3.5.4 Reduction in CWE

From 5 April 2010, if a worker’s current weekly earnings are reduced in certain circumstances (see the below table) for reasons unrelated to their incapacity, Agents may make a determination to:

• continue (and not increase) top up weekly payments at the rate they were being paid prior to the reduction in current weekly earnings; or

• not pay weekly payments of compensation.

Such a decision involves the exercise of a discretion, and Agents should have regard to the factors set out in the table below as to whether they should or should not exercise that discretion.

Note: Before 5 April 2010, notional earnings was used to determine reductions in a worker's weekly payments by:

• the weekly earnings an Agent determined a worker was capable of earning, or could earn from time to time in employment

• the CWE Current Weekly Earnings the worker actually received

The definition of ‘notional earnings’ was removed from the legislation effective 5 April 2010. From then, a worker’s weekly payments may only be reduced by the worker’s CWE from employment.

Making a determination

The following table outlines factors Agents should consider when assessing whether to apply a reduction in CWE:

Step	Considerations
Determine whether the relevant precondition has been met	the worker is no longer living in Victoria; or employment was terminated due to the worker’s misconduct; or the worker resigned from employment or reduced work hours for reasons unrelated to their incapacity for work resulting from their work-related injury. Note: this does not apply where a worker is entitled to weekly payments after the second entitlement period and there is a permitted fluctuation in hours or income in accordance with the legislation.
Determine whether discretion should be exercised	The Agent when deciding to exercise discretion, must consider: the objectives of the Act the worker’s circumstances, such as: severity of misconduct (e.g. calculated, deliberate or wilful) whether misconduct has been proven compliance with RTW and rehabilitation their employment record and duration the employer’s conduct, such as: whether principles of procedural fairness followed the harshness of the dismissal the nature and extent of the worker’s injury and prognosis The Agent must ensure they collate information to confirm the reason for employment termination, resignation or reduction in hours. This can include but is not limited to Policy and Procedures, medical information, current weekly earning information. See: 3.5.3 Current weekly earnings

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Circumstances where a determination cannot be made

Agents must not exercise the above discretion in the following circumstances:

• an employer has failed to provide suitable employment to the worker leading to a reduction in the worker’s current weekly earnings (and the worker is otherwise complying with their return to work obligations under the legislation);

• the worker reduces their hours or leaves their employment due to their incapacity from their work-related An injury/disease is work related if it arose out of or in the course of employment and the scope of employment. injury leading to a reduction in their current weekly earnings;

• the employer reduces the worker's hours or terminates their employment for reasons other than the worker’s misconduct, leading to a reduction in their current weekly earnings;

• the worker’s current weekly earnings are reduced only because the worker is on paid annual leave or long service leave (including during an annual shutdown).

A determination to cease weekly payments after the second entitlement period cannot be made if:

• there is a fluctuation in hours or income within the acceptable criteria.

Agent notification requirements

Agents must provide written notice to the worker when a determination is made not to increase weekly payments or not to pay weekly payments due to a reduction in CWE. This notice is effective from the date upon which the worker's CWE were reduced or on any later date specified in the notice.

Agent determinations not to pay compensation in the form of weekly payments must follow the usual process for termination of weekly payments under the legislation.

See: Terminate or alter weekly payments

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3.5.5 Annual leave & long service leave

 

Payment in lieu of leave

Effective from 1 January 2010, the legislation provides that weekly payments are not to be reduced where a worker receives payment in lieu of accrued annual leave or long service leave.

 

Where a worker is on paid leave

Effective from 1 January 2010, if the current weekly earnings of a worker are reduced because the worker is on paid annual leave or long service leave, WorkSafe must not, by reason only of that reduction, alter the amount of compensation in the form of weekly payments.

WorkSafe and Agents should not advise employers whether a worker is entitled to the payment or accrual of leave. Agents should advise employers and workers to refer to the appropriate employment agreement and/or the Fair Work Act 2009 (Cth).

Access annual or long service leave or pay other types of leave

If a worker is receiving weekly payments, employers and workers are to be advised to refer to the Fair Work Act 2009 (Cth) and/or the applicable industrial award or agreement or arrangement before:

• accessing annual leave or long service or
• paying other types of leave.

Annual Shutdown periods

If a worker’s current weekly earnings are reduced only because a worker is on paid annual leave or long service leave during an annual shutdown period, Agents must not alter the amount of compensation in the form of weekly payments payable to the worker. This applies equally to the following circumstances where, immediately prior to a shutdown a worker:

• is in receipt of current weekly earnings and top up weekly payments; or

• is in receipt of current weekly earnings only (because the value of current weekly earnings exceeds weekly payments that are payable).

Agents should ensure they obtain a copy of the relevant employment agreement or industrial award to confirm the worker is obliged to access paid annual leave or long service leave during the annual shutdown period. Employers and workers should also be referred to the relevant agreement or award to determine the amount of leave to be taken during the shutdown period.

If a worker’s current weekly earnings are reduced because of an annual shutdown period and the worker is not on paid annual or long service leave during that period, then Agents may decide to increase the worker’s weekly payments provided the worker otherwise remains entitled to weekly payments. Some examples of when a worker may not be on paid annual leave or long service leave during an annual shutdown would include:

• casual workers who do not have annual or long service leave entitlements

• workers who have exhausted their accrued annual or long service leave

If, at the time of an annual shutdown, a worker’s current weekly earnings are reduced because of a reduction in their capacity Agents may increase a worker’s weekly payments subject to claims management processes for changed capacity. Agents should consider what medical information is required to review the change in the worker’s capacity.

Certificates of capacity

Workers who take leave while receiving weekly payments must provide Certificates of Capacity for the leave period to receive weekly payments whilst on leave.

Agent notification requirements

See: Terminate or alter weekly payments

Agents and Employers should ensure they confirm paid leave and periods of shut down as early as possible to ensure accurate entitlements are determined.

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3.5.6 Paid parental leave

Eligible working parents of children born or adopted from 1 January 2011 may be entitled to Commonwealth Government funded payments at the National Minimum Wage via their employer under the Paid Parental Leave (PPL Paid Parental Leave) Scheme.

Working parents may also be entitled to employer paid parental leave. Employer paid parental leave will be defined by the workers employment contract or Enterprise Bargaining Agreement (EBA).

There may be some instances where a worker who is receiving weekly payments may concurrently be eligible to receive PPL and/or employer paid parental leave.

Determine if parental leave is a CWE

Payments made under the Commonwealth Government PPL scheme are not to be included in the definition of current weekly earnings and do not have any effect on a worker’s weekly payments.

Payments made under a workers employment contract and/or EBA, are to be considered a current weekly earning.

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