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Merit review WC056/18

Our Reference: 056/18
Date of review: May 2018

Findings on review

  1. The following finding of the Authority on review is to be the basis of a review decision by the Insurer.
  2. The Worker’s pre-injury average weekly earnings (PIAWE) is $749.42.

Recommendation based on findings

  1. The Insurer is to use the finding above as the basis for the calculation of the Worker’s entitlement to weekly payments of compensation and applied to the Worker’s claim for weekly payments of compensation from 24 November 2017.
  2. The above recommendation is binding on the Insurer in accordance with section 44BB(3)(g) of the Workers Compensation Act 1987 (the 1987 Act).

Background

  1. The Worker was injured when he had a car accident in the taxi that they were driving.
  2. The Worker has not returned to work since the time of the accident and their claim for weekly payments of compensation has been accepted by the Insurer.
  3. In November 2017 the Insurer made a work capacity decision that the Worker’s PIAWE was deemed to be $155 as it had not received any wage information from the Worker.
  4. The Worker contacted WIRO and a person from that body made enquiries with the Insurer on their behalf in February 2018 in relation to the calculation of their PIAWE. In its response on the same date, the Insurer indicated that it was then using a “Fair Work rate” of $694.90 for the Worker’s PIAWE in the absence of alternative information.
  5. In March 2018, the Insurer conducted an internal review and determined that the rate to be used for the Worker’s PIAWE was $155.
  6. The Authority received the application for merit review in March 2018. 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 decisions of the Insurer:
  • A decision as to their PIAWE.
  • A decision about the amount that he is able to earn in suitable employment
  1. The Worker has made a range of further submissions. I have read these in detail, however, they relate mainly to various accusations against government departments and occurrences that are unrelated to their claim for Workers compensation.
  2. In April 2018, the Authority wrote the Worker and requested that they provide further information in relation to their actual or potential earnings as a taxi driver with their pre-injury employer. The Worker responded on the following day, claiming $50,000,000 in compensation.
  3. In April 2018, the Authority wrote to both parties. The merit reviewer proposed the use of a report prepared for the NSW Independent Pricing and Regulatory Tribunal (IPART) on taxi driver earnings, for the purposes of determining the Worker’s PIAWE. A copy of the report was provided and the parties were invited to make submissions about the suitability of the report, in particular a table setting out average hourly rates on page 66 of that report.
  4. In April 2018, the Worker responded to the Authority as follows:

    “The merit review submission should be accepted of $2700pw as provided by my BAS certificate which is very private and shouldn't have been provided the taxi rates as approved by transport NSW of $230per hour or the maximum rate of $2200 would be a much better option for the incompetent NSW government and the Insurer for failing to have an agreed hourly rate when the policy was accepted”

    Attempting to pay me $150 per week is way under the minimum award rate. I hope I have given you enough information as the taxi industry legislation is not clear to the majority of lawyers and judges and errors are often made.

    The maximum amount of $2200 shouldn't be enforced if the Insurer is relying on weekly earnings why should taxi driver's accept less than $2700 or more. I have used the average of my weekly earnings the maximum would have been over $3000pw. Urgent decision and payment is required as I have waited since November 2017”

  5. The Worker had subsequent discussions with the Authority in which they confirmed that their position was that they would not forward a copy of the BAS statement showing details of the company that it relates to. The Worker also confirmed that they objected to the use of any information other than information that they had already provided to the Authority.
  6. In April 2018, the Insurer made the following further submissions to the Authority:
  • The Worker only worked for their pre-injury employer for one day, there is no reliable evidence as to their anticipated hours of work. It notes an email dated  January 2018 that states that their hours were expected to be 9pm to 3am, being only 6 hours per day. This is the only information that it holds as to the Worker anticipated hours of work.
  • The Worker has not provided any documentary evidence that he holds a current Taxi licence. The email from the Worker dated  January 2018 clearly states that they cannot return to taxi driving as they need legal help to regain these rights.
  • Their further submissions state that they were never without a taxi authority which is in contrast to the information provided to it and the rehabilitation services provider. To date, no copy of the licence has been provided.
  • It maintains that the Worker is entitled to the minimum rate of $155 noting that they would not have been able to earn in the role of a taxi driver in the 52 weeks following their injury as outlined in section 44C(2)(a) of the 1987 Act.

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 has been referred for review.
  3. The review is not a review of the Insurer’s procedures in making the work capacity decision and/or internal review decision.
  4. The Worker has requested a review of the Insurer’s decision as to the amount that they are able to earn in suitable employment. The Authority is able to conduct a merit review of a work capacity decision by the Insurer in accordance with the requirements under section 44BB(1)(b) of the 1987 Act.
  5. The above section of the 1987 Act requires that for the Authority to conduct a review of a work capacity decision, the decision must first have been the subject of an internal review by the Insurer. The information that has been provided to me does not support that this is the case in respect to a decision about the amount the Worker is able to earn in suitable employment.
  6. There is provision under section 44BB(3)(b) for the Authority to conduct a merit review of the work capacity decision of the Insurer in circumstances where “the insurer has failed to conduct an internal review and notify the Worker of the decision on the internal review within 30 days after the application for internal review was made”.
  7. The information that has been provided to me does not support that any application for internal review of any decision as to the Worker’s ability to earn in suitable employment was made to the Insurer.
  8. Accordingly, no merit review of the Worker’s ability to earn in suitable employment will be conducted.
  9. The Worker has also referred to a desire for compensation to be paid to them for a number of situations and incidents which occurred prior to their time with their pre-injury employer. I acknowledge that these events appear to have caused the Worker great stress and hardship. The events are however, beyond the scope that may be dealt with by the Authority in the conduct of a merit review of work capacity decisions.
  10. Accordingly, I have confined this merit review to the matter of the determination of the Worker’s PIAWE as this is the sole matter referred to the Authority for which there is power to conduct a merit review.

PIAWE

  1. Insurer submissions. The Insurer submits that the Worker is not entitled to receive any payment other than $155 per week on the basis that they would not have been capable of earning any money as a taxi driver in the 52 weeks following their injury as they were not in possession of a taxi authority. The basis of this submission is the Worker’s statement that due to changes in the law, they were as no longer eligible for a taxi authority and that they needed help to regain it.
  2. PIAWE is determined at the time that a Worker is injured and takes into account the relevant circumstances at that time. At the time of their injury the Worker held a relevant taxi authority and this is the basis on which their PIAWE must be determined.
  3. I also note that I have read the emails referred to by the Insurer; the first reporting the Worker’s words during a case conference with their nominated treating doctor and their occupational rehabilitation services provider, and the second directly from the Worker to the Insurer. In both cases it appears that the only basis of the claim that the Worker no longer had a taxi authority was their personal interpretation of legislation that they believed to have been introduced in 2017.
  4. The factual information that is available to me is that the Worker was in possession of the correct licence for operating a taxi at the time of their employment with their pre-injury employer. the Worker has not reported receiving any notice or other information from any government or licencing body to indicate that their licence has been revoked or is no longer valid.
  5. The Worker does not appear to have any experience or qualifications in interpreting legislation and their opinion as to the application of any changes to legislation is to be given limited weight for the purposes of this review.
  6. I therefore consider that the preferable interpretation of the information available is that the Worker is still in possession of a valid taxi authority or has the ability to renew such an authority, until such time as they are notified otherwise by the relevant authority or there is clear information available that changes to the law have rendered their current authority invalid.
  7. I have therefore proceeded on the basis that the Worker would have been able to continue driving a taxi had they not sustained the injury..
  8. The Insurer has also submitted that the Worker confirmed in an email dated  January 2018 that their working hours were between 9pm and 3am. I have read this email. It appears to be in relation to the Worker’s attempt to assert that they believe that they still have a working week and that the Insurer has split this week over 7 days. The Worker is claiming that they are able to set nominal working hours outside of which the Insurer is to pay them for attendance at appointments and for answering emails and phone calls in relation to their claim.
  9. The email clearly has no relationship with the Worker’s proposed or planned hours of work in their pre-injury role.
  10. Determination of correct section of the 1987 Act. The Worker commenced employment with their pre-injury employer on the date of the injury and was injured in the course of their employment on their first shift with that employer. In order to calculate the Worker’s PIAWE it is important to first determine the section of the 1987 Act under which this amount should be calculated.
  11. Section 44C(1) of the 1987 Act provides:

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).

  1. Section 44C(1) of the 1987 Act is to be used for the calculation of a Worker’s PIAWE unless another provision within section 44C applies.
  2. Section 44C(2) of the 1987 Act is a discretionary provision that may be applied to a Worker who has been continuously employed by the same employer for less than 4 weeks before the injury, it provides:

If a worker has been continuously employed by the same employer for less than 4 weeks before the injury, pre-injury average weekly earnings, in relation to that worker, may be calculated having regard to:

(a) the average of the worker’s ordinary earnings that the worker could reasonably have been expected to have earned in that employment, but for the injury, during the period of 52 weeks after the injury 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).

  1. The first matter to be addressed is therefore whether the Worker’s PIAWE should be calculated in accordance with section 44C(1) or 44C(2) of the 1987 Act.
  2. The Worker has either refused or is unable to provide information as to their earnings for their first shift of work with their pre-injury employer or any information in relation to any agreed earnings. It is therefore not possible for me to calculate the Worker’s actual ordinary earnings for the period of their employment (being the relevant period).
  3. I therefore find that it is preferable to use section 44C(2) of the 1987 Act to calculate the Worker’s PIAWE.
  4. Available information. The Worker has provided a copy of a BAS from 2008. They have indicated that the statement is from their previous business in which they were driving taxis on a full-time basis.
  5. The statement provided by the Worker has been redacted. It does not contain their name and there is no information to support that it relates to a business that they operated or that the statement relates to a business for the provision of taxi services. The statement is for a period that is now almost 10 years in the past.
  6. The Worker has been given the opportunity to provide a copy of the statement that is not redacted and any other information to support their submissions that the information relates to a business operated by them in the provision of taxi driving services. The Worker has declined to provide any further information.
  7. On the basis that I am not able to tell whether the statement relates to a business that was operated by the Worker, or whether that business was in the provision of taxi driving services and due to the age of the document, I am not satisfied that the information contained in the 2008 BAS can be relied on to determine the ordinary earnings that the Worker could reasonably have been expected to earn but for the injury, in the 52 weeks after the injury.
  8. The Worker has made submissions as to the amount that they consider that they would have been able to earn in employment as a taxi driver. The Worker has used a single fare that they earned on the evening of their employment with their pre-injury employer as one of the mechanisms for calculating this amount.
  9. I do not consider the Worker’s self-reported calculations, in the absence of any reliable supporting material, to be an appropriate basis for the calculation of their PIAWE.
  10. In the absence of any probative information I have located the most recent and reliable information as to wages for taxi drivers that is available to me. The information is in the form of a report titled “Reweighting of the taxi cost index” (Taxi Cost Report). The report was prepared in April 2012 by the Centre for International Economics for the NSW Independent Pricing and Regulatory Tribunal.
  11. Taxi Cost Report. A copy of the Taxi Cost Report was provided to the Worker and the Insurer in April 2018. Each party was invited to make submissions about the use of the report in the calculation of the Worker’s PIAWE. Each party provided a response that is recorded above. In brief, the Worker referred the use of the information they provided in the form of the BAS statement and the Insurer did not consider that there was a basis for calculating the Worker’s PIAWE in accordance with section 44C(2) of the 1987 Act.
  12. In May 2018 the Worker made the following submission in relation to the use of the information contained in Table 5.4 of the Taxi Cost Report for the determination of their PIAWE:

“If the table is to be used instead of my bas certificate the days should calculated as six days a week with Tuesdays off overtime rates for weekends and four hours overtime rates on every shift with total hrs is twelve hours times six shifts which is a total of sixty hours in total which will still total over $2000pw. The table is the national award rates for taxi drivers please also note that no taxi driver who works six shifts a week will work anything under 60hours per week.”

  1. My method and reasons for the calculation of the Worker’s hours of work has been set out below.
  2. In May 2018, the Insurer made the following submissions in relation to the use of tables 5.2 and 5.3 of the Taxi Cost Report as the basis for determining the Worker’s PIAWE:

“We note that the worker was employed for 1 day prior to their injury on the date of injury (Saturday). The email from the worker dated January 2018 states their hours would have been expected to be 6 hours per day (9pm to 3am), and this is the only information available regarding their anticipated hours of work.

We submit that Table 8.3 of the “Re-weighting of the taxi cost index” report is the most relevant information for the calculation of the worker’s earnings, as this table provides the hourly takings for drivers per day of the week (i.e. the Saturday that the worker worked), which can be multiplied by the anticipated 6 hours per day, to arrive at estimated earnings for the worker.

It is our view that Table 5.2 is not relevant in this case, as it indicates an estimated 10-11 hours worked per shift, which is in excess of the anticipated hours information that the worker has provided. Similarly, using the information on estimated earnings from Table 5.3 would skew (inflate) a calculation of estimated earnings for the worker, given the inaccuracy of the estimated hours per shift noted above.”

  1. My view as to the relevant provisions for the calculation of the Worker’s PIAWE differs from the of the Insurer. The reasons for my view are set out below.
  2. I note that the Taxi Cost Report was prepared in 2012 from data gathered in 2011. This makes the report 6 years old and the data that it relies on 7 years old. While I acknowledge that the age of the information is not ideal and that there are likely to have been considerable changes including changes to fares in the time since the report was produced, in light of the other information that is available to me, I am satisfied that this is the best information on which to base a finding as to the Worker’s likely earnings.
  3. Ordinary earnings. The method for calculating PAIWE under section 44C(2) of the 1987 Act requires a determination of the “ordinary earnings” that the Worker could reasonably have been expected to earn, but for the injury, in the 52 weeks of employment following the injury.
  4. Ordinary earnings are defined under section 44E of the 1987 Act as follows:

(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.

  1. The information contained in the Taxi Cost Report indicates that taxi driver earnings are based on a variety of rates that are payable while they are driving passengers, however, there are no earnings during times when the driver does not have a passenger even though they are available for hire.
  2. I therefore find that the Worker’s ordinary earnings were not calculated on the basis of ordinary hours worked. In these circumstances, the Worker’s PIAWE is to be calculated in accordance with section 44E(1)(b) of the 1987 Act.
  3. In an email to the Insurer dated  February 2018, the Worker indicates that they had a contract agreement for 6 shifts [per week] from Wednesday to Monday with Tuesdays off. In an email to the Insurer on the same date, the Worker indicated that they had intended to work 12 hours per shift.
  4. The Taxi Cost Report indicates that the night shift (which is the shift the Worker has indicated that they intended to drive) had the following working hours per shift (see table 5.2)
DayHours
Monday 10.1
Tuesday 1.6
Thursday 10.9
Friday 11.8
Saturday 11.7
Sunday 10.2
Total weekly hours65.3
  1. As the best information that is available to me is the information contained in the Taxi Cost Report, I find that the Worker’s ordinary earnings would likely have been earned on the basis of 65.3 hours per week.
  2. The following table at (set out at table 5.3 of the Taxi Cost Report) indicates that drivers working night shifts earned the following average hourly rates:
DayHours
Monday $7.55
Wednesday $9.68
Thursday $11.01
Friday $14.42
Saturday $14.82
Sunday $10.49
  1. For the avoidance of confusion, there is a table at 8.3 of the Taxi Cost Report that indicates the hourly takings for a bailee driver. The amounts in this table differ greatly from those set out in the table at 5.3. The difference in these amounts arises because the bailee driver (a driver who is not an owner driver) is responsible for the payment of “pay-in” costs and GST out of the overall takings.
  2. On the basis of the information set out above. I calculate the average weekly amount that the Worker is likely to have earned in their pre-injury role but for their injury, during the 52 weeks following their injury as follows:
DayHoursRateTotal
Monday 10.1 $7.55 $76.26
Wednesday 10.6 $9.68 $102.61
Thursday 10.9 $11.01 $120.01
Friday 11.8 $14.42 $170.16
Saturday 11.7 $14.82 $173.39
Sunday 10.2 $10.49 $107.00
Total    $749.42
  1. I therefore find that the Worker’s PIAWE, calculated in accordance with section 44C(2) of the 1987 Act is $749.42. This is the amount to be used by the Insurer to calculate the Worker’s entitlement to weekly payments of compensation.

Merit Review Service
Delegate of the State Insurance Regulatory Authority