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AEX v GIO [2019] NSWDRS MR 127

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsPre-accident weekly earnings – PAWE – weekly payments of statutory benefits – second entitlement period – motor vehicle accident – domestic helper – earner – change in earning circumstances – charter vessel employment – expected earnings – peak season
Legislation cited                    Motor Accidents Injury Act (NSW) s 3.6, 3.7, 7.13(4), Schedule 1 clause 2(a)(i), 2(b)(i), 4(2)(a), 4(2)(a1), 4(2)(c), 4(3)
Motor Accident Guidelines effective 13 July 2018 s 4.41, 4.59, 4.60, 4.61, 7.12(1)
Motor Accident Injuries Regulation 2017
Cases cited

N/A

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

Merit Review Certificate

Merit Reviewer's Reasons for Determination

Background

1.  There is a dispute between the claimant and the insurer with respect to calculation of pre-accident weekly earnings ("PAWE") for the purpose of weekly benefits under section 3.7 of the Act for the second entitlement period.

2.  The claimant was in a motor vehicle accident ("MVA") on 3 November 2018 and suffered a left shoulder dislocation with a fracture of the greater tuberosity and multiple fractures to the wrist. At the time of the MVA the claimant had been working as a part-time domestic helper. She had also recently arranged casual employment as a waitress for a charter vessel company but had not commenced that employment or received any earnings from it, prior to the MVA.

3.  On 21 December 2018 the insurer assessed the claimant's PAWE as $504.87. After an internal review on 14 February 2019 it was agreed between the parties for the purpose of the first entitlement period under section 3.6 of the Act, the PAWE is $1,384.45.

4.  However, there is a dispute regarding calculation of the PAWE for the second entitlement period. The insurer determined the PAWE is $1,298.89 for part of the second entitlement period (4 to 28 February 2019) and $301.39 for the balance of the second entitlement period (from 1 March 2019). The reasoning is the claimant's anticipated employment with the charter vessel company would have fluctuated.

5.  The PAWE dispute for the purpose of the second entitlement period was the subject of a second internal review. On 8 May 2019 the insurer confirmed the outcome of its first review. The claimant disputes the PAWE for the second entitlement period and asserts there can be only one PAWE for all entitlement periods, which should be $1,384.45.

Documents and Information

6.  I have considered the documents provided in the application and the reply.

Submissions

7.  The claimant submits given she had been working continuously as a domestic helper and was about to start work with a charter vessel company, her PAWE should be calculated under Schedule 1, clause 4(2)(a1) of the Act. It is submitted pursuant to these provisions the claimant could reasonably have been expected to have earned $1,384.45 per week after the accident. The claimant further submits the Act does not permit the PAWE to be adjusted to factor in future implications of the claimant's employment where the work may have varied in the future.

8.  The insurer relies on the findings of its internal reviews, which are also based on clause 4(2)(a1). The insurer observes it requested further evidence in relation to the claimant's anticipated earnings and reserved rights to make further submissions, if that information were provided by the claimant. I am satisfied the insurer made reasonable attempts to obtain the further information and gave the claimant a reasonable opportunity to provide it. The claimant is represented by a solicitor. She did not provide any further information.

Legislation

9.  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

The claimant's earnings as a domestic helper

10.   Both parties say clause 4(2)(a1) of Schedule 1 applies for the purpose of the claimant's PAWE, which provides "pre-accident weekly earnings" means:

"if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period--the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period".

11.  However, there is no evidence the claimant was employed for a period equal to at least 26 weeks during the first year of the pre-accident period, being the period of 2 years immediately preceding the MVA (clause 4(2A)). The available evidence is of a period of employment from 22 June 2018 until the accident. That period (22 June 2018 to 3 November 2018) is only 19 weeks, which falls below the 26-week threshold in clause 4(2)(a1). It also falls in the second year of the "pre-accident period", not the first year, as required by 4(2)(a1).

12.  As such, I find clause 4(2)(a1) of Schedule 1 does not apply to the claimant.

13.  Instead, Schedule 1, clause 4(2)(a) is triggered in respect of the claimant's earner status as a domestic helper. Clause 4(2)(a) provides:

"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".

14.  The available information suggests on the day of the MVA the claimant had been earning continuously (since 22 June 2018), but had not been earning continuously for at least 12 months. During the period 22 June 2018 to the MVA on 3 November 2018 the documents show the claimant earned $2,712.50 gross as a domestic helper. As noted above, this is a 19-week period. Accordingly, the claimant's PAWE would be $142.76 ($2,712.50 divided by 19 weeks) not $301.39, as calculated by the insurer.

15.  The insurer's calculation is also incorrect under clause 4(2)(a1) (if it were to apply - I have found it does not). Under 4(2)(a1) the claimant's earnings between 22 June 2018 and 3 November 2018 must be averaged out over a 12-month period. This would give a PAWE of $52.16 per week ($2,712.50 divided by 52 weeks).

16.  I find the claimant's PAWE pursuant to clause 4(2)(a) is $142.76, subject to the discussion below.

The claimant's change in earning circumstances

17.   The claimant arranged casual employment as a waitress on charter vessels but had not commenced this employment or received any earnings from it prior to the date of the MVA.

18.  Clause 4(3) of Schedule 1 provides:

"This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred".

19.   The charter vessel employment is a change in earnings circumstances that potentially resulted in the claimant becoming entitled to earn more on a weekly basis than she was earning before this change, so clause 4(3) arises for consideration. If clause 4(3) applies, the PAWE is calculated under clause 4(2)(b), which provides:

"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 circumstance referred to in that subclause occurred to immediately before the day of the motor accident".

20.  Clause 4(2)(b) requires the PAWE to be calculated on the weekly average of gross earnings "received by the earner during the period from when the change of circumstance ... occurred to immediately before the day of the motor accident" [my emphasis].

21.  Under clause 4(2)(b) the PAWE includes the claimant's domestic helper earnings (i.e. 4(2)(a) no longer applies as the PAWE now comes under 4(2)(b)) and any earnings "received" as a charter vessel waitress. The ordinary meaning of the words in clause 4(2)(b) require that earnings must be "received" by the earner "immediately before the day of the motor accident"  The claimant had not "received" any charter vessel earnings immediately before the day of the MVA.

22.  I find whilst clause 4(2)(b) and (3) prima facie apply, the claimant's PAWE would be the same as the calculation under clause 4(2)(a) (i.e. $142.76) as the claimant had not yet received any earnings from the change in circumstances that could be included in calculating the PAWE.

Arrangement for work

23.  The claimant is an "earner" pursuant to clause 2(a)(i) of Schedule 1 by reason of her employment as a domestic helper.

24.  In the alternative, clause 2(b)(i) provides a person is an earner if the person:

"before the motor accident, had entered into an arrangement ... with an employer or other person to undertake employment ... at a particular time and place".

25.   If she were not an earner under 2(a)(i), the claimant would be an "earner" under 2(b)(i) by reason of her arrangement to undertake work with the charter vessel company.

26.  The language of clause 2 of schedule 1 is each "earner" scenario is expressed as an alternative by the word "or". Accordingly, clause 2(b)(i) is an alternative to clause 2(a)(i). The claimant cannot be an earner under both. I do not think the intention of the Act is for a person to claim as an "earner" on multiple basis. The language of clause 4(2) is also such that only one of the alternative sub-subclauses (a) to (c) can apply because each sub-subclause is prefaced with "if" there is a certain situation then the PAWE (of which there is only one) is to be calculated in a particular way. For example, if there is a change in earnings circumstances which triggers subclause (3) then an injured person's PAWE is no longer assessed under 4(2)(a) or (al) but the whole of their PAWE is assessed under 4(2)(b). It is not assessed, for example, under both 4(2)(a) and 4(2)(b) as this potentially result s in double dipping.

27.  I agree with the claimant there can be only one PAWE but further this also means 2 or more sub­ subclauses under subclause 4(2) cannot be combined to calculate the PAWE. However, I think it is open to the claimant to elect whether she wants to be assessed as an earner pursuant to:

a.   Clause 2(a)(i) in which case her PAWE is assessed under 4(2)(a) based on domestic helper earnings only or in the alternative, under 4(2)(b) to account for the change in earnings circumstances arising from the intended charter vessel work (as no earnings were "received" from that work the PAWE under 4(2)(a) or 4(2)(b) is the same at $142.76); or

b.  Clause 2(b)(i) in which case her PAWE is assessed under 4(2)(c) and would not include her earnings as a domestic helper (see further below).

28.   Clause 4(2)(c) provides:

"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" [my emphasis].

29.  Clause 4(2)(c) clearly states the PAWE only takes into account expected earnings "under that arrangement" being the arrangement with a particular employer for future employment pursuant to which the claimant is an "earner" under clause 2(b)(i). This restriction means there is no scope to include the claimant's earnings as a domestic helper as part of her PAWE under 4(2)(c). If other earnings could be included, clause 4(2)(c) would be inconsistent with the operation of clause 4(2)(b) and (3) which allow both to be included, provided earnings had in fact been received from the new employment prior to the motor accident. This inconsistency is another reason I am of the view only one of 4(2)(a), (al), (b) or (c) can be applied. I do not think the intention of the act is to allow a claimant who does not meet the criteria of 4(2)(b) and (3) to be assessed instead under both 4(2)(a) and 4(2)(c) and to be able to combine those calculations for their PAWE.

30.  Clause 2(b)(i) and 4(2)(c) clearly intend to account for persons who were not earners at the time of the accident but were about to become earners through a prior arrangement. It is not intended to cover a person who is already an earner prior to the accident but their earning circumstances had recently changed. As noted, that scenario falls under clause 4(2)(b) and (3).

31.  Clause 4(2)(c) does not specify the period over which expected earnings are to be averaged but does say it must be the "average weekly earnings". The alternatives (a), (a1) and (b) operate as an average over a particular period, regardless of whether that period includes any weeks were there were no earnings. Such weeks cannot be removed to produce a higher average.

32.  Having regard to the intention of the Act the way in which the PAWE is calculated under other sub-subsections of clause 4(2) and my duty to decide what is the correct and preferable decision, I am of the view the intention of the Act is that expected earnings under clause 4(2)(c)  should be averaged over a 12-month period.

33.  It is clear the amount the claimant could reasonably have been expected to earn with the charter vessel  company would have varied and depend greatly on availability of work. A letter from the intended employer dated 15 February 2019 suggests they intended to offer "ongoing" work to the claimant. The letter does not make clear whether "ongoing" is a reference to future charter seasons, continuing work throughout the year or at least one shift per week. The letter is in the form of a reference and I consider it has little weight/offers little assistance on the matters I must decide. Even if "ongoing" is a reference to continuous work, the hours available to the claimant would still vary with the seasons and other variables

34.  The letter offering employment and a letter from the intended employer to SIRA dated 12 November 2018 make clear:

a.  The employment will be "on a casual, as required" basis and there is "no guarantee of ongoing or regular work".

b.  Each occasion on which the claimant worked would be a "separate contract of employment which ceases at the end of that engagement".

c.  The industry "is seasonal with the peak season being from early November to late February".

d.  The claimant could expect at least 35 hours per week during the peak charter season.

e.  The work was for the "chart er season", although the precise period is unspecified/unclear.

f.  The pay rate is $28.50 per hour and $55 per hour for public holidays. There are 4 public holidays during the peak charter season.

35.   Clause 4(2)(c) requires an assessment of what the claimant "could reasonably have been expected to earn". Having regard to the circumstances of the intended employment outlined above I do not accept the claimant could reasonably have expected to earn $997.50 per week, every week for 12 months (35 hours/week x $28.50/hour), as she may have expected to earn during peak season. Even in peak season, "reasonable" expectations should consider casual work may not be available regularly for many reasons, includin g adverse weather events (which would obviously impact this indust ry ), personal illness, time off for holidays (unpaid as a casual worker), unavailability of work (e.g. due to limited or no charter bookings), competition for the work in off-peak season when less sta ff are required and/or the claimant's own unavailability. For this reason, I do not propose to adjust the amount the claimant may have expected to earn for the peak season upwards to include penalty rates for the 4 peak season public holidays. I consider exclud in g this fairly balances out " reason able" expectations during peak season.

36.  Allowing 16 weeks (early November to late February) for the "peak season" at $997.50 per week the claimant could have expected to earn $15,960. Thereafter, I do not think she "could reasonably" expect to earn more than 30% to 40% of peak season weekly earnings at best and perhaps less, given the nature of the charter vessel industry and the clear terms of the employment offer. I propose to allow off-peak earnings at 40% of the peak season expected weekly earnings. This is 14 hours per week and consistent with a likelihood off-season work is mostly only available on weekends. This produces a weekly figure of $399 (14 hours x $28.50/hour) and totals $14,364 for the remaining 36-weeks of a 12-month period, bringing total expected earnings to $30,324 ($15,960 + $14,364) for a projected 12-month period. The PAWE is therefore $583.15 ($30,324 divided by 52 weeks). As noted above, the wording of clause 4(2)(c) does not allow the average earnings as a domestic helper to be added to this.

37.  As I have found the claimant can elect the basis upon which she says she is an "earner" it can be assumed she would elect to be an earner under clause 2(b)(i) and have her PAWE calculated under 4(2)(c) given this PAWE is higher than the PAWE under 2(a)(i) and 4(2)(a). I therefore find the correct and preferable decision is the claimant's PAWE is $583.15.

38.  The question of whether I should substitute my finding the PAWE is $583.15 for the insurer's decision for all entitlement periods arises. I must deal with this matter in the way that best supports the objects of the Act, given the facts and circumstances of the particular claim and the particular merit review. I am not bound by rules of evidence or technicalities. I am to decide what is the correct and preferable decision having regard to the material before me. I consider this includes determining what is just and fair in all the circumstances.

39.  The parties agree the PAWE for the first entitlement period is $1,384.45 and the claimant does not seek a merit review of that aspect of the insurer's internal review. In these circumstances, I do not consider it would be fair for me to interfere with that position by reducing the PAWE to $583.15 for all entitlement periods, including the first.

40.  Whilst the Act only allows one PAWE, there is an agreement in respect of the first entitlement period. The only dispute before me is the insurer's calculation of the PAWE for the second entitlement period . I therefore consider the correct and preferable decision having regard to all circumstances is the PAWE should be $583.15 for the purpose of calculating weekly benefits for the second entitlement period pursuant to section 3.7 of the Act but that the agreement in relation to the first entitlement period under section 3.6 of the Act should not be disturbed.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is varied as follows:
o   In respect of the whole of the second entitlement period the claimant's entitlement to weekly benefits under section 3.7 of the Act is to be calculated under that section based on a PAWE of $58 3.15.
  • Effective Date: This determination takes effect on 8 July 2019.

Katherine Ruschen

Merit Reviewer, Dispute Resolution Service