THE END OF UNCERTAINTY – INCLUDING OVERTIME IN THE POST-13 WEEK CALCULATION OF WEEKLY PAYMENTS
October 14, 2019
In BGC (Australia) Pty Ltd v Machali  WASCA 121 (Machali), the Court of Appeal considered whether overtime payments are included in the calculation of weekly payments payable by an award worker under Amount Aa of Clause 11, Schedule 1 of the Workers’ Compensation & Injury Management Act 1981 (WA)
Amount A of Clause 11 expressly provides that overtime payments are to be included in the calculation of weekly payments which are payable to an award worker for the first 13 weeks. However, since Amount Aa does not expressly refer to overtime payments being included in the calculation of weekly payments payable to an award worker following the initial 13 week period, a point of contention often arises as to whether overtime is to be considered when calculating the weekly payments of a worker for this period.
At Arbitration and on appeal to the District Court in Machali, it was held that overtime payments which were paid on a regular basis constituted an allowance which could be included in the calculation of weekly payments under Amount Aa.
The Court of Appeal upheld the decision of the Arbitrator and the District Court that overtime payments relate to the number of pattern of hours worked by a worker and are to be included in the calculation of Amount Aa if they are paid on a regular basis.
The Court of Appeal stated five reasons in support of its decision. In essence:
- the Court accepted that the ordinary meaning of ‘allowance’ in the context of payments made to an employee did not exclude overtime payments
- it did not consider there was any requirement under Clause 11 to give the word ‘allowance’ a restrictive interpretation which excluded overtime payments
- the Court found that the concepts of an allowance and overtime payments were not mutually exclusive and the expressions ‘bonus or allowance’ and ‘overtime’ could overlap
- it highlighted that the views which it had reached were consistent with the judgment of Wheeler J in EG Green & Sons v Sabourne  WASCA 172, in which it was held Amount Aa could include overtime payments which were paid on a regular basis and related to the number or pattern of hours worked
- the Court identified that the 2004 amendments to the Act (which resulted in Amount Aa including allowances which were paid on a regular basis and related to the number or pattern or hours worked) removed a distinction between Amount A and Amount Aa which previously excluded overtime from being included in the calculation of weekly payments under Amount Aa.
Otherwise, and while not forming part of its decision, the Court stated that assessment of whether overtime had been paid on a regular basis depended on the facts and gave an example that a worker would not have been paid overtime on a regular basis as contemplated by the Act if overtime was only worked during 4 of the 13 weeks leading up to the date of incapacity.
What does the decision mean?
Machali establishes that overtime payments made to an award worker on a regular basis during the 13 week period leading up to the date of incapacity are included in the calculation of Amount Aa. However, careful consideration is required to assess whether overtime payments have been paid on a regular basis. If overtime has only been paid, for example, during 4 of the 13 weeks leading up to the date of incapacity, Machali could be relied on to argue that such payments were not paid on a regular basis and, accordingly, are not to be included in the calculation of Amount Aa.
The same argument could be made if overtime is only paid during 5 or 6 of the 13 weeks leading up to the date of incapacity. However, it would appear from the Court of Appeal’s observations that overtime payments during 7 or more of the 13 week period would be considered regular.
Further information / assistance regarding the issues raised in this article is available from the author, Joshua Wilcox, Special Counsel, or your usual contact at Moray & Agnew.
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