Field v Secretary, Department of Education
[2023] NSWPIC 214
•11 May 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Field v Secretary, Department of Education [2023] NSWPIC 214 |
| APPLICANT: | Dennis Michael Field |
| RESPONDENT: | Secretary, Department of Education |
| Member: | Paul Sweeney |
| DATE OF DECISION: | 11 May 2023 |
CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly compensation by casual teacher; whether Schedule 3 requires pre-injury average weekly earnings (PIAWE) to be calculated by dividing gross earnings by 52 or by the weeks worker actually worked; Wake v State Emergency Services considered and followed; Held – PIAWE should be calculated by reference to weeks actually worked. |
| determinations made: | 1. That the applicant’s pre-injury average weekly earnings be calculated by reference to the weeks in which he actually performed work in the 52 week period before his injury. 2. Liberty to apply, if necessary, in relation to calculations. |
STATEMENT OF REASONS
BACKGROUND
The dispute in this matter concerns the correct approach to calculating the pre-injury average weekly earnings (PIAWE) of a casual teacher employed by the Department of Education (the respondent).
Dennis Michael Field (the applicant) was employed by the respondent as a teacher in 1964. In 2000, he ceased to be a permanent employee but remained a casual employee of the respondent.
On 14 October 2022, the applicant suffered a serious injury in the course of his employment when he fell down steps. He suffered multiple injuries. The respondent’s insurer (Allianz) accepted liability to pay the applicant compensation pursuant to the provisions of the Workers Compensation Act 1987. It determined that his PIAWE was the sum of $601.78 per week.
In the 52 weeks before his injury, the applicant worked for two periods. He worked during the fortnightly pay periods ending 11 November 2021 and 25 November 2021. He did not work again until 29 April 2022 after which he probably worked continuously to the date of his injury.
Allianz calculated that the applicant’s gross earnings in the 52 weeks before his injury were $31,292.74. In determining PIAWE, it divided that figure by 52 purportedly in compliance with the definition of PIAWE in cl 2, Schedule 3 of the 1987 Act. That calculation produced the weekly figure of $601.78.
The applicant does not accept that the insurer’s approach to the calculation of PIAWE is consistent with the language of Schedule 3. He argues that his PIAWE should be determined by dividing his gross earnings during the 52 weeks prior to the injury by the number of weeks during which he performed work.
PROCEDURE BEFORE THE COMMISSION
By these proceedings, the applicant claims weekly payments of compensation pursuant to ss 36 and 37 of the 1987 Act on the basis of a PIAWE of $1,688.40 from 14 October 2022.
When the matter came on for conciliation and arbitration in the Personal Injury Commission (Commission) on 24 April 2023, Mr Necovski, of counsel, appeared for the applicant and
Mr Grimes, of counsel, appeared for the respondent. I was informed by counsel that they were unable to resolve the threshold issue of the quantum of the applicant’s PIAWE. I am satisfied that the parties, who were represented by experienced lawyers, had ample opportunity to resolve their dispute but have been unable to reach a mutually acceptable resolution.
EVIDENCE
The documents before the Commission are as follows:
(a) Application to Resolve a Dispute and attached documents;
(b) Reply and attached documents;
(c) supplementary statement of the applicant dated 4 April 2023 lodged on
12 April 2023, and(d) an Application to Admit Late Documents dated 17 April 2023 and the documents attached.
There was no objection to the evidence referred to above and no application to adduce further oral or written evidence.
SUBMISSIONS
The submissions of the parties are recorded and I do not propose to reiterate each of the arguments of counsel in these short reasons. Mr Necovski referred to the origins of the present statutory scheme for calculation of PIAWE in the comments and recommendations of the Standing Committee on Law and Justice in its first review of the workers compensation scheme printed on 9 March 2017. He argued that it was important to consider cl 2(3) of Schedule 3 when interpreting the statutory language. This sub-clause provided for the adjustment of the relevant earning period by regulation to take into account periods of “unpaid leave or other change in earning circumstances” and to align the relevant earning period with regular intervals at which the worker was entitled to receive payments. He submitted that this clause was inserted, inter alia, to ensure fairness in the calculation of the PIAWE of casual workers.
Mr Necovski relied on cls 8B, 8C, and 8E of the Workers Compensation Regulation 2016 (the Regulation). He argued that the provision for the adjustment for unpaid leave found in cl 8E of the Regulation was particularly apt to the circumstances of the applicant’s case. The language of the clause necessitated that the period of the applicant’s absence from work before 29 April 2022 be excluded from the calculation of PIAWE. The correct approach to the calculation was to divide his gross weekly earnings by the number of weeks which he had worked during the 52 week period.
Mr Necovski also relied on the reasoning in two cases referred to in argument by Mr Grimes. They were Wake v State Emergency Services[1] and Peric v State of New South Wales (NSW Health Pathology).[2]
[1] [2022] NSWPIC 50 (8 February 2022) (Wake).
[2] [2019] NSWWCC 242 (Peric).
Mr Grimes submitted that the plain words of the Schedule did not permit the insurer to limit the bottom line of the PIAWE equation to the weeks that the applicant had actually worked in the 52 week period before his injury. The gross weekly earnings during the entirety of the 52 week period should be divided by 52; irrespective of how many weeks the applicant actually worked during that period.
He submitted that the reasoning relating to the calculation of the PIAWE of the casual workers in Wake was obiter, was wrong, and should not be followed in this case. He also argued that the reasoning in Peric was not applicable to the circumstances of this case.
Mr Grimes submitted that the recommendations of the Parliamentary Committee provided no assistance as to the meaning of the words in Schedule 3 or in the Regulation. He referred to the reasoning of the High Court in Re Bolton; ex parte Beane.[3]
[3] (1987) 162 CLR 514.
Prior to attempting to resolve the issue it is necessary to set out the relevant parts of the very short evidence of the applicant and to recite the critical legislative provisions.
Applicant
By his initial statement, the applicant records that he had been employed by the respondent from 1964. He says that:
“I became a casual with the DOE from 2000.
Between the period of 52 weeks prior to the date of injury, I can only recall working from 5 May 2002 when I was asked by the Department of Education to commence collaborating with Model Farms High School and I kept working until the date of the accident.”
By his supplementary statement, the applicant says that he cannot recall the terms of the contract of employment by which he worked for the respondent. He continues:
“I get my jobs directly from the school specifically from the person in charge of casual jobs from each school. I recall getting 3 calls a day about jobs at times. During COVID times I have rejected jobs as I am concerned about COVID due to my old age.
During the period of 18 December 2021 to 13 October 2022, I recall rejecting jobs due to COVID between these days.”
Legislation
Schedule 3 of the 1987 Act which provides a legislative scheme for determining the PIAWE of workers is, as far as it is relevant, as follows:
“‘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.3 Agreements relating to pre-injury average weekly earnings
(1) An injured worker and the employer may agree, in accordance with any requirements of the regulations, as to the amount of pre-injury average weekly earnings that is to apply to the worker for the purposes of Division 2 of Part 3 of this Act.
(2) If a worker enters into an agreement under this clause, the amount of pre-injury average weekly earnings that applies to the worker for the purposes of that Division is, subject to the regulations, the amount so agreed.
(3) Any decision of the insurer authorized or required by the regulations to be made in relation to an agreement under this clause before the agreement can take effect is, subject to the regulations, taken not to be a work capacity decision for the purposes of that Division.4 Pre-injury average weekly earnings for short-term workers
(1) If, at the time of the injury, the injured worker had been continuously employed in employment for less than 4 weeks, the
‘pre-injury average weekly earnings’ in relation to the worker may be calculated having regard to the weekly average of the earnings that the worker could reasonably have been expected to have earned in the employment, but for the injury, during the period of 52 weeks after the injury.
(2) The regulations may make provision for the matters to be taken into account for the purposes of determining the earnings that the worker could reasonably have been expected to have earned in the employment, but for the injury, during the period of 52 weeks after the injury.5 Pre-injury average weekly earnings of apprentices, trainees and young people
(1) This clause applies to an injured worker who, at the time of the injury, is--
(a) under the age of 21 years, or
(b) an apprentice, or
(c) working under a contract of employment under which the worker is required to undergo training, instruction or examination in order to become qualified to carry on an occupation to which the contract of employment relates.
(2) This clause applies to an injured worker under subclause (1) only if the worker would, but for the injury, have been entitled to increments in earnings at certain ages or stages during the course of employment to become qualified.
(3) The ‘pre-injury average weekly earnings’ , in relation to an injured worker to whom this clause applies, means--
(a) until the day on which the worker attains the age or stage or would, but for the injury, have attained the stage at which the highest rate is payable--the amount of earnings that the worker would have been entitled to receive in respect of a relevant week if the worker had not sustained the injury and had continued in the employment, or
(b) on and after the day on which the worker attains the age or stage or would, but for the injury, have attained the age or stage at which the highest rate is payable--the amount of pre-injury average weekly earnings calculated under clause 6 as if, at the time of the injury, the worker were being paid at the highest rate applicable to that age or stage, or
(c) if paragraph (a) or (b) applies but there is no rate applicable to a worker who has attained the age of 21 years, the worker's pre-injury average weekly earnings are to be determined in accordance with the regulations.
(4) The Workers Compensation Guidelines may make provision for the matters to be taken into account for the purposes of determining the weekly earnings that it is likely that a worker would have been entitled to in a week had the injury not occurred and had he or she continued in the employment concerned.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.”Clause 2(3) provides for the making of regulations to adjust the “relevant earning period”. Clauses 8B, 8C and 8E of the Regulation are as follows:
“8B Adjustment for workers not continuously employed--Schedule 3, clause 2(3)(a) of 1987 Act
(1) The relevant earning period for a worker in employment is to be adjusted in accordance with this clause if the worker was not engaged in the employment from the beginning of the unadjusted earning period.
(2) The relevant earning period for the worker in the employment is to be adjusted by excluding any period before the day on which the worker was first engaged in the employment.
8C Adjustment for financially material change to earnings--Schedule 3, clause 2(3)(a) of 1987 Act
(1) The relevant earning period for a worker is to be adjusted in accordance with this clause if, during the unadjusted earning period, there was a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker (for example, a change from full-time to part-time work).
(2) The relevant earning period is to be adjusted by excluding from the period any period before the change to the earnings of the worker occurred.
Adjustment for unpaid leave--Schedule 3, clause 2(3)(a) of 1987 Act
8E Adjustment for unpaid leave--Schedule 3, clause 2(3)(a) of 1987 Act
(1) The relevant earning period for a worker is to be adjusted in accordance with this clause if, during any period of not less than seven consecutive calendar days within the unadjusted earning period--
(a) no earnings in the employment were paid or payable to the worker, and
(b) the worker took a period of unpaid leave (‘the unpaid leave period’) commencing on the first day of that consecutive period.
(2) The relevant earning period is to be adjusted by excluding each day (whether or not the day was a usual work day for the worker) of the period commencing on the first day of the unpaid leave period and ending immediately before the day on which earnings in the employment once again became payable to the worker.”
DISCUSSION AND FINDINS
Unfortunately, the evidence in relation to the nature of the applicant’s employment and his absences from work is sparse. It was agreed by the parties that he was a casual employee. Thus, there was no advance commitment by the respondent to provide the applicant with work. Similarly, there was no obligation on the applicant to accept work offered by the respondent. The applicant says that the offers of periods of employment were made by individual schools rather than at department level.
It is likely that the applicant refused offers of employment between 25 November 2021 and 29 April 2022 because of his understandable fear of contracting COVID-19. During the period he was absent from work, he turned 77 years of age. That may not explain the entirety of his absence during this long period. It is plausible, for example, that he would not have been offered employment over the Christmas vacation and over other school holidays. It is also possible that at times the schools at which the applicant was offered work may not have had work available. The evidence is largely silent on these issues.
In construing the legislation, it is necessary to apply the principles of statutory construction enunciated by the High Court in Alcan (NT) Alumina Pty Ltd v Cmr of Territory Revenue (Northern Territory)[4] and Project blue Sky Inc v Australian Broadcasting Authority.[5] The task of construction commences with a consideration of the text of the legislation. It is necessary, however, to consider the text in the legislative context including, the history, purpose and policy of the Act.
[4] (2009) 239 CLR 27.
[5] (1998) 194 CLR 355.
Courts are reluctant to find that a Minister can stamp his or her interpretation on a legislative provision by stating its meaning in Parliament: Harrison v Melhem.[6] In this case, the Minister said no more than that the new Schedule 3 introduced a “simple and clear method of determining PIAWE”. The recommendations of the Standing Committee are similarly in very general terms and I doubt that they assist in understanding the specific provisions of the amending Act.
[6] [2008] NSWCA 67 (29 May 2008) at [168].
The present regime for the calculation of PIAWE was introduced by the Workers Compensation Legislation Amendment Act 2018. Previous iterations of the formula for determining average weekly earnings dealt specifically with the concept of casual employment. At the time of the introduction of the 1987 Act, s 43(1)(e) defined a casual worker as:
“a worker whose contracts of service are mainly contracts of separate periods each of which is of not more than 5 working days in the same industry.”
By s 43(1)(f), it was provided that if such a worker:
“has been absent from work by reason of illness, strikes, lockouts, bad weather, intermittency of employment, slackness of trade or any other reasonable cause, the average weekly earnings of the worker shall be deemed to be not less than the full wage for a full normal working week or the basic wage whichever was the greater.”
Immediately before the introduction of the present regime, the definition of average weekly earnings in s 44C of the 1987 Act contained the following:
“(a) the average of the worker’s ordinary earnings during the relevant period (excluding any week during which the worker did not actually work and was not on paid leave (expressed as a weekly sum)”
The relevant period was defined as “the period of 52 weeks immediately before the injury”. Provision was made for a number of other contingencies including a worker voluntarily reducing the number of hours which he worked during the 52 week period.
Plainly, the words in parentheses in the former s 44C would have application to the present circumstances. I was initially attracted to the notion that their absence from the present version was decisive, But the structure of the present legislation is very different to its predecessors.
In Wake, Member Wright considered Schedule 3, cl 2. He stated:
“While in my view clause 2 does not expressly provide an exception, it is necessary to consider whether there is an exception inherent in the definition of PIAWE, or whether the interpretation of clause 2 that is contended by the applicant does not require the application of the Regulations for the relevant period.”
He continued:
“As noted, clause 2(1) relates the weekly average to the (earnings received). In my view, the weekly average, is a calculation implying a division by the number of weeks, is tied to the meaning of earnings received and the number of weeks should not be considered in isolation, or arrived at independently, without reference to weeks in which there are earnings received. The word “gross” in my view makes no difference as it signifies a distinction from “nett” rather than a totality of earnings for a period without regard to the meaning under consideration.
Moreover, when no work is performed during a relevant week, the amount of earnings received is not a value of “0” or “nil”, rather it is a null result, and the relevant week is not a week for the purpose of the calculation within the statutory meaning. To include such a result would be a misleading and arbitrary calculation, in my view.”
This outcome, in my view, would not be anomalous with other not uncommon working situations, such as casual, seasonal or piecemeal workers who may experience unfortunate periods of not receiving earnings in any particular week. As a simple example, a casual worker, who earns $500 gross per week for work performed in a particular week, may work 26 weeks out of the relevant 52 weeks, for example they work every other week. If earnings received are regarded as “zero” for weeks not worked and average weeks include weeks not worked, then the PIAWE calculation results in $250 gross per week. The interpretation that I have found in my view avoids such anomalous situations.”
In reaching this conclusion, the Member probably adopted the approach of Dixon CJ in Commissioner for Railways (NSW) v Agalianos[7] where he stated that:
“It may be illogical to speak of a man as a recipient of a sum of money in prescribing the calculation on the result of which his receiving money is contingent, but the context, the general purpose and the policy of a provision and its consistency and fairness are surer guides to this meaning than the logic with which it is constructed.”
[7] (1955) 92 CLR 390 (9 June 1955).
As “earnings” in respect of a week is defined to mean the income received by the worker for work performed “during the week”, it is possible to envisage that the average weekly earnings are determined by dividing the worker’s gross income by the weeks that he actually earned income. Schedule 3, cl 2(2) does not prescribe that the entire 52 weeks during which the applicant is employed must be employed as the divisor. It simply states that no regard is be had to weeks before and after the 52-week period.
The interpretation that permits gross weekly earnings to be divided by the number of weeks which a worker actually works in the 52-week period is, however, inconsistent with several of the Regulations set out above. If that approach were correct there would be no need for the relevant period to be adjusted for unpaid absences of not less than seven consecutive days as contemplated by cl 8E. Similarly, there would be no real need for cl 8B as the language of Schedule 3 could accommodate the fact that the applicant only worked for a limited number of weeks in the 52-week period. While these clauses in the Regulation cannot negate the language of Schedule 3, they suggest a legislative intention to determine PIAWE by dividing average weekly earnings by 52 weeks unless one of the exceptions provided for by the Regulation apply.
Arguably, the definition of “earnings” in Schedule 3 is inserted to specify what income should or should not be taken into account in assessing gross weekly earnings, rather than to limit the weeks which should be utilised for calculating average weekly earnings. Certainly, it is a peculiarly arcane method of achieving an outcome which was evident from the plain words of the previous versions of the formula for establishing PIAWE which I have set out above.
Mr Necovski concluded his submission by referring to the calculation performed by the Member in Peric, which excluded from the devisor all weeks during which the applicant did not perform work. The calculation of PIAWE in that case, however, turned on the previous provision. As recorded above, it specifically excluded from the calculation of PIAWE weeks during which a worker did not work.
Regulation 8B
Clause 8B has application if the worker was not employed “from the beginning of the adjusted earning periodi”. However, as I understand the evidence in this case the applicant was employed and working at the beginning of the relevant 52 week period in this case. It is, therefore, difficult to envisage that it has any application. Mr Necovski suggested that the applicant was employed by a series of separate contracts which were coincidental with the periods of his employment during the 52 weeks before his injury. I doubt, however, I can reach that conclusion on the evidence in this case.
Regulation 8C
Clause 8C of the Regulation permits the adjustment of the 52-week period to reflect “a change of an ongoing nature to the employment arrangement resulting in a financial material change to the earnings of the worker”.
The clause gives an example of a change from full-time to part-time work. The converse is also true. In a series of cases, Members of the Commission have accepted that the term “employment arrangements” is a broad term. In Cain v Tamworth Aboriginal Medical Service[8] Member Wright held that it included wages, hourly rates of pay and matters such as a change from part-time to full-time work and promotion.
[8] [2021] NSWPIC 193.
It is not obvious, however, that there was any relevant change in the employment arrangements between the applicant and the respondent during the relevant period in this case. The respondent could offer work at its discretion and the applicant could accept or reject it at his discretion throughout the period.
Regulation 8E
Mr Necovski submitted that this clause was apt to address the facts of this case. However, it is difficult to imagine that the legislature would characterise a period during which a casual was not provided with work or did not accept work as a period of “unpaid leave”. As a casual worker, the applicant had no entitlement to leave entitlements. it is inappropriate to characterise the applicant’s absence from work from work before 5 May 2022 as a period of unpaid leave. Thus, it is improbable that this clause applies to the present facts.
In my opinion none of the clauses assist the applicant’s case. Uninstructed by the reasoning in Wake, I would hold that the methodology adopted by the respondent in calculating PIAWE complied with the statutory scheme. While, in my opinion, the outcome in that case does not sit comfortably with the language of Schedule 3, I do not conclude that it is plainly wrong. In the circumstances, it is appropriate that I follow it, pending determination of the issue by the Presidential unit. Accordingly, I hold that the respondent has erred in its calculation of PIAWE. The applicant’s PIAWE should be calculated by reference to the number of weeks during which the applicant performed work in the 52 week period prior to the injury. As there are competing calculations, I will leave the arithmetic to the parties. But I will give liberty to apply.
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