Lodging your WorkCover Claim after your employment has ended: effects of McCluskey v Oxford Managers

8 November 2017
An injured worker is not entitled to “earnings enhancement” (eg. shift allowance and overtime pay) as part of the calculation of their pre-injury average weekly earnings (“PIAWE”) where the injured worker has lodged their WorkCover claim after their employment has come to an end, the Melbourne Magistrates’ Court has ruled.

The decision will have a significant detrimental impact on the calculation of PIAWE for injured workers who have lodged a WorkCover claim after they have finished up with their employer.

Background

Mark McCluskey injured his right knee at work in August 2015. He reported the incident and continued to work the same overtime hours as he had done prior to becoming injured. The employer paid a small sum for physiotherapy and medication on an ex-gratia basis. Mr McCluskey was then made redundant in September 2015. 

He lodged a WorkCover claim in October 2015  and the claim was accepted by his employer’s workcover insurer, CGU. CGU’s Notice of Acceptance initially calculated Mr McCluskey’s PIAWE as including $66 each week for the average overtime he worked. But CGU later retracted this calculation, advising Mr McCluskey in an email that he was not entitled to any component for overtime because it was only inclusive “if it would have been worked but for the incapacity.”.

Relevant Legislation

Section 157 of the Workplace Injury Rehabilitation and Compensation Act 2013 allows PIAWE to include overtime and shift allowance as “earnings enhancement” for the first 52 weeks of weekly payments of compensation paid or payable. 

Section 157(b) of the Act provides that an “earnings enhancement” is only a relevant consideration where “but for the workers injury or death the worker would have been likely at an time prior to the enhancement period, to have worked paid overtime or carried out work that attracted a shift allowance”

McCluskey v Oxford Managers [2017] VMC002

Mr McCluskey sought review of CGU’s decision to reject his claim for his pre-injury overtime to be calculated as part of his PIAWE. The matter was heard in January 2017 before Magistrate Brian Wright. 

CGU relied on section 157(b) of the WIRC Act in submitting that the worker would not have worked overtime as at the date of lodging the WorkCover claim as the worker had been made redundant prior to lodgement of the claim. The worker was therefore not entitled to have his pre-injury overtime calculable as part of his PIAWE. 

Magistrate Wright agreed. He found that the worker did not have an entitlement to claim overtime (as an example of “earnings enhancement”, the other example being shift allowance) as part of his PIAWE calculation, on the basis that:

  • the worker had lodged his WorkCover claim after his employment had come to an end; and
  • because the worker was retrenched he could not have been “likely” to have worked paid overtime any time during the earning enhancement period but for his injury.   

Impact

This is an unfortunate decision for workers in a climate of growing redundancies and termination of employment, and where employers seem to be becoming increasingly willing to terminate employees after the 52-week obligation period (where the injured worker is unable to perform the inherent requirements of the role). 

To minimise the effect of this decision, injured workers should consider lodging their WorkCover claims in advance of any termination of employment occurring, so as to protect their right to calculate any overtime or shift allowance as part of their PIAWE. This is particularly important to consider where there is any hint of a possible cessation of employment (such as a redundancy or termination).  

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