Symons v Secretary, Department of Communities and Justice

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Symons v Secretary, Department of Communities and Justice [2024] NSWPIC 636
APPLICANT:	Gina Symons
RESPONDENT:	Secretary, Department of Communities and Justice
MEMBER:	Mitchell Strachan
DATE OF DECISION:	13 November 2024
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987 (1987 Act); Workplace Injury Management and Workers Compensation Act 1998 (1998 Act); pre-injury average weekly earnings (PIAWE); change of an ongoing nature to the employment arrangement; definition of “earnings”; clause 8C of the Workers Compensation Regulation 2016; clause 6(1) of Schedule 3 to the 1987 Act; temporary assignment; annual leave; sick leave; leave to rely on additional issues; section 287A of the 1998 Act; benefit of finality; prejudice; Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services; Secretary, Department of Communities and Justice v Farrugia; Aon Risk Services Australia Ltd v Australian National University; Lismore City Council v Garland; Secretary, Department of Communities and Justice v Stewart; Held – the change in the applicant’s employment with the respondent during the period 5 June 2023 to 8 October 2023 was temporary; the applicant’s “earnings” when calculating her PIAWE include payments of sick leave and annual leave paid to the worker during the relevant week; the respondent to pay the applicant weekly compensation.
DETERMINATIONS MADE:	The Commission determines: Findings: 1. The change in the applicant’s employment with the respondent from a “Correctional Officer, First Class, Level 2” to a “Senior Correctional Officer” during the period 5 June 2023 to 8 October 2023 was temporary and not a ‘change of an ongoing nature to the employment arrangement’. 2. The applicant’s “earnings” when calculating her pre-injury average weekly earnings (PIAWE) include payments of sick leave and annual leave paid to the worker during the relevant week. 3. The applicant’s PIAWE at the date of injury was $2,408.18 per week. Orders: 4. The respondent is to pay the applicant weekly compensation as follows: (a) Pursuant to s 36 of the Workers Compensation Act 1987: (i) from 9 June 2023 to 8 September 2023 at the rate of $2,287.77 per week. (b) Pursuant to s 37 of the Workers Compensation Act 1987: (i) from 9 September 2023 to 30 September 2023 at the rate of $1,926.54 per week; (ii) from 1 October 2023 to 31 March 2024 at the rate of $1,976 per week; (iii) from 1 April 2024 to 30 September 2024 at the rate of $2,008 per week, and (iv) from 1 October 2024 to date and continuing at the rate of $2,048 per week. 5. The parties are at liberty to apply within seven days with respect to the indexing of weekly payments in order 4 above. 6. The respondent it to have credit for payments of weekly payments previously made during the relevant periods.

STATEMENT OF REASONS

BACKGROUND

The applicant brings the current proceedings seeking a determination of her pre-injury average weekly earnings (PIAWE). The dispute involves the interpretation of cl 8C of the Workers Compensation Regulation 2016 (2016 Regulation) and the definition of “earnings” in cl 6(1) of Sch 3 of the Workers Compensation Act 1987 (1987 Act).
On 9 June 2023, the applicant sustained a dislocated jaw and scarring to the face together with a psychological injury resulting from a dog bite in the course of her employment as a corrective services officer with the respondent.
The fact that the applicant sustained an injury in the course of her employment rendering her totally incapacitated for work is not disputed.
On 2 November 2023, the respondent’s insurer wrote to the applicant advising that her work capacity had been assessed. The correspondence included a work capacity decision in which the insurer had assessed the applicant’s PIAWE at $1,530.23 per week. This decision was based on a relevant earning period of 52 weeks between 6 June 2022 and 4 June 2023 and gross earnings for the period of $53,251.93. It was said not to result in a change in payments being made to the applicant.
On 21 November 2023, the applicant sought a review of the 2 November 2023 decision. As a result of that application for review a further notice was issued by the respondent’s insurer pursuant to s 287A of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act). The outcome was that the applicant’s PIAWE was recalculated to $2,192.73 per week.
The notice referred to the decision of Acting Deputy President Michael Snell in Secretary, Department of Communities and Justice v Farrugia [2023] NSWPICPD 75.
There was further correspondence between the applicant’s solicitor and the respondent’s insurer with respect to the calculation of PIAWE however the dispute with respect to the calculation could not be resolved with the applicant ultimately commencing the present proceedings in the Personal Injury Commission (Commission).

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

The matter was listed before me for preliminary conference on 13 August 2024. The parties were unable to reach an agreement with respect to the applicant’s PIAWE and I ultimately listed the matter for conciliation conference and arbitration hearing for determination of the correct calculation of the applicant’s PIAWE. I made further orders for the service of further evidence and the service of detailed wages schedules.
The parties attended a conciliation conference and arbitration hearing, held by Microsoft Teams, on 4 September 2024.
The applicant was in attendance represented by Mr Hart of counsel, instructed by
Mr McCourt of Braye Cragg Solicitors. The respondent was represented by Mr Krieg, solicitor, of TurksLegal. Ms Teuma was in attendance on behalf of the respondent’s insurer, QBE.
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.
For reasons detailed below, on 5 September 2024 I issued a direction for the provision of further written submissions following the arbitration hearing.
The initial submissions filed on behalf of the applicant dated 10 September 2024 did not address the issues raised in the direction dated 5 September 2024. Given the basis upon which the directions were issued, I considered it was in the interests of justice and necessary to avoid any procedural unfairness, to provide the applicant with a further opportunity to provide written submissions. I issued a further direction for submissions to this effect on
13 September 2024.
Following receipt of the further submissions, it became evident that the respondent sought to withdraw from an agreement reached at the arbitration hearing with respect to the manner in which PIAWE should be calculated should I find against the respondent’s construction arguments. This issue was described as a “mathematical error”.
In the circumstances I listed the matter for further conference before me on
11 November 2024. At that further conference Mr Krieg appeared for the respondent and
Mr McKessar of Braye Cragg Solicitors appeared for the applicant.
Following discussion of the mathematical error, the parties agreed that should I find against the respondent, the applicant’s PIAWE would be $2,408.18.

ISSUES FOR DETERMINATION

The applicant brings a claim for weekly compensation from 9 June 2023 to date and continuing.
There is no dispute that the applicant sustained a compensable injury nor that she is totally incapacitated for work as a result of that injury.
The single issue in dispute is the calculation of the applicant’s PIAWE.
During the course of the conciliation conference and the further conference held on
11 November 2024 subsequent to the arbitration hearing the following facts were agreed:
(a)    in the 52 weeks prior to the applicant’s injury, she was paid, by the respondent, $54,689.75;
(b)    in the 52 weeks prior to the applicant’s injury, the applicant was on unpaid leave for 29.29 weeks, leaving a residual denominator for the PIAWE calculation of 22.71 weeks, and
(c)    if the respondent’s two construction arguments are unsuccessful, the applicant’s PIAWE would be $2,408.18 per week (subject to indexation).
Noting the agreement at the further conference on 11 November 2024, I granted leave to the applicant to amend her claim to claim a PIAWE of $2,408.18.
The respondent made an application for leave to raise an issue not otherwise notified with respect to the proper construction of ‘earnings’ in cl 6(1) of Sch 3 of the 1987 Act.
The application for leave under s 289A(4) of the 1998 Act to allow the respondent to do so was opposed by the applicant. I ultimately determined it was appropriate to grant leave and gave brief oral reasons at the commencement of the arbitration hearing. Further reasons are provided below.
As such, the following issues remain in dispute for determination:
(a) the construction of cl 8C of the 2016 Regulations and whether it operates such that the period prior to 5 June 2023 is excluded from the assessment of the applicant’s PIAWE, and
(b) the construction of the definition of ‘earnings’ in cl 6 of Sch 3 of the 1987 Act and whether it operates to exclude income from sick or annual leave from the definition.

EVIDENCE

Oral evidence

Neither party sought leave to adduce any oral evidence or cross-examine any witness.

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Application to Resolve a Dispute and attached documents;
(b)    respondent’s Application to Admit Late Documents (AALD) (with Reply and attachments);
(c)    respondent’s wages schedule dated 30 August 2024 and attachments (including submissions with respect to wages schedule);
(d)    applicant’s AALD dated 2 September 2024, and
(e)    respondent’s AALD dated 16 August 2018.
As there was no real factual dispute, I have referred to the evidence as relevant when considering the parties submissions and giving reasons below.
In addition to the documentary evidence above, the following written submissions have been filed as directed by the Commission and considered:
(a)    submissions prepared on behalf of the applicant dated 10 September 2024;
(b)    submissions prepared on behalf of the applicant dated 16 September 2024, and
(c)    submissions prepared on behalf of the respondent dated 27 September 2024.

FINDINGS AND REASONS

A brief statement is required for the reasons for determination.[1]
[1] Section 294(2) of the 1998 Act.

Grant of leave

At the commencement of the arbitration hearing, the respondent made an application to amend the Reply to put in issue the application and construction of cl 6(1) of Sch 3 of the 1987 Act, asserting that earnings cannot include entitlements paid to the applicant for annual leave or sick leave or anything other than wages for work performed. Such a construction and application would significantly reduce the calculation of the applicant’s PIAWE. This was put as an alternative to the respondent’s primary argument with respect to cl 8C of the 2016 Regulations.
The applicant objected to the respondent’s application to amend the Reply and the necessary exercise of discretion by the Commission under s 289A(4) of the 1998 Act.
I ultimately granted leave to the respondent and provided brief oral reasons which were recorded and are available to the parties. The reasons that follow supplement those oral reasons.
Section 289A(4) provides the Commission with discretion to allow a respondent to raise issues which had not been properly notified where it is in the interests of justice to do so.
The power in s 289A(4) is discretionary. The principles for consideration in the exercise of the discretion were considered by Deputy President Roche in Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSWWCCPD 227 and include:
(a)    the degree of difficulty or complexity to which the unnotified issues give rise;
(b)    when the insurer notified that it wished to contest the issue;
(c)    the degree to which the insurer has otherwise fulfilled its statutory obligation to notify the worker of its decision to dispute liability;
(d)    any prejudice that may be occasioned to the worker, and
(e)    any other relevant matters arising from the particular circumstances of the case.
Having regard to the considerations set out in Mateus I granted leave as sought by the respondent for the following reasons.
The issue raised by the respondent was one of statutory construction and limited to a single clause. It was purely a question of law and did not require the consideration of further evidence. Further the applicant was represented by experienced counsel. For these reasons I did not consider that the difficulty or complexity of the issue weighed against the grant of leave.
The applicant’s employment and earnings history in the 12 months prior to her injury was not straightforward with significant periods of paid and unpaid leave as well as a change in her employment status which also forms part of the basis for the current dispute. The calculation of the applicant’s PIAWE has been the subject of significant correspondence between the parties since the applicant first sought a review of her PIAWE on 30 October 2023. The interpretation of cl 6(1) of Sch 3 of the 1987 Act was not raised in any of this correspondence. The issue was not raised by the respondent at the preliminary conference on 13 August 2024. Further the respondent filed a wages schedule with submissions dated 30 August 2024 which did not raise the interpretation of Sch 3, cl 6(1) of the 1987 Act. The issue was ultimately not raised until the conciliation conference on 5 September 2024. This delay by the respondent in identifying the real issues in dispute weighed against the grant of leave.
The respondent has however engaged constructively with the applicant prior to the current proceedings being commenced to attempt to resolve and define the issues in dispute. I consider the conduct of the respondent and its insurer to be an otherwise neutral issue with respect to the grant of leave.
With respect to prejudice to the applicant, as discussed above, the further issue sought to be raised was a discreet issue of statutory construction. The applicant was represented by competent counsel and no further evidence was needed to address the issue. I consider that any prejudice to the applicant, which was minimal in the circumstances described, could be overcome by allowing for written submissions on the issue to be filed following the arbitration hearing (which has occurred). Having found that any prejudice was minimal, I consider this weighed in favour of the grant of leave.
Finally, with respect to the circumstances of the present case. Given the applicant’s complex employment and earnings history in the 52 weeks prior to her injury and the extensive effort the parties have already gone to in attempting to reach agreement on the calculation of the applicant’s PIAWE, I considered there was significant benefit to all involved in finality. Had leave not been granted, a further dispute notice raising the issue may well have been issued by the respondent and the applicant would again need to bring separate proceedings in the Commission to resolve the issue. There was significant benefit in finality not only to the parties but also in the effective use of Commission resources.[2] This is consistent to the purpose and objectives of the Personal Injury Commission Act 2020. This consideration weighs significantly in favour of granting leave.
[2] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27.
Having weighed the various competing principles and having regard to the limited nature of the issue, the limited prejudice to the applicant (and the steps taken to overcome this) and the value in finality, it is appropriate to exercise the discretion under s 289A(4) of the 1998 Act to allow the respondent to raise the further issue.

Legislative framework

Before considering the two construction arguments put forward by the respondent, it is beneficial to set out the relevant legislative framework.
Section 33 of the 1987 Act provides:
“If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.”
Sections 36, 37 and 38 of the 1987 Act provide for the payment of weekly compensation during various entitlement periods with reference to the worker’s PIAWE.
PIAWE is defined in cl 2 of Sch 3 of the 1987 Act:
“2 Meaning of ‘Pre-Injury Average Weekly Earnings’
(1)     Pre-injury average weekly earnings, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note: [other modifications]
(2)     Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).
(3)     The regulations may provide for the adjustment of the relevant earning period for a worker in employment (including, for example, by extending or reducing the period)—
(a)     to take into account any period of unpaid leave or other change in earnings circumstances in the employment, or
(b)     to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.”
Clause 2(3) of Sch 3 of the 1987 Act authorises the making of regulations which adjust the relevant earning period.
Clause 8C of the 2016 Regulations has been made in accordance with this power and provides:
“(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.”
Clause 6 of Sch 3 of the 1987 Act provides as follows:
“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) …”

Approach to statutory interpretation

The determination of both issues requires interpretation of the 1987 Act and the 2016 Regulations.
It is convenient to set out the accepted approach to statutory interpretation (as far as relevant) before considering both issues.
The task of statutory interpretation “must begin with a consideration of the text itself”[3] starting with “the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and legislative purpose”. [4] The “context and legislative purpose will cast light upon the sense in which the words of the statute are to be read”.[5]
[3] (Hayne, Heydon, Crennan and Kiefel JJ in Alcan (NT) Alumina Pty Ltd v
[4] Alcan per French CJ at [31].
[5] Alcan per French CJ at [31].

It is a statutory requirement that, in the interpretation of a provision of an Act, “a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule) … shall be preferred to a construction that would not promote that purpose or object”.[6]
[6] Interpretation Act 1987 (NSW) (Interpretation Act), s 33.
This provision (as with all provisions of the Interpretation Act) applies to the interpretation of delegated legislation made under Acts as well as to the Acts themselves, and to all laws, whether enacted or made before or after the date of commencement of the Interpretation Act, unless the contrary intention appears.[7]
[7] Interpretation Act, s 5.
Consistent with this, in Project Blue Sky Inc v Australian Broadcasting Authority[8] McHugh, Gummow, Kirby and Hayne JJ said:
“…the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.” (at 384, footnotes omitted)
[8] (1998) 194 CLR 355 (Project Blue Sky).
Dealing with the reconciliation of conflicting provisions, their Honours added that “[t]he primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute” and that the “meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’”.[9]
[9] Project Bluesky at [381] (citing Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 (Cooper Brookes) per Mason and Wilson JJ).
Further, an interpretation that provides an unjust result should be avoided.[10]

Construction of cl 8C of Workers Compensation Regulations 2016

[10] Tickle Industries Pty Ltd v Hann [1974] HCA 5; 130 CLR 321 at [331].

Respondent’s submissions

The respondent’s primary contention is that the applicant’s temporary assignment was “a change of an ongoing nature to the employment arrangement resulting in a financially material change to the earnings of the worker” such that cl 8C of the 2016 Regulations operates to exclude from the relevant earning period any period before the change occurred.
The respondent accepts that the change was only temporary with an end date of
8 October 2023 but submits that this is not inconsistent with the change being of “an ongoing nature”. The respondent notes that the cl 8C of the 2016 Regulations provides an example where the clause would apply, being a change from full time to part time work.
The respondent submits that the keyword ‘ongoing’ means ‘present and continuing’. It does not mean ‘forevermore’ nor ‘forever with no capacity to change back or change further in the future’. Further, the respondent submits that cl 8C does not contain any requirement for the change to be of any particular length. The respondent submits the change needs to only be current and ongoing into the future.
The respondent referred to the decision of Acting Deputy President Perry in Secretary, Department of Communities and Justice v Farrugia [2023] NSWPICPD 75 at [38]:
“To slightly digress, the penultimate ellipse omits the words “of an ongoing nature” as I do not see any basis for the appellant to say that any relevant change was not of an ongoing nature. The classification change was not, for example, in the nature of a one-off bonus, or earnings during a period where there was an unusual amount of overtime, or a depression in earnings due to a temporary illness or other circumstances where a worker was on temporary leave without pay. This is consistent with the example of a change from full-time to part-time work in cl 8C(1) (the cl 8C example), because such a change qualifies for the adjustment, even though it is not difficult to envisage situations where there is a possibility of a change back to full-time work at some stage in the future.”
The respondent submits the above passage supports the argument that a change in position from a lower position to a higher one, even on a temporary basis, will enliven the operation of cl 8C and it doesn’t matter that the arrangement is going to come to an end.
The respondent also seeks to separate the applicant’s arrangement which was to last for four months from circumstances where a worker may be acting in a higher capacity to cover illness or leave for another employee over a shorter period of time.
The respondent submits that in applying its preferred construction, consideration can only be had to earnings in the period between 5 June 2023 being the day the change came into effect and 8 June 2023 being the day immediately before the day of the applicant’s injury.
Further the respondent submits that consideration can only be had to earnings actually received by the applicant in that period, resulting in a PIAWE figure of $1,603.29.

Applicant’s submissions

Counsel for the applicant both addressed the issue during oral submissions and in further written submissions. The initial oral submissions somewhat misconstrued the respondent’s argument and were withdrawn.
The applicant ultimately submitted that the construction advanced by the respondent would be torturing the intent of the legislation and should be rejected.
In written submissions dated 10 September 2024 the applicant submitted that asserting that a temporary higher duties role is a change of an ongoing nature is inconsistent with the ordinary meaning of “ongoing”.
The applicant submits that the respondent had also not made out that the chance was a ‘financially material change’ and that this was not demonstrated by the earnings reports in evidence.
The applicant submits that consideration of any change should also consider the overtime that the applicant expected she would work in the higher duties role.
The applicant submits that having regard to the policy intention (see Lismore City Council v Garland (1992) 25 NSWLR 542 at [459] referred to in Farrugia at [34]), it should be found that the applicant taking up the higher duties position was temporary and not of an ongoing nature and did not result in a financially material change.

Consideration

The applicant’s submission that the change was not financially material cannot be accepted.
The change from “Correctional Officer, First Class, Level 2” to a “Senior Correctional Officer” produced a financially material change to the applicant’s earnings. The payroll records in evidence demonstrate that prior to 5 June 2023 the applicant’s base annual salary was $79,952 which increased to $84,782 on 5 June 2023 (and then to $88,173 from 3 July 2023 assumably due to incremental increases from the start of the new financial year).
Having considered these records, I find that the change was financially material.
The real issue is whether the change was of an “ongoing nature”.
There is agreement between the parties that the employment relationship between the applicant and the respondent changed from 5 June 2023. From that date the applicant was temporarily promoted to a senior correctional officer with that temporary assignment lasting until 8 October 2023.
The respondent’s argument relies on “ongoing” meaning “present and continuing” without reference to any timeframe as to how long something might be continuing for. Essentially something could be ongoing today even if it was known to end tomorrow. I do not accept this.
Beginning with a consideration of the text itself, the ordinary and grammatical meaning of “ongoing nature” is that something is to continue into the future. Something is of an ongoing nature where it is to continue into the future without expectation of change.
Within the context of cl 8C, “ongoing” is used to describe the nature of a change to an employment relationship. This requires regard to be had to the totality of the relationship. This is consistent with the example appearing in the clause and what was said by Acting Deputy President Perry in Farrugia. A change from full time to part time employment is a permanent change to the employment relationship between the employee and employer which continues until such time as there is a mutual agreement between them to again alter that relationship.
That is different to the present situation where there was an agreement for a temporary change to the applicant’s employment for a defined period between 5 July 2023 and
8 October 2023. There is limited evidence before the Commission to explain the background to the change however the fact that the change was to be for fixed period only was accepted by the applicant and respondent in submissions.
This is further supported when considered within the wider legislative framework. Clause 8C seeks to modify the relevant earning period for the calculation of a worker’s PIAWE and ultimately the amount of weekly compensation they are entitled to under ss 36, 37 and 38 of the 1987 Act. It must be construed within the context of this scheme for the payment of weekly compensation.
In Farrugia, the Acting Deputy President considered comments made by Kirby P (as he was then) in Lismore City Council v Garland with respect to the legislative history with respect to the provision of weekly payments and concluded:
“…the core principle, that a worker should be paid weekly compensation at a rate which would have been paid as wages had there been no injury (subject to statutory modifications), is sufficiently analogous for present purposes.”
Within this context, the purpose of the modification in cl 8C of the 2016 Regulations is to ensure that neither the worker nor employer are disadvantaged by recent long-term changes which might not be reflected in the historical payments made in the 52 weeks prior to injury.
The PIAWE figure is used (subject to indexation) to calculate entitlements to weekly compensation over the life of a claim for compensation which, in an extreme case and subject to a worker meeting legislative requirements, extend from the date of injury until a year after a worker reaches retirement age.
An interpretation that is not going to artificially increase or decrease the ongoing PIAWE, where it is meant to be a representation of what a worker would have been expected to earn, but for their injury, should be preferred.
To construe the meaning of “ongoing nature” in cl 8C of the 2016 Regulations to include a temporary change in earnings which the parties both acknowledge had a finite end date, is inconsistent with the purpose and context of the clause within the legislative framework as a whole.
For these reasons, I find that the change in the applicant’s employment from a “Correctional Officer, First Class, Level 2” to a “Senior Correctional Officer” during the period 5 June 2023 to 8 October 2023 was temporary and not a ‘change of an ongoing nature to the employment arrangement’ such that any adjustment should be made under cl 8C of the 2016 Regulations.

Definition of ‘earnings’ – cl 6 of Sch 3 of the 1987 Act

Respondent’s submissions

The respondent’s alternative argument is that when calculating the gross pre-injury earnings of the applicant for the purpose of a PIAWE, the definition of “earnings” in cl 6(1) of Schedule 3 of the 1987 Act only includes the amount of income received by the worker for work performed in any employment during the week.
The figure of $57,000 (later agreed to be in the vicinity of $54,000) is total gross earnings and includes sick leave and annual leave during the period 6 June 2022 and 4 June 2024.
The respondent submits that cl 6(1) of Sch 3 of the 1987 Act is self-explanatory in that earnings can only be for work performed for work in a given week. The respondent submits that it is not controversial that the applicant did not work at all between 17 June 2022 and
12 February 2023. During this period she was paid various types of leave. The respondent submits that the income from leave cannot be included in calculating earnings.
The cl 6(2) lists items that income does not include. There is nothing in cl 6 that there is to be any inclusion of any income received for work not performed. The respondent says that if it was to be included it would be explicitly included.
The respondent refers to the decision of the Court of Appeal in Secretary, Department of Communities and Justice v Stewart [2024] NSWCA 59 at [111]:
“This analysis is predicated upon wages for sick leave falling within the definition of ‘earnings’ in cl 6(1) of Sch 3 to the Compensation Act. During the hearing of the appeal, Senior Counsel for the Secretary relevantly contended ‘generally payment while on sick leave is accepted to be earnings’. In any event, it is tolerably clear that such wages would be ‘earnings’ for this purpose. First, the Compensation Act describes these payments as ‘wages’ in both ss 50 and 174. Whilst cl 6 of Sch 3 to the Compensation Act does not use the language of ‘wages’, Parliament’s description of these payments as wages suggests that they are regarded as payments on account of work done by the worker and are thus ‘income’ within the meaning of cl 6(1) of Sch 3 to the Compensation Act. Second, a payment of wages by an employer for sick leave is aptly described as a payment made in consideration for the work which the worker performs under the employment arrangement. It is thus within the ambit of “income”. In this regard, the better view is that under cl 6(1) of Sch 3 to the Compensation Act, a worker’s earnings in respect of a particular week includes an amount paid as income provided that it is paid as income during that week, irrespective of whether that payment is in respect of work actually performed during that particular week. There is some obscurity in the language of cl 6(1) of Sch 3 to the Compensation Act, in particular as to whether the words ‘during the week’ qualify the receipt of income by the worker, or the performance of work in the employment. However, construing cl 6(1) of Sch 3 to the Compensation Act in the context of cl 6 of Sch 3 as a whole, it is clear that ‘income’ will be ‘earnings’, provided it is received in the week in question (irrespective of when the work was actually performed). It would otherwise make no sense for Parliament to have provided, in cl 6(2)(c) of Sch 3, that ‘income’ does not include ‘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’. Manifestly, as such payment is in respect of loss of earnings, it will not have been made in respect of work performed in that week. It would thus have been wholly unnecessary to exclude such a payment from the ambit of ‘income’ if that term were limited to payments ‘for’ work performed in the week in question.”
The respondent concedes that the reasons of Stern JA are against the respondent’s contention however submits that Stern JA’s was a dissenting judgment and did not form the basis for the determination of that appeal.
Further, the respondent submits that Stern JA doesn’t actually consider the actual words in cl 6(1).
In its written submissions, the respondent further submitted that the single issue in dispute in Stewart was whether a period of absence from work due to incapacity for which workers compensation benefits were being paid constituted a “period of unpaid leave”. This is a separate issue to that in dispute in the current proceedings.
Additionally, the respondent submits that the reasons of Stern JA in Stewart are only relevant with respect to sick leave and not other leave entitlements and that in reaching the conclusion that she did, Stern JA impermissibly read words into cl 6(1) of Sch 3 of the 1987 Act.
The respondent submits that ‘during the week’ in cl 6(1) refers to the work performed and not to the income of the worker received “during the week”.
The respondent submits that between 17 June 2022 and 12 February 2023 the applicant did not work at all and any amount received during those weeks cannot be counted as earnings because they do not amount to earnings in accordance with cl 6(1).
The respondent submits this would result in a PIAWE of $1,704.60.
In its written submissions, in response to submissions by the applicant with respect to context, the respondent refers to cl 2(2) of Sch 3 of the 2016 regulation which provides “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 respondent submits that this clause restricts consideration to a worker’s earnings that are paid or payable for work that was performed within the relevant earning period and that cl 6(1) provides a further restriction in that earnings of a given week can only be income paid in respect of work performed within that week.
The respondent further submits that if leave payments are accrued and paid as a result of work performed, then it is impossible to know whether they accrued due to work undertaken during the relevant earning period.
The respondent refers to the changes made by the Workers Compensation Legislation Amendment Act 2018 (2018 Amendment Act) and the legislative position prior to the amendment which expressly referred to paid leave in the definition of PIAWE in ss 44C(1) and 44E.
The 2018 Amendment Act repealed ss 44C(1) and 44E and replaced them with Sch 3 without reference to paid leave.
The respondent submits this is evidence of a clear legislative intent to exclude payment for leave entitlements from PIAWE calculations.

Applicant’s submissions

The applicant submits that the respondent’s construction of cl 6 of Sch 3 of the 1987 Act is wrong.
The respondent submits that cl 6 ought to be construed as a beneficial provision with the intent being to provide a basis as to how to calculate earnings.
The applicant submits the respondent is trying to limit the effect of cl 6 but picking out the words “during the week” as meaning that if you were paid annual leave or sick leave they would fall outside the definition and the focus is based on when the worker received the money.
Further the applicant submits, sick leave and annual leave are accrued benefits for work performed.
The applicant submits that cl 6(2) provides a list of payments made to workers that are not to be included in the calculation of earnings.
The applicant submits that the clause should be given ordinary meaning being that you take income received during the week that came from work performed at any time and that is how it should be interpreted.

Consideration

I do not accept the respondent’s construction of cl 6 of Sch 3 of the 1987 Act, which seeks to exclude payments of annual leave and sick leave for the calculation of an injured worker’s PIAWE.
Firstly, examining the text of the clause, “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, it is evident, as discussed by Stern JA in Stewart, that there is obscurity as to whether “during the week” is seeking to qualify when the work was performed or when payment for that work was received.
I do not accept, as was submitted by the respondent, that Stern JA in Stewart did not consider the actual words in the clause. It is clear that Stern JA carefully considered the actual text and found obscurity in the language.
It is further clear that there are two interpretations available from the text of the clause.
The respondent submits that Stern JA’s reasons were addressing a separate issue with respect to an absence from work while on workers compensation payments and further are only applicable to a consideration of sick leave rather than other types of leave. This is not expanded on further by the respondent. While the issue in dispute was different in those proceedings, the reasons of Stern JA remain instructive with respect to the issues I am required to determine. Stern JA noted that ‘sick leave is aptly described as a payment made in consideration for the work which the worker performs under the employment relationship’.[11] Annual leave and other leave entitlements are no different.
[11] Stewart at [111]:

There is the construction advanced by the respondent, where “during the week” qualified when the work was performed and alternatively a construction where during the week qualifies when the income was received by the worker. I consider that both constructions are open on a plain reading of the text.
Regardless of the obscurity of a legislative instrument it is the duty of courts and tribunals to give meaning to the clause.[12]
[12] Vanit v R (1997) 190 CLR 378 at [393] per Kirby J.
Where there is obscurity it is necessary to consider the context and legislative purpose of the clause as well as the context of the clause within the Act more broadly.
The respondent submits that consideration should be given to the text and the text alone, without consideration of context or purpose. That is inconsistent with the modern approach to statutory interpretation, and particularly so in circumstances where there is obscurity in the language of the text.
In Stewart, when considering context and purpose, Stern JA makes the following observations:
(a) the 1987 Act describes sick leave as “wages” in both ss 50 and 174;
(b) Parliament’s description of sick leave as wages suggests that they are regarded as payment on account of work done and are thus income, and
(c) the payment of wages by an employer for sick leave is paid in consideration of work performed by the worker as part of the employment relationship.
It was on this basis that Stern JA reached the conclusion that,
“the better view is that under cl 6(1) of Sch 3 to the Compensation Act, a worker’s earnings in respect of a particular week includes any amount paid as income provided that it is paid as income during that week, irrespective of whether that payment is in respect of work actually performed during that particular week.”
While the dissenting reasons of Stern JA in Stewart did not form the basis for the determination of the appeal, the construction of cl 6 of Sch 3 of the 1987 Act was not otherwise considered by the Court and I find them persuasive on this issue.
The respondent refers to cl 2(2) of Sch 3 of the 1987 Act, which prevents consideration of earnings paid or payable for work performed before or after the 52 week period, as a contextual element and submits this supports its preferred construction. I do not consider this is inconsistent with a construction that includes annual leave. Clause 2(2) operates to exclude for example back payments received in the 52 week period for an earlier period of time, for example due to a back dated pay increase or correction of payroll records. It could also exclude incentive payments which might be paid on a quarterly basis in arrears. Again, this is consistent with the purpose discussed at 82 to 84 above.
Further, I do not consider that the changes to the PIAWE regime by the 2018 Amendment Act which removed reference to paid leave is demonstrative of a clear legislative intent to remove paid leave from PIAWE calculations. The 2018 changes to PIAWE simplified the calculation process and the language of the Act. I do not consider this simplification can be used to demonstrate clear legislative intention, particularly when considering the context and purpose overall.
A construction giving effect to the purpose and legislative intent of the section and consistent with the overall context, where a worker’s entitlement is assessed based on a wholistic view (subject to alteration by the legislation and associated regulations) of their income over the proceeding 52 weeks, inclusive of leave entitlements which accrue as part of the employment arrangement, should be preferred over a narrow reading of the text alone which does not give effect to the purpose of the legislation.
The applicant’s “earnings” when calculating her PIAWE include payments of sick leave and annual leave paid to the worker during the relevant week.

SUMMARY

For the reasons provided above, I do not accept the construction of cl 8C of the 2016 Regulations or cl 6 of Sch 3 of the 1987 Act advanced by the respondent.
I make the following findings:
(a) the change in the applicant’s employment with the respondent from a “Correctional Officer, First Class, Level 2” to a “Senior Correctional Officer” during the period 5 June 2023 to 8 October 2023 was temporary and not a ‘change of an ongoing nature to the employment arrangement’, and
(b) the applicant’s “earnings” when calculating her PIAWE include payments of sick leave and annual leave paid to the worker during the relevant week.
The parties agreed that where I not to accept the statutory constructions advanced by the respondent, the applicant’s PIAWE at the date of injury would be $2,408.18 per week.
The respondent is to pay the applicant weekly compensation in accordance with the Certificate of Determination.

Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at 46 (Alcan)).

[2024] NSWPIC 636

13 November 2024