Church v Workers' Compensation Regulator [2018] QIRC 38

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: Lindsay Laurie Church v Workers' Compensation Regulator [2018] QIRC 038 PARTIES: Lindsay Laurie Church (Appellant) v Workers' Compensation Regulator (Respondent) CASE NO. WC/2017/40 WC/2017/52 PROCEEDING: Appeal from decision of the Workers' Compensation Regulator DELIVERED ON: HEARING DATES: 16 March 2018 10 November 2017 HEARD AT: Brisbane MEMBER: Industrial Commissioner Black ORDER: 1. Appeal allowed; 2. Decisions of the regulator dated 6 March 2017 are set aside; 3. Costs are reserved. CATCHWORDS: WORKERS’ COMPENSATION - APPEAL AGAINST DECISION – Calculation of a workers normal weekly earnings – definition of wages – consideration of the Regulation including whether it was reasonable for the insurer to consider the calculation of normal weekly earnings to be unfair. CASES: Workers' Compensation and Rehabilitation Act 2003 s 106, s 151, s 556, Schedule 6. Workers' Compensation and Rehabilitation Regulation 2003 s 80, s 81, s 82, s 84. WorkCover Queensland v Australia Meat Holdings P/L [2003] QCA 350 APPEARANCES: Mr P B Rashleigh, Counsel, instructed by Turner Freeman Lawyers, for the Appellant; Mr S P Gray, Counsel, directly instructed, for the Workers’ Compensation Regulator. -- 1 of 13 -- 1 Decision Introduction [1] Lindsay Laurie Church (the appellant) appeals decisions of the Workers' Compensation Regulator dated 6 March 2017 in which the regulator determined applications for review of earlier WorkCover decisions. Appeal WC 2017/40 was filed in the Industrial Registry on 14 March 2017 while appeal WC 2017/52 was lodged on 28 March 2017. [2] The effect of the regulator's decision in matter WC 2017/40 was to confirm the decision of WorkCover to calculate the appellant's maximum rate of weekly compensation based on normal weekly earnings (NWE) at $1,067.38. Under this decision NWE had been determined by reference to the appellant's 2005 income tax return which showed the appellant's net income at $55,504. [3] The appellant had maintained in his submission on review that NWE should be determined by reference to actual earnings, not taxable income. The actual earnings figure for the relevant period was $103,311.00. [4] The effect of the regulator's decision in matter WC 2017/52 was to set aside WorkCover's decision to calculate the appellant's weekly rate of compensation from 16 May 2015 at $431.10 and substitute a new rate of $693.80. In the review process the appellant had submitted that the available evidence supported a conclusion that the appellant's injury could result in a WRI of more than 15%. [5] The appellant pressed this submission because, in the appellant's circumstances, and under s 151 of the Workers' Compensation and Rehabilitation Act 2003 (the WCR Act), the relevant weekly payments are determined by reference to the single pension rate ($431.10), or a higher rate if it is demonstrated that the injury could result in a WRI of more than 15%. In its decision the regulator agreed that the appellant could demonstrate that his injury could result in a WRI greater than 15%. In these circumstances, pursuant to s 151 of the WCR Act, the weekly rate of compensation was to be fixed at 65% of the appellant's NWE. This outcome is not contested, but the appeal is necessary in the event that the appeal in WC 2017/40 were successful and a higher NWE figure resulted. Agreed Statement of Facts [6] An agreed statement of facts was tendered by the parties at the hearing of the appeal. With some editing of the tendered document for the purposes of brevity, the agreed statement is as follows: "The parties agree on the following statement of facts: (a) The Appellant Lindsay Laurie Church's date of birth is 6 January 1972. (b) The Appellant worked as a spray painter with various employers in Queensland during the period 1999 to 14 November 2007. (c) During the period June 2004 to July 2006 ("the relevant period") the Appellant was engaged to work as a spray painter by Gosneys Panel Beating Works ("Gosneys"). (d) The Appellant performed his duties for Gosneys during the relevant period at a workshop located at 4 Anne Street, Southport in the State of Queensland. -- 2 of 13 -- 2 (e) For the purposes of this appeal, it is agreed that, during the relevant period, the Appellant was a worker within the meaning of that term as defined in the WCR Act. (f) The Appellant suffered an injury within the meaning of the WCR Act during the course of his employment over a period of time and: (i) the nature of the injury is a lower back injury and a psychiatric injury ("the injuries"); (ii) the date of the event causing the injuries was over a period of time from 1999 until 14 November 2007; (iii) the accepted date of the injuries was over a period of time from 2005 until 14 November 2007. (g) WorkCover Queensland has accepted liability for the injuries pursuant to the WCR Act. (h) The Appellant has been paid compensation by Workcover Queensland for the injuries including payment of compensation for total incapacity pursuant to s 150 WCR Act. (i) The Appellant has been paid compensation for total incapacity from 20 May 2013 to the present date and ongoing. (j) The Appellant has not lodged income tax returns for the financial years ended 30 June 2006 and 30 June 2007. (k) The Appellant's Net Weekly Earnings is to be calculated by reference to his earnings in the 2005 financial year. (l) In respect to the Appellant's earnings in the 2005 financial year: (i) the sole source of the Appellant's earnings was from monies paid to him by Gosneys, as his employer; (ii) the work performed by the Appellant for Gosneys was in the nature of panel beating work; (iii) the Appellant would receive payments from Gosneys on a periodical basis, based on purchase orders raised by Gosneys for the work performed by the Appellant; (iv) in accordance with his agreement with Gosneys, the Appellant was obliged to pay rent on the use of a spray booth at the workplace, power used at the workplace and materials in the form of paint consumed at the workplace; (v) the payments made by Gosneys to the Appellant was net of those expenses; (vi) the Appellant's declared total gross business income was $103,311.00; (vii) expenses totalling $47,807.00 were deducted from that total gross business income, which were itemised as follows: Depreciation $10,682.00 37 Rent on land and buildings $6,824.00 00 Tools $819.00 20 Insurance premiums $6,000.00 51 Motor – Insurance monthly $1,440.00 21 Interest – HP $5,647.00 01 Accounting $1,350.00 34 Printing and stationery $12.00 38 Repairs $1,338.00 48 Telephone $2,400.00 -- 3 of 13 -- 3 46 Sundry – Flexirent $4,920.00 16 Fuel and oil $5,200.00 46 Sundry – Internet $118.00 46 Sundry – desk $182.00 27 Materials and supplies $89.00 31 Motor Vehicle – rego $786.00 TOTAL EXPENSES $47,807.00 (viii) the Appellant's net business income was $55,504.00; and (ix) The Appellant's declared taxable income was his "net income from business" of $55,504.00, which equates to $1,607.38 per week. (m) The Appellant has demonstrated that from on or about 20 May 2015, the injuries could result in a WRI of more than 15%. (n) In so far as it is relevant to any determination by the Commission, the appropriate QOTE to be applied is the 2006 year, which is $969.50." Matters in Contention [7] The parties differed in respect to how the appellant's normal weekly earnings should be calculated. The appellant submitted that the NWE figure should be the appellant's actual earnings for the relevant period of $103,311.00 while the regulator believed the correct figure was the appellant's net income for the period of $55,504.00. [8] The key difference between the parties is whether the NWE calculation should take into account business expenses included in the appellant' tax return. The appellant argued that the expenses should not be taken into account because the appellant's gross earnings were a reward for labour only, and because the expenses included in the tax return were not expenses attributable to the appellant's work for Gosneys. [9] The regulator however took the view that the deductions included in the tax return were business expenses related to the performance of work by the appellant in the relevant financial year. In these circumstances it would be consistent with the relevant provisions of the Act and Regulation for the appellant to be compensated on the basis of his gross earnings less the value of expenses claimed in the tax return. Legislation [10] The determination of the appeal turns on an interpretation of a number of section of the WCR Act. Section 151 of the WCR Act, as in force at the relevant time, is set out below: 151 Total incapacity—workers whose employment is not governed by industrial instrument (1) The compensation payable to a totally incapacitated worker whose employment is not governed by an industrial instrument is, for each week— (a) for the first 26 weeks of the incapacity, the greater of the following— (i) 85% of the worker's NWE; -- 4 of 13 -- 4 (ii) 80% of QOTE; and (b) from the end of the first 26 weeks of the incapacity until the end of the first 52 weeks of the incapacity, the greater of the following— (i) 75% of the worker's NWE; (ii) 70% of QOTE; and (c) from the end of the first 52 weeks of the incapacity until the end of the first 2 years of the incapacity, the greater of the following— (i) 65% of the worker's NWE; (ii) 60% of QOTE; and (d) from the end of the first 2 years of the incapacity until the end of the first 5 years of the incapacity— (i) if a worker demonstrates to the insurer that the injury could result in a WRI of more than 15%— the greater of the following— (A) 65% of the worker's NWE; (B) 60% of QOTE; or (ii) otherwise—an amount equal to the single pension rate. (2) However, the amount must not be more than the worker's NWE. [11] Section 106 of the WCR Act defines what is meant by the term "normal weekly earnings": 106 Meaning of normal weekly earnings (1) Normal weekly earnings are the normal weekly earnings of a worker from employment (continuous or intermittent) had by the worker in the 12 months immediately before the day the worker sustained an injury. (2) If a worker has not had employment for the 12 months immediately before the day the worker sustained an injury, normal weekly earnings are the normal weekly earnings of the worker from employment (continuous or intermittent) had by the worker in the period in which the worker has had the employment. (3) Normal weekly earnings are calculated as prescribed under a regulation. [12] The regulation applying at the relevant time was that contained in Division 1 of Part 5 of the Workers' Compensation and Rehabilitation Regulation 2003: -- 5 of 13 -- 5 80 Calculation of NWE Normal weekly earnings of a worker from employment are to be calculated under this division. 81 What amounts may or may not be taken into account (1) Amounts paid to the worker by way of overtime, higher duties, penalties and allowances (other than amounts mentioned in subsection (2)) that are of a regular nature, required by an employer and that would have continued if not for the injury may be taken into account. (2) Amounts mentioned in the Act, schedule 6, definition wages, paragraphs (a) to (d) are not to be taken into account. [13] The definition of "wages" in Schedule 6 of the WCR Act, as in force at the material time, subject to a slight difference with respect to sub-paragraph (b)1, defined wages in the following terms: wages means the total amount paid, or provided by, an employer to, or on account of, a worker as wages, salary or other earnings by way of money or entitlements having monetary value, but does not include— (a) allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses; and (b) superannuation contributions, for deciding the amount of compensation payable to a worker under chapter 3 or 4; and (c) lump sum payments on termination of a worker's services for superannuation, accrued holidays, long service leave or any other purpose; and (d) an amount payable under section 66. [14] The regulation applying at the relevant time also included provisions to assist in determining normal weekly earnings if particular difficulties exist in the application of the primary provisions: 82 NWE if impracticable to calculate rate of worker's remuneration (1) This section applies if it is impracticable, at the date of injury to the worker, to calculate the rate of the worker's remuneration because of— (a) the period of time for which a worker has been employed; or (b) the terms of the worker's employment. (2) Regard must be had to— (a) the normal weekly earnings during the 12 months immediately 1 In 2005 this paragraph read: ‘(b) contribution by an employer to a scheme for superannuation benefits for a worker, other than contribution made from money payable to the worker. -- 6 of 13 -- 6 before the date of injury of a person in the same grade, employed in the same work, by the same employer, as that of the worker; or (b) if there is no such person—the normal weekly earnings of a person in the same grade, employed in the same class of employment, and in the same district as that of the worker. [15] As I understood the submissions of the parties, s 82 of the regulation was not relied on by the regulator in arriving a decision about normal weekly earnings. However the regulator did rely on s 84 in defending the decision to define normal weekly earnings as the appellant's net business income, not his gross business income: 84 NWE if insurer considers calculation unfair (1) This section applies if an insurer considers that the calculation of normal weekly earnings under this division would be unfair. (2) The normal weekly earnings may be calculated in the way the insurer considers to be fair, and the calculation under this subsection is taken to be the normal weekly earnings of the worker. Regulator's Submissions [16] The effect of the regulator's position was that because of the limited information available and because the appellant was not a traditional employee, but worked under some form of contract arrangement, the determination of normal weekly earnings should be made by reference to what the insurer considered to be fair. In this regard the regulator submitted that: "It is clear that the 'fairness' discretion does not mean that an insurer should determine normal weekly earnings at the highest rate possible for the worker. A contrary approach would clearly ignore the plain meaning of "fair". In the Appellant's case, as noted, it would certainly not be fair to assess his "earnings" by looking solely at the total of job values, which he did not even receive in his bank account and before necessary business expenses are deducted. Such an amount would not assist in approximating the Appellant's loss; nor his earning potential. The argument advanced for the Appellant ignores the legislative intention and to compensate him for the gross business income, which does not reflect the actual earnings generated by his business activities, would not be fair and representative of NWE." [17] The regulator took the position that the deductions shown in the appellant's income tax return comprised expenses that "were directly and necessarily incurred" by the appellant in order for him to earn his income. The effect of the submission was that payments made to the appellant included an allowance to cover costs such as rent, equipment including upkeep and depreciation, supplies and motor vehicle expenses. [18] The regulator also relied on s 81 of the regulation in that it had the effect of excluding particular payments from the calculation of normal weekly earnings. The submission was that normal weekly earnings were required to be calculated by reference to what the -- 7 of 13 -- 7 worker is ordinarily paid on account of wages, salary or other earnings, but relevantly excluding "allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses". The regulator's submission was expressed as follows: "Although Gosneys did not specifically pay the Appellant any allowances for travel, car, tools and vehicle expenses, the Appellant deducted such costs from his total income for the purposes of his 2005 income tax return. In effect, he treated some of his income as allowances. The portion of his total job receipts used to pay these costs is analogous to those nominated allowances that must be excluded from an assessment of NWE pursuant to the WCRA. In the circumstances, the Appellant's normal earnings cannot reasonably include the amounts necessarily expended, or deducted from the payment for services made by Gosneys, in order to earn his gross income. the Appellant did not declare to the ATO that he earnt $103,311.00 in 2005, because he did not earn that amount. A significant portion was always allocated to necessary expenses. The Appellant's income tax was assessed on his declared taxable income of $55,412.00." [19] The regulator further submitted that: "I think it would be a matter of common sense that the way that these arrangements go when you have contractors, subcontractors, doing the work, they are paid a higher allowance because it does take into account those expenses they incur such as your Honour has referred to; using their own vehicle, their tools, etcetera. And that's why the approach by WorkCover which was confirmed by the Regulator was to disregard or deduct amounts that would ordinarily be in the nature of allowances that would be paid to a worker if they use their vehicle. Because those allowances compensate them for expenses they incur. Otherwise if you included allowances that are paid to a worker for expenses they incur, you artificially increase their normal weekly earnings. And that's why they're excluded. So in this case because of the circumstances where you do have a subcontractor involved, that's why the submission is that you rely upon the regulations which provide that the section - this is regulation 94 as contained on page 5 of the submissions. That you can - normal weekly earnings may be calculated in the way the insurer considers to be fair. And that calculation, under this subsection, was taken to be the normal weekly earnings of the worker." Appellant's Submission [20] The appellant emphasised that neither the Act nor the Regulations included a provision which could provide authority for the proposition that a worker's taxable income should be considered to be the worker's normal weekly earnings. [21] The appellant submitted that the ordinary meaning of the word "earnings" supported a conclusion that that normal weekly earnings should equate to a worker's actual earnings. The Shorter Oxford Dictionary was relied on in that it defined "earning" as "the amount of money earned", "income from work", and "the action of becoming entitled to payment in return for work carried out." The appellant said that the judgment in WorkCover -- 8 of 13 -- 8 Queensland v Australia Meat Holdings Pty Ltd2 is authority for the proposition that such a meaning should be given to normal weekly earnings. [22] The appellant relied on a beneficial construction of the Act. It was submitted that once it is accepted that the Act is to be interpreted liberally and practically in favour of the worker in circumstances where there are two alternative constructions, then the proper calculation of normal weekly earnings to ensure that the Appellant is appropriately compensated for his loss of income is to assess the normal weekly earnings on the amount of $103,311 his actual earnings. [23] The appellant submitted that two complicating factors led WorkCover to decide to use the appellant's 2005 tax return to determine his normal weekly earnings: (i) There was a lack of information available about the appellant's work arrangements; and (ii) The appellant was not an ordinary worker but a "worker" by virtue of the extended definition in the Act. It was said that Gosneys did not deduct tax from the appellant's income and did not make superannuation contributions. The appellant was to be regarded as a contractor. However, he worked for labour only, or substantially for labour only. [24] The appellant invited the Commission to take judicial notice of normal taxation arrangements applicable to wages and salary earners. The submission was that a contractor should be treated in the same way as a normal employee. [25] The appellant's reasoning was that "if you look at the normal situation, it's the gross earnings of somebody. If somebody who works for wages gets injured, the employer says, look, this fellow gets $1000 a week gross, so he's paid – that's used to assess his normal weekly earnings and what he gets. When he – when it comes tax time, he may have deductions that he takes off that reduces his actual taxable income from his gross income, but it's his gross income that is used, because the employer doesn't know what deductions this fellow might have by way of him. He might have a house that he's writing off, so his taxable income is less than what his actual income is." [26] The simple proposition was that, for an ordinary worker, the relevant figure is the gross income, not the gross income less tax. The taxable income could not be nominated because it would only be known at the end of the financial year and after the employee had identified expenses to be claimed and completed his income tax return. A contractor should be treated consistently with this approach. That is, the earnings figure should be determined by reference to his earnings before any deductions were made. [27] In terms of the deductions included in the appellant's tax return, the appellant distinguished between deductions which were expenses directly attributable to the appellant's employment, and deductions which were related to the appellant's ongoing contracting business. All the deductions were said to be related to the appellant's business, not to his employment with Gosneys. The consequence of this position was that the appellant's earnings from Gosneys did not include reimbursement for expenses, but were wholly attributable to labour. 2 WorkCover Queensland v Australia Meat Holdings P/L [2003] QCA 350 -- 9 of 13 -- 9 Reasoning [28] The ascertainment of the appellant's normal weekly earnings is to be undertaken consistent with the legislation. The starting point is s 151(1)(d) of the WCR Act which sets the appellant's entitlement at 65% of his normal weekly earnings. Section 106 of the WCR Act defines normal weekly earnings as "the normal weekly earnings of a worker from employment (continuous or intermittent) had by the worker in the 12 months immediately before the day the worker sustained an injury". Section 106(3) of the Act provides that normal weekly earnings are to be calculated "as prescribed under a regulation". [29] The regulation applying at the relevant time was that contained in Division 1 of Part 5 of the Workers’ Compensation and Rehabilitation Regulation 2003. Section 81 of the Regulation identifies amounts which "may or may not be taken into account in the calculation of normal weekly earnings." Amounts that may be taken into account are identified as follows: "Amounts paid to the worker by way of overtime, higher duties, penalties and allowances (other than amounts mentioned in subsection (2)) that are of a regular nature, required by an employer and that would have continued if not for the injury …". [30] Amounts that are not to be taken into account are amounts mentioned in the definition of "wages" included in schedule 6 to the Act and which relevantly include: (a) allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses; and (b) superannuation contributions, for deciding the amount of compensation payable to a worker under chapter 3 or 43. [31] The Regulation also includes what might be referred to as a safety net provision at section 84. This section applies in the event that, after calculating the NWE in accordance with the provisions set out above, the insurer concludes that the calculation gives rise to unfairness. If this conclusion is arrived at, s 84(2) of the Regulation allows the insurer to calculate NWE "in the way the insurer considers to be fair". [32] It is within this legislative framework that the regulator has concluded, on the relevant facts and circumstances, that it would be unfair to set the appellant's NWE at the level of his gross business income. The effect of the regulator's submission in the proceedings was that the appellant's gross business income does not reflect the actual earnings generated by his business activities and a determination to calculate NWE as gross business income would not be "fair and representative of NWE". [33] The effect of the appellant's argument however was that in circumstances where the appellant worked for labour only, or substantially for labour only, there was no basis to conclude anything other than that his business income was his normal weekly earnings. It followed that considerations of unfairness did not arise. 3 In 2005 this paragraph read: ‘(b) contribution by an employer to a scheme for superannuation benefits for a worker, other than contribution made from money payable to the worker;’ -- 10 of 13 -- 10 [34] The suspicion of unfairness appears to have arisen from a reading of the appellant's tax return which disclosed that appellant incurred $47,807 in business expenses in earning his gross business income of $103,311. These considerations led to a conclusion that the remuneration paid by Gosneys to the appellant must have included compensation for the business expenses incurred. Therefore, consistent with the exclusions mentioned in the definition of "wages", the appellant's NWE should be determined by reference to his net business income. [35] It is not in dispute that there is no documentary or transactional evidence showing that the remuneration paid by Gosneys to the appellant included compensation for business expenses. [36] For my part, in circumstances where the appellant was treating his financial affairs on the basis that he was conducting a business and contracting to one or more employers and had incurred a range of fixed and variable costs in the process, I think the regulator was entitled to ask questions about, and subject to scrutiny, any proposition that the appellant's NWE should be assessed by reference only to his gross business income. This does not mean that it was unfair not to make deductions from the gross business income, only that the regulator was entitled to embark on an investigation of the merits of such a proposition. [37] Whether such investigation has correctly led to a conclusion that expenses included in the appellant's tax return should be deducted from gross income, is the determinative issue. [38] The starting point is to accept that the appellant's arrangement with Gosneys cannot be characterised as a normal employer/employee relationship. This is evidenced both by the content of the appellant's tax return but also by what was known about the appellant's relationship with Gosneys. In respect to the latter consideration, it is known that Gosneys did not deduct income tax from payments made to the appellant and that Gosneys did charge the appellant for the rent of a spray booth and for the cost of power and paint. While these arrangements were not codified, it would appear logical to assume that some form of negotiation took place dealing with the rate remuneration and the nature and quantum of the charges to be made by Gosneys in respect to the use of the spray room, and the cost of power and paint. [39] Whether the negotiation over price or the rate of remuneration included, at least from the appellant's perspective, consideration of and a contribution towards the appellant's business expenses is the matter for consideration. It is likely, given the nature of the relationship, that Gosneys may have set conditions beyond what is known such as that the appellant hold particular insurances, that the appellant was responsible for his own travel arrangements, that the appellant must perform work for a minimum number of hours each day or week, and so on. Intuitively, I would expect that any contractor tendering for work or offering to perform services would include in his or her pricing some provision for operating costs and overheads. [40] Confronted with a tax return which included $47,000.00 worth of business expenses, it is difficult not to proceed on the basis that the expenses were legitimately claimed and therefore must have had some association with the conduct of the appellant's business, including his work for Gosneys. Put conversely, if the appellant did not incur any of the expenses as a result of his work for Gosneys, how are the deductions to be explained? -- 11 of 13 -- 11 [41] In my view the following conclusions may be arrived at on the facts and circumstances of this particular matter: (i) In conducting his business, the appellant has incurred various expenses some of which are variable and relate to the day to day performance of his work with Gosneys, while others are fixed in nature; and (ii) In circumstances where there are no terms of contract and no information disclosing how the rate of remuneration was arrived at, given the appellant's business model, it is not unreasonable to assume that the remuneration did include some level of compensation for costs associated with the running the appellant's business. [42] If a conclusion is reached to the effect that the remuneration paid by Gosneys to the appellant included compensation or reimbursement in part or whole for the expenses included in the appellant's tax return, it follows in my view that such amounts should be deducted from the appellant's claimed earnings figure for the purpose of calculating the NWE. The difficulty lies in the identification of such amounts. In this regard, I accept that it may be open to characterise the expenses included in the tax return differently and to draw a distinction between day to day expenses and fixed costs or overheads. [43] The effect of the regulator's submission was that a decision should be made that was consistent with the exclusions mentioned in the definition of "wages" contained in Schedule 6 of the Act. The definition relevantly provides that "wages" does not include "allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses", nor are "superannuation contributions" included. [44] It seems to me that for these amounts to be operative, they must have been paid in some form or other by the employer to a worker in reimbursement of expenses incurred by a worker in the performance of the work. From the appellant's perspective, no such payments were made and that was the end of the matter. However while there was no evidence to establish that Gosneys had made payments of this nature to the appellant, nor is there any evidence that items such as these, or similar to these, were not expenses that the appellant sought to recover from Gosneys in whole or in part and that the remuneration level was not determined to include compensation for these items. Conclusion [45] If the appellant had been operating a contracting business for some time, it is logical to expect that he incurred expenditure in the conduct of his business including administration costs, costs associated with the maintenance in good working order of tools and equipment, motor vehicle costs, and interest expenses. [46] If one starts with the premise that the normal weekly earnings of an employee covered by an award or employed under a standard wages remuneration arrangement, would be expected to be less than the normal weekly earnings of a contractor, then there exists a basis to find in favour in the regulator. The expectation would be that a contractor tendering for work would quote a price that includes a component relating to the costs of -- 12 of 13 -- 12 running his business and costs which are expected to be incurred in the performance of the work. [47] If this contribution could be measured, the consequence would be that part of the income paid by Gosneys to the appellant could be held to be not for labour, but for expenses incurred by the appellant in the operation of his contracting business. This amount could then be legitimately be deducted from the $103,331 paid by Gosneys to arrive at a normal weekly earnings figure. [48] Given that the appellant worked solely for Gosneys in the relevant financial year, there is a basis to conclude that day to day business expenses claimed by the appellant in his tax return must relate to the performance of his work for Gosneys. It should also follow that the appellant would have, in any negotiation about remuneration, sought to recover from Gosneys those expenses which were directly incurred by the appellant in the performance of his work for Gosneys. While these items may not have been identified in any documentation, it could be expected the when the appellant agreed a price that he agreed to a price which covered his labour and these expenses. [49] In my review of the itemised expenses included in the agreed statement of facts, I would regard all the expenses listed as expenses incurred in the day to day operation of the business with the exception of depreciation, rent on land and buildings, and insurance premiums. It follows that $24,301.00 of the total expense figure of $47,807.00 should be regarded as expenses incurred by the appellant in the course of the performance of his work for Gosneys. Decision [50] The calculation of NWE is to be made having regard to s 84 of the Regulation. A determination to be made about what is fair is a determination that is based on the relevant facts and circumstances associated with each particular matter. In this instance, fairness is to be assessed through the identification of expenses which, on the balance of probabilities, the appellant would have been expected to recover from Gosneys, and which would have been included in the remuneration provided by Gosneys which totalled $103,311.00. [51] In my view the normal weekly earnings of a worker from employment does not include moneys deemed to have been paid as reimbursement for expenses incurred in the performance of work. It follows that expenses totalling $24,301 should not be included in the required NWE calculation. [52] The appeals are upheld and the decisions of the regulator dated 6 March 2017 are set aside and substituted with decisions in which NWE is calculated at $79,010. -- 13 of 13 --