roche DP found no error in the arbitrator’s conclusion that there was a contract to carry out work between Mr Compton and the alleged employer, rather than between the partnership and the alleged employer and that Mr Compton was, therefore, a “worker”. Deputy President Roche observed at [59]:
“Mr Compton’s wife performed no work in the partnership save for keeping the books. Mr Compton performed all of the income producing work. Without his work the partnership would have had no practical existence. Though it is not expressly covered in the evidence, it is doubtful that Beach Life Homes would have contracted with the partnership if Mr Compton had not been a part of it. Effectively Mr Compton worked as a sole practitioner, but he dealt with his income in a tax effective manner on the advice of his accountant. The Appellant Employer’s dealings were always with Mr Compton.”
The same approach was taken by Arbitrator Snell, as he then was, in Mortimer v JFTA Pty Limited[8], in similar circumstances:
“On the evidence in the current matter, in my view the respondent contracted with the deceased, rather than with the partnership. The only member of the partnership who supplied any services to the respondent was the deceased. The hours that were remunerated were those worked by the deceased. The applicant did not need to be on the site, she went there to accompany the deceased.
…
[8] [2015] NSWWCC 303.
The fact that the deceased was a member of a partnership which had an ABN, and that the partnership earnings were divided equally between the deceased and the applicant, are also factors which tend to militate against a contract of service. However, as in Gerob Investments, all of the income producing work was carried out by the deceased. The partnership, by the relevant time, appears to have been nothing more than an arrangement “for tax purposes”. It is quite unlikely the respondent would have contracted with the partnership, other than to secure the services of the deceased. The existence of the partnership is “not determinative of the issue of worker” (see Gerob Investments at [52]).”

In both of the above cases, “the worker” was found in the alternative to be a “deemed worker”.
Neither case is, however, of particular assistance on the question of how PIAWE should be calculated in these proceedings as it either did not arise for consideration or was not determined in accordance with the legislative framework that applies in this case.
The respondent has also referred to the arbitral decision in Chalmers v Cadbury Schweppes Pty Ltd[9]. In that case the applicant had worked in partnership with a boyhood friend for in excess of 20 years. They owned trucks with which they carried out work on a contract basis. They split the partnership income. In that case, however, the Arbitrator was not satisfied that the applicant had any incapacity. The legislative framework which applied was that in force prior to the 2012 amending Act. There was no call for the arbitrator to determine “PIAWE” as it applies in these proceedings and I draw no assistance from that decision.
[9] [2005] NSWWCC 157.
It is significant in the present case that subsequent to the previous Workers Compensation Commission proceedings, the applicant provided particulars to the respondent indicating that Mrs Eftimovski performed work in their partnership consisting of:
“- Deliveries to select customers including weekends
- Reconciliation of delivery manifests
- Stocktake and online orders, including pickup
- Attending to bookings for the vehicle
- Office administration including coordination of insurances and tax preparation.”
This work was said to performed for 15-20 hours per week. Mrs Eftimovski’s hourly rate was said to be $34.
This information does not appear to have been available prior to the concession as to “worker” in the previous proceedings. It is a basis on which the approach taken to the issue of worker in Gerob Investments and Mortimer might be distinguished. Unlike the partners in those cases, this information suggests that Mrs Eftimovski did engage in delivery driving (that is, income producing work) as well as providing administrative assistance to the applicant. The information also raises questions as to the application of “deemed worker” provisions. The issue has not, however, been raised in these proceedings and it is not open to me to determine that question now.
Even if it were open to me to consider that question, the evidence is unsatisfactory. The applicant has not provided an updated statement in these proceedings. Whilst the evidence suggests that Mrs Eftimovski performed 15-20 hours of work per week, it is not clear, for example, how much of that time was spent performing income producing work of making “deliveries to select customers including weekends”. It is possible that much of
Mrs Eftimovski’s time was taken up attending to the other duties identified. It is not possible to ascertain how many hours were spent per week by the applicant, as opposed to
Mrs Eftimovski, in performing income producing work. No invoices, payslips or wage records have been placed in evidence and it is not possible to discern on the evidence before me the identity of the owner of the St George Bank account into which payments were made by the respondent.
The applicant’s submissions in reply are consistent with the applicant being a “worker” akin to those found in Gerob Investments and Mortimer. It is suggested that the monies paid by the respondent were effectively paid to the applicant not the partnership. The applicant submits that the respondent was bound to remunerate the applicant for the work he performed as a contract delivery driver. It did so each week in accordance with the rates of remuneration agreed upon and the extent of the deliveries attended to by the applicant.
It is suggested that Mrs Eftimovski merely “assisted” the applicant in miscellaneous respects, enabling the applicant to be more efficient in discharging his duties as a worker in the employ of the respondent, and relieving him of tasks he would otherwise be required to perform in order to earn the remuneration payable to him each week.
Other than the particulars that Mrs Eftimovski had an “hourly rate” of $34 and usually performed certain duties, there is no evidence before me that Mrs Eftimovski was “employed” by the partnership or the respondent. Mrs Eftimovski’s individual tax return does not indicate that she was paid any income by way of wages or salary, only the distribution from the partnership. There are no payslips, payment summaries, contracts or other evidence of payment of wages or salary to demonstrate “employment” in relation to Mrs Eftimovski.
I am not satisfied on the evidence before me that any distribution from the partnership to
Mrs Eftimovski was income received for work performed in any “employment”.
On the other hand, I accept that it has been conceded that the applicant was “employed” by the respondent as a “worker”.
In the particular, and unusual, circumstances of this case, I am satisfied that, other than the GST payments, all of the monies paid by the respondent into the St George account, were income received by the applicant for work performed in employment with the respondent. The fact that Mrs Eftimovski in fact performed some of that work and that incomes was directed to be paid to a partnership, does not, in my opinion, change the nature of those payments. This approach is consistent with Gerob Investments and Mortimer.
There is no evidence of work in any other employment by the applicant in the relevant period or of any non-monetary benefit.
I am satisfied that the gross pre-injury earnings received by the applicant for work in any employment in which the applicant was engaged at the time of the injury therefore totalled $93,780. The weekly average of those earnings was $1,803. I am not satisfied that there is any basis for any modification or adjustment of that figure pursuant to subclauses (3) – (5) of cl 2 of Sch 3 to the 1987 Act.
I find that the relevant PIAWE for the purposes of ss 36 and 37 of the 1987 Act is $1,803.
That figure will be subject to periodic indexation in accordance with s 82A of the 1987 Act.
The indexation number which applies in respect of 1 October 2020 is 0.9795[10]. Applying this number to vary the amount of a weekly payment to a worker, in accordance with s 82A of the 1987 Act, has the effect of reducing the amount. Accordingly, under s 82C(a) of the 1987 Act, the variation is deemed not to have taken effect.
[10] SIRA Workers Compensation Benefits Guide - Part 2.4.
From 1 April 2021, the PIAWE is indexed at the rate of 1.0288[11] resulting in a PIAWE of $1,855.

Capacity
[11] SIRA Workers Compensation Benefits Guide - Part 2.4.

There remains a dispute between the parties as to the extent of the applicant’s incapacity in the period from 31 October 2020 to 4 January 2021. It appears to be accepted by both parties that from the date of injury until 30 October 2020 the applicant had no current work capacity. It also appears to be accepted by both parties that in the period from 5 January 2021 to date and continuing, the applicant had capacity to work for 12 hours per week in suitable employment.
The respondent asserts that the applicant has provided no evidence of incapacity in the period in dispute. There are, however, certificates of capacity attached to the ARD which cover this period. Those certificates were not attached to the Reply and do not appear to have been taken into account in the WCD.
The certificates of capacity during this period are, rather unhelpfully, contradictory. There is no lay or other medical evidence before me to explain the contradiction in those certificates.
Dr Singh has certified that the applicant had capacity for work in suitable employment for an unspecified number of hours and days during the period 31 October 2020 until 4 December 2021 and from 27 November 2020 to 4 January 2021. However, Dr Singh has also certified the applicant as having no current capacity from 4 December 2020 to 4 January 2021.
The applicant’s submissions suggested that given the certifications of “no current capacity” before and afterwards, the suggestion that the applicant would have had capacity for work in the period between 31 October 2020 and 3 December 2020 was “curious”. The fact remains however, that the only evidence of the applicant’s capacity between 31 October 2020 and 3 December 2020 indicates that he had capacity to engage in suitable work. It is possible that there could have been a deterioration in the applicant’s condition and capacity for work from 4 December 2020 to 4 January 2021. The matter is simply unexplained by the applicant’s evidence.
I am not prepared to infer, however, that the applicant had capacity to work full hours given the other certifications.
In all the circumstances, I find that:
(a)    from 22 May 2020 to 30 October 2020 the applicant had no current work capacity;
(b)    from 31 October to 3 December 2020 the applicant had capacity to work 12 hours per week in suitable employment (consistently with his current certifications);
(c)    from 4 December 2020 to 4 January 2021, the applicant had no current work capacity;
(d)    from 5 January 2021 to date and continuing, the applicant had capacity to work 12 hours per week in suitable employment.
The parties also differ as to what amount the applicant could earn in suitable employment. The applicant submits that having regard to his restrictions he could not earn more than minimum wage. The respondent submits that there is no reason why the applicant could not earn $34 per hour consistently with Mrs Eftimovski’s hourly rate.
I am not satisfied that the applicant could perform his pre-injury work as a contract delivery driver having regard to his lifting / carrying and pushing / pulling restrictions. Having regard to the considerations for suitable employment set out in s 32A, I am satisfied, however, that the applicant could perform the work of, for example, a fast food delivery driver, within his restrictions. The Pay Guide published by the Australian Fair Work Ombudsman for the Fast Food Industry Award provides that the hourly pay rate for a Level 1 part-time worker is $22.33. On this basis, I am satisfied that the applicant has capacity to earn $268 per week in suitable employment.
Applying the findings above to the calculations required by ss 36 and 37 of the 1987 Act, the applicant is entitled to weekly compensation as follows:
(a) pursuant to s 36(1) from 22 May 2020 to 20 July 2020 at the rate of $1,713 ($1,803 x 0.95);
(b) pursuant to s 37(1) from 21 July 2020 to 30 October 2020 at the rate of $1,442 ($1,803 x 0.80);
(c) pursuant to s 37(3)(a) from 31 October 2020 to 3 December 2020 at the rate of $1,174 ($1,803 x 0.80 less $268);
(d) pursuant to s 37(1) from 4 December 2021 to 4 January 2021 at the rate of $1,442 ($1,803 x 0.80);
(e) pursuant to s 37(3)(a) from 5 January 2021 to 31 March 2021 at the rate of $1174 ($1,803 x 0.80 less $268); and
(f) pursuant to s 37(3)(a) from 1 April 2021 to date and continuing at the rate of $1,216 ($1,855 x 0.80 less $268).

[2012] NSWPIC 288

12 August 2021