An injured worker (not Ali) waiting for a consultation at TWC2
By Debbie Fordyce
Determining the Average Monthly Earnings (AME) should be easy: Find out how much the worker was paid over the past twelve months and take the average. This is important because, as laid out in the Work Injury Compensation Act, the AME is used in computing the medical leave wages and the compensation for work-related injuries.
But what if the man wasn’t working for an extended period during the lockdown and beyond when workers were confined to dormitories and other facilities, and wasn’t paid? Now that migrant workers are back to work, accidents are taking place at the workplace and what should be a simple calculation could be problematic.
Ali joined his company in late August 2019. Because of the Covid-19 pandemic, he wasn’t able to work for five months of 2020, from April through August. For those five months, he received what he calls “no-work pay”, an average of $470 a month. He used this money to buy a few personal items for himself and managed to send the rest home to family. He didn’t need to buy food because catered meals were delivered to his dormitory three times a day.
Before starting with this company, he received an In-Principle Approval (IPA) (see explanation in Glossary) showing a basic monthly salary of $575. Under the law, he should have received at least this basic salary for the lock-down months he wasn’t able to work, but he doesn’t want to contest the lower amounts he received as he is grateful to have retained the job and to have started working again.
What he received during the lockdown was a far cry from what he used to earn before Covid-19. In the six months prior, from September 2019 until March 2020, he received more than $1,000 each month from basic and overtime wages. Ali can prove the payments he received from September 2019 to March 2020 by referring to his bank statements, though there is the separate question of whether the amounts paid to him were correctly calculated. However, it won’t be easy to check this because he was not provided with timecards nor pay slips. (Pay slips have been mandatory since 2016, but some companies are still not complying with this regulation.)
Post-lockdown, he resumed work in September 2020, and worked two full months in September and October earning $1,199 and $1,158 (includes overtime hours). Every day of these two months and into November he worked five hours of overtime, including on Sundays and holidays.
He hasn’t worked since mid-November when he suffered a workplace accident.
The accident and the question of AME
The injury affected his right wrist, and on seeing the doctor, he was given 41 days of medical leave. Computing the medical leave wages he should be entitled to involves a simple computation using the AME. This is usually derived from the average amount paid in salary for the previous twelve months, or however many months worked if less than twelve months.
Ali has been in the company’s employment for more than twelve months, but the five Covid shutdown months have been on reduced payments (not even his rightful basic salary).
In calculating the AME, should Ali include the “no-work pay”, or he should discount those five months?
Since, for the time being, we haven’t pinned down precisely what his salary was in the prior-lockdown months (he is still in the process of verifying), we can assume that it was similar to the average salary of $1,178 for the post-lockdown period (average of $1,199 and $1,158 for September and October respectively).
If we use only the above-mentioned salary for working months as the basis for calculating his AME, then his entitlement to 41 days’ medical leave wages would be around $1,582.
However, if we include the five months of no-work-pay, the AME would be reduced and with it his medical leave wages would be around $1,185.
(These are estimates only because the precise amount for medical leave wages also factors in Sundays, hospitalisation and other details.)
Nonetheless, the difference of around $400 between the two scenarios is no small matter to a migrant worker like Ali.
The AME is also used to compute his compensation for the work injury. This compensation amount is derived from three factors: the doctor’s assessment of permanent incapacity (as yet unknown), the AME, and a multiplying factor relating to his age. He was 31 years old at the time of the accident, meaning 162 is the multiplying factor stemming from his age.
The injury is not yet ready to be assessed for permanent incapacity, but if the doctor were to assess that Ali has suffered 10% incapacity, the compensation could be either approximately $19,000 using the higher AME, or closer to $14,300 using the lower AME. That difference of $4,700 would be a significant amount for Ali.
Clear and just policy needed
Since August or September 2020 when construction and marine workers have been allowed to resume work, there have been numerous accidents and several fatalities. Deciding whether to include the patchy and irregular payments that many workers received during the time they were not able to work would drastically lower their medical leave wages and their compensation.
For those who depend on overtime to supplement their low salaries, using the basic salary as listed on the IPA would also unfairly deprive them of their medical leave wages and injury compensation.
As a piece of social legislation, the Work Injury Compensation Act intends that injured workers should be compensated commensurate with their earning capacity. It would be contrary to such intent to take into account periods when by force majeure a worker is not permitted to work and earn at all.
TWC2 holds the view that it would be reasonable and fair to discount these non-working months in deriving the AME, but it remains to be seen whether the Ministry of Manpower will adopt this approach.