Zaree v C & N Laser Pty Ltd
[2024] NSWPIC 119
•12 March 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Zaree v C & N LASER PTY LTD [2024] NSWPIC 119 |
| APPLICANT: | Narges Zaree |
| RESPONDENT: | C & N Laser Pty Ltd |
| MEMBER: | John Wynyard |
| DATE OF DECISION: | 12 March 2024 |
| CATCHWORDS: | WORKERS COMPENSATION - Workers Compensation Act 1987; pre-injury average weekly earnings (PIAWE); dispute as to whether bonus payments should have been included in calculation: whether schedule 3.2(2)(d) prevented the same as being payments made without obligation; Held – respondent’s reliance on Taylor-Craig v Smartgroup Benefits Pty Ltd distinguished as no written contractual term present, parole evidence considered and payment of bonus found to be a contractual obligation; bonus payments accordingly part of the PIAWE. |
| DETERMINATIONS MADE: | The Commission determines: 1. The appropriate pre-injury average weekly earnings for the subject period was $1,912.22. 2. The respondent will calculate the payment of compensation in accordance with this finding. 3. Leave is granted for the parties to apply in respect of these calculations within 14 days of determination. |
STATEMENT OF REASONS
BACKGROUND
Narges Zaree, the applicant, brings an application against C & N Laser Pty Ltd, the respondent, for a determination regarding a work capacity Decision dated 6 October 2023.
It is common ground that on a deemed date of 13 September 2023 Ms Zaree suffered an injury to her neck, right shoulder, lower back, and secondary anxiety and depression.
It was agreed that Ms Zaree has been earning a base rate of $1,764.15 per week (pw) in her employment with the respondent company, which operated under the trading name “Evolution Laser Clinic,” where she commenced in January 2018.[1]
[1] Statement dated 23 October 2023 at [5].
The issue in dispute is whether the insurer was entitled to assess her pre-injury average weekly earnings (PIAWE) without including the payments described as “bonuses” on her payslips over the relevant period between 12 September 2022 and 10 September 2023.
It was agreed that with the bonuses included over that period, Ms Zaree would have earned $1,912.22, so that the dispute concerns the sum of $148.08 pw – the difference between the two annual figures.
The applicant was employed under a written contract of employment with C&N Laser Pty Ltd and it was common ground that the written contract did not include any mention of payments and commission for obtaining bonuses.[2]
[2] Employment Contract at Application to Resolve a Dispute (ARD) page 35.
ISSUES FOR DETERMINATION
The parties agree that the following issue remains in dispute:
(a) has Ms Zaree’s PIAWE been assessed correctly?
PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION
This matter was heard on 15 December 2023. Mr John Gaitanis of counsel appeared for the applicant briefed by Ms Dorsa Dawson. Mr James McEnaney of counsel appeared for the respondent, instructed by Mr Jamie Coleman. Ms Nishita Khanna appeared for the insurer.
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.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Personal Injury Commission (Commission) and considered in making this determination:
(a) ARD and attached documents, and
(b) Reply and attached documents.
Oral evidence
No application was made in relation to oral evidence.
FINDINGS AND REASONS
Ms Zaree made a statement on 20 October 2023.[3] She said, relevantly:
[3] ARD page 1.
“13. The insurer has calculated my PIAWE based on the income I have received in the 52 weeks before my injury.
14. The insurer has not included payments that are described as bonuses on the pay slip.
……
19. It was part of my employment arrangement that if I met certain sales targets I would be certain to receive the bonus payment.
20. The payment was in my mind like a commission.
21. This isn’t reflected in my original contract of employment which came about in 2018.
22. My earlier pay slips actually described the payment as a commission for sales achieved.
23. I know they are described as bonuses now but they are really commissions and were described that way on my earlier pay slips.
….
26. This bonus type commission commenced being paid to me from the beginning of my employment.
27. It came about in a discussion between Charlotte and myself in my interview for the role.
28. We agreed that if I met certain sales targets that she set I would receive the additional payment.
29. It was clear to me that I had to meet these targets or else I wouldn’t be paid them.
30. I am not sure why it is not included in my contract of employment but it was verbally agreed to at the commencement of my employment and had occurred throughout my employment whenever my targets have been met.
31. Initially my bonus commissions were payable based on my individual sales as a Beauty Therapist.
32. After I got promoted to manager my bonus commissions were based on the performance of the shop meeting overall targets.
33. As far as I know all the staff are put on the same employment”
Ms Zaree said that her payslips reflected this arrangement, and referred to receipt of bonuses from [37] of her statement. Ms Zaree also said that text messages that she exhibited demonstrated the employer’s agreement with this arrangement.
The text messages Ms Zaree exhibited were dated firstly 2 November 2021:[4]
“Hi hunny how are you?
I've put your rate to $39 per hour and
ta rgets have changed as following -
November target
$180K $1000
$200k $1500
I $220k $2000
Let me know your thoughts xxx”
[4] Text messages from ARD page 5.
Then on 10 May 2022 (the photocopying was cut off and miniscule):
“Charlotte,
st to be clear for this month 1t
e clinical targets right?
k your bonus only
is $1000
is $1500 bonus
is $2000 bonus”
The next text was dated 6 June 2022 (emojis omitted):
“Good morning!!
I paid you $1500 this month and it
was 2k less .... Let's aim for $150K
plus this month for bonus and
products increase. I'm going to bit a
strict this month
Randwick target
$150k $1500
$200kj $2000
$300k $4000”
A further text was exhibited dated 30 January 2023:
“Hi Charlotte,
I hope you are doing well?
It has been over one year that I
haven't received any pay rise ,
I was hoping you consider it after one
year.
Thanks ~
Yes sure but bonuses will change xx
As of today, you'll be on $40 per hour;
Here are the Clinic Bonuses -
$200 receive $1500 bonus
$225k receive $1750 bonus
$250k receive $2000 bonus”
Ms Zaree also lodged payslips which described the payments of ‘commissions’ as follows:[5]
[5] ARD from page 120.
· on payment date 20 February 2018 the sum of $80;
· on payment date 6 March 2018 the sum of $500;
· on payment date 3 April 2018 the sum of $680;
· on payment date 29 May 2018 the sum of $50;
· on payment date 12 June 2018 the sum of $310;
· on 26 June 2018 the sum of $30;
· on 10 July 2018 the sum of $550;
· on 24 July 2018 the sum of $50;
· on 7 August 2018 the sum of $350;
· on 4 September 2018 the sum of $900;
· on 2 October 2018 the sum of $610, and
· on 30 October 2018 the sum of $120.
In the “type” column these payments were described as “wages.”
Ms Zaree also lodged her payslips from the payment date 10 December 2018.[6] This payslip was in different form to the other 2018 pay slips. Two notable changes were that she was no longer paid by cheque and that the payments described as ‘commissions’ were thereafter described as ‘Bonus-General.’
[6] ARD page 134.
The applicant lodged payslips covering the relevant period from 12 September 2022 to 10 September 2023.[7] Bonuses were paid as follows:
· on pay date 11 October 2022 the sum of $1,500;
· on pay date 8 November 2022 the sum of $1,500;
· on pay date 6 December 2022 the sum of $2,000;
· on pay date 3 January 2023 the sum of $1,000;
· on pay date 14 March 2023 the sum of $200;
· on pay date 29 August 2023 the sum of $300, and
· on pay date 12 September 2023 the sum of $1,200.
[7] ARD from page 93.
The respondent lodged a statement by Ms Charlotte Antwan, the Director/Business Owner of the respondent dated 30 November 2023.[8] Relevantly, she stated:
“22. Regarding incentives and bonuses, all therapists within the business had personal targets to meet for the bonus payments to be applicable.
23. The Worker and the other manager that manages the city store have clinic target to reach for it to be applicable to them.
24. All these targets were discussed on an open group chat whatsapp messaging forum.
25. Occasionally these targets may change due to busy or not so busy times in order to motivate the staff to realistically reach their targets.
26. I have often times been lenient with the Worker and the other Manager in a sense that if they didn’t meet their clinic targets, but I can see how hard they worked and their sales were high I would then apply personal targets bonuses to them as a good will gesture.
27. Given the Worker was with me for a while she didn’t sign any contracts that stipulated bonus or incentive benefits.”
[8] Respondent ALD dated 4 December 2023.
The remuneration term of the employment contract provided:[9]
“1. Position and Salary
You will be employed as a Full Time.
You[r] agreed hourly rate will be $24 per hour flat rate. Saturday rate is $24 per hour. Sundays is time and half. As this rate is above award, you agree that any additional hours that may be required above the standard 38 hour week will be paid at a regular rate. We will review your wage after the 3 months period of employment.”
SUBMISSIONS
[9] ARD page 35.
Mr Gaitanis
Mr Gaitanis submitted that there were parole conditions to the employment contract, both by conduct and also in the form of text messages that were exhibited to Ms Zaree’s statement.
Mr Gaitanis said that he was aware that Mr McEnaney would be relying on Taylor-Craig v Smartgroup Benefits Pty Ltd[10] a decision of Senior Member Division Head, Glenn Capel.
[10] [2023] NSWPIC 137 (Taylor-Craig).
Mr Gaitanis submitted that the respondent’s position would be that the payment of bonuses and commissions in the arrangement, as had been shown on the evidence, was discretionary and accordingly could not be included in the calculation of the PIAWE.
The issue before Senior Member Capel was whether discretionary benefits could be included in the PIAWE, Mr Gaitanis said.
Mr Gaitanis said that there was no mention of them in the present employment contract but, as he already submitted, but the conduct of the parties, the text messages and the evidence contained in the payslips, would satisfy the provisions of Regulation 8C of the Workers Compensation Regulation 2016, as this was evidence of a financially material change to earnings. This evidence supported the applicant’s statement that the payments were not discretionary, but were part of the employment contract.
Mr Gaitanis submitted that although the respondent said that the bonus was necessarily discretionary, the applicant said that the bonus payments were made as commissions pursuant to a goal set and achieved, and were consequently earnings.
He submitted that the present role in the oral and text exchanges to the contract showed that the payment was not without obligation. It became obligatory once the worker satisfied the target.
Mr McEnaney
Mr McEnaney stated that the resolution to the dispute could be found by asking what was actually paid – was it a commission or a bonus? He too referred to the Ms Zaree’s statement and to the payslips. He said the early payslips were revealing because the payments were described as ‘commissions’, although only for small amounts of money. However from December 2018 their description changed to a ‘bonus.’ The reason for that, he said, was not clear but it could be inferred that the payments were discretionary.
He referred to Taylor-Craig and Senior Member Capel’s reliance on Schedule 3.2.6 of the Workers Compensation Act 1987 (1987 Act), which provided that ‘income’ as defined did not include any payment made by obligation. Mr McEnaney submitted that the claimed additional component of the PIAWE was a discretionary payment and outside the scope of the PIAWE legislation.
Mr Gaitanis in reply
Mr Gaitanis referred to Ms Zaree’s statement as to the mechanism of payment. He said that there was support as to the mechanism from the content of the texts. He submitted that Taylor-Craig was distinguishable on its facts, and that Schedule 3.2.(2)(d) of the 1987 Act did not apply in the present factual circumstances. He submitted there should be an adjustment to include the extra $148.08 per week in the calculation of the PIAWE.
Discussion
Schedule 3.2(1) of the 1987 Act provides relevantly:
“‘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.”
Schedule 3.6 is entitled “Meaning of ‘Earnings’”. It provides relevantly;
“(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) ….
(b) …..
(c) ….
(d) any payment made without obligation by the employer.”
This provision was considered by Senior Member Glenn Capel in Taylor-Craig, as indicated in submissions. The facts in Taylor-Craig differed significantly from those in the present case. Mr Taylor-Craig was a leasing consultant whose contract of employment provided for the payment of discretionary benefits, which were expressly stated to be at the employer’s “absolute discretion” and which were also expressly stated not to form part of his contractual renumeration package or indeed his contract of employment.
The insurer refused to include these discretionary benefits, which were described in the payslips as ‘bonuses,’ in its PIAWE calculation. Its decision was upheld by the Senior Member.
From [86] he stated:
“86. The current dispute centres on whether the ‘bonus’ payments made by the respondent to the applicant each month were made ‘without obligation by the employer’ in terms of cl 6(2)(d) of Schedule 3 of the 1987 Act.
87. The issue that I need to determine involves the interpretation of the legislation. The principles of statutory interpretation are well established and have been confirmed by the High Court in Project Blue Sky v Australian Broadcasting Authority[ and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT), and in the Commission in Hesami v Hong Australia Corporation Pty Ltd.
88. One must interpret the ordinary and grammatical meaning of the text, the language and structure of the legislation, the legal and historical context, and the purpose of the statute in order to come to a reasonable conclusion as to its meaning and application.
89. In my view, the language used in cl 6(2)(d) of Schedule 3 of the 1987 Act is clear and unambiguous. Any payment that an employer is not obliged to make is excluded from the calculation of the employee’s PIAWE…”
Applying this principle to the facts before him, Senior Member Capel noted the terms of the contract and dismissed the application.
Mr Gaitanis submitted that the facts in the present case were distinguishable from those in Taylor-Craig. It is clear that a significant difference between the two cases is that there was no term in Ms Zaree’s employment contract which considered the system introduced for the payment of bonuses. As such, it is necessary to consider parole evidence to establish the intent of the parties.
Firstly, the record of Ms Zaree’s remuneration since 20 February 2018 showed that she regularly received payments described firstly as ‘commissions’ and then, when the payment system changed, as ‘bonuses.’ These varied in size, and were paid irregularly.
Secondly, Ms Antwan, the owner of the employer, described ‘incentives and bonuses.’ as being payable when a personal target was reached. They were applicable to ‘all therapists within the business’.
In Ms Zaree’s case, she apparently did not always meet her targets, as the pay records show a varying receipt of payments. During the relevant period Ms Zaree received her bonuses on 7 of the 12 months.
Thirdly, the text exchanges showed that Ms Zaree increased Ms Zaree’s wages on 2 November 2021 and 30 January 2023. Additionally, Ms Antwan advised the ‘target’ and the amount of the bonus in each text – 2 November 2021, 10 May 2022, 6 June 2022 and 30 January 2023. It was clear that both parties intended that the bonus system be separate from the question of weekly remuneration.
Thirdly, Ms Zaree’s description of the bonus pay arrangement in her statement of 23 October 2023 is consistent with that of Ms Antwan, and is supported by the contemporaneous pay records and texts.
To come within the terms of Schedule 3.2(2)(d) it was necessary to show that the moneys paid as bonuses (or ‘commissions’) were made without obligation by Ms Antwan. The word ‘obligation’ in these circumstances refers to a contractual obligation, and the evidence does not support such a contention. The evidence confirms that there was an additional contractual obligation for the payment of bonuses when personal targets were met. This condition had been a continuing part of the employment contract since 20 February 2018.
DECISION
I find that the appropriate PIAWE for the subject period was $1,912.22.
The respondent will calculate the payment of compensation in accordance with this finding.
If necessary, leave is granted for the parties to apply in respect of these calculations within 14 days of determination.
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