Way v Cutting Edge Tree Maintenance Pty Ltd
[2023] NSWPIC 627
•23 November 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Way v Cutting Edge Tree Maintenance Pty Ltd [2023] NSWPIC 627 |
| APPLICANT: | Craig Way |
| RESPONDENT: | Cutting Edge Tree Maintenance Pty Limited |
| MEMBER: | Paul Sweeney |
| DATE OF DECISION: | 23 November 2023 |
| CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; calculation of the current weekly earnings of injured worker who had returned to the workforce as a self-employed uber driver; Cronje v Leighton Contractors Pty Ltd considered and applied; worker’s earnings determined by reference to Passenger Vehicle Transportation Award 2020; Held – award for worker pursuant to section 38. |
| DETERMINATIONS MADE: | The Commission determines: 1. The applicant suffered injury to his right shoulder arising out of and in the course of his employment on 22 July 2020. 2. As a result of the injury the applicant was totally and partially incapacitated for work and paid compensation until 11 January 2023. 3. From 12 January 2023 the applicant has had a current earning capacity. 4. At all material times the applicant’s pre-injury average weekly earnings were $890 per week. 5. In suitable employment as a driver working 20 hours per week the applicant was able to earn the sum of $459.60 per week from 12 January 2023 to 30 June 2023 and the sum of $486.20 thereafter. 6. Award for the applicant at the rate of $252.40 per week from 12 January 2023 to 30 June 2023 and $225.80 per week from 1 July 2023 to date and continuing pursuant to s 38 of the Workers Compensation Act 1987. 7. Liberty to apply in respect of the above calculations. |
STATEMENT OF REASONS
BACKGROUND
Craig Way (the applicant) was formerly employed by Cutting Edge Tree Maintenance (the respondent) as an arborist. On 22 July 2020, the applicant was required to work on the roof of a house at Fennell Bay. When cleaning leaves off the roof with a leaf blower, he fell heavily suffering a severe injury to his right shoulder.
Following the injury, the applicant came under the care of Dr Roy, a general practitioner, who referred him to Dr Jai Kumar, an orthopaedic surgeon, who specialises in treatment of the upper limbs.
On 12 August 2020, Dr Kumar performed surgery on the applicant’s right shoulder at Lingard Private Hospital. The doctor carried out a rotator cuff repair and bicipital tenodesis.
As the applicant experienced continuing symptoms and restriction of movement of his right shoulder following surgery, Dr Kumar carried out a further arthroscopic procedure during which he divided intra-articular adhesions in the right shoulder at the Lingard Private Hospital.
While the applicant obtained substantial benefit from the arthroscopic surgeries, he has been left with ongoing pain and restriction of movement in his right shoulder. In late 2021, the applicant commenced work as an Uber driver. He initially worked 10 to 15 hours per week but gradually increased those hours. The applicant performs the work of an Uber driver on the basis that he is a self-employed driver.
On 30 September 2022, the respondent’s workers compensation insurer, iCare, issued a s 78 Notice by which it stated that the applicant could perform the role of an Uber driver 20 hours per week and could earn $35 per hour in that work. The Notice asserted that the applicant’s pre-injury average weekly earnings (PIAWE) were $890 per week. As the applicant was able to earn $700 in suitable employment as an Uber driver, his compensation would be reduced to $145.50 from 12 January 2023.
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
By these proceedings, the applicant claims the sum of $614.62 per week pursuant to s 38 of the Workers Compensation Act 1987 (the 1987 Act). The Application to Resolve a Dispute (the Application) states that the applicant’s PIAWE were $890 per week and that his current weekly earnings as an Uber driver were $230.88 per week. The latter figure is derived from the calculations in a spreadsheet of the applicant’s earnings between 6 October 2022 and 8 November 2022 which records that the applicant’s earnings were $230.88 on a weekly basis after deductions for motor vehicle expenses, phone expenses and other costs incurred in the running of his business.
When the matter came on for a preliminary conference in the Commission on 26 September 2023, Mr Bechelli, solicitor, appeared for the applicant and Mr Todesco, solicitor appeared for the respondent.
At the conference it was common ground that the applicant could work 20 hours per week as an Uber driver in accordance his written evidence and the certification of his general practitioner.
The applicant argued that the applicant’s actual earnings should be assessed by reference to his nett earnings in his business after deductions for business expenses. A profit and loss statement for the financial year 1 July 2022 to 24 May 2023 recorded gross income of $19,738.31 and nett earnings after business expenses of $11,584.77. Only the latter figure should be utilised to determine earnings.
The respondent did not accept that the evidence before the Commission established that the substantial deduction for motor vehicle expenses, fuel, telephone, and other expenses were referable to the applicant’s business as opposed to the private use of the vehicle. Moreover, Mr Todesco submitted that it was no longer appropriate to measure the applicant’s actual earnings by reference to either the gross earnings or nett profit of the business as Division 2, Part 3 of the 1987 Act, which was introduced in 2012, rendered such an enquiry otiose.
Mr Bechelli conceded that the applicant’s evidence relating to incurring and calculation of deductions for the period 1 July 2022 to 24 May 2023 was inadequate. He sought leave to lodge a further statement.
As the issue between the parties was a narrow one, I concluded that it may conveniently be dealt with by written submissions. Accordingly, on 26 September 2023, I directed that:
· The applicant lodge and serve by 11 October 2023 written submissions addressing the basis of the claim and the arithmetical calculations relied on together with a further statement by the applicant.
· The respondent is to lodge and serve by 27 October 2023 written submissions in reply setting out the arithmetical calculations on which they rely and citing any case law which might be relevant.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) the Application and attached documents;
(b) Reply and the documents attached, and
(c) applicant’s statement of 9 October 2023 and annexures.
Applicant’s statement 9 October 2023
The applicant annexed to this statement copies of his income statements for the periods 1 July 2022 to 30 June 2023 and 1 July 2023 to 26 September 2023. The applicant also annexed a spreadsheet setting out his expenses from 1 July 2023 to 26 September 2023.
The statement addresses the applicant’s motor vehicle, telephone and other expenses for the purpose of the business he operates as an Uber driver. He gives brief evidence of the extent of the private use of his vehicle and telephone. He states that:
“After deducting the total of my average weekly expenses of $209.33 from my average weekly earnings in the sum of $515.44 my average weekly taxable earnings are $306.11.”
There is no reason to doubt the applicant’s evidence or that the expenses which he outlines are legitimate business expenses.
RESPONDENT’S SUBMISSIONS
Contrary to the view which I have expressed above, the respondent doubted the accuracy of the applicant’s itemised expenses. It did not accept that subscription fees, GST, one-off expenses or the accounting/consulting fees should be deducted from the earnings of the business for the purposes of establishing his current weekly earnings. The respondent continued:
“It is difficult to accept the Applicant’s alleged expenses at face value without any evidence to verify those alleged expenses. The applicant has not put forward any evidence to confirm whether or not he has a hybrid vehicle which would undoubtedly impact on fuel expenses”.
The respondent also submitted that the applicant had not tendered a “fuel/travel log” to confirm the distance travelled each week and the fuel used. It disagreed with the applicant’s submission that 95% of his motor vehicle expenses were referable to his business as an Uber driver. These submissions were posited on the basis that the applicant’s “reported weekly fuel expenses are not consistently proportionate to the work hours performed”.
I do not accept these submissions. However, the respondent’s primary submission is that the Commission would apply the reasoning of Deputy President Roche in Cronje v Leighton Contractors Pty Limited.[1] As the worker had a “current work capacity” his actual earnings are to be determined by what he “is able to earn in suitable employment”, as that term is defined in s 32A of the 1987 Act.
[1] [2015] NSWWCCPD 16.
Mr Todesco submitted that the approach of Roche DP in Cronje had been followed by members of the Commission in Garthon v Specialised Environmental Services Pty Limited t/as Trent Garthon Plumbing[2] and Chelin v Rock Logistics Pty Limited.[3] He also referred to the reasoning of Member Douglas in Alimmari v Unilever Australia (Holdings) Pty Limited[4] (Alimmari) where the Member utilised the Passenger Vehicle Transportation Award 2020 to determine the applicant’s ability to earn in suitable employment. He submitted that a similar approach was appropriate in this case.
[2] [2023] NSWPIC 447 (Garthon).
[3] [2023] NSWPIC 241 (25 May 2023)While the applicant did not directly address the cases or the respondent’s primary submission, it was raised at the preliminary conference and I am satisfied that his solicitor had an opportunity to deal with this aspect of the dispute. By an Application to Admit Late Documents dated 2 November 2023, the applicant’s solicitor contended that the respondent’s submissions went beyond the terms of my direction. Against the background of the discussion at the preliminary conference, I do not accept that contention.
LEGISLATION
Section 32A of the 1987 Act defines “suitable employment” as follows:
“‘suitable employment’, in relation to a worker, means employment in work for which the worker is currently suited--
(a) having regard to--
(i) the nature of the worker's incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker's age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the Workers Compensation Guidelines may specify, and
(b) regardless of--
(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker's pre-injury employment, and
(iv) the worker's place of residence.”
Schedule 3, cl 8 of the 1987 Act defines “current weekly earnings” as follows:
“Current weekly earnings, of an injured worker in relation to a week, means whichever of the following is the greater amount--
(a) the worker's actual gross earnings in respect of that week,
(b) the weekly amount that the worker is able to earn in suitable employment.
In Cronje, Deputy President Roche considered the methodology for ascertaining the current weekly wage rate of an injured worker who operated a business. At [64] to [68] he said this:
“Thus, one must look to the worker’s ability to earn in suitable work or employment as an employee. That will often be quite different to the income generated by a company or business, which involves, among other things, a return on capital and an allowance for profit. That is not to say that a worker’s activities in his or her own company or business, post-injury, will be irrelevant. Those activities will provide a guide to the worker’s ability to earn in suitable employment. However, the value of those activities must be determined by reference to the value of that work or employment, as an employee, in the labour market. Naturally, in making that assessment, each case will depend on its own facts.
The proper approach, in a case such as the present, is to consider the cost to Mr Cronje’s company (or another company) of employing a person to do the work he currently performs or is fit to perform. That means determining:
o(a) the number of hours Mr Cronje is working or, having regard to the restrictions that have resulted from his accepted psychiatric injury, is able to work;
o(b) the capacity in which he works, that is, the nature of his activities and the level of skill and training required to perform those activities, and
o(c) the market value of that work.
This assessment is made ‘regardless’ of ‘whether the work or employment is available’ (see (b) in the definition of suitable employment in s 32A). Thus, if a worker is working 15 hours per week, whether in his or her own business or for another employer, but is found to be capable of working 25 hours per week, it is the higher figure that is used to calculate ‘E’.
Adopting this approach, it is not open to conclude that Mr Cronje’s ability to earn is $500 per day, or anything like it. The proper approach is to look at his ability to earn as a plant operator/tipper driver, taking into account the nature of the equipment he operates and the hours he is able to work, having regard to his incapacity and the medical evidence, and to then apply the correct formula in s 37. As the medical evidence is generally unhelpful on this issue, the parties will be required to call further evidence dealing with Mr Cronje’s current work capacity in general and the hours he is capable of working in suitable employment in particular.
It follows from the above analysis that the complications that arise when a worker returns to work in his or her own business, as highlighted in Cage Developments Pty Ltd v Schubert [1981] 2 NSWLR 227; [1983] HCA 37; 151 CLR 584 and J & H Timbers v Nelson [1972] HCA 12; 126 CLR 625, are largely eliminated under the new weekly compensation provisions. The task now requires an application of the appropriate formula in either ss 36, 37 or 38, depending on which entitlement period applies. Assuming that the worker has a ‘current work capacity,’ the essential function is to determine what the worker ‘is able to earn in suitable employment,’ regardless of whether that work or employment is available.”
An injured worker operating a small business may have distinct advantages that an employee of another business does not have. He may be able to work at his own pace, introduce rest breaks between periods of employment, and avoid taking on jobs that are unsuitable. He can set his own financial targets rather than having them imposed on him. Accordingly, it does not inevitably follow that because a worker is self-employed for 20 hours per week he will be able to perform paid work in the same or similar job classification for 20 hours per week.
On the evidence in this case, however, there is a reasonable correlation between driving on a self-employed basis and driving on an employed basis. While the applicant has a restriction on the weight he can lift with his right arm, the fact that he’s been able to carry out the work of an uber driver over many months strongly suggests that there is a real job as a driver that he could perform in accordance with the principles in Wollongong Nursing Home Pty Ltd v Dewar[5].
[5] [2014] NSWWCCPD 55 (2 September 2014).
I am satisfied that the applicant would be able to work on a paid basis as the driver of a passenger vehicle 20 hours per week.
The hourly rate of a driver under the Passenger Vehicle Transportation Award 2020 Grade 1 is $22.98 for the period 1 July 2022 to 30 June 2023 and $24.31 thereafter. Given the limitations on the applicant’s physical capacity, I have concluded that Grade 1 is the appropriate classification.
It is common ground that the applicant’s PIAWE is $890 per week. As the claim falls within the third entitlement period s 38(7) is applicable. That sub-section is as follows:
“The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be the lesser of the following rates –
(a)80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings;
(b)The maximum weekly compensation amount, less the worker’s current weekly earnings.”
I should add that the other pre-conditions to an award after the second entitlement period for a worker with a current work capacity are satisfied. It was not suggested and it is not arguable that the applicant is likely to be able to undertake further additional employment or work which would increase his current weekly earnings.
My calculations result in an entitlement to weekly compensation of $252.40 per week to 30 June 2023 and $225.80 thereafter.
I propose to make the following findings:
· The applicant suffered injury to his right shoulder arising out of and in the course of his employment on 22 July 2020.
· As a result of the injury the applicant was totally and partially incapacitated for work and paid compensation until 11 January 2023.
· From 12 January 2023 the applicant has had a current earning capacity.
· At all material times the applicant’s PIAWE has been $890 per week.
· In suitable employment as a driver working 20 hours per week the applicant was able to earn the sum of $459.60 per week from 12 January 2023 to 30 June 2023 and the sum of $486.20 thereafter.
· Award for the applicant at the rate of $252.40 per week from 12 January 2023 to 30 June 2023 and $225.80 per week from 1 July 2023 to date and continuing.
· Liberty to apply in respect of the above calculations.
4 [2021] NSWPIC 464 (16 November 2021)
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