Ly v HealthShare NSW
[2021] NSWPIC 400
•8 October 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Ly v HealthShare NSW [2021] NSWPIC 400 |
| APPLICANT: | Seak Liv (Vivian) Ly |
| RESPONDENT: | HealthShare NSW |
| MEMBER: | Michael Wright |
| DATE OF DECISION: | 8 October 2021 |
| CATCHWORDS: | WORKERS COMPENSATION - Provisional payments of weekly compensation for psychological injury; statutory interpretation of section 267 of the Workplace Injury Management and Workers Compensation Act 1998, part 2 of the Workers Compensation Guidelines and section 11A of the Workers Compensation Act 1987; what constitutes a “reasonable excuse” of an injury not being work related for the purpose of commencing provisional payments; Held - a section 11A defence does not constitute a reasonable excuse for the injury not being work related as it is a separate causal matter after a relevant injury is established as being work related. |
| DETERMINATIONS MADE: | 1. The respondent is to pay the applicant provisional payments of weekly compensation pursuant to section 36 of the Workers Compensation Act 1987 for the period 20 May 2021 to 5 July 2021. 2. Liberty to apply in respect of a calculation of pre-injury average weekly earnings and the rate of weekly compensation to be paid for the above period. |
STATEMENT OF REASONS
BACKGROUND
This is an application by Ms Seak Liv (Vivian) Ly (the applicant) for payment of provisional payments of weekly compensation as a result of psychological injury deemed to have happened on 20 May 2021 in the course of employment with HealthShare NSW (the respondent).
PROCEDURE BEFORE THE COMMISSION
At the conciliation/arbitration of this matter on 7 September 2021, the applicant was represented by Mr Tanner of counsel, instructed by Mr Brennan, solicitor, and the respondent by Ms Goodman of Counsel, instructed by Ms Blackman, solicitor.
The issue in dispute was whether the applicant is entitled to provisional payments of weekly compensation for the period 20 May 2021 to 5 July 2021. The parties did not agree as to pre-injury average weekly earnings (PIAWE). The applicant said PIAWE was $848.74 and the respondent said it was $766.53. There was no wage information before me. There was no dispute as to incapacity and no submissions in that regard. There was no dispute that the applicant sustained psychological injury and there were also no submissions in that regard.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
EVIDENCE
Documentary evidence
The following documents were in evidence before the Commission and considered in making this determination:
(a) Application for Expedited Assessment and attached documents, and
(b) Reply and attached documents.
Oral evidence
There was no application to give oral evidence or to cross examine the applicant.
Other documents
Attached to the reply was a document headed “QBE Connect First Contact Notification”, completed by “Barry Denny”, whose relationship with the applicant was not identified
and who was also not identified other than with an email address “[email protected]”. The date of injury was given as 9 February 2021 and the date of notification to the employer was given as 7 April 2021. “Allegations of misconduct” was given as the response to the question as to how the injury occurred. The injury was described as “depression and anxiety”. This document was not signed, although that is not significant for these purposes. The document was marked as being received by QBE on 2 June 2021.Also attached to the reply were two Certificates of Capacity issued by Dr Wood dated 7 April 2021 and 18 June 2021. Both certificates diagnosed “depression/anxiety related to allegations of accusation of misconduct unproved”. In response to a question as to how the injury was related to work, Dr Wood stated “accused at work”. Dr Wood certified the applicant as having no current capacity for any work for the periods 7 April 2021 to 5 May 2021, and 1 June 2021 to 8 July 2021. These certificates were marked as being received by QBE on 2 June 2021.
Also in evidence was a letter from the respondent to the applicant dated 27 May 2021 and headed “re: Final Decision”. The letter outlined a finding against the applicant and stated that this was a breach of certain sections of the relevant Code of Conduct. The “final decision” was to issue “a first and final warning for substantiated misconduct effective from the date of this letter”. The letter warned that any further substantiated instances of misconduct could result in disciplinary action including termination of employment. This letter was marked as received by QBE on 8 June 2021.
Other documents were in evidence, being a number of emails to the applicant from a supervisor or supervisors, which outlined steps taken with respect to a “PIP”, which I understand to mean a “Performance Improvement Plan” from March 2021 to a final PIP review on 20 May 2021, the latter date apparently being conducted on review of an email on “feedback on her progress” from the applicant dated 12 May 2021. The email dated 20 May 2021 referred to a “Final PIP Review” but elsewhere in the email referred to a “meeting”. I was unable to ascertain whether this was in fact a meeting with the applicant on 20 May 2021 as there was no record of attendance nor of what was said by the writer nor any response from the applicant, other than reliance being placed on the email from the applicant of 12 May 2021. Another document “Timeline – Vivian Ly”, authored by for named persons, related various dates and events commencing in February 2021 and ending on 20 May 2021 with what was described as a “final PIP meeting”. These documents were marked as being received by QBE on 8 June 2021.
In a letter dated 9 June 2021 to the applicant, the workers compensation insurer (QBE) stated:
“Please be advised that we will not be commencing provisional weekly payment of compensation for the following reason(s), pursuant to S.267(1) of the Workplace Injury Management and Workers Compensation Act 1998.
• Information provided to date indicates that the injury may not be related to employment.
QBE have been notified that there has been misconduct allegations and complaint regarding breach of privacy during the course of your employment with HealthShare. An investigation has taken place commencing in February 2021, where you were placed on a formal performance improvement plan. It is noted that you have taken annual Ieave and sick leave throughout this time and have consulted with Dr Wood. Dr Wood has provided a WorkCover Certificate of Capacity indicating you have no work capacity. At this stage, information provided to date indicates that your injury may have arisen from reasonable action taken by the employer. QBE require further information to determine liability for your claim. QBE may arrange a factual investigation to gather more information regarding the workplace allegations and process followed. An independent Medical examination may also be required to confirm the diagnosis and cause.”
In a letter dated 5 July 2021 the insurer gave notice to the applicant pursuant to section 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) that it disputed the applicant’s claim for compensation on the basis that her psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by the employer with respect to performance appraisal and/or discipline pursuant to section 11A of the Workers Compensation Act 1987 (the 1987 Act).
In subsequent email correspondence dated 9 July 2021 from QBE to the applicant’s solicitor, it was stated that “the claim was reasonably excused on the basis that evidence obtained at that time indicated that your client injury may have arisen from reasonable actions taken by the employer”. Reference is made in that email to the QBE connector first contact notification noted above, the certificates of capacity noted above, and the timeline of events provided by the employer, also noted above.
In further subsequent email correspondence from the solicitor for the insurer to the solicitor for the applicant dated 16 July 2021, reference was made to the relevant provision of Table 2.1 (see below), and it was argued that both of the dot points in that provision applied in this case where evidence strongly indicates that any psychological injury sustained by the applicant was not compensable due to the operation of section 11A of the 1987 Act.
Submissions and reasons
Section 267 of the 1998 Act relevantly provides:
“267 Duty to commence weekly payments following initial notification of injury
(1) Provisional weekly payments of compensation by an insurer are to commence within 7 days after initial notification to the insurer of an injury to a worker, unless the insurer has a reasonable excuse for not commencing those weekly payments.
(2) A person does not have a reasonable excuse for not commencing those weekly payments unless the person has an excuse that the Workers Compensation Guidelines provide is a reasonable excuse…”
The Workers Compensation Guidelines (the Guidelines) were issued by the State Insurance Regulatory Authority and commenced on 1 March 2021. Part 2 of the Guidelines deals with “provisional liability”. Part 2.1 of the Guidelines is headed “Delaying provisional weekly payments”. It states that “section 267 (2) of the 1998 Act “allows the Guidelines to define what a ‘reasonable excuse’ may be”. The Guidelines in Part 2.1 then set out “Table 2.1 Reasonable excuses for not starting provisional weekly payments”.
Table 2.1 is a table with two columns. The first column is headed “Excuse” and the second, “Reason”. There are seven items listed in the “Excuse” column. They are “there is insufficient medical information”; “the injured person is unlikely to be a worker”; “the insurer is unable to contact the worker”; “the worker refuses access to information”; “the injury is not work-related”; “there is no requirement for weekly payments”; and “the injury is notified after two months”. Both parties’ submissions were directed to the item “the injury is not work-related”, which was the excuse provided by QBE in the letter dated 9 June 2021.
Table 2.1 relevantly provides:
“The insurer has a reasonable excuse for not starting provisional weekly payments if any of the following apply:
Excuse Reason … … The injury is not work related
The insurer has information that:
· the worker did not receive an injury which is compensable under the NSW workers compensation law, or
· strongly indicates that compensation for an injury may not be payable under NSW workers compensation law.
If the employer believes the injury is not work-related, they are to provide the insurer with any supporting evidence they have, such as:
· medical information that the condition already existed and has not been aggravated by work
· factual information that the injury did not arise from or during employment
Note: Suspicion, innuendo, anecdotes or unsupported information from any source, including the employer, is not acceptable.
… …”
The above excerpt from Table 2.1 is one of seven excuses listed.
Section 11A of the 1987 Act provides:
“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.
(3) A psychological injury is an injury (as defined in section 4) that is a psychological or psychiatric disorder. The term extends to include the physiological effect of such a disorder on the nervous system.
(4) This section does not affect any entitlement to compensation under this Act for an injury of a physical nature even if the injury is a physical symptom or effect of a psychological injury, so long as the injury is not merely a physiological effect on the nervous system.
(5) (Repealed)
(6) This section does not extend the definition of injury in section 4. In particular, this section does not affect the requirement in section 4 that a disease is not an injury unless it is contracted by the worker in the course of employment.
This section does not affect section 9A (No compensation payable unless employment substantial contributing factor to injury) …”
In summary, the respondent submitted that at the time of its letter dated 9 June 2021, the insurer had information which strongly indicated that compensation may not have been payable to the applicant. It was submitted that at that time the insurer had information that the applicant’s injury was caused by allegations of misconduct and that she was or had been on a PIP and that there had been an investigation which found the allegation of misconduct had been substantiated and the applicant had been given a first and final warning. The insurer also had at that time medical certificates certifying the applicant unfit for work as a result of depression or anxiety related to allegations of accusation of misconduct “unproved”.
The respondent also submitted that these matters also strongly point to the applicant’s injury not being compensable under New South Wales Workers Compensation law.
The respondent further submitted that section 11A is included as a reasonable excuse in both dot points of the reasons in Table 2.1. It was submitted that the insurer had information that the applicant did not receive an injury which was compensable under the NSW Workers Compensation legislation, as the applicant had engaged in misconduct and was the subject of a PIP. Also relied upon in submissions by the respondent were documents referred to above, being the letter of the respondent dated 27 May 2021, the “Timeline” and the email correspondence. It was submitted that this was information provided by the employer and considered by the insurer within the required statutory timeframe.
It was also submitted that the insurer had information that compensation for the injury may not be payable, that is even if it is accepted that the applicant suffered an injury in accordance with sections 4 and 9A of the 1987 Act, as compensation may not be payable because the application of section 11A. It was argued that the second dot point does not require that compensation will not be payable, rather it requires only that information available to the insurer strongly indicates that compensation may not be payable and therefore section 11A is clearly envisaged as a reasonable excuse.
The respondent also submitted that as the insurer had now served a notice pursuant to section 78 disputing the claim, the matter ought to be referred to the Commission for determination of the whole claim, rather than for this issue as to whether or not there was a reasonable excuse for not making provisional payments.
In summary, the applicant submitted that the respondent’s submissions were incompatible with the plain language of the 1998 Act and the Guidelines. The complaints made by the employer, it was submitted, were allegations of work-related matters which manifested a contradiction between the excuse given in the letter of 9 June 2021 and the substance of what caused the injury to the applicant.
The applicant submitted that there was no dispute as to injury, notwithstanding the reliance by the respondent on documents showing that the employer had cause to engage in a performance appraisal. It was submitted that a section 11A case is not what is required for the determination of this matter, as all that is required is consideration of whether the injury is work-related. The applicant submitted that the insurer’s email of 9 July 2021 provided a different reason to that of the letter of 9 June 2021, in which the insurer did not state the injury was not work-related, but instead stated that it may have arisen from reasonable action taken by the employer. The correspondence of 16 July 2021, it was submitted, then moved to the position that the injury is not work-related as it is not compensable due to the operation of section 11A.
The applicant submitted that by the respondent relying on the examples suggested in the content on the right-hand side of Table 2.1, it was effectively creating an excuse which does not appear on the left-hand side.
The applicant submitted that instead what is required is that each of the examples in the right-hand side of Table 2.1 should be read as being subordinate to the categories in the left-hand side of the table. It was submitted that the examples in the right-hand side are designed to assist in understanding the category on the left-hand side.
The applicant in submissions gave a number of examples in which an injury is not work-related. It was submitted that for a section 4(a) frank injury, the insurer’s evidence may be that the injury took place at home or elsewhere. For a section 4(b) disease or aggravation of disease injury, there may be information that the disease was not contracted arising out of or in the course of employment. Similarly, the provisions in respect of journey claims in section 10 may apply and in respect of recess claims in section 11. It was submitted that these and others are all examples of where an injury may not be work-related. It was submitted that in this case, the injury is explicitly work related and it cannot be considered that section 11A events lie within the excuses of the left-hand column of Table 2.1.
It was also submitted by the applicant that section 11A is a defence in respect of which the respondent bears the onus. It was submitted that this is the kind of defence which the employer should run and satisfy its onus, otherwise it could be asserted at the commencement of a claim to avoid a scheme which is premised on the idea of providing prompt compensation for workers pending investigation of the matter.
In my view, part 2 of the Guidelines may be viewed has the effect of a form of delegated legislation. The Guidelines must be published in the Gazette (section 376(5) of the 1987 Act). This differs from the Workers Compensation Guidelines that relate to the assessment of the degree of permanent impairment of an injured worker as a result of an injury, which must be laid before each House of Parliament (section 377 of the 1987 Act and section 40 of the Interpretation Act), and which have been characterised as having the effect of delegated legislation[1]. Nevertheless, in my view part 2 of the Guidelines is also legislative in effect, in terms of setting the content of the law as a declaration of limited exceptions to the duty to commence provisional weekly benefits[2]. Part 2 has also been delegated by parliament to be made by the Authority (SIRA) (
ssection 267(2))[3].[1] Ballas v Department of Education (State of NSW) [2020] NSWCA 86 at 97, discussing Kolundzic v Quickflex Constructions Pty Ltd [2014] NSWSC 1523 at [25]-[28].
[2] Commonwealth v Grunseit (1943) 67 CLR 58 at 82.
[3] Pearce, D, Argument, S, Delegated Legislation in Australia, 2012, p 1.
The context for the interpretation of part 2 of the Guidelines is the 1998 Act. That is, the context is to give effect to the intention of the 1998 Act and to specify what excuse is to be regarded as a reasonable excuse for the purpose of section 267(1) of the 1998 Act. As was stated by the High Court[4]:
‘The appropriate enquiry in the construction of delegated legislation is directed to the text, context and purpose of the regulation, the discernment of relevant constructional choices, if they exist, and the determination of the construction that, according to established rules of interpretation, best serves the statutory purposes’ (at [28]).”
[4] ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18.
The applicant submitted that the premise of the statutory scheme, that is the making of provisional weekly payments, is to provide prompt compensation pending any investigation of the matter. In my view, the purpose of payment of prompt compensation can be discerned from the 1998 Act. Section 267 is located within Division 1, which has the heading “Special provisions for commencement of weekly payments after initial notification of injury”, which in turn is located within Part 3 “Dealing with claims”. Headings to Parts and Divisions are part of the 1998 Act[5]. Section 267 is headed “Duty to commence weekly payments following initial notification of injury”. The heading of section 267 is not part of the 1998 Act[6], although it may be considered in interpreting section 267 and a statutory rule made under the 1998 Act[7]. While Part 2 of the Guidelines is not a statutory rule[8], for the purpose of interpreting Part 2 within the context of the 1998 Act, regard should be had to the heading of section 267.
[5] Interpretation Act s 35(1).
[6] Interpretation Act s 35(2).
[7] Interpretation Act s 34(2)(a).
[8] Interpretation Act s 39(1).
Section 267(1) requires commencement of payments within 7 days unless there is a reasonable excuse. Section 267(4) provides that “the acceptance of liability on a provisional basis does not constitute an admission of liability by the employer or insurer under this Act or independently of this Act”. These sections in my view lend weight to view that the statutory context is the duty of the insurer to commence prompt payment of weekly payments on a provisional basis pending investigation of the matter, unless there is a reasonable excuse. I accept the applicant’s submissions in this regard.
The phrase “work related” is not defined in the 1987 Act or in the 1998 Act, nor in the Workers Compensation Regulation 2016, although the phrase is used in Part 2 of that regulation in relation to diseases which are taken to be work related. In my view, the plain meaning of the “the injury is not work related” is that the injury claimed does not have the required relationship with employment, and the required relationship with employment is found in the 1987 Act, in sections such as section 4.
In my view, the right hand column headed “Reason” should be read in its entirety. That is, the part of the right hand column commencing “the insurer has reason that…” should be read having regard to the next section “If the employer believes the injury is not work-related, they are to provide the insurer with any supporting evidence they have…” While the provision of evidence by the employer is not a prerequisite for the insurer to have information that the worker did not receive a compensable injury, or is the basis for the required strong indication, nonetheless the categories of supporting evidence that the employer may provide is in my view an indication of what the “reason” column is directing itself towards, that is a consideration of whether there is medical information or factual information that the injury did not arise from (or was aggravated) or during employment. This medical or factual information is in my view the basis for the consideration of the relationship of the injury to work, as the necessary first step in establishing a claim for provisional payments, as distinct from the subsequent consideration of the characterisation and level of causal connection of any action taken by the employer, as discussed below.
This interpretation is, in my view, in accordance with the left hand column, “Excuse”, and seems to me to fit squarely within what should be regarded as a medical or factual basis for considering that an injury is not work related. This in turn is my view in keeping with the statutory context of prompt payment of weekly compensation on a provisional basis pending investigation. It seems to me that the argument advanced by the insurer pushes outward the boundary of the consideration of whether an injury is work related. In my view the meaning or content of whether an injury is work related comes from the statutory context, that is the provisions of the 1987 Act, such as sections 4 and 9 to 11, and also the 1998 Act, such as section 4. In my view, the reasonable excuse that an injury is ”not work related” must be within the meaning of these provisions of the legislation, that is there must be a relationship between injury and employment as provided by these sections of the legislation. In my view, the “reason” provided by part 2 of the Guidelines must come within the meaning of the “excuse”, rather than seeking to expand the meaning of what is not work related.
The interpretation advanced by the insurer is that, in summary, if information that a section 11A defence is available to the effect that the applicant did not receive a compensable injury or it is strongly indicated that compensation for the injury may not be payable, then the applicant’s injury is not work related within the meaning of the reasonable excuse. This in my view conflates the provision of section 11A with the injury provisions referred to by the applicant. Essentially, the reasonable excuse that the injury is not work related requires evidence that causation, or the requisite relationship with employment, is not established, at least at the time of the reasonable excuse, within the meaning of section 4 or other provisions such as sections 10 or 11. Section 11A(1) provides for an additional test of causation, with the onus of proof on the employer. In the case of a section 4(a) or (b) injury, as is the case here, it has been found in the Workers Compensation Commission that injury within the meaning of section 4 must first be proved separate to the section 11A causation requirement. It was stated that:
“It should be noted, for the sake of completeness, that the appellant’s submission that the Arbitrator conflated the tests pursuant to ss 4(b) and 11A(1) is also correct. In a case where s 11A(1) of the 1987 Act is raised as a defence, it is necessary that the issue of whether a worker has proved ‘injury’, within the meaning of s 4, be dealt with initially. It is only if ‘injury’ is established, that it is then necessary to consider whether s 11A(1) provides the employer with a defence (see Manly Pacific International Hotel v Doyle [1999] NSWCA 465; 19 NSWCCR 181 at [4]). In a claim involving the ‘disease’ provisions of the legislation, the test to establish injury (whether or not the 2012 Amending Act applies) is different to the causation issue requiring determination in s 11A(1). There were occasions, in the Arbitrator’s reasons dealing with ‘injury’, where he interspersed references to whether various events, potentially relevant to ‘injury’, might be subject to the provisions of s 11A in any event (see the reasons at [230], [242], [256] and [299]). The two issues, ‘injury’ and the causation test in s 11A(1), are different, and need to be considered separately. The appellant’s submission at [28] of its submissions is correct.[9]”
[9] Flanagan v NSW Police Force [2017] NSWWCCPD 33 at [81]
Section 11A(3) in my view does not assist the employer in this case. It defines psychological injury for the purposes of section 11A, but with reference to injury as defined in section 4.
The respondent’s submissions may also imply that both columns of Table 2.1 are to be read together to provide the meaning or content of the specified reasonable excuse, thereby permitting a reasonable excuse to be derived from the section 11A(1) defence, insofar as it is argued that injury is not compensable or may not be payable due the provision of section 11A(1). Thus, the left column provides the excuse and the right column outlines what may be regarded as reasonable. Another approach is that both columns of Table 2.1 provide the reasonable excuse. However, in my view both these approaches are still subject to the statutory context outlined above. Moreover, both approaches conflate the provisions of the 1987 Act which require the necessary relationship with employment, such as section 4, and the defence of section 11A(1), as discussed above.
In my view, the description by Dr Wood of injury in the Certificates of Capacity in this matter as “allegations of misconduct (unproved)” and of the relationship to work as “accusations at work” are sufficient to establish the first causal element of the injury being related to work. However, these certificates, together with the employer’s correspondence to the applicant as well as the timeline or chronology, and emails, insofar as they may also be considered in a separate section 11A issue, in my view constitute matters which relate to the separate causal enquiry of a section 11A defence, and hence are not within the enquiry of whether an injury is work related for the purpose of provisional payments of weekly compensation.
I also do not accept the respondent’s submission that this matter should be referred for the determination of a liability dispute in respect of the section 78 notice issued by the insurer. In my view, such an approach would be contrary to the statutory context identified above. The dispute before me was referred to me as a member of the Commission for determination.
I find that the applicant is entitled to payment by the respondent of provisional payments of weekly compensation. There is insufficient information before me to determine PIAWE and the rate of weekly compensation. Incapacity was not in dispute in these proceedings. Liberty to apply in respect of PIAWE and the rate of weekly compensation for the relevant period.
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