Sidhu v Secretary, Department of Communities and Justice
[2021] NSWPIC 522
•13 December 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Sidhu v Secretary Department of Communities and Justice [2021] NSWPIC 522 |
| APPLICANT: | Hardeep Sidhu |
| RESPONDENT: | Secretary Department of Communities and Justice |
| MEMBER: | Elizabeth Beilby |
| DATE OF DECISION: | 13 December 2021 |
| CATCHWORDS: | WORKERS COMPENSATION - Consideration of the calculation of pre-injury average weekly earnings; application of the Workers Compensation Amendment (Pre-injury Average Weekly Earnings) Regulation 2019; Held - the relevant earning period for the calculation of Pre-Injury Average Earnings should be adjusted to exclude the 9 weeks where the applicant was paid workers compensation benefits for an unrelated injury. |
| DETERMINATIONS MADE: | 1. The relevant earning period for the calculation of Pre-Injury Average Earnings should be adjusted to exclude the 9 weeks where the applicant was paid workers compensation benefits for an unrelated injury. |
STATEMENT OF REASONS
BACKGROUND
Hardeep Sidhu (the applicant) was employed by Secretary Department of Communities and Justice (the respondent) as a correctional officer. He commenced employment with the respondent in 2005 and sustained a non-disputed injury on 3 September 2020. The injury was accepted and the applicant remained off work for nine weeks and his pre-injury average weekly earnings (PIAWE) before the injury was $2,191. The applicant was paid 95% of his earnings in accordance with the Workers Compensation Act 1987 (the 1987 Act)[1]
[1] In accordance with s 36 of the 1987 Act.
The applicant was able to return to work and experienced a further injury on 12 December 2020 when he was restraining an inmate and suffered an injury to his lower back and right shoulder.
The applicant was able to return to work on 4 March 2021 on light duties before upgrading to full duties on 26 April 2021.
The dispute between the parties is in relation to their proper calculation of PIAWE. That is, whether the nine weeks that the applicant was paid by way of workers compensation weekly benefits should be included in the calculation.
The parties agree that weekly benefits do not form part of earnings for the purpose of calculating PIAWE. That is, it is not as simple as to include those nine weeks of benefits paid in the calculation to determine PIAWE.
LEGISLATION
Schedule 3 of the 1987 Act provides a method of calculating pre-injury average weekly earnings as follows:
“(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.”
Further guidance is provided by the Workers Compensation Amendment (Pre-injury Average Weekly Earnings) Regulation 2019 (the Regulation). This regulation identifies classes of workers where PIAWE is to be calculated on a basis that is not the average of 52 weeks earnings.
The Regulation provides guidance in respect of workers who could be described as “not continuously employed”[2] or where there has been a “financially material change to earnings”[3] and requiring “adjustment for unpaid leave.”[4]
[2] See 8B.
[3] See 8C.
[4] See 8E.
The relevant section in this dispute is 8C which is as follows:
(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”
SUBMISSIONS
The applicant’s submissions are to the effect that the nine week period that the applicant was paid workers compensation benefits should be taken into account in the calculation of PIAWE by shortening the period in respect of the calculation of the weekly entitlement.
It was submitted that a calculation in any other way, would lead to an absurd result with PIAWE being calculated over 52 weeks based upon 43 weeks income. The legislation must work together and harmonise the intention so that a productive outcome is obtained. It was further submitted that if there is any ambiguity in the provision then this should be interpreted with the beneficial nature of the legislation for the applicant. I agree that a finding a meaning of language that produces an unjust or capricious result should be avoided.
The Regulation provides guidance in determining the worker’s compensation entitlement to weekly payments of compensation.
It should be observed that 8A(3) provides that the relevant earning period is a reference to the relevant earning period as adjusted in accordance with any preceding provision applicable to the worker.
Part 8C provides for the adjustment for financially material changes to earnings. The first paragraph of that section provides that 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).
The section then goes on to provide 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.
The tension in this section is that the regulation provides that there must be a change of an ongoing nature to the employment relationship resulting in a financial material change to the earnings of the worker.
Mr Hanrahan, who appeared on behalf of the applicant, submitted that this section assists the applicant as there was a change of an ongoing nature to the employment arrangement, that is that the applicant was not receiving income from the respondent but was rather receiving benefits pursuant to the workers compensation legislation.
The respondent submitted that the application of the Regulation may cause an unfair and unjust outcome but it is not a matter for a Commission Member or scheme agent, to unilaterally determine what is fair and to pay compensation accordingly. That is, the statute provides the only basis upon which compensation can be paid as in reference to the written word.
In relation to 8C, the respondent submitted that there was no change of an ongoing nature to the employment arrangement. The word “ongoing” must have some import, that is that there must not be a change but a change of an ongoing nature in the employment arrangement. The respondent submitted that what must be inferred is that there must be a change in the way the worker is to be paid in that period which is ongoing, that is, from some point in the 52 week period there has been a change which remained current and ongoing.
The respondent therefore submitted that 8C does not provide any comfort for the applicant when interpreted using the ordinary literal English meaning of the phrase.
Consideration
After considering the submissions I find that 8C does provide some assistance with the applicant. I find that there has been a change of an ongoing nature to the employment arrangement resulting a financial material change the earnings of the worker. That is there has been a material change as the worker has changed from receiving workers compensation payments to ordinary earnings. The ongoing nature of this change is that after the first nine weeks the method of payment has changed and has continued so that the worker is no longer paid workers compensation payments (at 95% of his salary) but is paid normal ordinary earnings by his employer.
The words financial material change, to my mind mean that there can be a change in the amount the worker is paid, and/or additionally there can be a change in the method and type of payment. In the circumstances of this case, bearing in mind the beneficial intent of the legislation, the worker has shown that there is a change in ongoing nature to the employment arrangement. That is that the worker is receiving payment from his employer as opposed to the workers compensation insurer. The financial material change to the earnings of the worker is that he is now receiving his salary from his employer, whereas he was not receiving his salary from his employer for those first nine weeks of the 52-week calculation. In addition to those nine weeks payment the applicant would have only received 95% of his salary and not 100%.
The effect of this finding is that the relevant earning period should be adjusted by excluding those first nine weeks before the change occurred in the PIAWE calculation.
The applicant also submitted that 8E would have relevance for an adjustment for unpaid leave. However, in the circumstances of this case the applicant was not taking unpaid leave but was being paid workers compensation benefits. To find that the applicant was taking unpaid leave would to my mind be going beyond the “ordinary and grammatical sense of the statutory words” [5]. This was not unpaid leave and I find that this does not provide any assistance with the applicant.
[5] See Hayne, Heydon, Crennan and Kiefell JJ in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) 2009 239 CLR 27.
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