COVID and PIAWE
In 2020 the NSW Government made some laws that allowed the workers compensation system to adapt and respond to COVID-19.
The practical effects of these laws provided:
1. Telehealth access for injured workers with their nominated treating doctor
2. Adjustment to PIAWE calculations where earnings before the injury were reduced to the COVID-19
3. A presumption to accept liability for workers who contracted COVID-19 if employed in specified industries who contracted COVID-19
Sadly, this latter law is currently under threat with efforts being made to repeal it.
The PIAWE regulation though remains and has recently been determined in a vital Personal Injury Commission decision of Tibbets by Member McDonald.
PIAWE in general requires consideration of an injured worker’s ‘earnings’ during the ‘relevant earning period’ which is a period up to 52 weeks in length occurring prior to the date of injury. There are some exceptions that apply both to what can be considered ‘earnings’ and what the ‘relevant earning period’ is. The State Insurance Regulatory Authority (SIRA) have created an excellent product called the ‘PIAWE on a page’ that remains the premier resource for summarizing PIAWE.
The PIAWE COVID-19 regulation acts to adjust the ‘relevant earning period’. SIRA explain in their claims management guide that the adjustment occurs:
“… for workers who have had a change in their employment arrangements resulting in a financially material reduction in their earnings (this includes earnings reduced to zero) during the pandemic period attributable to the impact of the COVID-19 on their employer. A reduction in earnings may arise from a worker working fewer hours or accepting a lower rate of pay. ”
By adjusting and thus excluding some specified periods impacted by COVID-19 with lower income earned, the government allows for a fairer and likely higher PIAWE for an injured worker.
If the business is financially materially impacted by COVID-19 during the period of 23/03/20 to 14/06/20 this whole period, known as the ‘first prescribed period’, is excluded.
The ‘second prescribed period’ of 15 June 2020 to 27 September 2020 can also be excluded but the circumstances for when it can be have had some uncertainty. SIRA’s claims management guide explains:
The second prescribed period commences on 15 June 2020 and ends on either:
• 27 September 2020 or
• the day before the worker earns in any employment.
The second prescribed period may only be excluded if the worker’s relevant earning period has already been adjusted by the exclusion of the first prescribed period.
The decision of Tibbets provides helpful clarity on how not only the ‘first prescribed period’ works but particularly the ‘second prescribed period.’
Ms Tibbets situation can be summarized as follows:
• Ms Tibbetts commenced employment as a casual receptionist on 31/01/20
• In March 2020 the business closed down for six weeks due to the COVID pandemic
• After reopening in approximately May 2020 staff were brought back gradually
• Ms Tibbetts was brought back worked on the 18/06/20
• This was the third day of the second prescribed period in the PIAWE COVID-19 regulation
• Ms Tibbetts’ shifts after the 18/06/20 varied and she at times received Jobkeeper due to a lack of shifts
• Ms Tibbetts sustained a workplace injury with a deemed dated of injury on 12/01/21
Calculating Ms Tibbetts’ PIAWE required review of the ‘relevant earning period’ which was the period immediately before her injury back to the commencement of her employment; a period slightly less than 52 weeks. The ‘relevant earning period’ included the time when COVID-19 first unfolded in Australia thus including the ‘first prescribed period’ and the ‘second prescribed period’.
In calculating Ms Tibbetts’ PIAWE the first prescribed period was excluded as the business had shut down between March and June for a number of weeks entirely due to COVID-19.
Ms Tibbett’s argued that some of the ‘second prescribed period’ could be excluded too.
Ms Tibbetts argued that “there may be a number of periods where the change in employment arrangements as a result of the pandemic resulted in no earnings being paid for a period of two or more days. ”
It was certainly the case that Ms Tibbetts missed at least two days into the ‘second prescribed period’ before returning to work on the 18/06/20. She mentioned that she had other periods of two or more days too. Could more periods of two or more days in the ‘second prescribed period’ be adjusted/excluded too?
Member McDonald discussed interpretation principles and found that by giving the ‘grammatical meaning of the words and the objects of the provision’ that it wasn’t multiple periods envisaged in the second prescribed period.
Member McDonald noted that Ms Tibbetts had returned to work on the 18/06/20 and so only the period of 15/06/20 to 17/06/20 of the second prescribed period could be excluded.
In determining the PIAWE Member McDonald excluded all of the ‘first prescribed period’ and the three days of 15/06/20 to 17/06/20 in the ‘second prescribed period.’
This decision is extremely valuable for practitioners. It highlights that the first prescribed period is adjusted and excluded in circumstances such as what Ms Tibbetts’ employer experienced of a shut down due to the initial wave of COVID-19.
It also provides that the second prescribed period is also able to be adjusted and excluded if the injured worker has both had the first prescribed period excluded and then remains off work into the second prescribed period, but only until they return to work.
The correct application of this will mean that when the PIAWE COVID-19 regulation applies for an injured worker they will often have an increased PIAWE as a result.
If you have been injured and need advice as to whether the PIAWE COVID-19 regulation could apply to potentially increase your PIAWE please reach out to us.