PIKE and LINFOX AUSTRALIA PTY LTD
[2011] AATA 378
•2 June 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 378
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/2193
GENERAL ADMINISTRATIVE DIVISION ) Re LISA ANNE PIKE Applicant
And
LINFOX AUSTRALIA PTY LTD
Respondent
DECISION
Tribunal Senior Member K Bean Date2 June 2011
PlaceAdelaide
Decision The Tribunal:
(1) Sets aside the reviewable decision of 12 May 2010 and in substitution for that decision decides as follows:
(a) the applicant’s normal weekly earnings as calculated under s 8(1) of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) do not fairly represent the weekly rate at which she was being paid before her injury;
(b) it is reasonable to calculate the applicant’s normal weekly earnings before the injury over a 26 week period prior to the injury, commencing on 30 April 2009 and excluding weeks 6, 7, 21, 22, 23 and 26;
(c) calculated in that way, the applicant’s normal weekly earnings before the injury are $765.28 based on average weekly hours of 39.2 and average hourly earnings of $19.5226; and
(d) the applicant’s entitlements are to be calculated on that basis.
(2) Reserves the question of costs and directs that the parties provide written submissions in relation to any order which should be made by the Tribunal pursuant to s 67(8) of the SRC Act in accordance with the following timetable:
(a) submissions from the respondent by 16 June 2011;
(b) submissions from the applicant by 30 June 2011; and
(c) any reply from the respondent by 7 July 2011.
..............................................
K BEAN
(Senior Member)
CATCHWORDS
COMPENSATION – Calculation of incapacity payments – Whether rostered days off relevant to determining normal weekly earnings – Whether employee’s earnings in the two weeks prior to the injury “fairly represent” her earnings given no rostered day off taken – Regard should be had to a longer period including rostered days off – Decision under review set aside.
Safety, Rehabilitation and Compensation Act 1988 ss 4, 8(1), 8(5), 9, 19(2), 67(8)
Re De La Cruz and Australian Postal Corporation [1997] AATA 573
Re Shaw and Australian Postal Corporation [2005] AATA 747
Re Zegura and Comcare [1998] AATA 199
Gray v Comcare (2004) 139 FCR 41REASONS FOR DECISION
2 June 2011 Senior Member K Bean introduction
1.On 28 October 2009 the applicant, Ms Pike, suffered an injury to her leg in the course of her employment with the respondent, Linfox Australia Pty Ltd (Linfox). Linfox has since accepted liability to pay compensation to Ms Pike for that injury under the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act).
2.However an issue has subsequently arisen between the parties as to how Ms Pike’s weekly compensation payments should be calculated. In particular, the parties disagree as to whether and to what extent regard should be had to the fact that prior to her injury, Ms Pike was entitled to take and sometimes took rostered days off (RDOs). It is that issue which has brought the parties to this Tribunal.
background facts
3.There is no dispute between the parties as to the facts which form the background to the application and which are as follows.
4.In or about April 2007, Ms Pike commenced casual employment with a labour hire company to work at Linfox’s Pooraka site in South Australia as a store person. On or about 16 October 2008, she transferred to full-time employment with Linfox undertaking the same or similar duties.
5.Ms Pike’s employment with Linfox is governed by a letter containing an offer of employment dated 1 October 2008, and the Linfox South Australia (Pooraka) Agreement 2006[1].
[1] Exhibit 3
6.Under clause 5.2 of the Agreement, except where written agreement was reached to the contrary, Ms Pike’s ordinary hours of work were to be an average 38 per week (7.6 hours per day over a 5 day week). Ms Pike was to work a 5 day week subject to leave.
7.However under clause 5.2.2 of the Agreement, an RDO system was permitted to be implemented on a site or part of a site. An RDO system was implemented at the Pooraka site, and the particulars of the RDO system were as follows.
8.Over the course of a four week cycle:
(a) Ms Pike would actually work 19 days, each made up of 8 hours, instead of 7.6 hours, i.e. she would work an additional .4 hours per day or 2 hours per week.
(b)This would give a 40 hour working week, but Ms Pike would be paid for 38 hours only (or 7.6 hours per day).
(c) The remaining 2 hours per week (or .4 hours per day) would be put aside and accumulated into what was known as “an RDO bank”.
9.Under the RDO system in place at the Pooraka site, in respect of their RDO entitlement, an employee such as Ms Pike had two choices, being either:
(a) To take an RDO. The system was such that over a 4 week cycle an employee such as Ms Pike could have an RDO in the fourth week. An employee was required to put in an application for leave form for an RDO.
(b)Cash in the RDO. To make a refund request, the employee was also required to lodge a form.
10.Apart from circumstances where the employee cashed in RDOs, an employee was paid for a 38 hour week (notwithstanding working 40 hours) and in a week when an RDO was taken, was paid for a 38 hour week albeit only working a 4 day week of 32 hours.
11.As alluded to above, on 28 October 2009, Ms Pike suffered an injury to her left thigh and knee in the course of her employment. She made a claim for compensation in respect of “soft tissue L thigh and knee”[2] and by determination dated 12 January 2010, Linfox accepted liability in respect of “left thigh and knee soft tissue injury”[3].
[2] T6
[3] T9
12.As at the date of her injury, Ms Pike was paid a total sum of $780.90 per week (i.e. $19.5226 per hour) in respect of 40 hours work. Pursuant to the RDO system outlined above, the monetary value of 38 hours ($741.86) would be paid to her bank account and the value of 2 hours ($39.04) was paid to Ms Pike as an RDO entitlement. In the two week period prior to her injury, Ms Pike did not take any RDOs and therefore worked 40 hours each week and was “paid” $780.90 per week (in the manner explained above). However if was also agreed between the parties that in the twelve months prior to the injury, Ms Pike had taken four RDOs and “cashed in” the remaining RDO hours which she had accumulated in that period.
13.In a number of initial determinations[4], Linfox determined that Ms Pike’s average weekly hours (NH) were 38 hours per week and her normal weekly earnings (NWE) before the injury were $741.86.
[4] T11-T17
14.On 14 April 2010, Ms Pike sought reconsideration of the determinations relating to her NH and NWE. Her solicitors contended that she had worked a 40 hour week and her NWE should be predicated on that, i.e. $780.90.
15.By a reviewable decision dated 12 May 2010[5], Linfox affirmed the initial determinations[6] and on 1 June 2010, Ms Pike sought review of that reviewable decision by this Tribunal[7], giving rise to these proceedings.
[5] TT21
[6] T11-T17
[7] T2
the statutory framework
16.In relation to Ms Pike’s entitlement to incapacity payments, s 19 of the SRC Act relevantly provides as follows:
“19Compensation for injuries resulting in incapacity
…
(2) Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
NWE - AE
where:
AE is the greater of the following amounts:
(a) the amount per week (if any) that the employee is able to earn in suitable employment;
(b) the amount per week (if any) that the employee earns from any employment (including self‑employment) that is undertaken by the employee during that week.
NWE is the amount of the employee’s normal weekly earnings.
…”
17.As to the meaning of “normal weekly earnings”, sub-s 8(1) of the SRC Act provides[8]:
[8] Section 4 also provides that “normal weekly earnings means the normal weekly earnings of an employee calculated under s 8”.
“8 Normal weekly earnings
(1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:
(NH x RP) + A
where:
NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RP is the employee’s average hourly ordinary time rate of pay during that period; and
A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
…”
18.Section 4 of the SRC Act also provides that:
“normal weekly hours, in relation to an employee, means the average number of hours (including hours of overtime) worked in each week by the employee in his or her employment during the relevant period as calculated for the purpose of applying the formula in subsection 8(1) or (2).”
19.In addition s 4 provides that the “relevant period” is the period calculated under s 9 and s 9 relevantly provides:
“9 Relevant period
(1) For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.
…
(4) If, during any part of the period calculated under the preceding subsections, the employee’s earnings were reduced, or the employee did not receive any earnings, because of absence from his or her employment for any reason, that part of that period shall be disregarded for the purposes of calculating the relevant period.”
20.However, sub-s 8(5) also provides that, in determining an employee’s NWE before an injury, regard may be had to a period longer than two weeks in certain circumstances. It states as follows:
“(5) Where, because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.”
issues
21.It follows that the issues for my determination are:
(a) whether Ms Pike’s NWE for the two weeks prior to her injury would not fairly represent the weekly rate at which she was being paid in respect of her employment before the injury such that the discretion conferred by s 8(5) is invoked;
(b) if so, what period is reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which Ms Pike was being paid before her injury; and
(c)what amount represents Ms Pike’s NWE before the injury?
contentions
22.Mr Cole, who appeared as counsel for Ms Pike, contended that her NWE for the purpose of calculating her incapacity payments pursuant to s 19 of the SRC Act should be $780.90, based on NH of 40 hours. He argued that the discretion conferred by s 8(5) of the SRC Act was not invoked, as calculating Ms Pike’s NWE by reference to the “relevant period” prescribed by s 9(1) of the SRC Act (i.e. two weeks before the injury) resulted in a calculation of a NWE amount which fairly represented the weekly rate at which she was being paid in respect of her employment before the injury, i.e. $780.90 based on NH of 40.
23.Mr Cole also drew attention to the position of the respondent at the hearing, which was that Ms Pike’s earnings should be calculated on the basis that her average weekly hours were 39.33. Mr Cole submitted that this represented such a marginal difference from 40 hours a week that it could not be said that calculating Ms Pike’s NWE by reference to 40 hours a week did not “fairly represent” her earnings prior to the injury.
24.Mr Cole also directed my attention to the decision of the Tribunal in Re De La Cruz and Australian Postal Corporation [1997] AATA 573. In that matter, having undertaken calculations as to the applicant’s average earnings over a very lengthy period prior to the injury, the Tribunal observed that “the figure arrived at through the use of the two weeks immediately preceding the injury was very close to the average figure earned by the applicant over a very lengthy period prior to the injury”. The Tribunal accordingly concluded at [145]:
“… Thus, the use of the two week period stipulated in section 9 of the 1988 Act does provide a fair representation of the weekly rate at which Mrs de la Cruz was being paid before the injury. Subsection 8(5) provides that a longer period than two weeks may be used where the shorter period ‘would not’ provide such a fair representation. As that is not the case here, subsection 8(5) does not apply to this matter. The relevant period to be used in calculating Mrs de la Cruz’s NWE is two weeks before the date of the injury during which she was continuously employed by the Respondent.”
25.Mr Cole also pointed out that arriving at a longer period of time which fairly represented Ms Pike’s earnings was fraught with difficulty, because she occasionally took an RDO, which reduced the number of hours worked in that week to 32. Therefore the average arrived at would be affected by how many RDOs were taken in the period selected. Mr Cole submitted that this highlighted the difficulty with the approach contended for by the respondent. He submitted that this was a further factor in favour of simply adopting the two week period prescribed pursuant to s 9, rather than determining Ms Pike’s NWE by reference to any longer period.
26.Mr Berger, who appeared as counsel for Linfox, accepted that the difference in calculation of Ms Pike’s NWE which resulted if her RDOs were taken into account was marginal. However he submitted that there was nevertheless an important principle at stake. He pointed out that if a “broad brush” approach was taken this had the potential to work unfairly for employees, such as for example if they happened to take an RDO in the two weeks prior to being injured at work. He suggested that precision in calculating NWE was important, particularly given that employees can sometimes be in receipt of incapacity payments over many years.
27.Mr Berger pointed out that in the 12 months preceding the injury, Ms Pike had taken four RDOs so that effectively, for every two RDOs cashed out, she took one day off. Therefore, over a period of three months, for two of those months Ms Pike worked an average of 40 hours, whereas for the other month she worked an average of 38 hours.
28.Mr Berger relied upon the following passage from the decision of the Tribunal in Re Shaw and Australian Postal Corporation [2005] AATA 747 at [96]:
“In the present case the applicant has worked as a permanent part time employee for many years. As noted, although her "normal" hours are only 20 hours each week she has consistently been required to work many hours in excess of that figure. As has been observed in this Tribunal in many cases, the period over which the calculation under s 8(5) is to be made will vary according to the facts and circumstances of each case and that what is intended by sections 8 and 9 is to avoid a situation where an employee is disadvantaged or advantaged – and that the mechanism to calculate the entitlement must be construed as being fair to the employee; see generally Re Zegura and Comcare [1997] AATA 11555 and [1998] AATA 12740 and Re West and Telstra Corporation Limited [2002] AATA 852.”
29.In a similar vein, he also directed my attention to the decision of the Tribunal in Re Zegura and Comcare [1998] AATA 199 at [27] as follows:
“Argument was put to me on the proper construction of the words ‘fairly represent’. ‘Fair’ to whom? I accept that the Act is remedial legislation and must be construed in favour of the worker (Bradford and Comcare Australia [1994] AATA 285; (1994) 37 ALD 187). However, the provisions of sections 8 and 9 effect a clear purpose - to ascertain the figure on which to base the weekly rate of payments to be paid pursuant to s19 of the Act. Senior Member Allen said in his oral reasons for the decision he gave, that the scheme of s8 catered for the casual or part-time worker, ‘who may be disadvantaged or may be unduly advantaged by a calculation under to subsection (1) of section 9.’ The mechanism to calculate the NWE must of course be construed as being fair to the worker. This does not mean that the figure which most favours the worker is the one to be regarded as ‘fairly’ representing the worker's NWE. The terms of the provisions clearly do not support that construction.”
30.Mr Berger also directed my attention to the decision of Gyles J in Gray v Comcare (2004) 139 FCR 41 at [14] as follows:
“In my opinion, the search for ‘normal weekly earnings’ in this statutory context plainly means ‘normal whilst working’. An employee does not work whilst absent on sick leave. During that period, an employee neither earns nor receives payment for work. Even if sick pay were received during that period, that would not be correctly described as earnings in the relevant sense. That is even clearer where no remuneration at all is received for the relevant period of sick leave. Section 19 would certainly work unfairly if the normal weekly earnings were depressed below a proper casual rate. In my opinion, s 8(4) and s 9(4) give support to this reasoning, although neither is directly applicable to the present case.”
31.Mr Berger also submitted that the reasoning adopted in Gray should be applied with respect to recreation leave as well as sick leave.
32.Mr Berger submitted that in order to fairly represent Ms Pike’s earnings prior to her injury, it was necessary to select a period which included some RDOs, having regard to the fact that she took four RDOs in the 12 months before her injury. In all the circumstances, he submitted that the most appropriate approach was to select a six month period including two RDOs and calculate her NH and NWE over that period, excluding weeks in which she took sick leave or annual leave and the week in which she was injured. This resulted in a period of 21 weeks.
33.Consistently with that submission, Mr Berger acknowledged that the approach which had been taken by Linfox in the initial determinations and reconsideration was incorrect. However he submitted that the approach urged upon the Tribunal by the applicant was also incorrect as it resulted in a figure which inflated Ms Pike’s true earnings prior to the injury.
34.After the hearing, the solicitors for Linfox also two provided spread sheets setting out the calculations of the average number of hours worked by Ms Pike for six months prior to the injury. The first spread sheet excluded from calculation the week of the injury and those weeks during which annual leave was taken by Ms Pike. The second spread sheet (Spread Sheet 2) excluded the week of the injury and those weeks during which annual leave was taken by Ms Pike as well as the week commencing 4 June 2010, which included the Queen’s Birthday long weekend, giving a total of 20 weeks. Consistently with Mr Berger’s submissions at the hearing, in a covering letter accompanying the spread sheets, the solicitors for Linfox also conceded that, on the reasoning adopted in Gray, it was appropriate to exclude the week of the Queen’s Birthday long weekend as had been done for the purposes of Spread Sheet 2. The first spread sheet resulted in average weekly hours of 38.86 and Spread Sheet 2 resulted in average weekly hours of 39.2.
35.By way of submissions in response to these spread sheets and the letter which accompanied them, the solicitors for Ms Pike contended that it was not appropriate to exclude the week in which Ms Pike was injured “in its entirety”. They contended that this:
“… is not required or indeed permitted by the Act. Section 9(1) of the Act refers to the date of injury being the operative date not the week in which the injury occurred. Put differently, on a proper calculation the date, 28 October 2009, should be excluded from calculation not the entire week.”
Ms Pike’s solicitors further submitted:
“Further, in excluding those weeks (i.e. the week of injury, the weeks of annual and sick leave, the week of Public Holiday) the sample of weeks worked are reduced with the consequent effect that the rostered days off (“RDOs”) taken in the sample period skews the average hours worked in the sample period downward.”[9]
[9] Letter from the applicant’s solicitors dated 24 March 2011.
They also relied upon the decision in Gray and submitted:
“… Similarly it is submitted an employee does not work whilst on an RDO. It is submitted that the weeks in [which] the Applicant took an RDO ought to be excluded as they are not the normal weeks worked by the Applicant. The focus of the inquiry, under Section 8 of the Act is, it is submitted, as stated by Gyles J in Gray the search of ‘normal weekly earnings’. That is the normal amount the Applicant could expect to receive as a result of her exertion, i.e. normal whilst working.”
36.Ms Pike’s solicitors accordingly submitted that even if a longer period was selected, the average number of hours Ms Pike worked in a normal week was 40, the same hours she had worked in the two weeks before the injury.
37.In the alternative however, in the event the Tribunal decided that the discretion in s 8(5) was enlivened, Ms Pike’s solicitors submitted that it would be more appropriate to calculate Ms Pike’s NWE over the 12 months preceding the date of injury. They submitted that this resulted in NH of 39.38 hours if it was assumed that Ms Pike had worked 40 hours per week or 2,080 hours over 52 weeks, less four RDOs equating to 32 hours, resulting in a figure of 2,048, which when divided by 52 gave an average of 39.38 hours.
38.In the event that the discretion under s 8(5) was enlivened therefore, the difference between the approaches ultimately urged by each party was approximately 11 minutes per week.
consideration
Is the s 8(5) discretion enlivened?
39.I should indicate at the outset that I do not accept the submission for Ms Pike that in reliance on the reasoning in Gray, her RDOs do not affect her NWE regardless of what period is used. In my view RDOs are in a different category from sick leave or annual leave, each of which amount to a period of time during which an employee does not work but is ordinarily paid pursuant to an agreed leave entitlement. Periods of sick leave or annual leave represent a departure from an employee’s usual pattern of work such that having regard to them in calculating an employee’s NH will inevitably misrepresent that employee’s normal or usual hours of work.
40.By way of contrast to this, the RDO system in which Ms Pike participated was in effect a mechanism by which Ms Pike could work more than her intended hours, accumulate those hours and, by agreement with her employer, absent herself from her workplace at a time she would otherwise ordinarily have been expected to be at work. She would then be paid for the hours away from the workplace as if she had worked those hours, in recognition of the fact that at another time she had worked more hours than she was strictly required to do. In effect, the RDO system allowed an employee to “trade” extra hours worked in one period for time off in a later period, such that it could be said that the employee had worked some of their required hours for the later period in advance. In some respects it was not dissimilar to a “flexi time” system, although more formalised. The entire system however was predicated on an understanding that an employee’s standard working hours were 38 per week. Further whilst an employee could elect to “cash in” the excess hours worked, in my view this did not have the effect that the employee’s normal working hours had become 40 per week. That is partly because the employee retained the ability in respect of any future periods to take an RDO each month, resulting in average hours for each week of 38 for any month in which an RDO was taken.
41.Although I do not accept that Ms Pike’s RDOs have no potential bearing on her NWE however, that still leaves the question of whether the amount earned by Ms Pike in the two weeks prior to her injury “fairly represented” her earnings prior to the injury.
42.Having carefully considered the submissions of both parties, I have found that question to be a finely balanced one. I consider there to be some force in Mr Cole’s contention that the difference between the amount earned by Ms Pike in the two weeks before the injury, based on 40 hours, and the NWE contended for by Linfox is so “marginal” that it cannot be said a NWE based on 40 hours does not “fairly represent” Ms Pike’s earnings prior to the injury. Having said that however, the fact remains that in my view to adopt an NH of 40 hours would not truly reflect Ms Pike’s pre-injury earnings as she did occasionally take an RDO, thus reducing her NH in the weeks in which she did so and resulting in a lower average NH and therefore lower NWE when looked at over a longer period.
43.I have also had regard to Mr Berger’s submission that whilst taking a “broad brush” approach would advantage Ms Pike in this matter, if the same approach was taken in other circumstances, it could disadvantage an employee who for example took an RDO in the period immediately preceding an injury. Mr Berger submitted that this militated against a “broad brush” approach and I accept that submission as it seems to me as a matter of principle that an approach should be taken which can be consistently applied in different circumstances without resulting in unfairness.
44.Having regard to that broader context, I have concluded on balance that s 8(5) of the SRC Act should be construed such that in order for the relevant period to “fairly represent” the earnings of the injured employee, it must reflect those earnings with reasonable precision. Where it is clearly established that the earnings in the two weeks before the injury either overstate or understate the employee’s “true” earnings, even by a small amount, it seems to me to be preferable to calculate the employee’s NWE by reference to a longer period, noting that in some circumstances an employee may continue to receive incapacity payments for very many years and even a very small difference in their NWE may have a significant impact on their incapacity payments over time.
45.To some extent, I consider this point to have been underlined in this matter by the approach taken on behalf of Ms Pike. As I have noted above, in the event I took the view that the discretion conferred by s 8(5) was invoked, Ms Pike has put submissions in support of an outcome which differs from that advanced by Linfox by approximately 11 minutes per week. This illustrates that despite submitting that 40 hours was sufficiently close to her actual hours such as to “fairly” represent them, she is not content for her NWE to be calculated on the basis of a close approximation where this has the potential to work to her disadvantage.
46.For these reasons, I have concluded that in the circumstances of this matter, the “relevant period” does not “fairly represent” Ms Pike’s earnings prior to the injury and therefore the discretion conferred by s 8(5) of the SRC Act is invoked. It therefore remains for me to determine the period to which regard should be had in arriving at her NWE.
What period fairly represents the weekly rate at which Ms Pike was being paid before the injury?
47.In relation to this question, as I have already noted, the positions of the parties were not markedly different. As I have noted above, Ms Pike seeks to have her NWE calculated by reference to a 12 month period, giving an NH of 39.38 hours, while Linfox contended that the NWE should be calculated over 6 months (or 20 weeks once atypical weeks were excluded), giving an NH of 39.2.
48.As to the merits of the different periods proposed by the parties, I consider the approach taken by Linfox to be a logical and defensible one. Linfox has simply taken a period of 26 weeks and from that period excluded weeks which tend to unfairly distort the outcome, including weeks in which Ms Pike took annual leave and the week commencing 9 June 2009 which included the Queen’s Birthday long weekend. Linfox has also excluded the week of the injury, week 26.
49.Ms Pike’s solicitors argued that the whole of the week in which Ms Pike was injured should not be excluded, but only the date of the injury and any remaining days in that week. However Ms Pike’s pay cycle went from a Thursday to the following Wednesday. As Ms Pike was injured on a Wednesday, excluding that day in the context of calculating her average weekly earnings would result in a pay week of only 4 days, which would skew Ms Pike’s pre-injury earnings downwards. As that would not “fairly represent” Ms Pike’s earnings before the date of the injury, I consider Linfox was correct to exclude that week from its calculations in the context of calculating her average earnings over 20 weeks.
50.Ms Pike’s solicitors further contended that excluding the week of injury, the weeks of annual leave and the week of the public holiday had the result that the sample of weeks worked was reduced to 20 weeks with the consequent effect that the RDOs taken in the sample period skewed the average hours worked in the sample period downward[10]. Accordingly, they urged me to take the approach of simply assuming that Ms Pike worked 52 weeks a year of 40 hours each, subtracting from this four RDOs totalling 32 hours giving a total of hours worked of 2,048 hours which, divided by 52 weeks, gave a total of 39.38 hours.
[10] Applicant’s submissions 24 March 2011
51.The difficulty with that approach however is that in my view it is not one which is contemplated by the SRC Act. In my view, I am confined by the terms of s 8 to arriving at a period which I consider fairly reflects the rate at which Ms Pike was being paid before the injury. Once that is done, the SRC Act requires that Ms Pike’s NH be determined by reference to the hours she actually worked in that period, excluding periods of leave[11]. In my view the SRC Act does not allow for calculations to be made on the basis of assumptions, but requires regard to be had to the actual hours worked and the actual earnings of an employee during the relevant period.
[11] Gray v Comcare (2004) 139 FCR 41 at [14].
52.Having said that, I consider that it would be open to me to select a period of 12 months prior to Ms Pike’s injury as being the period which fairly represented her pre-injury earnings. However that raises the question of whether a 12 month period would more fairly represent her earnings than the 6 month or 20 week period proposed by Linfox.
53.I have not been provided with detailed information as to Ms Pike’s earnings over the 12 months prior to the injury for the purpose of comparison. However, it is agreed between the parties that Ms Pike took two RDOs in the 6 months prior to the injury, and four in the 12 months prior to the injury. In these circumstances, I am satisfied that the period contended for by Linfox “fairly represents” Ms Pike’s pre-injury earnings, providing the weeks excluded in Spread Sheet 2 are excluded for the reasons I have alluded to above. For completeness, I should add that I agree with both parties that on the basis of the reasoning in Gray, the week of the Queen’s Birthday public holiday should be excluded from consideration together with the weeks in which Ms Pike took annual leave, leaving the 20 weeks identified on Spread Sheet 2 as those to which regard should be had in calculating Ms Pike’s NH and NWE before the injury.
What amount represents Ms Pike’s NWE before the injury?
54.I have accordingly concluded that, consistently with Spread Sheet 2 provided by Linfox, Ms Pike’s incapacity payments should be calculated on the basis that her average number of hours worked each week during the applicable period (or NH) was 39.2. As her average hourly ordinary time rate of pay during the applicable period was $19.5226, that means the correct figure for her NWE before the injury is $765.28.
conclusion
55.I have therefore concluded that the incapacity payments to which Ms Pike is entitled should be calculated on the basis of NWE before the injury of $765.28.
additional matter
56.I should also formally record that although there was one application filed in this matter relating to one reviewable decision, being that of 12 May 2010, the Tribunal opened six files. This was done in error and I have accordingly directed the Adelaide Registry to close the Tribunal’s files numbered 2010/2194-2198.
decision
57.The Tribunal:
(1)Sets aside the reviewable decision of 12 May 2010 and in substitution for that decision decides as follows:
(a)the applicant’s normal weekly earnings as calculated under s 8(1) of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) do not fairly represent the weekly rate at which she was being paid before her injury;
(b)it is reasonable to calculate the applicant’s normal weekly earnings before the injury over a 26 week period prior to the injury, commencing on 30 April 2009 and excluding weeks 6, 7, 21, 22, 23 and 26;
(c)calculated in that way, the applicant’s normal weekly earnings before the injury are $765.28 based on average weekly hours of 39.2 and average hourly earnings of $19.5226; and
(d)the applicant’s entitlements are to be calculated on that basis.
(2)Reserves the question of costs and directs that the parties provide written submissions in relation to any order which should be made by the Tribunal pursuant to s 67(8) of the SRC Act in accordance with the following timetable:
(a)submissions from the respondent by 16 June 2011;
(b)submissions from the applicant by 30 June 2011; and
(c)any reply from the respondent by 7 July 2011.
I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K Bean
Signed: ..........J Coulthard.........................................
AssociateDate of Hearing 17 March 2011
Date of Decision 2 June 2011
Counsel for the Applicant Mr S Cole
Solicitor for the Applicant Moloney & Partners
Counsel for the Respondent Mr A Berger
Solicitor for the Respondent Clarke Legal
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