Secretary, Department of Communities and Justice v Farrugia - [2023] NSWPICPD 75

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	SECRETARY, DEPARTMENT OF COMMUNITIES AND JUSTICE v FARRUGIA [2023] NSWPICPD 75
APPELLANT:	Secretary, Department of Communities and Justice
RESPONDENT:	Leanne Farrugia
INSURER:	QBE Insurance (Australia) Limited
FILE NUMBER:	A1-W7734/22
PRESIDENTIAL MEMBER:	Acting Deputy President Michael Perry
DATE OF APPEAL DECISION:	28 November 2023
ORDERS MADE ON APPEAL:	1. Leave is granted to the appellant to amend the notice of appeal to rely on a second ground to allow the content of paragraph [11](a) and (b) of the appellant’s written submissions on appeal also being treated as a ground of appeal. 2. The Certificate of Determination dated 16 February 2023 is revoked. 3. Upon redetermination, the Commission finds that the change in the respondent’s employment classification under the Award from Correctional Officer, Level 02 to Correctional Officer, FST CLSS Level 01 did constitute a change of an ongoing nature to the employment arrangement resulting in a financially material change to her earnings within the meaning of clause 8C of the Workers Compensation Regulation 2016. 4. Liberty to apply in relation to any further dispute in the formulation of the rate(s) and or period(s) of weekly compensation.
CATCHWORDS:	WORKERS COMPENSATION – Construction of clause 8C of the Workers Compensation Regulation 2016 – meaning of “employment arrangement” in clause 8C – adequacy of reasons for an ex tempore decision
HEARING:	31 October 2023
REPRESENTATION:	Appellant:
Mr M Tan, solicitor
Bartier Perry Lawyers
Respondent:
Mr C Tanner, counsel
Walker Law Group
DECISION UNDER APPEAL
MEMBER:	Mr J Wynyard
DATE OF MEMBER’S DECISION:	16 February 2023

INTRODUCTION AND BACKGROUND

Leanne Farrugia (the respondent) has lodged an Application to Resolve a Dispute (ARD) seeking weekly payments of compensation for an injury she received on 4 May 2022 in the course of her employment with the appellant as a correctional officer. The appellant does not dispute this injury and has admitted liability to pay compensation to her under the Workers Compensation Act 1987 (the 1987 Act).
The dispute that has arisen concerns the calculation of the rate of weekly compensation payable to the respondent. This involves a calculation of her pre-injury average weekly earnings (PIAWE). Clause 2(1)–(3) of Sch 3 of the 1987 Act relevantly provide in this respect:
“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 [other modifications]
(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)    …”.
An important factor in calculating the PIAWE is “the relevant earning period”. Sch 3, cl 2(2) above provides that this is a period of 52 weeks ending immediately before the date of injury. However, Sch 3, cl 2(3) above authorises regulations providing for adjustment of the relevant earning period. Clause 8C of the Workers Compensation Regulation 2016 (the 2016 Regulation) is one such provision and is at the heart of this case. It says:
“(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.”
The relevant facts are undisputed. The respondent’s employment was governed by the Crown Employees (Correctional Officers, Department of Justice - Corrective Services NSW) Award (serial 8629), (the Award). The Award provides, amongst other things, “for Correctional Officers who have completed twelve (12) months service on the 2nd year rate to progress to the rank of First Class Correctional Officer, subject to [certain] criteria”.[1]
[1] ARD, p 63.
Up to on or about 28 March 2022, the respondent was classified as “Correctional Officer, Level 02”. That position carried a base rate of pay of $68,246.[2] During the pay period 28 March 2022–10 April 2022, this classification changed, and she progressed from Correctional Officer, Level 02 to Correctional Officer, FST CLSS Level 01. The latter classification carried a base rate of pay of $72,077.[3]
[2] ARD, pp 1, 53.
[3] ARD, p 55.
The respondent’s case to the Member was that her progression through these classifications enlivened cl 8C so that the relevant earning period of 52 weeks for calculating the PIAWE should be adjusted to exclude those weeks before that progression.
The appellant’s argument to the Member was that the alleged classification change did not constitute a relevant change of an ongoing nature to the employment arrangement (within the meaning of cl 8C) because there was an expectation under the Award that she would progress through the classifications after a certain period of service, with a resulting entitlement to a higher rate of pay. Therefore, there was a “normal expectation” that after a certain period of service, there would be an increase in her pay.[4]
[4] Transcript of proceedings (T), 13 February 2023, T4.19–5.7.
The issue before the Member was whether the classification change, from “Correctional Officer, Level 02” to “Correctional Officer, FST CLSS Level 01”, was “a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker” within the meaning of cl 8C.
In an ex tempore decision, the Member found in favour of the respondent and issued a Certificate of Determination, finding that the provisions of cl 8C of the 2016 Regulation “apply to circumstances where an award provides for a financially material change to the earnings of the worker”. The appellant appeals from that decision.

A BRIEF HEARING

Section 52(3) of the Personal Injury Commission Act 2020 (the 2020 Act) provides:
“(3) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act and enabling legislation without holding any conference or formal hearing.”
Having regard to Procedural Directions PIC2 and WC3; the documents before me, and the submissions by the parties that the appeal could be determined “on the papers”, I was largely satisfied I had sufficient information to proceed without holding a conference or formal hearing. However, I did seek the assistance of the parties through a brief oral hearing essentially to clarify the formulation and content of the appeal ground(s).
The hearing occurred on 31 October 2023. Mr Tan appeared for the appellant. Mr Tanner, instructed by Mr Sawers, appeared for the respondent. I pointed out to Mr Tan that paragraph [10] of his submissions on appeal appear, in substance, to be the formulation of Ground 1, with the content of paragraph [11] appearing to be capable of constituting a Ground 2. In the result, Mr Tan applied, at my invitation, for leave to add the further ground of appeal (recorded at [23] below). Mr Tanner, conceding the respondent would not be prejudiced by that amendment given that it only repeated the submissions he had responded to anyway, did not object.

THRESHOLD AND PROCEDURAL MATTERS

On 13 March 2023, a transcript of the proceedings before the Member, including the ex tempore reasons, was provided to the appellant. Due to an administrative oversight, this was done before the Member reviewed the transcript. On 16 March 2023 the appeal was lodged. This included an argument that “there was a failure to give adequate reasons and consequently an error of law in respect of the … reasons to the extent … they were not able to be transcribed”.[5] In the meantime, the Member reviewed the transcript and made some minor changes to it by 20 March 2023.
[5] Appellant’s submissions, [16].
On 20 March 2023, the President’s delegate made various procedural directions pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) and the Personal Injury Commission Rules 2021, noting the matters referred to in the preceding paragraph, and further noting that it was appropriate for the parties to be provided with the revised transcript and with an opportunity to address on it.
A copy of the revised transcript (settled by the Member in respect of the ex tempore reasons) was issued to both parties on 20 March 2023. The appellant was given until 3 April 2023 to file and serve any further submissions it wished to make in respect of the transcript, including as to whether the revised transcript impacted the appeal, and any further submissions arising from the revised transcript as needed. The appellant has not lodged any submissions since.
There is otherwise no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the 1998 Act have been met.

THE EVIDENCE

The evidence consisted of the ARD, a Reply from the appellant, and the Award which was marked exhibit A. However as earlier noted, the relevant facts are undisputed.

THE MEMBER’S REASONS

The Member noted that Sch 3 of the 1987 Act provided “a fifty two-week assessment of what the injured worker has been earning”, with the 2016 Regulation then providing for a number of adjustments. He then set out the terms of cl 8C in full.
The Member noted the Award was tendered and became exhibit A. He then noted the “relevant clause” [subclause (iii) of cl 8 ‘Progression and Promotion’] says:
“Officers who have completed 12 months service on the second year and thereafter … (not transcribable 00: 21:48) [the missing words on my reading of the Award are ‘rate for’] … Correction[al] officer shall progress to the rate of a Correctional Officer 1st class subject to the following criteria … (a) Satisfactory conduct of services …”.[6]
[6] T11.3–16.
The Member noted that subcl (iii) continued to list various indicia or examples of satisfactory conduct of services, all of which the Member noted in full.[7]
[7] T11–12.
Immediately following his recording of the Award cl 8 subcl (iii) content, the Member stated:
“So it cannot be said that the increase, to use the term of the clause, the financially-material change is an automatic one. It is subject to those matters that I’ve just read out. The question is, as I understand it, is does the effect of an award such as this … invoke the financially material benefit provisions of clause 8C? …
How does it impact or does it impact on this provision where because of the terms of the employment [the respondent] gets to be entitled to an increase in her salary. I think the answer has got to be that the award has no effect. It simply is a contractual, if you like, guarantee that, provided those matters are satisfactorily complied with, that there will be a financially material change to the earnings of the worker. I do not see that there is any principle, certainly not one submitted, that holds that I can draw an inference that because it’s an award that it doesn’t apply to clause 8C …”[8] (emphasis added).
[8] T12.4–24.
The Member ultimately said, “I therefore find [the respondent] is entitled to the increased amount by the amount of increase permitted by the award because it’s a financially material change”. The Certificate of Determination records:
“In this matter the parties were unable to come to an agreement.
To ensure the parties received a timely determination of their dispute, the reasons for the orders set out below were given orally.
The Commission finds:
1. The provisions of regulation 8C of the Workers Compensation Regulation 2016 apply to circumstances where an award provides for a financially material change to the earnings of the worker.
A sound recording of the reasons given is available to the parties on request”.

GROUNDS OF APPEAL

Ground 1 alleges failure to give adequate reasons (in determining that clause 8C applied). Ground 2 alleges the Member erred in finding:
(a) The classification change from Correctional Officer, Level 02 to Correctional Officer, FST CLSS Level 01 constituted a change within the meaning of cl 8C.
(b) The Award was contractual or a contractual guarantee of a financially material change to the earnings of the respondent.

SUBMISSIONS FOR THE APPELLANT

The appellant says the Member was required to provide detailed reasons as to why the classification change which formed part of the Award was a change of an ongoing nature to the employment arrangement.
The appellant also put that the Award “is not a contract or a contractual guarantee that there will be a financially material change” to the respondent’s earnings, and that industrial awards are “legal documents that outline the minimum pay rates and conditions of employment”.[9]
[9] Appellant’s submissions, [13].
The appellant says the respondent’s employment was governed by the Award which:
“… was the ‘employment arrangement’ as referred to in clause 8C. The worker’s classification change is embedded in the Award … there could not have been a change to the ongoing nature of the employment arrangement because the classification change was the very nature of the employment arrangement” (emphasis in the original).[10]
[10] Appellant’s submissions, [14].
The appellant says it follows that cl 8C cannot apply, because there was no change to the ongoing nature of the employment arrangement as required by cl 8C.
The appellant also asserts a failure to give adequate reasons “to the extent that they were not able to be transcribed”.[11]
[11] Appellant’s submissions, [16].

SUBMISSIONS FOR THE RESPONDENT

The respondent says the appellant did not tender evidence to show the change in her role was to be temporary, and cl 8C applies as there was an ongoing material financial change in the rate of remuneration pursuant to a change in her classification under the Award.
The respondent puts that the appellant’s submission – that an award “is not a contract or a contractual guarantee that there will be a financially material change to the earnings of the worker as found by the member” shows a misunderstanding of the nature of awards.

DISCUSSION

I believe it is appropriate to first deal with Ground 2(a), which is also the appellant’s main argument. I then propose to deal with Ground 2(b). This means Ground 1 will be dealt with last. This should make the reasons easier to follow because, as is so often the case, the analysis of the reasons for the decision is significantly dependent upon the analysis of grounds where error is alleged or identified in relation to a finding or failure to make a finding.
I do not accept the appellant’s submission that the classification change did not constitute “a change of an ongoing nature to the employment arrangement” within the meaning of cl 8C.
The text of cl 8C needs to be read with the context and purpose of the provision in mind. Sch 3, cl 2(3) of the 1987 Act authorises the primary “relevant earning period” of 52 weeks in Sch 3, cl 2(2) to be adjusted by extending or reducing that period. Clearly enough, it does so in an attempt to ensure the PIAWE calculation properly reflects what an injured worker would have been paid but for the injury and this is its purpose. This is not new.
In Lismore City Council v Garland,[12] Kirby P detailed the legislative history of the “provision for the calculation of weekly compensation for a worker incapacitated for work as a result of a compensable injury” in the versions of the 1987 Act going back to the Workers’ Compensation Act 1926. His Honour concluded that the:
“… policy which lay behind the introduction of the present approach to the requirement under s 36 of the Act [is] that, during the first twenty-six weeks of incapacity, the worker should be paid his or her ‘current weekly wage rate as defined by s 42. That policy I take to be that the worker should, during such incapacity, be paid the ordinary rate which would have been paid as wages had there been no compensable injury” (emphasis added).
[12] (1992) 26 NSWLR 542 (Garland), 549.
Garland is not perfectly analogous to the present situation as the provisions for payment of weekly compensation have of course changed since both 1926 and 1992, and the first 26 weeks of incapacity had long expired in the present case. Nevertheless, the core principle, that a worker should be paid weekly compensation at a rate which would have been paid as wages had there been no injury (subject to statutory modifications), is sufficiently analogous for present purposes. This is consistent with Sch 3, cl 2(1) of the 1987 Act, in outlining the meaning of PIAWE, referring to earnings “at the time of the injury”.
The appellant says the respondent’s employment is governed by the Award, the Award is the employment arrangement cl 8C refers to, thus the classification change was not a change to the arrangement. This argument is rejected. It ignores the change in the respondent’s position from a Level 1 Officer to an Officer First Class – except to say this was no change at all and not ongoing as it was “embedded in the Award” and or was to be expected.
The appellant has not explained how the interaction between the Award and cl 8C could practically or logically operate if it were read this way. For example, it would, in my opinion, still leave the problem of what to do with, or how to read, the words “a change … to the employment arrangement resulting in a financially material change to the earnings …” (emphasis added). It is implicit in appellant’s argument that those emphasised words have no work to do if the relevant “employment arrangement”, or at least the one in the present case, the Award, is the employment arrangement itself for the purposes of cl 8C.
To slightly digress, the penultimate ellipse omits the words “of an ongoing nature” as I do not see any basis for the appellant to say that any relevant change was not of an ongoing nature. The classification change was not, for example, in the nature of a one-off bonus, or earnings during a period where there was an unusual amount of overtime, or a depression in earnings due to a temporary illness or other circumstances where a worker was on temporary leave without pay. This is consistent with the example of a change from full-time to part-time work in cl 8C(1) (the cl 8C example), because such a change qualifies for the adjustment, even though it is not difficult to envisage situations where there is a possibility of a change back to full-time work at some stage in the future.
This does not mean there may not be many factual circumstances where the full clause needs to be considered in order to properly conduct the analysis.[13]
[13] 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 [2014] NSWCA 409, [39].

But in the present case, the appellant’s focus appears to be on whether “there was a change … to the employment arrangement”. In my opinion, it is clear that if there is such a change, it is ongoing and also one which has resulted in a financially material change in the earnings. It is not totally clear whether or not the appellant’s submissions focus on the “ongoing nature” or “financially material change to the earnings” aspects, except to the extent of being part of the essential focus of the submissions noted above under Ground 2(a), particularly at paragraphs [12] and [14] of those submissions. If they do, again, there are no submissions explaining how that may be so. Otherwise, I do not see how that point is arguable.
This returns the discussion to whether the appellant is correct in submitting that the Award itself is the employment arrangement referred to in cl 8C, and if so, whether that makes a difference anyway. Again, there is little if any analysis or assistance provided in support of this submission. In essence it is rather put as a bare proposition or conclusion. One question that arises though is why, if the appellant’s position is right, does cl 8C(1) use the term “arrangement” rather than “contract” or “agreement” or “award”. In my opinion, this is because cl 8C contemplates its applicability to any specified or class of contract of employment, industrial agreement, award or other employment arrangement.
These terms are used elsewhere in the 1987 Act. Sections 49 and 50 relevantly provide for weekly compensation being payable despite having received holiday pay or “sick leave” under any “Act … award or industrial agreement … or contract of employment”. Similarly, s 87A authorises the regulations to prescribe additional or alternative compensation, including payments to workers or their dependants in respect of injuries or deaths under any specified or class of contract of employment, industrial agreement, award “or other arrangement”. These examples are not exclusive.
Perhaps a more important question arising is this: even assuming the Award itself is the “employment arrangement” referred to in cl 8C, what does the appellant’s argument mean? The essential extent of the submission in that respect is that there could not have been a relevant change because the classification change was the employment arrangement. If this means, for example, cl 8C has no work to do unless the Award itself is changed, another question arises of how that would work. If it means cl 8C would only apply in this instance if there was a change, for example, to the salary rates payable under cl 6, or allowances under cl 7, of the Award, I do not see how there would be a difference between such change and the change (“Progression and Promotion”) in cl 8 of the Award.
The issue appears to largely boil down to what “employment arrangement” means. This requires consideration of the text, context and purpose of the matter to be interpreted.
The statute authorising cl 8C, the 1987 Act, provides some assistance in the interpretation of it. Schedule 3, cl 2(3) relevantly provides “for the adjustment of the relevant earning period … (a) to take into account any period of unpaid leave or other change in earnings circumstances in the employment …” (emphasis added). The emphasised words are consistent with the statute contemplating regulations in many and varied situations where there is a change in earnings circumstances in the employment, and likely in a more general rather than limited way.
When cl 8C provides for an adjustment where “there was a change of an ongoing nature to the employment arrangement”, it is difficult to see how the legislative intention would be to limit the type of change – except of course in the way spelt out in Sch 3, cl 2(3)(a) (“earnings circumstances in the employment”) and in cl 8C (“of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings”). The appellant also submits (at paragraph [12]), inconsistently with its own argument, that the “classification change” (my emphasis, pointing to an apparent acceptance of ‘a change’), “… formed part of” the Award.
Making the appellant’s argument even harder to accept is the appearance of the cl 8C example. There is no hint that this operates in the context of an employment arrangement (whether it be a contract, award or other type of employment) only where the machinery to facilitate the change is not already part of the arrangement. There is also no explanation of how the appellant’s interpretation might be consistent with the statute and regulation. In my opinion, this interpretation attempts to create an artificial distinction between the employment arrangement itself and its constituent parts. It is a specious argument, and a distraction from what should be addressed: whether the respondent’s classification change “was a change of an ongoing nature to the employment arrangement” (my emphasis).
It is also difficult to see how the respondent’s earnings circumstances relevantly differ from the cl 8C example, particularly given the way the appellant has put its case: thus, if cl 8C does not apply in the respondent’s case, as there was no change to the employment arrangement because the change was the very nature of the arrangement, how can that be reconciled with the cl 8C example? The appellant has not addressed this either.
In other words, if a change from full-time to part-time work does constitute a change of an ongoing nature to the employment arrangement why would a change in a worker’s job classification, through progression and promotion, not also qualify? Clause 19 of the Award (“Permanent Part-Time”) contemplates arrangements being made to allow for part-time work, subject to those arrangements being acceptable to the employer and in compliance with the relevant legislation and policies). In my opinion, there is no reason why there should be a difference. Of course, it does not matter whether an award or a contract is involved. It is not difficult to envisage a clause similar to cl 8 of the Award in an employment contract.
The appellant’s submissions, in relation to both grounds of appeal, also ignore the criteria the respondent needed to comply with before being progressed and promoted from the classification of Officer Level 02 to Officer First-Class Level 01. It may even be said that the terms of cl 8C make it unnecessary to show the circumstances underlying the change. It is unnecessary to determine that in this case. But the terms of the criteria are relevant here because they are further evidence confirming a change, and one that has resulted “in a financially material change to the earnings” of the respondent.
The criteria make clear, as the Member found, that “it cannot be said that the increase … the financially-material change is an automatic one …”.[14] In my opinion, the terms of the criteria are inconsistent with the appellant’s argument that “there could not have been a change to the ongoing nature of the employment arrangement because the classification change was the very nature of [it]”. This is a fallacy by circular reasoning. The Member’s reference to “automatic” was appropriate in circumstances where the appellant was submitting there was an “expectation” or a “normal expectation” (see [7] above).
[14] T12.4–7.
This is also relevant to the appellant’s complaint of inadequate reasoning. The Member clearly regarded this as important in his reasoning, as he recorded in those reasons both the chapeau to the criteria[15] as well as each criterion. It is unnecessary to repeat that detail here. His comment that it could not be said to be automatic may be pithy but that was appropriate in the circumstances.
[15] T11.8–12.
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue,[16] the High Court stated (footnotes omitted) that:
“The language which has actually been employed in the text … is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy”.
[16] [2009] HCA 41; 239 CLR 27, [47].
For the reasons expressed above, and taking into account the text, context and purpose of Sch 3, cl 2 of the 1987 Act and cl 8C of the 2016 Regulation, “employment arrangement” in my opinion refers to the nature of the employment relationship, that is, whether it be, for example, by contract, award or other arrangement, and includes the various ingredients of the arrangement, which include other arrangements within the purview of that arrangement including, for example, terms or clauses or understandings (of contracts, agreements or awards or other arrangements). This is all limited to a “worker for work in any employment” (Sch 3, cl 2(1)).
I will return to discussion of Ground 2(a) below. As to Ground 2(b) (including the submission at paragraph [13]), the appellant’s characterisation of an industrial award, including the Award, as being relevantly different to a “contract or a contractual guarantee … as found by the Member” is incorrect. The bare reason or basis given for this statement is “an industrial award, like the subject Award, are legal documents that outline the minimum pay rates and conditions of employment”. It can be accepted that industrial awards do provide for minimum entitlements or standards, and that an employment contract may “guarantee” higher entitlements or standards. But that is not always the case or necessarily so. More importantly, it is beside the point of this case and is another distraction. There is no basis in the 1987 Act or cl 8C, or the evidence, for this submission.
If the appellant only puts this submission in the sense that it was “as found by the Member”, the lack of clarity has been increased by the submission immediately following, that industrial awards outline the minimum pay rates and employment conditions. Ultimately though, this does not matter – because whether or not the Member was mistaken (in referring to “[i]t simply is a contractual, if you like, guarantee …”), he was correct in concluding that it would be wrong to find the Award does not apply to cl 8C simply by reason of its status as an award.
The appellant also submits that the Member erred in finding “that the award was contractual or a contractual guarantee that there will be a financially-material change to the earnings …”.[17] But he did not find this, and I reject this submission. He relevantly said:
“How does it impact or does it impact on this provision where because of the terms of the employment Ms Farrugia gets to be entitled to an increase in her salary. I think the answer has got to be that the award has no effect. It simply is a contractual, if you like, guarantee that, provided those matters are satisfactorily complied with, that there will be a financially-material change to the earnings of the worker. I do not see that there is any principle, certainly not one submitted, that holds that I can draw an inference that because it’s an award that it doesn’t apply to clause 8C and, in fact, the opposite applies” (emphasis added).[18]
[17] Appellant’s submissions, [11(b)].
[18] T12.14–25.
The above qualification “if you like” makes it clear enough that the Member did not intend to say, nor did he say, that the Award is actually a contract or a contractual guarantee. He was rather saying that the terms of the Award are relevantly analogous to a contract, and there was no relevant difference between the effect of the Award and a contract of employment. The context of the comment can be seen to relate to his concern about the “effect” of the Award in relation to the criteria in cl 8(iii) for “Progression and Promotion”. More importantly, it is tolerably clear from this passage that the Member is implicitly referring to a change (“Ms Farrugia gets to be entitled to an increase in her salary”) in the employment arrangement (“this provision where because of the terms of the employment”) – even though he does not use those precise words.
I therefore reject the appellant’s argument that the Member erred in finding that the Award was contractual or a contractual guarantee that there will be a financially material change to the earnings of the worker. It follows that I reject appeal Ground 2(b).
Returning to appeal Ground 2(a), the above passage of the Member’s decision[19] does concern me in the context of whether the classification change constituted “a change … to the employment arrangement …” limb of cl 8C. This, rather than the “financially material change” limb, was the appellant’s essential argument. This passage refers to “the term of the clause” as being “the financially-material change” – so omitting “change of an ongoing nature to the employment arrangement resulting in”.
[19] T12.4–7.
Shortly thereafter the Member asked, “[h]ow does it impact or does it impact on this provision where because of the terms of the employment Ms Farrugia gets to be entitled to an increase in her salary.”[20] The content I have emphasised is not ideal as there is no express reference to change. But this should be read as a whole, and fairly, in the context of the Member’s comments clearly relating not only to change, but the detail of that change which he noted in full.
[20] T12.14–17.
However, similar language also appears earlier (“to use the term of the clause, the financially-material change”).[21] But even if an error was then said to exist, it also may be said to be inconsequential, given this passage: “It simply is a contractual, if you like, guarantee that, provided those matters are satisfactorily complied with, that there will be a financially-material change to the earnings of the worker” (emphasis added).[22] This implies a cognisance of the need to find, and provide adequate reasons in doing so, a change of an ongoing nature to the employment arrangement.
[21] T12.4–5.
[22] T12.18–21.
On the other hand, it appears the Member may have understood that at least part of the appellant’s argument was that cl 8C did not apply to an award per se – in other words, there was a particular difficulty with the Award being applicable simply on the grounds that it was an award. It does not appear, on my reading of the transcript before the Member, that the appellant’s case was, at least necessarily, put that way (see [7] above). In any event, at a later and critically important juncture, the Member states in conclusion:
“I therefore find that the [respondent] is entitled to the increased amount by the amount of increase permitted by the award because it’s a financially-material change” (my emphasis).[23]
[23] T13.6–8.
This finding is of concern because it is dispositive, and only relates to part of the correct test in cl 8C, omitting the limb of the test which represented the appellant’s main argument (“a change of an ongoing nature to the employment arrangement …”).
The error is consequential as the above language has found its way into the Certificate of Determination, which appears to be formulated as a type of general declaration about the applicability of an award. It states:
“The provisions of regulation 8C of the Workers Compensation Regulation 2016 apply to circumstances where an award provides for a financially material change to the earnings of the worker”.
Thus, in my view, the learned Member has erred[24] in applying a wrong test and/or identifying a wrong issue. In Minister for Immigration and Multicultural Affairs v Yusuf,[25] Gleeson CJ stated that (jurisdictional) error occurs if a decision-maker applies a wrong test. This statement is consistent with the observations of McHugh, Gummow and Hayne JJ in Yusuf (at [82], including in relation to an identifying a wrong issue also being an error of law).
[24] At T12.7–13.8.
[25] [2001] HCA 30; 206 CLR 323 (Yusuf), [41].
In these circumstances, and with some reluctance, I revoke the Certificate of Determination. This is unfortunate as the error may be described as minor. However, the dispositive finding and Certificate itself does not ultimately accord with the essential issue in the case.
Accordingly, I uphold Ground 2(a) as there is error in the finding that the classification change did constitute a change within the meaning of cl 8C, and revoke the decision.
While it may be said to be unnecessary to deal with Ground 1, including because I propose to redetermine the matter, I believe it appropriate, in all the circumstances, that I do deal with this ground.[26]
[26] See Kuru v State of New South Wales [2008] HCA 26; 236 CLR 1.
In Magliano v Workers Compensation Nominal Insurer,[27] Deputy President Wood helpfully set out the relevant principles which I will repeat (omitting footnotes) as follows for ease of reference:
[27] [2023] NSWPICPD 51.
“205. The minimum standard that a decision of a member of the Commission must reach in providing adequate reasons is defined by the duty imposed in the Commission’s statutory framework. Section 294(2) of the 1998 Act provides that a member is to provide a brief statement setting out the Commission’s reasons for the determination. Rule 78(2) of the Personal Injury Commission Rules 2021 requires the Members reasons to set out:
(a) his or her findings on the material questions of fact, referring to the evidence or other material on which those findings were based;
(b) the Member’s understanding of the applicable law, and
(c) the reasoning processes that led to the Member’s conclusions.
206. Further, in accordance with r 78(3), the Member’s reasons must be sufficient to make the parties aware of the Member’s view of their case.
207. The obligations of a primary decision maker to provide reasons are also spelt out in various authorities. The above statutory obligations are consistent with those authorities. The principles were summarised by McColl JA (with Ipp JA and Bryson AJA agreeing) in Pollard v RRR Corporation Pty Ltd. McColl JA also observed (citations omitted):
‘The Court is conscious of not picking over an ex tempore judgement and, too, of giving due allowance for the pressures under which judges of the District Court are placed by the volume of cases coming before them. However a trial judge’s reasons must, ‘as a minimum … be adequate for the exercise of a facility of appeal’. A superior court, ‘considering the decision of an inferior tribunal, should not be left to speculate from collateral observations as to the basis of a particular finding’.”
I also note Fire and Rescue NSW v S,[28] where Deputy President Roche helpfully referred to the following authorities and propositions:
“… ‘reasons need not be lengthy or elaborate’ (Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 (Beale) [at 443]). The extent and scope of a [Member’s] duty to give reasons depends upon the circumstances of the individual case (Mifsud v Campbell (1991) 21 NSWLR 725 at 728 …
As explained ... in Woolworths Ltd v Warfe [2013] VSCA 22 at [131]:
‘… reasons can be adequate by a combination of what is expressly stated and the inferences that necessarily arise from what is expressly stated. Thus, as … stated in Murray Goulburn Coop Co Ltd v Filliponi:
‘In some cases, the path of reasoning which led to the ultimate conclusion is necessarily implicit in a sufficiently detailed recitation of the relevant material upon [which] the decision was based …’.”
[28] [2015] NSWWCCPD 50, [142], [145].
As noted by the Court of Appeal in Pollard v RRR Corporation Pty Ltd,[29] an ex tempore decision should not be picked over for the purposes of identifying error. Nor should a fine-tooth comb be run through a decision such as this; it should be read fairly and as a whole. For those reasons, I reject the appellant’s submission, and therefore Ground 2(b), that the Member erred in finding that the Award was “contractual or a contractual guarantee that there will be a financially-material change to the earnings of the worker”.
[29] [2009] NSWCA 110.

Meagher JA also stated this in Beale:
“It does not automatically follow that because the reasons for a decision are inadequate then an appealable error has occurred. Examination of nearly any statement of reasons with a fine-tooth comb would throw up some inadequacies. Indeed, an appeal court will reserve any intervention to the situations in which it is left with no choice, where no reasons have been given in circumstances where there was an obligation to provide them and in circumstances where a statement of reasons is so inadequate as to constitute a miscarriage of justice. In other words, the statement of reasons must be looked at as a whole and the material inadequacies identified and considered”.[30]
[30] Beale, 444.
I do not agree with the appellant’s submission that the Member failed to provide adequate reasons, nor do I agree with the submission that the Member “was required to provide detailed reasons as to why the classification change … was a change of an ongoing nature to the employment arrangement (emphasis added).”[31]
[31] Appellant’s submissions, [12].
The above principles relating to adequacy of reasons make it clear that the content and extent of reasons required depend upon the nature of the issues presenting. In the present case, there was no factual dispute, and the issue was a limited one, whether cl 8C applied to the agreed facts. In these circumstances, I believe that the brevity of the reasons was not inappropriate. It should be remembered the Member also stated his understanding of the applicable law, referring to Sch 3 of the 1987 Act and then setting out cl 8C in full.
The Member also then read the criteria onto the record, in full, and, tellingly, stated “so it cannot be said that the increase … is an automatic one”. Again, this clearly is a reference to the appellant’s argument to him that there was no change. Whether the Member’s statement was erroneous in this respect is not to the point – which is that the reasons were adequate.
In the context of dealing with Ground 2(a) and (b), I have earlier (at [52] and [55]–[63] above) analysed in detail the Member’s reasoning. I believe it is clear from that analysis that the Member’s reasons were at least adequate for the exercise of a facility of appeal. As I have found above, it is not so much the reasoning that is deficient, it is rather the erroneous finding identified that was problematic. This can be seen from the way the appeal ground was initially drawn, by only including one ground, relating to alleged inadequate reasons, but then inconsistently proceeding to make submissions (at paragraphs [11]–[15]) that challenged the findings made. Even if I am wrong about the adequacy of reasons, it does not follow that error occurred, and I would still be of the view that any such inadequacy did not constitute a miscarriage of justice.[32]
[32] Beale, 444. See [71] above.
It is not clear whether the appellant persists with its final submission (at [28] above). However, to the extent it is necessary, I reject that argument given the circumstances there set out. In particular, the parties received a copy of the revised transcript on 20 March 2023 and the appellant was given an opportunity to provide any supplementary submissions with the benefit of the transcript by 3 April 2023, and no further submissions were lodged. The Member stated his understanding of the applicable law, referring to Sch 3 of the 1987 Act and then setting out cl 8C in full.
For those reasons, Ground 1 fails.

REDETERMINATION

The circumstances of the error of law are such that it is appropriate that I redetermine the matter. This is consistent with s 3(c) of the 2020 Act requiring “the Commission to resolve the real issues in proceedings justly, quickly, cost effectively and with as little formality as possible”. This will not involve credit issues, or the need for oral evidence.
My redetermination is that the change in the respondent’s employment classification under the Award from Correctional Officer, Level 02 to Correctional Officer, FST CLSS Level 01 did constitute a change of an ongoing nature to the employment arrangement resulting in a financially material change to her earnings within the meaning of cl 8C.
Given the way that I have addressed the grounds of appeal, I have already provided reasons for this redetermination at [32]–[65] above. Those reasons apply to this redetermination. They also inform the finding I now make that the change in the respondent’s employment classification under the Award did constitute a change of an ongoing nature to the employment arrangement she had with the appellant, within the meaning of cl 8C.
At the brief hearing on 31 October 2023, I raised the matter of formulation of final orders in terms of precise rates and periods to be included in final orders in the event of the appeal being dismissed. The transcript before the Member shows he dealt with that aspect, at the invitation of Mr Tanner, and with no objection from the appellant, by leaving the question of working out this detail to the parties subject to them having leave to apply if necessary.
Mr Tanner made the same submission to me on 31 October 2023, although Mr Tan requested that I “do the calculations”. The difficulty with that is the apparent absence of adequate information to allow me to do that. At the least, such information was not included in any of the submissions before the Member or on appeal. Accordingly, I will allow liberty to apply in this respect if it is necessary.

DECISION

The appellant is granted leave to amend the notice of appeal to rely on a second ground to allow the content of paragraph [11](a) and (b) of the appellant’s written submissions on appeal also being treated as a ground of appeal.
The Certificate of Determination dated 16 February 2023 is revoked.
Upon redetermination, the Commission finds that the change in the respondent’s employment classification under the Award from Correctional Officer, Level 02 to Correctional Officer, FST CLSS Level 01 did constitute a change of an ongoing nature to the employment arrangement resulting in a financially material change to her earnings within the meaning of cl 8C of the Workers Compensation Regulation 2016.
Liberty to apply in relation to any further dispute in the formulation of the rate(s) and or period(s) of weekly compensation.

Michael Perry
ACTING DEPUTY PRESIDENT

28 November 2023