Temmuz v Stock Specialist Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Temmuz v Stock Specialist Pty Ltd [2023] NSWPIC 429
APPLICANT:	Yuhanon Temmuz
RESPONDENT:	Stock Specialist Pty Limited
MEMBER:	Rachel Homan
DATE OF DECISION:	24 August 2023
CATCHWORDS:	WORKERS COMPENSATION - Claim for weekly compensation in respect of accepted psychological injury at a higher rate than has been paid; whether commissions to which the applicant says he was entitled to be included in pre-injury average weekly earnings (PIAWE); non-compliance by employer with Notices to Produce and requests by insurer for records relating to employment; Held – no dispute that commissions not in fact paid; documents identified as employment contracts by applicant unsigned, undated and vague with regard to the entitlement to commission; evidence insufficient to establish entitlement to commissions or quantum of entitlement; Commission declined to make orders sought by applicant.
DETERMINATIONS MADE:	The Commission determines: 1. The Commission declines to make the orders sought by the applicant.

STATEMENT OF REASONS

BACKGROUND

Mr Yuhanon Temmuz (the applicant) commenced employment as an Equities Specialist with Stock Specialist Pty Limited (the respondent) on 16 June 2022.
On 5 September 2022, the applicant made a claim for compensation in respect of a psychological injury arising out of or in the course of his employment with the respondent. Payments of weekly compensation were commenced and backdated to 22 July 2022.
Email correspondence between the applicant and the respondent’s insurer reveal a dispute as to the proper calculation of the applicant’s pre-injury average weekly earnings (PIAWE) rate and, in particular, whether commissions to which the applicant was entitled should be included in the calculation of his PIAWE.
The present proceedings were commenced by lodgement of an Application to Resolve a Dispute (ARD) on 16 March 2023. The applicant sought weekly compensation from 22 July 2022 to date and continuing pursuant to ss 36 and 37 of the Workers Compensation Act 1987 (the 1987 Act) based on a higher PIAWE rate of $1,906.50, subject to periodic indexation.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (Commission)

The matter was listed for a preliminary conference before Member Young on 18 April 2023, on which occasion orders were made for the lodgement of Directions for Production seeking payslips, financial records, wage records, group certificates and other documents in relation to the applicant’s injury. The matter was referred to conciliation conference and arbitration hearing to be held on 15 June 2023.
At the conciliation conference and arbitration hearing on 15 June 2023, the applicant was represented by Mr John Gaitanis of counsel, instructed by Mr Lorenzo Gutierrez. The respondent was represented by Mr Justin Hart of counsel, instructed by Ms Tarana Singh. A representative from the insurer was also present.
A direction was made admitting into evidence documents attached to an Application to Admit Late Documents lodged by the applicant on 2 May 2023.
Submissions were also heard from the parties in relation to an application made by the respondent to have admitted in the proceedings a payslip for the period ending 15 August 2022. An interlocutory determination was made by Member Young admitting the document into evidence.
As there remained insufficient time to hear oral submissions addressing the substantive issue in dispute, a direction was made for the lodgement of written submissions.
Written submissions were received in accordance with the timetable established, however Member Young became unavailable to determine the matter due to illness.
On 28 July 2023, the Commission wrote to the parties advising them of Member Young’s unavailability. The parties were advised that, given oral and written submissions had already been received, the Division Head proposed to reallocate the matter to another member for determination. Alternatively, the parties were given the option of requesting a hearing de novo.
The parties wrote to the Commission consenting to the reallocation of the matter to a new member for determination.
The parties were subsequently advised that the matter had been reallocated to me and that I proposed to determine the matter on the material already before the Commission. The parties were advised that should any further submissions be required a direction to that effect would be issued.
After considering the oral and written submissions made to Member Young and the documentary evidence, I have not considered it necessary to request further submissions.
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 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.

ISSUES FOR DETERMINATION

The sole issue in dispute is whether commissions to which the applicant was entitled should be included in the calculation of his PIAWE.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    ARD and attached documents;
(b)    Reply and attached documents;
(c)    documents attached to an Application to Admit Late Documents lodged by the applicant on 2 May 2023;
(d)    payslip for the period ending 15 August 2022;
(e)    written submissions lodged on behalf of the applicant on 29 June 2023;
(f)    written submissions lodged on behalf of the respondent on 12 July 2023, and
(g)    written submissions in reply lodged on behalf of the applicant on 18 July 2023.
Neither party applied to adduce oral evidence or cross-examine any witness.

Applicant’s evidence

The applicant’s evidence is set out in a written statement made by him on 10 March 2023.
The applicant stated that he was being paid weekly compensation based on a PIAWE rate that was calculated using only his base rate and not his expected commissions. The applicant was employed in a sales role and commission was an important part of his salary. The applicant would have been earning commission had it not been for his injury.
The applicant said he had attempted to resolve the matter with the insurer. However, the employer had been unresponsive to the insurer’s attempts to obtain proof of the applicant’s earnings. The applicant was unable to obtain proof of his earnings himself because access to his payslips had been removed.
The applicant commenced working with the respondent on 16 June 2022 and received an employment contract of the same date, stipulating a base salary of $78,000 including superannuation with monthly commissions as follows:
“i.     $25,000 + 5%
ii.      $45,000 + 10%
iii.     $60,000 + 12.5%.”
The applicant said his earnings circumstances changed on 1 August 2022. Due to his excellent performance, the applicant was promoted and received a revised employment contract effective 1 August 2022, stipulating a base salary of $88,000 including superannuation and monthly commissions as follows:
“i.     $30,000 + 5%
ii.      $45,000 + 10%
iii.     $60,000 + 12.5%.”
The applicant said his employment was unfairly terminated on 9 August 2022.
The applicant said that liability in respect of his psychological injury had been accepted and he had received weekly compensation based on a PIAWE of $1,531.50.
The applicant said that, in accordance with his employment contract, he was entitled to $1,500 per month (5% of $30,000) or $375 per week on top of his base salary of $1,531.50 per week. The total PIAWE therefore ought to be $1,906.50, subject to periodic indexation.

Employment contracts

Attached to the ARD are two documents identified as employment contracts.
Both documents are unsigned and undated.
A “Schedule of Employment Details” attached to the first document records a commencement date of 16 June 2022 and a “Total Remuneration Package” as follows:
“Base: $78 000 AUD inclusive of Superannuation
Monthly Commissions
$25 000 + 5 %
$45 000 + 10 %
$60 000 +12.5 %
If the amount of $45 000 is reached for 3 months in a row salary will be increased to $85 000”
A “Schedule of Employment Details” attached to the second document records a commencement date of “1 August 2021” and a “Total Remuneration Package” as follows:
“Base: $88 000 AUD inclusive of Superannuation ‘
Monthly Commissions
$30 000 + 5 %
$45 000 + 10 %
$60 000 +12.5 % “

Other financial records

An Australian Taxation Office (ATO) Income Statement for the period 1 July 2022 to 15 August 2022 indicates the applicant was paid gross payments of $5,789.55 by the respondent.
Osko receipts indicate that payments were made to the applicant by the respondent in the amount of $3,586.19 on 15 July 2022 and $1,371.36 on 15 August 2022.
Commonwealth Bank transaction statements for the period 15 June 2022 to 15 August 2022 show the two payments above, as well as Centrelink payments, including Jobseeker payments.

Payslip

The respondent has provided a payslip for the period 16 July 2022 to 15 August 2022 which indicates that the applicant was paid $1,371.36 on 15 August 2022. The applicant was paid in respect on 30.4 ordinary hours and 11.287 hours of annual leave. The applicant’s hourly rate was given as $36.6388.

Applicant’s submissions

The applicant submitted that the respondent employer and its officer had failed to produce the documents requested in Notices to Produce issued following the preliminary conference. The respondent employer had ignored all efforts by both parities to obtain the requested documents. In the absence of contradiction, the applicant’s claims should be accepted.
The applicant referred to the assertion in his statement evidence that the insurer had not been paying him weekly compensation at the correct rate. The applicant had set out how the PIAWE should be calculated.
The applicant said that the payslip for the period ending 15 August 2022 had been forwarded to the insurer by him on 5 September 2022. The applicant submitted that little or no weight should be given to the payslip because it covered a period after the injury when the applicant had ceased working.
The applicant submitted that his statement evidence and the contracts of employment attached to the ARD had not been disputed.
The applicant said his performance warranted the payment of commissions for which he had now been deprived.
The applicant submitted that the evidence relating to what was in fact paid to him was unreliable for the purposes of calculating PIAWE. In the absence of any contest by the respondent in these proceedings, little weight, if any, should be given to that evidence.
The applicant submitted that it was generally accepted that PIAWE is the total of gross weekly earnings over the 52 weeks of employment before the date of the injury occurring. To calculate PIAWE, gross weekly earnings include earnings such as wages, including any paid leave and loadings, shift, overtime, and other allowances paid, commissions and piece rates.
The applicant submitted that the commissions that were agreed to as part of his contracts of employment were payable. The respondent had refused to produce the material evidencing the applicant’s entitlement to the commissions. Without this evidence, a Jones v Dunkel[1] inference that the material sought would not have assisted the respondent was available.
[1] [1959] HCA 8.
The applicant submitted that the PIAWE rate should be determined by cl 3(2) of Schedule 3 to the 1987 Act on the basis that the PIAWE was agreed between the worker and employer. The contracts of employment were said to be compelling evidence of the intention of the parties in this regard.
The applicant sought to draw assistance from the decision in Almanaa v FBS Formwork Group Pty Ltd [2021] NSWPIC 455 (Almanaa) where the member accepted that there had been an oral contract between the parties. The applicant likewise urged the contracts of employment as plain indicators of the PIAWE.
The applicant claimed the entitlement to weekly compensation should be assessed as $1,811.18 per week as indexed (being 95% of $1,906.50) in the first entitlement period and $1,566.49 per week as indexed for the second entitlement period (being 80% of $1,958.11). The applicant sought orders accordingly.

Respondent’s submissions

The respondent submitted that there was an insufficient evidentiary basis for the Commission to accept the applicant’s claims as to the PIAWE figure and argued that, even if the applicant was entitled to the unpaid monthly commission, the value of that commission must not be included in the assessment of his PIAWE.
The respondent submitted that, as the applicant had received weekly compensation from 22 July 2022, that must be the first date of incapacity and the deemed date of injury. The “relevant earning period” for the purposes of cl 2 of Schedule 3 to the 1987 Act was, therefore, 16 June 2022 to 21 July 2022.
The respondent submitted that the employment contracts attached to the ARD were vague as to the entitlement to commissions in the alleged remuneration package. It was inherent in the concept of commissions that they are only payable upon satisfaction of certain conditions. There was no evidence before the Commission that the required conditions for payment of the monthly commissions were met. It was not clear which tier of commissions the applicant may have been entitled to. The applicant did not set out the basis for his assertion that he was entitled to $1,500 per month.
The respondent submitted that there was no evidentiary basis for the Commission to find the applicant was entitled to monthly commissions let alone the quantum of those monthly commissions.
The respondent submitted that any adverse inference arising from the failure to produce material could not be used to fill gaps in the evidence. The respondent referred to the Court of Appeal decision in Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 in this regard.
The respondent submitted that, in any event, the material sought from the respondent employer did not include material relating to monthly commissions in the relevant earning period. There was no basis for the Commission to draw an adverse inference against the respondent in the manner urged by the applicant.
Even if the Commission were to accept that there was an entitlement to monthly commissions, that entitlement should not be included in the calculation of PIAWE. The respondent referred to cl 6(1) of Schedule 3 to the 1987 Act, which referred to the earnings “received”. Giving that word its ordinary and natural meaning, earnings must actually have been “received” by the worker, for example, through the deposit of funds into a bank account. This did not include unpaid monthly commissions to which a worker was “entitled” but had not “received”. The applicant had not grappled with the textual meaning of cl 6(1).
The respondent submitted that the employment agreements attached to the ARD did not reflect any agreement as to PIAWE or acknowledgement that it was an agreement for the purposes of cl 3 of Schedule 3 to the 1987 Act.
The respondent made submissions as to the correct calculation of PIAWE, noting that the unsigned employment agreement, expressed to commence from 16 June 2022 identified a base salary of $78,000 inclusive of superannuation. Superannuation was to be excluded from the calculation of PIAWE pursuant to cl 6(2)(a) of Schedule 3 to the 1987 Act. This yielded a PIAWE of $1,350.
The bank records indicated the applicant was paid $3,586.19 net for the month of July 2022, equating to approximately $950 per week gross.
Alternatively, using the hourly rate in the payslip over a 38 hour week equated to a PIAWE of $1,392.27.
The respondent submitted that the employment agreement said to have come into effect on 1 August 2022 was unsigned and came into effect after the injury. The bank statements and payslips were not consistent with the remuneration included in that agreement.
In response to the applicant’s submission that little weight should be placed on the payslip, the respondent noted that it had been provided by the applicant himself in support of his workers compensation claim. No evidence or arguments had been provided to support an inference that the document was not authentic or reliable. The most telling sign of its reliability was the correspondence between the payslip and the amount in fact paid into the applicant’s bank account on 15 August 2022. The fact that it included a period after the injury was irrelevant. The payslip recorded the applicant’s hourly rate.
The respondent submitted that the best evidence of the applicant’s PIAWE was the payslip and submitted that the Commission should determine the applicant’s PIAWE to be $1,392.27, as indexed from time to time.

Applicant’s submissions in reply

The applicant submitted that the employer and its relevant officer had neglected, ignored or refused to engage with the dispute. The respondent’s arguments should not be accepted.
The applicant argued that he had not been paid correctly and so the payslip was not reliable evidence. The respondent had not disputed that assertion.
With regard to the relevant period, although conceding that he was not a “short-term worker” as was the case in Almanaa, that case remained instructive for the finding that contracts of employment could be viewed as plain indicators of the PIAWE. The respondent had no basis to question the authenticity of the contracts of employment because it had no instructions to challenge them.
In circumstances where the applicant did not accept that the respondent had paid him correctly, the concept of “earnings received” could not apply.
The applicant referred to cl 8C of Part 4 of the Workers Compensation Regulation 2016 and submitted that the employment contract which commenced on 1 August 2022 resulted in a financially material change. Any earnings received before that contract came into effect should be disregarded. The only evidence of earnings after the revised employment contract was a payment which included a period in which the applicant was no longer employed and so was wholly unreliable.
The applicant submitted that none of arguments raised by the respondent as to the proper calculation of PIAWE had been included in a notice pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) and, in the absence of leave, should not be entertained.

FINDINGS AND REASONS

Relevant law

Section 33 of the 1987 Act provides that if total or partial incapacity for work results from an injury, the compensation payable by the employer to the injured worker shall include a weekly payment during the incapacity. There is no dispute before the Commission that the applicant has received a compensable injury or that he has been incapacitated by that injury.
The rates at which weekly compensation is to be paid are determined by reference to ss 36 and 37of the 1987 Act. There is no dispute before the Commission as to the extent of the applicant’s incapacity. The applicant’s submission that he is entitled to receive compensation in accordance with ss 36(1) and 37(1) of the 1987 Act on the basis that he has no current work capacity is not challenged by the respondent. Both ss 36(1) and 37(1) of the 1987 Act refer to a rate which is a percentage of the worker’s “pre-injury average weekly earnings”.
The expression, “pre-injury average weekly earnings” is relevantly defined in cl 2 of Schedule 3 to the 1987 Act as follows:
“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).”

Clause 3 of Schedule 3 provides that an injured worker and the employer may agree, in accordance with any requirements of the regulations, as to the amount of pre-injury average weekly earnings that is to apply to the worker for the purposes of Division 2 of Part 3 of the 1987 Act. Provisions pertaining to pre-injury average weekly earnings agreements are set out in Division 4 of Part 4 of the Workers Compensation Regulations 2016.
Clause 4 of Schedule 3 to the 1987 Act sets out special provisions for workers continuously employed in employment for less than four weeks. There is, however, no suggestion that the applicant was employed by the respondent for less than four weeks.
Adjustments to the “relevant earning period” described in cl 2(2) are also provided by Division 2 of Part 4 to the Workers Compensation Regulation 2016. Clause 8C provides for the relevant earning period to be adjusted 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 expression, “earnings” in cl 2 of Schedule 3 to the 1987 Act is defined in cl 6 of Schedule 3 to the 1987 Act 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) 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.”

Consideration

The dispute that arises in these proceedings revolves around the question of whether the applicant’s PIAWE rate should include commissions identified in the employment contracts attached to the ARD.
The applicant did not in his statement evidence, or the correspondence exchanged between himself and the insurer prior to the commencement of these proceedings, dispute the “base rate” of $1,531.50 which had been used by the insurer as his PIAWE. The applicant only argued that an additional amount of $375 ought to be added to the weekly rate to account for commissions to which he was entitled.
A difficulty confronting the Commission and the parties in attempting to resolve the dispute in this case is the unsatisfactory nature of the documentary evidence. The state of the evidence is, in part, the result of the respondent employer’s failure to comply with requests made by the applicant and by the insurer and it’s representatives, both before and after the commencement of these proceedings, for relevant records, including through the appropriate use of notices to produce or directions for production. The employer’s failure in this regard potentially exposes it to a risk of prosecution of an offence. That is not, however, a matter for me to determine.
It is the applicant who bears the onus of establishing that the higher PIAWE rate should apply. I accept that the applicant has been disadvantaged in the prosecution of his case by the employer’s failure to comply with the requests for relevant documents.
The applicant relies primarily on two documents identified by him as employment contracts in support of his case. The documents attached to the ARD are, however, unsigned and undated. No evidence has been provided by the applicant as to how the documents came into existence, how they came into his position or whether and under what circumstances copies of those documents were in fact signed or exchanged with the employer. No evidence of any communications between the applicant and employer about the documents or the terms of the employment agreement is before me.
The documents themselves contain a number of unusual features including atypical use of grammar. The author of the offer of employment is not identified, nor is the officer to whom the applicant would report. The schedule of employment details refers to a “Schedule A” which is has not been provided. Although the applicant has given evidence that the second agreement was to take effect commencing on 1 August 2022, the document itself gives a commencement date of 1 August 2021.
Although I accept that the applicant’s evidence has not been specifically contradicted, having regard to the face of the documents and the statement evidence from the applicant, I have considerable hesitation in accepting that these documents constitute an accurate or reliable record of the employment agreement between the applicant and the respondent employer.
Even if I were to accept that the contracts were executed, the terms of the contracts, insofar as they relate to monthly commissions, are vague and ambiguous. As noted by the respondent’s submissions, no explanation is given in the documents themselves or in the applicant’s statement evidence as to how the monthly commissions were to be determined. For example, the first document could be read as indicating that monthly sales of $25,000 would result in a commission of 5% of the base salary payable on a monthly basis; sales of $45,000 would result in a 10% commission, and so on.
That interpretation is not, however, consistent with the applicant’s own interpretation of the document in his statement evidence, insofar as he suggested that he was entitled to 5% of $30,000 or $1,500 on a monthly basis.
No evidence is available either in the documents themselves or the applicant’s statement evidence as to the pre-conditions to the payment of commissions, if any. I accept the respondent’s submission that the ordinary use of the word “commission” denotes a system of payment based on a percentage of the value of sales or other business done. There is simply insufficient evidence before me to determine the pre-conditions which would govern the entitlement to commissions or how the commissions were to be quantified.
There is also insufficient evidence as to whether those pre-conditions were in fact satisfied in the applicant’s case. The applicant does state that his excellent performance was sufficient to justify a promotion and the issuing of a new employment contract effective from 1 August 2022. As noted, however, the second document attached to the ARD gives a commencement date of 1 August 2021, is unsigned, does not identify the author and makes no reference to a promotion.
The evidence that the applicant was promoted due to excellent performance and given a pay rise effective from 1 August 2022 is difficult to reconcile with the termination of his employment seven days later in the context of allegations of bullying, interpersonal relationship problems, stalking, intimidation and harassment in the course of his employment. This is a matter on which the applicant’s evidence is silent. Similarly, the applicant’s evidence is silent as to why he was promoted and given a new employment contract effective from 1 August 2022, if he was incapacitated as a result of injury from 22 July 2022.
Although the employer has failed to provide the requested “payslips, financial records, reports of injury, claim forms, statements, wage records and group certificates”, there is before the Commission reliable evidence of the payments actually made to the applicant in the form of Osko receipts and bank transaction records as well as the ATO income statement. That evidence aligns with the single payslip in evidence. It is common ground between the parties that the applicant was not in fact paid commissions. I am not satisfied that any further payslips, wage records or group certificates from the employer are likely to have added to or altered the evidence as to what was in fact paid.
The applicant has submitted that he was underpaid or paid incorrectly by the employer and so little weight should be given to the financial records before the Commission. If I were to accept that submission as correct, it is unclear how additional wages records from the employer would assist the applicant’s case. The applicant’s own evidence as to the nature of the employment agreement and his performance was critical to the resolution of the dispute.
For the reasons given above, the applicant’s own evidence falls short of satisfying me that he was entitled to be paid commissions as claimed.
In view of this finding, it is not necessary for me to address the parties’ submissions as to the proper construction of cl 2 and cl 6 of Schedule 3 to the 1987 Act or determine whether commissions ought to be included in the calculation of PIAWE in this case.
I also do not accept the applicant’s submission that the “employment contracts” constitute an agreement between the parties as to PIAWE for the purposes of Division 2 of Part 3 of the 1987 Act. Nothing in the applicant’s statement evidence or on the face of the documents indicates they were made in contemplation of such. If executed, they would also appear to pre-date the claim for compensation for a work injury.
In all the circumstances, I decline to make the orders sought by the applicant.
As noted above, the respondent has made various submissions as to alternative ways PIAWE could be calculated in the circumstances of this case. As noted by the applicant’s submissions, however, there is no s 78 notice or work capacity decision before the Commission. The dispute which the applicant was entitled to bring before the Commission was that raised in writing between the parties prior to the commencement of proceedings in accordance with s 289A(2)(b) of the 1998 Act. That dispute concerned only the inclusion of commissions in the calculation of PIAWE.
No application for leave pursuant to s 289A(4) of the 1998 Act has been made by either party.
Should the respondent wish to reduce the rate at which it is paying weekly payments, the appropriate course is for a work capacity decision to be made.

[2023] NSWPIC 429

24 August 2023