State of New South Wales (NSW Police Force) v Browne - [2024] NSWPICPD 16

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	State of New South Wales (NSW POLICE FORCE) v Browne [2024] NSWPICPD 16
APPELLANT:	State of New South Wales (NSW Police Force)
RESPONDENT:	Matthew Warren Browne
INSURER:	Employers Mutual Limited (TMF)
FILE NUMBER:	A1-W5253/22
PRESIDENTIAL MEMBER:	Acting Deputy President Michael Perry
DATE OF APPEAL DECISION:	12 March 2024
ORDERS MADE ON APPEAL:	1. With the consent of the parties: (a) The appeal is allowed. (b) The Certificate of Determination dated 7 March 2023 is revoked. 2. No order as to costs. 3. The matter is remitted to another non-presidential member to conciliate, and failing that, determine, the residue of the dispute between the parties.
CATCHWORDS:	WORKERS COMPENSATION – requirement to show error in order to revoke a Certificate of Determination
HEARING:	21 February 2024
REPRESENTATION:	Appellant:
Ms L Goodman, counsel
Rankin Ellison Lawyers
Respondent:
Mr M Hammond, counsel
Bourke Legal
DECISION UNDER APPEAL:	Browne v State of New South Wales (NSW Police Force) [2023] NSWPIC 92
MEMBER:	Ms J Snell
DATE OF MEMBER’S DECISION:	7 March 2023

INTRODUCTION AND BACKGROUND

In 1997 Matthew Warren Browne, the respondent, began employment with the State of NSW, the appellant, as a police officer in the NSW Police Force (NSWPF). In the course of that employment, he sustained a psychological injury. The appellant has accepted liability to pay the respondent compensation with respect to that injury pursuant to s 40 of the Workers Compensation Act 1987 (the 1987 Act). In December 2011, the respondent was medically discharged from the NSWPF because of that injury.
The respondent began employment with the Royal Society for the Prevention of Cruelty to Animals (RSPCA) on 11 March 2013. During relevant periods of his claim, RSPCA paid him salary or wages plus the compulsory statutory superannuation guarantee levy (SGL) pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA). The respondent also voluntarily entered into a salary sacrifice arrangement with RSPCA whereby it deducted monies from his pay directly into his superannuation fund (the voluntary contributions).
The respondent claims weekly compensation between 23 December 2011 and 30 June 2020 based on receipt of various physical injuries while employed with NSWPF, to his right elbow in July 2006 and 14 November 2006, right shoulder on 20 January 2008 and right ankle on 19 February 2009. The appellant has accepted liability to pay compensation for these injuries.
The above claim is made under s 40 of the 1987 Act as it was enacted just prior to the amendments made by the Workers Compensation Legislation Amendment Act 2012 (the 2012 amendments). As the respondent is a former police officer, he is exempt from the 2012 amendments by operation of cl 25 of Pt 19H of Sch 6 to the 1987 Act.
The Member noted the issues for determination before her were about the following matters:
(a)    whether there was any incapacity for work because of the physical injuries;
(b)    whether the respondent was entitled to two awards of weekly compensation because he suffered from separate and distinct incapacities arising from his physical and psychological injuries respectively;
(c)    the actual earnings during the period of the weekly compensation claim, and
(d)    the probable earnings during the period of the weekly compensation claim.
The Member determined each of the above issues in favour of respondent.[1] There is no appeal from her decision with respect to each of these issues – except issue (c), relating to the respondent’s actual earnings with RSPCA (the actual earnings issue). The appeal grounds as to this issue were clearly and succinctly drawn as follows:
(a) error of law in failing to have regard to the submission that the amount salary sacrificed by the respondent ought to be added to the gross payments noted on the Payment Summaries in calculating his actual weekly earnings (Ground 1), and
(b) error of law and fact in failing to include the amount salary sacrificed by the respondent as part of his actual earnings (Ground 2).
[1] Browne v State of New South Wales (NSW Police Force) [2023] NSWPIC 92 (reasons).
The parties appeared, from their written submissions, to agree that only one discrete issue remained: whether the voluntary contributions ought to be included in the RSPCA actual earnings. However, the respondent disagreed with the appellant’s contention that the appeal could be dealt with on the papers and requested it be “determined by a hearing in person”. For this reason, and because of some opacity in the respondent’s submissions, I concluded there should be a hearing in person. This took place on 21 February 2024.
At the hearing, both counsel agreed with the above formulation of the issue, but the respondent said there was a second, or sub-issue about the “interpretation of the financial material”.
During the argument, the appellant tendered the content of a purported application, by the respondent, to admit late documents dated 19 February 2024 containing the respondent’s earnings reports for the financial years 2013 to 2020. Despite purporting to lodge these documents, the respondent eschewed them at the hearing, but did not object to their tender, on condition that his counsel had an opportunity to consider and make submissions on them. These documents were admitted into evidence under s 352(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) on the basis that the failure to grant such leave would cause substantial injustice in the case.
The hearing closed with orders being made to allow each party an opportunity to lodge any further brief submissions by 1:00 pm on 23 February 2024. The appellant then further submitted that analysis of these documents confirmed the position and written submissions it had put on appeal. The appellant also noted that it had “very recently been advised” that the respondent proposed to amend his claim for weekly compensation, and that any such amendment was opposed.
In his further submission, the respondent then acknowledged that:
(a) the appellant’s wages schedules correctly show he received additional payments over and above his salary which equated to the salary sacrifice amount from 2013 to 2020, and
(b) the “taxable income” listed in his tax return and statement of earnings issued by RSPCA for those years is the amount calculated by deducting the salary sacrificed component from the total payments made by RSPCA.
The respondent only then conceded that the appeal should be allowed.
Then the respondent raised a further matter, asserting a “Living Away from Home Allowance” and “Regional Office (Rental Subsidy)” (the allowance/subsidy) should be taken into account for the purposes of identifying “the correct Award”, and that the matter should be remitted to a non-presidential member to determine the issue and make final orders.
Section 352(5) of the 1998 Act provides that an appeal from a decision of a non-presidential member is limited to determining whether the decision appealed against was affected by error of fact, law or discretion, and to the correction of such error. In these circumstances, I need to identify error in order to revoke the Certificate of Determination.[2]
[2] Prescott v State of New South Wales (South Western Sydney Local Health District) [2023] NSWPICPD 33.

THE MEMBER’S REASONS

The Member gave over 24 pages of detailed reasons in relation to all issues. As to the actual earnings issue, she noted the respondent’s statement where he said, in relation to “salary sacrificing”, that he had “elected to put more money into superannuation because it is tax effective and is earning me money. [RSPCA] doesn’t pay me any higher salary … I just used to take home less in my hand …”.[3]
[3] Reasons, [19(b)].
The Member said she had “reviewed the financial material in evidence”, and noted the respondent’s 4 October 2022 wages schedule “relevantly particularised his claim … under s 40” with separate columns identifying:
(a)    the period of the claim;
(b)    the RSPCA earnings;
(c) the weekly compensation paid under s 40 of the 1987 Act with respect to the psychological injury;
(d)    the total of (b) and (c);
(e)    comparable earnings but for injury, and
(f)    loss.
The Member noted the NSWPF awards and the appellant’s concession that the respondent would, but for the injury, have attained the ranks of sergeant by December 2011 and inspector by 2018 at the latest, and set out, by drawing a further schedule following the respondent’s 4 October 2022 schedule, how those factors would affect the calculations in that schedule.
The Member then said that the appellant’s wages schedule:
“… quibble[s] with the manner in which [the respondent] has calculated his actual earnings ... NSWPF assumed [the appellant] as having adopted the ‘gross payment’ particularised in his PAYG summaries for the purpose of estimating his actual earnings and argued that the extent of [the respondent’s] actual earnings was unclear from the PAYG summaries”.
In that context, the Member then stated that the respondent:
“… has explained, with example, … that reference in his pay slips to the deduction of ‘extra tax’ is relevant to prepayment of an ‘extra tax bill’ that he receives at the end of each year for reasons that are not entirely clear to him and that reference to the deduction of ‘salary sacrificing’ is relevant to his election to pay more money into his superannuation fund than the contribution made by RSPCA. In light of the comments made by NSWPF relevant to [the respondent’s] PAYG summaries and the fact that [his] income tax returns are in evidence I do not propose to canvass the PAYG summaries that are in evidence”.[4]
[4] Reasons, [31].
The Member said she reviewed a “further wages schedule” from the appellant which was attached to its written submissions, and that it “purports to particularise” the respondent’s probable earnings but for injury and his “actual earnings during the period of his claim”, the difference between those asserted probable and actual earnings, the maximum statutory rate under s 40 of the 1987 Act from time to time, and the weekly compensation paid under s 4 for the psychological injury,[5] then stated:
“… that NSWPF had lodged no evidence to refute [the respondent’s] assertion he would have attained the role of Inspector by 2016/2017 or 2018 by the latest, or [the respondent’s] assertion that he would have earned an additional 10% over and above the loaded salary applicable to the rank of Sergeant”.[6]
[5] Reasons, [32].
[6] Reasons, [33].
The Member did set out (at [55] of the reasons) the terms of s 40 of the 1987 Act for the apparent purpose of considering the “Mitchell steps” (Mitchell v Central West Health Service[7]). Otherwise, there is no discussion in relation to, or focus on, the actual earnings issue – perhaps apart from this comment:
“Following a review of the evidence as a whole and careful consideration of counsel’s submissions I accept [the respondent’s] actual earnings with RSPCA between … 11 March 2013 and 30 June 2020 are as evidenced in his income tax returns for the financial years ending 30 June 2013 through to 30 June 2020”.[8]
[7] (1997) 14 NSWCCR 526 (Mitchell).
[8] Reasons, [65].
As the Member’s disposition of the actual earnings issue partly related to how she viewed the appellant employer’s submissions, it is necessary to briefly set them out. As to Ground 1, the relevant submission was that “the amount that the worker salary sacrificed was noted on his Payment Summaries as ‘Emp.Super Withheld’ and that the amount shown under this heading ought to be added to the gross payment shown on the Payment Summary to arrive at his actual earnings”.[9] The appellant says the Member did not have any regard to this submission and when calculating the actual earnings “paid no attention” to its schedule. The appellant also says the Member made it clear she had not canvassed the PAYG summaries that were in evidence.[10]
[9] Appellant’s submissions on appeal, [1(g)], referring to its submissions before the Member dated 30 November 2022, [10]–[13].
[10] Appellant’s submissions on appeal, [1(h)], referring to reasons, [31].
The appellant also submits the amount shown as “Emp.Super Withheld” is an amount over and above the compulsory superannuation paid by the employer and is the amount referred to by the respondent as the salary sacrifice amount and was the additional amount he elected to put into superannuation because it was tax effective and was earning him money. The appellant also says the Member did not give any reason for not taking this additional amount into account in calculating the actual earnings. Also, a review of the tables produced at [28] and [29] of the reasons demonstrates the Member adopted the figure for actual earnings provided by the respondent, without any reasons for not adopting the figures the appellant provided.
As to Ground 2, the appellant says if the Member did consider its submissions, there was error in the finding that the “Emp.Super Withheld” payments were not part of the actual earnings. The appellant also put that the Member accepted that the respondent’s actual earnings could be calculated by reference to the gross figures shown in his tax returns – but that those gross figures “do not include the amounts that are shown in the PAYG summaries as ‘Emp.Super Withheld’.”
The appellant says the exclusion of the “Emp. Super Withheld” amounts from the actual earnings is erroneous and this has resulted in an underestimate of the actual earnings.
The respondent submitted the Member did consider the appellant’s submissions and was not required to specifically refer to the table submitted by the appellant in circumstances where the Member preferred the table submitted by the respondent, and so there was no error.

DISCUSSION AND FINDINGS

The Member’s decision was lengthy and involved analysis of multiple issues of some complexity (as the Member found at [73] of the reasons). But I respectfully disagree with her summary (at [31] of the reasons) of the appellant’s argument. She said the appellant assumed the respondent adopted the “gross payment” particularised in his PAYG summaries and that the extent of the actual earnings was unclear from those summaries. This oversimplifies the appellant’s submissions.
I agree with the appellant’s submission that it did submit to the Member that the salary sacrificed part of the respondent’s earnings, noted on the PAYG summaries as “‘Emp. Super withheld’ … ought to be added to the gross payment on the Payment Summary to arrive at his actual earnings”.[11]
[11] Appellant’s submissions on appeal, [1(g)], referring to its submissions before the Member dated 30 November 2022, [10]–[13].
Also, contrary to the Member’s comment at [31] of the reasons that the appellant “argued that the extent of [the respondent’s] actual earnings was unclear from the PAYG summaries”, the written submissions put to her (at paragraphs [9]–[13]) appear to me to be clear enough – about the matter simply being about whether the “Emp. Super Withheld” (or salary sacrificed monies) should be regarded as part of the actual earnings. This should have been further explained to assist the Member. Still, a clearly articulated argument was put that the voluntary contributions ought to be included for the purposes of s 40. I also do not see where the appellant put that the “actual earnings were unclear from the PAYG summaries”.
The Member was aware that the respondent’s entitlement to weekly compensation was to be assessed in accordance with s 40 of the 1987 Act, including by referring to the terms of s 40(2)(b) as it stood just prior to the 2012 amendments. She also cited Mitchell. But there was no analysis of s 40(2)(b). The actual earnings issue was not really about Mitchell (in the sense of “the Mitchell steps”). It was about how the actual earnings issue interacted with s 40(2)(b). Relevantly, it refers to the amount “the worker is earning or would be able to earn in some suitable employment”.
This raises a question of what the words “is earning” mean having regard to the text, context and purpose of this sub-section. The parties did not refer the Member to any authority or analysis in this regard. Section 40 at the relevant time did not define this expression or the word “earning(s)”. Similarly, s 43 of the 1987 Act does not expressly define the word “remunerated”, although it mandates, for the purposes of all provisions in the Act, that the average weekly earnings “shall be computed in such manner as is best calculated to give the rate per week at which the worker was being remunerated”.
In Cage Developments Pty Ltd v Schubert,[12] the High Court stated in relation to s 11(1)(a) of the Workers’ Compensation Act 1926 (the 1926 Act) (in essentially the same terms as s 40(2)(b) of the 1987 Act) that the “reference in s 11(1)(a) to the ‘amount’ which a worker ‘is earning, or is able to earn’ is a reference to the amount which he is earning or able to earn as a worker, that is to say, by his own physical and mental exertions ...”.
[12] [1983] HCA 37; 151 CLR 584 (Cage), [3].
The facts in Cage are different to the present case. But the High Court’s above statement was a general observation as well as applying to the facts in that case (the assessment of the average weekly amount a worker was able to earn in the context of running a business).
Taking into account the text, context and purpose of s 40(2)(b), I find the words “the average weekly amount that the worker is earning” has essentially the same meaning. This finding, that s 40(2)(b) refers to the amount which the worker is earning or able to earn by his own physical and mental exertions, does not put an end to the actual earnings issue.
In Aitkin v Goodyear Tyre & Rubber Co (Australia) Limited,[13] the Chief Justice, Sir Frederick Jordan, said of the then equivalent words in the 1926 Act:
“As to the phrase ‘is earning’ … if the partially incapacitated worker is earning something his actual earnings must prima facie be taken as the basis, and the rate of compensation provided for by s 9 reduced by a calculation based on the excess of his pre-injury average weekly earnings above what he is actually earning. If, however, it is proved that his actual earnings are not a proper test, because there is some reason unconnected with his earning power which makes them lower than they should be, the other alternative, what he is ‘able to earn’, must be adopted. This is so where it is shown that he is deliberately taking lower-paid work than he could get, or is idling and on this account receiving less that he could be reasonably expected to obtain, or where his actual earnings have been compulsorily reduced by something unconnected with his injury or general earning power”. (emphasis added)
[13] (1946) 46 SR 20 (Aitkin), 22.
In Pira Pty Ltd v Tucker,[14] Beazley JA (as her Excellency then was) stated:
“In Aitkin, Jordan CJ held that the test to be applied in determining the rate of compensation to be awarded … for partial incapacity was, prima facie, the … actual earnings unless it is proved that the worker’s actual earnings are not a proper test, because there is some reason unconnected with the worker’s earning power which made them lower than they should be.
Jordan CJ stated at 23 that that will occur where a worker is ‘deliberately taking lower paid work than he could reasonably be expected to get; is idling or his earnings are compulsorily reduced for a reason unconnected with his injury or general earning power’. These are … examples, only and do not represent an exhaustive list of the circumstances in which it will be inappropriate to apply the ‘prima facie’ test.
… first … one has to approach the matter on a prima facie basis and only move from that basis if the evidence establishes that the actual earnings are not, in the circumstances of the case, a proper test”. (emphasis added)
[14] [1996] NSWSC 569 (Tucker).

After applying the above statutory and case law principles to the facts of the present case, I believe ss 40(2)(b) and 43(1)(a) of the 1987 Act should be read to require inclusion of the voluntary contributions in the gross earnings for the purposes of “Computation of [the] average weekly amount” the respondent “is earning or would be able to earn in some suitable employment from time to time after the injury”.
In my opinion, the words “earning” and “earnings” both have the same meaning as the word “earnings” in s 43(2). This points strongly towards the words “is earning or would be able to earn” referring to the average weekly amount which is paid, or to be paid to the worker, even if it is deducted at some point – if it is what “he [or she] is earning or able to earn as a worker, that is to say, by his [or her] own physical and mental exertions”.[15] In other words, if the worker earns or is able to earn an amount through his or her own physical and mental exertions, such earning does not cease, or is not extinguished by a subsequent decision by anyone, including the worker, on where all or part of those earnings go.
[15] Cage.
Therefore, in my opinion, the voluntary contributions should be regarded as part of the “average weekly amount that the [respondent] is earning …” for the purposes of s 40(2)(b) of the 1987 Act. However, even if that is wrong, I believe that the voluntary contributions should be regarded as part of what the respondent “would be able to earn in some suitable employment, from time to time after the injury”. That is, even if one assumes they are not properly classifiable as part of his actual earnings, my view is that it has been proved that the respondent’s “actual earnings are not a proper test, because there is some reason unconnected with the [respondent’s] earning power which made them lower than they should be”.[16] That reason is that the respondent’s decision to make voluntary contributions by deducting various amounts of money from a larger amount of money appearing on his payslip is unconnected with his earning power.
[16] Tucker, [31]–[32], per Beazley JA.
For the above reasons I do find the Member erred in law in failing to have regard to the appellant’s submission that the amount salary sacrificed by the respondent ought to be added to the gross payments for the purposes of calculating his actual earnings (upholding Ground 1). I also find an error of law and fact in the failure to include the amount salary sacrificed by the respondent as part of the actual earnings (upholding Ground 2).
The appellant’s written submissions on appeal sought that the Member’s decision be revoked and the matter referred to a different member for determination. At the hearing, the appellant said that would be unnecessary if the appeal succeeds, but that “someone would [still] have to look at actual earnings, what actual earnings really are … and the appellant’s submission is very simple … you add the two figures together.”[17] Then, a five-page schedule was attached to the appellant’s further submissions. The respondent also attached a schedule to his further submissions, including the allowance/subsidy content. Presumably, each party seeks that these further schedules be read with its earlier schedule(s).
[17] Transcript of appeal proceedings, 21 February 2024, p 29.
I think it inappropriate for me to traverse into this territory. At the least, the specific (voluntary contributions) amounts which are the subject of the content of the appeal/the appeal grounds are entangled with other specific amounts, including various components of the RSPCA earnings which are not part of the appeal grounds. This aspect also has not been sufficiently addressed in the submissions for either party to properly allow for it to be part of the appeal. There is also the unsatisfactory situation where it appears the parties are still in dispute, with the respondent referring to the allowance/subsidy matter which is clearly outside the gamut of the appeal.[18]
[18] See Ballina Shire Council v Knapp [2019] NSWCA 146.
In all these circumstances, the appropriate course is to remit the matter to a non-presidential member for the purpose of firstly attempting to conciliate the residue of the differences between the parties, and failing that, to determine the matter. I understand there to be no issue between the parties about the Commission being able to consider the schedules lodged by them – except that relating to the allowance/subsidy issue raised by the respondent. However, I also bear in mind that the documents tendered by the appellant at the hearing and referred to as “employee previous earnings report” (see [9] above) have yet to be formally lodged. Given that the documents have been tendered without opposition I grant leave for them to be lodged for the purposes of the Member taking them into account in any determination if that becomes necessary. This means that if the respondent wishes to pursue such issue, any material relevant to the issue should be lodged with the Commission.
I do not express an opinion as to whether or not the late allowance/subsidy issue should be taken into account for the reasons provided above. As to whether any such material or submissions are able to be lodged and/or taken into account is matter for the Member.
The appellant has sought costs, submitting that as “an exempt worker, … Schedule 6 costs apply. Costs should follow the event”. This submission is not developed, including as to whether the power to determine costs in the 1998 Act should be viewed just before the 2012 amendments came into force or presently. But the submission presumes the former.
As such, I do not agree costs should follow the event as s 341(4) of the 1998 Act, at the relevant time, provided that the Commission may not order the payment of costs by a claimant unless satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification. There is no evidence, nor has there been a submission, that the claim fell within any of these categories. The appropriate order is that there be no order as to costs.
Finally, at 2:51 pm Thursday 7 March 2024, just before this decision was to be issued, the appellant’s solicitor sent an email to the Commission (including the respondent’s solicitor in the communication as well) requesting the Commission to set a timetable for filing of any further evidence or submissions if the Commission “intends to allow the respondent … to raise an issue regarding the inclusion of some allowances”. I was overseas between Wednesday 7 March and Sunday, 10 March 2024 and unable to attend to the request immediately. As the decision was just about to be issued, with the parties already having had multiple opportunities to put their case, I have declined to take this request into account.

DECISION

With the consent of the parties:
(a) The appeal is allowed.
(b) The Certificate of Determination dated 7 March 2023 is revoked.
No order as to costs.
The matter is remitted to another non-presidential member to conciliate, and failing that, determine, the residue of the dispute between the parties.

Michael Perry
ACTING DEPUTY PRESIDENT

12 March 2024