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AFB v QBE Insurance [2019] NSWDRS MR 189

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
Jurisdiction Merit Review Panel
Catchwords Review Panel – PAWE – change in employment circumstances – earned continuously – pre-accident weekly earnings – contract of employment – child care worker – university student – pre-accident earning capacity – post-accident earning capacity – after school care – qualified for role – casual employment – discontinuation of employment
Legislation Cited

Motor Accident Injuries Act 2017 (NSW) ss 1.3(a), 3.6, 3.7, 3.8, 7.15(3), 7.15(4), Div 3.3, Schedule 1 clause 4(2)(a), Schedule 1 clause 4(2)(b), Schedule 1 clause 4(3), Schedule 1 clause 4(4), Schedule 1 clause 6(1)(c) & 6(2)

Motor Accident Injuries Regulation 2017

Motor Accident Guidelines 2017
Case CitedN/A
Text CitedN/A
PartiesAFB – Claimant
QBE Insurance – Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Panel Certificate

Background

1. The single merit review decision determined by Merit Reviewer Davidson dated 15 July 2019 was referred to this Review Panel for determination under section 7.15(3) of the Act.

The Review Panel members confirmed they had no previous involvement with this matter, or with the above injured person. All Review Panel members also confirmed there was no conflict or any other reason that they would be unable to approach this review with an open mind.

2. Review Panel Conference
An initial conference of the Review Panel was held on 1 October 2019. Merit Reviewer Ruschen acted as the Chairperson of the Review Panel. A further conference was held on 20 November 2019 following the provision of further information by the parties.

Merit Review Decision under Panel Review

3. Merit Reviewer Davidson had determined the following:

  • The Claimant’s PAWE is to be calculated under clause 4(2)(b) of Schedule 1 of the Act on the basis the Claimant’s employment circumstances changed such that clause 4(3) applies.
  • Clause 4(2)(b) requires the PAWE to be calculated from ‘when the change of circumstances’ occurred, not from when the Claimant earned continuously.
  • The change of circumstances occurred on 3 December 2018.
  • The relevant period for calculation of the PAWE is therefore 3 December 2018 to 4 March 2019, being 13 weeks.
  • On this basis the Claimant’s PAWE is $221.57 ($2,880.45 divided by 13 weeks = $221.57).

Disputes identified by the Parties

4. The Review Panel considered the Application for Review and all subsequent submissions and noted that the following aspects of the single merit review decision were disputed:

  • That the PAWE is to be calculated under clause 4(2)(b).
  • That the relevant period for calculating the PAWE is 3 December 2018 to 4 March 2019.

5. The Review Panel considered the reply to the Application for Review and all subsequent submissions and noted that:

  • The respondent opposed the application.

Summary of documents considered

6.The Review Panel members confirmed that they had received and considered the following documentation:

  • The single merit review decision issued by Merit Reviewer Davidson on 15 July 2019.
  • Application for review and attached documents.
  • Reply and attached documents.
  • The Statement of Reasons issued by the Proper Officer on 3 September 2019 referring this matter to a Review Panel.
  • All the documents which were provided to Merit Reviewer Davidson prior to the assessment under review.
  • A letter from the Claimant dated 23 October 2019 and the additional documents attached.
  • Additional submissions from the Insurer dated 30 October 2019.

Legislation and Guidelines

7. In making our decision the Review Panel has considered the following legislation and guidelines:

  • Motor Accident Injuries Act 2017 (the Act)
  • Motor Accident Injuries Regulation 2017
  • The Motor Accident Guidelines 2017 (the Guidelines)

Reasons

Matters Considered and Decided by the Review Panel

8. The Review Panel considered afresh all aspects of the decision under review.

A. Evidence Considered

9. The Review Panel determined that the evidence available to Merit Reviewer Davidson was incomplete to the extent the Claimant’s contract of employment (evidencing the terms and conditions of his employment) was not available and the reasons for which the Claimant did not work during the period 8 December 2018 to 28 January 2019 were unclear.

10. The Review Panel requested additional information and any further submissions from the Claimant. The Claimant provided additional material under cover of a letter from his solicitor dated 23 October 2019. The Insurer was provided with an opportunity to provide any further material or submissions in reply and provided further submissions dated 30 October 2019.

11. The Review Panel considered all of the available evidence including the parties’ additional
material.

B. Panel Deliberations

Background

12. The Claimant was injured in a motor vehicle accident on 4 March 2019.

13. There is a dispute between the Claimant and the Insurer about the amount of weekly payments of statutory benefits payable under division 3.3 of the Act. The specific dispute relates to calculation of the Claimant’s pre-accident weekly earnings (PAWE) under Schedule 1 of the Act.

14. From 28 February 2018 to 28 November 2018 the Claimant was employed on a casual basis with ABC Child Care Crew (ABC). From 3 December 2018 he changed employers to XXXX After School Care Program Incorporated (XXXX) pursuant to a contract of casual employment. He remained in that employment as at the date of the accident, 4 March 2019.

15. The Insurer accepts the Claimant’s change of employment on 3 December 2019 amounts to a change in circumstances such that clause 4(3) of Schedule 1 of the Act is triggered. On this basis the Insurer assessed the Claimant’s PAWE at $221.57 under clause 4(2)() of Schedule 1. This calculation was subsequently affirmed by the Insurer’s internal review.

16. The Claimant requested a merit review and on 15 July 2019, Merit Reviewer Davidson issued his certificate, affirming the reviewable decision.

Submissions

17. The Claimant has made various alternative submissions as to how his PAWE should be calculated under Schedule 1 of the Act.

18. The Review Panel requested submissions from the Claimant in an attempt to clarify which clause under Schedule 1 the Claimant relies upon for calculation of his PAWE.

19. The Claimant’s letter of 23 October 2019 contains submissions on this issue as follows:

  • The Claimant’s primary position is his PAWE should be assessed under clause 4(2)(a) of Schedule 1 on the basis he had not been earning continuously for at least 12 months prior to the accident and only began earning continuously from 28 January 2019. As such, the Claimant says his PAWE should be his average weekly earnings during the period 28 January 2019 to the date of the accident on 4 March 2019. This would produce a PAWE of $464.41.
  • In the alternative, the Claimant submits clause 6(1)(c) of schedule 1 applies as the Claimant was “employed under a contract of service under which he or she was expressly required to undergo any training, instruction or examination for the purpose of becoming qualified for the occupation to which the contract of service related”. The Claimant relies on his application to XXXX dated 19 November 2018 as evidence of such arrangement and submits this would produce a PAWE of $575.48 under clause 6(2).

20. The Insurer maintains their position the PAWE should be $211.57 under clause 4(2)(b) and further submits the parties have already accepted clause 4(3) of Schedule 1 applies on the basis the Claimant’s employment with XXXX amounts to a change in circumstances (the Claimant’s latest submissions do not make any submission in relation to clause 4(3)).

21. The Insurer submits:

  • If clause 4(3) applies the Claimant’s PAWE is to be assessed pursuant to clause 4(2)(b).
  • For the purposes of clause 4(2)(b) the relevant date is the date on which the change occurred (i.e. 3 December 2018) and not the date from when the Claimant “earned continuously”.
  • Even if the relevant date for the purpose of clause 4(2)(b) is the date from when the Claimant earned continuously that date is also 3 December 2018 due to the casual nature of the Claimant’s employment.

22. The Insurer highlights that XXXX is a before and after school care service and as a result the school holiday period would inevitably reduce the need for staff. The Insurer notes there is no clause within the Claimant’s contract which indicates his employment would be “discontinued” if he were not assigned shifts.

23. In response to the Claimant’s alternative submission under clause 6((1)(c) and 6(2) the Insurer submits the Claimant’s contract of employment does not indicate there is any express requirement to undergo training, instruction or examination in order to hold the position within the place of employment. The Insurer submits the Claimant’s acknowledgment in the contract that he held the qualifications and skills he represented himself as having does not amount to a requirement of the employer that the Claimant hold such qualifications in order to hold the position with XXXX.

24. The Insurer points to the Children Services Award 2010, which is applicable to the Claimant’s contract of employment and which stipulates an employee is capable of working as a children services employee with no qualifications as a level 1, level 2, level 3, level 4A, level 5A and level 6A children services employee.

25. Lastly, the Insurer is of the view the Claimant’s entire work schedule has not been produced and that the Claimant is only produced his work schedule for 3 to 14 December 2018 and from 29 January 2019 to 8 February 2019. The Insurer requests the balance of the roster be produced (presumably meaning for the period 15 December 2018 to 28 January 2019).

Consideration

Clause 6(1)(c) and 6(2)

26.Clause 6 provides:

(1) This clause applies if, at the time an earner was injured in a motor accident, he or she was:
(a) under the age of 21 years, or
(b) an apprentice, or
(c) employed under a contract of service under which he or she was expressly required to undergo any training, instruction or examination for the purpose of becoming qualified for the occupation to which the contract of service related,

and, under the terms of his or her employment, he or she was entitled to increments in earnings as the employment continued.

(2) In respect of any week after the motor accident in which the earner is entitled to a weekly payment under Division 3.3 the calculation of which depends on the amount of the earner's pre-accident weekly earnings, the payment is to be calculated on the basis that the earner's pre-accident weekly earnings are the weekly earnings that it is likely that he or she would have been entitled to in that week had the accident not occurred and had he or she continued in the employment.

27. At the time of the merit review the Claimant had failed to provide any evidence that his university degree was an express requirement of employment with XXXX. The Claimant now relies on his application to XXXX dated 19 November 2018. This is in the form of an email of that date at 11:30 pm which states:

“Dear J,

I am writing to you to introduce myself. My name is AFB and I am a fifth-year student at XXX University majoring in a double degree of Bachelor of Primary Education and Bachelor of Arts.

Please find the attached file for my CV.

If you have any further questions, please do not hesitate to contact me.

Kind regards
AFB”

28. There is nothing in this application email to support a finding consistent with clause 6(1)(c) that the Claimant’s ongoing university studies were an express requirement of XXXX for the occupation to which the Claimant was employed under a contract of service. The above is simply a representation by the Claimant that at the time of his application he was a fifth-year student studying a Bachelor of Primary Education and a Bachelor of Arts. The document does not evidence any requirement of XXXX for the Claimant to be undertaking those degrees.

29. Whilst clause 2.3 of the contract of employment with XXXX contains an acknowledgement by the Claimant that he agrees he holds the qualifications and has the skills as represented by him to XXXX the Review Panel does not accept this amounts to a requirement by XXXX that the Claimant must be undertaking and continue to undertake any particular course of study to “become qualified” for the role with XXXX.

30. Clause 6(1)(c) requires something more. The fact of prior training or qualifications at the time the Claimant makes his application for employment (or is offered a contract of employment) is not sufficient in itself to trigger clause 6(1)(c). Rather, it is the employer’s requirement that the employee undertake further training, instruction or examination during the course of employment in order to become qualified “in the occupation to which the contract for service relates” that triggers clause 6(1)(c).

31. In addition, it must also be a term of the Claimant’s contract of employment that the Claimant “be entitled to increments in earnings as the employment continued”. An example might be an apprenticeship or trainee employment arrangement where the employee undertakes TAFE studies in addition to their employment in order to ultimately become qualified in their chosen occupation and as the employee progresses with their training or studies their wages in the related employment increase incrementally to account for the progress in study or training.

32. Neither the application email or the contract of employment make any provision for the Claimant to undergo training, instruction or examination during the course of his employment with XXXX in order “to become qualified for the occupation”. It is clear that in employing the Claimant, XXXX considered him to already be ‘qualified’ for the role at the time it was offered to him. Further, there is no provision in the contract of employment for the Claimant to be entitled to increments in earnings as the employment continued, which is a mandatory condition of 6(1)(c). Accordingly, clause 6(1)(c) and 6(2) do not apply.

Clause 4(2)(a)

33. The Insurer argues that if the applicable clause is 4(2)(a) then the date from which the Claimant’s PAWE should be assessed is the date upon which he first commenced employment with XXXX being 3 December 2018.

34. The Claimant asserts because he did not work between 15 December 2018 and 29 January 2019 he did not “earn continuously” until he began to work again on 29 January 2019. The Claimant says his PAWE should therefore be calculated from that date until the day of the accident.

35. Clause 4(2)(a) provides that:

(2) In the following cases,
"pre-accident weekly earnings" , in relation to an earner 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,

36. Clause 4(4) provides a definition for earning “continuously” as follows:

For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that on the day of the motor accident was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.

37. There appears to be no dispute that the Claimant was not a permanent employee and it is clear from the contract of employment he was not. The question is whether the Claimant earned continuously “from a source that on the day of the motor accident was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day”.

38. The Claimant’s submissions in relation to “continuously” do not appear to have regard to the definition of “continuously” found in clause 4(4) of Schedule 1 of the Act. Clause 4(4) clearly requires an assessment of the basis on which earnings were being provided rather than simply identifying a period when wages were paid from the same source, without any interruption, as the Claimant has done.

39. The Claimant’s contract of employment with XXXX usefully sets out the basis upon which the earnings were being provided as at the date of the accident, as follows:

  • That the Claimant’s employment commences on 29 November 2018 (clause 2.1 of the contract and Item 4 of the Schedule to the contract).
  • That the Claimant is employed on a casual basis (clauses 3.1 and 8.2 of the contract).
  • That the Claimant is required to perform the hours of work allocated by the Employer from time to time (clause 8.2 of the contract).
  • That the Claimant will be given reasonable notice of when he is required to work (clause 8.3 of the contract).
  • That the Employer does not guarantee to provide the Claimant with a minimum or maximum amount of work (clause 8.3 of the contract).
  • That the Claimant is not entitled to paid personal leave or paid annual leave due to his “casual employment status” and receives the casual loading in lieu of these entitlements (clauses 9.2, 10 and 12 of the contract).
  • That as a causal employee, any absences from work on a public holiday will be unpaid (clause 14 of the contract).
  • That the contract of employment may be terminated by either party by providing one hour’s verbal or written notice or one hour’s pay in lieu of notice (clause 18.1).

40. The Review Panel considers the above terms of the contract of employment form the “basis on which the earnings were being provided” for the purpose of clause 4(4) and in turn, clause 4(2)(a). That is to say, the earnings were being provided on the basis the Claimant’s employment status was casual, there was no guarantee of work and all absences from employment would be unpaid, regardless of the reason for the absence (e.g. sick leave, annual leave, shifts being reduced or because XXXX temporarily closed on public holidays or during school holidays).

41. The fact the Claimant goes unpaid for any absences from work does not mean he ceases to earn “continuously” for the purpose of the Act. Rather, clause 4(4) suggests the opposite where this is the basis upon which the earnings are provided: that there is no guarantee of work and absences are unpaid.

42. The Claimant’s letter of 23 October 2019 acknowledges he did not attend work between 8 December 2018 and 27 January 2019 because XXXX “had not assigned any shifts for him as he was on a casual contract” and the Claimant “received nil income in this period”. This is because that was the basis upon which the earnings were being provided and not because the Claimant ceased earning “continuously”.

43. The Claimant’s argument that his “employment was discontinued” because he “was not offered or assigned any shifts from 8 December 2018 and 28 January 2019” is inconsistent with his earlier acknowledgment in the same document that he was “not assigned any shifts ... as he was on a casual contract”. The contract prescribes the circumstances in which the Claimant’s employment might be terminated (on one hour’s notice), but it was not terminated by either party prior to or at any time in the period 8 December 2018 to 28 January 2019.

44. If the Claimant’s argument were accepted it would mean that in any given week where the Claimant is not offered any shifts his employment is “discontinued”. This could produce multiple discontinuances, every time an employer fails to offer shifts to a casual employee. The Review Panel doubts the intention of clause 4(3)(a) is to permit casual employees to choose a period among multiple “discontinuances” in a 12-month pre-accident period so as to maximise their PAWE (by choosing the most favourable period). This would be against the object of the Act in section 1.3(a) to maximise an injured person’s return to work or other activities as it would disincentivise a person in such position from returning to work as statutory benefits would be more than a casual earner might otherwise earn.

45. In any event, it is clearly not the intention of the claimant’s contract of employment that his employment be discontinued at any time when shifts are not made available to him. The document at page 20 of 27 of the Claimant’s 23 October 2019 material indicates the parties intended and understood the claimant’s employment was continuing between 8 December 2018 and 28 January 2019 and that allocation of shifts would resume after the Christmas holidays. This document is a communication from XXXX sending the roster for the period Monday 28 January 2019 to Friday 8 February 2019 to the Claimant and 7 other recipients (presumably the other casual employees) on 16 January 2019, during the period the Claimant asserts his employment had been “discontinued”. The inclusion of the Claimant as a recipient of this communication (and on the roster) is inconsistent with there having been a discontinuance of employment which implies something has permanently come to an end.

46. Further, this communication states:

“Hey Guys,

Hope you all had a good holidays and a happy new year!! Here is the roster for the first two weeks
back, can’t wait to see you all [emphasis added].

X”

47. It seems clear from this communication that XXXX was closed during the Christmas school holiday period and the roster is being sent in readiness for when XXXX re-opens for business after the holidays. Of note, XXXX represents itself (through its name) as providing before and after school care, not vacation care. Further, the XXXX East Public School website states the Claimant’s employer’s hours of operation are “School Terms only” and that XXXX is “Closed: Public Holidays, School Holidays, Staff Development days and Teachers Strike days”.

48. The above (particularly the “first two weeks back” communication) indicates the Claimant was effectively on leave during the school holiday closure period and consistent with the terms of his contract of employment (which remained on foot), this leave (or “holidays”) was unpaid.

49. The Insurer seeks production of rosters during the period 8 December 2018 to 28 January 2019 but the Review Panel considers it unlikely that these exist having regard to the XXXX “first two weeks back” communication which indicates XXXX was closed during this period.

50. The definition of earning “continuously” clearly extends to casual employment and in doing so takes into account the different basis upon which casual employees earn as opposed to permanent employees. By its very nature, casual employment may involve inconsistent earnings from week to week and in some weeks, no pay. It does not mean that on each occasion there is no pay there is a “discontinuance” of the contract of employment. Rather, the Claimant commenced earning on “the same, or a similar basis” from the date on which his employment commenced with XXXX pursuant to a contract of employment which provides there will be no wages for any periods of absence, whether the absence is by reason of illness, holidays or a lack of available shifts. That same basis “was likely to continue for a period of at least 6 months” in that the Claimant would likely have had further unpaid absences from work after the date of the accident by reason of, for example, the then upcoming Autumn, Winter or Spring school vacation periods.

51. Accordingly, the relevant period for clause 4(2)(a) of Schedule 1 of the Act is 3 December 2018 to 4 March 2019 as the claimant commenced earning continuously (for the purpose of Clause 4(3) of Schedule 1) upon commencing employment with XXXX on 3 December 2018.

52. To the extent at some future date the Claimant might have transitioned to permanent employment thereby enjoying a higher or more stable income, this is accommodated by section 3.8 of the Act. Unlike sections 3.6 and 3.7 (for the first and second entitlement periods) which assess statutory weekly benefits based on the PAWE, section 3.8 assesses statutory benefits based on the difference between the person’s pre-accident earning capacity and the person’s post-accident earning capacity rather than the difference between pre-accident earnings and post-accident capacity.

53. The Review Panel observes that prior to commencing with XXXX the claimant had worked in similar casual employment with YYY since 28 February 2018. Although the contract with ABC is not available, if the claimant’s employment with ABC was on a similar basis then arguably he had been earning continuously for at least 12 months in which case clause 4(2)(a) would not apply and the claimant’s PAWE would be assessed under clause 4(1), unless clause 4(3) and in turn clause 4(2)(b) applies.

54. If the claimant’s PAWE were calculated under clause 4(1) of Schedule 1 of the Act it would be $171.14 calculated as follows (being the weekly average of the claimant’s gross earnings during the 12 months immediately before the day of the accident):

Earnings from YYY 7 March 2018 to 28 November 2018 $5,896.69
Plus earnings from XXXX 28 November 2018 to 10 March 2019 $3,002.45
TOTAL $8,899.14
$8,899.14 divided by 52 weeks = $171.14  

55. The Insurer concedes, however, that there is a change of circumstances under clause 4(3), which triggers clause 4(2)(b) as the relevant clause for assessment of the PAWE. In the alternative, the Insurer is prepared to accept the Claimant did not start to earn continuously until he commenced employment with XXXX. In these circumstances, the Review Panel considers it appropriate to proceed on that basis and for the PAWE to be assessed under clause 4(2)(a) (pursuant to our decision above that the relevant period commences 3 December 2019) or 4(2)(b) in the alternative, based on a change in earning circumstances (discussed below).

Clause 4(2)(b)

56. The Review Panel considers clause 4(2)(b) may be applied, in the alternative. It is clear each of clause 4(2)(a) to (c) are alternatives, and the PAWE must be assessed under only one of those alternatives. If the Claimant’s particular circumstances fall within more than one of the four alternatives then the Review Panel considers it open to the Claimant to elect which alternative his PAWE should be assessed under.

57. In this case, it appears the Claimant has elected clause 4(2)(a) by reason of the fact his most recent submissions are silent in relation to clause 4(2)(b). In any event, if the Claimant’s PAWE is assessed under clause 4(2)(b) in the alternative, the relevant date must be the date on which the Claimant commenced employment with XXXX as the relevant period is clearly expressed in this clause as the date on which “the change of circumstance… occurred to immediately before the day of the motor accident”.

58. There is no requirement to analyse when the Claimant commenced earning “continuously” under clause 4(2)(b) but even if that were the case, the Review Panel would find the relevant commencement date to be the same, that is 3 December 2018 having regard to the above reasoning in relation to “earning continuously” for the purpose of clause 4(2)(a).

59. Regardless of whether the PAWE is assessed under clause 4(2)(a) or 4(2)(b) it produces the same result of $221.57 ($2,880.45 divided by 13 weeks being the period 3 December 2018 to 4 March 2019).

Panel Decision

In conclusion the Merit Review Panel finds that the PAWE is to be calculated under clause 4(2)(a) or in the alternative, under 4(2)(b) and that for the purpose of either calculation the relevant period is 3 December 2018 to 4 March 2019 (13 weeks).

On this basis the Merit Review Panel considers that Merit Reviewer Davidson’s determination that the Claimant’s PAWE is to be calculated as follows is correct:

$2,880.45 divided by 13 weeks = $221.57

Review Panel Certification

This certificate has been viewed by Merit Reviewer Elyse White who has confirmed that they are in agreement.

Katherine Ruschen Merit Reviewer
Dispute Resolution Service