Merit review WC075/18

An example of a decision where no recommendations were made to the insurer as the merit reviewer also calculated the worker’s entitlement to weekly payments of compensation to be $0.00

Our Reference: WC075/18
Date of review: September 2018

Finding on review

1. The following finding is made by the State Insurance Regulatory Authority (the Authority) on review.

2. The Worker’s shift allowance payments received for hours worked on Saturday and Sunday during the relevant period are excluded from the calculation of pre-injury average weekly earnings (PIAWE) after 52 weeks of weekly payments.

Recommendations based on findings

3. The Authority may make a binding recommendation to the Insurer based on the findings of this merit review under section 44BB(3)(e) of the Workers Compensation Act 1987 (the 1987 Act).
4. The Authority makes no recommendations for the reasons below.


5.The Worker sustained a right wrist injury in the course of their employment with pre-injury employer.

6.The Insurer accepted liability for the injury and commenced weekly payments of compensation to the Worker.

7. In February 2018, the Insurer made a work capacity decision which determined the Worker's PIAWE to be $1,987.40 for the first 52 weeks of weekly payments. After 52 weeks, their PIAWE would step down to $1,482.81. It was noted that these amounts would be subject to indexation if deemed applicable.

8. At the request of the Worker, the Insurer conducted an internal review in June 2018. The internal review confirmed the Insurer's original decision.

9. The application for merit review was received by the Authority in July 2018. I am satisfied the application was made within 30 days, as is required under section 44BB(3)(a) of the 1987 Act.

Legislation and guidelines

10.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).

11. Section 43 of the 1987 Act describes a "work capacity decision".

12. Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Information considered

13. The information that I have considered in making this decision is the information attached to the application for merit review and the Insurer's reply and any other information that has been supplied by the parties, which I am satisfied has been exchanged between them.


14. In the application for merit review, the Worker submits:

  • After 52 weeks of weekly payments, their PIAWE include a 32.5% shift allowance for Saturday and Sunday work. This is because working Wednesday to Sunday has been their usual (or permanent) shift for the last 11 years and they even receive this allowance when they are on annual leave. Other employees who work Monday to Friday do not receive this shift allowance.
  • Therefore, their post 52 weeks PIAWE should be calculated as $1,482.81 + $385.70 = $1,868.51.

15. In reply, the Insurer submits:

  • PAYG for 2014, 2015 and 2016 along with payslips dated August 2015 and March 2016 provided by the Worker were not used in the calculation of PIAWE as they are not for the relevant period.
  • The calculation of the Worker’s PIAWE is as follows:
Relevant periodx/03/2014- x/03/2015
WeeksOrdinary (52)
OT/Allowances (36)
AverageBase: $1,482.81
OT: $118.90
  • Clauses 26 and 29 of the Fair Work Instrument "Health Professionals and Support Services Award 2010", confirms that work performed on a Saturday, Sunday or shift falls within the category of an allowance.
  • Therefore, the Worker’s shifts are deemed as an allowance for the purposes of PIAWE and are excluded after 52 weeks.
  • The Worker’s PIAWE is $1,987.40 (first 52 weeks) and $1,482.81 (after 52 weeks) in accordance with section 44C of the 1987 Act.


16. "Pre-injury average weekly earnings" is defined by section 44C(1) of the 1987 Act as:

(1) 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).

17. There are various other elements expanding on this definition of PIAWE but it is not necessary that these be discussed in this matter.

18. The payslip information indicates that the Worker was paid ordinary hours of 38 hours per week. On top of the base rate of pay they received for these ordinary hours, they received various overtime and shift allowance payments for Saturday and Sunday work.

19. I note that the base rate of pay has been factored into the Insurer's calculation of the Worker’s PIAWE with overtime and shift allowance payments included for the first 52 weeks of weekly payments.

20. I acknowledge the Worker’s submission that Saturday and Sunday work was part of their permanent shift and they were paid these   allowances during the time they took as annual leave. However, the definition of PIAWE (s44C(l)(b)) expressly excludes these allowances in the calculation of PIAWE after the first 52 weeks of weekly payments.

21. I therefore do not agree with the Worker’s submission that their PIAWE calculation after 52 weeks of weekly payments should include the $385.70, which they say comprises of their Saturday and Sunday allowance payments during the relevant period.

22. As there are no other issues in relation to the Insurer's calculation of the Worker’s PIAWE, no recommendations will be made on the Insurer as a result of the findings of this merit review.

Merit Review Service
Delegate of the State Insurance Regulatory Authority