Sternbeck v State of New South Wales (Hunter New England Local Health District)
[2023] NSWPIC 192
•1 May 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Sternbeck v State of New South Wales (Hunter New England Local Health District) [2023] NSWPIC 192 |
| APPLICANT: | Michael Sternbeck |
| RESPONDENT: | State of New South Wales (Hunter New England Local Health District) |
| Member: | Karen Garner |
| DATE OF DECISION: | 1 May 2023 |
CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly benefits compensation; applicant had accepted injury; whether 52-week period provided for the calculation of pre-injury average weekly earnings (PIAWE) is adjusted by deducting the period in respect of which the worker had been in receipt of compensation for an unrelated injury; Nitchell v Secretary (Department of Communities and Justice) applied; Held – the 52-week period provided for the calculation of PIAWE is adjusted by deducting the weeks to which Schedule 3, clause 6(2)(c) applied; the applicant’s weekly compensation is to be calculated on PIAWE of $1,748.86; the respondent pay the applicant $1,661.42 per week from 4 April 2022 to 3 July 2022 pursuant to section 36; the respondent pay the applicant $1,399.01 per week from 4 July 2022 to 7 March 2023 pursuant to section 37; the parties have 14 days liberty to apply with respect to the calculation of the weekly compensation amounts. |
| determinations made: | |
The Commission determines:
The 52-week period provided for the calculation of pre-injury average weekly (PIAWE) earnings is adjusted by deducting the weeks to which Schedule 3, cl 6(2)(c) of the Workers Compensation Act 1987 applied.
The applicant’s weekly compensation is to be calculated on PIAWE of $1,748.86.
The Commission orders:
The respondent is to pay the applicant weekly payments of compensation in accordance with s 36(1) of the Workers Compensation Act 1987 as follows:
$1,661.42 per week from 4 April 2022 to 3 July 2022.
The respondent is to pay the applicant weekly payments of compensation in accordance with s 37(1) of the Workers Compensation Act 1987 as follows:
$1,399.01 per week from 4 July 2022 to 7 March 2023.
The parties have 14 days liberty to apply with respect to the calculation of the weekly compensation amounts referred to above.
STATEMENT OF REASONS
BACKGROUND
Michael Sternbeck (the applicant) was employed by the State of New South Wales (Hunter New England Local Health District) as a health and security assistant. He commenced employment with the respondent in or about 2006.
The applicant sustained a non-disputed work injury in May 2021. The injury was accepted. The applicant remained off work from the injury in May 2021 until 25 November 2021. During that time, the applicant was paid weekly workers compensation benefits (weekly benefits), calculated on the basis of pre-injury average weekly earnings (PIAWE) of at least $1,560 per week, and was paid 95% of PIAWE for the first 13 weeks and 80% of PIAWE thereafter.
The applicant returned to work on full unrestricted duties on or about 26 November 2021. The applicant continued to work without incident to and including 3 April 2022.
On 4 April 2022, the applicant sustained another non-disputed work injury. The injury was accepted. The applicant remained off work from the injury on 4 April 2022 until 20 September 2022. The applicant returned to work on 20 September 2022 on a graduated light duties program.
In respect of the accepted injury on 4 April 2022, the applicant claims weekly benefits pursuant to s 33 of the Workers Compensation Act 1987 (1987 Act) as follows:
(a) from 4 April 2022 to 3 July 2022 (the first 13 weeks), in accordance with s 36 of the 1987 Act, and
(b) from 4 July 2022 to 7 March 2023 (weeks 14 to 130), in accordance with s 37 of the 1987 Act.
The dispute between the parties is in relation to the proper calculation of PIAWE, which is applicable to determine the weekly benefits for the relevant periods.
The parties agree that, by operation of Schedule 3, cl 6(2)(c) of the 1987 Act, the calculation of PIAWE in respect of the accepted injury on 4 April 2022 does not include weekly benefits received during the preceding 52 weeks being the relevant earning period.
The applicant asserts that, as the applicant was in receipt of weekly benefits during the 52 weeks prior to the accepted injury on 4 April 2022, the PIAWE should be calculated on the basis of a reduced “relevant earning period” which excludes the period of weekly benefits paid pursuant to Regulation 8C.[1] On that basis, the applicant asserts that the applicant’s weekly benefits should be calculated on PIAWE of $1,748.86.
[1] Application to Resolve a Dispute (ARD), page 7.
The respondent asserts that the “relevant earning period” should not be so reduced and should be the entire of the 52-week period prior to the injury on 5 April 2022.[2] On that basis, the respondent asserts that the applicant’s weekly benefits should be calculated on PIAWE of $807.59.
[2][2] ARD, page 9.
ISSUES FOR DETERMINATION
The issue for determination is in relation to the calculation of PIAWE, specifically whether the “relevant earning period” should be adjusted to exclude the period during which the applicant was in receipt of weekly benefits.
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
A preliminary conference was conducted by me on 22 March 2023. Mr Hill, solicitor with McNally Jones, appeared for the applicant who was also in attendance. Counsel, Mr Stockley, appeared for the respondent, instructed by Mr Andrew Murphy of Hall & Wilcox lawyers. Ms Bree Montshiwa was in attendance on behalf of the respondent’s insurer.
On 22 March 2023, directions were made for lodgement and service of written submissions.
The parties were informed of my intention to determine the dispute on the papers following receipt of written submissions without holding a conciliation and arbitration hearing.
The parties have agreed to the determination of the matter without a conciliation and arbitration hearing.
LEGISLATION
Schedule 3, cl 2 of the 1987 Act states:
“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 - 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) If the amount of a worker’s pre-injury average weekly earnings is less than any minimum amount prescribed by the regulations as applicable to the worker, the amount of the worker’s pre-injury average weekly earnings is taken to be that minimum amount. Different minimum amounts may be prescribed for different classes of workers, including part-time and full-time workers.”
Schedule 3, cl 6(2) of the 1987 Act states:
“6 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) any minimum amount paid to a superannuation fund or scheme in respect of the week to avoid an individual superannuation guarantee shortfall, within the meaning of the Superannuation Guarantee (Administration) Act 1992 of the Commonwealth, for the worker, or
(b) the monetary value of any non-monetary benefit provided to the worker for the performance of work by the worker, or
(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) any payment made without obligation by the employer.
(3) However, the monetary value of a non-monetary benefit of a worker is to be included as part of the income of the worker for the purposes of the calculation of the weekly payments of compensation payable to the worker if the worker is not entitled to the use of the benefit.
(4) The Workers Compensation Guidelines may make provision for or with respect to the matters to be taken into account for the purposes of determining whether a benefit has been provided to a worker or whether the worker is entitled to the use of a benefit.”
The Workers Compensation Amendment (Pre-Injury Average Weekly Earnings) Regulation 2019 (the Regulation) provides further guidance and identifies classes of workers where PIAWE is to be calculated on a basis that is not the average of 52 weeks.
The Regulation provides guidance in respect of workers who could be described as “not continuously employed”[3] or where there has been a “financially material change to earnings”[4] and where there is a requirement for “adjustment for unpaid leave”.[5]
[3] See 8B.
[4] See 8C.
[5] See 8E.
Regulation 8B states:
“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 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.”
Regulation 8C states:
“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 in employment 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.”
Regulation 8D states:
“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.”
Regulation 8E states:
“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.”
SUBMISSIONS
Written submissions were provided by the parties in accordance with the directions issued.
Applicant’s submissions
The applicant submits that the PIAWE should be calculated on the basis of a reduced “relevant earning period” which, pursuant to Regulation 8C, excludes the period during which weekly benefits were paid to the applicant. The applicant submits that such an approach is consistent with the clear intention of the legislature to ensure calculation of PIAWE with reference to periods when a worker worked and was paid earnings, which is demonstrated by Regulation 8B, Regulation 8C and Regulation 8E. The applicant submits that, in the present case, Regulation 8C is applicable because the applicant proceeded from a period of incapacity, no work, and no earnings, to a period of capacity, work and earnings. It submits that the progress from nil earnings to a weekly average of $1,748.86 cannot be characterised other than as “a financially material change”. The applicant accordingly relies on Regulation 8C as supporting his calculation that the quantum of his PIAWE is $1,748.86. The applicant relies on the decision of Member Beilby in Sidhu v Secretary Department of Communities and Justice [2021] NSWPIC 522 which confirmed the application of Regulation 8C to the worker in similar circumstances.
The applicant submits that the respondent’s construction of Regulation 8C would be inappropriate because it would lead to the unintended result and an inequitable disparity where a worker who suffers a prior injury, and was unable to earn income prior to recovering, should receive diminished benefits in the wake of a further injury.
The applicant additionally submits that the applicant should be entitled to a reduced “relevant earning period” pursuant to Regulation 8E on the basis that, during the period that he was incapacitated and in receipt of weekly benefits, he was not on paid leave and it therefore follows that he was on paid leave.
On that basis, the applicant asserts that the applicant’s weekly benefits should be calculated on PIAWE of $1,748.86.
Respondent’s submissions
The respondent submits that the “relevant earning period” should not be adjusted or reduced as contended by the applicant or at all.
The respondent submits that Sidhu v Secretary Department of Communities and Justice [2021] NSWPIC 522, Stewart v Secretary, Department of Communities and Justice [2022] NSWPIC 333 and Nitchell v Secretary (Department of Communities and Justice) [2022] NSWPIC 625 were wrongly decided and should not be followed.
The respondent submits that the applicant’s approach is inconsistent with accepted principles of statutory intention and the clear statutory provisions and intent. The respondent submits that whilst the purpose of the legislation is to confer a benefit on injured workers, consistent with ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18, Schedule 3, cl 6(2) is not beneficial. The respondent submits that the overall purpose of the legislation does not provide a ground for reading something into Regulation 8C (as in Sidhu) or adding to the definition in Schedule 3, cl 2(2) (as in Nitchell).
The respondent notes that no regulation has been promulgated pursuant to cl 2(3) of Schedule 3 of the 1987 Act which specifically provides for adjustment of the relevant earning period in circumstances such as the current situation.
The respondent submits that the “relevant earning period” should be the entire of the
52-week period prior to the injury on 5 April 2022.On that basis, the respondent asserts that the applicant’s weekly compensation should be calculated on PIAWE of $807.59.
CONSIDERATION
The decisions of Sidhu v Secretary Department of Communities and Justice [2021] NSWPIC 522 and Stewart v Secretary, Department of Communities and Justice [2022] NSWPIC 333 and Nitchell v Secretary (Department of Communities and Justice) [2022] NSWPIC 625 each adopt differing approaches to resolution of the issue of whether a period during which a worker received weekly benefits in respect of an unrelated injury should be excluded from the relevant earning period for the purposes of calculation of PIAWE of a later injury.
In Nitchell, Member Wynyard considered the relevant statutory provisions, Sidhu and Steward and relevant principles of statutory interpretation. Member Wynyard considered that the correct approach was that the words “immediately before the date of injury” in Schedule 3(2)(2) should be read to mean “immediately before the date of injury, or as adjusted where a worker receives income as defined by Clause 6(2)(c) hereof”.[6]
[6][6] Nitchell, [40]-[87].
I do not accept the respondent’s submissions that Nitchell, Sidhu and Steward were wrongly decided and should not be followed.
With respect, I prefer and adopt the approach adopted by Member Wynyard in Nitchell for the reasons that he outlined in his statement of reasons.
On that basis, I determine that:
(a) the 52 week period provided for the calculation of PIAWE is adjusted by deducting the weeks to which Schedule 3, cl 6(2)(c) applied, and
(b) the applicant’s weekly benefits should be calculated on PIAWE of $1,748.86.
Calculation of weekly benefits
As the only dispute between the parties is in relation to the calculation of PIAWE, it is appropriate to make orders in respect of payment of weekly benefits.
Wage schedules have been filed by the parties. I have determined that PIAWE is $1,748.86.
In accordance with s 36(1) of the 1987 Act the applicant’s entitlement to weekly benefits during the entitlement period from 4 April 2022 to 3 July 2022 is:
$1,748.86 x 95% = $1,661.42
In accordance with s 37(1) of the 1987 Act the applicant’s entitlement to weekly benefits during the entitlement period from 4 July 2022 to 7 March 2023 is:
$1,748.86 x 80% = $1,399.01.
I will order accordingly.
I will allow the parties 14 days liberty to apply with respect to the calculation of the weekly benefits amounts referred to above.
1
4
0