Findings on review
1. The following are the findings of the Authority and are to be the basis of the Insurer’s review decision.
2. The Worker’s pre-injury average weekly earnings (PIAWE) are $1,025.86.
Recommendation based on findings
3. The Insurer is to calculate the Worker’s entitlement to weekly payments of compensation from October 2017 in accordance with my findings set out above.
4. The above recommendation is binding on the Insurer in accordance with section 44BB(3)(g) of the Workers Compensation Act 1987 (the 1987 Act)
5. The Worker injured their right elbow and left shoulder in the course of their pre-injury employment with the pre-injury employer. The accepted date of injury is November 2016.
6. In October 2017, the previous insurer in this matter made a work capacity decision and determined the Worker’s PIAWE. The insurer determined that the Worker’s PIAWE was $968.33. The Worker was advised of the outcome of the decision in a letter dated the day of the decision.
7. The current Insurer conducted an internal review and determined that the Worker’s PIAWE was $875.65. The Worker was notified of the outcome of the review in a letter dated July 2018.
8. The Authority received the application for merit review in August 2018. The application has been accepted.
9. The legislative framework governing work capacity decisions and reviews is contained in the:
- Workers Compensation Act 1987 (the 1987 Act);
- Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act);
- Workers Compensation Regulation 2016 (the Regulation);
10. Section 43 of the 1987 Act describes a “work capacity decision”.
11. Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.
12. I have considered all of the information that was provided by the parties in relation to the Worker’s application for merit review.
13. In the application for merit review, the Worker has requested a review of the following work capacity decisions of the Insurer:
14. The Worker’s submissions in support of their application for merit review are summarised as follows:
- The relevant period is from November 2015 to November 2016.
- They commenced employment with the pre-injury employer on or about August 2016. The relevant period with the pre-injury employer is therefore August to November 2016.
- They were employed for their other employer for the whole of the relevant period.
- Between October and November 2016, they were on unpaid leave as they underwent surgery.
- Unpaid leave should be excluded from any calculation of their PIAWE. This means that the relevant period with pre-injury employer is 10 weeks and the relevant period with the other employer is 50 weeks.
- Their rate of pay with pre-injury employer is $30.09 per hour.
- Their rate of pay with the other employer varied over the course of the relevant period as follows:
Number of weeks
x.11.15 – x.12.15
x.12.15 – x.7.16
x.7.16 – x.11.16
- The initial insurer should have taken their earnings with the pre-injury employer into account and should have used Item 8 of Schedule 3 of the 1987 Act to determine their PIAWE.
- They have attached a schedule A to their application which sets out what they believe their PIAWE should be. This is based on their payslips from both.
- Schedule B sets out their calculation of what their PIAWE post 52 weeks should be.
- The Insurer has correctly identified that their PIAWE should be calculated according to item 8 of schedule 3 of the 1987 Act.
- The Insurer has not included all hours that they worked in the relevant period in their PIAWE.
- The hours should be included however the calculation of their earnings for those hours should be at their base rate of pay with each employer, that is, the overtime component should be removed.
- During the relevant period with the pre-injury employer they worked a total of 58.25 hours. This included 6.25 hours of work on a Sunday during which they were paid double time.
- If Sunday hours are calculated at their base rate of pay, then their total ordinary earnings for the period should be $1,752.74 (58.25 hours x $30.09).
- In regard to their employment with the other employer, the Insurer has not included the additional hours worked in overtime. These hours should be included at their base rate of pay.
- Schedules C and D of the submissions set out their calculation of their earnings with the other employer and pre-injury employer on a fortnightly basis for the relevant period and the hours worked each fortnight respectively.
- The total weeks of employment in the relevant period should be 10 rather than 12.
- Their PIAWE for the first 52 weeks is $1,144.38 subject to indexation if applicable.
- Their PIAWE post 52 weeks is $1,038.17 subject to indexation if applicable.
15. In reply, the Insurer’s submissions may be summarised as follows:
- In November 2016, the Worker suffered an injury to their left shoulder and right elbow during their employment with the pre-injury employer.
- The Worker was employed as a support worker and was also employed by the other employer at the time of their injury.
- The Worker resigned from both the pre-injury employer and the other employer in March 2017.
- The relevant period to the calculation of PIAWE is November 2015 –November 2016.
- PIAWE was originally calculated at $968.33 by the original agent.
- June 2017 PIAWE was calculated at $383.38 and this rate was included in correspondence in June 2017 sent to the Worker.
- As noted above the Worker was employed by two or more employers immediately before their injury and is therefore said to be employed in concurrent employment.
- For situations of concurrent employment, regardless in which employment the injury occurs, the earnings from all employers need to be obtained for consideration in the calculation.
- In this instances schedule 3, item 8 applies.
- Fair work instrument: Social and Community Services Award:
CLAUSE 4.4 CASUAL EMPLOYEES
4.4.1 A casual employee is a person engaged to work either:
(a) for less than an average of 15 hours per week, or
(b) where the employee's ordinary hours vary from week to week; provided that a person employed on a casual basis for an average of fifteen hours or more per week and up to and including 38 hours per week must not be engaged for any continuous period exceeding 13 weeks.
- Note that any employee engaged for an average of 15 hours or more per week for a continuous period exceeding 13 weeks is deemed to be a full-time or part-time employee.
- 6.5.3 Part-time/casual limit:
A part-time or casual employee must not, unless temporarily replacing a full-time employee, work more than 76 ordinary hours in any one fortnight.
1.1.4 Penalty rates
126.96.36.199 An employee working on an afternoon or night shift from Monday to Friday inclusive will be paid an allowance calculated at the rate of 15 per centum of actual hours worked in addition to the ordinary rate as defined in clause 5.1.
188.8.131.52 The additional payments prescribed by this clause do not form part of the employee's ordinary pay for the purposes of this Award.
5.5 Saturday and Sunday work
5.5.1 An employee will be paid for work done during ordinary working hours (i.e. not being overtime) between midnight Friday and midnight Sunday an additional payment calculated at the rate of 50 per centum of the ordinary rate for the actual hours worked.
184.108.40.206 The additional payments prescribed by this clause will not form part of the employee's ordinary pay for the purposes of this Award and will be in substitution for and not cumulative upon the afternoon or night shift penalty prescribed in clause 6.5.4 and 6.5.6 or the broken shift penalty clause in 6.5.13.
- For employment with the pre-injury employer, the information available to complete the calculation was the fair work instrument noted above and a pay history for the period August 2016 – March 2017 was provided. Noting only earnings from periods August 2016 - October 2016 were included as periods outside this are not in the relevant period.
- It was made aware after the determination in July 2018 that in the period October 2016 to November 2016 the Worker was on unpaid leave. It requested from the Worker information as to whether they wished for a further review of their PIAWE and this had not been confirmed.
- For employment with the other employer, the information available to complete the calculation was the fair work instrument noted above and payslips from November 2015 to November 2016.
- The Worker’s weekly earnings are calculated as follows:
pre-injury employer: $1,402.08 (total ordinary earnings) divided by 12 (weeks) = $116.84 the other employer: $37040.20 (total ordinary earnings) divided by 50 (weeks) = $740.81 Total ordinary earnings = $857.65
- Calculation of ordinary earnings expressed as an hourly rate:
$857.65 divided by 30.38 = $28.23 per hour
- As the ordinary hours of work are less than the prescribed number of hours, being 38 hours per week, it is required to calculate PIAWE in accordance with Schedule 3, Item 8 by multiplying the ordinary weekly earnings as an hourly rate by the ordinary hours per week (being 30.38).
30.38 x $28.23 = $857.65 (this figure is subject to indexation)
- Upon further review, it submits that the Worker’s PIAWE should be calculated as follows:
pre-injury employer: $1,257.66 (total ordinary earnings) divided by 10 (weeks) = $125.77
the other employer: $47,226.50 (total ordinary earnings as defined by section 44E) divided by 50 (weeks) = $944.53
Total ordinary earnings = $1061.37 expressed as an hourly rate = $34.94 per hour. PIAWE = $1061.37 (subject to indexation).
Nature of merit review
16. 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.
17. I will then make findings and may make recommendations about the work capacity decision that have been referred for review.
18. The review is not a review of the Insurer’s procedures in making the work capacity decision and/or internal review decision.
19. Employment overview. The Worker has referred the Insurer’s calculation of their PIAWE for review. At the time of their injury, the Worker was employed by two separate employers and was incapacitated for employment for both employers.
20. The Worker is not under the age of 21, they are not an apprentice and according to their contract of employment is not required to undergo further training to become qualified.
21. At the time of their injury, the Worker was employed as a worker in roles with organisations known as the other employer and pre-injury employer. Their work with both employers was governed by the provisions of the Social, Community, Home Care and Disability Services Industry Award (the Award).
22. The letter of offer for employment with the other employer is dated February 2015 and indicates that the Worker was employed on a casual basis and their payslips show that they worked varying number of hours each fortnight ranging from approximately 30 to 75.
23. The Worker’s pre-injury employer completed a “calculating pre-injury average weekly earnings” form. In that form, their employer indicated that they were a casual employee and had worked with that organisation since August 2016. The employer indicated that the Worker worked an agreed number of hours, being 16 hours per week. This statement is not supported by any contract of employment or by the printout from the pre-injury employer payroll system. This document indicated that the Worker’s hours of work varied considerably from week to week and that they were consistently less than 16 on a weekly basis.
24. In calculating the Worker’s PIAWE, I have used their actual earnings and hours of work as provided by pre-injury employer rather than those reported in the “calculating pre-injury average weekly earnings” form.
25. PIAWE. Section 44C(4) of the 1987 Act requires that a worker who is of a class referred to in Column 2 of an item in Schedule 3 is to have their PIAWE determined in accordance with Column 3 of that item.
26. Column 2 of Schedule 3. the Worker does not fall within any of the 3 descriptions set out in item 1 of Schedule 3 of the 1987 Act. They were not; under the age of 21, an apprentice or under a contract of employment that provided for pay increases following successful completion of training.
27. The ordinary hours of work under the Award are 38 per week and the Worker therefore did not work at least the ordinary hours prescribed in the fair work instrument (being the Award). Item 2 of Schedule 3 therefore does not apply.
28. The prescribed number of hours is 38 in accordance with Item 7 of the Regulation, therefore Item 3 of Schedule 3 does not apply to the Worker.
29. As the Worker worked for neither of their employers for at least the ordinary or prescribed hours, they are also not a category of worker described in items 4, 5 or 6.
30. As the Worker was incapacitated to work for both of their employers at the time of their injury, they do not fall under the description at item 7 of Schedule 3 of the 1987 Act.
31. There is no information that suggests that the Worker had been given advice in writing that they had been promoted to a different position and they therefore do not fall within item 9 of Schedule 3 of the 1987 Act.
32. I therefore find that the Worker is a worker of the kind described in Column 2 of Item 8 in Schedule 3 of the 1987 Act.
33. Column 3 of Item 8 of Schedule 3 of the 1987 Act sets out the following method for calculating the PIAWE of a worker who falls within the description under Column 2, as follows:
The worker’s pre-injury average weekly earnings are the worker’s average ordinary earnings expressed as
an amount per hour for all work carried out by the worker for all employers multiplied by:
(a) the prescribed number of hours per week, or
(b) the total of the worker’s ordinary hours per week,
whichever is the lesser.
34. Ordinary earnings. The method for calculating the Worker’s PIAWE requires the determination of their average “ordinary earnings”. “Ordinary earnings” are defined as follows under section 44E(1) of the 1987 Act as follows:
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.
35. The definition of ordinary earnings includes references to the “relevant period” and the worker’s “base rate of pay”. I am required to determine the relevant period for the Worker’s employment prior to their injury and also their base rate of pay was calculated on the basis of ordinary hours worked.
36. Relevant period. The definition of ordinary earnings refers to the “relevant period”. “Relevant period” is defined under section 44D 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.
37. The Worker was employed with the other employer for more than 52 weeks prior to their injury. the Worker was employed with the pre-injury employer from August 2016 and the relevant period in relation to the pre-injury employer is therefore from that date to the date of their injury. For the two weeks prior to their injury from October 2016 the Worker was on unpaid leave.
Base rate of pay. “Base rate of pay” is defined under section 44G(1) of the 1987 Act as follows:
(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 their 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,
(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).
39. The Worker was paid for both of their roles on the basis of the number of hours that they worked and was paid a base rate of pay, to which loadings applied for various shifts, according to the payslips from each of their employers. I therefore find that the Worker’s ordinary earnings are to be calculated in accordance with section 44E(1) of the 1987 Act.
40. I note that loadings are base rate of pay exclusions.
41. The Worker received an allowance for their first aid certificate and reimbursements for travel. The allowance is a monetary allowance and the reimbursement is a separately identifiable amount under section 44G(1)(f) and these amounts are to be excluded from any calculation of base rate of pay.
42. I therefore find that the Worker’s base rate of pay is the amount that they were paid on an hourly basis in each of their roles before loadings and allowances were added. These amounts are set out on the accompanying spreadsheet.
43. Calculation of PIAWE. To arrive at an hourly rate for all of the Worker’s earnings in the relevant period, I have:
- Determined their ordinary earnings by multiplying their base rate of pay for each role, by the hours worked in those roles,
- Added the earnings from each role together to determine the total earnings for the relevant period,
- And divided the total earnings by the total hours worked.
((Base rate of pay x hours for the other employer) + (Base rate of pay x hours for pre-injury employer)) ÷ total hours
= ($44,604.14 + $1,402) ÷ 1,605.2
= $73,406.84 ÷ 1,605.2
45. I find that the Worker’s ordinary earnings, expressed as an hourly rate as required under Item 8 of Schedule 3 of the 1987 Act is $28.66.
46. I am required to multiply this hourly rate by the lesser of:
a) The prescribed number of hours per week, or
b) The total of the Worker’s ordinary hours.
47. Ordinary hours. Section 44H of the 1987 Act sets out the definition of ordinary hours of work as follows:
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, or
48. In their role with both of their employers, the Worker’s employment was governed by the Award. This is a fair work instrument.
49. The Worker’s hours of work varied on a weekly basis with each of their employers. It does not appear that the hours of work were determined in accordance with the Award between the worker and the employer but that they were agreed on a rostered basis that varied from week to week.
50. Accordingly, I find that the Worker’s ordinary hours of work are to be determined in accordance with section 44H(a)(ii) of the 1987 Act.
51. Calculating ordinary hours of work. In calculating the Worker’s ordinary hours of work, I have calculated these separately for each of their employers and have removed from the calculation any weeks in which they did not work and was not on paid leave. The calculations are as follows:
the other employer
=Total hours of work ÷ 50 weeks
=1546.95 ÷ 50 weeks
=Total hours of work ÷ 12 weeks
=58.25 ÷ 12 weeks
52. I therefore calculate the Worker’s combined average weekly hours of employment as follows:
=30.939 + 4.8542
53. The Worker’s ordinary hours of work on a weekly basis are less than the prescribed number of hours in regulation 7 of the Regulation, being 38 hours per week.
54. In accordance with Item 8, of Schedule 3, the Worker’s PIAWE is determined by multiplying their average ordinary earnings expressed as an amount per hour for all employers multiplied by the lesser of the prescribed number of hours and their ordinary hours. In the Worker’s case, the lesser of these is their ordinary hours per week being 35.7931.
I therefore calculate the Worker’s PIAWE as follows:
=Ordinary hours per week x ordinary earnings expressed as an amount per hour
=35.7932 x $28.66
56. I find that the Worker’s PIAWE is $1,025.86.
Merit Review Service
Delegate of the State Insurance Regulatory Authority