Open scrollable table of contents

Print entire document

Merit review WC051/18

The Insurer found that the worker's ordinary earnings were $266.74 and the relevant period was 52 weeks. The Reviewer considered that the worker was not continuously employed for the 52 weeks prior to the injury and that the worker's ordinary earnings were $664.81. Ultimate finding on PIAWE was $1,083.53 whereas the Insurer found $388.53.

Our Reference: 051/18
Date of review: 

Findings on review

  1. The following is the finding of the Authority on review and it is to be the basis of a review decision by the Insurer.
  2. The Worker’s pre-injury average weekly earnings (PIAWE) are $1,083.53 for the first 52 weeks that weekly payments are payable.

Recommendation based on findings

  1. The Insurer is to calculate the Worker’s entitlement to weekly payments of compensation for any week in which they were entitled to such payments in accordance with my finding above.
  2. This recommendation is binding on the Insurer in accordance with section 44BB(3)(g) of the 1987 Act.

Background

  1. The Worker sustained an injury in the course of their employment with the pre-injury employer. The date of injury accepted by the Insurer is XXXXXXXX.
  2. The Insurer made a work capacity decision in relation to the Worker’s PIAWE. The decision was notified to the Worker by way of a letter dated XX July 2017.
  3. The Worker applied for an internal review of the Insurer’s decision. The internal review was conducted and the Worker was notified of the outcome on a letter dated August 2017.
  4. The Authority received the application for merit review in September 2017. The application has been accepted.

Legislation

  1. The legislative framework governing work capacity decisions and reviews is contained in the:
  2. Section 43 of the 1987 Act describes a ‘work capacity decision’.
  3. Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Information considered

  1. I have considered all of the information that was provided by the parties in relation to the Worker’s application for merit review. I have only referred to the information that is most relevant to my findings, in my reasons that are set out below.

Submissions

  1. In the application for merit review, the Worker has requested a review of the following work capacity decision of the Insurer:
    • The calculation of their PIAWE.
  2. The Worker’s submissions in support of their application for merit review are summarised as follows:
    • They were working in a trainer role for the April class as requested and confirmed by management.
    • The Insurer stated that they did not include the trainer role in their original documentation with their nominated treating doctor (NTD).
    • This is incorrect. While their NTD made some errors on their original Workplace Certificate, the Worker later corrected the document and returned it with these corrections to the NTD.
    • They then sent this adjusted documentation by Registered Post in May 2017 to their manager at the pre-injury employer who later informed them that the documents had been given to HR.
    • On the Workers Injury Claim Form, they detailed that their injury occurred when they were performing the trainer role.
    • An independent investigator from the Insurer interviewed them in June 2017. They had a copy of their WorkCover Certificate of Capacity that they had mailed. They therefore know that the Insurer had received a copy of their altered certificate
    • They understand the reasons provided by the Insurer on internal review for not including the income that they would have earned as a trainer as being:
      • Their employer has not provided requested information in this matter.
      • They did not include the trainer role in their original documentation.
      • The Insurer has been unable to determine what they would have been paid in the trainer role and so has declined their request that that income be included.
    • It’s clear that they were employed to complete both the training and the transition task roles and that they had been performing in both roles prior to their work injury occurring.
    • They are requesting the merit review because they do not understand how the Insurer can justify denying their request seemingly because it can’t work out how much they would have been paid and also because it has not followed up with their employer to obtain the necessary information.
    • As per the April class training schedule and management emails, their employment days and hours per week for the training role are clearly set out. It should not be difficult to work out what they would have been paid in the training role.
    • They are also seeking payment for what was originally agreed in an email (provided as part of their submissions) and for the training transition task.
    • They also included emails verifying that they were employed to undertake completion of the transition task over 3 days at the same rate as the contracted Supervisor Role.
    • They also suggested in the review request that, since another employee replaced them as the trainer for that class, the Insurer could request their employer for the total that was paid to the employee in performing this training since that is what they would have earned had they not been injured.
    • They also consider that the date of injury is incorrect.
    • They were not injured in May 2017. That is a Sunday when they work as the supervisor. They were not at work that day.
    • The Insurer states that their PIAWE will be reduced from December 2017. All staff employed as the support co-ordinators ceased employment in June 2017 as the pre-injury employer ceased funding this service as of that date. They have not been receiving payments past that date, would not expect to, and so this is not relevant.
    • They obtained a role as a casual employee in the position of a support co-ordinator as of July 2017.
    • They also suggest a method for determining what they would have been paid in their trainer role.
  3. In reply, the Insurer’s submissions may be summarised as follows:
    • It acknowledges that the Worker had undertaken the training role. It maintains that, as the role was temporary in nature, it may not be taken into account as a promotion when calculating the Worker’s PIAWE.
    • The relevant period of the calculation of PIAWE is 52 weeks.
    • The Worker’s ordinary earnings (weekly) for the 52 weeks prior to their injury are calculated as $266.74.
    • The Worker’s shift allowances are calculated as $121.79 per week.
    • It acknowledges that the current accepted date of injury is incorrect but submits that this is outside of the scope of a merit review.

Reasons

Nature of merit review

  1. A merit review is a review of the work capacity decision of the Insurer. It involves considering all of the information that has been provided to me.
  2. I will then make findings and may make recommendations about the work capacity decision that have been referred for review.
  3. I am required to consider all of the information that has been provided and make findings and recommendations that are most correct and preferable.
  4. The Worker has made submissions that their date of injury, as accepted by the Insurer, is incorrect. The Insurer has conceded this point but submits that the matter is beyond the scope of a merit review.
  5. The date at which an Insurer has determined that liability is accepted for an injury is outside the scope of this merit review and I will therefore not address the matter. I note that if the date of injury is revised by the Insurer, calculation of PIAWE may also require review in accordance with the requirements of the 1987 Act.

PIAWE

  1. The Worker has requested a review of the Insurer’s calculation of their PIAWE. In conducting the review I am to refer to the relevant sections of the 1987 Act.
  2. Section 44C(1) of the 1987 Act sets out the definition of PIAWE as follows:
  3. (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. The definition of PIAWE requires that I determine the relevant period in relation to the Worker.

The relevant period

  1. The “relevant period” is defined in section 44D(1) of the 1987 Act as follows:

    (1)  Subject to this section, a reference to the relevant period in relation to pre-injury average weekly earnings of a worker is a reference to:

    (a)  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, that period of 52 weeks, or

    (b)  in the case of a worker who has been continuously employed by the same employer for less than 52 weeks immediately before the injury, the period of continuous employment by that employer.

  2. I have been provided with a document that is dated November 2016. The document states that it relates to “changes” to the Worker’s employment terms and conditions, however, I believe that the more accurate construction is that the document is a new contract of employment.
  3. Under the heading duration of employment is the following statement:
  4. Your fixed term contract will commence XX December 2016 and will cease on XX June 2017. You accept and agree that there is no guarantee of ongoing employment past the conclusion of this fixed term.

  5. The position that the Worker is appointed to by way of the document is that of a support supervisor. I note that this role was different from their previous role of a shift supervisor.
  6. I consider that whatever employment relationship the Worker had with the pre-injury employer prior to XX December 2016, that relationship ended on XX December 2016 and a new, fixed term employment relationship commenced on XX December 2016.
  7. I therefore do not consider that the Worker was continuously employed by the same employer for 52 weeks prior to their date of injury. Accordingly, I find that the relevant period is to be determined in accordance with section 44D(1)(b) of the 1987 Act and that the relevant period is XX December 2016 to XX May 2017.

Ordinary earnings

  1. The definition of PIAWE requires that I determine the Worker’s ordinary earnings (as a weekly average).
  2. “Ordinary earnings” are defined in section 44E of the 1987 Act as follows:
  3. (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.

  4. The method for calculating the Worker’s ordinary earnings turns on the method on which their “base rate of pay” is calculated.
  5. 'Base rate of pay' is defined in section 44G of the 1987 Act as follows:
  6. (1)  In relation to pre-injury average weekly earnings and current weekly earnings, a reference to a base rate of pay is a reference to the rate of pay payable to a worker for his or her ordinary hours of work but does not include any of the following amounts (referred to in this Division as base rate of pay exclusions):

    (a)  incentive based payments or bonuses,

    (b)  loadings,

    (c)  monetary allowances,

    (d)  piece rates or commissions,

    (e)  overtime or shift allowances,

    (f)  any separately identifiable amount not referred to in paragraphs (a) to (e).

  7. The Worker received a leave loading in relation to their Sunday shift work when taking annual leave. As loadings are a base rate of pay exclusion, the leave loadings do not form part of the calculation of the Worker’s PIAWE.
  8. The Worker also received shift allowances. These will be dealt with below.

Ordinary hours of work and ordinary earnings.

  1. Section 44H of the 1987 Act defines “ordinary hours of work” as follows:
  2. In relation to pre-injury average weekly earnings and current weekly earnings, the ordinary hours of work:

    (a)  in the case of a worker to whom a fair work instrument applies are:

    (i)  if the ordinary hours of work in relation to a week are agreed or determined in accordance with a fair work instrument between the worker and the employer—those hours, or

    (ii)  in any other case, the worker’s average weekly hours (excluding any week during which the worker did not actually work and was not on paid leave) during the relevant period.

  3. The Worker’s employment was governed by the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award). This is a fair work instrument.
  4. Although the Worker’s contract indicate that they are to work 8 hours per week on a Sunday, their payslips for the relevant period show that they usually worked additional shifts.
  5. I therefore find that the Worker’s ordinary hours of work were not agreed in accordance with the fair work instrument between them and their employer but that they varied from week to week.
  6. The Worker’s ordinary hours of work are therefore to be calculated in accordance with the requirements under section 44H(a)(ii) of the 1987 Act.
  7. When considering the Worker’s ordinary earnings, I am satisfied that their base rate of pay is calculated on the basis of their ordinary hours worked, despite their hours varying from week to week, for the reasons set out below.
  8. The Worker’s classification was level 4, pay point 4 and their hourly rate of pay was said to be $33.57.
  9. The SCHADS Award sets a rate of pay for part time workers where they work less than 38 hours per week. There are various multipliers that are applied for additional hours of work or for certain shift.
  10. The Worker’s pay slips indicated that they consistently worked less than 38 hours per week and that their base rate of pay was $33.57 for all hours worked.

Non-pecuniary benefits

  1. A determination of the Worker’s ordinary earnings also requires a calculation of the monetary value of any non-pecuniary benefits. Section 44F of the 1987 Act defines non-pecuniary benefits as follows:
  2. (1)  The following benefits provided in respect of a week to a worker by the employer for the performance of work by the worker are non-pecuniary benefits in respect of that week:

    (a)  residential accommodation,

    (b)  use of a motor vehicle,

    (c)  health insurance,

    (d)  education fees.

    (2)  Any amount that, under the worker’s terms of employment, the employer is required (for the performance of work by the worker) to apply or deal with on behalf of the worker in accordance with the worker’s instructions is also a non-pecuniary benefit but this does not include any amount that is a base rate of pay exclusion.

  3. I am satisfied from viewing the Worker’s payslips for the relevant period that they were not in receipt of any non-pecuniary benefits.

Calculation of ordinary earnings

  1. I have been supplied with payslips for the Worker that cover the relevant period. The first payslip covers a period from XX December 2016 to XX December 2016.
  2. There are 14 weeks in the relevant period. The following table outlines the number of hours worked by the Worker on a fortnightly basis in the relevant period. The table also shows the value of the Worker’s ordinary earnings when calculated at their rate for ordinary hours.
  3. Fortnight EndingHours Hourly Base rate of pay Ordinary earnings

    XX/05/2017

    8

    $ 33.57

    $ 268.56

    XX/05/2017

    8

    $ 33.57

    $ 268.56

    XX/05/2017

    30

    $ 33.57

    $ 1,007.10

    XX/04/2017

    16.5

    $ 33.57

    $ 553.91

    XX/04/2017

    8

    $ 33.57

    $ 268.56

    XX/04/2017

    8

    $ 33.57

    $ 268.56

    XX/04/2017

    8

    $ 33.57

    $ 268.56

    XX/04/2017

    7

    $ 33.57

    $ 234.99

    XX/03/2017

    8

    $ 33.57

    $ 268.56

    XX/03/2017

    12.75

    $ 33.57

    $ 428.02

    XX/03/2017

    8

    $ 33.57

    $ 268.56

    XX/03/2017

    16

    $ 33.57

    $ 537.12

    XX/02/2017

    8

    $ 33.57

    $ 268.56

    XX/02/2017

    8

    $ 33.57

    $ 268.56

    XX/02/2017

    3

    $ 33.57

    $ 100.71

    XX/02/2017

    8

    $ 33.57

    $ 268.56

    XX/02/2017

    8

    $ 33.57

    $ 268.56

    XX/01/2017

    8

    $ 33.57

    $ 268.56

    XX/01/2017

    8

    $ 33.57

    $ 268.56

    XX/01/2017

    16

    $ 33.57

    $ 537.12

    XX/01/2017

    24

    $ 33.57

    $ 805.68

    XX/01/2017

    16

    $ 33.57

    $ 537.12

    XX/12/2016

    8

    $ 33.57

    $ 268.56

    XX/12/2017

    8

    $ 33.57

    $ 268.56

    XX/12/2017

    16

    $ 33.57

    $ 537.12

    Totals

    277.25

     

    $ 9,307.28

  4. As previously noted, I am satisfied that the Worker was not in receipt of any non-pecuniary benefits. I am also satisfied that they did not receive piece rates or commissions for their work.
  5. I therefore find that the Worker’s ordinary earnings are calculated as follows:
  6. (277.25 hours x $33.57)/14 weeks

    =$9,307.28/14

    =$664.81

  7. I find that the Worker’s ordinary earnings are $664.81 per week.

Overtime and shift allowances

  1. Overtime and shift allowances are included in PIAWE for the first 52 weeks that weekly payments are payable to the Worker.
  2. In accordance with the SCHADS Award the Worker received a shift allowance for work undertaken on afternoons, weekends and public holidays. The allowance was calculated on the basis of the base rate of pay, multiplied by a set percentage.
  3. The table below sets out the actual hours of work undertaken by the Worker in the relevant period and the shift allowances that were applicable for the hours of work.
  4. Fortnight EndingHours Base rate of pay Total pay

    XX/05/2017

    8

    $ 33.57

    $ 537.12

    XX/05/2017

    8

    $ 33.57

    $ 268.56

    XX/05/2017

    30

    $ 33.57

    $ 1,007.10

    XX/04/2017

    16.5

    $ 33.57

    $ 1,384.76

    XX/04/2017

    8

    $ 33.57

    $ 537.12

    XX/04/2017

    8

    $ 33.57

    $ 268.56

    XX/04/2017

    8

    $ 33.57

    $ 537.12

    XX/04/2017

    7

    $ 33.57

    $ 264.36

    XX/03/2017

    8

    $ 33.57

    $ 268.56

    XX/03/2017

    12.75

    $ 33.57

    $ 428.02

    XX/03/2017

    8

    $ 33.57

    $ 537.12

    XX/03/2017

    16

    $ 33.57

    $ 1,074.24

    XX/02/2017

    8

    $ 33.57

    $ 302.13

    XX/02/2017

    3

    $ 33.57

    $ 100.71

    XX/02/2017

    8

    $ 33.57

    $ 268.56

    XX/02/2017

    8

    $ 33.57

    $ 537.12

    XX/02/2017

    8

    $ 33.57

    $ 537.12

    XX/01/2017

    8

    $ 33.57

    $ 302.13

    XX/01/2017

    8

    $ 33.57

    $ 671.40

    XX/01/2017

    16

    $ 33.57

    $ 1,074.24

    XX/01/2017

    24

    $ 33.57

    $ 2,014.20

    XX/01/2017

    16

    $ 33.57

    $ 604.26

    XX/12/2016

    8

    $ 33.57

    $ 302.13

    XX/12/2016

    8

    $ 33.57

    $ 268.56

    XX/12/2016

    16

    $ 33.57

    $ 1,074.24

    Totals

    277.25

     

    $ 15,169.44

  5. I am satisfied that the Worker did not receive any base rate of pay exclusions. I therefore find that the value of their shift allowances is calculated as:
  6. Total earnings for the relevant period – Ordinary earnings for the relevant period

    =$15,169.44 - $9,307.28

    =$5,862.16

  7. The Worker’s average weekly shift allowances for the relevant period are calculated as follows:
  8. =$5,862.16/14

    =$418.73

  9. I find that the Worker’s shift and overtime allowances for the relevant period were $418.73 per week.

Findings on PIAWE

  1. I find that the Worker’s PIAWE for the first 52 weeks for which weekly payments are payable is calculated as:

    = $664.81 + $418.73

    = $1,083.53

  2. I find that the Worker’s PIAWE is $1,083.53 for the first 52 weeks that weekly payments are payable.

Response to other submissions

  1. I have noted the Worker’s submission in relation to taking their future earnings into account when calculating their PIAWE. I have carefully read the information provided and have concluded that the trainer role that the Worker was to undertake was not a promotion and was also temporary in nature. The provisions for taking future income into account are therefore not relevant in the Worker’s circumstances.
  2. I have explained as clearly as possible, the relevant provisions of the 1987 Act that are applicable to the calculation of the Worker’s PIAWE and my method of making those calculations. I hope that this has assisted the Worker to understand the way in which their PIAWE is to be correctly determined in accordance with the 1987 Act.>

Merit Reviewer
Merit Review Service
Delegate of the State Insurance Regulatory Authority