Ford v Forestry Commission of NSW

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Ford v Forestry Commission of NSW [2022] NSWPIC 206
APPLICANT:	Kristen Ford
RESPONDENT:	Forestry Commission of NSW
MEMBER:	Michael Perry
DATE OF DECISION:	10 May 2022
CATCHWORDS:	WORKERS COMPENSATION - Applicant injured prior to 17 September 2012; the commencement, of the 2012 amendments to the Workers Compensation Act 1987 (1987 Act); applicant then an existing recipient of weekly payments and a seriously injured worker for the purposes of section 32A of the 1987 Act; whether section 38A of the 1987 Act having regard to the transitional provisions of the 1987 Act (Schedule 6 Part 19H and 19I of the 1987 act and clause 35(2) of the Workers Compensation Regulation 2016); Held- section 38A of the 1987 Act does not apply to the applicant’s circumstances.
DETERMINATIONS MADE:	The Commission finds: 1. That section 38A of the Workers Compensation Act 1987 does not apply to any weekly compensation payable to the applicant under that Act.
ORDERS MADE:	The Commission orders: 2. The parties are to confer for the purpose of lodging short minutes of orders to reflect the attached reasons. 3. The parties are to communicate with the Personal Injury Commission in the event they are unable to agree about any such orders with a view to seeking a further teleconference.

STATEMENT OF REASONS

BACKGROUND

Kristen Ford (the applicant) suffered an injury in the course of his employment with the Forestry Commission of NSW (the respondent) when a log struck him on 18 November 1987. He then had concurrent “on-call” employment with the NSW Fire Brigade. He has bought a claim for weekly compensation from 17 September 2012 and ongoing by an Application to Resolve a Dispute (ARD) lodged in the Personal Injury Commission (the Commission).
The parties agree the applicant is a “worker with highest needs” as defined by s 32A of the Workers Compensation Act 1987 (the 1987 Act).
Upon commencement of the Workers Compensation Legislation Amendment Act 2012 (the 2012 amendments) the applicant was assessed as a “seriously injured worker” as defined within s 32A. The 1987 Act was later amended by the Workers Compensation Amendment Act 2015 (the 2015 amendments). These amendments relevantly changed the s 32A definition of “seriously injured worker” to “worker with highest needs”; and also introduced a special weekly payment regime for such a worker by s 38A of the 1987 Act.
The applicant contends that from the introduction of the 2015 amendments, he should have been, and should continue to be, compensated under s 38A. The respondent contends that
s 38A does not apply to the applicant, nor to his weekly compensation entitlement.

ISSUES FOR DETERMINATION

The parties agree that there has been underpayment of weekly compensation to the applicant in the past, in the sum of at least about $25,000. The respondent says this is not by reason of
s 38A. The applicant requested such amount be paid immediately. The respondent submitted that it would be more appropriate for this payment to be deferred, pending determination of this proceeding, on the basis that whatever way the result goes, a precise recalculation of back pay will have to be made; and that the applicant had already claimed interest on outstanding payments so that factor would also be taken into account in any subsequent calculation.
I agreed with Mr Mclean’s submission and declined to order payment of that sum immediately.
The only essential issue remaining is whether s 38A applies to the applicant’s circumstances.

PROCEDURE BEFORE THE COMMISSION

The parties attended a conciliation and arbitration on 7 March 2022. Lachlan Robison of counsel, instructed by Katherine Harley, solicitor, appeared for the applicant. Mr McLean, solicitor, appeared for the respondent. I used my best attempts to bring the parties to a settlement and am satisfied they had sufficient opportunity to explore settlement but were unable to reach an agreed resolution.

EVIDENCE

The ARD and attached documents, and the Reply and attached documents were in evidence, without objection, and have been considered in the making of this determination. There are no essential facts in dispute. The issue of whether s 38A applies to the applicant is mainly a matter of statutory construction.
Accordingly, it is appropriate that I set out the relevant parts of the 1987 Act and the Workers Compensation Regulation 2016 (the Regulation),
“2012 Amendments (commencement date 17 September 2012)
1987 Act Sch 6 Part 19H CI6 – Application of weekly payments amendments to existing claimants.
An existing recipient of weekly payments remains entitled to compensation under Division 2 of Part 3 of the 1987 Act if the weekly payments amendments had not been made, but only until the weekly payments amendments apply to the compensation payable to the person as provided by this Division.
1987 Act Sch 6 Part 19H cl I8 – Work capacity assessment of existing recipients of weekly payments
(1) A work capacity assessment of an existing recipient of weekly payments is to be conducted as provided by this clause for the purposes of facilitating this application of the weekly payments amendments to the worker.
(2) The insurer who is liable to make weekly payments of compensation to an existing recipient of weekly payments must conduct a work capacity assessment of the worker no later than 12 months (or such longer period as may be prescribed by the regulations) after the commencement of the weekly payments amendments.
(3) If an existing recipient of weekly payments is a seriously injured worker, the insurer is not to conduct a work capacity assessment of the worker under this clause.
(4) The workers …
(5) A work capacity …
1987 Act Sch 6 Part 19H cl 10 – Special provision for seriously injured workers
(1) The weekly payments amendments apply from the commencement of those amendments to the compensation payable under Division 2 of Part 3 of the 1987 Act to an existing recipient of weekly payments who is a seriously injured worker.
(2) For the purposes of the application under this clause of the weekly payments amendments to a seriously injured worker, the worker’s pre-injury average weekly earnings are deemed to be equal to the transitional amount.
2015 Amendments
1987 Act s38A – Special provision for workers with highest needs
(1) If the determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision results in an amount that is less than $788.32, the amount is to be treated as $788.32.
(2) If the amount specified in subsection (1) is varied by operation of Division 6A, a weekly payment of compensation payable to a worker with highest needs before the date on which the variation takes effect is, for any period of incapacity occurring on and after that date, to be determined by reference to that amount as so varied.
(S38A commenced on 4 December 2015).
1987 Act Sch 6 Part 19I cl9 – Weekly payments
(1) Section 38A of the 1987 Act extends to the determination of the compensation payable in respect of any period of incapacity occurring before the commencement of that section.
(2) The regulations may make provision for or with respect to the adjustment of the amount of weekly payments of compensation payable to an injured worker as a result of the operation of section 38A of the 1987 Act and this clause.
(3) Without limiting subclause (2), the regulations may prescribe the period within which any additional amount payable to an injured worker as a result of the adjustment is to be paid.
2016 Regulation Sch 8 Part 1 cl 2 – Weekly payments amendments - workers with highest needs
(1) If a worker is a worker with highest needs and a claim for compensation in respect of the worker’s injury was made before 17 September 2012, the following provisions apply,
(a) The weekly payments amendments apply to the compensation payable to the worker in respect of the injury (while the worker is a worker with highest needs) on and from 17 September 2012,
(b) The amount of weekly payments of compensation payable to the worker pursuant to the weekly payments amendments is not to be less than the amount of the weekly payments of compensation that would have been payable to the worker had the weekly payments amendments not applied to the worker (having regard to the period for which the worker has been entitled to weekly payments and the effect this has on entitlement to weekly payments or the amount of weekly payments),
(c) The adjustment of the transition amount (which the workers pre-injury average weekly earnings are deemed to equal) under section 80 of the 1987 Act that occurs on 1 October 2012 is backdated to have effect on and from 17 September 2012 in respect of the compensation payable to the worker on and from 17 September 2012,
(d) The amount of the weekly payments of compensation that would have been payable to the worker had the weekly payments amendments not applied to the worker is to be determined as if the adjustment of any relevant amount under Division 6 of Part 3 of the 1987 Act that occurs on 1 October 2012 were backdated to have effect on and from 17 September 2012 in respect of the compensation payable to the worker on and from 17 September 2012.
(2) For the purposes of the application of the weekly payments amendments to a worker with highest needs whose claim for compensation was made before 1 October 2012, the worker’s pre-injury average weekly earnings are deemed to be equal to the transitional amount whether or not the worker is an existing recipient of weekly payments.
2016 Regulation Sch 8 Part 3 cl 35 – Weekly payments – workers with highest needs
(1) Section 38A of the 1987 Act does not apply to the determination of the compensation payable in respect of any period of incapacity occurring before 17 September 2012.
(2) Section 38A of the 1987 Act does not apply to a worker whose pre-injury average weekly earnings have been deemed to be equal to the transition amount for the purposes of the application under clauses 9 or 10 of Part 19H of Schedule 6 to the 1987 Act of the weekly payments amendments (within the meaning of that Part) to the worker.”

SUBMISSIONS

Both parties provided written and oral submissions.

Submissions for the applicant

Interpretation of the 1987 Act should proceed on the basis that it is beneficial legislation. While this does not mean every provision or amendment to a provision has a beneficial purpose or is to be construed beneficially (ADCO Constructions Pty Ltd v Goudapple [2014] HCA18; 254 CLR 1 at [29] (Goudapple)), s 38A can be regarded as beneficial as it produces a benefit that has been described as a windfall or a bonus.
It would be a perverse reading or interpretation of s 38A if the respondent’s submission was correct. This would mean someone who earned more than transitional amount at the time of injury would not qualify for the s 38A benefit while a low-income earner would qualify.
Reliance is placed on Hee v State Transit Authority of NSW [2019] NSWCA 175 (Hee). The facts of this case are squarely on point. This case is relevant to the issue of whether a worker is entitled to the minimum payment even when the true loss is lower. This has become part of orthodox practice in the Commission.
Reliance is also put on Vostek industries Pty Ltd v White [2018] NSWWCCPD 47 (Vostek). The facts in Vostek are similar to the facts in the present case. The worker was injured on 20 July 2005, prior to the 2012 and 2015 amendments. On 23 August 2010 he was assessed to have suffered a 32% whole person impairment (WPI) by reason of the 2005 injury. There was then, as now, no dispute that the definition of worker with highest needs in s 32A was satisfied. Another similarity between the two cases is that the solicitors for the workers in each case corresponded with the insurer requesting that the weekly payments be adjusted to reflect the minimum amount guaranteed by s 38A.
In Vostek, the insurer issued a notice advising of its opinion that s 38A could not operate to entitle the worker to more than what would be permissible by way of weekly benefits in accordance with the 1987 Act otherwise. It also asserted that the worker would not be entitled to the same weekly benefits as workers who sustain a 30% or less WPI; and that
cl 35 (1), Part 3, Schedule 5 of the Regulation had the effect that s 38A did not apply in respect of compensation payable before s 38A commenced.
In Vostek, Keating P described the effect of the legislation being potentially anomalous or to use the term preferred by the employer, a “bonus”. Notwithstanding that, his Honour upheld the arbitral award. There is no basis for distinguishing Vostek from the present matter. Both Vostek and Hee are binding on a Member of the Commission.
The pre-injury average weekly earnings (PIAWE) in Vostek were $1,625 per week – in excess of the transitional amount. Also, the respondent has not produced evidence of the applicant’s correct rate of pay. There is only a bare assertion of that rate. Therefore, it cannot support its position by evidence. But even if the respondent can demonstrate the applicant earned more than the transitional amount, the respondent’s case fails given Vostek and Hee.

Submissions for the respondent

On 17 September 2012 the applicant was transitioned to the weekly benefits scheme that applied as a consequence of the 2012 amendments. The “transitional rate” was incorrectly set by the insurer at $1,525.90 rather than the correct rate of $920.90. On 12 December 2018 the applicant was notified that such error had been made and he had been overpaid and that benefits would reduce to the correct “transitional rate” which was applied as of 22 July 2019.
The respondent now concedes that it was in error in informing the applicant that he had been overpaid since 2012.
The applicant was an “existing recipient of weekly payments” immediately before 1 October 2012. He was also a seriously injured worker as he had a degree of WPI of more than 30%.
The 2012 amendments created a significant departure from the previous weekly payment provisions. The scheme of the amendments was to apply them in a staged fashion. The transitional provisions created a “transitional amount” that was in effect a deemed amount of PIAWE for the purpose of determining the compensation payable for existing recipients of weekly payments once they became subject to the weekly payment amendments.
The method for such transitioning is set out in Schedule 6 Part 19H cl 8 of the 1987 Act. The “transitional amount” at the time of enactment of the 2012 amendments was $920.90; it is an indexed amount and currently stands at $1,125.20. However, that transitioning excluded seriously injured workers for whom special arrangements applied. They were transitioned to the new weekly compensation arrangements with immediate effect from 17 September 2012 on the basis that the “transitional amount” was deemed to be their PIAWE.
However, in relation to seriously injured workers, the transitional provisions contained what became known as the “no disadvantage rule”, meaning that if the determination of the seriously injured worker’s weekly benefit by reference to the amendments and application of the deemed transitional PIAWE resulted in an amount of weekly compensation payable that was less than what that worker would be receiving had the weekly payment amendments not been applied, that worker continued to be entitled to the “old” rate, that is, the rate that would have applied to him were it not for the 2012 legislative reforms (2016 regulation Sch 8 Part 1 Cl 2(1)(b)).
As part of the 2015 legislative amendments, further protections were given to seriously injured workers, who became known as “workers with the highest needs” (Sch 6 Part 19I
cl 6).
The enactment of s 38A created, in effect, a minimum payment to which a worker with the highest needs would be entitled. At the date of enactment of the section that was $788.32 and is an amount that is indexed.
Although the transitional provisions in the 1987 Act relating to s 38A indicate that it extends to the determination of any compensation payable in respect of any period of incapacity prior to the commencement of the section, that is subject to the regulations (Sch 6 Part 19I
cl 9(2)).
Also, the Workers Compensation Regulation 2016 provides that s 38A does not apply to the determination of compensation payable in respect of any period prior to 17 September 2012.
Section 38A also does not apply to a worker whose PIAWE were determined equal to the transitional amount for the purposes of the application of either cl 9 or cl 10 of Part 19H of Schedule 6. Because the applicant was a seriously injured worker, his PIAWE were determined equal to the transitional amount by reason of Sch 6 Part 19H cl 10. Therefore,
s 38A does not apply to his weekly compensation entitlement.
Hee and Vostek are not relevant. The issue in Hee was whether a worker with the highest needs was entitled to receive payments under s 38A even though the entitlement assessed pursuant to s 37 was nil. The issue in Vostek was whether the word “amount” here used for the second and third time in s 38A “is a reference to the amount of weekly compensation payments only or to a combined total of weekly compensation payments, earnings or deemed earnings and the value of any non-pecuniary benefits received” - consistent with the recording, in the proceedings before the senior arbitrator, that the parties had agreed that the only issue in dispute was “quantification of … entitlement to weekly compensation – s38A of the 1988 Act”.
There was no determination in Vostek as to whether s 38A applied. That the facts in that case may be similar in some respects to the present case is not a relevant consideration. It is only the determination of the legal principle that is relevant. In Vostek there was no discussion of the principles and arguments that are raised in the present case.
The applicant is always entitled to the protection of the no disadvantage rule. His weekly entitlement can never be less than it would have been if his weekly benefit entitlement was calculated under the weekly benefit regime that applied prior to the 2012 amendments.
Assuming the applicant remains partially incapacitated, this “safety net” would in effect be a calculation made under the former s 40 of the 1987 Act, subject to the cap that applied to weekly compensation payments after the first 26 weeks of total incapacity.

FINDINGS AND REASONS

I agree with the essence of the submissions for the respondent. There is no dispute that when the 2012 amendments were enacted, the applicant was an existing recipient of weekly payments and a seriously injured worker. Clause 2(1)(a) of the Regulation states that the 2012 amendments “apply to the compensation payable to the worker in respect of the injury (while the worker is a worker with highest needs) on and from 17 September 2012”.
Clause 35(1) of the Regulation states that s 38A does not apply to the determination of the compensation payable in respect of any period of incapacity occurring before 17 September 2012. But it is cl 35(2) that is particularly relevant. It states that s 38A “does not apply to a worker whose (PIAWE) have been deemed to be equal to the transitional amount for the purposes of the application under cl 9 or 10 of Part 19H of Schedule 6 to the 1987 Act of the weekly payments amendments … to the worker”.
Clause 35 (2) applies to the applicant because Part 19H cl 10 applies to him. He was a seriously injured worker and an existing recipient from the commencement of the 2012 amendments. In those circumstances, Part 19H cl 10(2) provides that “for the purposes of the application under this clause of the weekly payments amendments to a seriously injured worker, the worker’s (PIAWE) are deemed to be equal to the transitional amount”.
The decision in Hee arises from a subtle but different factual circumstance to the present case. Mr Hee sustained an injury after the 2012 amendments and was not an existing recipient or caught by the “special provision for seriously injured workers” in Schedule 6 Part 19H cl 10 of the 1987 Act. As a result, he was not affected by Regulation 35(2).

The submissions for the applicant do not, at least adequately, engage with the submissions for the respondent in this respect. The applicant has submitted that the relevant legislation should be construed beneficially to him. That may be so. But there should still be a construction of the statute and regulation for the purposes of identifying the correct or preferable interpretation; or for the purposes of a juxtaposition of competing interpretations of these provisions.
This means that there is no express or clear submission for the applicant to provide an alternative construction or meaning of the relevant transitional provisions. But this does relieve me of the duty to independently determine the issue.
The applicant has also submitted that the authorities, particularly Vostek, are clear, and the same result should occur in the present case, and that there “is no basis for distinguishing Vostek from the present matter and it is binding, together with Hee”.
I do not think Hee is binding because, as the respondent has submitted, the issue was different to that in the present case. The Court of Appeal (Hee v State Transit Authority of NSW [2019] NSWCA175) identified two issues. The first was whether there was error in the Commission “finding that the appellant was able to return to his pre-injury employment and was a worker with ‘current work capacity’, this being relevant to whether the appellant was entitled to a determination of compensation under s37 …”. The second issue was whether there was error “in the construction and application of s38A”. With respect to that issue, there a relevantly different construction of s 38A compared to the present case. The Court found that s 38A only applied when there was an entitlement to an “amount of weekly compensation, determined in accordance with ss 36, 37 or 38; and went on to note that such “… ‘amount’ can be zero … although this literal interpretation can lead to anomalous results, engaging in a re-writing of s38A is beyond the scope of judicial interpretation”.
I also agree with the submission for the respondent that Vostek is not binding on me, also because the issue in this case is different to what was decided in Vostek. It is true, as the applicant submits, that Keating P stated that “this appeal concerns the construction of s38A …”. However, that was the introductory paragraph. His Honour went on to provide more content and background to the issue that was presented by the parties; firstly noting that the senior arbitrator in the conciliation and arbitration proceedings “recorded the parties agreement that the only issue in dispute was … quantification of … entitlement to weekly compensation – s38A of the 1987 Act …”. His Honour then noted that “the only issue in dispute on this appeal is whether the senior arbitrator erred by … misconstruing s38A of the 1987 Act by finding that it authorises the payment of weekly compensation of $788.32 … to a worker with highest needs without taking into account the worker’s earnings …”.
Therefore, the submission for the applicant that Vostek “is clearly very much on point in relation to the construction of s38A…” is clearly wrong. The issue in the present case is whether or not s 38A applies to the applicant at all – having regard to the transitional provisions of the 2012 and 2015 amendments referred to above. That issue did not arise in Vostek at all.
The Regulation, including Schedule 8 cls 2 and 35, is intra vires the 1987 Act, in particular, the 2012 and 2015 amendments (Part 19H, cl 5 and Part 19I, cl 4).
My interpretation of the relevant provisions referred to above lead me to the conclusion that
s 38A does not apply to the applicant, because his PIAWE have been deemed to be equal to the transitional amount for the purposes of the application of cl 10 of Part 19H of Schedule 6 to the 1987 Act. I have started this construction with a consideration of the text of the 1987 Act and the Regulation. As stated by the majority of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA41; 239CLR27 at [47]:
“… the language which has actually been employed in the text of the legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”
My literal construction of the above provisions are also consistent with the Minister stating in the second reading speech to the Workers Compensation Amendment Bill in 2015 that the:
“Bill will ensure the workers with the highest needs will receive a minimum amount of $788 each week, which will comprise the benefit paid for by their insurer and any post-injury earnings of the worker … will assist those workers with over 30% permanent impairment who were on very low pre-injury average weekly earnings and who may receive weekly payments for many years.”
The explanatory note to that Bill also stated that the amount of $788.32 per week was “a combined total of compensation and earnings”.
The Minister’s speech does not displace the “text, language and structure…(and)…legal and historical context and purpose of the statute” (Vostek at [21]). I only use such extrinsic material as an aid to the construction by noting that there is a consistency between the speech and the explanatory note and the ultimate statute and regulation. There is further contextual consistency when regard is had to what was described in the submissions for the respondent as “the protection or … safety net … of the … no disadvantage rule …”.
I find that s 38 does not apply to the applicant’s circumstances. However, the claim made for the applicant in the ARD was for weekly payments from 1 January 2009 and 16 September 2012 to date and continuing. In those circumstances, as well as the earlier notation about the admission of the respondent of some arrears of weekly payments owing to the applicant,
I order that the parties formulate short minutes of orders to reflect the weekly compensation payable to the applicant.
While I have not heard either party in detail in relation to interest on arrears of weekly compensation, I presently see no reason why the respondent should not pay the applicant interest on all such arrears and would need to be persuaded otherwise.

[2022] NSWPIC 206

10 May 2022