Bacic and Comcare (Compensation)
[2018] AATA 2384
•13 July 2018
Bacic and Comcare (Compensation) [2018] AATA 2384 (13 July 2018)
Division:GENERAL DIVISION
File Number(s): 2015/2597
Re:Helena Bacic
APPLICANT
AndComcare
RESPONDENT
DECISION
Tribunal:Ms A F Cunningham, Senior Member
Date:13 July 2018
Place:Hobart
The Tribunal sets aside the reviewable decision dated 18 March 2015 and substitutes it with the decision that:
(i)the applicant is entitled to compensation payments for incapacity for the period 2 April 2008 until 29 February 2012;
(ii)the matter is remitted to the respondent to determine the amount of weekly compensation payable to the applicant pursuant to s 19 of the Safety, Rehabilitation and Compensation Act 1988 (Cth); and
(iii)any application for costs be made by the applicant by 5:00pm on Monday 16 July 2018 and any submissions in reply from the respondent by 1:00pm on Wednesday 18 July 2018.
.......................[sgd]........................
Ms A F Cunningham, Senior Member
Catchwords
COMPENSATION – accepted injury – incapacity payments – ability to earn – voluntary redundancy – no offer of suitable employment – decision under review set aside and substituted.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 14, 19
Cases
Bacic and Comcare [2008] AATA 465
Fleming and Comcare [2011] AATA 936
Ilsley v Wattyl Australia Pty Ltd (1997) 75 FCR 1; 144 ALR 510Kavas and Comcare [2011] AATA 935
Secondary Materials
Macquarie Dictionary, 6th edition
REASONS FOR DECISION
Ms A F Cunningham, Senior Member
13 July 2018
The applicant, Helena Bacic, has an accepted claim for the ‘tear of cartilage or meniscus of knee (R) and injury to posterior tibial nerve (R)’ (the accepted knee condition) with a date of injury of 4 May 1999. The respondent has paid compensation payments for incapacity, medical expenses and a lump sum payment for 20% whole person impairment in respect of the accepted knee condition.
This application concerns the review of a decision dated 18 March 2015 (the reviewable decision). That decision affirmed a determination dated 26 November 2014 in which the respondent denied liability to pay incapacity payments for the period 7 June 2004 to 29 February 2012.
On 20 March 2017 the Tribunal determined that it had no jurisdiction to review the reviewable decision in so far as it concerned the applicant’s entitlement to incapacity payments for the period 7 June 2004 to 1 April 2008. Therefore the relevant period for the purposes of this decision is 2 April 2008 to 29 February 2012.
BACKGROUND
The applicant has made the following applications for review to the Administrative Appeals Tribunal:
·a claim for permanent impairment (2003/18) (subsequently withdrawn by the applicant);
·a claim for liability, incapacity payments and medical expenses relating to a right thumb and shoulder injury (2004/132) (subsequently withdrawn by the applicant) and permanent impairment in relation to the accepted knee condition; and
·a claim for incapacity payments relating to the accepted knee condition from 7 June 2004 (2005/105)
On 31 March 2008 the solicitors for the applicant and the respondent filed signed consent terms in relation to the claim for liability for the right thumb and shoulder condition, and signed consent orders in relation to incapacity payments for the accepted knee condition. On 1 April 2008 the Tribunal issued decisions in the terms of those consent memorandums affirming the denial of liability in relation to the right thumb and shoulder claim, and affirming the denial of liability for incapacity payments in relation to the accepted knee condition.
On 5 June 2008 the Tribunal set aside the decision denying liability for permanent impairment and remitted the matter to the respondent with directions that the applicant was suffering 20% whole person impairment as a result of the accepted knee condition (Bacic and Comcare [2008] AATA 465).
On 1 March 2012 the applicant had total knee replacement surgery on her right knee and was paid incapacity payments by the respondent from 1 March 2012 until 21 August 2012.
ISSUES
The issues for determination by this Tribunal are:
(a)whether the applicant was incapacitated as a result of her accepted knee condition in the period 2 April 2008 to 29 February 2012 (the relevant period); and
(b)if so, in respect of any such period of incapacity during the relevant period:
(i)whether the applicant had an ability to earn in suitable employment; and
(ii)whether the applicant is entitled to incapacity payments.
LEGISLATION
The respondent’s liability to pay compensation arises pursuant to s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) which reads as follows:
Compensation for injuries
1Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.
…
Section 19 of the SRC Act provides:
Compensation for injuries resulting in incapacity
1This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.
2Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
…
3Subject to this Part, Comcare is liable to pay compensation to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in subsection (2), of an amount calculated using the formula:
…
4In determining, for the purposes of subsections (2) and (3), the amount per week that an employee is able to earn in suitable employment, Comcare shall have regard to:
(a)where the employee is in employment (including self-employment)--the amount per week that the employee is earning in that employment;
(b)where, after becoming incapacitated for work, the employee received an offer of suitable employment and failed to accept that offer--the amount per week that the employee would be earning in that employment if he or she were engaged in that employment;
(c)where, after becoming incapacitated for work, the employee received an offer of suitable employment and, having accepted that offer, failed to engage, or to continue to engage, in that employment--the amount per week that the employee would be earning in that employment if he or she were engaged in that employment;
(d)where, after becoming incapacitated for work, the employee received an offer of suitable employment on condition that the employee completed a reasonable rehabilitation or vocational retraining program and the employee failed to fulfil that condition--the amount that the employee would be earning in that employment if he or she were engaged in that employment;
(e)where, after becoming incapacitated for work, the employee has failed to seek suitable employment--the amount per week that, having regard to the state of the labour-market at the relevant time, the employee could reasonably be expected to earn in such employment if he or she were engaged in such employment;
(f)where paragraph (b), (c), (d) or (e) applies to the employee--whether the employee's failure to accept an offer of employment, to engage, or to continue to engage, in employment, to undertake, or to complete, a rehabilitation or vocational retraining program or to seek employment, as the case may be, was, in Comcare's opinion, reasonable in all the circumstances; and
(g)any other matter that Comcare considers relevant.
WAS THE APPLICANT INCAPACITATED AS A RESULT OF HER ACCEPTED KNEE CONDITION FROM 2 APRIL 2008 TO 29 FEBRUARY 2012?
The circumstances of the injury suffered by the applicant to her right knee on 4 May 1999 were not in issue. The applicant described how she sustained an injury from a fall during the course of her employment with the Health Insurance Commission (HIC) when she hit her right knee against a wall after rising from her chair. The respondent accepted liability for the injury and paid incapacity payments. The applicant returned to work in a reduced capacity on 22 March 2002.
It was the applicant’s evidence that, due to the effects of her medication, she was not able to continue her work at the counter dealing with customers’ claims and so instead assessed claims in a back room office. She was subsequently moved to the HIC’s head office in Hobart where she continued her work on the ground floor (as she was not able to use the stairs to access the second floor). The applicant said she continued to experience lapses of memory and that arrangements were made for nametags to be placed on people’s desks to assist her.
Workplace changes were made in 2004 and as a result, the applicant’s previous customer claims assessment work was no longer available and she was instead given principally filing tasks. The applicant said she experienced swelling and numbness in her leg because she was no longer seated at her desk and was required to stand for long periods.
Voluntary redundancies were first made available to staff in March 2004 as a number of positions were being discontinued, including positions in claims assessments. The applicant said she was approached by Frank Bidejowski, her case manager at HIC, and asked whether she was interested in a redundancy package, given the only position currently available to her was filing. The applicant said she queried what affect accepting a redundancy package would have on her workers’ compensation payments and that she was informed by Mr Bidejowski it would have no effect.
The applicant was provided with a breakdown of her redundancy entitlement and says she did not consider it to be sufficient to live on. Although the applicant had worked for the HIC in various capacities for some 21 years, she discovered that the first three years of her service would not be included in the redundancy entitlement because of a ‘break’ in her service. The applicant’s evidence was that the offer of redundancy was first made in March 2004 with the expectation that employees would take up the offer by July 2004. Because the applicant did not consider that the amount of her redundancy offer was sufficient, she continued to undertake her filing duties until June 2004 when she found she was no longer physically able to continue with the work. She was experiencing pain in her hands, particularly in her right thumb joint, as well as pain in her shoulder. From June 2004 the applicant was off work and was paid workers’ compensation in accordance with certificates issued by Mr John Mills, an orthopaedic surgeon, for the periods 25 June 2004 to 5 August 2004 and 5 August 2004 to 5 November 2004.
In early November 2004 the applicant said she discovered that she was no longer being paid workers’ compensation when she went to an ATM to withdraw cash. The applicant said that she immediately contacted the HIC and was told that the respondent had made a decision to cease her payments some time ago and that the money she had been receiving from her accumulated sick and recreational leave had now run out. The applicant could not be definitive about who she spoke to in this call but said she believed it was Don McVilly and that she had informed him that she had no option but to resign and so be able to access her superannuation. During a second phone call some minutes later, Mr McVilly advised her they would accept her resignation and would ‘top it up with a redundancy’. A few days later the applicant received papers in the mail which she signed and returned. The applicant said that it was her understanding that there was no suitable work available for her apart from work on the first floor which she was not able to access due to her disabilities.
The applicant underwent right knee replacement surgery on 1 March 2012 and the respondent paid compensation from this date until the date of her 65th birthday in August 2012.
The applicant maintained that the pain in her shoulders was associated with the weight she applied to her walking stick, which she required to minimise the impacts from her right knee injury. The applicant had undergone surgery on her right shoulder in 2006 and on her left shoulder in 2007. The applicant’s evidence was that, despite her retirement in 2004, the pain in her right knee was ongoing between 2004 and 2008.
Evidence of Mr John Mills
Mr Mills prepared a report dated 27 November 2017 (Exhibit A4) regarding the applicant’s consultations between 2004 and 2012 in which he stated that, at a review on 26 March 2004, the applicant:
remained with significant ongoing symptoms in her right foot consistent with the documented damage to her posterior tibial nerve. She remained on Neurontin tablets at a high dose, Endep, Panadeine Forte and Digesic.
Her symptoms on review on the 25th June 2004 consisted of an ache in her right knee which was treated by using a crutch. Mrs Bacic tended to use a crutch on her right side as she did not feel that it provided as much support when using it on the left. She stated that she tended to trip over the crutch if she used it on the left side. Use of the crutch on the right side however tended to flare symptoms in her right shoulder where she had evidence of rotator cuff pathology and her right thumb where she had degenerative change in the carpometacarpal joint. Her right knee also caused a degree of insecurity and tended to let her down. She tended to use supports particularly on uneven ground and on steps and slopes. She reported a reduced range of flexion in the knee, limited by pain. She complained of ongoing problems in her foot which remained unchanged with pain and a burning sensation, a reduction in movement, and weakness.
In that report, Mr Mills went on to state:
At review on the 5th August 2004 Mrs Bacic remained with ongoing problems in her foot. She also complained of an exacerbation of symptoms involving the base of her right thumb. Her right shoulder continued to give her problems.
Mrs Bacic was seen again in September and November 2004. She had ongoing problems with her right foot which had remain unchanged throughout 2004. …
…
In 2005 I saw her on the 10th February, 16th May, 26th August, 10th October and 15th December. She remained with persistent symptoms involving her right foot consistent with the diagnosis of damage to the posterior tibial nerve on this side. She had ongoing and increasing problems involving her right shoulder. An ultrasound scan of her right shoulder had demonstrated a complete tear of the anterior portion of supraspinatus with a significant subacromial bursa causing impingement at 60 degrees of abduction.
…
Reviews on the 16th January 2006, 10th April 2006 and September 2006 were mainly concerned with her right shoulder. I note that at the time of her review on the 10th April 2006 knee and foot symptoms remained the same and I provided her with a further prescription for Endep, Neurontin and Panadeine Forte. Her left shoulder remained manageable at that stage.
At review on the 15th January 2007 Mrs Bacic reported episodes of giving way of her right knee. X-rays confirmed moderate change affecting the medial compartment of this knee consistent with the development of arthritic change. …
…
At her review in April 2007 her left shoulder was making a slow recovery. She had only 50% of the normal range of motion but felt that her strength was gradually improving. She stated that her right knee continued to feel unstable with persisting paraesthesia in the leg and foot. She remained with signs of damage to the posterior tibial nerve with both sensory and motor components.
…
In 2008 I saw Mrs Bacic on the 2nd February, 17th April, 4th August and 13th November. She reported frequent falls and increasing discomfort associated with her right knee. She had resumed using a crutch. She remained with ongoing problems associated with dysfunction of the posterior tibial nerve and was developing increasing symptoms associated with progressive arthritic change involving the medial aspect of her right knee. An x-ray taken towards the end of 2008 revealed moderate arthritic change involving the medial compartment. …
Mrs Bacic re-attended in February 2009 having been involved in a motor vehicle accident in December 2008 when she drove into a ditch in an attempt to avoid hitting a wallaby which had wandered onto the road. She had suffered soft tissue injuries to her knees. Her left knee x-ray had shown a mild decrease in the medial joint space but this was nowhere near as severe as the x-ray changes noted in her right knee.
I saw Mrs Bacic again in November 2009. At that time she stated that her knees were bad, particularly the right knee. X-rays revealed moderately severe arthritic changes involving the right knee with less significant changes seen on the left side.
…
Right knee replacement surgery was performed on Mrs Bacic on the 1st March 2012. The surgery was uncomplicated. She remained on crutches due to the ongoing problems associated with her posterior tibial nerve lesion.
At review in February 2013 she reported that her right knee was functioning very well. Her x-ray remained satisfactory. She reported increasing problems with her left knee. Further problems with her left knee were noted at review on March 2014 and again in May 2014, and she underwent left-sided knee replacement surgery on the 17th July 2014.
In answer to specific questions asked of him by the respondent, Mr Mills wrote that when seen in June 2004, the applicant was suffering from the effects of an injury to the posterior tibial nerve of her right lower limb and, in his opinion, she was incapacitated for work at that time. Mr Mills confirmed that in July 2003 he had certified the applicant as fit to undertake a return to work program. He had noted that, at that stage, there were minimal symptoms and signs of developing arthritic change in her right knee.
Later in that report, Mr Mills commented that the medications prescribed for complex regional pain syndrome had significant side effects causing drowsiness, affecting concentration and memory, as well as having significant impact on cognitive function and awareness. He stated that these side effects would have had a significant impact on her ability to concentrate and perform any complex tasks requiring significant cognitive input.
Mr Mills noted that the applicant went on to develop progressive arthritic change in her right knee that was much more severe and earlier in onset than the arthritic change involving her left knee. In his opinion there was a significant contribution to the right knee from the work-related injury that resulted in the need for the procedure performed in 1999 (a partial medial meniscectomy).
On the final page of his November 2017 report, after having perused the medical records in detail, Mr Mills concluded:
Mrs Bacic was incapacitated for engaging in her usual work with Medicare during the period 2008 to 2012 as a result of her knee condition and the resultant complication of posterior tibial nerve injury. Her inability to work was also compounded by her medications which have documented side effects including problems with cognitive function, concentration and drowsiness. Throughout this period of my contact with Mrs Bacic she remained with consistent and ongoing symptoms associated with her documented knee injury and its sequelae and was developing increasing problems associated with progressive arthritic change involving her right knee. This progressive change has been documented by progressive x-ray changes over this period of time.
In a medical certificate dated 25 June 2004 Mr Mills certified the applicant as unfit for work from 25 June 2004 to 5 August 2004 citing ‘post tibial neuropraxia & meniscal injury (R leg) osteoarthritis of R thumb, R shoulder pain’ (T8, p 25). A second medical certificate issued by Mr Mills dated 5 August 2004 certified the applicant as unfit for work from 5 August 2004 to 5 November 2004 also citing ‘post tibial neuropraxia & meniscal injury (R leg) osteoarthritis ofr (sic) thumb, R shoulder pain’ (T11, p 28).
In a report dated 19 November 2005 (T16, pp 38-39), Mr Mills opined that the applicant’s incapacity:
with respect to her right lower limb is permanent and is unlikely to improve in the near or distant future.
It is my opinion Mrs. Bacic does have this incapacity and the incapacity has continued since October, 2004.
With respect to her posterior tibial nerve lesions and regional pain syndrome, I don’t think there is any surgical treatment likely to benefit her. Treatment remains symptomatic. She has tried a dorsal column stimulator but this is no longer in operational mode. She continues on regular medication including analgesics and modified medication (Neurontin). She also has degenerative change documented in her right knee and it is likely that this will progress with time. This may progress to such a level that surgical intervention following a knee joint replacement surgery becomes an option. The disability is not sufficient at this time to warrant such major intervention. The presence of a regional pain syndrome also is a relative contra indication to a successful outcome from such surgery and I would be against this at this time.
My prognosis for the future is that Mrs. Bacic will continue on with her current level of disability indefinitely.
On 31 August 2011 Mr Mills reported that the accelerated rate of degenerative change in the applicant’s right knee was a consequence of the removal of her damaged medial meniscus, which occurred as a result of the accepted work related injury in 1999 (T21, pp 53-54). Mr Mills was of the opinion that whilst the applicant had a high risk of developing arthritic change in her right knee over time, this risk had been increased and the timeframe for surgical intervention accelerated as a result of the work-related injury. He attributed this to the resultant loss of the protective mechanisms of an intact meniscus. Mr Mills said it was arguable that if the applicant had not sustained the injury, ‘her right knee symptoms would be roughly equivalent to the symptoms and degree of change noted on her left knee’ (T21, p 54).
On 19 October 2004 the respondent issued a decision determining that the applicant was not entitled to incapacity payments under s 19 of the SRC Act from 7 June 2004 (T12, pp 29-30). The decision referred to video surveillance of the applicant taken in June 2004, which was also tendered in proceedings before the AAT, and statements provided by several work colleagues that suggested that the applicant was able to attend evening social functions that extended into the morning and was able to navigate her office/work environment without the need of a crutch.
The applicant sought a review of the respondent’s decision dated 19 October 2004. The decision was affirmed by a review officer on 28 April 2005 who also referred to the video surveillance evidence before the Tribunal and concluded ‘given that the video evidence indicates that the employee has little disability, it follows that the employee has no entitlement to incapacity payments and it is considered that the determination dated 15 October 2004 is correct’ (T14, p 33).
The respondent made the decision to cease liability to pay incapacity payments in 2004 on the basis of the video surveillance evidence and statements from the applicant’s work colleagues. After viewing the video surveillance, Mr Mills was still of the opinion that the applicant was incapacitated for her usual work during the relevant period as a result of her knee condition and the resultant complication of posterior tibial nerve injury. He stated that the applicant’s inability to work was compounded by the side effects of her medications, which included problems with cognitive function, concentration and drowsiness.
Mr Mills’ opinion as to the applicant’s incapacity and its cause was not refuted by any medical evidence called by the respondent, nor was it effectively challenged under cross-examination.
Evidence of Dr Tim Stewart
The respondent did not call any witnesses to give medical evidence in person but relied on reports from Dr Tim Stewart, a consultant occupational physician, contained in the T documents.
The applicant attended Dr Stewart’s consulting rooms on 23 November 2005. Dr Stewart was asked whether the applicant was incapacitated for work as a result of side effects caused by the medication she was taking, in particular whether she was incapacitated for work prior to 10:00am or at any other time. Dr Stewart reported that the applicant told him she had problems handling money because her memory was affected by the drugs that she was taking (T17, p 41). He confirmed that the main side effects of the applicant’s medication were memory disturbance, headaches and an inability to rouse herself early in the morning (T17, p 42). In his opinion:
[t]he pharmacological cocktail appears to be having a less than beneficial effect on Mrs Bacic. In my opinion she should be weaned off the medications and seek other methods of pain management, focusing on cognitive behavioural therapy rather than pharmacology (T17, p 43).
Dr Stewart considered the applicant’s dosage inappropriate and suggested that she ‘reduce her medications, commence activity and move forward’ (T17, p 44).
In a later report dated 2 July 2007 Dr Stewart suggested that the applicant:
… should be in employment where she is seated primarily but can also move around. Her original job with HIC would be ideal. There are no specific restrictions that I would place on Mrs Bacic other than the obvious one in relation to stairs and climbing on to stools. These activities should not be encouraged as they are beyond her capacity (T18, p 46)
Noting the applicant’s medication regime, Dr Stewart opined that it was not surprising she was having problems with her memory as the medications acted directly on the central nervous system to help with pain management. Dr Stewart noted that the side effects of Neurontin include drowsiness, dizziness, unsteadiness, fatigue, weight gain, nausea and constipation and wrote that, in his opinion, the applicant should desist from taking the medications as they were of no benefit to her. He suggested Panadol or paracetamol but opined that ‘cognitive behavioural therapy is beyond question the treatment of choice, particularly where a dorsal column stimulator has failed to add value’ (T18, p 48).
It is notable that the respondent’s initial decision of 26 November 2014 relied upon the evidence in Dr Stewart’s report of 2 July 2007 regarding the applicant’s capacity to work in a primarily seated role and his statement that her original job with HIC would be ideal. Dr Stewart was apparently unaware that the applicant’s employer did not consider that she was fit to continue with her original duties processing claims at the front counter and interacting with clients, and had made arrangements for her to assess claims away from the front counter. Dr Stewart’s opinion was that the applicant should be in employment where she was primarily seated. However, the applicant’s evidence was that such work was not made available to her when she was moved to head office.
Consideration
The term ‘incapacity for work’ is defined in s 4(9) of the SRC Act as an incapacity to engage in any work or an incapacity to engage in work at the same level at which the applicant was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened.
In Fleming and Comcare [2011] AATA 936 the Tribunal stated (at [20]):
[t]o my mind, restrictions of this kind, in effect light all restricted duties, may exist within the concept of incapacity for work for the purposes of section 4(9)(b) of the Act. The words ‘work at the same level’ are not confined in meaning to the salary, class or grade of the particular employment, but also refer to the characteristics of the work in terms of, for example, the nature, complexity and duration of tasks, as well as the quality of the work itself. While it may be accepted, as in Re Moon and Telstra Corporation Ltd, that minor changes in duties before and after an injury may not represent an incapacity for work, this is not such a case. To my mind, the restrictions on Ms Fleming’s capacity to undertake certain tasks, albeit relatively minor, are consistent with an incapacity to engage in work at the same level as prior to her injury in 2002.
Mr Mills gave evidence that the applicant ‘was incapacitated for engaging in her usual work with Medicare during the period 2008 to 2012 as a result of her knee condition and the resultant complication of posterior tibial nerve injury’. The applicant was certified by Mr Mills in June 2004 as incapacitated for work for specified periods.
The applicant gave evidence that the nature of her duties changed when she was moved to head office in that she was expected to undertake more filing activities. She said she found these increasingly difficult to manage due to her knee condition. There seems to be no argument that the applicant was no longer able to perform the claims assessment duties that she was performing immediately prior to her injury. The evidence was that on her return to work she undertook claims assessment work in a back office as she was no longer able to work at the counter and interact with clients. The applicant said that no suitable alternative duties were offered to her when she moved to the head office. She described how the nature of the filing duties exacerbated her knee pain and required her to lean on her crutch, which, in turn, caused shoulder and thumb pain. The applicant subsequently consulted her medical practitioner for a medical certificate. She left work in early June 2004 and did not return.
No evidence was produced by the respondent to refute the evidence regarding the nature of the applicant’s duties and their impact, and the Tribunal has no reason to doubt the applicant’s evidence. In the Tribunal’s view, the above evidence from the applicant and Mr Mills demonstrates that the applicant continued to suffer from the effects of the injury throughout the relevant period. The Tribunal accepts the evidence of the applicant and Mr Mills that the applicant was incapacitated for work within the meaning of the SRC Act during the relevant period.
The Tribunal must next determine whether the incapacity to work was as a result of the accepted knee condition within the meaning of s 14 of the SRC Act.
On the basis of the evidence given by Mr Mills and the applicant as outlined above, the Tribunal is satisfied that that the applicant continued to suffer from the effects of her injury throughout the relevant period. The respondent’s liability to pay compensation in this case arises where the injury suffered ‘results in’ an incapacity for work.
The Tribunal was referred to a decision of the Federal Court in Ilsley v Wattyl Australia Pty Ltd (1997) 75 FCR 1 (Ilsley) where the words ‘results in’ were considered in the following terms (at 6):
[t]hat the clause raises a question of causation is not open to question: see Kooragang Cement Pty Ltd v Bates at 463-464. It should be taken as “unarguably clear and generally accepted” since at least the Morris v George litigation (that is, Morris v George and Bushby v Morris); that an incapacity can result from more than one injury: see Switzerland Insurance Workers Compensation (NSW) Ltd v Burley, New South Wales Court Of Appeal, 5 December 1996, unreported per Mahoney P. It likewise should be taken as clear that the notion of causation imported by the clause does not limit the operative injury (or injuries) “to the immediate proximate cause of incapacity”: Kooragang Cement Pty Ltd v Bates at 463. Whether total incapacity results from an injury is a question of fact. This is no different from the application to a given case of the common law principles of causation in negligence cases: see March v E & M H Stramare Pty Ltd (1991) 171 CLR 506; a “common sense” evaluation of the causal chain is required – that evaluation being made in light of the statutory formula itself.
The only additional general comments we consider it necessary to make are these. First, where the causal chain reveals multiple and sequential (or cumulative) injuries that are alleged to provide causes for an incapacity, before an earlier such injury can properly be said to be an injury for the purposes of cl 1(b), it must be able to be said that it remained an effective or operative cause of the incapacity. Secondly, as is well recognised, the sustaining of an injury and the onset of incapacity resulting from that injury need not, and commonly does not, occur simultaneously: Accident Compensation Commission v C E Heath Underwriting & Insurance (Aust) Pty Ltd, above, at 526-527.
In Kavas and Comcare [2011] AATA 935 (Kavas) there was evidence that the applicant’s accepted condition had deteriorated and that associated factors, including the lack of stable employment, had led to an increase in his psychological symptoms. The respondent’s proposition in Kavas was that Mr Kavas’ injury-related incapacity for work had been entirely displaced by a new cause of incapacity. This was rejected by the Tribunal which, referring to Ilsley, stated (at [41]):
[i]f an injury is an “effective and operative” cause of incapacity despite supervening events or subsequent injuries, the resulting incapacity may truly be said to result from the injury.
This is so even if some supervening cause has aggravated the effects of the original injury and prolonged the period of incapacity.
That Tribunal in Kavas also referred to the decision of Re Sadek and Commonwealth of Australia (1988) 14 ALD 769 where (at 771) it was said:
[b]efore the novus actus will be regarded as the only cause of the incapacity, it must be shown that the incapacity which would have resulted from the injury has ceased to exist and that the incapacity which does exist ‘has resulted from the new cause as the sole cause.’
The Tribunal in Kavas went on to state (at [42]) that:
It is well established law that it is not necessary for an incapacity to result solely from an injury before compensation is payable – “it is sufficient if the injury contributes in a material sense to the incapacity… If a compensable injury constitutes one of a number of factors or events each of which combine as links in a chain of causation terminating in a single condition amounting to total incapacity, that incapacity will be fully compensable, the injury being a contributing cause in a material sense”. Considering sections 5B, 14 and 19, I do not accept the proposition that a substantial contribution, or a contribution to a significant degree, is required when deciding whether claimed incapacity is ‘as a result of’ a compensable injury. But this point, presently, is not determinative.”
In the current case, the Tribunal is satisfied on the basis of Mr Mills’ evidence that the applicant continued to suffer the effects of her accepted knee condition in that she suffered ongoing pain and discomfort, which was aggravated by the change in her duties at head office, and resultant pain in her shoulder and thumb. There was no persuasive evidence that the applicant’s incapacity could fairly be attributed to a new cause such that it could no longer be attributed to the accepted knee condition.
In line with the above authorities, the Tribunal can confidently conclude that the applicant was incapacitated for work at the same level at which she was engaged immediately prior to her injury during the relevant period as a result of the accepted knee condition within the meaning of s 14 of the SRC Act.
DID THE APPLICANT HAVE AN ABILITY TO EARN IN SUITABLE EMPLOYMENT?
The respondent submitted that the applicant’s actions in accepting a voluntary redundancy meant that she failed to continue in suitable employment within the meaning of s 19(4) of the SRC Act. In particular, the respondent relies on s 19(4)(d) and contends that in accepting the voluntary redundancy in November 2004 and ceasing her employment with the HIC, the applicant failed to ‘continue in suitable employment’. Any such failure would impact on the calculation of weekly payments for incapacity liable to be paid for by the respondent.
The applicant submits that there was no evidence to support a finding that an offer of ‘suitable employment’ was ever made. It was the applicant’s clear evidence that the redundancy ‘offer’ came from her employer during a telephone conversation. It was also during that conversation that the applicant said she discovered her incapacity payments had been retrospectively cancelled and deducted from her leave payments, leaving her in a situation where she was not being paid and had no ongoing likelihood of wages or compensation. The applicant decided that she had no choice but to resign and access her superannuation in order to survive. She was then told that she could also have a redundancy, which she decided to accept. It was submitted by the applicant that there was never any offer of a suitable position and that prior to her leaving work in June 2004, she was not in ‘suitable employment’ as she was conducting filing duties that were not consistent with her status as a CSO-9, nor with regard to her incapacity.
The applicant’s job title was ‘Customer Service Officer – Processing Centre’ and the main focus of her position was processing claims relating to programs administered by the HIC. Her contact with customers could be via telephone, facsimile, email or mail. The applicant’s job description set out her work context, specific accountabilities and work behaviours, including business knowledge, computer skills, team work, self-management and technical job knowledge requirements.
Evidence of Don McVilly
Don McVilly was called to give evidence on behalf of the respondent. Mr McVilly was the applicant’s supervisor early in her employment with the HIC and was later involved with her relocation and redundancy. Before his retirement, he held the position of manager, business services and had been employed with HIC for 31 years. Mr McVilly’s statement dated April 2007 was tendered in evidence (Exhibit R5) and he gave oral evidence before the Tribunal.
Mr McVilly confirmed that, prior to her injury, the applicant worked in the HIC branch office in the Trafalgar building as a claims assessment officer and was involved in cash transactions with the public. When she returned to work, she was unable to work at the front counter and so instead worked in a back room office. The applicant was subsequently moved to the head office because she was unable to work at the front counter with clients. Mr McVilly understood that her work at head office involved telephone calls, filing and administrative work. Mr McVilly was no longer the applicant’s supervisor after she moved to head office and so was unable to give evidence regarding the exact nature of her duties there.
Mr McVilly gave evidence that there was a national restructuring of HIC in 2004 and that this impacted on the Tasmanian HIC offices and employees. He stated that the area in which the applicant was working, the pharmaceutical benefits scheme (PBS) area, was restructured. A decision was made to centralise the administrative work relating to the PBS to New South Wales and Queensland, taking the function away from Tasmania. At the time of the national restructure, employees in the PBS area were told that they had a number of options open to them: they could seek a voluntary redundancy or be re-skilled and move into another area.
Mr McVilly gave evidence that the applicant had indicated an interest in applying for a voluntary redundancy and so she had been provided with an estimate of her final payout. The applicant subsequently raised two issues with Mr McVilly, the main issue relating to her years of service. Mr McVilly described ongoing negotiations with the applicant from April/May 2004 through to November 2004 until, on 5 November 2004, a formal invitation to accept a voluntary redundancy was given to her. Mr McVilly said that the applicant accepted the offer of a voluntary redundancy and left the organisation in November 2004.
Consideration
A copy of the letter of ‘Formal Invitation of Voluntary Redundancy’ dated 5 November 2004 is contained in the applicant’s personnel employment file (Exhibit A10, p 161). The first paragraph of the letter states ‘I am writing to advise that you have been identified as excess to requirements’ (emphasis added).
At T31, p 70 there is a copy of an email from Mr Bidejowski, the applicant’s case manager, dated 30 March 2004 and addressed to the respondent. The second paragraph of the letter states:
HIC is currently undergoing structural changes nationally that will result in a number of positions becoming excess to requirements. It is HIC’s intention to minimise the impact of these changes and staff in affected areas will be provided with opportunities to transfer to another area, accept a voluntary redundancy or arrange a job swap with someone from a non-affected area.
Mrs Bacic’s substantive position is located in one of the affected areas and she has expressed an interest in voluntary redundancy.
The letter goes on to request details of how voluntary redundancy will impact on the applicant’s compensation claim in the following scenarios which are listed as:
1Voluntary (excess) – where Mrs Bacic is declared excess with no reasonable employment options and in this sense has no real option other than to accept the offer, and
2Voluntary (hands up) – where Mrs Bacic has the option of remaining with HIC but actively seeks and is granted redundancy, eg through a job swap with someone wishing to remain in HIC or putting her ‘hand up’ for selection.
The respondent’s reply to Mr Bidejowski’s letter notably states that for a voluntary (excess) option, ‘if an employee is totally incapacitated for work then it is considered that redundancy would not affect the employee’s entitlement to compensation other than by taking into account the Government financed portion of the Superannuation payment’ (emphasis in original) (T31, pp 72-73). The letter goes on to state that if the employee is only partially incapacitated for work there would be a consideration of the reason for the redundancy/loss of earning power, the actual capacity for employment, and proof that the claimant is actively seeking employment. In regard to voluntary redundancy, the letter states that, in general terms, the respondent would deny liability for weekly compensation payments for an employee who cannot obtain employment after redundancy because of compensable work restrictions. The basis for this being that the claimant voluntarily removed herself from the employment situation.
The three major types of redundancies in the respondent’s ‘Rehabilitation Handbook for Case Managers’ are listed (at T31 p 71) as:
1Involuntary – for SRC Act purposes the employee did not separate by choice
2Voluntary (excess) – where the person was declared excess with no reasonable employment options and in this sense had no real option other than to accept the offer; and
3Voluntary (hands up) – where it is clear that the individual had the option of remaining in Commonwealth employment but actively sought and was granted redundancy. Two examples of this are where the person took a package on behalf of someone else who wish to remain employed (i.e. substituted) or where, in a general program, the person puts their ‘hands up’ for selection.
A letter dated 10 November 2004 from Peter Sexton, State Manager for HIC in Tasmania, to the applicant advises of confirmation of the applicants consent to be voluntarily retired with effect from close of business 10 November 2004 (T31, p 76).
The applicant agreed that in around March/April 2004 she had investigated a redundancy package however she said she did not pursue it when she discovered that the proposed amount was insufficient for her needs. The Tribunal is not persuaded that there were ongoing discussions regarding a voluntary redundancy after the applicant was accepted as being incapacitated for work in June 2004. Mr McVilly was not the applicant’s supervisor at this time and whilst he said that he ‘would have’ spoken to her between June and November, he had no specific recollection of having done so and there are no records of such conversations on her personnel file. The Tribunal accepts the applicant’s evidence that she believed she was in receipt of worker’s compensation payments during her absence from work. It was not until she learned that the payments were stopped as a result of the respondent’s determination of 19 October 2004 and retrospectively cancelled, and that she had instead been receiving leave payments that she decided she had no option but to resign from the HIC.
Mr Mills certified the applicant as totally incapacitated and unfit for work following her injury on 4 May 1999 until March 2002. Mr Mills was thereafter involved in her return to work program that involved limited duties with hours of work increasing over a period of time. In a medical certificate dated 26 March 2004 (Exhibit A3) Mr Mills noted:
neuropraxia of this post tibial nerve inhibits normal sensation of the right foot – predisposing to trophic ulceration due to unrecognised injury. She will need to protect her foot against such ulceration.
Mr Mills added this comment as a further stipulation to the applicant’s return to work program. He agreed that the applicant would be at added risk if she was required to be on her feet for any length of time because she lacked the protective sensation to avoid injury and needed to check her feet from time to time. Mr Mills stated that the effects of neuropraxia were affecting the applicant’s capacity to work and that she had gone on to develop chronic pain syndrome, a sequela of the neuropraxia.
At the hearing, Mr Mills’ evidence was that in 2008 he had observed that:
the associated foot remained unchanged throughout this period of time. She’s now developing pain in her knee, her right knee, and she was describing frequent falls of instability, but there’s two types of instability. One is called a ligament instability like the footballers have, and then there is a second type which is an inhibition of pain. So you have a painful stimuli, and ... your muscle to relax … and it will tend to buckle rather than a true instability. I surmised that her instability to her knee was a reflex inhibition secondary to increasing pain in her progressively arthritic knee.
He also reported that the weakness, sensory changes, burning and neuropathic symptoms in the applicant’s foot remained unchanged during the relevant period. The evidence is that, whilst these symptoms persisted following the applicant’s return to work, the applicant was able to manage her work due to the employer’s accommodation of her needs in the form of a return to work program. The applicant gave evidence that she was initially able to undertake her duties in a back room office and that she was primarily seated during her work. The Tribunal accepts the applicant’s evidence that when she was subsequently moved to the head office, although there was no formal change in the nature of her duties, they did in fact change and she was expected to undertake more filing and administrative duties, requiring her to be on her feet for longer periods of time. It was the nature of this work that exacerbated the symptoms of her accepted knee condition and resulted in her being medically certified as unfit for work. Mr Mills’ evidence was that whilst the applicant’s neuropraxia symptoms did not change over time, her knee symptoms did change to the extent that she became more unsteady on her feet and suffered falls from time to time. In his opinion, the knee injury accelerated the osteoarthritis in the applicant’s knee and this was the reason she underwent a knee replacement in 2012.
Mr Mills’ evidence was that the applicant was incapacitated for work in 2004 as a result of the neuropraxia, the weakness and burning sensation in her foot, and the vascular instability associated with her chronic regional pain syndrome. Whilst Dr Stewart reported that the applicant’s medication should be reviewed because there were other appropriate medications that would not cause the same side effects, he was not called to give evidence and was therefore not subject to cross-examination. No evidence was led from Mr Mills regarding alternative medications nor did he suggest that there were medications that were more suitable for the applicant’s symptoms. His evidence was that the medications the applicant was taking caused side effects and impacted on her work capacity. The Tribunal prefers the evidence of Mr Mills who was the applicant’s treating doctor during the relevant time.
In his report dated 2 July 2007, Dr Stewart opined that the applicant was not totally incapacitated for work if arrangements could be made for her to undertake work in a primarily seated position. On her initial return to work, such arrangements were made. However when the applicant was moved to HIC’s head office, she was not able to perform her duties in a primarily seated position as the nature of her duties changed such that she was required to stand for long periods and undertake filing work.
The Tribunal accepts the applicant’s evidence that she did not accept the initial offer of redundancy because she considered that it was insufficient for her needs. For the reasons outlined above, the Tribunal accepts the applicant’s evidence that there were no ongoing discussions regarding this offer of a voluntary redundancy after she left on incapacity grounds in June 2004.
The Tribunal finds that on account of the change in duties when she was relocated to head office, which meant that she was no longer able to work in a primarily seated position, the applicant experienced an increase in her symptoms resulting in an incapacity to undertake her work. The evidence was that the applicant never returned to her full-time duties of a claims assessment officer, which involved interacting with clients at the front counter.
Subsection 19(4)(d) refers to ‘an offer of suitable employment’. The term ‘suitable employment’ is defined in s 4(1) of the SRC Act:
"suitable employment" , in relation to an employee who has suffered an injury in respect of which compensation is payable under this Act, means:
(a)in the case of an employee who was a permanent employee of the Commonwealth or a licensee on the day on which he or she was injured and who continues to be so employed--employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to:
(i) the employee's age, experience, training, language and other skills;
(ii) the employee's suitability for rehabilitation or vocational retraining;
(iii) where employment is available in a place that would require the employee to change his or her place of residence--whether it is reasonable to expect the employee to change his or her place of residence; and
(iv) any other relevant matter; and
(b) in any other case--any employment (including self-employment), having regard to the matters specified in subparagraphs (a)(i), (ii), (iii) and (iv).
The definition of ‘suitable employment’ requires that the employee be suited to the work offered having regard to a number of listed factors, including suitability for rehabilitation or vocational retraining. Subsection 19(4)(d) contemplates an employee receiving ‘an offer’ of suitable employment. The word ‘suitable’ is defined in the Macquarie dictionary as ‘such as to suit; appropriate; fitting; becoming’. The Tribunal accepts the evidence that the type of the duties that the applicant was performing prior to her ceasing work in June 2004 were not appropriate and resulted in medical incapacity to work.
There is simply no evidence of an offer of ‘suitable employment’ having been made to the applicant. Nor was there evidence of ‘a reasonable rehabilitation or vocational retraining program’ having been offered to the applicant. The evidence from Mr McVilly was that due to restructuring within HIC, the applicant’s work as a client assessment officer was being transferred interstate and so was no longer available in the Hobart office. There is documentary evidence that the applicant was considered ‘excess’ to requirements and was offered a redundancy on this basis, which she accepted.
The Tribunal is satisfied that the applicant’s acceptance of the offer of redundancy was reasonable in all of the circumstances on account of there having been no offer of alternative suitable employment made to her. Nor was there any evidence that other ‘suitable employment’ was available given the applicant’s circumstances and physical limitations. The very fact that the applicant’s position was classified as ‘excess’ to requirements indicates that her position was no longer available to her or to anyone else.
Further, the Tribunal does not consider that the applicant’s email of farewell, sent to her fellow staff members on 11 November 2004 advising them that she had received an offer she could not refuse, is of any significance (T31, pp 77-78). The Tribunal considers that, given that she found herself in circumstances where she was no longer being paid, the applicant would have been relieved to have received the redundancy offer together with the 10 week bonus payment.
The Tribunal is satisfied that the evidence supports a finding that when the applicant accepted the offer of redundancy made on 5 November 2004 and subsequently confirmed by the respondent on 10 November 2004, she was totally incapacitated for work on account of her accepted knee condition. The Tribunal finds that the applicant remained incapacitated for work during the period 7 June 2004 to 29 February 2012 and is entitled to be paid incapacity payments. The amount of weekly compensation is to be calculated under s 19 of the SRC Act. The Tribunal does not consider that any of the deemed capacity to earn from suitable employment provisions of s 19(4) are applicable in the applicant’s circumstances.
DECISION
It is the Tribunal’s decision that the reviewable decision dated 18 March 2015 be set aside and substituted with the decision that:
(i)the applicant is entitled to compensation payments for incapacity for the period 2 April 2008 until 29 February 2012;
(ii)the matter is remitted to the respondent to determine the amount of weekly compensation payable to the applicant pursuant to s 19 of the SRC Act; and
(iii)any application for costs be made by the applicant by 5:00pm on Monday 16 July 2018 and any submissions in reply from the respondent by 1:00pm on Wednesday 18 July 2018.
I certify that the preceding 75 (seventy -five) paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham, Senior Member
................................[sgd]........................................
Associate
Dated: 13 July 2018
Date(s) of hearing: 14-16 May 2018 Counsel for the Applicant: Mr B Hilliard Solicitors for the Applicant: Page Seager Counsel for the Respondent: Mr J Wallace Solicitors for the Respondent: Australian Government Solicitor
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