Winfield v Kelly's & Young Trucking Co. Pty Ltd
[2021] NSWPIC 192
•18 June 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Winfield v Kelly’s & Young Trucking Co. Pty Ltd [2021] NSWPIC 192 |
| APPLICANT: | Andrew Winfield |
| RESPONDENT: | Kelly’s & Young Trucking Co. Pty Ltd |
| MEMBER: | Michael Wright |
| DATE OF DECISION: | 18 June 2021 |
| CATCHWORDS: | WORKERS COMPENSATION- work capacity dispute; PIAWE calculation based on sections 44C-44I of the 1987 Act as at 24 February 2019; applicant’s secondary business earnings; net earnings considered; Held- finding that PIAWE under provisions as at 24 February 2019 includes business earnings. |
| DETERMINATIONS MADE: | 1. Pre-injury average weekly earnings are found to be $2,319.92. |
STATEMENT OF REASONS
BACKGROUND
This is an application for expedited assessment by Andrew Winfield (the applicant) in respect of a work capacity decision dated 15 January 2021 issued on behalf of Kelly's & Young Trucking Co. Pty Ltd (the respondent). The applicant disputes the respondent’s calculation of preinjury average weekly earnings (PIAWE).
In a letter dated 15 January 2021, iCare notified the applicant that it had made a work capacity decision which had the effect of increasing weekly compensation payments to the applicant, based upon a calculation of PIAWE which averaged the applicant’s preinjury earnings from the respondent and also from his own horticultural business.
PROCEDURE BEFORE THE COMMISSION
At the telephone conference in this matter on 24 March 2021 the applicant was represented by Mr Carney of counsel, instructed by Mr Counter, solicitor, and the respondent by Mr Maakasa of counsel, instructed by Ms Rafiqi. Following that telephone conference, directions were issued for the filing of written submissions. After receipt of the parties’ written submissions, further directions were issued seeking clarification and further submissions regarding amendment to the weekly compensation claim, clarification and submissions regarding the correct legislative provisions applicable for the date of injury, and possible determination of the matter by a member rather than direction by a delegate.
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.
The parties have agreed to the determination of the matter without a further conference or formal hearing.
I have received written submissions from the applicant dated 13 April 2021, 28 April 2021 and 11 May 2021, and from the respondent dated 21 April 2021 and 12 May 2021. I have also received the applicant’s wage schedule dated 13 April 2021.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) Application Expedited Assessment (the Application) and attached documents, and
(b) Reply and attached documents.
Oral evidence
There was no application for leave to give oral evidence nor to cross examine the applicant.
FINDINGS AND REASONS
The applicant’s statement
The applicant provided a statement dated 20 January 2021.
The applicant stated that he started a horticultural business in 2015. This involved selling horse radishes to wholesale markets in Sydney and Melbourne. He grew this produce on his own property.
He stated that the business had an ABN but did not have a trading name. He did not collect GST for the business as none was paid on fresh produce. He paid quarterly instalments in accordance with his BAS statements.
He said that he occasionally hired a backpacker to help with harvesting and packing of the produce. He did not have a business partner or report to anybody. He had variable hours of work but he thought that on average it was about 15 to 20 hours per week in the business.
He said that he earned about $1,874.52 gross per week in his horticultural business.
He stated that he commenced employment with the respondent as a truck driver in January 2019. He worked 35 to 45 hours per week in this employment and earned $1,467.54 gross per week.
The applicant said that after the subject accident on 24 February 2019 he has been unable to return to his employment with the respondent due to the injury to his neck. His employment with the respondent was terminated on 16 August 2019 as he had not returned to work.
On 8 December 2020 the applicant underwent the fusion surgery on his neck and he was still recovering.
The applicant stated that he was unable to participate in his horticultural business since the subject accident due to neck pain and due to the fact that he did not have a business partner to assist. He stated that he had not arranged to hire anybody to operate the business in his absence as he had always hired people to perform the menial jobs under his supervision and he would operate the machinery himself.
PIAWE email and work capacity decision
In an email to the applicant dated 30 December 2020, an officer of the workers compensation insurer (EML) stated
“Thanks for following regarding the calculation of your PIAWE.
At the time of the lodgement of the claim, the PIAWE that was calculated during your time with Pickering Transport worked out to be $1467.54
We relied on information that was provided to us in respect to your Weeds business. Based on that information your average weekly was calculated at $1874.52
Pursuant to the Schedule 3 Item 8 of the Workers Compensation Act 1987 - An average is PIAWE is to paid.
.legislation.nsw.gov.au/view/html/inforce/2018-12-01/act-1987-070#sch.3
Your revised PIAWE is calculated to the amount of $1,671.03 where we relied on the above figures”.
The workers compensation insurer (iCare) notified the applicant of a work capacity decision in a letter dated 15 January 2021 (the work capacity decision). In part, that letter stated
“On 3 December 2020 you provided information in respect to the earnings from your Herb Sales business. Based on this information your PIAWE was calculated to be $1874.52.
Information provided by Kelly and Young Trucking Co-Pty Ltd confirmed that you earned $1467.54 where you worked approximately 38 hours per week.
In accordance with Schedule 3 item 8 of the Workers Compensation Act 1987, your PIAWE has been calculated as follows:
$1467.54 + $1874.52 = $3342.06
$3342.06/2 = $1671.03
…
The decision made will increase your weekly payments to $1671.03 from 24 February 2019.”
Applicant’s business profit and loss statement
The applicant provided a “Cash Profit and Loss 24/02/2018 – 24/02/2019” spreadsheet statement (the profit and loss statement) for the same ABN referred to in his statement dated 20 January 2021. The profit and loss statement was not in dispute.
The profit and loss statement recorded that total revenue was $93,061.74 for the year to February 2019. Net cash inflow for the same period was $44,324.36.
Findings and reasons
The claim for weekly payments in these proceedings is for the period 30 December 2020 to 10 February 2021. Following the Direction dated 3 May 2021 which, in part, sought submissions as to whether the period of the weekly compensation claim in these proceedings should be amended to be from 24 February 2020 to date and continuing, the applicant did not seek amendment.
It was the applicant’s submission that the only matter arising from the disputed work capacity decision which requires decision is PIAWE.
This matter remains as an application for a claim for weekly compensation of not more than 12 weeks. Section 298 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) applies and a direction for interim payment of weekly payments cannot exceed 10 weeks in the past and 12 weeks in total.
An order may be made under sections 304A(1) and 305 of the 1998 Act for the balance of weekly payments not otherwise available under an interim payment direction up to a total of 12 weeks.
However, the applicant does not seek a direction or order for weekly payments of compensation.
The date of injury in this matter is 24 February 2019.
The calculation of PIAWE is made in accordance with the provisions of the Workers Compensation Act 1987 (the 1987 Act) as in force at the date of injury, as provided by clause 7, Part 19L of Schedule 6 of the 1987 Act, with the exception of the restriction of overtime and shift allowance for the calculation for the first 52 weeks. Sections 44C – 44I and Schedule 3 of the 1987 Act apply as they were in force at the date of injury, that is in force from 1 January 2019.
Section 44 C of the 1987 Act provided at the relevant time
“44C Definition—pre-injury average weekly earnings
(1) In this Division, pre-injury average weekly earnings, in respect of a relevant period in relation to a worker, means the sum of:
(a) the average of the worker’s ordinary earnings during the relevant period (excluding any week during which the worker did not actually work and was not on paid leave) expressed as a weekly sum, and
(b) any overtime and shift allowance payment that is permitted to be included under this section (but only for the purposes of the calculation of weekly payments payable in the first 52 weeks for which weekly payments are payable).
‘’’
(4) In relation to a worker of a class referred to in Column 2 of an item in Schedule 3, pre-injury average weekly earnings means the amount determined in accordance with Column 3 of that item, expressed as a weekly sum.”
Section 44E of the 1987 Act provided at the relevant time
“44E Definitions applying to pre-injury average weekly earnings—ordinary earnings
(1) Subject to this section, in relation to pre-injury average weekly earnings, the ordinary earnings of a worker in relation to a week during the relevant period are:
(a) if the worker’s base rate of pay is calculated on the basis of ordinary hours worked, the sum of the following amounts:
(i) the worker’s earnings calculated at that rate for ordinary hours in that week during which the worker worked or was on paid leave,
(ii) amounts paid or payable as piece rates or commissions in respect of that week,
(iii) the monetary value of non-pecuniary benefits provided in respect of that week, or
(b) in any other case, the sum of the following amounts:
(i) the actual earnings paid or payable to the worker in respect of that week,
(ii) amounts paid or payable as piece rates or commissions in respect of that week,
(iii) the monetary value of non-pecuniary benefits provided in respect of that week.
…”
Schedule 3 of the 1987 Act provided at the relevant time (without reproducing Column 3, calculation of PIAWE)
Schedule 3 Pre-injury average weekly earnings
Column 1
Column 2
Item
Class of worker at time of injury
1
Worker who is:
(a) under the age of 21 years, or
(b) an apprentice, or
(c) working under a contract of employment under which the worker is required to undergo training, instruction or examination in order to become qualified to carry on an occupation,
and who, but for the injury, would have been entitled to increments in earnings at certain ages or stages during the course of employment to become qualified.
2
Worker employed by 2 or more employers and who works for one of those employers for at least the ordinary hours fixed in any applicable fair work instrument.
3
Worker employed by 2 or more employers who works for one of those employers for at least the prescribed number of hours each week and to whom no fair work instrument is applicable.
4
Worker employed by 2 or more employers for at least the ordinary hours fixed in any applicable fair work instrument.
5
Worker employed by 2 or more employers who works for one of those employers for at least the ordinary hours fixed in an applicable fair work instrument and works for another of those employers for at least the prescribed number of hours each week.
6
Worker employed by 2 or more employers for at least the prescribed number of hours each week and to whom no fair work instrument is applicable.
7
Worker employed by 2 or more employers who sustains an injury that results in an incapacity to work for one or more of those employers but not for all those employers.
8
Worker employed by 2 or more employers in circumstances other than those described in the preceding provisions of this Schedule.
9
Worker who, during the period of 52 weeks immediately before the injury, receives advice in writing from the employer that the worker is to be promoted or otherwise appointed to a new position (otherwise than on a temporary basis) with the effect that the worker’s ordinary earnings will be increased but has not been so promoted or appointed.”
For item 8 of Schedule 3 above, Column 3 provided that that the worker’s PIAWE
“are the workers average ordinary earnings expressed as an amount per hour for all work carried out by the worker for all employers multiplied by (a) the prescribed number of hours per week, or (b) the total of the worker’s ordinary hours per week, whichever is the lesser”.
The respondent has submitted that the applicant’s earnings from his business should not be included at all in the calculation of PIAWE. The respondent submitted that the work capacity decision incorrectly increased the workers weekly benefits compensation by including the applicant’s earnings from his business.
The respondent in submissions also disputed the applicant’s allegations of earnings with the respondent and in his business. The respondent submitted that earnings from employment with the respondent was incorrectly calculated as $1,467.54 when pay records attached to the reply showed an amount of $1,424.50 gross per week for the period 30 January 2019 to 2 February 2019 (four weeks). The respondent also submitted that “net cash flow” for the year prior to the injury was $44,324 ($852.38 gross per week).
The applicant in reply noted that the respondent’s submissions went to matters that were not notified in the work capacity decision.
In my view, on the evidence before me there is no notification pursuant to section 78 of the 1998 Act that the PIAWE calculation in respect of employment with the respondent was incorrect and should be reduced, nor that the PIAWE calculation should not have included the applicant’s earnings in his business. Both of these matters would lead to a reduction in the applicant’s weekly payments of compensation and hence notice pursuant to section 78 would be required. These matters are therefore not properly notified disputes and should not form part of these proceedings.
The respondent approached this matter by submitting that it disputed “the applicant’s allegations of earnings with the respondent”, but it was the respondent’s own work capacity decision which set the rate of $1,467.54 as earnings with the respondent. The applicant did not dispute the rate of $1,467.54 as calculated by the insurer as earnings with the respondent. This, in my view, was not an allegation made in these proceedings by the applicant of earnings with the respondent, it was an undisputed decision by the insurer about the amount of the applicant’s earnings in his employment with the respondent. Additionally, no explanation was provided as to why a period of four weeks is the relevant period for the calculation of earnings with the respondent.
There is no provision in Part 5 of the 1998 Act, in my view, to allow consideration in these proceedings of matters previously not notified by the insurer. However, if I am wrong, and there is a discretion, then I do not grant leave, not least because the applicant has not had the opportunity to investigate and provide evidence in relation to his earnings with the respondent. The circumstances of these proceedings are also relevant in such a discretion. The application is in respect of the work capacity decision. The outcome of the application may be either a decision to decline an interim payment direction or a decision to issue an interim payment direction in respect of a PIAWE amount that is greater than the amount calculated by the work capacity decision. The outcome in the current proceedings could not in my view include a direction that the respondent must reduce current payments of weekly compensation. That is a matter for a work capacity decision and notification pursuant to section 78.
I do not accept the respondent’s submission that the earnings of the applicant with the respondent prior to the injury was less than $1,467.54. The work capacity decision notified the applicant that this was the relevant earnings amount with the respondent. On the available evidence, there has been no contrary work capacity decision and section 78 notice since the subject work capacity decision.
I accept the respondent’s submission that Schedule 3 as it applied to injuries prior to 21 October 2019, in general applies to workers “employed by two or more employers”.
I do not accept the respondent’s submissions in relation to Schedule 3(6) of the 1987 Act. Clause 6 Schedule 3, as set out by the respondent, is in its current form and is not applicable to the current matter. The provisions of Schedule 3 that apply in this matter are as set out above in summary form.
The provisions of Schedule 3 as it applied to injuries received prior to 21 October 2019 is not the end of the matter. While pertaining to various categories of employment, Schedule 3 is limited to categories of employment, but it does not operate to exclude earnings from business, such as self-employment or work as a sole trader. This is so because section 44C(4), as it then applied, provided that PIAWE for workers of a class referred to in Column 2 of an item in Schedule 3 is the amount determined in Column 3 of that item. Thus, a worker whose non-employment earnings do not come within a class referred to in Column 2 of Schedule 3 is not necessarily precluded by Schedule 3 from including such earnings in the PIAWE calculation. This is so, if section 44C(4) does not apply, because the worker may still be entitled, pursuant to section 44C(1), to earnings having regard to categories that are not listed in Schedule 3, that is business earnings.
Section 44C(1), as it then applied, defined PIAWE to mean the sum of the average of the workers ordinary earnings during the relevant period, excluding any week during which the worker did not actually work and was not in paid leave, expressed as a weekly sum. “Ordinary earnings” is in turn defined in section 44E, as it then applied, in relation to PIAWE in a week during the relevant period as the worker’s base rate of pay calculated on the basis of ordinary hours worked, or “in any other case” relevantly the “actual earnings paid or payable” to the worker in respect of that week. Neither section 44C(1) nor section 44E (as they then applied) restricted earnings to employment earnings.
The “relevant period” was defined in section 44D as it then applied. A reference to the relevant period in relation to PIAWE, in the case of a worker who has been continuously employed by the same employer for the period of 52 weeks immediately before the injury, is a reference to that period of 52 weeks. In my view, this sets the relevant period with reference to employment with the respondent, rather than being a general provision which excludes nonemployment earnings.
In the Application, under “Injury Description”, it was submitted that
“the Applicant was self-employed as a sole trader in this venture using an ABN and did not conduct business using an entity under the Corporations Act 2001. We submit that [Schedule 3 item 8] is incorrectly applied as there were no two employers in this scenario and our client cannot employ themselves as sole trader.”
In my view, this is a proper concession to make on the evidence as the applicant’s statement dated 20 January 2021 points to that conclusion that the applicant worked in the Herb Business on a self-employed basis as a sole trader and I so find. It follows that there was no contract of service or employment relationship in the applicant’s work as a sole trader in the Herb Business in the “relevant period”. I note that there is no dispute that the applicant was employed by the respondent at all material times in the “relevant period”.
In this case, PIAWE are the “actual earnings” of the applicant in the relevant period, as the earnings from the Herb Business cannot be calculated on the basis of ordinary hours worked, and additionally there is some ambiguity with the calculation of earnings from the truck driving employment as the work capacity decision referred only to work of “approximately 38 hours per week”. There is no dispute that the Profit and Loss Statement provides the applicant’s gross and net earnings from the Herb Business in the relevant period. I find that actual earnings, and hence PIAWE, includes earnings from both employment with the respondent and earnings from the Herb Business in the relevant period.
The respondent has submitted that if earnings from the Herb Business were to be included then the correct amount would be net earnings, after deduction of expenses. The applicant has submitted that it should be gross earnings from the Herb Business. I accept the submission of the respondent in this regard as it appears to me that the expenses deducted would relate to continuing activities in business by the applicant, and on the applicant’s evidence this has ceased. In any event, in this case, net earnings of the business pre injury in my view represent the actual “reward for the labour” of the applicant[1].
[1] Cage Developments Pty Ltd v Schubert [1983] HCA 37; (1983) 151 CLR 584 at 687.
There is no dispute that the applicant has no current capacity for work. The work capacity dispute confirmed that the applicant had no current capacity for work.
I find that for the relevant period PIAWE is calculated on the basis of $1,467.54 for earnings with the respondent, and $852.38 for net earnings from his business. I find that PIAWE is therefore $2,319.92.
The respondent submitted, and the applicant agreed, that the statutory maximum for PIAWE is capped pursuant to section 34 at $2,224 per week, and that statutory cap is less than the total PIAWE submitted by both the applicant and the respondent.
I do not accept this submission. In my view section 34 of the 1987 Act provides for maximum weekly compensation payable, not maximum PIAWE. PIAWE does not have a statutory maximum. Additionally, the section 34 maximum weekly compensation (as adjusted) was $2,242.40 for the period commencing 1 October 2020.
The work capacity decision and the Application confirm that the weekly compensation claimed is within the second entitlement period. Section 37(1) of the 1987 Act applies.
If an order or direction were necessary, then the weekly compensation payable would be 80% of $2,319.92, being $1855.94 per week.
1
0