Department for Child Protection v Morris

[2022] SASCA 131

Supreme Court of South Australia

(Court of Appeal: Civil)

DEPARTMENT FOR CHILD PROTECTION v MORRIS

[2022] SASCA 131

Judgment of the Court of Appeal  

(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)

15 December 2022

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES - QUESTION OF LAW

WORKERS' COMPENSATION - LIABILITY TO PAY COMPENSATION - LIABILITY OF EMPLOYER - STATUTORY BODY OR CORPORATION

The question of law arising on this appeal is whether a breach of the “obligation of mutuality” referred to in s 48(3)(g) of the Return to Work Act 2014 (SA) (the Act) does not apply to a worker who has a total incapacity for work by reason of a work injury.

The appellant discontinued the worker’s weekly payments after she pleaded guilty to trafficking in methylamphetamine and, in addition, after she pleaded guilty to attempting to dissuade a witness from giving evidence. After each conviction the appellant issued notices of discontinuance pursuant to s 48 of the Act.

The primary judge found that the respondent’s criminal misconduct constituted breaches of the obligation of mutuality.  Both the primary judge and the Full Bench held that these breaches could not be relied upon where the worker had no work capacity at the time the notices of discontinuance were issued.

The Court held:

1.The obligation of mutuality under the Act is designed to ensure that weekly payments can be discontinued where the worker’s conduct or circumstances are “inconsistent with the necessary degree of co-operation” as between worker and employer, and where the worker’s conduct is “inconsistent with the degree of co-operation that is essential to an effective working relationship”.

2.The obligation of mutuality under section 48(3)(g) of the Act applies to a worker who has a total incapacity for work by reason of a work injury. In the circumstances, it was an error of law to find otherwise.

3.      Leave to appeal is granted and the appeal is allowed. 

Return to Work Act 2014 (SA) ss 48, 193; Workers Compensation Act 1971 (SA) ss 36, 43; Workers Rehabilitation and Compensation Act 1986 (SA); Workers Rehabilitation and Compensation (Miscellaneous Provisions) Amendment Act 1995 (SA) s 11, referred to.
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; Asciak v Australian Glass Manufacturers Pty Limited (1964) 64 SR(NSW) 344; Attorney-General (NSW) v Melco Resorts and Entertainment Ltd (2020) 102 NSWLR 47; Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1; Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321; Blyth Chemicals v Bushnell (1933) 49 CLR 66; Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378; Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; Department for Child Protection v Morris [2021] SAET 146; Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417; Electric Power Transmission Pty Ltd v D’Urso (1970) 124 CLR 338; Eylward v Select Staff Pty Ltd [2000] SAWCT 192; General Motors-Holden Limited v D’Andrea (1985) 122 LSJS 301; Harrison v Melhem (2008) 72 NSWLR 380; Hartwell v Electricity Trust (SA) (1982) 29 SASR 365; HEF of Australia v Western Hospital (1991) 4 VIR 310; Kelvinator v Jezior (1988) 49 SASR 592; Knight v South Australia [2022] SASCA 14; Morris v Department for Child Protection [2020] SAET 92; Morris v Department for Child Protection (No 2) [2020] SAET 148; Paschalis v Return to Work Corporation of South Australia [2021] SASCFC 44; Pond v Workcover/Allianz Australia (Wunda Joinery) [2001] SAWCT 69; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Redman v Return to Work Corporation of South Australia (2021) 139 SASR 131; Return to Work Corporation of South Australia v Watkins [2017] SASCFC 149; RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665; Sacco v Local Government Association Workers Compensation Scheme (No 2) [2020] SAET 112; Schroeder v Return to Work SA [2018] SAET 168; Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312; Seal v Transfield Services (Australia) Pty Ltd [2009] SAWCT 4; South Australia v McDonald (2009) 104 SASR 344; State of South Australia (In Right of Dept for Health and Ageing (SA Ambulance Service)) v Dohnt (2021) 138 SASR 270; Talacko v Bennett (2017) 260 CLR 124; The State of South Australia (In Right of the Department for Health and Ageing (SA Ambulance Service)) v Dohnt [2021] SASCFC 33; Transfield Services (Australia) Pty Ltd v Seal [2008] SAWCT 43; WorkCover Corporation v Gregor (1994) 62 SASR 283, considered.

DEPARTMENT FOR CHILD PROTECTION v MORRIS
[2022] SASCA 131

Court of Appeal – Civil:  Livesey P, Doyle and Bleby JJA

LIVESEY P AND BLEBY JA:

Introduction

1. The question of law arising on this appeal is whether a breach of the “obligation of mutuality” referred to in s 48(3)(g) of the Return to Work Act 2014 (SA) (the Act) does not apply to a worker who has a total incapacity for work by reason of a work injury. 

2. The appeal on this question arises in unusual circumstances. The appellant discontinued the worker’s weekly payments after she was found guilty on 1 December 2017 to trafficking in methylamphetamine and, in addition, after she had pleaded guilty on 8 June 2018 to attempting to dissuade a witness from giving evidence. After each conviction the appellant issued notices of discontinuance dated 1 March 2018 and 14 June 2018 pursuant to s 48 of the Act.

3. On 20 September 2020, following the decisions of the primary judge made at first instance,[1] the appellant issued a further determination purporting to discontinue the respondent’s weekly payments on the basis that on 19 April 2018 the respondent had been dismissed from her employment for serious and wilful misconduct within the meaning of s 48(2)(e) of the Act. The respondent has filed an application for review in respect of that determination. Proceedings concerning that application remain before the Tribunal.

   [1]     Morris v Department for Child Protection [2020] SAET 92 (Gilchrist DPJ); Morris v Department for Child Protection (No 2) [2020] SAET 148 (Gilchrist DPJ).

4. Although the primary judge found that the respondent’s conduct constituted a breach of the obligation of mutuality, both he and the Full Bench held that these breaches could not be relied upon where the worker has no work capacity at the time the notices of discontinuance are issued.[2]

   [2]     Morris v Department for Child Protection (No 2) [2020] SAET 148, [40], [48] (Gilchrist DPJ); Department for Child Protection v Morris [2021] SAET 146, [20], [45]-[46] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

5. For the reasons that follow, these decisions adopted an erroneous reading of s 48(3)(g) because that provision does apply to a worker who has a total incapacity for work by reason of a work injury. Accordingly, permission to appeal should be granted and the appeal allowed.

   Factual background

6. Before this Court there was no issue about the facts.  These were largely the subject of an agreed statement of facts. 

7. The respondent had worked for Families SA, now the Department for Education and Child Development, in its Child Protection Unit. During 2002 she was seriously assaulted by a disgruntled parent over an issue concerning the removal of a child. The respondent sustained multiple physical injuries as well as a post-traumatic stress disorder and, in June 2003, she was assessed as having a 64% whole person impairment. Pursuant to s 43 of the repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the 1986 Act), the respondent received a lump sum payment of $318,990 for non-economic loss.  The respondent was rendered unable to work and received weekly payments of compensation by way of income maintenance.

8. On 1 July 2015, the respondent’s right to compensation was, pursuant to cl 34 of Schedule 9 of the Act, transitioned from the 1986 Act to the Act. Pursuant to ss 21 and 44 of the Act, the respondent was designated a “seriously injured” worker and had a potential entitlement to continue to receive weekly payments until her normal retirement age.

9. The primary judge referred to the sentencing judge’s sentencing remarks and found that the respondent had been under telephone surveillance by police for around nine days during which she was detected to be dealing in methylamphetamine involving a number of “small street deals”.  The respondent was apprehended by police when driving a car in the early hours of the morning.  A search revealed that she was in possession of five plastic bags, each containing around 0.5g of methylamphetamine with a purity of 79 per cent.  The primary judge found that this offending constituted a breach of the obligation of mutuality:[3]

   Persons involved with the sale of drugs by necessity mix with others involved in the drug trade.  After all, they have to source their drugs from somewhere.  Sometimes those suppliers [will] be connected to organised crime.  People involved in selling illicit drugs, like methamphetamine, plainly not only have no regard for the law, they have no regard for the health and safety of those to whom they sell drugs.  The potential for such a person to be compromised in the performance of their duties as a public servant is self-evident.

   [3]     Morris v Department for Child Protection [2020] SAET 92, [43] (Gilchrist DPJ).

10. The primary judge described the further offending as “even more egregious”, involving an abuse of the respondent’s position as a public servant “in a most appalling way”:[4]

    … Again I take the following from the sentencing judge’s sentencing remarks: Ms Morris’s partner had allegedly committed aggravated robbery by entering into a couple’s home unit, threatening them with a knife while one of them was holding an infant, and stealing a laptop and mobile phone.  The robbery charge was listed for a declarations hearing in the Magistrates Court on 16 January 2018.  A few days before this, Ms Morris attended at the victims’ home unit.  Obviously armed with inside information [from] the Department that the victims and their child had a relationship with the Department, she presented herself to the victims in a composed manner, dressed and armed in such a way as to convince them that she was a Government official who had the authority of a Child Services Agency.

    [4]     Morris v Department for Child Protection [2020] SAET 92, [45] (Gilchrist DPJ).

11. Using her Department for Child Protection badge in an unauthorised manner, the respondent:[5]

    … prevailed upon them to drop the case and left them with the impression that if they did not immediately withdraw the charges, their child would be taken away from them.  She returned later, explained that she was from Child Services and calmly threatened them with the removal of their baby if they did not drop the charges and left them with a blank statutory declaration form in the expectation that they would complete it.  The victims, who were immigrant escapees from a corrupt regime and therefore vulnerable to intimidation from persons appearing to have Governmental authority, spoke of Ms Morris’s convincing and heart wrenching attempts to secure their co-operation.

    [5]     Morris v Department for Child Protection [2020] SAET 92, [45] (Gilchrist DPJ).

12. As the primary judge put the matter:[6]

    Frankly, it is difficult to imagine a more graphic example of an employee’s conduct that is utterly inconsistent with the necessary degree of co-operation required of a contract of employment.  The circumstances of this offending also constituted a breach of mutuality.

    [6]     Morris v Department for Child Protection [2020] SAET 92, [46] (Gilchrist DPJ).

13. In the course of argument before this Court, the respondent emphasised that the sentencing judge accepted that she had experienced “a terrible life”.  As the sentencing judge said when sentencing the respondent, this was:

    … interrupted only by a period in which you were doing well professionally, savagely ended by a brutal attack in the workplace.  It is clear that you have long-standing mental health problems, some remaining undiagnosed until recently, and that you suffer physically and mentally from the consequences of this vicious attack.

14. The respondent also emphasised in argument before this Court that her offending occurred whilst she was in what the sentencing judge described as an “abusive and manipulative” relationship from which the respondent had removed herself by the time of sentence.

15. On 29 August 2018, the respondent was sentenced for the trafficking charge to three years’ imprisonment which was backdated to commence from the time she was taken into custody.  For the charge of attempting to dissuade a witness from giving evidence, the respondent was sentenced to imprisonment for 19 months and two weeks.  For both offences, the respondent was subjected to a non-parole period of two years and three months, suspended upon entry into a good behaviour bond for two years.[7] 

    [7]     Morris v Department for Child Protection [2020] SAET 92, [13] (Gilchrist DPJ).

16. Before the respondent was sentenced, on 18 January 2018 the appellant issued a determination suspending the respondent’s weekly payments pursuant to s 193(1) of the Act. Whilst that issue was addressed in the reasons of the primary judge, it is not relevant to the determination of this appeal.

17. On 1 March 2018, the appellant issued a determination discontinuing the respondent’s weekly payments for a breach of the obligation of mutuality in respect of the drug trafficking offending, pursuant to ss 48(2)(f) and 48(3)(g) of the Act.

18. On 19 April 2018, the appellant terminated the respondent’s employment for serious and wilful misconduct.

19. On 14 June 2018, the appellant issued a determination to discontinue the respondent’s weekly payments for a further breach of the obligation of mutuality in respect of the witness tampering offending pursuant to ss 48(2)(f) and 48(3)(g) of the Act.

20. The respondent disputed these determinations.  On 1 February 2019, the respondent claimed a restoration of weekly payments.  That claim was rejected by letter from the appellant dated 8 March 2019.  Again, the reason given was the respondent’s breaches of the obligation of mutuality. 

21. On 17 May 2019, the Tribunal ordered that the scope of the proceedings before it be enlarged to include the issue whether the respondent’s claim for a restoration of compensation on 1 February 2019 should be accepted.  The parties agreed to deal only with the question of breach of the obligation of mutuality and not the issue of restoration.  Should the respondent not succeed on this appeal, the question of restoration will need to be determined. 

22. As mentioned, on 20 September 2020 the appellant issued a further determination discontinuing the respondent’s weekly payments on the basis that the respondent had been dismissed from employment for serious and wilful misconduct on 19 April 2018. The appellant relied on s 48(2)(e) of the Act.[8]  The respondent has sought a review of that determination.  The proceedings relating to that review remain before the Tribunal. 

    [8]     Whether mutuality can be restored in those circumstances was questioned in Sacco v Local Government Association Workers Compensation Scheme (No 2) [2020] SAET 112, [51]-[57] (Gilchrist, Farrell and Kelly DPJJ).  It is not necessary to address that issue here.

    The relevant provisions of the Act

23. It is appropriate to notice the provisions relevant to the determination of this appeal. These include s 4(10) of the Act:

    (10)   For the purposes of this Act—

    (a)     total incapacity for work is the incapacity for work that is represented by a worker having no current work capacity within the meaning of this Act; and

    (b)     partial incapacity for work is the incapacity for work that is represented by a worker having a current work capacity within the meaning of this Act.

24. By s 8(3) of the Act, where injuries are sustained in the course of serious and wilful misconduct, those injuries may be regarded as compensable where they constitute injuries which are serious and permanent.

25. Section 36 of the Act addresses the concept of “work capacity”:

    36—Capacity to perform work

    (1)For the purposes of this Act, the current work capacity of a worker is constituted by a present inability arising from a work injury such that the worker is not able to return to his or her employment at the time of the occurrence of the injury but is able to return to work in suitable employment.

    (2)For the purposes of this Act, a worker has no current work capacity if the worker has a present inability arising from a work injury such that the worker is not able to return to work, either in his or her employment at the time of the occurrence of the injury or in suitable employment.

26. Section 48(2) of the Act confines the circumstances in which weekly payments to a worker may be discontinued. As has been seen, s 48(2)(f) of the Act is of particular relevance in this case:

    (2)Subject to this Act, weekly payments to a worker who has suffered a work injury must not be discontinued unless—

    (a)     the worker consents to the discontinuance of weekly payments; or

    (b)     the Corporation is satisfied, on the basis of a certificate of a recognised health practitioner, that the worker has ceased to be incapacitated for work by the work injury; or

    (c)     the worker has returned to work; or

    (d)     the worker has obtained work as an employee, or as a self-employed contractor, that is providing remuneration equal to or above the worker's notional weekly earnings; or

    (e)     the worker is dismissed from employment for serious and wilful misconduct; or

    (f)     the worker breaches the obligation of mutuality; or

    (g)     the worker is, without the Corporation’s consent—

    (i)    residing outside the State; or

    (ii)absent from the State for more than 2 months in any continuous period of 12 months; or

    (h)     the worker’s entitlement to weekly payments ceases because of the passage of time; or

    (ha)   the worker—

    (i)has been receiving weekly payments on the basis of an interim decision under section 21(3); and

    (ii) the interim decision is brought to an end under section 21(4)(b)(ii); or

    (i)    the worker's entitlement to weekly payments ceases because of the occurrence of some other event or the making of some other decision or determination that, under another provision of this Act, brings the entitlement to weekly payments to an end or the discontinuance of weekly payments is otherwise authorised or required under another provision of this Act.

27. The concept of a breach of the obligation of mutuality is specifically addressed by s 48(3) of the Act. This case turns on the proper meaning and effect of s 48(3)(g):

    (3)     A worker breaches the obligation of mutuality if—

    (a)     the Corporation has, by written notice to the worker, required the worker to submit to an examination by a recognised health practitioner nominated by the Corporation and the worker fails to comply with the requirement within the time allowed in the notice or obstructs the examination; or

    (b)     the Corporation has, by written notice to the worker, required the worker to submit to the Corporation a certificate from a recognised health practitioner certifying that the work injury continues, and the worker fails to comply with the requirement within the time allowed in the notice; or

    (c)     the worker refuses or fails to submit to proper medical treatment for the worker's condition; or

    (d)     the worker refuses or fails—

    (i)to participate or cooperate in the establishment of a recovery/return to work plan for the worker; or

    (ii)to comply with obligations imposed on the worker by or under a recovery/return to work plan for the worker; or

    (e)     the worker refuses or fails—

    (i)to undertake work that the worker has been offered and is capable of performing; or

    (ii)to take reasonable steps to find or obtain suitable employment or to comply with any other return to work obligation placed on the worker under this Act,

    or having obtained suitable employment, unreasonably discontinues the employment; or

    (f)     the worker refuses or fails to participate in assessments of the worker's capacity, return to work progress or future employment prospects (including by failing to attend); or

    (g)     the worker does anything else that is, apart from this subsection, recognised as a breach of the obligation of mutuality.

1. Sections 48(2)(f) and 48(3) are in relevantly the same terms as were ss 36(1)(f) and 36(1a) of the 1986 Act which were considered by the Full Court in Seal v Transfield Services.[9]

   [9]     Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312 (Seal v Transfield).

   The reasons of the primary judge

2. As has been seen, in his initial reasons the primary judge found that the respondent’s criminal offending comprised breaches of the obligation of mutuality.  No challenge is made to that decision, nor to any of the conclusions reached by the primary judge relating to the respondent’s criminal offending. 

3. In a further set of reasons, the primary judge addressed the extent and relevance of the respondent’s work capacity as at the date of the first two notices of discontinuance in 2018. By that stage, the parties were in agreement that the respondent did not possess any capacity for work for the purposes of s 36(2) of the Act as at the date of the notices of discontinuance in 2018.

4. Before the primary judge the respondent relied on Eylward v Select Staff.[10] After distinguishing Eylward v Select Staff, the primary judge explained why he thought that the expression “recognised as a breach of the obligation of mutuality” had a meaning which was confined to cases where a partially incapacitated worker was prevented from receiving payments based on a “notional” total incapacity:[11]

   Although ‘mutuality’ might have its genesis in contractual relationships generally, it is quite clear that in the context of workers compensation legislation it has quite a specific purpose.  The recurring theme that emerges from the case law[12] is that a breach of mutuality denies a partially incapacitated worker from [sic] the benefit of compensation payments based on ‘notional’ total incapacity.  As King CJ observed in Hartwell v ETSA:

   … notional total incapacity arises only if and while the worker is ready willing and able to perform work which he is not prevented from doing by the compensable injury.[13]

   If a worker is unable to perform any work as a result of the compensable injury, no issue of notional total incapacity arises.  In other words, the concept of ‘breach of mutuality’ as developed in the case law relating to workers compensation legislation, has no application in these circumstances.

   This suggests that a recognised breach of mutuality as it appears in s 48(3)(g), only relates to workers who have some capacity for work.

   [10]   Eylward v Select Staff Pty Ltd [2000] SAWCT 192 (Eylward v Select Staff).

   [11]   Morris v Department for Child Protection (No 2) [2020] SAET 148, [36]-[38] (Gilchrist DPJ).

   [12]   Many of these are collected and discussed by von Doussa J in Re Australian National Railways Commission v Commission of the Safety Rehabilitation and Compensation of Commonwealth Employees and Peter Hoppo [1992] FCA 130.

   [13] (1982) 29 SASR 365, 369.

5. It will be noticed that the primary judge addressed the “specific purpose” of the obligation of mutuality in earlier legislation and the “recurring theme” in the cases that confined the concept to cases of partial capacity.  The primary judge expressed his conclusion “with some hesitation”, appreciating that there were contrary indications.  These included that the Full Bench had held that a compensating authority could rely upon a dismissal for serious and wilful misconduct to defeat a claim for weekly payments even where a worker had no current work capacity.[14]  Nonetheless:[15]

   … the fact that ‘notional’ total incapacity is so inextricably linked to the principle of ‘breach of mutuality’ as that concept has been developed in workers compensation case law, suggests to me that a ‘recognised breach of the obligation of mutuality’ as it appears in s 48(3)(g), can only relate to a worker who has some capacity for work.

   [14]   Sacco v Local Government Association Workers Compensation Scheme (No 2) [2020] SAET 112.

   [15]   Morris v Department for Child Protection (No 2) [2020] SAET 148, [40] (Gilchrist DPJ).

6. Because a recognised breach of the obligation of mutuality referred to in s 48(3)(g) only related to a worker who had some capacity for work,[16] and as the appellant had conceded that the respondent did not have any capacity for work at the time of the determinations, her misconduct “did not comprise of conduct recognised as a breach of mutuality for the purposes of s 48(3)(g)”. Accordingly, and notwithstanding the egregious nature of the respondent’s criminal misconduct, the primary judge ordered that the appellant’s 2018 determinations be set aside.[17]

   [16]   Morris v Department for Child Protection (No 2) [2020] SAET 148, [40] (Gilchrist DPJ).

   [17]   Morris v Department for Child Protection (No 2) [2020] SAET 148, [48]-[49] (Gilchrist DPJ).

   The reasons of the Full Bench

7. Before the Full Bench, the appellant contended that the primary judge had taken a view of the obligation of mutuality which was too narrow.  It relied upon the common law notion of mutuality, including that which applied in employment law.[18]  The respondent again relied on Eylward v Select Staff and contested the proposition that the concept of mutual obligation referred to in the Act was as found in the law of contract or in employment law generally.[19]  The respondent emphasised that the implication of a term of mutual trust and obligation in a contract of employment had been rejected by the High Court in Commonwealth Bank of Australia v Barker.[20]

   [18]   Department for Child Protection v Morris [2021] SAET 146, [13] (Gilchrist DPJ) (Calligeros DPJ with whom Kelly and Crawley DPJJ agreed).

   [19]   Department for Child Protection v Morris [2021] SAET 146, [18] (Gilchrist DPJ) (Calligeros DPJ with whom Kelly and Crawley DPJJ agreed).

   [20]   Commonwealth Bank of Australia v Barker (2014) 253 CLR 169.

8. The Full Bench undertook a close analysis of various of the decisions which had considered the obligation of mutuality, before explaining that the concept had evolved under the 1986 Act and the Act because the obligation of mutuality is not confined to the relationship of employment between a worker and an employer, but extends to the relationship between a worker and the statutory corporation which regulates the schemes operated under workers compensation legislation.[21]  The Full Bench explained:[22]

   The instances of breach of the obligation of mutuality in s 48(3) are mainly directed to managing claims and ensuring workers comply with reasonable claims management requests. Mutuality may be breached by not attending medical examinations or recovery/return to work plan appointments, not providing ongoing certification of incapacity and not seeking proper medical treatment. Subsections (3)(a) to (d) and (3)(f) do not appear to discriminate between total and partial incapacity. Subsection 3(e) only has application to a worker who has some current work capacity.

   Section 48(2)(e) applies to mutuality between a worker and an employer. Under s 48(2)(e), weekly payments may be discontinued where a worker is dismissed from employment for serious and willful misconduct.

   However, most of the grounds of discontinuance in s 48(2), and most of the instances of breach of the obligation of mutuality found in s 48(3), do not concern employment.

   [21]   Department for Child Protection v Morris [2021] SAET 146, [28] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

   [22]   Department for Child Protection v Morris [2021] SAET 146, [29]-[31] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

9. The Full Bench emphasised that the examples of breaches of the obligation of mutuality to be found in s 48(3) included a refusal or failure to take up an offer of work or a failure to find suitable employment. However, apart from the examples given in ss 48(3)(e) and 48(3)(f), the words “employment” and “employer” do not otherwise appear in s 48(1) through to s 48(15). Against this context, the Full Bench said:[23]

   Subsection 48(3)(g) is different to the preceding subsections. Rather than identifying a particular action or omission considered to be a breach of mutuality, subsection (3)(g) refers to a worker doing “anything else that is, apart from this subsection, recognised as a breach of the obligation of mutuality”. While at first blush that wording could be seen as a ‘catch-all’ which enables any act or omission thought to breach mutuality to be used to cease weekly payments, the word ‘recognised’ is a reference to the recognition of the mutuality found present in s 67 of the WCA in Hartwell, and in s 35(2) of the WRCA in Jezior.

   [23]   Department for Child Protection v Morris [2021] SAET 146, [33] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

10. The Full Bench then appeared to disagree with the view expressed by the primary judge that Eylward v Select Staff was distinguishable,[24] before rejecting the submission that a broader conception of mutuality applied to s 48(3)(g).[25]  In reaching this finding, the Full Bench pointed out that the question whether there was an implied term of mutual trust and confidence had been regarded as uncertain,[26] before it was rejected by the High Court.[27]

    [24]   Department for Child Protection v Morris [2021] SAET 146, [37]-[38] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

    [25]   Department for Child Protection v Morris [2021] SAET 146, [40] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

    [26]   By reference to the reasons of White J in Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [73], fn 54, citing South Australia v McDonald (2009) 104 SASR 344.

    [27]   Department for Child Protection v Morris [2021] SAET 146, [41] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed) citing Commonwealth Bank of Australia v Barker (2014) 253 CLR 169.

11. The Full Bench held that the case was not concerned with either employment law or with the common law. The Full Bench concluded that the obligation of mutuality referred to in s 48(3)(g) was confined to cases where a worker had some capacity for work.[28]

    [28]   Department for Child Protection v Morris [2021] SAET 146, [42]-[43] and [45]-[46] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

12. The Full Bench pointed out that the appellant could have challenged whether the respondent was totally incapacitated for work at the relevant times and, in addition, it could have relied upon a notice of discontinuance based on serious and wilful misconduct pursuant to s 48(2)(e) which was issued “instead of or in addition to the second breach of mutuality notice”.[29]

    [29]   Department for Child Protection v Morris [2021] SAET 146, [43]-[44] (Calligeros DPJ, with whom Kelly and Crawley DPJJ agreed).

13. In those circumstances, and notwithstanding the respondent’s breaches of the obligation of mutuality, the Full Bench held that there was no relevant breach within the meaning of s 48(3)(g) of the Act because the respondent was totally incapacitated.

    The appellant’s contentions

14. Before this Court the appellant commenced with what was described as the established approach to statutory construction when determining the meaning of ss 48(2)(f) and 48(3)(g) of the Act, examining the text, context and purpose.[30] The appellant emphasised that s 48(2) precluded the discontinuance of weekly payments to a worker unless one of the conditions in the sub-paragraphs that followed was established. Relevantly in this case, that was s 48(2)(f) where “the worker breaches the obligation of mutuality”.

    [30]   Citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381-382 [69]-[70] (McHugh, Gummow, Kirby and Hayne JJ); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 31 [4] (French CJ), 46-47 [47] (Hayne, Heydon, Crennan and Kiefel JJ); Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378, 388-392 [23]-[32] (French CJ and Hayne J), 404-405 [68]-[70] (Crennan and Bell JJ), 411-412 [88]-[89] (Kiefel J); Talacko v Bennett (2017) 260 CLR 124, 149-150 [82], [84] (Nettle J; Gageler J agreeing at [78]).

15. As for the meaning of the phrase “worker breaches the obligation of mutuality”, the appellant submitted that this was defined in an exhaustive manner by s 48(3) and, subject to the exceptions in s 48(4), conduct coming within any one of the subparagraphs to s 48(3) comprised a breach of the obligation of mutuality. Relevantly in this case, the question was the meaning and scope of the last subparagraph, being s 48(3)(g):

    the worker does anything else that is, apart from this subsection, recognised as a breach of the obligation of mutuality.

16. The appellant relied on the progenitor provision in s 36(1a)(g) of the 1986 Act, particularly the construction given to that provision by the Full Court in Seal v Transfield Services.[31]  There, the Full Court held that this provision referred to the established meaning developed by the common law in the context of workers compensation legislation.[32]  The appellant emphasised that the language of the provision is similar to that used by Cox J in Kelvinator v Jezior,[33] a matter recognised by White J in Seal v Transfield Services.[34]

    [31]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312.

    [32]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [28], [30] (Gray J), [80]-[82], [84] (White J, in dissent as to the result). Cf, [181] (Kourakis J, as he was).

    [33]   Kelvinator v Jezior (1988) 49 SASR 592, 597-598 (Cox J, with whom White and Prior JJ agreed).

    [34]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [80] (White J).

17. After pointing out that there was nothing in the text of s 48 to suggest that a distinction should be drawn between partially and totally incapacitated workers, the appellant reviewed in an extensive way the evolution of the concept of the obligation of mutuality in workers compensation legislation. It will be necessary to return to the cases examined.

18. Essential to the appellant’s contentions was the proposition that although the concept had been developed in the context of deeming provisions,[35] by which partial incapacity was deemed to be total incapacity where the employer failed to provide suitable employment, it addressed the kind of conduct expected of a worker in the employment relationship.  This was described from time to time as the necessary degree of co-operation which is expected from a worker. 

    [35]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [164] (Kourakis J).

19. The appellant contended that it was significant that the 1995 amendment gave an additional use to the concept of mutuality.[36]  Whereas the concept had, in the context of s 67 of the Workers Compensation Act 1971 (SA) and s 35(2) of the 1986 Act, been utilised in connection with deeming provisions, it was now applied to the determination of the discontinuance of workers weekly payments.  As White J explained in Seal v Transfield Services:[37]

    In applying the concept to this different purpose, the Parliament also developed it: first, by referring to mutuality as an obligation which may be breached; secondly, by specifying particular circumstances which may amount to a breach of the obligation; and, thirdly, by tailoring those breaches to particular obligations or expectations arising under the Act itself.

    [36]   Workers Rehabilitation and Compensation (Miscellaneous Provisions) Amendment Act 1995 (SA) s 11.

    [37]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [82] (White J).

20. The appellant contended that the examples specified by s 48(3) demonstrated that the concept of the obligation of mutuality was no longer confined to matters essential to the employment relationship but extended to obligations coincident with the right to continue to receive weekly payments under the Act, including undergoing medical treatment, observing return to work obligations and other employment obligations.

21. Whilst the appellant accepted that these obligations may “operate differently” to an incapacitated worker when compared with a partial incapacitated worker, all provisions were able to apply to a worker without a present work capacity who may, nonetheless, have a future work capacity. There was no “bright line distinction” to suggest that any part of s 48 did not apply to a worker without a present work capacity.

22. Indeed, contended the appellant, if s 48(3), or some aspect of it, had no application to a worker who was totally incapacitated, that could have been simply stated in the Act but it was not. As it was not expressly stated, it was contended that there was no occasion for any implication to that effect. Accordingly, the appellant submitted that s 48(3)(g) applied to all workers, regardless whether they were totally or partially incapacitated for work.

    The respondent’s contentions

23. The respondent submitted that the decisions of the primary judge and the Full Bench were correct insofar as they held that a breach of the obligation of mutuality referred to in a s 48(3)(g) only referred to a partially incapacitated worker and not to a totally incapacitated worker.

24. The respondent contended that the contrary conclusion was inconsistent with the decision of the Full Court in Seal v Transfield Services,[38] as well as inconsistent with the decision of the Full Bench of the Tribunal in Eylward v Select Staff.[39]

    [38]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [26] (Gray J), [84]-[85] (White J) and [182]-[183] (Kourakis J).

    [39]   Eylward v Select Staff Pty Ltd [2000] SAWCT 192, [15].

25. The respondent emphasised that the contrary conclusion failed to recognise that the concept of a breach of mutuality had developed in workers compensation jurisdiction in connection with deeming provisions which were concerned with whether a partially incapacitated worker should be treated as totally incapacitated workers. If that concept was now to be applied to totally incapacitated workers, that was not supported by the objects and purpose of the Act and its effect would “simply be punitive”.

26. Like the appellant, the respondent charted the authorities concerning the development of the concept of a breach of the obligation of mutuality, concluding with the proposition that the appellant’s approach amounted to a reinterpretation of the concept which should not be entertained.  As the respondent put it, the appellant’s reinterpretation would have “far-reaching consequences”:[40]

    It is clear that a partially incapacitated worker may not be ready, willing and able to undertake work offered to them by the employer, and therefore in breach of the obligation of mutuality, through circumstances that affect them, rather than only through conduct on their part: the heart attack sufferer in Hartwell; the sufferer of alcoholism in Seal. Those events disentitle the partially incapacitated worker to weekly payments precisely because they prevent the partially incapacitated worker from performing work which their work injury would have permitted them to perform. But on the Appellant’s construction, where a totally incapacitated worker suffers a similar event, which would independently prevent them from working, they too would be disentitled to weekly payments.

    So a bricklayer, rendered quadriplegic and totally and permanently incapacitated for work by a work injury, who subsequently suffers a heart attack which independently prevents them from working, would, on the Appellant’s construction, lose their entitlement to weekly payments because they have breached mutuality.

    [40]   Respondent’s written submissions [40]-[41]. 

27. The respondent contended that this seemed “an unlikely outcome” which was “merely punitive” and there was nothing in the objects or scheme of the Act to suggest that it was concerned with punishing injured workers for their inappropriate conduct where that conduct can have no bearing on the basis upon which compensation is paid.

28. The respondent called in aid s 8(3) of the Act which recognised that, notwithstanding that injuries may be sustained in the course of serious or wilful misconduct, those injuries were compensable where they constitute injuries which are serious and permanent.

1. The respondent contended that if serious injuries arising from serious and wilful misconduct are compensable, it was difficult to see why the Act should be construed as having the effect that, in the case of a totally incapacitated worker, misconduct which had no logical effect on the liability to pay compensation should nonetheless disentitle the worker to compensation.

   The development of the obligation of mutuality

2. In order to resolve these competing contentions, it is necessary to commence with the development of the concept of mutuality in workers compensation law.  As will be seen, though the concept was developed in connection with deeming provisions, that was merely the legislative context in which the obligation of mutuality was recognised.  The concept was, from the outset, concerned with the nature and incidents of the relationship between an employer and an employee.

3. In RJ Brodie (Holdings) Pty Ltd v Pennell, the High Court considered the proper interpretation and effect of s 11(2) of the Workers Compensation Act 1926 (NSW), which was in the following terms:[41]

   An employer shall provide suitable employment for his injured worker during the worker’s partial incapacity for work.

   Upon any failure by such employer to provide suitable employment as aforesaid the worker’s incapacity for work shall be deemed to be total, and he shall be compensated accordingly.

   [41]   RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665, 667 (Kitto, Taylor, Windeyer and Owen JJ) (RJ Brodie v Pennell).

4. In a passage that has often been cited, the High Court explained that employment was provided only by the employer and employee entering into and performing their obligation under a contract of service, and that this involved the co-operation of both employer and employee:[42]

   … Employment is not a commodity which can be provided merely by an offer; it can in strictness be provided only by the employer and employee entering into and performing their obligation under a contract of service and this involves the co-operation of both employer and employee. There can, of course, be no “failure” on the part of an employer to provide suitable employment if the employee refuses, and continues to refuse, to enter his employment, or, if the facts show that the employee’s conduct is inconsistent with the necessary degree of co-operation on his part. Such would be the case where the employee has undertaken full-time employment with another employer so long as such employment continues, or, where the employee moves his residence to a place so remote from the employer’s place of business as to be quite incompatible with employment by that employer. Likewise, it would seem, the position would be the same where after his partially incapacitating injury the worker suffers further injuries or sickness resulting in total incapacity for any form of work. It must be remembered that not only is the obligation to provide suitable employment a continuing one but there must also be a continuing failure to provide suitable employment in order to entitle a worker to continuing benefits pursuant to s 11(2) and, in our view, there cannot be a continuing failure where the circumstances are such that it can be seen that throughout any relevant period the employee is not ready, willing or able to enter the employ of the pre-injury employer.

   Whether or not there has been any such failure in relation to any period during the continuance of the partial incapacity is, of course, a question of fact to be determined in the light of all the circumstances including the situation of the worker. If throughout any such period he is engaged in activities which would have made it impossible for him at the same time to have performed the duties of an employment with his former employer there cannot be said to be a failure on the latter’s part to provide suitable employment …

   [42]   RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665, 669-670 (Kitto, Taylor, Windeyer and Owen JJ)

5. The other member of the Court, Menzies J, stated his conclusion briefly and in broad terms:[43]

   The provision of employment imports, of course, mutuality between the employer and the worker and it is not difficult to see that where it is the worker who is responsible for a lack of mutuality there is no failure on the part of the employer to provide employment.

   [43]   RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665, 671 (Menzies J).

6. It can be seen that the High Court was concerned with the concept of employment which required “the co-operation of both employer and employee”, as well as the requirement that the employee ought not refuse or continue to refuse to enter employment or to engage in conduct which is “inconsistent with the necessary degree of co-operation” on the part of the employee.  Examples were given of taking up employment with another employer, moving residence or where the partially incapacitated worker suffered further injuries or sickness resulting in total incapacity.  Ultimately, the concept of mutuality was concerned with whether the employee was ready, willing or able to remain in the employ of the pre-injury employer.  The concept was not confined by whether the employee had any residual capacity for work, although that was of course inherent in the legislative provision and the facts of the case before the Court.

7. There has since been a line of decisions recognising the principle of mutuality in connection with workers compensation legislation.  These decisions arose in the context of legislation which contained deeming provisions making the failure of the employer to provide suitable work a pre-condition, or at least one of the

   
   

   pre-conditions, to deeming partial incapacity as total incapacity.[44]

   [44]   Electric Power Transmission Pty Ltd v D’Urso (1970) 124 CLR 338; Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417 and General Motors-Holdens Ltd v D’Andrea (1985) 122 LSJS 301.

8. RJ Brodie (Holdings) v Pennell was applied in Electric Power Transmission Pty Limited v D’Urso where it was held that the refusal of an employer to employ a partially incapacitated worker did not amount to a failure to provide suitable employment within the meaning of s 11(2) where the worker was unwilling to accept suitable employment notwithstanding that the employer was unaware of the worker’s unwillingness.  Barwick CJ, Menzies, Windeyer and Owen JJ referred to RJ Brodie v Pennell’s case as follows:[45]

   It was pointed out there that employment involved mutuality between the employer and the worker and that if a worker did not want to work, an employer could not be said to have failed to provide him with employment.

   [45]   Electric Power Transmission Pty Ltd v D’Urso (1970) 124 CLR 338, 341.

9. The High Court approved a statement by Sugerman J in Asciak v Australian Glass Manufacturers Pty Limited where his Honour had said:[46]

   Section 11(2) necessarily imports a readiness and willingness on the part of the worker both to accept suitable employment when offered and, if it is undertaken, to continue in it and conform to its duties and obligations. It cannot be said that there has been a failure on the employer's part where it appears that he has not offered employment to, or continued in his employment, a worker as to whom it is found that he was not so ready and willing. Moreover, the circumstances that suitable employment is not forthcoming the instant that it is asked for is not necessarily a “failure” to provide it within the meaning of the subsection. Before it can be said that there has been a “failure” on the employer's part a reasonable opportunity may have to be accorded him to find or create a job which is “suitable” having regard to the extent and nature of the worker’s incapacity.

   [46]   Asciak v Australian Glass Manufacturers Pty Limited (1964) 64 SR(NSW) 344, 351.

10. In Dowell Australia Limited v Archdeacon the High Court was divided on whether the evidence established as a matter of fact that a partially incapacitated worker who had been retrenched, and who had moved his home to a distant part of the State, remained ready, willing and able to take up suitable employment in Sydney.[47]

    [47]   Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417.

11. In Hartwell v Electricity Trust (SA), the Full Court addressed the proper interpretation and scope of s 67 of the Workers Compensation Act 1971 (SA) which provided:[48]

    For the purposes of determining the amount of weekly payments provided for by section 51 of this Act, partial incapacity for work shall be treated as total incapacity for work except—

    (a) during any period in respect of which the employer proves that work for which the workman was fit was made available to the workman by the employer; or

    (b)     during any period in respect of which the employer proves—

    (i)    that it was not reasonably practicable for the employer to make available to the workman work for which the workman was fit;

    (ii)     that such work was reasonably available to the workman elsewhere.

    [48]   Hartwell v Electricity Trust (SA) (1982) 29 SASR 365 (Hartwell).

12. In that case, a worker sustained a work injury.  Whilst totally incapacitated, the worker sustained a heart attack which was unrelated to his employment.  As a result, he became totally incapacitated for work.  Despite the difference in language between the New South Wales and South Australian legislation, the Full Court concluded that the underlying concept of mutuality applied in the same way.  The question was whether, once the worker regained a partial incapacity for work, total incapacity caused by the heart attack precluded the worker from receiving weekly payments calculated on the basis of a notional total incapacity.  After referring to authorities such as RJ Brodie (Holdings) v Pennell, King CJ explained:[49]

    In my opinion the authorities cited above establish that the notional total incapacity arises only if and while the worker is ready able and willing to perform work which he is not prevented from doing by the compensable injury.

    … The governing principle of the Act is that the employer is liable for the results of incapacity which is related to the employment, but not for incapacity which is not so related. If a worker is unable to perform work which is available, not because of incapacity caused by the compensable injury, but because incapacity caused by other factors, the section cannot operate to give rise to notional total incapacity.

    [49]   Hartwell v Electricity Trust (SA) (1982) 29 SASR 365, 369 (King CJ).

13. In General Motors-Holden Limited v D’Andrea the Full Court considered the application of s 67 to a worker who decided to accept an offer made by the employer to its employees generally of early retirement, which included a special retirement allowance.[50]  At the time the worker accepted early retirement under the scheme, he was partially incapacitated and was on light duties.  Under the scheme the worker resigned and received superannuation benefits and $4,446 in retirement benefits.  After retirement he unsuccessfully sought other work and then went on to an invalid pension.  Some two and a half years later he notified his former employer that he was ready, willing and able to undertake suitable work, and he again claimed weekly compensation.  The Court held that the worker had withdrawn from the work force and was no longer available for work.  The worker brought to an end the mutuality upon which the obligations under s 67 depended.

    [50]   General Motors-Holden Limited v D’Andrea (1985) 122 LSJS 301.

14. O’Loughlin J was of the opinion that the worker was estopped thereafter from asserting that he was ready, willing and able to work, even if he sought to return the employer to its former position by repaying the early retirement benefit. [51]  King CJ, however, considered that the worker was estopped from denying that he was ready, willing and able to work only until such time as he restored the employer to its original position.[52]

    [51]   General Motors-Holden Limited v D’Andrea (1985) 122 LSJS 301, 311 (O’Loughlin J).

    [52]   General Motors-Holden Limited v D’Andrea (1985) 122 LSJS 301, 307 (King CJ).

15. With the advent of the repealed 1986 Act, compensation was addressed through the medium of a compensating authority rather than solely through an employer.  In Kelvinator v Jezior[53] the Full Court considered s 35(2) of the 1986 Act which, at that time, provided that:

    (a)a partial incapacity for work over a particular period shall be treated as a total incapacity for work over that period unless the Corporation establishes that suitable employment for which the worker is fit is reasonably available to the worker in respect of that period.  …

    [53]   Kelvinator v Jezior (1988) 49 SASR 592.

16. Again, the Court determined that the concept was an incident of employment which remained relevant to the determination of the rights and obligations of the employed worker under the new legislation.  As the decisions on mutuality under earlier legislation showed, the concept of the obligation of mutuality was not explicitly mentioned but was to be implied.  According to Cox J:[54]

    Conduct on a worker’s part, independent of any injury, [that] is inconsistent with the degree of co-operation that is essential to an effective working relationship may take his case outside the ambit of s 35. Perhaps it is more difficult to fasten on particular words in s 35(2) in which the notion of mutuality is implied, but that does not matter. Besides, the expression “reasonably available” is probably adequate for that purpose. It is hardly to be supposed that an employer, in order to avoid having a partial incapacity treated as a total incapacity, is obliged to restore an injured worker to the payroll when it is plain that the worker will behave in a fashion that is fundamentally destructive of the required mutuality — by persistently disobeying instructions, say, or by assaulting his fellow workers or by repeatedly flouting the safety rules. The evidence in this case showed that suitable employment was available to the respondent, in the relevant sense, but that he had by his behaviour and attitude disqualified himself from carrying it out. Alternatively, it may be said that the respondent was not “able” to work in the sense contemplated in Pennell’s case.

    As the authorities emphasise, however, it is a question of fact, and perhaps degree, in every case whether there has been a fundamental breach of the condition that underlies s 35. Obviously a mere temporary disagreement or other passing episode will not ordinarily constitute this kind of disqualification. The question has to be judged in relation to the time for which the weekly compensation is sought.

    [54]   Kelvinator v Jezior (1988) 49 SASR 592, 597 (Cox J, with whom White and Prior JJ agreed).

17. It can be seen that Cox J was there concerned with conduct “independent of any injury” which could be regarded as “inconsistent with the degree of

    
    

    co-operation that is essential to an effective working relationship”.  Cox J addressed the behaviour of a worker that is “fundamentally destructive of the required mutuality” and his Honour gave, as instances, disobeying instructions or assaulting fellow workers or repeatedly flouting safety rules.  His Honour emphasised that what was involved are questions of “fact, and perhaps degree”. 

18. Subsequently, in WorkCover Corporation v Gregor, a partially incapacitated worker resigned from employment before seeking to return to his former employment and claim an entitlement to weekly payments of compensation.  In that context, King CJ summarised the development of the law, including its refinement under the 1986 Act:[55]

    It is settled law that the notion of unavailability to a worker of work for which he is fit connotes that he is ready and willing to perform such work. … This is the principal of mutuality which is referred to in the Corporation’s determination.

    Those cases were decided upon statutory provisions which made the failure of the employer to provide suitable work the precondition or one of the preconditions of partial incapacity being treated as total. …

    … If the employer made suitable work available to the worker, the effect was to deprive the partial incapacity of the potential to be treated as total irrespective of whether the worker might be unable to avail himself of the work by reason of altered circumstances such as having moved from the locality. With such a provision mutuality required a readiness on behalf of the worker to avail himself of the work made available by the employer with which he was employed at the time of incurring the disability.

    … The precondition under s 35(2) does not have an aspect which is specific to a particular employer. The precondition is the non-availability of suitable work generally. … The mutuality required by s 35(2) is therefore a readiness and willingness to perform work which is reasonably available and is not necessarily negated by the worker’s unavailability for work provided by the employer in whose employment the disability occurred.

    [55]   WorkCover Corporation (Plas-Tec Pty Ltd) v Gregor (1994) 62 SASR 283, 285-286 (King CJ, with whom Bollen and Mullighan JJ agreed).

19. Whilst the respondent suggested that this passage confined the operation of the obligation of mutuality to partially incapacitated workers, King CJ was addressing how the concept continued to apply notwithstanding the introduction of the Corporation as the compensating authority, rather than an employer.  Though the former Chief Justice acknowledged the statutory context in which the concept had developed, and in which it continued to be relevant, his Honour did not suggest that the statutory context circumscribed the conduct or circumstances which had been recognised by the authorities as amounting to a breach of the obligation of mutuality. 

20. It may be seen from this brief review of the authorities that whether there is or is not an implied term of mutual trust and confidence in the contract of employment is a distraction.[56]  The requisite mutuality recognised in the authorities is different and broader than the implied contractual term which was rejected in Commonwealth Bank of Australia v Barker.[57]  It is, as the High Court held in RJ Brodie v Pennell, concerned with conduct or circumstances fundamentally destructive of the required mutuality between employee and employer which enables the conclusion that the employee is not ready, willing or able to undertake or adhere to the responsibilities and duties of employment.

    [56]   South Australia v McDonald (2009) 104 SASR 344.

    [57] (2014) 253 CLR 169.

21. In 1995, s 36 of the 1986 Act was amended to introduce ss 36(1)(f) and 36(1a) and the new, explicit ground that a worker’s breach of the obligation of mutuality could be relied on by the compensating authority to support the discontinuance of weekly payments. When introducing the Bill, the Attorney-General explained the amendment by saying that “the concept of mutuality is recognised”, referring to the concept which had been developed at common law in the context of workers compensation legislation.[58]  In contrast to earlier legislation, the concept of mutuality was now both specifically adverted to and given a different and wider field of operation.

    [58]   Workers Rehabilitation and Compensation (Miscellaneous Provisions) Amendment Act 1995 (SA), s 11; Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [82] (White J).

22. The significance of these amendments was addressed by the Full Court in Seal v Transfield Services, a case where the employer contended that there was a breach of the obligation of mutuality notwithstanding the worker’s contention that he retained a partial capacity for some work and was willing to undertake work duties. 

    Seal v Transfield Services

23. In Seal v Transfield Services, the Full Court considered the way the progenitor provision to s 48(3)(g), s 36(1a)(g) of the 1986 Act, should be interpreted. In that case, the worker had non-work-related alcoholism and drug dependency which it was said, at times, rendered him totally incapacitated for work.

1. The litigation in Seal v Transfield Services followed an unusual course.  At an initial trial, Hannon DPJ rejected the case of the employer, Transfield, that the worker had refused or failed to undertake work which had been offered and for which he was fit.  Hannon DPJ also rejected the contention that the worker was totally incapacitated for work by reason of his alcohol and drug abuse and dependence. 

2. In the first appeal, the Full Bench held that the approach of Hannon DPJ revealed an error of law because Hannon DP had failed to consider the question of the worker’s employability from the perspective of the employer, including whether “in truth, the worker’s residual working capacity is in a realistic market, unsaleable”.[59]  The Full Bench emphasised that a reasonable employer might be concerned about whether the worker posed a risk of injury to himself and others given his long history of substance abuse. 

   [59]   Transfield Services (Australia) Pty Ltd v Seal [2008] SAWCT 43, [39] (Hannon DPJ).

3. At the re-hearing before Hannon DPJ, extensive consideration was given to whether employing the worker was “not worth the risk”.[60]  No further evidence was called.  Ultimately, Hannon DPJ concluded that the worker was effectively totally incapacitated because the hypothetical reasonable employer would likely decide that it was not worth the risk of employing Mr Seal. 

   [60]   Seal v Transfield Services (Australia) Pty Ltd [2009] SAWCT 4, [13] (Hannon DPJ).

4. In the course of the second appeal to the Full Bench, the correctness of the earlier Full Bench decision was challenged on the basis that it was not concerned with the worker’s inability or refusal to perform duties or with the worker’s actual employment but rather, with hypothetical, prospective employment.  This criticism was rejected, and the appeal was dismissed. 

5. The worker’s appeal to the Full Court was concerned with the proper meaning and effect of s 36(1a)(g), together with whether the Full Bench had erred in its articulation of the legal test to be applied when determining whether there was a breach of the obligation of mutuality. Whilst the worker in that appeal emphasised the words “does anything” appearing in s 36(1a)(g), the Full Court held that the effect of the earlier decisions under different legislation was not confined to conduct by a worker and included cases where, like Hartwell, something had happened to the worker which rendered the worker totally incapacitated and, in that sense, not ready, willing or able to work.  In addition, the Full Court emphasised the reciprocal nature of the mutual obligations arising as between an employer and an employee in an employment relationship.  The appeal to the Full Court was dismissed.  An application for special leave to appeal to the High Court was refused.[61]

   [61]   Seal v Transfield Services [2011] HCATrans 163 (10 June 2011) (French CJ and Crennan J), 8: “While not agreeing with all that was said by the majority in the Full Court, we are not persuaded that an appeal to this Court would enjoy sufficient prospects of success to warrant a grant of special leave”.

6. After extensively reviewing the authorities, Gray J (who with Kourakis J comprised the majority) pointed out that in Dowell Australia Mason J had held that the employee must demonstrate that the employee was “ready, willing and able” to enter into the employment that the employee claims the employer failed to provide.[62] 

   [62]   Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417, 435 (Mason J) (Dowell Australia); Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [25] (Gray J).

7. Gray J explained that whether the obligation of mutuality has been breached is a matter determined having regard to the circumstances of the particular case.[63]  Gray J concluded that the Full Bench in that case made no error in emphasising that the question of mutuality was not confined to whether the worker could undertake some duties and that it extended to considering the issue of incapacity from the perspective of a “potential buyer” of Mr Seal’s labour.  It was in that context that the worker’s long-term substance abuse “meant that he could not meet his obligation of co-operation”:[64]

   … Mr Seal’s conduct induced by long-term substance abuse meant that he could not meet his obligation of cooperation. At the time that he recovered sufficiently from his work injury to be only partially incapacitated, Mr Seal was rendered unfit to be able to attend to light duties by reason of the effects of long-standing and continuing substance abuse. The problems associated with his substance abuse were not caused by work; they resulted from personal lifestyle choices that he had made over many years.

   [63]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [25] (Gray J).

   [64]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [29] (Gray J).

8. Gray J went on to emphasise that, as a result, the worker was a danger to other workers and his substance abuse rendered him unemployable for light duties.[65]

   [65]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [32] (Gray J).

9. Although White J dissented in the result, he too approached the interpretation of s 36(1a)(g) by reference to the earlier authorities on mutuality. White J recognised that the Full Bench had postulated the concept of a hypothetical, reasonable employer when determining whether the worker in that case was employable:[66]

   It can be seen that in these passages the Full Bench postulated a hypothetical reasonable employer, clothed that person with a number of attributes and concluded that the determination of the issue of total incapacity required a consideration of whether such a person, knowing of the worker’s condition, would consider that it was “worth the risk” of employing him. It considered that Hannon DP had erred by failing to consider whether a “hypothetical prospective employer” possessing the qualities of “a reasonable employer” would employ the worker. The Full Bench remitted the matter to Hannon DP for further consideration in the light of its reasons.

   [66]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [56] (White J).

10. White J noted that one of the worker’s arguments was based on whether there had been conduct by the worker which amounted to a breach of the obligation of mutuality. Although he agreed that the manner in which ss 36(1)(f) and 36(1a) were expressed provided some support for that submission, it was belied by the authorities concerning the obligation of mutuality in the context of workers compensation legislation, particularly cases such as Hartwell, where something had happened to the worker.[67] Importantly, White J explained that the introduction of ss 36(1)(f) and 36(1a) gave additional use to the “element of mutuality”:[68]

    Whereas it had been articulated by the courts in relation to provisions concerning the rate at which compensation was to be paid, it was now to be applied in the determination of a worker’s continued entitlement to weekly payments. In applying the concept to this different purpose, the Parliament also developed it: first, by referring to mutuality as an obligation which may be breached; secondly, by specifying particular circumstances which may amount to a breach of the obligation; and, thirdly, by tailoring those breaches to particular obligations or expectations arising under the [1986 Act] itself.

    [67]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [72] (White J).

    [68]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [81] (White J).

11. Central to the consideration given by White J of the concept of mutuality was what he described as the “Common Law Circumstances”.  These were concerned not with the particular legislation under which the concept of mutuality was considered but, rather, with the conduct or circumstances which constituted a breach of the obligation of mutuality and from which it could be concluded that a worker was neither ready, willing nor able to accept suitable employment.[69]

    [69]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [75] (White J).

12. White J then extensively reviewed the authorities relating to total and partial incapacity, as well as the concept of the hypothetical reasonable employer as articulated by the Full Bench in that case,[70] before summarising what he discerned to be the relevant propositions:[71]

    1.incapacity for work exists when workers have a physical or mental disability which affects their earning power in any market reasonably accessible to them;

    2.it is the open labour market and all fields of employment reasonably accessible in that market to the disabled worker which are to be considered;

    3.the concept of incapacity is not concerned only with the worker’s capacity to perform the work which he or she was doing at the time the disability was sustained, nor is it concerned only with employment of particular kinds, nor with particular employers only;

    4.the question of whether a worker is totally or partially incapacitated in the relevant sense is a question of fact.

    (Original emphasis.)

    [70]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [87]-[100], [120] (White J).

    [71]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [94] (White J).

13. White J concluded that the decisions under appeal in that case were affected by errors of law, with the result that the appeal should be allowed.[72]

    [72]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [94]-[95] (White J).

14. In the course of his reasons, Kourakis J explained that the implication of mutuality was concerned with ensuring that compensation was paid for work-caused injury:[73]

    I would explain the implication of mutuality in the following way. If a partially incapacitated worker becomes totally incapacitated for reasons unrelated to his or her employment, the Corporation will be unable to establish that employment is reasonably available in literal compliance with the proviso to s 35(2)(b) which requires the Corporation to show that work is reasonably available to the worker. Work cannot literally be reasonably available to a worker who is totally incapacitated by a supervening condition. It would, in my view, be inconsistent with the purpose of the Act, and the legislative history of the workers’ compensation Acts it replaced, to construe s 35(2)(b) in a way which extended the scope of the Act beyond the provision of compensation for work-caused injury. If weekly payments were made on the basis of total incapacity when the cause of that total incapacity was a supervening disability which was not work-related, the payments would be social security payments and not payments of workers’ compensation. Accordingly, s 35(2)(b) of the Act must by necessary implication be subject to a condition that partial incapacity will only be treated as total incapacity for so long as the worker is ready, willing and able to perform work other than the work which is precluded by his or her compensable disability. A similar implication underlies the operation of s 35(2)(c) of the Act.

    [73]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [166] (Kourakis J).

15. Importantly, his Honour viewed the mutual obligation which is to be implied as extending beyond ensuring that there was a capacity to undertake work within the worker’s residual capacity:[74]

    In my view, the mutual obligation which is implied by s 35(2)(b) and (c) extends beyond ensuring that there is a capacity to undertake work within the partially incapacitated worker’s residual capacity. The mutuality implied by s 35(2) precludes from its beneficial operations any worker who engages in conduct, or who lapses into a position, which substantially detracts from his or her capacity to obtain employment. Where it is reasonably possible to return a worker to work, it would be repugnant to the Act’s objectives and to commonly accepted ethical standards to reward the worker who engages in conduct which obstructs his or her return to work with the benefit of the deeming provision.

    The obstruction which may amount to a breach of mutuality need not be limited to a condition which totally incapacitates a worker. Any conduct which is inconsistent with the degree of cooperation expected of a worker to exploit his or her remaining capacity will suffice. …

    [74]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [167]-[168] (Kourakis J).

16. Whilst these observations addressed the situation where it is “reasonably possible to return a worker to work”, in the particular context of s 35 of the 1986 Act, there is no suggestion that Kourakis J was thereby confining the breadth of the conduct or circumstances that may comprise a breach of the obligation of mutuality.  The breadth of the obligation of mutuality under the terms of the 1986 Act was then emphasised by Kourakis J.  As his Honour put it, the obligation does not arise in the same way as it did under former legislation:[75]

    It arises in part from the implication in s 35 to which I have referred but also from the context of the Act as a whole. The purpose of the Act is to provide ongoing income support and medical and rehabilitative services to promote and achieve an early return to work.[76] The purpose of the Act would be manifestly frustrated if s 35(2)(b) operated to provide partially incapacitated workers their full pre-injury notional weekly earnings when they were no longer willing or in a position to return to their former employment or a position with an equivalent level of remuneration.

    [75]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [170] (Kourakis J).

    [76]   See the repealed Workers Rehabilitation and Compensation Act 1986 (SA), s 2.

17. Kourakis J then described the apparent purpose of the various circumstances prescribed by s 36 (now s 48) in the following way:[77]

    The apparent purpose of the circumstances prescribed by s 36 is to require the worker to prove his or her ongoing entitlement if there be any. True it is that some of the circumstances, if found to exist, will necessarily disentitle the worker from weekly compensation. For example, a dispute over a notice of discontinuance grounded on the allegation that the worker has obtained work providing a remuneration equal to or above his or her notional weekly earnings, if determined adversely to the worker, will necessarily mean that he or she has no further entitlement to weekly compensation.

    [77]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [177] (Kourakis J).

18. After recognising that the onus to establish the existence of a circumstance prescribed by s 36 is on the employer, and that it will be for the worker to prove any entitlement on a fresh application for compensation, Kourakis J returned to the apparent breadth of the phrase “recognised as a breach of the obligation of mutuality”:[78]

    The reference in s 36(1a)(g) to the worker doing anything which is “recognised as a breach of the obligation of mutuality” is not a reference to the decisions of courts and tribunals. It should not be construed as in effect a delegation of legislative power to courts and tribunals to prescribe the circumstances that will amount to a breach of the obligation of mutuality under that section. It can hardly be regarded as a reference to the decisions of courts and tribunals under other statutory schemes because whether or not particular circumstances will amount to a breach of the obligation of mutuality will necessarily depend on the provisions of each statutory scheme. Rather, s 36(1a)(g) must be construed as a reference to circumstances which breach the implication of the concept of mutuality which necessarily arises out of the text and context of s 35(2)(b) and (c).

    Mr Seal’s counsel relied heavily on the language of s 36(1)(f) which suggests that mutuality is breached only by active conduct. However, s 36(1a)(g) incorporates as a breach of mutuality any recognised breach in addition to the particular matters prescribed by that subsection. True it is that s 36(1a)(g) speaks of the worker “doing anything”. However, notwithstanding the ambiguity caused by that language, it is not sufficient to persuade me that it was Parliament’s intention to depart dramatically from the concept of mutuality as it was understood and stated by King CJ in Hartwell.

    [78]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [181]-[182] (Kourakis J).

19. The reference in this passage to “the decisions of courts and tribunals” might perhaps be thought problematic.  This reference does not suggest that what has been recognised as a breach of the obligation of mutuality is not relevant to a determination of breach.  In that sense, what has been recognised in the authorities as amounting to a breach of the obligation of mutuality remains of relevance.  Rather, it would appear that his Honour was concerned to address the notion that it is not for courts or tribunals to effectively usurp legislative power when determining what is or is not to be recognised as a breach of the obligation of mutuality.

20. That approach is particularly important when one is evaluating whether, in the circumstances of a particular case, the worker’s conduct or circumstances should be viewed as amounting to a breach of the obligation of mutuality.  That analysis cannot be made in the abstract and without reference to the nature of the worker’s employment and, where relevant, the worker’s employment obligations and duties, having regard to the applicable statutory scheme.  That is to say, what has previously been recognised as amounting to a breach in an earlier case does not foreclose whether similar conduct or circumstances must necessarily amount to a breach in all cases.  The analysis depends on the nature of the worker’s employment and the particular conduct or circumstances in question, together with the terms of the applicable statutory scheme. 

21. What has been recognised as amounting to a breach of the obligation of mutuality is nonetheless relevant to the analysis.  For example, it has long been recognised as a breach where a worker moves residence away from the city or town in which a workplace is based.[79]  That conduct may be of particular importance where the duties of employment require the worker to engage in manual or other labour in a particular workplace.  The same might be said where retraining must occur in a particular workplace.  Since the Covid 19 pandemic, however, working or training remotely using the internet or other technology has become common-place across a range of occupations.  The requisite analysis may not therefore be necessarily foreclosed by earlier decisions.  Whether there has been a breach of the obligation of mutuality will depend on the facts and circumstances of each case.

    [79] Whilst that kind of conduct is recognised under s 48(2)(g), these comments are directed to s 48(3)(g) of the Act.

22. When considering the question of total incapacity, it is important also to recognise that Kourakis J posed the relevant question in that case as being whether the worker’s alcohol and substance abuse effectively precluded him from securing a position in the workforce.  As with Gray J, that question was not confined to a worker’s capacity to undertake the physical duties of employment or work. The relevant question was broader, requiring that “the degree of occupational risk that is acceptable … be considered” by reference to the worker’s employability and not merely by reference to employment in particular duties with Transfield.  Indeed, Kourakis J approached the matter by taking a very broad view of the issue:[80] 

    The relevant question on this issue arising out of the remaining ground of Transfield’s s 36 notice is: Does Mr Seal’s alcohol and substance abuse effectively preclude him from securing a position in the workforce? That question cannot be answered merely by surveying the nature and range of the positions that are available in the modern Australian labour force. More subtle questions are involved. In particular, the degree of occupational risk that is acceptable in the modern Australian workforce must be considered. The economic viability of hiring a worker with such a condition is another important consideration.

    It is important to emphasise here that the issue is not whether an employer would prefer to employ a partially incapacitated worker who has no drug or alcohol problem to one who has. That can be accepted but it does not necessarily render drinkers totally incapacitated. I suspect that many workplaces could not be as productive as they are if that were so. In order to determine whether a worker is totally incapacitated by his or her alcohol dependency, the question is a narrower one. It is whether there are positions in the Australian labour force which such a person could secure notwithstanding his or her condition; it is whether industrial, economic, and workplace safety considerations allow for the employment of such a person. In attempting to answer that question, it is not surprising that lawyers and judges, who are not trained as economists or labour market analysts invoke the assistance of their constant companion, the reasonable person.

    [80]   Seal v Transfield Services (Australia) Pty Ltd (2010) 108 SASR 312, [191]-[192] (Kourakis J).

1. Formerly, whilst whether a worker had engaged in serious misconduct might have furnished a basis for an employer to resist a determination that partial incapacity should be deemed to be total incapacity, that same conduct now furnishes a basis for the compensating authority to determine that there should be a discontinuance of weekly payments.  The sub-section now focusses on the worker’s conduct or circumstances and the effect they have on employment or employability, and it is these rather than the statutory setting that permits the conclusion that the worker is not ready willing or able to work or take up employment.  And, as Seal v Transfield Services shows, that extends to the worker’s employability generally and not merely whether the worker can be placed into particular employment or given particular duties for which the worker retains some capacity.

2. Nonetheless, the provisions in s 48(3) may operate differently depending upon whether the worker is totally or partially incapacitated. That is demonstrated, for example, when addressing whether a worker has failed to undertake work which the worker is “capable of performing” (s 48(3)(e)(i)) or, when addressing whether the worker has failed to take “reasonable” steps to find “suitable” employment (s 48(3)(e)(ii)). Depending upon the particular conduct or circumstances of a case, s 48(3)(e) may demand of a worker a standard of conduct which varies, depending upon various considerations including whether a worker retains any residual capacity for work, especially any work of a kind not previously encountered or undertaken by the worker.

3. In addition, ss 4(10) and 36 of the Act show that the entitlement to weekly payments is concerned with a worker’s current work capacity, including any “present inability” to work arising from a work injury. These provisions recognise what should otherwise be obvious: that a worker’s capacity for work may and often will fluctuate over time. Recognition of that same phenomenon underpins ss 39 and 41 of the Act which contemplate that there may be periods of transient total incapacity, including for “seriously injured” workers. That a worker has been designated as “seriously injured” under s 21 of the Act does not necessarily say anything at all about that worker’s capacity for work or employability over time.

4. Accordingly, the evident legislative purpose of s 48(3)(g) is to preserve the breadth of what had been recognised as a breach of the obligation of mutuality in a new legislative context, not to confine it by assuming that it continues to operate in a legislative context that fundamentally changed in 1995. Section 48(3)(g) therefore addresses in a new legislative context - which includes a compensating authority and not solely an employer - what had been recognised as conduct or circumstances so inconsistent with the degree of co-operation to be expected of a worker in the context of an employment relationship that it or they are destructive of the necessary relationship of confidence between employee and employer, including a potential employer in the applicable labour market.[105]

   [105] Blyth Chemicals v Bushnell (1933) 49 CLR 66, 81 (Dixon and McTiernan JJ); HEF of Australia v Western Hospital (1991) 4 VIR 310.

5. Insofar as the respondent points to what it described as “penal” consequences, these are the consequences determined by giving effect to Parliament’s legislative purpose as revealed by the words it has used.  To return to an earlier example by way of illustration, insofar as the respondent points to situations where a totally incapacitated worker is beset by a heart attack which, independently of any work injury, totally incapacitates the worker, Hartwell and the cases which have followed it demonstrate that circumstances such as these are clearly recognised as a breach of the obligation of mutuality which will now furnish a basis for discontinuance.  That operation and effect of the legislation is not penal but concerned with ensuring that only those workers who are only incapacitated by work-related injuries, rather than non-work-related injuries, continue to receive weekly payments.

   The determination of this appeal

6. Ultimately, the error made in the decision under appeal was to conflate the legislative context in which a breach of the obligation of mutuality initially arose with the conduct or circumstances which were recognised as amounting to a breach of the obligation of mutuality. That this conduct or these circumstances are not confined to partially incapacitated workers is demonstrated by the text and scheme of s 48, as well as by the ruling made in Seal v Transfield Services that the worker’s substance abuse and addiction undermined the employment relationship thereby rendering the worker unemployable.  That conclusion was open on the facts of that case even if the worker had had no present capacity for work.

7. Where the conduct of a worker or the circumstances affecting a worker demonstrate that there has been a breach of the obligation of mutuality or the worker is totally incapacitated by reasons unrelated to a work injury, the Parliament has made it clear that these now provide a basis for discontinuance, regardless whether the worker is otherwise totally or partially incapacitated by a work injury.  That entails no injustice.  It ensures that the statutory scheme responds where the incapacity is only caused by a work injury rather than by other causes or circumstances.

8. Work-related-incapacity may fluctuate over time. Indeed, incapacity unrelated to a work injury may fluctuate over time.  As with many other breaches of mutuality, if whatever is causing total incapacity which is not work-related abates, mutuality can be restored and the entitlement to weekly payments revived.

9. Similarly, it is not unjust to require that a totally incapacitated worker, including a seriously injured worker, abide by the requirements of that worker’s employment.  As was recognised in Sacco, a case involving the ingestion of illicit drugs which was detected by a work-related drug test, both concepts may be relevant:[106]

   It will be recalled that in this case the trial judge concluded that Mr Sacco had no initial entitlement to weekly payments on two bases. One, was that he breached mutuality. The other was that he was dismissed for serious and wilful misconduct. Whilst dismissal for serious and wilful misconduct will frequently underpin an assertion that a worker has breached mutuality, it can be seen that it is a ground of discontinuance in its own right.

   [106] Sacco v Local Government Association Workers Compensation Scheme (No 2) [2020] SAET 112, [50] (Gilchrist, Farrell and Kelly DPJJ).

10. In Sacco the Full Bench held, with respect correctly, that a worker’s misconduct may result in dismissal for serious and wilful misconduct even if the worker has no present capacity for work. It is difficult to see why conduct or circumstances which amount to both serious and wilful misconduct and a breach of the obligation of mutuality cannot both furnish grounds for discontinuance where the worker is totally incapacitated. As with s 48(3)(g), s 48(2)(e) is expressed in a general way and there is no textual support for the implication that either is confined in operation to workers who retain some work capacity.

11. The designation of a worker as “seriously injured” is an important aspect of the Act. That designation carries with it valuable entitlements that may be life-long or, in the case of weekly payments, that may subsist until normal retirement age.[107]  As important as the entitlement to weekly payments is, it does not amount to a statutory sinecure which is to be enjoyed regardless of criminal misconduct by a worker which is both inimical to and destructive of the mutuality required in an effective employment relationship.

    [107] Redman v Return to Work Corporation of South Australia (2021) 139 SASR 131, [82]-[84] (Livesey JA, with whom Bleby JA agreed); State of South Australia (In Right of Dept for Health and Ageing (SA Ambulance Service)) v Dohnt (2021) 138 SASR 270, [92]-[104] (Livesey J, with whom Kourakis CJ and Parker J agreed); Return to Work Corporation of South Australia v Watkins [2017] SASCFC 149, [2] (Kourakis CJ, with whom Nicholson J agreed), [33] (Stanley J, with whom Kourakis CJ and Nicholson J agreed).

12. In circumstances where there remain unchallenged findings that the respondent’s criminal offending breached the obligation of mutuality, and on the second occasion egregiously so, the Tribunal and Full Bench should have found that s 48(3)(g) can apply to a worker who is totally incapacitated for work.

    Conclusion

13. Whilst the authorities show that the obligation of mutuality developed in the context of deeming provisions which were concerned with whether partial incapacity should be treated as total incapacity, the 1995 amendments to the 1986 Act, and s 48(3)(g) of the Act, show that it now operates differently.

14. This provision is one aspect of a scheme which is designed to ensure that weekly payments can be discontinued where the worker’s conduct or circumstances are “inconsistent with the necessary degree of co-operation” as between worker and employer,[108] and where the worker’s conduct “independent of any injury” is “inconsistent with the degree of co-operation that is essential to an effective working relationship”.[109] Depending on the facts and circumstances of the particular case, those conclusions may be appropriate where the worker is totally incapacitated by a work injury and discontinuance is sought under s 48(3)(g).

    [108] RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665, 669-670.

    [109] Kelvinator v Jezior (1988) 49 SASR 592, 597-598.

15. Accordingly, leave to appeal should be granted and the appeal allowed. 

16. The parties should be heard as to any other orders which should be made, including an order that the matter should be remitted to the Tribunal for determination according to law.

17. DOYLE JA: Under s 48(2)(f) of the Return to Work Act 2014 (SA) (the Act), weekly payments being made to a worker who has suffered a work injury may be discontinued if the worker breaches “the obligation of mutuality”. The circumstances in which a worker breaches this obligation are described in s 48(3) of the Act. Under s 48(3)(g), those circumstances include where the worker does anything else, not otherwise covered by that subsection, that is “recognised as a breach of the obligation of mutuality”.

18. The issue on appeal is whether weekly payments being made to a worker who is totally incapacitated for work by reason of a work injury may be discontinued under s 48(3)(g) by reason of circumstances which would be recognised as a breach of the obligation of mutuality.

19. The facts and circumstances giving rise to this appeal have been summarised in the reasons of Livesey P and Bleby J.  Their Honours have also set out the relevant legislative provisions and history, and have traced the line of decisions addressing the obligation of mutuality as recognised in the case law addressing earlier iterations of the workers compensation legislation in this State.  I agree with their Honours’ reasons, and their conclusion that leave to appeal should be granted and the appeal allowed.  I wish merely to add some brief observations of my own by way of emphasis.

20. As Livesey P and Bleby JA have observed, the concept of mutuality within the employment relationship was initially recognised in the context of workers compensation legislation deeming partially incapacitated workers to be fully incapacitated workers.  A worker who was partially incapacitated, and hence who had some residual capacity to work, was entitled to be compensated on the basis of a notional or deemed total incapacity in circumstances where the worker was ready, willing and able to exercise their residual capacity, but was not offered any opportunity to do so.  Put in negative terms, a partially incapacitated worker was not entitled to the benefit of this notional or deemed total incapacity in circumstances where they were not ready, willing and able to accept suitable employment, or to exercise their residual capacity.[110]

    [110] RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 117 CLR 665 at 669-670 (Kitto, Taylor, Windeyer and Owen JJ), at 671 (Menzies J); Electric Power Transmission Pty Ltd v D’Urso (1970) 124 CLR 338 at 341 (Barwick CJ, Menzies, Windeyer and Owen JJ); Dowell Australia Ltd v Archdeacon (1975) 132 CLR 417 at 438-439 (Mason J), at 443 (Jacobs J).

21. In Hartwell v Electricity Trust (SA),[111] mutuality was held to apply by way of a statutory implication arising under s 67 of the Workers Compensation Act 1971 (SA).  As King CJ explained, a notional or deemed total incapacity, and an entitlement to be compensated on that basis, only arose “if and while the worker is ready able and willing to perform work for which he is not prevented from doing by the compensable injury”.[112] His Honour explained that the governing principle was that the employer was liable only for the results of incapacity that were related to the employment; not for incapacity to perform work for some other reason.

    [111] Hartwell v Electricity Trust (SA) (1982) 29 SASR 365.

    [112] Hartwell v Electricity Trust (SA) (1982) 29 SASR 365 at 369 (King CJ).

22. Under the Workers Rehabilitation and Compensation Act 1986 (SA), compensation was addressed through the medium of a compensating authority rather than the employer. However, an equivalent implication was held to arise under the deeming provision contained in s 35(2) of the 1986 Act.[113]

    [113] Kelvinator v Jezior (1988) 49 SASR 592 at 597-598 (Cox J, White and Prior JJ agreeing); WorkCover Corporation v Gregor (1994) 62 SASR 283 at 285-286 (King CJ, Bollen and Mullighan JJ agreeing).

23. In 1995, the 1986 Act was amended to introduce ss 36(1)(f) and 36(1a),[114] being the equivalently worded predecessor provisions to ss 48(2)(f) and 48(3) of the current Act. These provisions explicitly provided for the compensating authority to discontinue weekly payments in the event that the injured worker breached the obligation of mutuality.

    [114] Workers Rehabilitation and Compensation (Miscellaneous Provisions) Amendment Act 1995 (No 35), s 11.

24. In Seal v Transfield (Australia) Services Pty Ltd,[115] the Full Court was concerned with ss 36(1)(f) and 36(1a)(g) of the 1986 Act. As White J explained,[116] these provisions drew upon the concept of mutuality that had been recognised in cases such as those mentioned above, but applied it for a different statutory purpose and expanded its content.  Mutuality was expressly referred to as an obligation that may be breached.  Breach of the obligation of mutuality became a basis for discontinuing weekly payments, rather than being confined to a basis for defeating a deemed total incapacity in the case of a partially incapacitated worker.  And the content of the obligation was expanded to encompass various expectations and obligations that were imposed upon injured workers under the 1986 Act, and that were referable to the worker’s relationship with not just the employer, but also the compensating authority.  Mutuality was expanded to encompass obligations such as to submit to medical examinations and treatment, and to participate in rehabilitation programs with a view to restoring the worker’s capacity.

    [115] Seal v Transfield (Australia) Services Pty Ltd (2010) 108 SASR 312.

    [116] Seal v Transfield (Australia) Services Pty Ltd (2010) 108 SASR 312 at [81] (White J).

25. Seal v Transfield (Australia) Services Pty Ltd was concerned with whether an injured worker’s lapse into alcoholism was a breach of the obligation of mutuality under s 36(1a)(g) (which was expressed in terms of a worker who “does anything” else that is recognised as a breach of the obligation). But in applying the concept of mutuality, the Court did so in the context of a worker who was partially incapacitated, and hence did not directly address the issue arising for resolution in the present case.

26. Indeed, as Kourakis J recognised in his reasons, whilst the amendments to the 1986 Act made a breach of the obligation of mutuality a basis for discontinuing weekly payments, this was in a legislative context where mutuality also continued to be relevant to the operation of s 35(2) in deeming a partial incapacity to be a total incapacity.  It was in this context that Kourakis J emphasised the role of mutuality in ensuring that the legislation operated to provide compensation for work related incapacity and not to provide some form of social security.[117]  It was also in this context that his Honour contemplated that, in the case of a partially incapacitated worker receiving weekly payments on the basis of a deemed total incapacity under s 35(2), a decision to discontinue weekly payments on the basis of some supervening incapacity which was destructive of mutuality would not prevent the worker from nevertheless establishing an entitlement to (lesser) weekly payments based upon his partial incapacity.[118]  In other words, a supervening total incapacity by reason of a breach of the obligation of mutuality, whilst disentitling the worker from the benefit of an uplift in his weekly payments by reason of a deemed total incapacity, would not disentitle him from receiving weekly payments based upon his partial incapacity prior to the supervening event or circumstances.

    [117] Seal v Transfield (Australia) Services Pty Ltd (2010) 108 SASR 312 at [163]-[171] (Kourakis J).

    [118] Seal v Transfield (Australia) Services Pty Ltd (2010) 108 SASR 312 at [173]-[180] (Kourakis J).

27. Without intending to express any concluded view as to correctness of this understanding of the (limited) effect of discontinuing weekly payments under the 1986 Act on the basis of a breach of mutuality, the point for present purposes is that, at least so far as Kourakis J was concerned, the operation of the concept of mutuality under the 1986 Act, even after the 1995 amendments, extended beyond, but nevertheless remained tethered to, its operation as a deeming provision.

28. However, under the current Act, the operation of the concept of mutuality is no longer tethered in any way to a deeming provision.  It operates solely in the extended and different context of providing a basis for ceasing weekly payments, and does so in circumstances where there no longer appears to be any basis for suggesting that the worker might retain an entitlement to claim lesser weekly payments based upon his partial incapacity prior to the supervening total incapacity by reason of the breach of his obligation of mutuality.  The resumption of payments would require a restoration of mutuality.

29. Turning more directly to the issue that arises in the present appeal, I agree with the reasoning of Livesey P and Bleby JA to the effect that there is no textual basis for concluding that s 48(3)(g) is confined to workers with a partial, as opposed to total, incapacity for work. In circumstances where various of the other limbs of ss 48(2) and (3) plainly operate in respect of totally incapacitated workers, there is no basis for any textual implication that precludes s 48(3)(g) operating in respect of such workers.

30. However, it might nevertheless be argued that, despite the absence of any textual basis for an implication of this nature, the reference in s 48(3)(g) to circumstances which have been “recognised” as a breach of the obligation of mutuality might nevertheless provide the basis for confining the operation of that subsection in an equivalent way. Whilst not put quite in these terms by the respondent, or in the decisions below, it might be argued that, given the context in which it has previously been recognised and given effect, the concept of mutuality has always been confined to workers with some residual capacity, with the existence and content of the obligation of mutuality thus inherently bound up in the existence of some residual capacity. In other words, the obligation of mutuality does not exist in the abstract. Its content and operation can only ever be considered in terms of a worker being ready, willing and able to exercise some residual capacity. The effect of this argument would be that whilst the obligation of mutuality under s 48(3)(g) might, in its terms, be capable of application to a worker who is totally incapacitated, it has no meaningful content in respect of such a worker because that duty has (by reason of the context in which it came to be recognised and given content) only ever been recognised, and been capable of being given meaningful content, in the context of a worker with some residual capacity.

1. In my view, there is some attraction to this argument.  It would avoid some of what the respondent contends would be the harsh, indeed capricious, consequences of the approach contended for by the appellant.  And circumstances such as those in the present case might be addressed through alternative mechanisms, such as by ceasing weekly payments on the basis that the worker has been dismissed from employment for serious and wilful misconduct (s 48(2)(e)), or by contesting the extent of the worker’s incapacity.  But in the ultimate analysis, I am not persuaded this argument can be sustained.

2. It is true that, by reason of the statutory context in which mutuality came to be recognised and given effect, its operation has not previously been recognised or given effect in respect of totally incapacitated workers. However, properly understood, I do not think that the notion of mutuality recognised under the predecessor legislation, and now given operation under s 48(3)(g) of the current Act, has ever been entirely bound up in the worker’s residual capacity. While it has generally been convenient and appropriate to describe the concept of mutuality by reference to the worker’s residual capacity, I do not think it is confined to considerations bound up in the worker’s residual capacity.

3. As Livesey P and Bleby JA have explained, the notion of mutuality extends to more fundamental matters that are inherent in the employment relationship, and the worker’s employability, more generally.  The compendious requirement that the worker be ready, willing and able to accept suitable employment is not confined to the worker retaining their physical ability to exploit some residual capacity.  Rather, the requirement of cooperation inherent in the obligation of mutuality requires that the worker remain suitable for employment in a more general and broad sense.  The present case is an illustration of where a worker, by reason of her dishonest criminal conduct, has destroyed her suitability for employment in that more general and broad sense.

4. The view I have reached is consistent with the notion, inherent in the Act, that the degree of a worker’s incapacity, including whether he is totally incapacitated, is always addressed to a particular point in time. It is also consistent with the evident purpose of the Act being to require that an injured worker continue to cooperate towards improving or restoring his capacity for work, with a view ultimately, if possible, to returning to work. In this context, there is nothing surprising about expecting, indeed obliging, even a totally incapacitated worker to retain his suitability for employment in the more general and broad sense that I have described.

5. I conclude by addressing the respondent’s submission that the construction contended for by the appellant would lead to harsh and capricious results. There is limited weight that can be afforded to such a contention, given both the contestable nature of the assertions of harsh and capricious results, and the primacy that must be given to the text, context and evident purpose of the legislation when construing s 48(3)(g). But in any event, to the extent that there is any scope for what the respondent would suggest is unexpected (and hence unlikely to have been intended) harshness, it seems to me that this is largely inherent in the enactment of a scheme which, unlike Kourakis J’s construction of the predecessor legislation in Seal v Transfield (Australia) Services Pty Ltd, unequivocally permits the discontinuance of – and termination of any underlying entitlement to – weekly payments in the event of a breach of the obligation of mutuality, subject only to a restoration of mutuality.  Whilst it might seem harsh that a totally incapacitated worker would suffer this fate where the breach of the obligation of mutuality occurs by reason of supervening events or circumstances outside of the control of the worker, the weight that can be attached to this is very limited in circumstances where it seems to be accepted that the current Act operates to similar effect in the case of partially incapacitated workers (including those with very little residual capacity).

6. To put this last point in more concrete terms, it seems to be accepted that the effect of the Act is that a worker who is partially incapacitated (including a worker with very little residual capacity, and with very little realistic prospect of ever returning to work in any meaningful way), who then suffers an event or circumstances – such as a heart attack – that renders him totally incapacitated, would be vulnerable to having the entirety of his weekly payments discontinued. The effect of the appellant’s construction would be merely to extend this ‘harsh’ consequence to a worker who was totally incapacitated at the time of his heart attack. Understood in this way, it is difficult to see how the assertion of capricious outcomes associated with the appellant’s construction can be maintained. Any harshness in outcomes flowing from the appellant’s construction is at most incremental upon that which already exists, and of limited significance in construing s 48(3)(g).

7. For these reasons, I agree with Livesey P and Bleby JA that leave to appeal should be granted and the appeal allowed.