COMCARE OPERATIONAL ADVICE NO. 110
CALCULATION OF NORMAL WEEKLY EARNINGS FOR EMPLOYEES WHOARE EMPLOYEE FOR FIXED PERIODS OUTSIDE AUSTRALIA
Branch Managers
State Managers
Directors Central Office
State Operations Managers
State Review Managers
State Rehabilitation Managers
State Executive Officers
The purpose of this Operational Advice is to clarify the way in which the level of Normal Weekly Earnings is to be calculated for employees who are injured whilst employed by the Commonwealth for a fixed period outside Australia.
A number of State offices have received claims from employees who are contracted by the Commonwealth for a fixed period of employment outside Australia, in employment which attracts substantial allowances over and above the normal salary payable for the classification in which they are employed.
The allowances relate specifically to the period of employment outside Australia because of the location in which the employee is employed and the nature of the duties which the employee is expected to perform whilst in that location. The employee is only eligible to receive those allowances whilst stationed in that location and in that particular employment.
Section 8 of the Act provides that the normal weekly earnings calculated at the date of injury for those employees includes these allowances.
Further, sub‑section 8(10) of the Act provides that normal weekly earnings for injured employees who cease to be employed by the Commonwealth is maintained at the amount payable for the employment in which the employee was engaged at the date of injury or the date of cessation of employment, whichever is the greater.
It has been argued that when the contracted period expires and the employee returns to Australia, sub‑section 8 (10) operates to maintain the normal weekly earnings of these employees at the level payable for employment during the contracted period, which would include allowances payable during that contracted period of employment.
However the intention of the legislation in providing for the payment of normal weekly earnings for employees is to compensate for loss of income due to the injury.
The loss of allowances for employees in the circumstances described above, is not due to the injury but results from the expiration of the fixed term employment contract.
It follows therefore that once the employee returns to Australia and if incapacity for work continues, the inclusion of those allowances in normal weekly earnings is incorrect since an employee engaged in the same type of employment in Australia would not be eligible to receive those allowances.
In circumstances where an employee's entitlement to allowances expires with the contract of employment and the termination of the contract is in the normal course of the events, the normal weekly earnings figure to be applied should be based on the salary and allowances that the employee would receive if the employee had continued to work in the type of employment performed during the contract period in the location in which the employee now resides.
For example, an officer employed as an engineer for a period of Antarctic duty and injured whilst in service in Antarctica would be entitled to normal weekly earnings which includes allowances peculiar to Antarctic duty if incapacitated during the period of contracted service. If the officer returns to Australia and continues to be incapacitated, the normal weekly earnings for that officer should only include components payable to engineers employed in the place where the officer normally lives. If the officer lives in Adelaide then normal weekly earnings should be based on salary and allowances payable to engineers in Adelaide. Any entitlement to Antarctic allowances lapses at the expiration of the employment contract.
It is important to note that should the employment contract be prematurely terminated due to the injury, allowances would continue to be included in normal weekly earnings for the term of the original contract.
Enquiries may be directed to the Compensation Unit on (06) 275 0081.
Robert Knapp
Deputy Chief Executive Officer
12 July 1991