Bleston Pty Limited t/as Erindale Bakery v Graham Shaw
[2013] ACTMC 20
•19 September 2013
BLESTON PTY LIMITED t/as ERINDALE BAKERY v GRAHAM SHAW [2013] ACTMC 20 (19 September 2013)
WORKERS COMPENSATION - application for leave to reject claim - preliminary ruling on whether application can be entertained when employer concedes worker not fit for pre-injury duties - whether employer has implied power to vary compensation payments.
Workers Compensation Act 1951 (ACT) ss 39, 40, 41, 42, 43, 113, 130, 131, 132, 134, 195
Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 168
Workers Compensation Regulation 2002 (ACT) regs 48, 56
Court Procedures Rules 2006 (ACT)
Stowe Australia Pty Ltd v Sara Melody Kelly [2013] ACTCA 18
Barbaro v Leighton Contractors Pty Limited [1980] FCA 56
Michael James Seers v The Exhibition Centre Pty Limited [2009] ACTSC 85
No. WC 372 of 2012
Magistrate: Morrison
Magistrates Court of the ACT
Date: 19 September 2013
IN THE MAGISTRATES COURT OF THE )
)
AUSTRALIAN CAPITAL TERRITORY ) WC 372 of 2012
BETWEEN:BLESTON PTY LIMITED t/as ERINDALE BAKERY
Applicant
AND:GRAHAM SHAW
Respondent
DECISION
Magistrate: Morrison
Date: 19 September 2013
Place: Canberra
The applicant employer has brought an application which is described as being an "application for arbitration about the rejection by the applicant of the respondents claim for compensation". As argued, it is apparent that what the applicant employer is in fact seeking is the leave of the court to reject the respondent workers claim pursuant to section 132 of the Act. Whether the Court is exercising an arbitral function under that section was not argued.
I have been asked to make a preliminary ruling on a point of law, against the background of certain agreed facts. An agreed statement of facts is in evidence as Exhibit A1. It is agreed that the worker suffered an injury in the course of his employment in 2010, that he was totally incapacitated for work as a result of that injury, that his claim for compensation was accepted and that payments in respect of that claim are continuing. The applicant employer asserts that the worker is no longer totally incapacitated for work, but concedes that the worker is unfit for pre-injury duties. The respondent worker disputes the assertion.
The preliminary ruling sought from me is whether, given the agreed facts and the concession that the respondent worker is unfit for pre-injury duties, an application for leave to reject his claim under section 132 can, as matter of law, be entertained.
If the worker’s objection on the point of law is upheld the application will be dismissed. If it is not a date is to be set for the application to be heard.
The applicant employer says that the legislative scheme must allow some review of compensation entitlements which may change over time for a range of reasons. It argues however that it has no power under the legislation to unilaterally vary or reduce the compensation payments being made to the respondent worker. It follows, according to the employer, that it must be able to invoke the "claim rejection" process in section 132, because, after more than one year has passed since the claim was made, no other power exists.
The respondent worker argues that the applicant employer does by implication have the power to vary or reduce payments by reference, for example, to the parts of the Act such as sections 39, 40, 41, 42, 43 and 43A which speak in terms of the compensation which a worker is entitled to receive.
It is apparent that there is a core issue in dispute in these proceedings which is not addressed in the limited application before me. That issue is whether and the extent to which the worker is entitled to ongoing compensation under the Act.
As can be gathered from what I have said, the argument before me proceeded on the basis that the proper construction of section 132 depends upon whether there exists a power under the Act to vary compensation payments. On that point the argument was that the legislation could be interpreted in only one of only two ways. Either, as argued by the applicant employer, the insurer was obliged to follow the claim rejection process in section 132 and seek the leave of the Court; or, as argued by the respondent worker, the insurer has a unilateral right to vary the payments without notice to the worker in accordance with its assessment of the workers entitlement from time to time.
I do not agree that the choice is as stark as the argument suggests.
It is certainly the case that the current legislative scheme lacks any express general provision for review of a worker’s entitlements such as exists, for example, in section 168 of the Workers’ Compensation and Rehabilitation Act 2003 (Qld).
But that has not always been the case. At the time of the decision in Barbaro v Leighton Contractors Pty Ltd [1980] FCA 56, a schedule to the relevant ACT ordinance provided that weekly payments of compensation under it "may be varied or ended by agreement or by arbitration".
In 1994 the Act was amended to insert 2 new provisions for the termination of payments — sections 26C and 26E — but the schedule provision for payments to be varied by agreement or arbitration remained.
It was the subsequent amendments to the Act which took effect in 2002, and which made the very substantial changes referred to in the decision of the ACT Court of Appeal in Stowe Australia Pty Ltd v Sara Melody Kelly [2013] ACTCA 18, which did away with the schedule reference to variation without replacing it by any other reference to variation.
The facts in Stowe did not call for consideration of any variation of a compensation entitlement. Unsurprisingly therefore the Court of Appeal’s deliberations do not appear to have touched on the significance of the removal of any express procedure for variation in the new legislative scheme.
The absence of express reference to variation of payments must be viewed against the background of the broad arbitration provision in the Act. Under section 195 of the Act “all matters and questions arising under the Act” must, in the absence of any other provision, be settled by conciliation or arbitration in accordance with the regulations.
Under regulation 48, either a worker or an employer may apply for the arbitration of a matter in issue arising from a worker’s claim for compensation, subject to certain conditions.
On the face of the matter what I have described as the core issue — that is whether and the extent to which the worker is entitled to ongoing compensation under the Act — is something falling within what the Act requires to be arbitrated in accordance with the regulations.
I mention that the Court Procedures Rules speak only in terms of a party asking that “a claim be decided by arbitration” but that cannot have the effect of limiting the scope of the broad requirement in section 195 for arbitration of all matters and questions.
The present application before me is not concerned with what I have described as the core issue. It is an application which is limited to leave to reject the worker’s claim, but it is important to keep in mind that it is made against the background of the core issue, and the options in the Act for dealing with that core issue.
The scheme of the Workers Compensation Act 1951 does not incorporate any notion of the payment of compensation being triggered by an employer’s "acceptance" of a claim. What section 134 of the Act in fact requires is that the employer must pay compensation when a claim for which compensation is payable is made until the insurer rejects or settles the claim.
Whilst section 39 and those immediately following it speak in terms of a worker’s entitlement to compensation from time to time there is nothing in the legislation which limits the employer’s obligation to pay the amounts determined from time to time in accordance with those sections.
On the contrary, various provisions of the Act expressly impose upon the employer an obligation to give notice to the worker before taking steps affecting the compensation being paid — see for example sections 113, 130, 131.
Both parties referred me to the decision of the Court of Appeal in Stowe.
In its decision in Stowe the Court of Appeal considered the history of the workers’ compensation legislation, in particular the scheme which existed before and after the substantial amendments introduced by the Workers Compensation Amendment Act 2001. The Court pointed out that in the pre-amendment legislation each claim to payment of weekly compensation for a period of incapacity was a separate "claim". The post amendment legislation introduced a requirement for the lodgement of a single claim for compensation, described by the Court of Appeal as being a procedural gateway linking the ongoing entitlement of the worker to the obligation of the insurer to pay such amount as required by the Act.
There are obvious benefits and protections for an injured worker in a scheme which creates a compensation entitlement (and corresponding payment obligation) triggered by the act of lodgement of a compensable claim. To interpret the Act as then impliedly giving an employer the power to unilaterally vary the amount of that entitlement in accordance with the employer’s own assessment of entitlements from time to time would be inconsistent with those benefits and protections and leads me inevitably to conclude that the Act should not be interpreted in that way.
What does that conclusion mean for the employer’s current application to reject the worker’s claim?
There are some circumstances in which it appears obvious that the section 132 claims rejection process is the only appropriate option for an employer/insurer.
In the proceedings in Stowe which took place before the Master, the Master suggests that the procedure in part 6.2 would be applicable, for example, where an insurer had reason to believe that the injury alleged by the worker did not happen at work, or that there was no injury and the claim was fabricated. He went on to say that the procedure is also intended to be available to an insurer in circumstances where a worker has made a genuine claim (a year or more earlier) and is in receipt of weekly compensation but has made a complete recovery from his or her injuries.
None of those things represent the circumstances which are before me; at least not by way of the agreed facts for the purpose of this application. On the contrary, what is before me is a concession by the employer/insurer that the worker is unfit for pre-injury duties.
I have concluded that the legislation does not permit an employer/insurer to unilaterally vary the amount of compensation payments. It follows that an injured worker who receives, for example, compensation payments calculated on the basis of total incapacity, is entitled to continue to receive payments at that rate until some other entitlement is determined, subject to the limited exceptions in sections 113, 130 and 131.
Such an entitlement continues even while any dispute about the extent of incapacity is subject to conciliation or arbitration or other attempt at resolution. Subject again to some limited exceptions there is no provision for payments received to be repaid or retrospectively adjusted.
Some measure of protection is afforded to an employer/insurer by virtue of section 113. Under that section, an employer/insurer is entitled to stop payment of compensation on two weeks’ notice in certain specified circumstances —including where a worker fails to attend an assessment of the worker's employment prospects; or fails to attend a medical assessment of the worker's injury.
There may however be other circumstances (that is circumstances outside section 113) under which a worker might seek to delay or avoid an arbitration sought by an employer/insurer to determine whether compensation payments should be reduced. If a worker sought to unreasonably delay or avoid such arbitration, it may be that the employer/insurer's only option was to seek rejection of the claim, notwithstanding that there may appear to be some lesser ongoing entitlement.
Given that an employer/insurer faces such a risk, and that, in such a case, the employer/insurer's options would be limited to seeking leave to reject the claim, the proper construction of section 132 cannot deny to the employer/insurer the right to seek leave to reject a claim only because there is or may be an ongoing entitlement to some compensation.
I hasten to add that there is no evidence before me that Mr Shaw has sought to delay or avoid arbitration in this case. I mention the hypothetical possibility of a worker doing so only in the context of possible circumstances with which section 132 might be required to deal, and because doing so informs the proper construction of the section.
It follows that the employer/insurer is not, as a matter of law, precluded from bringing its application to reject the worker’s claim.
Having reached that conclusion, I will make some general observations about an application under section 132.
A worker with an ongoing entitlement to compensation whose claim is rejected under section 132 is in an unenviable position. He or she must effectively start the claim process afresh. Mr Muller submits that, as a matter of legal principle, the insurer would be estopped from denying the existence of certain things which the worker might otherwise be required to establish. That may well be so but the estoppel argument may be complex and its outcome uncertain. To require a worker to start the claims process afresh imposes a significant burden on the worker and risks compounding the worker’s difficulties via e.g. psychological effects flowing from the notion of “rejection” of his or her claim.
I have already expressed the view that the mandatory arbitration requirements of section 195 apply to what I have described as the core issue between the employer and the worker in this case.
In addition, I note that there is an express obligation under regulation 56(5) for the Court to act, in an arbitration, according to equity, good conscience and the substantial merits of the matter being arbitrated, and without regard to technicalities and legal forms. Whilst what is before me is limited to an application for leave to reject a claim it appears that it would be possible for a leave application to be heard together with, or to follow, an application to arbitrate a dispute about the extent of the worker’s ongoing incapacity. The principle of hearing arbitration applications together to accord with equity, good conscience and the substantial merits of the case met with judicial approval in obiter in the decision of Refshauge J in Michael James Seers v The Exhibition Centre Pty Limited [2009] ACTSC 85.
Against the background of all of the above it is relevant, in considering the discretion to be exercised under section 132, to look to what steps have been taken by the applicant to resolve the core issue before seeking rejection of the claim, and whether such an application should be deferred until after, or heard together with, arbitration of any dispute arising from that resolution process. Absent circumstances such as those identified by the Master in Stowe the claim rejection process under s132 should be seen as a process of last resort.
The formal order of the Court is that the respondent worker’s objection is not upheld. I will hear the parties as to a date for the hearing of the application for leave to reject the claim.
I certify that the preceding forty-two (42) paragraphs are a true copy of the Reasons for Decision of his Honour, Magistrate Morrison.
Associate: Gary Khoo
Date: 19 September 2013
Counsel for the Applicant: Mr A Muller
Solicitor for the Applicant: Sparke Helmore Lawyers
Counsel for the Respondent: Mr D Richards
Solicitor for the Respondent: RSK Legal
Date of hearing: 7 August 2013
Date of judgment: 19 September 2013
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