Hee v State Transit Authority of New South Wales

[2019] NSWCA 175

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Hee v State Transit Authority of New South Wales [2019] NSWCA 175
Hearing dates:	15 October 2018
Decision date:	17 July 2019
Before:	Meagher JA at [1]; White JA at [36]; Simpson AJA at [117]
Decision:	1. Appeal allowed. 2. Remit the proceedings to the Workers Compensation Commission for rehearing or redetermination of the appellant’s claim in accordance with the reasons of the majority of the Court.  3. Respondent to pay the appellant’s costs of the appeal.
Catchwords:	WORKERS COMPENSATION – Workers Compensation Act 1987 (NSW) – construction of s 38A – where appellant a worker with highest needs –whether arbitrator made finding that appellant able to return to pre-injury employment – whether appellant entitled to compensation under s 38A
Legislation Cited:	Interpretation Act 1987 (NSW), ss 33, 34 Workers Compensation Act 1987 (NSW), ss 9, 32A, 33, 34, 35, 36, 37, 38, 38A, 43, 44B, 44C, 44I, 65, 66A, Pt 3 Div 2 Workers Compensation Amendment Act 2015 (NSW), s 2, sch 2 Workers Compensation Legislation Amendment Act 2012 (NSW), s 2, sch 1, sch 2 Workers’ Compensation Act 1926 (NSW), s 11 Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 352, 353
Cases Cited:	AAI Ltd t/as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229 Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171; [1985] HCA 2 Dranichnikov v Minister for Immigration [2003] HCA 26; (2003) 77 ALJR 1088 Eraring Energy v Brownlie [2008] NSWWCCPD 42 Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 8 Sabanayagam v St George Bank Ltd [2016] NSWCA 145 Speirs v Industrial Relations Commission of New South Wales [2011] 81 NSWLR 348; [2011] NSWCA 206 Tan v National Australia Bank Ltd [2006] NSWWCCPD 115 Tan v National Australia Bank Ltd [2008] NSWCA 198; (2008) 6 DDCR 363 Taylor v The Owners – Strata Plan No 11564 (2013) 83 NSWLR 1; [2013] NSWCA 55 Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9 The King Island Company Ltd v Deery [2005] NSWWCCPD 1 Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105 Wentworth Securities Ltd v Jones [1980] AC 74 Williams v Metropolitan Coal Ltd (1948) 76 CLR 431; [1948] HCA 8
Texts Cited:	Explanatory note to the Workers Compensation Amendment Bill 2015 (NSW) Explanatory note to the Workers Compensation Legislation Amendment Bill 2012 (NSW) New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 5 August 2015
Category:	Principal judgment
Parties:	Michael Hee (Appellant) State Transit Authority of New South Wales (Respondent)
Representation:	Counsel: BG McManamey (Appellant) SL Flett and Dr S Blount (Respondent)   Solicitors: Law Partners Personal Injury Lawyers (Appellant) Moray & Agnew (Respondent)
File Number(s):	2018/84054
Publication restriction:	N/A
Decision under appeal	Court or tribunal: Workers Compensation Commission Jurisdiction: Civil Citation: [2018] NSWWCCPD 6 Date of Decision: 26 February 2018 Before: President Judge Keating File Number(s): A1-2051/17

headnote

[This headnote is not to be read as part of the decision]

The appellant, in the course of his duties as a bus driver, sustained an injury to his cervical spine on 17 October 2013. The degree of permanent impairment arising from that injury was agreed by the parties as 34%. He underwent surgery and did not work from late January to 31 May 2014, returning to his usual rostered shifts on 1 June 2014 without restriction. The appellant made a claim for compensation under Workers Compensation Act 1987 (NSW). The respondent agreed to pay compensation pursuant to ss 36 and 37 based on the appellant’s pre-injury average weekly earnings for the period from 21 January to 31 May 2014. The appellant then made a claim for weekly compensation under s 38A for the period from 1 June 2014. The claim was disputed by the respondent.

The appellant referred his claim for determination by the Workers Compensation Commission (WCC), arguing that s 38A applied as he was a “worker with highest needs” with partial incapacity to work under s 33 and irrespective of whether he was entitled to a determination of compensation under s 37. The arbitrator rejected that construction of s 38A, and held that the appellant was not entitled to compensation under s 38A because, assuming he had “current work capacity” (as that term is defined in the Workers Compensation Act), he would receive nil compensation under s 37. The appellant appealed to the President of the WCC. The President rejected the appellant’s construction of s 38A and also concluded that the appellant was not entitled to a determination of compensation under s 37 as he was not a worker with “current work capacity”. In doing so, he held that the effect of the arbitrator’s factual findings was that the appellant had returned to his pre-injury employment.

The principal issues before this Court were:

(i) whether the President erred in law in 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 s 37; and if so whether that error was potentially material to the outcome of Mr Hee’s claim as made.

(ii) whether the President erred in the construction and application of s 38A.

Held, allowing the appeal (per White JA and Simpson AJA, Meagher JA dissenting):

As to issue (i), per White JA:

(1) A worker who returns to work, but is not able to perform all their duties as fully as before the injury, is not able to return to their pre-injury employment and is a worker with “current work capacity”. It was disputed before the arbitrator whether the appellant could undertake the same level of overtime as he had undertaken before his injury. The arbitrator did not make a finding as to that issue, and his finding that the appellant “resumed his full pre-injury duties on 1 June 2014” was not a finding that the appellant was able to return to his pre-injury employment. The President’s conclusion that the effect of the arbitrator’s factual findings was that the appellant was able to return to his pre-injury employment, and therefore not a worker with “current work capacity”, was incorrect. That conclusion misconstrued the arbitrator’s reasons and involved an error in point of law: [48], [60], [72], [73], [80], [84].

(2) That error was potentially material to the outcome of Mr Hee’s claim because if Mr Hee was not able to return to his pre-injury employment he would be entitled to benefits claimed under s 38A, because he would have “current work capacity” and be entitled to a determination of weekly compensation under s 37 (albeit one determined to be nil): [86], [87].

As to issue (i), per Simpson AJA:

(3) Whether the appellant was able to return to his pre-injury employment was an essential question of fact to be determined in addressing the appellant’s case of “partial incapacity” under s 33 and of “current work capacity” under s 37(2). The arbitrator did not make that finding. That failure to address the case the appellant sought to make led to a failure to accord him natural justice, constituting a constructive failure to exercise jurisdiction. That error also infected the decision of the President: [161], [162].

(4) That error was potentially material to the outcome of Mr Hee’s claim because on the proper construction of s 38A if it is found that Mr Hee had “current work capacity” the Commission would be obliged to determine in his favour that he was entitled to a weekly payment of $788.32, regardless of his current earnings: [165], [170].

Dranichnikov v Minister for Immigration [2003] HCA 26; (2003) 77 ALJR 1088; AAI Ltd t/as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229; Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105 applied.

As to issue (i), per Meagher JA (dissenting):

(5) The President’s conclusion that the arbitrator made findings as to Mr Hee’s capacity to return to his pre-injury employment in the context of determining his “work capacity” may have involved error. However that error is not the subject of grounds of appeal 2 or 6, which are directed to securing a finding in support of Mr Hee’s case that his injury resulted in “partial incapacity” under s 33, entitling him to the benefit of s 38A there being no issue that he was a “worker with highest needs”. However any such error could not be material to the outcome of Mr Hee’s case which was that he was entitled to the benefit of s 38A if his injury resulted in “partial incapacity” and regardless of whether he was entitled to a determination under s 37 as a worker with “current work capacity”. Accordingly the appeal should be dismissed irrespective of whether grounds 2 and 6 are upheld: [25], [26], [29].

As to issue (ii), per Meagher and White JJA and Simpson AJA:

(6) Section 38A only applies when there is an entitlement to an “amount” of weekly compensation, determined in accordance with ss 36, 37 or 38. Due to the operation of s 35(2), that “amount” can be zero. Although this literal interpretation can lead to anomalous results, engaging in a rewriting of s 38A is beyond the scope of judicial interpretation: [31], [33], [34], [90], [100]-[105], [114], [166], [168], [169], [170].

Judgment

MEAGHER JA:

Outline

1. The ultimate question in this appeal is whether the appellant worker (Mr Hee), a “worker with highest needs” within Workers Compensation Act 1987 (NSW) (1987 Act), s 32A, is entitled to the benefit of the “Special provision for workers with highest needs” made by s 38A. That section, although not enacted until 2015, forms part of the revised scheme for the payment of weekly benefits to injured workers introduced in 2012. It provides:

38A 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.

2. The answer to that question turns on the construction of subsection (1). That exercise involves giving effect to the language of s 38A(1), taking account of its context and purpose, as reflected in the 1987 Act and any extrinsic material: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 8; Interpretation Act 1987 (NSW), s 34.

3. Mr Hee’s case before the Workers Compensation Commission (Commission), first as constituted by an arbitrator and then by its President, and in this Court was that he could receive a benefit under s 38A irrespective of whether he was entitled to a determination of weekly compensation in accordance with ss 36, 37 or 38 of the 1987 Act, provided he established that he was a “worker with highest needs” whose injury had resulted in a “total or partial incapacity to work” within s 33. Consistent with that being his case, there being no issue before the Commission that he was a “worker with highest needs”, Mr Hee sought only to establish that his injury had resulted in “partial incapacity”. As I understand the materials before this Court, it was not part of that case that he was entitled to a determination under s 37 as a worker with “current work capacity”, even if the amount of that determination was nil. On the construction of ss 33 and 38A contended for by Mr Hee no question about that entitlement arose. In response his employer (STA) contended that s 38A only applied if the worker was entitled to an “amount”, being more than a nil amount, of weekly compensation determined in accordance with Pt 3, Div 2, Subdiv 2; and that such a determination required a finding that Mr Hee had “current work capacity”, which could not have been the position if he was able to return to his “pre-injury employment”.

4. For the reasons which follow, s 38A(1) has the meaning contended for by the respondent with one qualification, namely that a determination which produces a weekly payment “amount” of zero or less than zero (see s 35(2)) will nevertheless attract the application of s 38A. It follows that Mr Hee’s appeal to this Court under Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 353(1) must be dismissed. That is because grounds of appeal 1, 3, 4 and 5, which propound his construction of s 38A, should be rejected. That leaves grounds 2 and 6. The former is directed to the absence of any finding by the arbitrator of “partial incapacity” within s 33 and the President’s treatment of that issue. The latter is directed to the meaning of that expression as used in s 33. However success on either or both of those grounds could not result in an entitlement under s 38A in the absence of a finding that Mr Hee had “current work capacity”; and no such finding was sought by Mr Hee before or made by the arbitrator, and the President’s holding to the contrary is not expressly challenged by any of the grounds of appeal to this Court. Accordingly whilst ground of appeal 2 may be made out the appeal must nevertheless fail because success on that ground could only lead in any further hearing in the Commission by way of remitter to a finding of “partial incapacity” in circumstances where there was no challenge made to the President’s conclusions in relation to “current work capacity” for the purposes of s 37.

5. It is convenient first to set out the relevant statutory provisions and then to summarise the background facts and issues before the President, whose decision – Hee v State Transport Authority of NSW [2018] NSWWCCPD 6 – is the subject of this appeal limited to questions of law.

Relevant statutory provisions and extrinsic material

6. Part 2 of the 1987 Act describes the circumstances in which an employer is liable for compensation, s 9 providing that an injured worker is entitled to receive compensation from his or her employer “in accordance with” the Act. The compensation benefits, and circumstances in which they are payable, are described and specified in Divs 1 to 5 of Pt 3. They include compensation payable on death (Div 1), weekly compensation by way of income support (Div 2) and compensation for medical, hospital and rehabilitation expenses (Div 3).

7. The immediately relevant provisions of Pt 3, Div 2, Subdivs 1 and 2 that apply to Mr Hee’s claim for weekly compensation are set out below. They form part of the scheme for the payment of weekly benefits introduced by Workers Compensation Legislation Amendment Act 2012 (NSW) (2012 Act), s 2, Sch 1:

Subdivision 1 Interpretation

32A Definitions

…

current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment.

…

no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment.

…

work capacity decision—see section 43.

…

worker with high needs means a worker whose injury has resulted in permanent impairment and:

(a)    the degree of permanent impairment has been assessed for the purposes of Division 4 to be more than 20%, or …

worker with highest needs means a worker whose injury has resulted in permanent impairment and:

(a)     the degree of permanent impairment has been assessed for the purposes of Division 4 to be more than 30%, or

(b)    an assessment of the degree of permanent impairment is pending and has not been made because an approved medical specialist has declined to make the assessment on the basis that maximum medical improvement has not been reached and the degree of permanent impairment is not fully ascertainable, or

Note. Paragraph (b) no longer applies once the degree of permanent impairment has been assessed.

(c)    the insurer is satisfied that the degree of permanent impairment is likely to be more than 30%.

Subdivision 2 Entitlement to weekly compensation

33 Weekly compensation during total or partial incapacity for work (cf former s 9 (1))

If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.

Note. Chapter 3 of the 1998 Act (Workplace injury management) provides that, if a worker fails unreasonably to comply with a requirement of that Chapter after being requested to do so by an insurer, the worker has no entitlement to weekly payments of compensation for the period that the failure continues.

…

35 Factors to determine rate of weekly payments

(1)     For the purposes of the provisions of this Subdivision used to determine the rate of weekly payments payable to an injured worker in respect of a week:

AWEmeans the worker’s pre-injury average weekly earnings.

D (or a deductible amount) means the sum of the value of each non-pecuniary benefit (if any) that is provided by the employer to a worker in respect of that week (whether or not received by the worker during the relevant period), being a non-pecuniary benefit provided by the employer for the benefit of the worker or a member of the family of the worker.

E means the amount to be taken into account as the worker’s earnings after the injury, calculated as whichever of the following is the greater amount:

(a)     the amount the worker is able to earn in suitable employment,

(b)     the workers current weekly earnings.

MAXmeans the maximum weekly compensation amount.

(2)     If the determination of an amount for the purpose of determining the rate of weekly payments payable to an injured worker results in an amount that is less than zero, the amount is to be treated as zero.

36   Weekly payments in first entitlement period (first 13 weeks)

(1)    The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the first entitlement period is to be at the rate of:

(a) (AWE × 95%) − D, or

(b) MAX − D,

whichever is the lesser.

(2)    The weekly payment of compensation to which an injured worker who has current work capacity is entitled during the first entitlement period is to be at the rate of:

(a) (AWE × 95%) − (E + D), or

(b) MAX − (E + D),

whichever is the lesser.

37   Weekly payments in second entitlement period (weeks 14–130)

(1)     The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the second entitlement period is to be at the rate of:

(a)  (AWE × 80%) − D, or

(b)  MAX − D,

whichever is the lesser.

(2)     The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for not less than 15 hours per week is entitled during the second entitlement period is to be at the rate of:

(a)  (AWE × 95%) − (E + D), or

(b)  MAX − (E + D),

whichever is the lesser.

(3)     The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the rate of:

(a)  (AWE × 80%) − (E + D), or

(b)  MAX − (E + D),

whichever is the lesser.

38 Special requirements for continuation of weekly payments after second entitlement period (after week 130)

(1)     A worker’s entitlement to compensation in the form of weekly payments under this Part ceases on the expiry of the second entitlement period unless the worker is entitled to compensation after the second entitlement period under this section.

(2)     A worker who is assessed by the insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity is entitled to compensation after the second entitlement period.

…

(3A)     A worker with high needs who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period.

…

(6)     The weekly payment of compensation to which an injured worker who has no current work capacity is entitled under this section after the second entitlement period is to be at the rate of:

(a)  (AWE × 80%) − D, or

(b)  MAX − D,

whichever is the lesser.

(7)     The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be at the rate of:

(a)  (AWE × 80%) − (E + D), or

(b)  MAX − (E + D),

whichever is the lesser.

38A Special provision for workers with highest needs

[extracted in [1] above]

8. Section 33 was not changed by the 2012 Act amendments. It provides that if “total or partial incapacity for work” results from an injury, the compensation payable includes a weekly payment during the period of incapacity. The expression “total or partial incapacity for work”, although not defined, has a well-understood meaning and describes from the injured worker’s perspective a physical incapacity for actually doing work, not in the abstract, but in the labour market in which the employee was working or might reasonably be expected to work: per Mason, Wilson, Deane and Dawson JJ in Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 176-178; [1985] HCA 2; Sabanayagam v St George Bank Limited [2016] NSWCA 145 at [131] (Sackville AJA).

9. However that section did not, and continues not to, describe how the amount of weekly compensation is to be calculated, and it does not follow from the fact of an injury causing “partial incapacity” that the worker was entitled to a “weekly payment”. Under the previous scheme, in the case of partial incapacity that depended on whether the injury resulted in a loss of earning power measured as a “reduction in the worker’s weekly earnings” (former s 40(1)), being the difference between the amount the worker would probably have been earning but for the injury in the same or some comparable employment, and the amount the worker is earning “or would be able to earn in some suitable employment” (former s 40(2)). Thus if there was no loss of earning power resulting from partial incapacity, no compensation was payable by way of a weekly benefit: see Arnotts Snack Products at 176-177 citing the statements of Starke and Dixon JJ in Williams v Metropolitan Coal Ltd (1948) 76 CLR 431 at 444, 449; [1948] HCA 8 in relation to the substantially similar provision for compensation for partial incapacity made by Workers’ Compensation Act 1926 (NSW), s 11(1).

10. The 2012 Act amendments were described in the Explanatory note to the bill for that Act as making the following significant changes to the then-existing scheme for the payment of weekly benefits:

(a)    …

(i)    the calculation of weekly payments will be based on the worker’s pre-injury average weekly earnings rather than on the worker’s current weekly wage rate at the time of injury,

(ii)    the amount of weekly compensation will be calculated as a percentage of pre-injury average weekly earnings (with a maximum compensation amount of $1,838.70) minus any current earnings or an amount the worker is able to earn in suitable employment,

(iii)    the rate of compensation will vary during 3 entitlement periods (weeks 1–13, weeks 14–130, and after week 130), with weekly payments after week 130 only available to totally incapacitated workers or partially incapacitated workers who have returned to work for at least 15 hours per week,

(iv)    no weekly compensation will be payable to a worker after 5 years of weekly payments (with an exception for workers with more than 20% whole person impairment),

(v)    a new dispute resolution process for disputes about work capacity decisions will feature internal review by an insurer of its decision with a merit review by WorkCover Authority and a procedural review by the proposed WorkCover Independent Review Officer,

(vi)    transitional arrangements will continue existing benefits for existing recipients of weekly payments generally until a worker undergoes a work capacity assessment, with immediate application of the amendments to injured workers with more than 30% whole person impairment,

(vii)    insurers will conduct a work capacity assessment of injured workers to assess capacity for work at various stages throughout the life of the claim…

11. The changes made to that scheme by the Workers Compensation Amendment Act 2015 (NSW) (2015 Act), s 2, Sch 2, included the introduction of s 38A together with the definitions of “worker with highest needs” and “worker with high needs”, the former to replace the earlier definition of “seriously injured worker”. They were described in the Explanatory note to the bill for that Act as including:

(b)   the scheme for the payment of weekly compensation… will be changed as follows:

(i)    a worker who receives an injury before reaching retiring age will remain eligible for weekly payments of compensation (which currently terminate on retiring age) for a period of 12 months after reaching retiring age,

(ii)    an injured worker with work capacity and more than 20% permanent impairment will no longer be required to work for a minimum number of hours (currently 15 hours), and earn a minimum amount (currently $176), per week to be eligible to receive weekly payments of compensation after a period of 130 weeks during which weekly payments have been paid or payable,

(iii)    the minimum amount of weekly compensation that an injured worker with more than 30% permanent impairment will be eligible to receive will be the amount of $788.32 (being a combined total of compensation and earnings), to be indexed twice a year…

12. In the Legislative Assembly the object of s 38A was described by the Minister for Finance, Services and Property in the following terms:

Schedule 2 to the bill introduces a minimum safety net weekly payment for the most seriously injured workers. The bill will ensure … 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. This will assist those workers with over 30 per cent permanent impairment who were on very low pre-injury average weekly earnings and who may receive weekly payments for many years. (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 5 August 2015 at 2097)

The background facts

13. Mr Hee was a bus driver. On 17 October 2013 he sustained an injury to his cervical spine when he tripped and fell while helping a passenger with a broken trolley board the bus he was driving. He later underwent surgery and did not work from 24 January to 31 May 2014, returning to his pre-injury duties on 1 June 2014.

14. He then made a claim for compensation. Following a conciliation conference the STA’s insurer agreed to pay compensation based on his pre-injury average weekly earnings of $1,391 for the period from 21 January to 31 May 2014 pursuant to 1987 Act, ss 36 and 37. On 9 March 2017 the parties entered into a “complying agreement” under 1987 Act, s 66A, agreeing the degree of permanent impairment resulting from the injury at 34%. Mr Hee was entitled to compensation under Pt 3, Div 4 for that permanent impairment.

15. On 17 March 2017 Mr Hee made a claim for weekly compensation under Pt 3, Div 2 equal to the “specified” amount in s 38A. That claim was disputed by the insurer and on 28 April 2017 Mr Hee filed an Application to Resolve a Dispute, referring his claim for determination by the Commission. As amended in October 2017, that claim was for compensation from 1 June 2014 and in the “second entitlement period” (s 37). The STA continued to dispute that claim and also maintained that the Commission did “not have jurisdiction” to determine any dispute about a work capacity decision of the insurer, and that it could not make a decision in respect of a dispute before the Commission that was inconsistent with any such decision of the insurer (s 43(3)). In this context a “work capacity” decision includes a determination as to whether a worker has “current work capacity” (s 32A).

The decision of the President and issues in this appeal

16. The dispute before the Commission was first heard and determined by senior arbitrator Glenn Capel: Hee v State Transit of NSW (Workers Compensation Commission, 27 October 2017, unrep). He held that Mr Hee was not entitled to any “payments of weekly compensation pursuant to s 38A” because the worker was not entitled to monetary compensation under s 37. Although noting the requirement that the worker have “no current work capacity” or “current work capacity” for a determination under ss 36, 37 or 38, the arbitrator assumed that Mr Hee did have “current work capacity” so as to be entitled to a weekly payment rate under s 37 calculated at zero, which he held did not give Mr Hee any benefit under s 38A: see his reasons at paras [174], [181], [195], [198]. In doing so the arbitrator did not make findings as to Mr Hee’s “partial incapacity” under s 33 or “current work capacity” for the purposes of s 37. To make a finding as to the latter the arbitrator would have had to address whether Mr Hee was able to return to his “pre-injury employment”. The arbitrator also concluded that s 43(3) had no application because the insurer had not made any “work capacity decision”.

17. Broadly speaking there were three issues raised for determination in the appeal from the arbitrator to the President pursuant to Workplace Injury Management Act, s 352. The first, raised by the STA, was whether the arbitrator had erred in not finding that the insurer had made a “work capacity decision”. The second concerned the construction and application of s 38A. The third, which only arose if the worker’s construction of s 38A was upheld, was whether the arbitrator had erred in not holding that Mr Hee had “partial incapacity” for the purposes of s 33. This last issue, raised by ground (a) in the appeal to the President, was not concerned with the absence of a finding that Mr Hee had “current work capacity” for the purposes of s 37, as on Mr Hee’s case his entitlement to a benefit under s 38A was enlivened by his being a “worker with highest needs” having a “partial incapacity for work” under s 33.

18. As to the first of these issues, the President rejected the challenge to the arbitrator’s conclusion on the application of s 43(3). That conclusion is not said to give rise to any question of law challenged in the appeal to this Court.

19. As to the question of construction of s 38A, the President rejected the appellant’s argument that s 38A applied if he was a “worker with highest needs” with an injury resulting in “partial incapacity” under s 33 (Judgment [145]). His Honour held that s 38A only applied if there was an entitlement to a “determination” under ss 36, 37 or 38 to an “amount of weekly payments of compensation payable” (Judgment [141]).

20. His Honour then proceeded to address whether Mr Hee was entitled to compensation under s 37 for the second entitlement period, concluding:

[146] … The formulas provided for in s 37 depend upon whether the worker “has current work capacity” or “no current work capacity” as those terms are defined in s 32A. It has not been argued, nor could it have been argued, that Mr Hee was a worker with “no current work capacity”. Obviously, he had returned to work and continued working full-time duties following the accepted injury.

[147]    A worker with “current work capacity” is defined as a worker who “is not able to return to his or her per-injury employment…” [s 32A]. Subject to the Senior Arbitrator’s factual findings on capacity being correct, Mr Hee cannot meet the statutory description of a worker with “current work capacity” or “no current work capacity”. That is because the effect of the Senior Arbitrator’s factual findings [confirms] that Mr Hee is able to return to his pre-injury employment. The application for weekly compensation should have failed once those findings were made.

21. Having observed (Judgment [149]) that the arbitrator calculated Mr Hee’s entitlement “as if” he was a worker with “current work capacity” and that the outcome of doing so was a “nil result” (Judgment [150]), the President rejected the worker’s submission that “an assessment of nil does not equate to a finding of no entitlement to benefits”, concluding (Judgment [151]):

The plain words of s 38A suggest the opposite is the case. Unless the calculation of any entitlement under Div 2 results in an amount “of compensation payable” to the worker s 38A does not apply. This ensures that only those workers who have a demonstrated entitlement to weekly compensation are able to access the additional benefits available under s 38A. An assessment of nil under s 37 cannot result in “compensation payable” to the worker.

22. Thus the President rejected Mr Hee’s construction of s 38A, did not make a finding as to whether Mr Hee’s injury had resulted in “partial incapacity” and found that he did not have “current work capacity”. That last conclusion was unnecessary as a basis for rejecting Mr Hee’s claim because it was not part of his case that he was entitled to a benefit under s 37. Furthermore, the President’s “work capacity” conclusion relied on the “effect” of findings said to have been made by the arbitrator as to Mr Hee’s ability to undertake the same level of overtime work as he had undertaken before his injury (Judgment [147]). His Honour’s conclusion as to the construction of s 38A is challenged in this Court by grounds of appeal 1, 3, 4 and 5. Those questions are dealt with below.

23. Of the remaining grounds, ground of appeal 2 is that the President “erred in point of law when he held that the Arbitrator had found there was no loss of income due to the injury when no such finding had been made”; and ground of appeal 6 is that his Honour “erred in point of law when he held that probable earnings are irrelevant when determining whether [Mr Hee] has a partial incapacity within the meaning of s 33”. It is convenient to deal with these grounds first.

24. By ground (a) of his appeal to the President from the arbitrator’s decision, Mr Hee argued that the arbitrator had erred in not making a finding of “partial incapacity” for the purposes of s 33. STA responded that there had been a finding of wage loss but did not make a submission as to whether the arbitrator had made the finding sought. The President did not deal with this ground. Instead his Honour addressed the different factual question of whether Mr Hee had “current work capacity”, an issue which did not arise on Mr Hee’s case but which did arise on the President’s construction of s 38A. That question ultimately turned on whether Mr Hee could undertake the same level of overtime work as he had undertaken before his injury. The President concluded that he could (Judgment [178]). It followed in the President’s judgment that Mr Hee was not entitled to the benefit of s 38A for two reasons. First, he was not entitled to a determination under s 37 because he did not have “current work capacity”; and secondly any such determination resulted in a zero weekly payment outcome meaning that there was no “amount” to which s 38A could apply. As will become apparent, this second conclusion does not take account of the operation of s 35(2).

25. As the worker’s written and oral submissions to this Court show, ground 2 is not concerned with any failure of the arbitrator to determine that he had “current work capacity” for the purposes of s 37, or to hold that Mr Hee was entitled to a determination under that section. Rather it was contended on behalf of Mr Hee that the President had erred in failing to hold that the arbitrator had not determined that his injury had resulted in “partial incapacity”, which was submitted to be a broader concept than “current work capacity” and relevantly not limited to cases where there had been a loss of earnings. That submission also engaged ground 6 which is concerned with the interpretation of s 33.

26. It follows that I respectfully disagree with White JA’s description of the issues raised by the grounds of appeal (see [48] and [75] below) as including whether the arbitrator had determined that Mr Hee was able to return to his pre-injury employment and accordingly could not satisfy the descriptions of “current work capacity” or “no current work capacity”. The issue to which grounds 2 and 6 are addressed is whether the President erred in concluding that the arbitrator had found that there was a loss of earnings, that question said to be relevant to whether there was “partial incapacity” under s 33. If these grounds were upheld, Mr Hee seeks that the proceeding be referred back to the Commission to determine only whether there was “partial incapacity” under s 33.

Error in dealing with the finding as to loss of income in determining whether “partial incapacity” under s 33 (grounds of appeal 2 and 6)

27. The President did not in his dispositive reasoning rely on the arbitrator as having made a finding in the terms contended and in relation to “partial incapacity”. The arbitrator made two related findings. The first was that the worker had “resumed his full pre-injury duties on 1 June 2014” (see para [206]). In the President’s reasoning, that finding was material to the application of s 38A because he considered it informed a conclusion as to whether Mr Hee had “current work capacity”. The second was that the worker’s actual earnings since 1 June 2014 exceeded 95% of his pre-injury average weekly earnings (see para [209]). In his Honour’s assessment (Judgment [147]), that finding confirmed that Mr Hee was able to return to his pre-injury employment, which was relevant to whether he had “current work capacity”.

28. At Judgment [174] and following the President addressed the arbitrator’s factual findings in considering whether Mr Hee was a worker with “current work capacity”, a matter assumed but not addressed by the arbitrator. The President noted that the evidence in support of the findings referred to above included Dr O’Sullivan’s opinion “that Mr Hee continued to be fit for full-time work as a bus driver working 9 hour shifts, six days a week” (Judgment [175]). At Judgment [185] the President concluded that the “Senior Arbitrator’s findings concerning Mr Hee’s ability to return to his pre-injury employment were open and do not disclose error”.

29. This last conclusion involved error if the arbitrator did not make findings as to Mr Hee’s capacity to return to his pre-injury employment in the context of determining his “work capacity”. However in my view that error is not the subject of ground of appeal 2, which is directed in the worker’s case only to the making of a finding for the purposes of s 33. If that error is established, as appeared to be conceded in the appeal, the worker’s case must nevertheless fail in the face of the correct construction of s 38A requiring proof of an entitlement to a determination under s 37 and the absence of any claim in that case, or finding, that he had “current work capacity” establishing such an entitlement.

27. My conclusions in these respects also depart from those of Simpson AJA (at [155]ff below). As I have understood Mr Hee’s case as made before the Commission and in this Court, it was that neither the arbitrator nor the President decided whether there was “partial incapacity” under s 33, so that if the appeal was successful it was only that question which should be referred back to the Commission for determination. Relevantly, it was not submitted that the separate question whether Mr Hee had “no current work capacity” within s 37 also should be remitted for decision.

The construction and application of s 38A (grounds of appeal 1, 3, 4 and 5)

31. The structure and terms of s 38A(1) confirm that it only operates in circumstances where there is an entitlement to an amount of weekly compensation, determined in accordance with ss 36, 37 or 38(6) or (7), and irrespective of whether that amount is zero, or less than zero. If the condition enlivening the “special provision” is satisfied, that provision is to be made by treating the amount which is the outcome of that earlier and necessary “determination” as being the specified amount, initially $788.32. Section 38A does not in terms provide that a worker with highest needs with partial incapacity for work is entitled to weekly compensation at the specified or any other rate. It applies if there is an entitlement to an “amount” determined in accordance with one of those earlier provisions, and then only to specify a minimum amount which is to be payable. Section 35(2) recognises that the outcome of such a determination may be zero or less than zero, in which case the “amount” is to be treated as zero. To the extent that the President has held otherwise at Judgment [151]-[152], his analysis in that respect overlooks s 35(2) and is not correct.

32. The “determination” describes the outcome of the calculation of the rate of weekly payments to which an injured worker is entitled under one of the relevant provisions. The use of the word “payable” in s 38A(1) confirms that outcome is the weekly payment to which the injured worker is otherwise entitled under Pt 3, Div 2. As Giles JA observed (Allsop P and Hodgson JA agreeing) in Speirs v Industrial Relations Commission of New South Wales [2011] 81 NSWLR 348; [2011] NSWCA 206 at [76], in this context “an employer’s liability to pay compensation and a worker’s entitlement to receive compensation each express compensation being payable”.

33. All of this is consistent with the language of s 33 and the scheme of Pt 3, Div 2. The general provision in s 9 makes clear that the injured worker is entitled to compensation “in accordance with this Act”. Section 33 does not provide for the calculation of any “weekly payment” to which the worker is entitled for partial or total incapacity. It is the other provisions of Div 2, Subdiv 2 that do so. That is confirmed by the language of s 35(1) which defines the integers to be used in those calculations and in doing so describes the operative sections – ss 36, 37 and 38 – as “the provisions of this Subdivision used to determine the rate of weekly payments payable to an injured worker in respect of a week”. Accordingly the reference to a “weekly payment” in s 33 is to a payment determined in accordance with those operative sections. In that context s 38A applies to a “worker with highest needs” entitled to a determination of a weekly payment amount, even if the amount determined is zero.

34. Finally this literal construction of the language is consistent with the explanations given in the second reading speech and the Explanatory note to the bill for the 2015 Act, although it gives rise to the not inconsiderable difficulties referred to by White JA at [99]-[114]. Nevertheless I agree with his Honour that engaging in a rewriting of the section is beyond the scope of judicial interpretation.

Conclusion

35. The appeal to this Court is concerned only with the worker’s entitlement under s 38A construed as contended for by Mr Hee. That construction was correctly rejected by the President. It follows that the appeal must be dismissed with costs.

36. WHITE JA: The appellant, Mr Hee, appeals from orders of the President of the Workers Compensation Commission made on 26 February 2018 (Hee v State Transit Authority of New South Wales [2018] NSWWCCPD 6). The President’s order was that the Senior Arbitrator’s determination of 27 October 2017 was confirmed. The Senior Arbitrator’s determination and orders were as follows:

The Commission determines:

1.   The applicant sustained injury to his cervical spine arising out of or in the course of his employment on 17 October 2013.

2. The applicant was paid weekly compensation and medical expenses from 21 January 2014 to 31 May 2014 pursuant to section 36 and section 37 of the Workers Compensation Act 1987.

3.   The applicant resumed his full pre-injury duties on 1 June 2014.

4.   The parties entered into a Complying Agreement on or about 9 March 2017 in the sum of $68,750 in respect of 34 per cent whole person impairment of the cervical spine due to injury sustained on 17 October 2013.

5.   The notice issued by the insurer on or about 17 May 2017 was not a notice with respect to a work capacity decision.

6. The applicant’s actual earnings since 1 June 2014 have exceeded 95 per cent of his pre-injury average weekly earnings for the purpose of section 37 of the Workers Compensation Act 1987.

7. The applicant is not entitled to any payments of weekly compensation pursuant to section 38A of the Workers Compensation Act 1987.

The Commission orders:

8.   Award for the respondent in respect of the claim for weekly compensation.

9.   No order as to costs.

37. Mr Hee suffered injury in the course of his employment as a bus driver on 17 October 2013. He was off work from 24 January 2014 to 31 May 2014. The following findings at [38]-[41] below were made by the Senior Arbitrator (“the Arbitrator”) and are not in dispute.

38. At a conciliation conference on 22 August 2016 the respondent’s insurer agreed to pay Mr Hee weekly compensation based on his pre-injury average weekly earnings of $1,391.35 pursuant to ss 36 and 37 of the Workers Compensation Act 1987 (NSW) (“the WC Act”) from 21 January 2014 to 31 May 2014.

39. On or about 9 March 2017 the parties entered into a Complying Agreement (viz. an agreement under s 66A of the WC Act for payment of lump sum compensation) in respect of 34 per cent of whole person impairment due to injury to Mr Hee’s cervical spine sustained on 17 October 2013.

40. On 17 March 2017 Mr Hee’s solicitor served a notice of claim for weekly compensation at the rate of $788.32 per week as adjusted, “from 17 October 2013 to date and continuing” pursuant to s 38A of the WC Act on the basis that he was a “worker with highest needs”.

41. By his application registered in the Commission on 28 April 2017 and amended at the conciliation conference on 10 October 2017, Mr Hee claimed weekly compensation pursuant to s 38A from 1 June 2014 and continuing.

42. That claim was rejected by the Arbitrator and the Arbitrator’s decision was confirmed by the President.

43. The appeal from the Arbitrator to the President was brought pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the WIM Act”). Section 352(5) of the WIM Act provides:

352 Appeal against decision of Commission constituted by Arbitrator

...

(5)    An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.

44. The appeal from the Commission constituted by the President to this Court lies where the party is aggrieved by the decision of the President “in point of law” (WIM Act, s 353(1)).

45. Almost all relevant provisions of the WC Act are quoted in the reasons for judgment of Meagher JA which I have had the advantage of reading in draft. Other tangentially relevant provisions are s 44C (definition of “pre-injury average weekly earnings”) and s 44I (definition of “current weekly earnings”). The effect of these definitions is that overtime and shift allowance payments are taken into account in calculating pre-injury average weekly earnings only for the first 52 weeks for which weekly payments of compensation are payable, but are to be taken into account in any calculation of current weekly earnings.

46. It was common ground that Mr Hee is a “worker with highest needs” within the definition of that expression in s 32A of the WC Act. Mr Hee claimed weekly payments pursuant to s 38A of the WC Act.

47. The right of a worker with highest needs to weekly payments under s 38A is predicated on there being a “determination of the amount of weekly payments ... in accordance with this Subdivision ...”.

48. The issues arising on the appeal and my conclusions on them are as follows:

1. whether if, as Mr Hee contends, he suffered a partial incapacity within the meaning of s 33 of the WC Act he was necessarily entitled to some payment of weekly compensation under s 38A, (he not being entitled to weekly compensation benefits under ss 36 and 37). I agree with Meagher JA that he is not so entitled by reason of s 33. In the case of partial incapacity under s 33 the worker is only entitled to compensation under some other provision of the WC Act that so provides. This court’s decision in Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566 at 568 in relation to s 11 of the Workers’ Compensation Act 1926 (NSW) (“the 1926 Act”) is not authority to the contrary;

2. whether the Arbitrator determined that Mr Hee was able to return to work in his pre-injury employment within the meaning of the definitions of “current work capacity” and “no current work capacity” in s 32A of the WC Act. I accept Mr Hee’s submission that such a determination requires a finding not only that Mr Hee returned to his full pre-injury duties but that he was able to do so to the same extent as he was able to fulfil those duties before his injury. The Arbitrator did not make such a determination;

3. whether the President made such a determination on appeal from the Arbitrator. I conclude that the apparent finding by the President to that effect would only be relevant if the President had found an error of fact, law or discretion by the Arbitrator and found that no different decision should be substituted because Mr Hee was able to work in his pre-injury employment. The President did not so find. I have concluded that the President was in error in deciding that the Arbitrator had found that Mr Hee had returned to his pre-injury employment, and this was an error in point of law;

4. whether the appeal should in any event be dismissed because Mr Hee was not entitled to weekly compensation payments under s 36 or s 37 of the WC Act. I conclude that it should not, because on a literal interpretation of s 38A Mr Hee would be entitled to the benefits claimed under s 38A for at least the second entitlement period if he were not able to return to work in his pre-injury employment within the meaning of that expression in the definitions of “current work capacity” and “no current work capacity”. Although a literal interpretation does not advance the purpose or object intended to underlie s 38A, it is consistent with the general operation of the section and departure from a literal interpretation would require a rewriting of the section that is beyond the legitimate scope of judicial interpretation;

5. accordingly, the matter should be remitted to the Commission to determine whether Mr Hee did or did not return to his pre-injury employment within the meaning of the definitions of “current work capacity” and “no current work capacity” in s 32.

49. Mr McManamey, who appeared for Mr Hee, submitted that Mr Hee suffered a partial incapacity for work as a result of his injury and was thus entitled to a weekly payment by reason of s 33. He submitted that the weekly payment to which Mr Hee was entitled was that provided for by s 38A. Meagher JA has referred to the meaning of the expression “total or partial incapacity for work” used in earlier versions of the WC Act. As his Honour observes (at [9]), s 33 does not describe how the weekly compensation is to be calculated, and it does not follow from the fact of an injury causing incapacity that a worker will be entitled to a payment of weekly compensation.

50. Mr McManamey relied on the decision of this court in Kesen v Luke Singer Pty Ltd where in the context of s 11 of the 1926 Act this court said of s 11(1) that if partial incapacity were found, a weekly payment was to be made (at 568).

51. Section 9(1) of the WC Act provides that a worker who has received an injury (as defined) shall receive compensation from the worker’s employer “in accordance with this Act”. Section 33 is also to be understood in the sense that it provides that in the case of total or partial incapacity for work resulting from an injury the compensation payable by the employer is to include a weekly payment “in accordance with this Act” so far as is presently relevant, that directs attention to s 34 (that provides the maximum weekly compensation amount is $1,838.70 as adjusted by Div 6) and to ss 35-38A.

52. Section 35 partially defines the expressions “AWE”, “D”, “E” and “MAX” that are used in ss 36 and 37 for the determination of weekly payments of compensation.

53. Subsection (2) of s 35 is important. It provides in effect that for the purposes of Subdivision 2 where a determination is made for the purpose of determining the rate of weekly payments payable to an injured worker and that determination results in an amount that is less than zero, the amount is to be treated as zero. Thus, Subdivision 2 of Div 2 (in which ss 34-38A are found) provides that where there is a determination of an amount for the purposes of determining the rate of weekly payments pursuant to ss 36 or 37 that results in an amount of less than zero, the amount so determined is to be treated as zero. For the purposes of Subdivision 2, including s 38A, zero is an amount.

54. One ground upon which Mr Hee’s claim failed in the Commission was that if no weekly compensation benefits were payable under ss 36, 37 or 38 then there could be no determination resulting in an amount of less than $788.32 being payable to Mr Hee. The respondent submitted that nil was not an amount.

55. I address that submission further below at [93]-[114]. It is inconsistent with the express terms of s 35(2).

56. Section 38A only applies if there is a “determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision”. That refers to a determination to be made under s 36, s 37 or s 38.

57. As noted above, on 22 August 2016 the respondent’s insurer agreed to pay the applicant weekly compensation pursuant to s 36 for the first 13 weeks from 21 January to 22 April 2014 and for about five and a half weeks from 23 April 2014 pursuant to s 37. The amounts so paid were more than the amounts provided for by s 38A and no claim is made by Mr Hee in respect of those periods. He claims payments under s 38A from 1 June 2014.

58. It is sufficient to refer to s 37, this being the section that would apply to that claim until the expiry of the second entitlement period (that is, approximately two years from 23 April 2014). A determination of an amount of weekly payments of compensation can only be made in the case of an injured worker who has “no current work capacity” or who “has current work capacity”. One might think that those expressions would cover the field. That is not so. Because of the definitions of those expressions, they do not cover the field. A worker who is able to return to “his or her pre-injury employment” neither has “current work capacity” nor “no current work capacity”. Hence, no determination of amounts of weekly compensation could be made in accordance with Subdivision 2 in respect of a worker who had returned to his or her pre-injury employment and such a worker, even if a worker of highest needs, would not be entitled to benefits under s 38A.

59. Before the Commission, Mr Hee said that although he had returned to full-time employment with the respondent, he was not able to undertake the same amount of overtime as he had worked before his injury. Mr McManamey, who appeared for Mr Hee, submitted that if this were accepted, it would follow that he was not able to “return to his or her pre-injury employment” within the meaning of the definitions of “current work capacity” and “no current work capacity”. When pressed, I did not understand the respondent to submit to the contrary.

60. I accept that if a worker returns to work for his or her employer, but is not able to perform all of his or her duties, or is not able to perform all of his or her duties as fully as he or she were able to do before the injury, then that worker is not able “to return to his or her pre-injury employment” within the definitions of “current work capacity” and “no current work capacity” in s 32A. Such a construction is required to accommodate the terms of s 33. That section provides that in the case of partial incapacity for work resulting from an injury, a weekly payment of compensation during the incapacity is payable under the Act. Were it otherwise, a worker who returned to work with his or her employer on reduced hours, reduced duties and reduced wages would not be entitled to weekly payments under ss 36-38 because he or she could be said to be “able to return to his or her pre-injury employment”.

61. The respondent submitted that Mr Hee had neither “work capacity” nor “no work capacity”. This was because, so the respondent submitted, Mr Hee had returned to his pre-injury employment. It submitted that findings to this effect had been made by the Arbitrator and the President.

62. As quoted at [36] above, the Arbitrator determined that “the applicant resumed his full pre-injury duties on 1 June 2014”.

63. The materials that were before the Arbitrator and the President were not before this Court. The Arbitrator’s reasons included the following:

18.   The applicant provided a statement on 18 April 2017. He confirmed the details of the circumstances of his injury, treatment and symptoms. He advised that he was employed on a fulltime basis for more than 40 hours per week plus overtime and his pre-injury average weekly earnings were $1,391.35. He was off work following the operation on his neck from 24 January 2014 to 31 May 2014 and he eventually resumed his duties without restriction.

...

21.   The applicant acknowledged that he was able to work fulltime in his pre-injury duties as a bus driver. Each trip lasted an hour to an hour and a half. He needed to go to the toilet immediately before and after each trip, and he restricted his fluid intake in order to control his bladder.

22.   In his statement dated 21 July 2017, the applicant indicated that he worked a six day roster plus overtime prior to his injury. He estimated that he would do overtime for 80 per cent of his shifts. There was no set roster and he was just asked whether he wanted to perform overtime or not.

23.   The applicant stated that since he returned to work in late May 2014, he no longer performed overtime. He was able to do his normal shifts, but was too tired and stressed to take on any extra work. He also had problems with his bowels and bladder. He estimated that he was losing $200 per fortnight.

64. The Arbitrator referred to medical reports, including a report of a Dr Mellick whom he said recorded that “the applicant was still able to work as a bus driver on a full-time basis” (para 32), and a report of a Dr O’Sullivan who recorded that “... the applicant continued to work full-time as a bus driver for nine-hour shifts/six days per week” (para 35). He referred to evidence of a staff supervisor of the respondent, a Mr Singleton, and recorded that Mr Singleton “... indicated that the applicant had performed his pre-injury duties and hours since he was cleared to return to work on 22 May 2014”. The Arbitrator recorded Mr Singleton’s evidence as follows:

43.   In his statement dated 10 August 2017, Mr Singleton stated that overtime was offered to bus drivers two or three times per week on an as needs basis. Drivers could be asked and regularly asked to do overtime, which was given if it was available. The drivers could also decline to do overtime work if they wished to.

44.   Mr Singleton stated that overtime was made available to cover driver sickness, mechanical breakdowns, accidents or excessive late running of buses. There was no specific system of sharing overtime and it was basically allocated to whoever was available at the time, subject to safety guidelines such as driver fatigue.

45.   Mr Singleton stated that since June 2014, overtime had been readily available and had been offered to the applicant. His Duty Officers told him that the applicant mostly declined overtime without giving any reason for doing so. He stated that to his knowledge, the applicant had never presented a certificate that he could not perform overtime. He recalled seeing a certificate in the past that certified that the applicant was fit for all of his pre-injury duties.

46.   Mr Singleton stated that the amount of overtime available and offered to drivers had not changed in any significant way since 2009. He considered that it was more likely that the applicant would have done overtime after 50 per cent to 60 per cent of his shifts, although he conceded that he had not done an analysis of the applicant’s work journals.

47.   Mr Singleton disputed that the applicant had not done any overtime since May 2014. For example, records showed that the applicant had performed overtime for five shifts since January 2017. He did not feel that he was qualified to conduct an analysis of the applicant’s overtime records, and this was better left to the payroll office.

65. Mr Singleton’s evidence as recorded at para 45 of the Arbitrator’s reasons corroborated Mr Hee’s evidence to the extent that it confirmed that he “mostly declined overtime”.

66. The Arbitrator referred to evidence given by Mr Singleton as to Mr Hee’s earnings. He recorded that Mr Singleton stated that Mr Hee’s paysheets showed that he earned $75,992 in the financial year ended 30 June 2013, $81,584 in the financial year ended 30 June 2015, and $82,419 in the financial year ended 30 June 2016 and $82,748 in the financial year ended 30 June 2017 (para [48]). Mr Hee’s earnings in the financial year ended 30 June 2014 were reduced as a result of his injury. The Arbitrator also said:

50.   Mr Singleton provided a further statement on 30 August 2017. He advised that an analysis of the applicant’s pay records showed that his overtime payments were as follows:

14 October 2012 to 26 October 2013: $18,512,26

27 October 2012 to 25 October 2014: $6,814.04

26 October 2014 to 24 October 2015: $18,533.57

25 October 2015 to 22 October 2016: $14,750.40

23 October 2016 to 29 July 2017: $9,693.33

(with the potential of earning a further $5,816.04, giving a total of $15,509.37)

51.   Mr Singleton explained that the decline in overtime from October 2015 to date was because the applicant had declined to do overtime.

67. Later in his reasons the Arbitrator made a calculation of any wage loss for the second entitlement period. He adopted the figure of Mr Hee’s pre-injury average weekly earnings of $1,391.35 that had been accepted by the parties in consent orders made on 22 August 2016. He noted that that figure would remain the same for the first 52 weeks and then overtime and shift allowances would be deducted (s 44B(1)(c) of the WC Act) (Reasons at [164]).

68. In making this calculation the Arbitrator made the following findings:

165.   According to the evidence, the applicant has been paid weekly compensation for 19 weeks, so the 52 week period for the current claim would conclude on 17 January 2017. The evidence does not indicate that the applicant was in receipt of any non-pecuniary benefits.

166.   According to the applicant’s second statement, he had not done any overtime since he returned to work in late May 2014 and he estimated that he was losing $200 per fortnight. However, it is clear from a perusal of the applicant’s payslips that he has performed some, albeit not excessive, overtime on a regular basis. Therefore, his evidence on this aspect carries little weight.

167.   There is merit in Mr Robertson’s submission that there is no medical evidence to support the contention that the applicant is unable to perform overtime. The certificates of Drs Abeydeera, Narayanan and Ruan do not extend beyond May 2014. Dr Hawthorne did not comment on the applicant’s capacity.

168.   Little assistance is provided by Drs Kohan and Mellick, who both noted that the applicant had returned to his pre-injury duties for normal or fulltime hours. Dr Mellick commented that the applicant was unable to perform heavy duties at home. Dr O’Sullivan recorded that the applicant continued to work fulltime as a bus driver for nine hour shifts/six days per week and he confirmed that the applicant could continue to perform his duties as a bus driver.

169.   Mr Singleton indicated in his statement that the applicant’s actual gross earnings for the period 1 July 2015 to 30 June 2016 were $82,419, or $1,584.98 per week, and in the financial year 1 July 2016 to 30 June 2017, the applicant’s gross earnings were $82,748, or $1591.31 per week. This is consistent with the year to date gross earnings identified in the applicant’s payslips for the period up to 18 June 2016 at page 96 and in the applicant’s payslip for the period up to 17 June 2017 at page 122 of the late documents received on 7 September 2017.

69. The summary of the medical evidence provided by the Arbitrator does not indicate that the doctors whom Mr Hee consulted, or by whom he was examined, addressed Mr Hee’s capacity to perform overtime duties. The submission of counsel for the respondent before the Arbitrator (which the Arbitrator accepted) was that there was no medical evidence to support the contention that Mr Hee was unable to perform overtime, not that the medical evidence was inconsistent with Mr Hee’s evidence that he was unable to perform overtime. Mr Hee’s evidence that since he returned to work he did not perform overtime (i.e. any overtime) was evidently not accepted in the light of Mr Singleton’s evidence. The evidence of Mr Singleton referred to in the Arbitrator’s reasons referred to the overtime that Mr Hee worked. It did not and could not address what overtime he would have been capable of working but for his injury.

70. The Arbitrator made a calculation applying the formula in s 37(2)(a) of the WC Act as follows:

178. Applying the formula in s 37(2)(a) of the 1987 Act, the weekly payment of compensation during the second entitlement period from 1 June 2016 to 30 June 2016 would be as follows:

(a)   (AWE x 95%) – (E + D)

($1,391.35 x 95%) – ($1,584.98)

$1,321.78 - $1,584.98 = $0.00

179.   The weekly payment of compensation during the second entitlement period from 1 July 2016 to 17 January 2017 would be as follows:

(a)   (AWE x 95%) – (E + D)

($1,391.35 x 95%) – ($1,591.31)

$1,321.78 - $1,591.31 = $0.00

180. Given the applicant’s actual earnings, his entitlement in the period 18 January 2017 to 30 June 2017 will still be zero after the pre-injury overtime is deducted from the PIAWE in accordance with s 44C(1)(b) of the 1987 Act.

181. Therefore, having regard to the above calculations, it is not surprising that the applicant has not made a claim for weekly compensation pursuant to s 37 of the 1987 Act as he has no entitlement.

71. This calculation is only called for if the worker has “current work capacity”, that is, is not able to return to “his or her pre-injury employment”.

72. The Arbitrator concluded (at [206]) that:

206.   The applicant resumed his full pre-injury duties on 1 June 2014.

73. This was not a finding that Mr Hee was able to return to his pre-injury employment. The finding would mean that Mr Hee was able to drive all of the routes with the same breaks as he had done before his injury and perform whatever else are the full duties of a bus driver. It was not a finding that Mr Hee could perform all the duties he had performed before his injury to the same extent as he could do before his injury.

74. The notice of appeal from the Arbitrator’s decision to the President was not before this Court, but the grounds were summarised in the President’s reasons at [75] as follows:

75.   The grounds of appeal are whether the Senior Arbitrator erred when he:

(a)   failed to determine that Mr Hee had a partial incapacity within the meaning of s 33;

(b) interpreted s 38A by only considering the explanatory note, the second reading speech and the Benefit Guide, rather than the clear and unambiguous grammatical meaning of the words of the section;

(c) concluded that a worker who has no entitlement to a weekly payment (pursuant to ss 34-38) is not entitled to a payment pursuant to s 38A;

(d) concluded that the clear and unambiguous meaning of s 38A is that a worker with highest needs is to receive a minimum amount of $788.32 per week made up of compensation and actual earnings and then did not apply that meaning;

(e) found that the clear and unambiguous meaning of s 38A is to set a minimum amount of compensation to be paid to a worker with highest needs and then did not apply that interpretation, and

(f) concluded that a worker was not entitled to a payment pursuant to s 38A unless he was entitled to a payment pursuant to ss 34-38.

75. The ground relevant to the present issue is ground (a), namely that the Arbitrator failed to determine that Mr Hee had a partial incapacity within the meaning of s 33. It was not an express ground of appeal that the Arbitrator failed to determine whether Mr Hee was not able to return to his “pre-injury employment” in the sense that he was not able to return to the carrying out of his duties as a bus driver to the full extent that he had been able to do before his injury. But it was clear that that was the reason for which Mr Hee contended that he had a partial incapacity within s 33.

76. The question before the President on this ground was whether or not the Arbitrator had failed to determine that Mr Hee had such a partial incapacity. In determining that question the President was confined to determining whether the Arbitrator’s decision was affected by an error of fact, law or discretion (WIM Act, s 352(5)). The appeal to the President was not by way of review, let alone rehearing.

77. Section 352(5) of the WIM Act was enacted in its present form by clause 16 of Sch 2 to the Workers Compensation Legislation Amendment Act 2010 (NSW) which took effect on 1 February 2011. Prior to then s 352(5) provided that an appeal to a Presidential member from a decision of an arbitrator was by way of review of the decision appealed against. Prior to the decision of this court in Tan v National Australia Bank Ltd [2008] NSWCA 198; (2008) 6 DDCR 363 (“Tan”) that provision had been interpreted in the Commission as meaning that a successful appeal required establishment of error on the part of an arbitrator, whether by way of law, fact or discretion. If such an error were established and but for the error the decision would have been different, then the Presidential member could substitute a different decision in place of that of the arbitrator (The King Island Company Ltd v Deery [2005] NSWWCCPD 1 at [19]; Eraring Energy v Brownlie [2008] NSWWCCPD 42 at [20], [24]; Tan v National Australia Bank Ltd [2006] NSWWCCPD 115 at [30]).

78. The majority of this Court in Tan held that this understanding was incorrect and a Presidential member could conduct a fresh hearing and could intervene without being constrained to identify error by the arbitrator (per Basten JA at [5]-[12], Bell JA agreeing). The 2010 amendment returned the position to what it had been before this Court’s decision in Tan.

79. On the question of Mr Hee’s ability to work overtime to the same degree as he had before his injury, the President made the following findings:

147. A worker with ‘current work capacity’ is defined as a worker who ‘is not able to return to his or her [pre]-injury employment...’ [The 1987 Act, s 32A.] Subject to the Senior Arbitrator’s factual findings on capacity being correct, Mr Hee cannot meet the statutory description of a worker with ‘current work capacity’ or ‘no current work capacity’. That is because the effect of the Senior Arbitrator’s factual findings confirm that Mr Hee is able to return to his pre-injury employment. The application for weekly compensation should have failed once those findings were made.

...

174.   Although it is not determinative of the appeal, because as I have said (at [147]) if the Senior Arbitrator’s factual findings are correct Mr Hee is unable to satisfy either definition of a worker with ‘current work capacity’ or ‘no current work capacity’ and therefore is not entitled to compensation under s 37, I note the following. For the following reasons, the Senior Arbitrator’s factual findings on capacity, are soundly based on the evidence presented and do not involve error.

175. First, the Senior Arbitrator found that there was no evidence before the Commission that Mr Hee was unfit to perform his usual duties including overtime. [Reasons, at [166].] The most recent medical evidence tendered in support of Mr Hee’s claim was the report of Dr O’Sullivan dated 12 January 2017. Even after recording Mr Hee’s symptoms, that he has difficulty walking and climbing stairs, and that he had residual impairment of function in both hands, slight incontinence and slight sexual dysfunction; Dr O’Sullivan opined that Mr Hee continued to be fit for full-time work as a bus driver working 9 hour shifts, 6 days a week. In other words, notwithstanding an acceptance of the symptomology Mr Hee complained of, Dr O’Sullivan did not accept that Mr Hee suffered any impairment in his ability to undertake his normal duties, including overtime.

176.   Further, as the Senior Arbitrator observed, the medical certificates issued by Dr Abeydeera, Dr Narayanan and Dr Ruan do not assist Mr Hee as they do not extend beyond May 2014.

177.   The evidence of Dr Kohan and Dr Mellick offer no assistance as both doctors certified Mr Hee fit for full-time duties.

178.   It follows that, even if it is accepted that Mr Hee is not working overtime hours to the extent that he was pre-injury (which the Senior Arbitrator did not accept) there was no evidence before the Senior Arbitrator to establish that Mr Hee’s decline in overtime was a result of the accepted work injury.

179. Second, the Senior Arbitrator placed little weight on Mr Hee’s evidence concerning his alleged loss of earnings. As the Senior Arbitrator found, in his first statement Mr Hee said that he returned to work after the accepted injury on a full-time basis including undertaking over time duties. Mr Hee added that his return to work was ‘without restriction.’ However, in his second statement, Mr Hee claimed that since his return to work at the end of May 2014, he could not do any over time. That latter evidence was not accepted. The Senior Arbitrator found that Mr Hee’s pay slips demonstrated that he worked overtime, albeit not excessive overtime, on a regular basis following his return to work. [Reasons, at [166].]

180.   Further, the Senior Arbitrator found that the evidence concerning overtime worked before the accepted injury was unreliable. Mr Hee also claimed that prior to the injury he was working overtime after 80% of his shifts. However, Mr Singleton, the staff supervisor, considered that to be an overestimate. Mr Singleton said that prior to Mr Hee’s injury he was probably offered overtime after 50% to 60% of his shifts.

181.   Moreover, Mr Hee’s actual gross earnings post injury do not demonstrate any diminution in his earnings. The evidence reflects an increase in Mr Hee’s post-injury earnings compared to his pre-injury earnings. In the financial year ending 30 June 2013, the last full year before the injury, Mr Hee earned $75,992. Whereas, in the financial year ending 30 June 2015 he earned $82,419. In the financial year ending 30 June 2017, he earned $82.748.

182.   In submissions before the Senior Arbitrator, Mr McManamey claimed that Mr Hee’s inability to undertake overtime was due to his being ‘tired and stressed’ after completing his shifts. That submission is unsupported by the evidence. I note that Mr Hee did not make any direct connection between being ‘tired and stressed’ and the effects of the accepted work injury. Nor are there any reported complaints to any of his treating doctors of feeling tired and stressed by reason of his accepted injury. However, as neither party made any submissions in relation to this issue on appeal, I make no findings with respect to it.

183.   Further, for the following reasons, I do not accept Mr McManamey’s submission that Mr Hee is entitled to an award of compensation because there was evidence of a partial incapacity compared to Mr Hee’s probable earnings. Whatever Mr Hee’s ‘probable earnings’ may have been is irrelevant. There is no longer any reference in either the 1987 Act or the 1998 Act to the notion of partial incapacity being assessed by reference to probable earnings.

...

185.   The Senior Arbitrator’s findings concerning Mr Hee’s ability to return to his pre-injury employment were open and do not disclose error. It follows that Mr Hee’s submission that ‘the evidence before the Arbitrator established that Mr Hee had a partial incapacity and was losing money compared to his comparable earnings’ cannot be accepted. (Emphasis added.)

80. The President concluded that the effect of the Arbitrator’s factual findings was that Mr Hee was able to return to his pre-injury employment. This was an error because the Arbitrator did not make that finding. Nor did the factual findings made by the Arbitrator necessarily lead to that conclusion. Rather, the Arbitrator found that Mr Hee resumed his full duties, which was not the same thing. This was a misconstruction of the Arbitrator’s reasons, which involved an error in point of law.

81. The President went on to make his own findings (at Reasons [175], [178], and [182] (as underlined above)) that:

1. Dr O’Sullivan’s opinion that Mr Hee was fit for full-time work (nine hours per day, six days per week) meant that Dr O’Sullivant did not accept that Mr Hee was unable to undertake overtime ([175]); and

2. there was no evidence to establish that Mr Hee’s decline in overtime was due to the work injury ([178] and [182]).

82. The President also appears to have concluded (at Reasons [180] and [181]) that because Mr Hee worked some overtime and his earnings were not diminished after recovery from injury, that his ability to return to his pre-injury employment was not reduced.

83. These were findings of fact. Had the President accepted Mr Hee’s contention that the Arbitrator erred in not determining partial incapacity then it would have been open to his Honour to have concluded that the error made no difference on the basis of facts as found by the President. No further appeal would lie unless in so concluding the President erred in point of law.

84. But that is not what the President did. He concluded (wrongly) that the effect of the Arbitrator’s findings was that Mr Hee was able to return to his pre-injury employment within the meaning of the definitions of “current work capacity” and “no current work capacity”. Because the President found that there was no error of fact, law or discretion on the part of the Arbitrator and because the appeal to him was not by way of review or new hearing, his factual findings are not relevant.

85. The grounds of appeal to this court include that:

2. The President erred in point of law when he rejected the submission that the benefit provided by section 38A applied upon satisfaction of the definition of worker with highest needs coupled with a finding of ‘incapacity’ under s 33, as that term was understood prior to the 2012 amending Act.

117. Pursuant to s 65 of the 1987 Act Mr Hee was assessed to have suffered, as a result of the injury, permanent impairment of 34 percent. He was paid compensation in accordance with an agreement reached with the STA under s 66A of the 1987 Act.

118. Mr Hee returned to work on 1 June 2014 without restriction as to his usual rostered shifts. He claims, however, that on his return to work, he was not able to undertake as much overtime as before his injury. He applied to the STA for weekly compensation in accordance with s 38A of the 1987 Act. For the purposes of the 1987 Act, the STA was a self-insurer. It may be taken that those provisions of the 1987 Act that confer powers or impose duties on an insurer apply equally to employers who are self-insured. The basis for Mr Hee’s claim was that, although he had returned to work, he was partially incapacitated for work (see s 33, set out below) because he was not able to undertake overtime to the same degree as previously. The STA rejected that application, saying that he was not entitled to further weekly compensation because he had resumed his pre-injury duties:

… on a full-time basis, despite the fact that you have been assessed as a worker with the ‘highest needs’ as defined in s 32A of [the 1987 Act].

Mr Hee then made a claim in the Workers Compensation Commission (“the Commission”) for payment under s 38A of the 1987 Act. That claim came before Senior Arbitrator Glenn Capel (“the arbitrator”), who rejected it in a Certificate of Determination dated 27 October 2017.

122. Pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the WIM Act”), Mr Hee appealed to the Commission constituted by a Presidential Member. By subs (5) of s 352 such an appeal is limited to a determination of whether the decision appealed against:

… was or was not affected by any error of fact, law or discretion, and to the correction of any such error.

Subsection (5) specifically states that the appeal is not a review or rehearing.

123. The appeal came before the President of the Commission, Mr Keating. Mr Keating determined the appeal without the need for a further hearing, on the documentary materials that had been before the arbitrator. He dismissed the appeal and confirmed the decision of the arbitrator. From that decision Mr Hee appeals to this Court. By s 353(1) of the WIM Act, such an appeal lies only where a party to proceedings is aggrieved “in point of law” by the decision.

The relevant legislative provisions – Workers Compensation Act 1987

124. Part 2 of the 1987 Act is concerned with liability of employers to pay compensation to workers who have received injury arising out of or in the course of employment. Part 3 deals with the benefits to which injured workers are entitled. The presently relevant provisions are all to be found in Part 3, Division 2, which provides for weekly compensation “by way of income support”. Subdivision 2 of Division 2 (ss 33-42) specifies the entitlement to weekly payments. Generally speaking, the entitlement varies according to the time that has elapsed since the injury and the severity of the injury, measured against the capacity of the injured worker to return to work.

125. Division 2 of Part 3 was inserted into the 1987 Act by the Workers Compensation Legislation Amendment Act 2012 (NSW). Further amendments were made to Division 2 by the Workers Compensation Amendment Act 2015 (NSW) (“the 2015 Act”). Section 32A, which defines the terms used in Division 2, was amended by the introduction of the terms “worker with high needs” and “worker with highest needs”, and, importantly for present purposes, by the insertion of s 38A.

126. Section 38A, under which Mr Hee’s claim was brought, makes “special provision for workers with highest needs”. Subsection (1) provides:

(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.

127. In order to understand s 38A, it is necessary to be familiar with some other provisions of the 1987 Act. The following definitions are presently relevant:

current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment;

no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment;

worker with high needs means a worker whose injury has resulted in permanent impairment; and

worker with highest needs means a worker whose injury has resulted in permanent impairment and:

(a)   the degree of permanent impairment has been assessed for the purposes of Division 4 to be more than 30%, or

(b)   [not presently relevant]

(c)   [not presently relevant]

(Division 4 provides for compensation for non-economic loss.)

[It may be here observed that the definition of “current work capacity” is apt to cause confusion. The concept might more accurately be framed as “diminished work capacity”, language that I will at times use in the interests of clarity.]

128. “Work capacity decision” is defined by reference to s 43, which identifies a number of decisions by insurers (or employers who, as here, are self-insurers) as work capacity decisions. Relevantly, “a decision about a worker’s current work capacity” is a “work capacity decision”.

129. By subs (3) (since repealed) of s 43, the Commission did not have jurisdiction to determine any dispute about a work capacity decision of an insurer (or self-insured employer) and was not permitted to make a decision in respect of a dispute before the Commission that was inconsistent with a work capacity decision of an insurer.

130. Section 33 provides:

33 Weekly compensation during total or partial incapacity for work

If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.

“Total or partial incapacity” is not defined. However, it is well established that:

… the concept of partial incapacity for work is that of reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working or might reasonably be expected to work.

Arnotts Snack Products Pty Ltd v Yakob (1985) 155 CLR 171 at 178; [1985] HCA 2; Sabanayagam v St George Bank Ltd [2016] NSWCA 145 at [131].

131. Sections 34-38 specify the basis on and the manner in which weekly payments of compensation are to be calculated, varying according to what are called the “first entitlement period” (s 36, the first thirteen weeks), the “second entitlement period” (s 37, weeks 14-130), and thereafter (s 38). It is s 37 that is presently relevant. Section 37 provides for alternative entitlements for three categories of injured workers in the second entitlement period:

• workers who have no current work capacity (subs (1));

• workers who have current (that is, diminished) work capacity and have returned to work for not less than 15 hours per week (subs (2));

• workers who have current (that is, diminished) work capacity and have returned to work for less than 15 hours per week or who have not returned to work (subs (3)).

Each subsection then sets out a formula by which entitlements are to be calculated.

132. That factors that make up the formulae are defined in s 35(1). They include (relevantly) the worker’s pre-injury average weekly earnings (“AWE”) and “the amount to be taken into account as the worker’s earnings after injury” (“E”), being the greater of the amount the worker is able to earn in suitable employment and the worker’s (actual) current weekly earnings.

133. Section 35(2) provides:

(2)   If the determination of an amount for the purpose of determining the rate of weekly payments payable to an injured worker results in an amount that is less than zero, the amount is to be treated as zero.

134. As set out above, s 38A makes special provision for “workers with highest needs” – that is (relevantly) for workers whose degree of permanent impairment has been assessed to be more than 30 percent. An Explanatory note that accompanied the introduction of the Bill that became the 2015 Act explained that the existing scheme providing for payment of weekly compensation to injured workers would be changed in various ways, including:

(iii)   the minimum amount of weekly compensation that an injured worker with more than 30% permanent impairment will be eligible to receive will be the amount of $788.32 (being a combined total of compensation and earnings), to be indexed twice a year (italics added)

135. It may here be observed that the words in the Explanatory note that I have italicised did not find their way into s 38A as enacted. By reason of the assessment of his injury as giving rise to 34 percent permanent impairment, Mr Hee was a “worker with highest needs”.

The proceedings before and the decision of the arbitrator

136. Before the arbitrator, the STA first argued that the jurisdiction of the Commission was limited by reason of s 43(3). That subsection applies where an insurer (or self-insured employer) has made “a work capacity decision” (that is, in this case, a decision about Mr Hee’s “current work capacity”). It will be recalled that “current work capacity” is defined, in effect, as diminished or reduced capacity for work. The importance of the STA’s position was that, if the STA had made a work capacity decision, the jurisdiction of the Commission was, at best, limited. The arbitrator was not satisfied that the STA had made such a decision, and the Commission was therefore not precluded, by s 43(3), from determining the dispute. That decision is not in issue on this appeal.

137. It was common ground that, by reason of the time that had elapsed since Mr Hee’s injury, and that he had returned to work for not less than 15 hours per week, the relevant provision for the calculation of any weekly payments to which he was entitled (other than under s 38A), was s 37(2). The formula provided by s 37(2) relevantly entitled an injured worker to whom that subsection applied to compensation calculated at 95 per cent of pre-injury weekly earnings less current weekly earnings. Mr Hee’s current weekly earnings exceeded the sum resulting from the application of that formula. The calculation therefore yielded a negative figure. Mr Hee therefore accepted that he did not qualify for payments of weekly compensation as prescribed by the application of the s 37(2) formula. His claim, however, was that, because he was not able to undertake the same amount of overtime as previously, “partial incapacity” within the meaning of s 33 had resulted from the injury and this, in conjunction with his status as a “worker with highest needs”, entitled him to payment of compensation in accordance with s 38A. That was because of the mandatory term in which s 33 is framed. The section provides, relevantly:

If … partial incapacity for work results from an injury, the compensation payable … shall include a weekly payment during the incapacity. (italics added)

138. On Mr Hee’s argument, it was not to the point that application of the s 37(2) formula yielded a negative figure: s 35(2) specifically required that amount to be treated as “zero”.

139. The arbitrator considered that Mr Hee was not so entitled. In effect, the arbitrator gave little weight to Mr Hee’s evidence that his capacity to undertake overtime was reduced, having regard to documentary evidence of Mr Hee’s post-injury payments. He found that Mr Hee had:

… performed some, albeit not excessive, overtime on a regular basis.

He made no express finding about Mr Hee’s claim that his capacity to do overtime work was reduced.

140. The arbitrator’s factual conclusions were stated in a summary of findings, relevantly as follows:

204.   [Mr Hee] sustained injury to his cervical spine arising out of or in the course of his employment on 17 October 2013.

…

206.   [Mr Hee] resumed his full pre-injury duties on 1 June 2014.

…

209 [Mr Hee’s] actual earnings since 1 June 2014 have exceeded 95 percent of his pre-injury average weekly earnings for the purpose of s 37 of the 1987 Act.

210 [Mr Hee] is not entitled to any payments of weekly compensation pursuant to s 38A of the 1987 Act.

141. A critical determination of the arbitrator was the construction of s 38A. In coming to that construction, the arbitrator had regard to the Explanatory note and the Second Reading Speech that accompanied the 2015 introduction of s 38A into the 1987 Act.

142. The relevant part of the Explanatory note has been set out above. In the Second Reading Speech, the Minister said:

Schedule 2 to the bill [in which draft s 38A appeared] introduces a minimum safety net weekly payment for the most seriously injured workers. 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. This will assist those workers with over 30 per cent permanent impairment who were on very low pre-injury average weekly earnings and who may receive weekly payments for many years. (italics added, New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 5 August 2015 at 2097)

143. The arbitrator then concluded:

191 In my view, the Explanatory Note explained in clear and unambiguous terms what Parliament intended, namely a worker with highest needs would receive $788.32 per week, comprising the worker’s weekly compensation and actual earnings, if any. The Minister described the payment of $788.32 [sic] per week as the minimum amount.

192   In other words, once the worker’s weekly compensation entitlement was added to the worker’s actual earnings, the worker would receive a minimum amount of $788.32 per week and nothing less … (italics added)

The proceedings before and the decision of the President

144. The documentary material (which, it may be assumed, included written submissions of the parties’ legal representatives) presented to the President was not before this Court. The evidence, the arguments addressed and, indeed, the grounds of appeal are to be gleaned from the reasons of the President, which are detailed and comprehensive.

145. The President identified six grounds of appeal by which it was asserted that the arbitrator had erred “in fact, law or discretion”. The first was that the arbitrator had failed to determine that Mr Hee had a partial incapacity within the meaning of s 33 of the 1987 Act (such as to entitle him to weekly payments of compensation in accordance with Part 3, Division 2, Subdivision 2 of the 1987 Act). The remaining grounds attacked the arbitrator’s construction of s 38A. The grounds identified by the President do not include any challenge to the arbitrator’s finding that Mr Hee had “returned to his full pre-injury duties”.

146. The STA sought, by Notice of Opposition analogous to a notice of contention in this Court, to argue that the arbitrator had erroneously failed to find that it had made a “work capacity decision” within the meaning of s 43. The President declined to embark upon a consideration of that contention, saying that no grounds of (relevant) error had been identified. That is no longer in issue.

147. The President does not appear to have addressed, directly, the argument advanced in support of the first ground of appeal. So far as can be discerned, the argument was that, once an injured worker established total, or (relevantly) partial, incapacity within the meaning of s 33, it was necessary to proceed to a calculation in accordance with ss 36-38 (here, s 37). Even if that calculation resulted (as here) in a nil or negative sum, the worker would still be entitled to the benefit provided by s 38A of $788.32 per week. Support for that proposition was drawn from s 35(2).

148. With respect to the construction of s 38A, the President (at [140]-[143]) identified three pre-conditions for entitlement:

1. a “determination” of the amount of weekly payments of compensation payable in accordance with Part 3, Division 2, Subdivision 2 (in this case, under s 37) of the 1987 Act;

2. that the determination results in an “amount of weekly payments of compensation being payable” following such a determination;

3. that the amount of compensation is less than $788.32.

149. The President then said:

144. It seems plain that the general purpose of inserting s 38A into the legislation is to ensure that workers with highest needs receive additional weekly compensation payments compared to those workers with an impairment of 30% or less. That is not to say that all workers with highest needs receive the additional compensation. Such compensation is only available to those workers who meet the conditions set out above.

…

147.   A worker with ‘current work capacity’ is defined as a worker who ‘is not able to return to his or her pre-injury employment …’ Subject to the Senior Arbitrator’s factual findings on capacity being correct, Mr Hee cannot meet the statutory description of a worker with ‘current work capacity’ or ‘no current work capacity’. That is because the effect of the Senior Arbitrator’s factual findings confirm that Mr Hee is able to return to his pre-injury employment. The application for weekly compensation should have failed once those findings were made.

…

151. I do not accept [the submission of counsel for Mr Hee] that, applying the formula in s 37, an assessment of nil does not equate to a finding of no entitlement to benefits. The plain words of s 38A suggest the opposite is the case. Unless the calculation of any entitlement under Div 2 results in an amount of ‘compensation payable’ to the worker s 38A does not apply. This ensures that only those workers who have a demonstrated entitlement to weekly compensation are able to access the additional benefits available under s 38A. An assessment of nil under s 37 cannot result in ‘compensation payable’ to the worker. (italics added)

150. At [161] the President rejected the argument advanced on behalf of Mr Hee to the effect that, once a worker has established incapacity within the meaning of s 33 and has satisfied the definition of “worker with highest needs”, the worker is entitled to the benefit of s 38A irrespective of whether any entitlement to weekly compensation under ss 34-38 has been established. He considered that argument to be “directly contrary” to the text and context of s 38A. He placed emphasis on the words “determination of the amount of weekly payments payable …” (italics added) in s 38A (see [151]).

151. The President found error in the arbitrator’s reliance, in the construction of s 38A, on the Explanatory note and other extrinsic material, noting that the words “the worker’s actual earnings” in those documents do not appear in s 38A. The President nevertheless considered the error to be immaterial, since it resulted in the same construction as would have resulted from the application of “the ordinary grammatical meaning of the text” (at [173]). That, again, appears to have been a reference to the words “amount of weekly compensation payable” in s 38A. The President stated his conclusions as:

173. Namely, in the absence of an amount of weekly compensation payable to the worker calculated in accordance with the provisions of ss 34-38 there can be no entitlement to the additional benefits conferred by s 38A of the 1987 Act.

…

178.   It follows that, even if it is accepted that Mr Hee is not working overtime hours to the extent that he was pre-injury (which the Senior Arbitrator did not accept) there was no evidence before the Senior Arbitrator to establish that Mr Hee’s decline in overtime was a result of the accepted work injury.

Finally, the President said:

188. A worker with highest needs and an established incapacity is not entitled to the additional benefits payable pursuant to s 38A merely by reason of the satisfaction of those criteria alone. More is required. The benefits provided for in s 38A are only payable where a worker has established that there is an amount of weekly compensation payable applying the provisions of ss 34-38 that is less than $788.32. A worker, such as Mr Hee, who is unable to establish any amount of weekly compensation payable arising from a compensable injury, is not eligible for the additional benefits under s 38A.

152. The President confirmed the decision of the arbitrator.

The appeal to this Court

153. Six grounds of appeal were identified:

1. The President erred in point of law when he found that section 38A only applied when a worker was entitled to a payment pursuant to sections 36, 37 or 38 of the Workers Compensation Act 1987.

2.   The President erred in point of law when he held that the Arbitrator had found that there was no loss of income due to the injury when no such finding had been made.

3. The President erred in point of law when he rejected the submission that the benefit provided by section 38A applied upon satisfaction of the definition of worker with highest needs coupled with a finding of ‘incapacity’ under s 33, as that term was understood prior to the 2012 amending Act.

4. The President erred in point of law when he said ‘Whilst there may be merit in the submission that the principles of over compensation do not apply in cases where a worker is entitled to a s 38A benefit, that does not mean that s 38A is satisfied by a worker of highest needs merely establishing that he or she suffers a partial incapacity within the meaning of s 33 of the 1987 Act.

5. The President erred in point of law when he interpreted section 38A contrary to the intention in the second reading speech which was ‘It was intended that this (section 38A) was to assist those workers with over 30 per cent permanent impairment who were on very low pre-injury average weekly earnings and who may receive weekly payments for many years.

6. The President erred in point of law when he held that probable earnings are irrelevant when determining whether the Appellant has a partial incapacity within the meaning of section 33 of the Workers Compensation Act 1987.

154. Grounds 1, 3, 4 and 5 are directed to the construction of s 38A. By Ground 2, complaint is made that the President misconstrued the arbitrator’s findings concerning Mr Hee’s loss of income. Ground 6 is directed to the construction of s 33.

155. The competing positions of the parties may be stated briefly. On behalf of Mr Hee, it was contended that:

1. where total or partial incapacity is established, s 33 confers an absolute entitlement to a payment of weekly compensation (reliance was placed on the decision of this Court in Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566);

2. the quantum of such weekly payments is determined by reference to ss 34-38; application of the ss 36-38 formulae may yield a nil result – that is, notwithstanding that a worker may establish total or partial incapacity within the meaning of s 33, a combination of the worker’s actual post-injury earnings and the application of the relevant formula may result in a negative figure thereby entitling the worker to no weekly payment under those provisions;

3. that the application of the relevant formula under ss 36-38 yields a nil or negative result does not preclude the entitlement of a totally or partially incapacitated worker to weekly payments under s 38A;

4. a contrary construction (as proposed by the STA) would defeat the stated objects of the amendments made by the 2015 Act;

5. there was no warrant for a construction of s 38A that included taking into account the worker’s actual earnings; once total or partial incapacity is established, an entitlement to compensation in accordance with s 38A arises;

6. although the arbitrator found that Mr Hee had returned to his “full pre-injury duties”, that was not a finding that he had returned to his “pre-injury employment” within the definition of “current work capacity”; the President was in error in [147] when he said that the effect of the arbitrator’s factual findings confirm that Mr Hee is able to return to his pre-injury employment;

7. the arbitrator never determined whether Mr Hee’s return to work involved a loss of overtime, and, accordingly, never determined whether he was “not able to return to his pre-injury employment” as required in order to determine whether he was “a worker with current [that is, diminished] work capacity”;

8. the President failed to determine whether the arbitrator was in error “in fact, law or discretion” in failing to address Mr Hee’s claim to partial incapacity;

9. the failure of the President to make that determination was an error in point of law.

Reference was made to the Second Reading Speech of the Minister set out above.

156. Counsel for Mr Hee did not shrink from the consequences of the construction advanced; on that construction, a partially incapacitated worker whose loss of income was small (say, $1 per week) would, under s 38A, be entitled to payment of $788.32 per week – in addition to his or her actual earnings. Counsel also accepted that anomalies will arise on either interpretation of s 38A.

157. The STA’s position was that Mr Hee had returned to his pre-injury employment, as found by the arbitrator, and he therefore was not a worker “with current [that is, diminished] work capacity”. This argument equated “pre-injury employment” with “pre-injury duties”. In taking this position, the STA expressly accepted that Mr Hee did, within the meaning of s 33, suffer “partial incapacity”.

Discussion

158. Although the grounds of appeal to this Court are framed as disparate errors, the essence of the appeal is that neither the arbitrator nor the President addressed the case Mr Hee sought to make in each proceeding; the arbitrator erroneously failed to make the necessary findings of fact to do so, and the President failed to correct those errors. And the President misconstrued the finding of the arbitrator with respect to whether Mr Hee met the definition of “worker with current work capacity” by failing to appreciate the difference between the finding that Mr Hee had returned to his full pre-injury duties, and a finding (which should have been, but was not, made) as to whether Mr Hee had returned to his pre-injury employment.

159. As indicated above, the case Mr Hee sought to make was that s 33 provides a direct route, where total or partial incapacity is established, to compensation under s 38A. It is not necessary, on that argument, in order to entitle an injured worker to compensation under s 38A, to establish that an amount is “payable” under ss 36, 37 or 38. It is sufficient to establish that the worker is within one of the categories for which ss 36, 37 and 38 provide. In this case, Mr Hee claimed to be, within s 37(2), “an injured worker with current [that is, diminished] work capacity [who] has returned to work for not less than 15 hours per week …”. It is immaterial that the application of the s 37(2) formula yielded a negative amount. By s 35(2) that negative amount was to be treated as “zero”, and allowed the pathway into s 38A.

160. The case advanced on behalf of Mr Hee called for a factual determination, under s 33, of whether he was partially incapacitated for work, as that term is ordinarily understood – that is, whether he had:

reduced physical capacity, by reason of physical [or, I would add, psychological] disability, for actually doing work in the labour market in which he was working or might reasonably be expected to work.

That, in turn, depended on whether he had shown that he was not able to return to his “pre-injury employment” (as required by the definition of “current work capacity”). It is at least arguable that the finding that Mr Hee had “resumed his full pre-injury duties” does not equate to a finding that he was “able to return to his pre-injury employment”. These questions were not addressed by the President.

161. In order to determine Mr Hee’s case, whether he was able to return to his pre-injury employment was an essential question of fact. That finding was also necessary for a determination whether Mr Hee had “current [that is, diminished] work capacity” in order to permit a quantification of any weekly amounts “payable” under s 37(2).

162. It appears to have been assumed by the arbitrator that, because Mr Hee had returned, essentially, to his pre-injury work regime, he had returned to his “pre-injury employment”. Contrary to the STA’s submissions, that was not the finding the arbitrator made. That finding was that Mr Hee had “resumed his full pre-injury duties”. The distinction is, in this case, significant. The arbitrator’s assumption failed to take into account Mr Hee’s claim that he was working less overtime than he had pre-injury, and had therefore not returned to his “pre-injury employment”. It is true that the arbitrator referred to the conflicting evidence concerning the amount of overtime which Mr Hee had worked pre-injury and post-injury, and gave indications that he held doubts about Mr Hee’s claims. But he did not make a clear finding rejecting Mr Hee’s claim. It was a critical finding, because the determination of whether Mr Hee had “current [diminished] work capacity” depended on it. In failing to address the case Mr Hee sought to make, the arbitrator at least failed to accord natural justice: Dranichnikov v Minister for Immigration [2003] HCA 26; (2003) 77 ALJR 1088 at [24]; AAI Ltd t/as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229; that failure constituted a constructive failure to exercise jurisdiction: Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105 at [39]. The same error infected the decision of the President.

163. At the risk of repetition, the case advanced on behalf of Mr Hee before both the arbitrator and the President involved the following steps:

1. by reason of his inability to undertake the same amount of overtime work as prior to his injury, Mr Hee had diminished work capacity;

2. he was therefore unable to return to his “pre-injury employment” and thus had “current [that is, diminished] work capacity” as defined;

3. his current [diminished] work capacity meant that he was, within s 33, partially incapacitated for work;

4. his partial incapacity meant that, pursuant to s 33, he was entitled to a weekly payment during the incapacity;

5. the arbitrator was obliged to make a determination whether he had current [diminished] work capacity – that is, whether he was able to return to his pre-injury employment;

6. because he was in the “second entitlement period” and had returned to work for not less than 15 hours per week, his entitlement was to be assessed under s 37(2);

7. application of the formula prescribed in s 37(2) resulted in a nil or negative amount of weekly compensation payable;

8. a nil or negative amount of weekly payments of compensation was, nevertheless, an “amount payable” for the purposes of s 38A;

9. the “amount payable” was less than $788.32;

10. he was therefore entitled, under s 38A, to weekly payments of $788.32.

That is the case that was not addressed. The failure to address it was an error in point of law.

164. However, that is not the end of the appeal. By s 353(2) of the WIM Act, this Court has power to remit the matter to the Commission constituted by a Presidential member for determination in accordance with any decision of this Court.

165. The ultimate question is the proper construction of s 38A. Unless the construction advanced by Mr Hee is correct, there is no utility in remitting the matter to the Commission. That is because it is accepted on all sides that, on the application of the formula prescribed by s 37(2), no amount would be “payable” to Mr Hee under that subsection. If, as he asserts, an amount of “zero” is an “amount payable”, then, if it is found that he had “current [that is, diminished] work capacity”, the Commission would be obliged to determine in his favour that he was entitled to a weekly payment of $788.32, regardless of his current earnings. If, on the other hand, the construction adopted by the President is correct, then, even if he is found to be a “worker who has current [diminished] work capacity”, s 38A does not operate to entitle him to payment. That is because there is no amount of weekly payments “payable” under s 37(2).

166. As the judgment of White JA demonstrates, either construction is apt to give rise to anomalies. In some respects, Mr Hee’s argument is an unattractive one. If his construction of s 38A is correct, he will be the recipient of an unwarranted windfall – $788.32 per week, in addition to his current weekly earnings, in circumstances where his loss of income is not such as to entitle him to any payment under s 37(2).

167. If, on the other hand, the President’s construction (adopted by the STA) is correct, the very workers who, according to the Minister, were intended to benefit from the provision, will not.

168. The words in the Explanatory note and the Minister’s Second Reading Speech are a powerful indicator that the intention was to create an entitlement that took into account post-injury earnings of the claimant worker. Those words were not enacted. The task of this Court is to construe the legislation as it is enacted. The literal construction of s 38A is as contended for on behalf of Mr Hee. The words omitted cannot be inserted by judicial decree.

169. An alternative approach is to treat s 33 as a prelude to ss 36-38, which sections then amplify the entitlement and specify the method of calculation of the payments contemplated by s 33. But to adopt that construction would be to read into s 33 words that the legislature did not enact.

170. The conundrum in this debate is the meaning of s 35(2) which is, to say the least, obscure. Section 35(2) does not provide that “zero” is an “amount”. It deals with amounts that are less than zero which are then to be treated as “zero”. In fact, that is precisely what the application of the s 37(2) formula to Mr Hee’s pre- and post-injury earnings yields. By reason of s 35(2), Mr Hee’s entitlement is to be treated as “zero”. That is the amount payable under s 37(2), and the amount to be taken into account for s 38A purposes.

171. I appreciate that this result may well not be what the legislature intended. It is the consequence of what it enacted.

172. This construction to which I have come is not to be treated as any conclusion that Mr Hee is entitled to payment under s 38A. That, as indicated above, will depend on findings of fact not yet made. The analysis has been necessary to determine what order should be made following the conclusion that neither the arbitrator nor the President addressed the case advanced on behalf of Mr Hee, and that the necessary fact finding exercise was not undertaken.

173. With some hesitation, I have come to the conclusion that the orders proposed by White JA ought to be made.

**********

Endnote

Decision last updated: 17 July 2019