Judicial determination - Whether overtime to be included in an assessment of the worker's notional weekly earnings - Whether sufficient overtime worked to satisfy criteria of section 4(8)(a) - Worker's evidence that overtime routinely offered and performed - Pattern of overtime satisfies relevant criteria - Worker's entitlements to be assessed on that basis - S.4(2)(b)(iii), (8), (a)(i), (ii), (iii), 4(9) Workers Rehabilitation and Compensation Act, 1986.

Hills Industries v. Basini (unreported A.146/1996)

Murphy v. Woolworths (S.A.) Pty. Ltd. (unreported J.D.37/1998).

Pizzorno v. Workers Rehabilitation and Compensation Corporation [1997] SASC 6229; (1997) 69 S.A.S.R. 211.

This is a judicial determination of a dispute between Gianfranco Giocondo Zanini (`the worker') and the WorkCover Corporation (`the Corporation') concerning the assessment of the worker's notional weekly earnings relating to a claim for income maintenance as a result of a compensable disability that occurred on 13 December 1996 in the course of the worker's employment with Ballestrin Concrete Construction Pty. Ltd.(`the employer').

The dispute concerns whether or not overtime ought to be included in that calculation. Overtime can only be included in the calculation of notional weekly earnings if it satisfies the criteria set out in section 4(8) of the Workers Rehabilitation and Compensation Act, 1986 (`the Act'), which provides as follows:-

(8) For the purposes of determining the average weekly earnings of a worker -

(a) any component of the worker's earnings attributable to overtime will be disregarded unless -

(i) the worker worked overtime in accordance with a regular and established pattern; and

(ii) the pattern was substantially uniform as to the number of hours of overtime worked; and

(iii) the worker would have continued to work overtime in accordance with the established pattern if he or she had not been disabled; and

In section 4(2)(b)(iii), the Act declares that it is permissible in making an assessment of average weekly earnings to take into account earnings over a period of up to 12 months prior to the relevant date. Section 4(9) stipulates the relevant date as being a reference to a date of the commencement of the worker's period of incapacity for work. In this case that date is 13 December 1996.

There is no doubt that overtime was a regular feature of the worker's employment with the employer. A schedule detailing the overtime worked by the worker for the 12 month period prior to 13 December 1996 is as follows:-

The Corporation contends that the overtime worked by the worker does not satisfy the relevant criteria. Mr. Hanus said that the pattern of overtime:-

`Whether its analysed daily, weekly or monthly or half yearly if one goes to the calculations, there's no substantial uniformity as to hours. The hours are literally all over the shop.'

Next it was said, that even if I could somehow be persuaded that the criteria contained in section 4(8)(a)(i) and (ii) have been met, I could not be satisfied that the requirements of section 4(8)(a)(iii) have been because the employer's operations closed over the Christmas break at the end of 1996.

At this point I think it is helpful to reflect upon the evidence that was placed before me. The worker said that he commenced working with the employer in May 1992 and that he was employed as a concrete finisher. He spoke of the fact that he was routinely offered overtime and routinely performed it. He spoke of routinely working a 6 day week and working most Saturdays for at least 8 hours.

Mr. Des Collins, the manager of the employer, said:-

`As you can see from the schedule of overtime hours worked by Mr Zanini during the latter half of 1996, it appears that his overtime hours lessened particularly in the months of July, August, September and October of 1996.

However, the schedule shows that Mr Zanini's overtime hours increased in November and December 1996 because the Magistrate's Court project and the Woolworths Distribution project required a great amount of labour in order to have both projects completed by January 1997. If Mr Zanini had remained working on the Woolworths project, he would have worked a number of overtime hours during January 1997, and then this would have dropped off. Towards the end of January and February, the Woolworths project and the Magistrate Court project were almost completed and there was little work required, if Mr Zanini had still been working with us, I do not believe that he would have been undertaking any overtime work during this time.'

Mr. Collins gave oral evidence before me and I think the reasonable inference to draw from his evidence, is that although it had previously been the custom of the building trade and building companies to shut down in January, that was no longer the case. His evidence suggested that in fact in the 1996/1997 year, the employer resumed work on 3 January 1997, and I find that to be so.

I think it is worth repeating what I said in Hills Industries v. Basini (unreported A.146/1996) and Murphy v. Woolworths (S.A.) Pty. Ltd. (unreported J.D.37/1998):-

`In Hills Industries v. Basini (unreported A.146/1996) I made some general observations about how the issue of overtime was to be approached. I said at p.6 of the judgment as follows:-

`...First, one should bear steadily in mind, that the purpose of assessing average weekly earnings and considering the impact of overtime is to arrive at a figure which represents: the average amount that the worker could reasonably be expected to have earned for a week's work if the worker had not been disabled' (Section 4(1)). Secondly, although the Act authorises a consideration of "the actual weekly earnings of the worker over a period of up to 12 months before the relevant date ..." (Section 4(2)(b)(i)), that is not a mandatory process, and it does not necessarily require a consideration of the full period of 12 months. In some cases it might be a sensible thing to look at such a period because the pattern of work or overtime might not emerge unless a full year is considered. But in other cases, it might be appropriate to have regard to a considerably shorter period. Thirdly, the parties are not permanently bound by the initial assessment. There is scope to review it, and to adjust it if necessary. (Sections 36(2)(b)(b), 38 and 39).

To these observations must be factored the statements made by Doyle C.J. in Pizzorno v. Workers Rehabilitation and Compensation Corporation [1997] SASC 6229; (1997) 69 S.A.S.R. 211.

All of this leads me to conclude that the starting point in determining the impact of overtime upon an assessment of average weekly earnings, is a consideration of the position immediately prior to the commencement of the period of incapacity for work. If no pattern of overtime emerges, it might be necessary and it is permissible to look further, and in doing so, one can go back as far as 12 months: Section 4(2)(b)(i).

But, it seems to me, that if a pattern which satisfies the relevant criteria emerges upon examination of the period immediately prior to the commencement of the incapacity, one should not look any further. If subsequent events reveal that that pattern has changed, the compensating authority has its remedies (see: Section 36(2)(b) and Pizzorno (supra) at p.216)).'

The statement of Mr. Collins to which I have earlier referred reveals a change in the pattern of overtime evolving towards the end of 1996. That change is revealed in the schedule that is set out earlier in these reasons. By the week ending 10 November 1996, the worker was working 20 hours overtime per week and but for the week of 17 November 1996, when the worker worked only 6 hours of overtime, the amount of overtime for the weeks thereafter as 20.5, 17.5, and 19 hours respectively. I would not regard the week ending 17 November 1996 as negating a finding that the worker worked overtime in accordance with a regular and established pattern or negating a finding that the pattern was substantially uniform as to the number of hours of overtime worked over that period of time. In any event, it is to be noted that on one of the days in that week, the worker was off on workers compensation and bearing in mind Mr. Collins' evidence, it seems likely that the worker would have been offered overtime on the Saturday. I appreciate that sections 4(8)(a)(i) and (ii) are focused towards overtime actually worked, not overtime offered, but nonetheless, I do not regard the fact that it was likely to have been offered, as entirely irrelevant.

As to the suggestion that the pattern would not have continued, I do not think that that is borne out by the evidence. The reasonable inference, is that the employer's operation only shut down for the public holidays over the Christmas break. That does not provide a basis upon which to conclude that the worker would not have continued to work in accordance with the established pattern. It might well be that by the end of January or by early February 1997 the overtime would have come to an end but the observations of Doyle C.J. about the proper construction of section 4(8)(a)(iii) in Pizzorno (supra) make it clear that such evidence is not inconsistent with a conclusion that the requirements of that subsection have been met. A change in the pattern of overtime might have been in the wind, but it was not imminent.

I find that the worker worked overtime that satisfies the relevant criteria such that moneys earnt by him for working that overtime should be included in the calculation of his notional weekly earnings. The overtime to be included should in my view be based upon 10.5 hours overtime worked on Saturday and 7 hours of overtime spread over Monday to Friday.

The parties did not address me as to the quantum of the worker's entitlements as a result of the inclusion of overtime. I therefore adjourn further consideration of this judicial determination to enable the parties to consider these reasons and to give them an opportunity to reach agreement as to the quantum of the worker's entitlements to income maintenance. I grant them liberty to apply for the purpose of recording orders or seek my ruling in default of their agreement.

Parties are advised that if a party wishes to appeal against any part of this decision which raises a question of law such appeal must be filed with the Registrar in accordance with Form 11 within 14 days of the delivery of this decision and must be served on all parties.