Why is overtime often included in post-13 week calculations for workers’ comp claims?

Risk Matters - Winter 2021

Picture of Joshua Wilcox

Joshua Wilcox

Special Counsel, Moray & Agnew

Joshua is a leading workers’ compensation lawyer, representing major insurers
and self-insured clients in the Conciliation and Arbitration Services division of WorkCover WA and in the District Court of Western Australia. He is highly regarded for his professional and commercial approach to claims management and his ability to provide clear and concise legal advice to clients in relation to complex
and contentious issues.

This question is often asked when LGIS members receive the post-13 week calculation of weekly payments for workers’ compensation claims. 

Amount A of Clause 11, Schedule 1 of the Workers’ Compensation & Injury Management Act 1981 (WA) 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 direct that overtime should be included in the weekly payments post-13 weeks, it’s often a point of contention as to whether overtime is to be considered when calculating payments for this period.

Explaining the Amounts

‘Amount A’ prescribes the method for calculating the weekly payments of an award worker for the first 13 weeks. 

‘Amount Aa’ prescribes the calculation method for the post-13 week period.

In BGC (Australia) Pty Ltd v Machali [2019] 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. 

At arbitration and again on appeal to the District Court, it was held that regular overtime payments constituted an allowance which could be included in the calculation of weekly payments under Amount Aa.

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What is the difference between statute and common law?

Statute law

Statute Law can also be called legislation (made by Parliament).

Legislation consists of Statutes (or Acts) and Delegated Legislation (usually Regulations).

Common law

Common law, or case law, is declared by judges.

Legislation is the primary source of law today and all cases start with interpreting the legislation as made by Commonwealth and the States.
However, the decisions judges make in court can set a precedent, and therefore, common law. 


Legislation made by Parliament

Case law made by judges

The Court of Appeal upheld the decision that overtime payments relate to the number or pattern of hours worked 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: 

  • 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 restrict the interpretation of ‘allowance’, such as to exclude 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 these views were consistent with the judgment in EG Green & Sons v Sabourne [2009] 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 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. 

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, for up to six 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. 

However, it would appear from the Court of Appeal’s observations that overtime payments during seven or more of the 13 week period would be considered regular

Please speak to your LGIS WorkCare claims consultant if you have any questions regarding this or any other workers’ compensation issue,
on 9483 8888.

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