Determining how “normal” weekly earnings are calculated for people injured at work is an issue that workers’ compensation insurers in the Northern Territory are expected to take to court. Darwin lawyer Ian Morris, a partner with law firm Hunt & Hunt, said yesterday that if a recent Court of Appeal decision is allowed to stand, insurers could find they have under-estimated their potential liability for workers.

Under the NT’s Work Health Act, an injured person’s normal weekly earnings are calculated by excluding allowances which some workers are normally paid only in special circumstances. These include “danger money” for particular worksites as well as travel and food allowances. But in a decision handed down recently, the Court of Appeal ruled that an injured worker’s compensation must be based on his normal weekly earnings including his allowance for food and board. 

“This decision conflicts with what the Act intends – that is, a simple way to calculate the compensation to be paid to the worker,” Mr Morris said. “It also creates a problem for insurers who assess their likely exposure under the Act and set their premiums accordingly.”