Secretary, Department of Communities and Justice v Nitchell
[2023] NSWPICPD 36
•23 June 2023
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
CITATION: | Secretary, Department of Communities and Justice v Nitchell [2023] NSWPICPD 36 |
APPELLANT: | Secretary, Department of Communities and Justice |
RESPONDENT: | Ingrid Nitchell |
INSURER: | QBE TMF |
FILE NUMBER: | A1-W4729/22 |
PRESIDENTIAL MEMBER: | Deputy President Elizabeth Wood |
DATE OF APPEAL DECISION: | 23 June 2023 |
ORDERS MADE ON APPEAL: | 1. The Member’s Certificate of Determination dated 14 October 2022 is revoked. 2. The Member’s further orders dated 24 October 2022 and the final orders dated 28 October 2022 are revoked. 3. The respondent’s “relevant earning period”, as defined by cl 2(2) of Sch 3 to the Workers Compensation Act 1987 is adjusted to be the period from 21 February 2022 until 17 March 2022 inclusive, in accordance with reg 8C of the Workers Compensation Regulation 2016. 4. The parties have liberty to apply in the event that an agreement cannot be reached as to the calculation of the respondent’s pre-injury average weekly earnings. |
CATCHWORDS: | WORKERS COMPENSATION – Clause 2 of Schedule 3 to the Workers Compensation Act 1987 – calculation of pre-injury average weekly earnings – whether Regulation 8C of the Workers Compensation Regulation 2016 applies to exclude from the calculation a period when workers compensation payments were received in respect of an earlier injury – Secretary, Department of Communities and Justicev Pell [2023] NSWPICPD 19 discussed – statutory construction – circumstances when words can be read into the statute –Berminghamv Corrective Services Commission of NSW (1988) 15 NSWLR 292 considered; Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue (NT) [2009] HCA 41; Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9 discussed and applied |
HEARING: | 24 May 2023 |
REPRESENTATION: | Appellant: |
| Ms S Warren, Counsel | |
| Bartier Perry Lawyers | |
| Respondent: | |
| Mr J Mrsic, counsel | |
| Grieve Watson Kelly Lawyers | |
| DECISION UNDER APPEAL | |
MEMBER: | Mr J Wynyard |
DATE OF Member’s DECISION: | 14 October 2022 |
INTRODUCTION AND BACKGROUND
Ms Ingrid Nitchell (the respondent) was employed by the Secretary, Department of Communities and Justice (the appellant) on a part-time basis as a child protection caseworker. On 12 November 2021, she suffered an injury to her back when travelling in a faulty lift. Liability for the injury was accepted by the appellant. The respondent ceased work, returning to work on a graduated basis from 27 January 2022. She returned to her usual pre-injury hours on 21 February 2022. On 17 March 2022, the respondent suffered a psychological injury in the context of threats made by the parent of a child. She claimed weekly compensation and her claim was accepted.
The dispute before the Commission is about how the pre-injury average weekly earnings in respect of the injury on 17 March 2022 (the second injury) should be calculated. In the calculation of the respondent’s pre-injury average weekly earnings, the appellant disregarded the weekly compensation amount paid in respect of the earlier injury, as required by cl 6(2)(c) of Sch 3 to the Workers Compensation Act 1987 (the 1987 Act). However, the appellant calculated the pre-injury average of the respondent’s weekly earnings by applying the “relevant earning period” as defined in cl 2(2) of Sch 3 to the 1987 Act. That is, the appellant applied the full period of 52 weeks prior to the injury to the calculation, without disregarding the period during which the respondent was in receipt of payments of weekly compensation for the earlier injury. The respondent asserted that the relevant earning period should be reduced because of the exclusion of the earlier workers compensation payments from her gross earnings. The respondent relied upon regulations 8A to 8EA in Division 2 of Pt 4 of the Workers Compensation Regulation 2016 (the 2016 Regulation). Those regulations provide for an adjustment of the “relevant earning period” defined in cl 2(2) of Sch 3 in certain circumstances for the purpose of calculation of the worker’s pre-injury average weekly earnings.
The appellant disputed that the respondent’s relevant earning period could be adjusted. The respondent brought proceedings in the Personal Injury Commission (the Commission) and the dispute was listed for arbitration before a non-presidential member. The Member issued a Certificate of Determination on 14 October 2022. The Member determined that:
(a) the phrase “immediately before the date of injury” in cl 2(2) of Sch 3 should be read as “immediately before the date of injury, or as adjusted where a worker receives income as defined by Clause 6((2)(c) hereof” (my emphasis), and
(b) the appellant contravened cl 6(2)(c) of Sch 3 by:
(i)including the respondent’s earnings received when performing suitable duties as a result of her unrelated injury, and
(ii)including the period when the respondent was in receipt of weekly payments for her unrelated injury.
The Member issued further orders on 24 October 2022 and 28 October 2022 in respect of the respondent’s pre-injury average weekly earnings figure, which he determined was $1,636.25, and the amounts of weekly compensation payable.
WHETHER THE APPEAL COULD BE DETERMINED ON THE PAPERS
Section 52(3) of the Personal Injury Commission Act 2020 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.”
The appellant submitted that the appeal could be determined “on the papers.” The respondent indicated that, if the Commission considers an oral hearing is required, she would be ready to assist.
I had regard to Procedural Directions PIC2 – Determination of matters ‘on the papers’ and WC3 – Presidential appeals and questions of law, the documents before me, and the submissions by the parties. I formed the view that there were some matters relevant to the appeal that had not been adequately addressed in the written submissions lodged by the parties. I was therefore not satisfied that I had sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing.
An oral hearing was arranged and took place on 24 May 2023.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met and the Member’s decision is not interlocutory in nature, so that leave to appeal is not required.
THE LEGISLATION
Clause 2 of Sch 3 to the 1987 Act provides:
“Meaning of ‘pre-injury average weekly earnings’
(1) Pre-injury average weekly earnings, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note—
See also clauses 3–5 relating to modifications of pre-injury average weekly earnings by agreement and in relation to apprentices, trainees and persons aged under 21 years.
(2) Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).
(3) The regulations may provide for the adjustment of the relevant earning period for a worker in employment (including, for example, by extending or reducing the period)—
(a)to take into account any period of unpaid leave or other change in earnings circumstances in the employment, or
(b)to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.
(4) … .”
Clauses 6(1) and 6(2) of Sch 3 to the 1987 Act relevantly provide:
“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)…
(b)…
(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)...”.
Regulation 8AA of the 2016 Regulation defines “the relevant earning period” as having “the same meaning as in clause 2(2) of Schedule 3 to the 1987 Act”.
Division 2 of Pt 4 of the 2016 Regulation (reg 8A to reg 8EA) provides for an adjustment of the “relevant earning period” defined in cl 2(2) of Sch 3 for the purpose of calculation of the worker’s pre-injury average weekly earnings. Regulation 8A provides for adjustment in the following circumstances and in the following order:
(a) adjustment for workers not continuously employed (reg 8B);
(b) adjustment for financially material change to earnings (reg 8C);
(c) alignment of relevant earning period with pay period (reg 8D);
(d) adjustment for unpaid leave (reg 8E), and
(e) adjustment for prescribed periods relating to COVID-19 (reg 8EA).
The issue in dispute in these proceedings concerns consideration of the following regulations within the 2016 Regulation:
“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.
8D Alignment of relevant earning period with pay period—Schedule 3, clause 2(3)(b) of 1987 Act
(1) The relevant earning period for a worker in employment may be adjusted 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.
(2) The relevant earning period is not to be adjusted as provided by this clause unless the insurer is reasonably satisfied that the amount of pre-injury average weekly earnings calculated by reference to the period as so adjusted is not less than the amount that it would have been but for the adjustment.
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.”
THE MEMBER’S REASONS
The Member identified the issue in dispute, which was how the respondent’s pre-injury average weekly earnings figure was to be calculated. He noted the relevant facts and the circumstances of both of the respondent’s injuries. He referred to the work capacity assessment undertaken by the appellant in which the appellant asserted that the respondent was entitled to $1,184.75 per week pursuant to s 36 of the 1987 Act.
The Member reproduced the relevant legislation dealing with how pre-injury average weekly earnings were to be calculated and the regulations pertaining to adjustment of the relevant earning period. He noted that cl 6(2)(c) of Sch 3 to the 1987 Act provided that weekly payments of compensation were not to be included in the calculation of the worker’s pre-injury average weekly earnings. He summarised the submissions of the parties, noting that the respondent asserted that reg 8C of the 2016 Regulation applied so that the weeks during which the respondent was receiving workers compensation for her earlier injury could be adjusted to remove those weeks from the calculation of the respondent’s relevant earning period.
The Member discussed similar decisions by non-presidential members, namely Sidhu v Secretary, Department of Communities and Justice,[1] issued by Senior Member Beilby and Stewart v Secretary, Department of Communities and Justice,[2] issued by Member Burge. The Member observed that both those cases were factually different to the current matter because in this case, the respondent had returned to suitable duties for a period, during which time the respondent was paid some weekly payments and some income for her earnings.
[1][1] [2021] NSWPIC 522 (Sidhu).
[2] [2022] NSWPIC 333 (Stewart).
The Member noted that the appellant submitted that:
(a) Sidhu was wrongly decided;
(b) the principles of statutory construction required a consideration of the text itself;
(c) the relevant earning period could not be adjusted other than in accordance with regs 8B to 8EA of the 2016 Regulation, and
(d) none of those regulations applied in the respondent’s circumstances.
The Member considered that there was “some ambiguity” in the appellant’s position. That is, that the payments of weekly compensation made during the 52 week period used for the calculation of the pre-injury average weekly earnings were to be excluded from the gross pre-injury earnings but the weeks in which weekly payments were made could not be excluded from that period.
The Member was of the view that reg 8E, which permits weeks during which a worker took “unpaid leave” to be excluded from the 52 week period, did not apply in the respondent’s circumstances, for the reasons set out by Member Beilby in Sidhu. That is, that a finding that the worker was on unpaid leave would go beyond the “ordinary and grammatical sense of the statutory words.”[3]
[3] Sidhu, [24].
The Member observed that reg 8E was enabled by cl 2(3)(a) of Sch 3 to the 1987 Act, which provided that the regulations may also take into account “other change in earnings circumstances in the employment”. The Member considered that a common change in a worker’s “earnings circumstances” could be identified where the worker is paid reduced earnings when returning to work on suitable duties after an injury. The Member noted that reg 8C identified the enabling provision.
The Member proceeded to consider cl 6(2)(c) of Sch 3, which he said was not limited to excluding the payment of weekly compensation from the calculation of the pre-injury average weekly earnings because it provided for the exclusion of “any payment in respect of loss of earnings under a scheme to which the workers compensation legislation relates.” The Member observed that weekly payments of compensation constituted a “payment in respect of loss of earnings” and added that the worker’s loss of earnings while on suitable duties was also a payment in respect of loss of earnings. He remarked that the concept of rehabilitation was an integral part of the workers compensation legislation. He concluded that cl 6(2)(c) of Sch 3 applied to exclude from the definition of “earnings” payment of compensation and loss of earnings while the respondent was on suitable duties, which in turn excluded that income from “earnings” as defined in cl 2(1) of Sch 3.
The Member noted that an anomaly arose. The Member reasoned that the calculation of the respondent’s pre-injury average weekly earnings did not include the compensation, or the reduced earnings paid during the performance of suitable duties, so that that period became “inapplicable” to the 52 week period. He said that a difficulty arose because cl 2(2) of Sch 3 specifically mandated that the relevant earning period was the 52 weeks immediately before the injury, which, in the respondent’s case, was 22 March 2022. The Member noted the qualification in the clause “except as provided by this clause.” He observed that cl 6 of Sch 3 did not provide that the 52 week period could be adjusted and while cl 2(2) of Sch 3 appeared to allow for an adjustment, the only manner in which the period could be adjusted was by regulation made under cl 2(2).
The Member turned to reg 8C of the 2016 Regulation. He noted that the regulation did not refer to “other changes in earnings circumstances” provided for in cl 2(2) of Sch 3, but it described the circumstance where there had been “a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker”. He further noted that in Sidhu, Member Beilby (as she then was) considered that the words “ongoing nature” was a reference to a change in income from payments of weekly compensation to payments for earnings from the employer. He further referred to the decision in Stewart, in which that Member “said that cl 8C applied to the change from earnings from the employer to receipt of compensation from the insurer.”[4]
[4] Nitchell v Secretary (Department of Communities and Justice) [2022] NSWPIC 625 (reasons), [70].
The Member observed that both interpretations were based on the factual circumstances in each case. He said that there were two aspects of the regulation that needed to be noted. He said that the first aspect was that the example given in reg 8C of a change from full-time work to part-time work indicated that the drafter did not take into account cl 6(2)(c) of Sch 3 but was concerned with circumstances where the contractual aspect of the employment itself had changed. He said that the second aspect was that reg 8C(2) excluded any period before the change in earnings from the calculation of the pre-injury average weekly earnings. He reasoned that that would result in a calculation based on less earnings if it were a change from full-time work to part-time work, or greater earnings if the change was from part-time work to full-time work.
The Member pointed to cl 6(2)(c) of Sch 3 and said that it excluded from the definition of pre-injury average weekly earnings the workers compensation payments and the respondent’s reduced earnings while on suitable duties and excluded them from the definition of “income” in cl 6(2) of Sch 3. He noted that cl 6(1) of Sch 3 defined “income” as “earnings”. He reasoned that, as a result, the definition of “pre-injury average weekly earnings” provided in cl 2 of Sch 3 could not apply because the income and compensation received while the respondent was performing suitable duties was not “earnings”.
The Member noted the respondent’s submission that the whole of cl 2 of Sch 3, including the requirement for a 52 week period and the power to adjust that period, could be ignored. He considered, however, that if such a construction was applied, there would be no statutory guidance as to how the pre-injury average weekly earnings could be calculated. He said that this “lacuna” in the scheme had resulted in the unconscionable result that pre-injury average weekly earnings were being calculated over the whole 52 weeks, notwithstanding that the worker received income during that period that was excluded from the calculation.
The Member referred to s 33 of the Interpretation Act1987, which required that, in interpreting an Act or statutory rule, a construction that promoted the purpose and object of the Act, or the Act under which the statutory rule was made, was to be preferred. The Member further referred to the authority of Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue (NT),[5] in which French CJ observed that “[t]he starting point … is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose”.[6] He noted that French CJ observed that that approach was consistent with the approach taken by Gaudron J in Corporate Affairs Commission (NSW) v Yuill,[7] in which her Honour said that the context and legislative purpose, that is, the state of the law and the mischief the legislation intended to remedy, were relevant.
[5] [2009] HCA 41 (Alcan).
[6] Alcan, [4].
[7] [1991] HCA 28 (Yuill).
The Member considered that, in its context, the ordinary and grammatical sense of the words “other change in earnings circumstances” in cl 2(3) indicates that the legislative purpose was to exclude from the calculation of the pre-injury average weekly earnings the income defined in cl 6(2)(c). The Member observed, however, that while the income is excluded, the statute was silent in respect of how the “properly defined” pre-injury average weekly earnings period was to be adjusted.
The Member said that the requirement in cl 2(2) that the period before and after the 52 weeks ending immediately prior to the date of injury could not be complied with because the 14 weeks from 12 November 2021 to 21 February 2022 had been excluded. The Member considered that Sch 3 was beneficial in nature in that it provided for injured workers to be compensated by assessing their gross pre-injury earnings. He said that it was highly unlikely that the legislative intention was to include a period when the injured worker was not working, as was the situation with the respondent in this case and the injured workers in Sidhu and Stewart.
The Member said that there were two methods that could be adopted to remedy the situation in this case, the first being the approach taken in Sidhu, which was to apply reg 8C. The Member considered that “on a fair reading” of reg 8C, it did not apply to workers who had suffered prior unrelated injuries for which they were compensated during the 52 week period. He observed that the “contrasting results found in Sidhu and Stewart attest to the problems in this approach.”[8]
[8] Reasons, [81].
The Member cited Berminghamv Corrective Services Commission of NSW[9] and Nightingale v Blacktown City Council[10] as authorities to say that a court may read words into a legislative provision in order to give effect to the purpose of the legislation if, by inadvertence, the legislature had failed to deal with an eventuality which needed to be dealt with in order to achieve the purpose of the Act.
[9] (1988) 15 NSWLR 292 (Bermingham).
[10] [2015] NSWCA 423 (Nightingale).
The Member concluded that such an inadvertence had occurred in this case. He concluded that the remedy was to add to the phrase “immediately before the date of injury” in cl 2(2) of Sch 3 the words “or as adjusted where a worker receives income as defined by Clause 6(2)(c) hereof”.
The Certificate of Determination issued on 24 October 2022 records:
“The Commission finds:
1. The insurer contravened the provisions of Schedule 3(6)(2)(c) when it included in its calculations of the pre-injury average weekly earnings (PIAWE) the earnings received by the [respondent] whilst she was performing suitable duties with regard to her unrelated injury.
2. The insurer contravened the provisions of Schedule 3(6)(2)(c) when it included in the calculation of the PIAWE the period when the [respondent] had been in receipt of compensation for her unrelated injury.
3. The 52 week period provided for the calculation of the PIAWE is adjusted by deducting the 14 weeks to which Schedule 3(6)(2)(c) applied.
The Commission orders:
1. The parties are to bring in short minutes of order in accordance with these reasons.
2. The parties have liberty to apply.”
The Member issued further orders on 24 October and 28 October 2022 in relation to the actual calculation of the respondent’s pre-injury average weekly earnings. Those orders are not relevant to this appeal.
GROUND OF APPEAL
The appellant brings one ground of appeal, alleging error on the part of the Member as follows:
“The Member erred in his interpretation of Schedule 3 of the Workers Compensation Act 1987 … in that the Member determined that the relevant earning period could be adjusted by deducting 14 weeks by applying the definition of earnings from Schedule 3(6)(2)(c).”[11]
SUBMISSIONS
[11] Appellant’s submissions, [13].
The appellant’s written submissions
The appellant refers to the decisions in Sidhu, Stewart and Pell v Secretary, Department of Communities and Justice.[12] The appellant acknowledges that appeals to a Presidential member have been lodged in the decisions in Pell and Stewart but submits that this appeal will not affect those matters.
[12] W1586/22, 13 May 2022 (Pell).
The appellant refers to the respondent’s assertion that her pre-injury average weekly earnings figure should be $1,720.64. The appellant submits that the respondent’s gross earnings in the 52 weeks prior to her injury on 17 March 2022 were $64,849.58, and that figure should be divided by 52 weeks in order to arrive at a pre-injury average weekly earnings figure of $1,247.11.
The appellant reproduces cl 2 of Sch 3 to the 1987 Act, in which the meaning of pre-injury average weekly earnings is defined. The appellant submits that cl 2 limits the earnings to be used in the calculation of the pre-injury average weekly earnings to the amounts earned in the “relevant earning period”, and no regard is to be had to earnings paid or payable before or after the 52 weeks that constitute the “relevant earnings period.”
The appellant submits that the clause allows the regulations to make provision for an adjustment of the relevant period and submits that there is no discretion in the 1987 Act for the Commission to alter the relevant earning period, other than in accordance with the regulations. The appellant says that calculating the pre-injury average weekly earnings is a two-step process. That is, the first step in the process of the calculation is to determine the relevant earning period and then “step” to the earnings.
The appellant refers to regulations 8A to 8EA of the 2016 Regulation which provide five ways in which the relevant earning period can be adjusted and asserts that there is no other permissible circumstance in which the period can be altered.
The appellant contends that none of the circumstances set out in the regulations apply to the respondent, so that her relevant earning period remains at 52 weeks immediately prior to the injury. The appellant refers to the respondent’s reliance on reg 8C and reg 8D as mechanisms to adjust the relevant earning period to exclude the period when the respondent was in receipt of workers compensation benefits.
The appellant maintains that reg 8C does not apply. The appellant refers to the example set out in the regulation of the circumstance when a worker changes from full-time work to part-time work, and the requirement that there must be “a financially material change” to the earnings of the worker. The appellant asserts that the ongoing nature of the employment arrangement between the respondent and the appellant did not change.
The appellant further submits that reg 8D does not apply either and it is clear that reg 8D is limited to allowing the relevant earning period to be aligned (that is, shifted) to a worker’s pay periods (such as fortnightly or monthly pay periods) in order to more easily calculate the figure. The appellant submits that that scenario was clearly not the dispute that was before the Commission. The appellant asserts that to apply reg 8D in order to shorten the relevant period was contrary to the intention of the regulation.
The appellant refers to the respondent’s submission to the Member that cl 6(2)(c) of Sch 3 required that the period during which the respondent was on weekly payments was to be excluded from the relevant earning period. The appellant observes that, ultimately, the Member concluded that the regulations did not apply, and that the dispute could be determined by reading words into cl 2(2) of Sch 3. The appellant asserts that the Member fell into error in taking that approach. The appellant submits that the Member was not entitled to determine what was fair, and what compensation was payable, without giving regard to the relevant statutory provisions.
The appellant submits that the 1987 Act and the regulations make it clear that the relevant earning period is 52 weeks immediately prior to the injury and that period can only be adjusted in the circumstances prescribed in regulations 8A to 8EA.
The appellant maintains that the Member erred in determining the relevant earning period by taking into account the fact that weekly payments of compensation were excluded. The appellant asserts that the Member “entangled” the definition of earnings with the assessment of the relevant earning period. The appellant says that the definition is only relevant after the relevant earning period is ascertained. The appellant submits that the Member misinterpreted the legislative provisions.
The appellant refers to the respondent’s submission to the Member that the definition of the relevant earning period permits the exercise of discretion to alter the relevant earning period. The appellant submits that such an interpretation does not sit with all of the legislation dealing with adjustments and exclusions of periods during the relevant earning period. The appellant adds that, if there were such a discretion, the provisions of the Act (presumably a reference to Sch 3 to the 1987 Act) and the 2016 Regulation would have no work to do. The appellant submits that the interpretation should not go beyond the ordinary grammatical meaning of the words, citing Alcan. The appellant says that “there is no exception inherent in the definition of PIAWE that includes the definition of ‘earnings’ provided for in clause 6 of Schedule 3.”[13]
[13] Submissions, [46].
The appellant points out that cl 2(2) specifically provides “except for as provided by this clause (or the Regulations made under this clause)”. The appellant submits that, if the respondent’s interpretation was accepted, those words would have no purpose.
The appellant contends that the regulations could have made express provision for the exclusion of any week not worked, such as in reg 8E, which excluded weeks when the worker was on “unpaid leave” but did not otherwise exclude weeks not worked. The appellant submits, however, that if the periods during which workers did not work were excluded, the exclusion would also apply to holidays or other paid leave, which is inconsistent with how the pre-injury average weekly earnings have been calculated both before and after the 2019 amendments. The appellant submits that, if the legislature intended to include those periods, such an intention would have been expressed in either the regulations or the clause within Sch 3.
The appellant maintains that it is not necessary to take into account the definition of “earnings” when determining the relevant earning period, it is clearly defined and sets out the specific circumstances where it can be altered. The appellant further maintains that the exclusion of weekly payments of compensation occurs at the second step in the calculation of the pre-injury average weekly earnings. The appellant says that Div 2 of Pt 4 of the 2016 Regulation provides for the adjustment of the relevant earning period and does not exclude periods during which weekly compensation was received.
The appellant reiterates that the only proper interpretation of the relevant earning period is that it must be 52 weeks, which can only be adjusted in accordance with the regulations. The appellant asserts that there is nothing in the legislature that indicates that the 52 week period is a “maximum” period. The appellant acknowledges that parts of the workers compensation legislation are intended to be beneficial in nature, but parts of the legislation are not, and are limiting in nature in order to preserve the workers compensation scheme. The appellant submits that the assertion that the legislation is beneficial is not sustainable, and an interpretation of Sch 3 to the 1987 Act should not go beyond the ordinary meaning of the words adopted. The appellant relies on Australian Education Union v Department of Education and Children’s Services[14] to say that the starting point in legal interpretation is the primacy of the statutory text and the ordinary and grammatical meaning of the words.
[14] [2012] HCA 3 (Australian Education Union).
The appellant’s oral submissions
At the hearing, the appellant provided a brief overview of its case, which is essentially that the Member erred by determining that there was ambiguity in the application of the schedule so that he could therefore read additional words into cl 2 of Sch 3. The appellant submits that there is no ambiguity and therefore no permission to change the provisions in order to fit the factual circumstances of the case. The appellant says that the Member combined part of cl 6 with cl 2, which resulted in both clauses, as well as many of the regulations, having no work to do.
The appellant advised that, while there was a discussion about whether the 52 week period was intended to be a maximum period, the Member’s finding that additional text was to be added to cl 2 of the schedule was not the subject of submissions at the arbitration.
In response to further queries posed by me, the appellant submitted that:
(a) the words “in the following order” expressed in reg 8A of the 2016 Regulation mean that “you would step through each regulation and find which one applied to the factual scenario”;[15]
(b) the appellant maintains its position that reg 8C does not apply in this case;
(c) if reg 8C did apply, the period to be used for the purpose of calculating the pre-injury average weekly earnings would be from the respondent’s return to work after the first injury until the date of the injury;
(d) reg 8E does not apply because the respondent was not on “unpaid leave” when on workers compensation payments, as that term is ordinarily understood.
[15] Transcript of the appeal hearing (T), T4.4–6.
The respondent’s written submissions
The respondent refers to the appellant’s assertion that the Member erred by reading words into the statute and points out that, in doing so, the Member relied on Bermingham. The respondent submits that the appellant does not dispute that Bermingham is correct and does not show how it was not open for the Member to apply that authority. The respondent says that the Member also cited Nightingale, which he says is more recent authority endorsing the “Bermingham principle.”[16] The respondent quotes from the reasoning in Nightingale. The respondent submits that it is clear that the Member identified an anomaly in the legislation, which the Member described as “unconscionable”, and was dealing with the mischief that the anomaly created. The respondent further submits that the Member’s reference to Yuill indicates that the Member took into account the importance of statutory context.
[16] Respondent’s submissions, [5].
The respondent says that the Member also gave regard to the beneficial nature of the legislation and identified the injustice of the anomaly in the legislation. The respondent asserts that the appellant does not attempt to “defend the anomaly” but relies upon the words of the provision. The respondent observes that the “mischief” was plainly obvious and was identified by the various members of the Commission in Sidhu, Stewart and Pell.
The respondent indicates that the Member accepted his submission that it was not necessary to descend into the regulations in order to remedy the injustice created by defective legislative drafting because the answer lay within the schedule. The respondent asserts that it was open for the Member to do so.
The respondent submits that, if the approach suggested by the appellant was adopted, it would lead to numerous workers being undercompensated, so that the suggestion should be rejected.
The respondent’s oral submissions
The respondent refers to the appeal decision issued by me on 19 April 2023 in Secretary, Department of Communities and Justicev Pell,[17] which was an appeal from the decision in Pell. The respondent indicates that she adopts the reasoning in that appeal decision.
[17] [2023] NSWPICPD 19 (Pell No 2).
The respondent confirms that the solution arrived at by the Member was not one which had been put by either party, but in any event that was not a point raised by the appellant in this appeal. The respondent reiterated that all that was required was to look at Sch 3 and observe that weekly payments of compensation are not to be taken into account and so, by implication, the periods during which the payments were made is also to be excluded. The respondent submitted that, if that argument was not accepted, then he relied upon my reasoning in Pell No 2 and reg 8C applies to the facts in the respondent’s case.
The respondent indicated that a “cascade” approach should be taken in considering the regulations, so that if reg 8C does not apply, then consideration should be given to reg 8E. The respondent submits that a construction in respect of “unpaid leave” in favour of the respondent was available.
The respondent asserts that it would never have been the intention of the legislature to “undercompensate” workers who unfortunately suffered a different injury during the 52 week period. The respondent provides the example of a worker who had been off work in relation to an earlier injury for ten months prior to the injury under consideration. The respondent submits that it could never have been the intention of Parliament that the worker’s pre-injury average weekly earnings should be calculated by dividing the gross earnings derived from two months of work by 52 weeks.
The respondent asserts that, while in some respects the regulations could be seen as non-beneficial in nature, there are other situations where a beneficial construction could be applied.
The respondent submits that, if reg 8C applied, the calculation of the respondent’s pre-injury average weekly earnings should be made by taking the gross earnings received for work performed over the whole 52 weeks (excluding weekly payments) but deducting from the 52 weeks those weeks when the respondent was on workers compensation “of any degree.”[18]
[18] T10.18.
CONSIDERATION
The appellant asserts error on the part of the Member in that he found that cl 2 of Sch 3 enabled him to adjust the relevant earning period without recourse to regulations 8B to 8E of the 2016 Regulation.
The appellant submits that the correct approach to the interpretation of the legislation is that enunciated in Australian Education Union, in which the High Court observed:
“The disposition of this appeal turns upon the correct construction of s 9(4). The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose.”[19]
[19] Australian Education Union, [26].
The above extract from Australian Education Union is consistent with the observations made by French CJ in the earlier decision of Alcan, in which French CJ said:
“The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill as:
‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law’s commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’
In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy”.[20]
[20] Alcan, [4].
On a plain reading of the words of the statute, in my view, there is no ambiguity within cl 2 of Sch 3. Clause 2(1) of Sch 3 defines “pre-injury average weekly earnings” as the weekly average of the worker’s gross pre-injury earnings. Clause 2(2) provides that earnings earned outside of the 52 weeks immediately prior to the injury are not to be taken into account in the calculation, and the period of 52 weeks ending immediately before the date of the injury is the “relevant earning period”. Clause 2(3) permits the clause itself, or the regulations, to provide for the adjustment of “the relevant earning period” in the circumstances described therein. Thus the “relevant earning period” is the 52 week period, unless it can be adjusted in accordance with cl 2 of Sch 3, or by the regulations.
There is nothing in cl 2 of itself that makes provision for the adjustment of the “relevant earning period”, which is defined as the 52 weeks immediately prior to the injury. In my view, there is nothing in cl 2 or indeed in the regulations that supports the notion that the 52 weeks could be considered the “maximum” earning period, which could be shortened or otherwise adjusted at the discretion of the decision maker. I accept the appellant’s submission that, in the absence of any such adjustment provision in cl 2, in order to adjust the 52 week period, the only recourse is to be had in the regulations enacted in accordance with that clause. The exclusion of payments of weekly compensation from the calculation of pre-injury average weekly earnings in accordance with cl 6(2), on a plain reading of the text and in the context of the provision, does not extend to permission to exclude the weeks when weekly compensation was received from the relevant earning period.
The Member determined that he was not required to find relief in favour of the respondent from the regulations. The Member erred in so concluding.
The appellant further asserts that the Member was in error to read additional words into cl 2 of Sch 3 to the 1987 Act. The respondent submits that the Member was permitted to do so, citing Bermingham and Nightingale as relevant authorities, which were authorities relied upon by the Member.
The Member’s reasoning process was as follows:
“I was not, with respect, attracted to the application of regulation 8C suggested by the [respondent], as on a fair reading it did not relate (although perhaps it should have) to the circumstances of claimants who had suffered prior unrelated injuries for which they had received compensation during the PIAWE calculation period of 52 weeks. The contrasting results found in Sidhu and Stewart attest to the problems in this approach.
The second [approach] is to read the words ‘immediately before the date of injury’ in Schedule 3(2)(2) as meaning ‘immediately before the date of injury, or as adjusted where a worker receives income as defined by Clause 6((2)(c) hereof’.”[21]
[21] Reasons, [81]–[82].
Firstly, it is not clear from the additional wording what the Member was trying to achieve. Clause 6(2) of Sch 3 provides that “income” does not include weekly payments of compensation so that the respondent did not receive any “income as defined by cl 6(2)(c)”.
Secondly, it was not open to the Member to read into the clause a provision which adjusted the relevant earning period. The clause, and the context in which the clause was expressed, did not infer any such intention but rather made provision for the circumstances in which the regulations could permit the relevant earning period to be adjusted.
The Member relied upon the following passage from Bermingham:
“[It] is not only when Parliament has used words inadvertently that a court is entitled to give legislation a strained construction. To give effect to the purpose of the legislation, a court may read words into a legislative provision if by inadvertence Parliament has failed to deal with an eventuality required to be dealt with if the purpose of the Act is to be achieved.”[22]
[22] Bermingham, 302, per McHugh JA (as his Honour then was).
More recently, the High Court considered the question in Taylor v The Owners – Strata Plan No 11564.[23] The plurality said:
“The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills ‘gaps disclosed in legislation’ or makes an insertion which is ‘too big, or too much at variance with the language in fact used by the legislature.
…
[T]he task remains the construction of the words the legislature has enacted. In this respect it may not be sufficient that ‘the modified construction is reasonably open having regard to the statutory scheme’ because any modified meaning must be consistent with the language in fact used by the legislature. … Sometimes, as McHugh J observed in Newcastle City Council v GIO General Ltd,the language of a provision will not admit of a remedial construction. Relevant for present purposes was his Honour's further observation, ‘[i]f the legislature uses language which covers only one state of affairs, a court cannot legitimately construe the words of the section in a tortured and unrealistic manner to cover another set of circumstances’.”[24]
[23] [2014] HCA 9 (Taylor).
[24] Taylor, [38]–[39].
In the circumstances of this case, the suggested addition to the clause does not work to correct any simple, grammatical, drafting errors. It is apparent that the Member was attempting to fill a gap in the legislation and the Member erred in doing so.
Section 352(6A) of the 1998 Act provides that on appeal, the Member’s decision may be affirmed or revoked, and a new decision made in its place. Section 352(7) provides that, in the alternative, the matter may be remitted to a non-presidential member for re-determination.
For the reasons set out above, it follows that the Member’s Certificate of Determination dated 14 October 2022, and the further and final orders made on 24 October 2022 and 28 October 2022 respectively are revoked. Given the nature of the issues on appeal, I consider it appropriate that I re-determine the matter.
RE-DETERMINATION
This matter involves similar considerations to those in Sidhu and Pell, that is, how the workers’ pre-injury average weekly earnings should be calculated. In Sidhu, which was not the subject of an appeal to a Presidential Member, the worker sustained an injury on 3 September 2020, for which liability was accepted and the worker was paid weekly compensation for nine weeks. The worker returned to work and suffered a further injury on 12 December 2020. Following the submissions made by the parties as to how the worker’s pre-injury average weekly earnings should be calculated for the purpose of the 12 December 2020 injury, the Member concluded that reg 8C of the 2016 Regulation applied. She excluded from the relevant earning period the nine weeks within which the worker received weekly compensation for the first injury. The Member reasoned that there had been a change of an ongoing nature to the employment arrangement resulting in a financial material change to the worker’s earnings. The Member explained that the change occurred when the worker ceased receiving weekly payments of compensation and returned to his employment duties, earning his usual income from her employer, which was a change in the nature of the employment arrangements of an ongoing nature.
In Pell, the worker suffered a work related injury in 2020 and was incapacitated for work until 11 May 2021. During his incapacity he was paid weekly payments of compensation. On 30 August 2021, the worker contracted COVID-19, which was accepted as a work-related injury. He was off work until 28 September 2021. A dispute arose as to how the worker’s pre-injury average weekly earnings should be calculated, given that the worker received payments of weekly compensation for the first injury for a period of 36 weeks within the 52 weeks immediately prior to the second injury. The Member determined that, consistent with the decision in Sidhu, the period during which the worker received payments of compensation should be excluded from the calculation. The respondent in the proceedings below (the appellant) appealed the decision.
On appeal, I confirmed the Member’s decision. I considered that the words of reg 8C should be read as they are expressed. Regulation 8C required “a change of an ongoing nature to the employment arrangement.” The “employment arrangement” was not limited to the contractual relationship between the parties and the change was of an ongoing nature because the worker returned to his pre-injury duties in accordance with a return-to work arrangement. The return to pre-injury earnings resulted in a financially material change to the worker’s earnings because he had been, up to that time, in receipt of weekly compensation at a lesser rate than his usual employment earnings. I considered that such an arrangement was not inconsistent with moving from part-time work to full time work, an example which suggested that reg 8C would apply and a circumstance which the appellant conceded would fall within the regulation.
Taking into account the ordinary and grammatical meaning of the words of Reg 8C, the context (in terms of the existing state of the law expressed in the enabling clause, cl 2 of Sch 3) and the mischief that the regulation is intended to address, I am satisfied that the same approach taken in Pell No 2 should be applied in this case. For those reasons, and the reasons expressed by me in Pell No 2, I find that reg 8C of Sch 3 to the 1987 Act applies.
I note, however, that unlike the facts in Pell, the respondent’s period off work in respect of the first injury fell after the commencement of the 52 week period. That is, the injury the subject of these proceedings occurred on 17 March 2022, so that the 52 weeks commenced on 18 March 2021. The respondent’s period off work and the return to work on reduced hours in respect of the earlier injury was from 12 November 2021 to 20 February 2022, returning to full hours thereafter. Reg 8C(2) provides that:
“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.”
I note that, at the oral hearing, the parties were given the opportunity to address as to how the relevant earning period should be adjusted if reg 8C applied. Both parties were in agreement that, in those circumstances, the period from 18 March 2021 to the respondent’s return to work after the earlier injury should be excluded. I understand, however, that the appellant may have indicated that the period from when the respondent returned to suitable duties (27 January 2022) should be included in the relevant earning period. If that was the respondent’s submission, I do not accept it. The period during which the respondent performed selected duties was not a “change of an ongoing nature” which resulted in a financially material change to her earnings. She performed those duties on reduced hours, for a short period of time, and received weekly compensation in the form of “make-up” payments.
Consequently, as the change of an ongoing nature to the respondent’s earnings, which would have continued but for the second injury, occurred on 21 February 2022, the respondent’s relevant earning period as adjusted is from 21 February 2022 until 17 March 2022. No submissions were made as to what amount constituted the respondent’s pre-injury average weekly earnings if reg 8C applied. I have determined the dispute as to the respondent’s relevant earning period. I therefore leave the calculation of the respondent’s pre-injury earnings to the parties. I trust that that will be a simple mathematical process, but I shall grant leave to apply if an agreement cannot be reached.
DECISION
The Member’s Certificate of Determination dated 14 October 2022 is revoked.
The Member’s further orders dated 24 October 2022 and the final orders dated 28 October 2022 are revoked.
The respondent’s “relevant earning period”, as defined by cl 2(2) of Sch 3 to the Workers Compensation Act 1987 is adjusted to the period from 21 February 2022 until 17 March 2022 inclusive, in accordance with reg 8C of the Workers Compensation Regulation 2016.
The parties have liberty to apply in the event that an agreement cannot be reached as to the calculation of the respondent’s pre-injury average weekly earnings.
Elizabeth Wood
Deputy President
23 June 2023
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