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ABX v GIO Insurance [2018] NSWDRS MR 050

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsStatutory benefits – PAWE – pre-accident weekly earnings – foreign earnings – earnings in Australia – teacher – earner
Legislation cited                    Motor Accidents Injury Act (NSW) ss 1.3, 7.13(4), Schedule 1 Clause 4(1)&(2). Schedule 2(1)(a)
Motor Accident Guidelines effective 13 July 2018 s 7.12(1)
Motor Accident Injuries Regulation 2017 (NSW)
Worker Compensation Act 1987
Cases cited

N/A

Text citedN/A
Parties ABX - Claimant
GIO Insurance - Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

View the certificate

Issued under section 7.13(4) of the Motor Accident Injuries Act 2017

The Claim
Claimant ABX
InsurerGIO
Claim Number Y05714200901-01
The Reviewable Decision
Reviewable decision-makerMar-Lize Crawford
Date of Reviewable decision                                         10 September 2018
Nature of Reviewable decisionThe amount of pre-accident weekly earnings
The Merit Review
Our Reference 10052204
Merit Reviewer Jeanette Woollacott
Date of Merit Review Certificate 21 November 2018

Merit Reviewer’s Determination

This determination relates to a merit review matter, which is a reviewable decision under Schedule 2(1) (a) of the Motor Accident Injuries Act 2017 (the Act).

The merit review is about the amount of weekly payments of statutory benefits that is payable to the claimant under Division 3.3 of the Act.

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
o   The amount of the claimant’s pre-accident weekly earnings (PAWE) is $893.42
  • Effective Date: This determination takes effect on 8 August 2018. The Insurer is to pay the claimant the difference between what they have been paid and was entitled to be paid in accordance with the decision above.

A brief statement of my reasons for this determination are attached to this certificate.

Jeanette Woollacott
Merit Reviewer, Dispute Resolution Service

Merit Reviewer’s Reasons for Determination

Background

1.  There is a dispute about the calculation of the claimant’s pre-accident weekly earnings (PAWE). The amount of PAWE affects the amount of weekly payments of statutory benefits.

2.  The claimant was injured in a motor vehicle accident on 15 June 2018.

3.  The claimant relocated from Thailand to Australia in early June 2018 with the intention of working in Australia as a casual secondary school teacher. Prior to relocating the claimant had been employed as a teacher with an International School in Thailand on a full-time basis. The claimant also worked as a casual teacher at an Australian school in Term 2 of the 2017 school year.

4.  On 8 August 2018, the insurer wrote to the claimant and advised that they were entitled to weekly payments of statutory benefits, which would be calculated on the basis that their PAWE is equal to $658.75.

5.  The claimant applied for an internal review by the insurer and submitted that their PAWE should be calculated based on their potential earning capacity in Australia as a teacher and not on their foreign Thai earnings preceding the motor accident.

6.  On internal review dated 10 September 2017, the claimant’s PAWE was increased to $660.56.

7.  The claimant applied for merit review by the Dispute Resolution Service in September 2018.

Documents and information

8.  I have considered the documents provided in the application and the reply and any further information provided by the parties.

Submissions

9.  The claimant submits:

  • Their loss of income has been assessed on mainly Thailand salary rates.
  • They had been accepted and approved to work in Australia as a casual teacher.
  • They were residing in Australia for the purposes of working as a casual teacher at the time of the motor accident where the rate of pay is $419 per day.
  • The potential earnings of a fully approved and qualified secondary teacher are above the Australian average wage.
  • They earnt in excess of $70,000 as a teacher in the 2013 financial year whilst residing in Australia.
  • The costs of living in Australia is higher than Thailand.

10.  The Insurer submits:

  • The Act and Guidelines have no scope, provision or discretion to include average potential full-time earnings in the calculation of a claimant’s PAWE, especially if they were not employed on a full-time basis prior to the accident.
  • It is unfortunate for the claimant that his pre-accident earning capacity was based on his Thai salary and casual teaching position in New South Wales.
  • The claimant’s PAWE has been calculated correctly and in accordance with the Act and Guidelines.
  • There is no provision in the Act or Guidelines to over compensate claimants, especially when there were employed on a casual basis prior to the accident and now believe that they are entitled to a full average Australian wage.

Legislation

11.  In conducting my review, I have considered the following legislation and guidelines:

a.  Motor Accident Injuries Act 2017 (NSW) (“the Act”)

b.  Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)

c.  Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

Reasons

Pre-accident weekly earnings

12.  PAWE is defined by clause 4 of schedule 1 of the Act. Sub -clauses 1 and 2 state:

4 . Meaning of “pre-accident weekly earnings”- general

(1)  Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.

(2)  In the following cases, pre-accident weekly earnings, in relation to an earner (other than a self-employed person) who is injured as a result of a motor accident, means:

(a)  If, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months-the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,

(b)  If Subclause (3) applies-the weekly average of the gross earnings received by the earner as an earner during the period from when the change of circumstances referred to in that subclause occurred immediately before the day of the motor accident,

(c)  If the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person-the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.

13.  Earner is defined by clause 2 of schedule 1 of the Act as follows:

2. Meaning of "earner"

A person who is injured as a result of a motor accident is an "earner" if the person is at least 15 years of age and who:

(a) was employed or self-employed (whether or not full-time):
(i) at any time during the 8 weeks immediately preceding the motor accident, or

(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or

(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident, and, at the date of the motor accident, had not retired permanently from all employment , or

(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract):
(i) with an employer or other person to undertake employment, or

(ii) to commence business as a self-employed person,

at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.

Communications between the claimant and insurer

14.  On 12 July 2018, the claimant emailed the insurer advising that they intended to work as a causal teacher during the period 18 June 2018 to 20 December 2018.

15.  On 2 August 2018, the insurer requested evidence of the claimant’s intention to return to casual teaching for the period 18 June 2018 to 20 December 2018, including a contract with NSW Department of Education.

16.  On 2 August 2018, the claimant advised the Insurer that casual teaching is by arrangement and not by contract and that BM High School had recently informed them that they were happy to have them back at their school as a casual teacher in the 2018 school year. The claimant provided the insurer with an email exchange between the claimant and BM High School as follows:

  • On 4 December 2017, the claimant emailed KG, Head Teacher Administration, BM High School as follows:
“I do not plan to return to Sydney until during term 2 next year. At that time, I would love to reconnect with BM High as a casual teacher.”
  • On 4 December 2017, KG replied stating:
“Please contact me next year when you return to Sydney and are interested in Casual Work.”

17.  On 2 August 2018, the claimant advised the insurer that when they previously worked for BM High School in the 2017 school year, they were advised that they could work every day as a casual teacher however, they weren’t able to due to their brother’s terminal illness.

18.  On 3 August 2018, the claimant wrote to the insurer advising that it was their intention to seek causal teaching work in a number of schools in addition to BM High School and that they were 100% confident that they would have been working full-time as a casual teacher from 18 June 2018.

19.  On 8 August 2018, the insurer informed the claimant that they had contacted BM High School to ascertain their intended employment status. BM High school confirmed that there was no guarantee that the claimant would be given work every day as they were not under a temporary contract. They further advised that the claimant had been allocated 12 days of work out of a 50-day term during Term 3 of the 2017 school year.

20.  The claimant has provided the insurer with a letter from NSW Department of Education dated 12 July 2017, confirming they are eligible for employment as a causal teacher with the NSW Department of Education, with a Band 2 teaching rate, effective from 27 January 2016. The letter is stated as not constituting a promise of employment.

21.  Clause 4 (2)(c) of schedule 1 of the Act provides that if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment, then PAWE means the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.

22.  The term "arrangement" is not defined in the Act. I accordingly rely on the normal definition of the word. The Oxford English Dictionary defines “arrangement” as:

“An agreement with someone to do something”

23.  In view of the evidence before me, I consider there was an agreement in place between the claimant and BM High School for the claimant to undertake casual work as a secondary teacher during the 2018 school year, commencing in Term 2. The claimant has stated to the insurer that his intention was to work for the period 18 June 2018 to 20 December 2018. I note that the claimant had relocated from Thailand to Australia in early June 2018 to take up casual work under this arrangement.

24.  Accordingly, I consider that the exception in clause 4 (2)(c) of schedule 1 of the Act applies.

25.  In view of the arrangement, I also consider the claimant was an earner under clause 2(b)(i) of schedule 1 of the Act. I note the insurer does not dispute that the claimant was an earner.

26.  The correct and preferable method for calculating the claimant’s PAWE, is therefore to determine the average weekly gross earnings that the claimant could reasonably have been expected to earn, but for the injury, in employment under the arrangement in place with BM High School.

27.  Whilst the claimant submits that it was their intention to source casual teaching work from other schools, there is no evidence before me that they had entered into any other arrangements. Accordingly, I determine the claimant’s PAWE based on the arrangement they had in place with BM High School.

28.  The claimant submits that he would have worked every day had it not been for the accident. However, the claimant advised the insurer on 3 August 2018, that it was their intention to seek casual teaching in a number of schools in order to achieve full time employment, suggesting that they did not expect to achieve full-time hours under their arrangement with BM High School.

29.  BM High School have informed the insurer that there was no agreement or guarantee that the claimant would be given work everyday as they were not under a temporary contract and that they only received 12 days from a 50-day term in the 2017 school year. I note however, the claimant’s submissions to the insurer that they did not have availability to work more days due to their brother’s illness.

Calculation of PAWE

30.  In light of the information before me and the reasons provided above, I am of the view that there is insufficient evidence to conclude the claimant would have secured continuous full-time hours at BM High School as a casual secondary teacher.

31.  BM High School is however, a large school and given that maths is an integral part of the school curricular, it is reasonable to expect that the claimant would have received sustained casual employment. It is also reasonable to expect that the claimant accepted the position with BM High School on the basis that sustained employment would have been available.

32.  The hours the claimant would have worked but for the motor accident would have been dependent on a number of variables, including staffing levels and the availability of other casual teachers for the 2018 school year at the school. In the absence of the school’s employee scheduling, it is difficult to make an accurate calculation and accordingly, in view of the above, I consider that a sensible and fair approach would be to assess the claimant’s PAWE based on 2.5 days per week across Terms 2, 3 and 4 of the 2018 school year, commencing 18 June 2018.

33.   The NSW Department of Education terms dates for the 2018 school year are as follows:

  • Term 2- 30 April 2018 to 6 July 2018 (50 days)
  • Term 3- 23 July 2018 to 28 September 2018 (50 days)
  • Term 4- 15 October to 21 December 2018 (50 days)

34.   The claimant submits he intended to commence casual teaching in Term 2 from 18 June 2018. As at 18 June 2018, there were 15 school days remaining in Term 2.

35.   Schedule 4 of the Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award 2017, provides a daily rate of $419.52 for casual teachers in Band 2 for the 2018 school year. I therefore accept the claimant’s PAWE to be:

$419.52 x 57.5 days (7.5 days worked in Term 1, 25 days in Term 3 and 25 days in Term 4) = $24,122.40 ÷ 27 weeks (the arrangement period) = $893.42

36.   In considering my determination of this merit review, I have also considered the objects of the Act and in particular sections 1.3(2)(a), 1.3(2)(g), 1.3(4) and 1.3(5) which provide;

(2) For that purpose, the objects of this Act are as follows:
(a)  to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities.

(g)   to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes.

(4) In the interpretation of a provision of this Act or the regulations, a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects.

(5) In the exercise of a discretion conferred by a provision of this Act or the regulations, the person exercising the discretion must do so in the way that would best promote the objects of this Act or of the provision concerned.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
o   The amount of the claimant’s PAWE is $893.42
  • Effective Date: This determination takes effect on 8 August 2018. The Insurer is to pay the claimant the difference between what they have been paid and was entitled to be paid in accordance with the decision above.

Jeanette Woollacott
Merit Reviewer, Dispute Resolution Service