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WORKERS COMPENSATION - normal weekly earnings - part-time Commonwealth employment - relevant period two weeks immediately prior to injury does not fairly represent the weekly rate - consideration of alternative period - decision varied

Administrative Appeals Tribunal Act 1975 (Cth)

Administrative Review Tribunal Act 2024 (Cth)

Safety Rehabilitation and Compensation Act 1988 (Cth)

Comcare v Nicolas [2014] FCAFC 122

Keys and Comcare [2011] AATA 277

Tapper and Transpacific Industries Pty Ltd [2012] AATA 870

1. Dr Penelope Gosling has an entitlement to compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). She suffered an injury on 3 July 2024 in the course of employment with Australian Capital Territory Health (ACT Health) when she fell on uneven ground at the Canberra Hospital (TCH) in Garran, thereby sustaining a Weber fracture of the lateral malleolus in the left ankle.
2. Her claim for compensation was accepted by a determination dated 11 July 2014 pursuant to section 14 of the SRC Act.[1] The determination was made by the Australian Capital Territory (ACT) which holds a license issued on 1 March 2019 pursuant to Part VIII of the SRC Act as a 'licensed authority' to accept liability in respect of claims made by employees of the Territory.
3. The injury resulted in an incapacity for work which reduced Dr Gosling's income. In a statement dated 18 December 2024, Dr Gosling advised that as a result of the injury, she missed clinical work in the period from 4 to 21 July 2024.
4. The present dispute arises from the ACT's assessment of her normal weekly earnings, a key element of the formula for determining a weekly entitlement to compensation for incapacity resulting from injury. By determination dated 31 July 2024, the ACT assessed Dr Gosling's normal weekly earnings at $2,225.42 gross per week and that her 'normal weekly hours' were 20 per week.[2] Dr Gosling sought a review of that decision on the grounds that her normal weekly earnings should include her earnings from her private general practice where she asserted her normal weekly hours were 20 per week and her normal weekly earnings were $4,530.08 per week to be combined with the assessed earnings of her ACT employment.
5. The reviewable decision of 23 August 2024 varied the determination to include the earnings from Dr Gosling's private practice and arrived at the conclusion that the normal weekly hours were now 40 hours per week, 20 hours each from Commonwealth employment and private practice, and the normal weekly earnings were $6,257.83 gross per week.[3] The relevant period prior to the injury that was used to assess these earnings encompassed 15 fortnightly pay periods from 11 December 2023, shortly after commencing employment with the ACT, to 7 July 2024, which was a period of 30 weeks. The total earnings were $120,972.32, a weekly average of $4,032.41. This average weekly figure was accepted as the earnings from non-Commonwealth employment for the purposes of subsection 8(3) of the SRC Act and was added to the earnings of $2,225.42 per week from Commonwealth employment to give a total of $6,257.83 gross per week.
6. In her application for review lodged with the former AAT the applicant gave the following reasons why she considered the reviewable decision of 23 August 2024 was wrong:

The NWE calculation fails to take account of: > > SRC 9(2) - my hours changed less than a week before the injury as a result of 'doing of an act or thing', meaning a there is no 'relevant' two week period and that as such it is impracticable as per 9(3) to calculate a pre-injury NWE; > > 9(4) states that pay periods in which earnings were reduced 'because of absence for any reason' should be - and were not - disregarded in the calculation in the attached decision.

7. The parties have provided written submissions together with documentary evidence going to the issues in dispute. The parties have agreed that this matter can be decided by the Tribunal without need for a hearing.

1. An employee 'who is incapacitated for work as a result of an injury' and thereby suffers loss of income is entitled to weekly compensation payments calculated in accordance with section 19 of the SRC Act. That provision establishes a formula for monetary compensation by calculating the difference between 'normal weekly earnings' and the amount per week, if any, that the employee earns, or is 'able to earn' in suitable employment.
2. The present dispute concerns the calculation of normal weekly earnings. That expression is defined in section 4 of the SRC Act:

normal weekly earnings means the normal weekly earnings of an employee calculated under section 8.

8 Normal weekly earnings > > (1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula: > > (NH x RP) + A > > where: > > NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period; > > RP is the employee's average hourly ordinary time rate of pay during that period; and > > A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment. > > (2) Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula: > > where: > > NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and > > OR is the employee's average hourly overtime rate of pay during that period.

4. The term 'normal weekly hours' is also defined in section 4 of the SRC Act:

normal weekly hours, in relation to an employee, means the average number of hours (including hours of overtime) worked in each week by the employee in his or her employment during the relevant period as calculated for the purpose of applying the formula in subsection 8(1) or (2).

5. The issue of overtime is not raised on either party's contentions, at least as to the number of hours worked. However, the term 'overtime' is defined in section 4 of the SRC Act to include '(a) any duty on shifts or on Saturdays, Sundays or other holidays; and (b) excess travelling time'. There is no evidence before me relating to shift work or weekend and holiday work or the like in the relevant period and I have no basis to assume that there was any.
6. However, the issue of what counts as the relevant period is a matter of contention. The relevant period for the purposes of calculating normal weekly earnings is determined in accordance with subsection 9(1) of the SRC Act:

9 Relevant period > > (1) For the purposes of calculating the normal weekly earnings of an employee before an injury, a reference in section 8 to the relevant period is, subject to this section, a reference to the latest period of 2 weeks before the date of the injury during which the employee was continuously employed by the Commonwealth or a licensed corporation.

7. The reviewable decision of 23 August 2024 noted Dr Gosling's evidence for the computation of her income from private practice was measured over 12 weeks prior to the date of injury on 3 July 2024, not the two weeks set out in subsection 9(1) of the SRC Act. There is provision to vary that two-week period in the event of unfairness, 'because of the shortness of the relevant period,' might be occasioned. Subsection 8(5) of the SRC Act provides:

(5) Where, because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.

1. Given that Dr Gosling was employed for only 20 hours per week, subsection 8(3) of the SRC Act concerning the normal weekly earnings for part-time Commonwealth employees who are also employed in non-Commonwealth employment:

(3) Where an employee was, at the date of the injury, employed by the Commonwealth or a licensed corporation in part-time employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth or the licensed corporation.

1. The parties presently agree that Dr Gosling's earnings from her private medical practice is part-time (given her part-time practice with ACT Health and should be treated as earnings from Commonwealth employment for the purposes of the SRC Act).
2. However, the difficulty is the degree of fluctuation of those earnings over the preceding period, the fact that the private practice income in the two weeks immediately prior to the date of injury was unusually high and thereby not representative of her pre-injury earnings. These factors lead to a question of whether a more representative period ought to be adopted, and if so, could such a period encompass earnings after the date of injury?

1. The parties agree that there needs to be consideration of earnings of non-Commonwealth employment. The respondent accepts that Dr Gosling is an employee of the medical practice from which her non-Commonwealth earnings are derived. This was accepted in the reviewable decision which varied the initial determination which only recognised earnings from ACT Heath. In the absence of any argument to the contrary, I accept Dr Gosling is an employee of the medical practice and that her earnings ought to be taken into consideration.
2. The applicant contends that she lost income from her non-Commonwealth employment at the rate of $8,958.00 per week. This amount is well in excess of the figure of $6,257.83 per week calculated by the respondent. Both of these figures are in addition to the earnings in part-time Commonwealth employment which appears to be agreed at the rate of $2,225.42 per week. The applicant had earlier provided several different methods by which her earnings in non-Commonwealth employment might be calculated and submitted in an email dated 19 December 2024 that the loss of income from the non-Commonwealth employment might be between $7,185.00 and $9,011.00 per week. Some of the periods vary and evidence was submitted of the extent of earnings prior to the commencement of her engagement with ACT Health as well as earnings after the date of the injury on 3 July 2024. The figures do not identify any 'normal hours' or 'overtime hours'. Further, there are no identified 'allowances' in the non-Commonwealth employment.
3. In addition, the applicant submitted during the preliminary stages of the review that her calculations were in accord with the provisions of section 9 of the SRC Act allowing certain periods to be ignored where earnings were reduced.
4. The respondent maintains that the sum of $6,257.83 gross per week is correct. The respondent submits the following should be taken into consideration when calculating the correct normal weekly earnings:

(a) The period of two weeks immediately prior to the injury of 3 July 2024 does not fairly represent the earnings of the applicant in her employment with ACT Health during the period following commencement approximately 7 months earlier on 6 December 2023. Examining the stated earnings in non-Commonwealth employment, the fortnight ending 23 June 2024 is the largest of all prior fortnightly periods. The respondent accepts that the earnings of a general practitioner employee may fluctuate over time. > > (b) The periods prior to the commencement of the employment with ACT Health must be ignored since they do not fairly represent the pattern of earnings while working in Commonwealth employment. > > (c) No period after the date of injury can be included in the analysis of the normal weekly earnings since this is not authorised by any section of the Act. I adopt the statements in this respect in Keys and Comcare [2011] AATA 277[4] and Tapper and Transpacific Industries Pty Ltd [2012] AATA 870[5] to which the respondent referred me to the effect that the determination of the relevant period looks to the period prior to the injury and not to anticipated future earnings. > > (d) The preferred period that the ACT accepts as fairly representing the applicant's pre-injury earnings are the 28 weeks after commencing ACT employment and the date of injury. The ACT submits that Dr Gosling worked in each of those weeks and was paid. There are figures provided for the earnings of each fortnight ending 24 December 2023 to 23 June 2023. These figures are derived from a collection of invoices from which the applicant advised that a service fee, exclusive of GST, was deducted from receipts, also exclusive of GST. The respondent adopted that formula to present its summary of the earnings of each fortnight the period adopted. The applicant takes no exception to that approach.

5. I accept on the figures provided to me that the applicant's non-Commonwealth employment earnings fluctuated in a manner that would make the two weeks prior to the date of injury an unfair representation of her earning prior to the injury. I also accept that parties' method of calculating the earnings from non-Commonwealth employment even though they are not identified as an hourly rate of pay with overtime components or allowances. Difficulties fitting the evidence into formulas used for quantifying the entitlement to compensation should not be allowed to defeat the entitlement to compensation for lost earnings due to incapacity for work resulting from injury.
6. The applicant did raise an issue of whether some fortnightly periods, typically where the income from non-Commonwealth employment was lower than others, ought to be excluded from consideration. I am not prepared to do so in the absence of evidence concerning the duration of these absences from employment. There is a reference to a Broulee holiday within the week ending 21 January 2024 and another Coast holiday in the week ending 31 March 2024. There are also references to 'Leave Tuesday afternoon - son's medical appointment' for which the whole of the weeks ending 11, 18 and 25 February 2024 are suggested to be removed from consideration. Another suggested week to be ignored is that of the week ending 28 April 2024 since the Anzac Day public holiday fell within that week. I have no evidence before me as to the duration of the leave periods and the fact that Dr Gosling absented herself from non-Commonwealth employment on successive afternoons does not truly indicate that these weeks ought to be removed from consideration. I have accepted that, as a matter of fairness, the whole of the period leading up to the date of injury should be used to determine the proper normal weekly earnings from part-time Commonwealth and non-Commonwealth employment, and that without good evidence for exclusion of particular weeks grounded in evidence, those weeks will be considered.
7. The reference to subsection 9(4) of the SRC Act is of no assistance to the applicant since it clearly refers only to the problems of calculation within the two-week period prior to the injury provided for in subsection 9(1) of the Act. Given that it has been common ground that the two-week period does not fairly represent the earnings of the applicant prior to injury, there is no role for the remainder of that section. The respondent's reference to the decision in Comcare v Nicolas [2014] FCAFC 122[6] is apt and I respectfully follow the Full Court's decision.
8. For that same reason, I see no need to exclude the period after Sunday, 23 June 2024 to the date of injury on 3 July 2024 from consideration simply because it only contains a partial pay period. The respondent's submissions calculate the 28 weeks to 23 June 2024 only. However, the submissions contain relevant evidence of the actual earnings in the period Monday, 24 June to the end of Tuesday, 2 July 2024 from the applicant's non-Commonwealth employment and there is no good reason to ignore it. The evidence follows the methods accepted by the ACT in determining all other periods. The calculation of earnings is from the start of Monday, 24 June to the end of Tuesday, 2 July 2024, the last full day of work prior to the injury. That is a period of 1.4 weeks, counting the ordinary working week in ACT employment as extending from Monday to Friday.
9. The total non-Commonwealth income from the medical practice in that particular 1.4-week period was $8,527.99 by the methods adopted by the parties. In that same 1.4-week period, the earnings from ACT Health employment were $3,115.58 ($2,225.42 x 1.4). The ACT employment earnings were constant throughout the period.
10. Hence, to derive the normal weekly earnings based on a relevant period from the end of the first pay fortnight from 24 December 2023 to 2 July 2024, a period of 29.4 weeks, the total earnings from non-Commonwealth employment is $122,225.87, or $4,157.34 per week.
11. That needs to be added to the unfluctuating weekly earnings from ACT employment of $2,225.42 to give a total of $6,382.76 per week as the normal weekly earnings for the purposes of section 8 of the SRC Act. This is a higher sum than the $6,257.83 per week in the 23 August 2024 reviewable decision of the respondent contended by reason of the inclusion of the 1.4-week period to capture the period up to the date of the injury.

1. According, the reviewable decision must be varied so that the normal weekly earnings of the applicant prior to the injury of 3 July 2024, for the purposes of section 8 of the SRC Act is $6,382.76 gross per week.

[1] T9, 66-70. References commencing with the letter 'T' are references to Tribunal documents that are lodged with the Tribunal pursuant to a Notice to the Respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act), in operation when the application commenced. They are generally known as 'Tribunal documents', sequentially numbered, with subsequent page references.

On 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), proceedings in the AAT that were not finalised before 14 October 2024 are to be continued and finalised by the Tribunal. Anything done in relation to the proceeding before 14 October 2024 is taken to have been done by the Tribunal.

[4] [2011] AATA 277 [58], per Senior Member R M Creyke.

[5] [2012] AATA 870 [21], per Deputy President R N Nicholson.

[6] [2014] FCAFC 122 [26]-[28] per Edmonds, Buchannan and Flick JJ.