Melides v Meat Carter Pty Limited
[2019] NSWWCCPD 48
•10 September 2019
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| Status: Appeal to the Court of Appeal allowed – Meat Carter Pty Ltd v Melides [2020] NSWCA 307 | ||
| CITATION: | Melides v Meat Carter Pty Limited [2019] NSWWCCPD 48 | |
| APPELLANT: | Steven Melides | |
| RESPONDENT: | Meat Carter Pty Limited | |
| INSURER: | Allianz Australia Workers Compensation (NSW) Ltd | |
| FILE NUMBER: | A1-6032/18 | |
| ARBITRATOR: | Mr A Scarcella | |
| DATE OF ARBITRATOR’S DECISION: | 26 February 2019 | |
| DATE OF APPEAL DECISION: | 10 September 2019 | |
| SUBJECT MATTER OF DECISION: | Construction of s 38A of the Workers Compensation Act 1987, “determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision”: Hee v State Transit Authority of New South Wales [2019] NSWCA 175 applied; RSM Building Services Pty Limited v Hochbaum [2019] NSWWCCPD 15 distinguished | |
| PRESIDENTIAL MEMBER: | Acting Deputy President Geoffrey Parker SC | |
| HEARING: | On the papers | |
| REPRESENTATION: | Appellant: | Peninsula Law |
| Respondent: | Stiles Lawyers | |
ORDERS MADE ON APPEAL: | 1. The Orders of the Arbitrator made 26 February 2019 are revoked. | |
| 2. The respondent to the appeal is to pay to the appellant weekly compensation at the rate prescribed by s 38A of the Workers Compensation Act 1987 from 14 August 2014 to 8 July 2017, with credit to be given for weekly payments of compensation between 14 August 2014 and 8 July 2017. | ||
INTRODUCTION
This is an appeal pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act1998 (the 1998 Act) against a decision of the Workers Compensation Commission constituted by an Arbitrator dated 26 February 2019.
THE DECISION UNDER APPEAL
The Certificate of Determination dated 26 February 2019 records the Arbitrator’s Orders as follows:
“The Commission orders:
9. The orders sought by the applicant for weekly benefits at the rates provided under section 38A of the Workers Compensation Act 1987 from 14 August 2014 to 8 June 2017 or in the alternative, from 2 November 2016 to 8 June 2017 are declined.”
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
I note that the appellant, Mr Melides, has sought an oral hearing, this is opposed by the respondent employer.
In addition to the parties’ written submissions in support and opposition of the appeal, further written submissions were filed by the appellant and respondent pursuant to a Direction issued on 13 August 2019.
In the circumstances, I am satisfied that I have sufficient information to proceed “on the papers” without holding any conference or formal hearing and that this is an appropriate course in the circumstances.
The parties are agreed that the amount of compensation in issue exceeds the threshold specified in s 352(3) of the 1998 Act.
The appeal was filed on 26 March 2019 and has been commenced within the time limited by s 352(4) of the 1998 Act.
NATURE OF THE APPEAL
Section 352(5) of the 1998 Act confers the following jurisdiction:
“(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.”
GROUNDS OF APPEAL
The Grounds of Appeal are:
(a) The Arbitrator erred when he found that the entitlement pursuant to s 38A did not commence until the date of the issue of the Medical Assessment Certificate (Ground 1).
(b) The Arbitrator erred when he considered that the requirements of paragraph (a) of the definition of worker with highest needs was satisfied when there had been an assessment by an Approved Medical Specialist on referral from the Commission (Ground 2).
(c) The Arbitrator erred when he declined to infer that the respondent had made an assessment of the worker’s capacity in circumstances where it had continued to pay weekly compensation (Ground 3).
(d) The Arbitrator erred when he failed to make an order for the payment of compensation (Ground 4).
BACKGROUND FACTS
The facts as found by the Arbitrator are not challenged.
Meat Carter Pty Limited employed Mr Melides as a casual driver.
On 14 August 2014, Mr Melides contracted Q Fever. He subsequently developed a consequential psychological condition.
On 14 December 2015, the Commission issued a Certificate of Determination:
“1. That the respondent pay the applicant weekly compensation as follows:
(a)$277.58 a week pursuant to s 36 from 29 October 2014 to 12 November 2014;
(b)$233.75 a week pursuant to s 37 from 13 November 2014 to 14 December 2015.
2. That there be an award for the respondent for any claims for weekly compensation after 14 December 2015.
3. That the respondent pay the applicant’s expenses incurred to date for treatment that is reasonably necessary as a result of the injury upon production of accounts, receipts and/or medicate [sic] charge.”
The appellant was paid weekly benefits at the rate of $233.75 from 15 December 2015 to 7 July 2017.
On 3 November 2016 Dr Mark Burns, Occupational Physician, assessed Mr Melides as having a 31% whole person impairment.
On 9 June 2017 Associate Professor Haber, Approved Medical Specialist (AMS), issued a Medical Assessment Certificate assessing Mr Melides’ whole person impairment at 60%.
On 4 July 2017, the respondent lodged an Application to Appeal the Decision of the AMS.
On 24 July 2017, the appellant lodged a Notice of Opposition to Appeal Against the Decision of the AMS.
On 17 August 2017 a delegate of the Registrar made an order as follows:
“28. As I am not satisfied that at least one of the grounds of appeal as specified in s 327(3) has been made out, the appeal is not to proceed.” (cf. par [8] of the Arbitrator’s Statement of Reasons.[1])
[1] Melides v Meat Carter Pty Limited [2019] NSWWCC 81.
On 21 September 2017, the Commission issued a Certificate of Determination ordering that the appellant receive $162,250 in respect of a 60% permanent impairment resulting from injury on 14August 2014.
From 8 July 2017, the employer has paid weekly benefits to Mr Melides at the s 38A rate.
On 15 August 2018, Mr Melides requested payment of the arrears of weekly benefits at the s 38A rate from the date of injury on 14 August 2014 to 7 July 2017.
On 29 August 2018, the respondent employer disputed Mr Melides’ entitlement to weekly benefits at the s 38A rate prior to the date on which he was confirmed as a worker with highest needs.
GROUND 1: The Arbitrator erred when he found that the entitlement pursuant to s 38A did not commence until the date of the issue of the Medical Assessment Certificate
GROUND 2: The Arbitrator erred when he considered that the requirements of paragraph (a) of the definition of worker with highest needs was only satisfied when there had been an assessment by an Approved Medical Specialist on referral from the Commission
The findings relevant to these grounds of appeal are:
“95. I reject Mr Melides’ submission that his entitlement to the s 38A rate vests upon the happening of the injury. Mr Melides’ references to the cases relating to s 66 of the 1987 Act (Horne) and the cases related to the payment of interest in respect of permanent impairment claims are not relevant when one considers a proper reading of the s 32A definition of a worker with highest needs referred to below. The entitling factor to the special provision under s 38A of the 1987 Act is an assessment in excess of 30% whole person impairment in accordance with the definition of worker with highest needs in s 32A of the 1987 Act.
96. … A proper reading of sub-paragraph (a) of the s 32A definition of worker with highest needs results in the conclusion that the entitlement to weekly compensation at the s 38A rates, as adjusted, commences at the time the worker ‘has been assessed’ with a permanent impairment in excess of 30% whole person impairment. In this case, that occurred once Mr Melides had been assessed by AMS Associate Professor Haber and the Medical Assessment Certificate issued. Pursuant to s 326(1) of the 1998 Act, the Medical Assessment Certificate of AMS Associate Professor Haber dated 9 June 2017 is conclusively presumed to be correct.
…
100. Whilst in both O’Donnell and Hee No 1 the reasoning relating to the commencement date of payments pursuant to s 38A of the 1987 Act were obiter and not binding on me, for the reasons referred to above, I agree with Senior Arbitrator McDonald’s reasoning in O’Donnell, which was subsequently supported by Senior Arbitrator Capel in Hee No 1.
101. Accordingly, I find that Mr Melides is entitled to payments of weekly compensation pursuant to s 38A of the 1987 Act from the date of the issue of the Medical Assessment Certificate on 9 June 2017 and not before that date.”
The reference to “O’Donnell” is a reference to the decision of O’Donnell v Abroandco Pty Limited;[2] and the reference to the decision of “Hee No 1” is a reference to the matter of Hee v State Transit Authority of New South Wales.[3]
[2] [2016] NSWWCC 129.
[3] [2017] NSWWCC 252 (Hee No 1), 27 October 2017.
Hee No 1 was decided by Senior Arbitrator Capel, Hee No 2 was a decision of Keating P.[4] Hee v State Transit Authority of New South Wales,[5] the appeal from the latter Presidential decision, was published after the parties made their initial submissions. For this reason the Direction of 13 August 2019 was made providing inter alia the parties with an opportunity to make submissions on the relevance of Hee No 3 to the present matter.
[4] Hee v State Transit Authority of New South Wales [2018] NSWWCCPD 6 (Hee No 2), 26 February 2018.
[5] [2019] NSWCA 175 (Hee No 3), 17 July 2019.
In support of ground 1 the appellant submits:
“3. It is well established in workers compensation that a worker’s entitlement to compensation vests upon the happening [of] injury.
…
6. … s 32A is a definition section. As such the section provides the means of identifying when each of the defined terms exists … S 32A does not create any entitlement but merely it defines various terms.
…
11. … The better view is that consistent with other authority, the worker has the vested rights of a worker with highest needs from the date of the injury. Section 32A merely refers to the mechanism by which that status is identified. This is exactly the same mechanism as is used to determine the extent of whole person impairment for the purposes of s 66. There is no warrant for treating the two matters differently.”
As to ground 2, the appellant submits:
“14. Section 32A(a) states that a worker is a worker with highest needs when the degree of permanent impairment has been assessed for the purposes of Division 4 as being more than 30%. This should be contrasted with Paragraph b which requires that it is an Approved Medical Specialist who has declined to make the assessment on the basis that maximum medical improvement has not been reached. The fact that b specifically refers to an Approved Medical Specialist and makes no reference at all to who has carried out an assessment means, applying the usual rules of statutory interpretation, that the two paragraphs have a different meaning. In order to give the definition the meaning as concluded by the Arbitrator, it is necessary to write the additional words ‘by an Approved Medical Specialist’ into the definition. There is no warrant for doing this.
…
23. The Arbitrator erred when he rejected the submission that the assessment by Dr Burns was an assessment sufficient to satisf[y] subparagraph (a) of the s 32A definition of worker with highest needs. The definition merely requires the impairment to be assessed. …
24. Even if contrary [to] the Appellant’s position, his entitlement pursuant to s 38A did not commence until he was assessed as having an impairment of greater than 30%, that assessment occurred on 3 November 2016.”
The crux of the respondent’s submission in relation to grounds 1 and 2 is to be found in the following paragraphs:
“15. The entitling factor to the special provisions under s 38A of the 1987 Act is an assessment in excess of 30% whole person impairment in accordance with the definition of worker with highest needs in s 32A of the 1987 Act. Further, there was a medical dispute between the appellant and the respondent within the meaning of s 319 of the 1998 Act enlivening the relevant processes referred to in Part 7 of the 1998 Act.
16. A proper reading of sub-paragraph (a) of the s 32A definition of worker with highest needs results in the conclusion that the entitlement to weekly compensation at the s 38A rates commences at the time the worker has been assessed with a permanent impairment in excess of 30% whole person impairment in accordance with Part 7 of Ch 7 by an Approved Medical Specialist. This occurred on 9 June 2017.
17. The appellant’s submissions that his entitlement to the [sic] section 38A vests upon the happening of the injury are entirely inconsistent with a plain reading of the workers compensation legislation taken as a whole.
…
20. The respondent’s construction of s 38A, set out above, gives it a future action, being payment at the rate prescribed by s 38A in respect of the past event of an assessment by an approved medical specialist of permanent impairment of more than 30% … It is a permissible construction that does not attract the prohibition against retrospectivity: ADCO Constructions Pty Limited v Goudappel (2014) 254 CLR 1 at [26].
21. The appellant’s submission that the past event of an assessment by an approved medical specialist of permanent impairment of more than 30% giving the worker highest needs, has the prior effect that the worker had highest needs from the time of moment of injury. Section 38A should not be construed to have this effect without clear language rebutting the presumption against retrospectivity. Had the legislature intended s 38A to apply to a time prior to an assessment of a degree of permanent impairment of more than 30% it could, and should, have signalled its intent so by clear words. No language rebutting the presumption against retrospectivity is found in s 38A. The appellant’s construction is an impermissible construction attracting the prohibition.
22. The appellant’s construction is also inconsistent with President Phillips’ approach to the proper construction of s 39 of the 1987 Act in RSM Building Services v Hochbaum [2019] NSWWCCPD 15 at [123]–[125]. The President found that subsection 39(2) was speaking in the present tense but that the Arbitrator at first instance had impermissibly given subsection 39(3) the effect of giving weekly compensation for a period prior to the relevant criterion in 39(2) being achieved.”
Without intending any disrespect I abbreviate the Appellant’s submissions in Reply as follows:
(a) Grounds 1 & 2;
(i)The Appellant reiterated the proposition that “the entitlement to permanent impairment [compensation] vests upon the happening of the injury and not when it is assessed by an AMS it would be inconsistent to interpret the definition of a worker with highest needs as only being satisfied when the assessment has been made by an AMS as part of the resolution of a medical dispute”.
(ii)The determination of weekly payments by the Commission will always involve some period of arrears meaning that it will make orders for the payment of compensation for a period prior to the date of making the order. Section 38A is no different.
(b) Ground 3 The respondent’s submission ignores the distinction between a work capacity assessment and a work capacity decision. Section 38 when it refers to being “assessed by the insurer” is referring to an assessment and not a decision. The work capacity decision does not happen until an assessment is applied to section 38 and a decision is made about compensation payable.
Construction of section 38A
In Adco Constructions v Goudappel[6] the High Court said when construing a regulation that the appropriate enquiry should be 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 purpose”.[7]
[6] [2014] HCA 18; 254 CLR 1 (Goudappel).
[7] Goudappel, [28].
A similar approach to the construction of s 38A is appropriate
It is necessary to identify the statutory context of the provision in the Workers Compensation Act 1987 (the 1987 Act).
Section 9 of the 1987 Act provides:
“(1) A worker who has received an injury (and in the case of the death of the worker his or her dependants) shall receive compensation from the worker’s employer in accordance with this Act.”
The right to receive and the obligation to pay compensation are determined by reference to receipt of an injury.
Division 2 of Pt 3 of the 1987 Act is entitled “Weekly compensation by way of income support.”
Section 32A provides interpretation for Pt 3 Div 2 and Sch 3.
Mr Melides is defined as a “worker with highest needs” because he satisfies the requirements of paragraph (a) of the definition in s 32A, which states as follows:
“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%.”
Section 33 provides for weekly compensation:
“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.”
Sections 34 to 42 quantify and qualify the entitlement to weekly compensation with respect to both duration and amount.
Before turning to the text of s 38A the following points may be made:
(a) Sections 36, 37, 38, 39 and 40, each make explicit reference to a temporal component. The Act is quite specific in defining that temporality. Section 38A does not contain any explicit temporal element.
(b) Section 38A is placed after the sections that define the amount of weekly payments to be made.
(c) It is followed by s 39(1), which provides that weekly compensation shall not be paid after 260 weeks. An exception is made where s 39(2) is satisfied.
(d) Sections 40 to 42 contain provisions whereby weekly payments may be adjusted to accommodate particular circumstances of the recipient.
Section 38A 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.
(2) If the amount specified in subsection (1) is varied by the 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.”
Section 38A operates from 4 December 2015.
The transitional provision for s 38A is contained in cl 9 of Pt 19I of Sch 6 to the 1987 Act. That provides:
“9 Weekly payments
(1) Section 38A of the 1987 Act extends to the determination of the compensation payable in respect of any period of incapacity occurring before the commencement of that section.
(2) The regulations may make provision for or with respect to the adjustment of the amount of weekly payments of compensation payable to an injured worker as a result of the operation of section 38A of the 1987 Act and this clause.
(3) Without limiting subclause (2), the regulations may prescribe the period within which any additional amount payable to an injured worker as a result of the adjustment is to be paid.”
A further transitional provision is contained in the Workers Compensation Regulation 2016 (the 2016 Regulation), clause 35 of Schedule 8 of the 2016 Regulation:
“35 Weekly payments – workers with highest needs
(1) Section 38A of the 1987 Act does not apply to the determination of the compensation payable in respect of any period of incapacity occurring before 17 September 2012.
(2) Section 38A of the 1987 Act does not apply to a worker whose pre-injury average weekly earnings have been deemed to be equal to the transitional amount for the purposes of the application under clause 9 or 10 of Part 19H of Schedule 6 to the 1987 Act of the weekly payments amendments (within the meaning of that Part) to the worker.”
The purpose of s 38A is to provide that in the case of a worker with highest needs the rate of weekly benefit payable is adjusted so that it does not fall below the prescribed minimum.
Section 38A is premised on the “determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision”.[8]
[8] Hee No 3, [31], [56].
Pursuant to the Direction issued on 13 August 2019, the appellant submitted that whilst the Court of Appeal decision in Hee No 3 did not directly consider the matters in issue in this appeal, the majority decisions are consistent with the proposition that the entitlement to the benefit of s 38A commences prior to any assessment of Whole Person Impairment by an Approved Medical Specialist. The respondent submitted that although the Court of Appeal considered s 38A, the decision is not on point in the current appeal because the Court was concerned with the issues of the construction and application of the phrases “current work capacity” in s 37 and the “amount of weekly payments under s 38A”.
In my view Hee No 3, provides considerable guidance to the correct construction of s 38A. Meagher JA said:
“[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 the earlier provisions, and then only to specify a minimum amount which is to be payable. …
[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 payments’ 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.”
Section 38A operates in the context of the determination made under ss 36, 37 and 38. Those provisions calculate the entitlement to weekly payments. The special payment under s 38A is substituted for the determined amount under those provisions. It follows that the entitlement to the special payment for workers with highest needs arises at the same time as the entitlement to weekly compensation under ss 36, 37 or 38 is determined. That date in my view is the date of injury.
In my view, dating the payment of the special benefit to commence from the date of injury accords with the purpose of s 38A to provide that workers with highest needs should receive a prescribed minimum payment. This purpose is not advanced by limiting the payment to a date after the medical assessment declares the worker to be a worker with “highest needs”. In the majority of cases a “worker with highest needs” is likely to have qualified as such from the date of injury even if the formal assessment of same does not occur until a later point of time.
The benefit paid under s 38A is substituted for the amount of weekly compensation determined under ss 36–38. It follows in my view that the entitlement arises at the same time as the entitlement under those sections. That in my view is the date of injury, in this case 14 August 2014.
Ground 1 of the appeal should be upheld. This conclusion disposes of the appeal in favour of the appellant.
However I provide additional reasons with respect to the respondent’s submission based on retrospectivity and the decision of the President in RSM Building Services v Hochbaum.[9]
[9] [2019] NSWWCCPD 15 (Hochbaum).
Retrospective Operation
I have set out above the transitional provision for s 38A and the 2016 Regulation. Section 38A operates from 4 December 2015.
In my view cl 9(1) of Pt 19I of Sch 6 to the 1987 Act is clear in its terms. It says that s 38A “extends” to the determination of compensation payable “in respect of any incapacity occurring before the commencement” of the section. The period 14 August 2014 to 4 December 2015 is such a period.
Any argument about retrospectivity derived from the common law must give way to express statutory provision.
Even if contrary to my view the transitional provision does not in express terms cover the present matter, I am against the respondent’s submission that the above construction gives a retrospective operation to s 38A for the following reasons.
Legislation only operates retrospectively if it provides that rights and obligations are changed with effect prior to the commencement of the legislation: DC Pearce and RS Geddes Statutory Interpretation in Australia 7th ed at page 323.
Section 38A does not operate in this manner. As discussed above, s 38A in my view operates on the determination made under ss 36, 37 or 38. Section 38A does not operate retrospectively to alter rights and obligations. The worker’s right to receive compensation and the employer’s obligation to pay arise at the “moment of happening of the ‘jurisdictional fact’ of injury. Quantification and precise calculation may take time. But the right is then ‘accrued and vested’”.[10]
[10] TNT Australia Pty Limited v Horne (1995) 36 NSWLR 630 at 39E; Ogden Industries Pty Limited v Lucas [1967] HCA 30; 116 CLR 537 at 550 and 572 (Ogden Industries).
In Ogden Industries the death was a necessary precondition to crystallise the entitlement. Compensation was paid for the loss to the dependants’ consequent on the death. The dependants’ rights and the death are separate from the injury to the worker and his rights under the Act. The compensable event is the death combined with the injury in the course of employment. There were two jurisdictional facts namely (1) injury to the worker; and (2) death leaving dependants.
In the present matter the singular jurisdictional fact is the occurrence of the injury. Determination of the worker as a worker with highest needs was merely a quantification of the entitlement that accrued and vested on the happening of the injury.
The passage from Goudappel at [26] referred to by the respondent was to the effect that characterisation of the clause there being considered as “retrospective” was a distraction. The High Court directed attention to the proper construction of the Workers Compensation Regulation 2010.[11]
[11] Goudappel, [28].
I reject the respondent’s submission that the operation of s 38A contended for by the appellant, with which I agree, is precluded by the principle against retrospective operation of legislation.
RSM Building Services Pty Limited v Hochbaum [2019] NSWWCCPD 15
The respondent submits that the appellant’s construction is inconsistent with President Phillips’ approach to the proper construction of s 39 of the 1987 Act in Hochbaum at [123] to [125].
For the reasons that follow I reject that submission.
The President held:
“147. Where the worker ceases to be paid weekly payments of compensation due to s 39(1), it is only if a worker has been assessed, for the purpose of s 65, to have a degree of permanent impairment of greater than 20%, that s 39(2) is engaged to determine whether the worker’s entitlement to weekly payments of compensation may be restored. The worker having undertaken the process of an assessment of permanent impairment as defined in s 39(3) and having achieved the criterion set out in s 39(2) is then relieved of the bar provided for in s 39(1). The bar is lifted at the point in time of the assessment of permanent impairment of greater than 20%. The phrase ‘[t]his section shall not apply’ set out in s 39(2) is dependent upon the completion of this process and the achievement of the criterion. The operation of s 39(2) is subject to the existence of an assessment of the degree of permanent impairment, as set out in s 39(2) when read with s 39(3). A worker’s entitlement to weekly compensation, beyond the aggregate period of 260 weeks remains dependent on satisfying the preconditions for payment of weekly compensation pursuant to s 38 of the 1987 Act. This is confirmed by the note to s 39(2).”
“151. Clearly the overall parliamentary intention in introducing s 39 was to bring an end to compensation payments after an aggregate period of 260 weeks. An exception is provided for a subset of workers who achieve a greater than 20% permanent impairment assessment (as defined and provided for). Looked at in this way, if section 39(2) is truly an excepting provision, it does not warrant a beneficial interpretation.”
Because s 39(1) is a disentitling provision, the worker requires an assessment of a permanent impairment in excess of 20% to become entitled to further weekly compensation. Absent such an assessment the bar imposed by s 39(1) remains in position. An assessment in excess of 20% is an essential precondition to continuing entitlement.
Section 38A is different. It is not a disentitling provision. Indeed, it depends on the worker having a determination that s/he is entitled to compensation under ss 36, 37 or 38 as the case may be. All s 38A does for a worker with highest needs is adjust the rate so that the weekly benefit paid does not fall below the prescribed minimum.
Section 38A proceeds on the premise that the worker has a “determination of the amount of weekly payments of compensation” to which he is entitled pursuant to ss 36, 37 and 38. In relation to that determination s 38A operates. When he became a worker with highest needs is of no concern. The only issue is whether or not he is in fact a worker with highest needs as defined by s 32A.
Section 39 provides that the worker is not entitled to further payments after 260 weeks unless and until s 39(2) is satisfied following the operation of s 39(3). The default position under s 39(1) is that no weekly payments of compensation are payable whilst the bar remains in position. The default position under s 38A is that weekly compensation is payable but it may need to be adjusted having regard to the s 38A requirement that the weekly payment not fall below the prescribed minimum.
The focus of s 38A is on the amount of weekly payments to be made. The focus of s 39 is whether any payments are to be made.
Unlike s 39(2) and (3), s 38A(2) is an indexation provision. Section 38A fulfils the purpose of providing a special payment in relation to weekly compensation payable to workers with highest needs.
The construction of s 38A contended for by the appellant is correct. That construction is not inconsistent with the conclusions expressed by the President in Hochbaum.
Ground 1 of the appeal should be upheld. It is unnecessary for disposal of the appeal to express a conclusion as to Ground 2.
GROUND 3: The Arbitrator erred when he declined to infer that the respondent had made an assessment of the worker’s capacity in circumstances where it had continued to pay weekly compensation
GROUND 4: The Arbitrator erred when he failed to make an order for the payment of compensation
The Arbitrator held:
“108. There is no evidence before me that the respondent has issued a work capacity decision.
109. Mr Melides submitted that s 38 of the 1987 Act does not arise in this case because there has never been any dispute that Mr Melides has been incapacitated. The respondent has paid weekly benefits throughout, which means, by necessary implication, that the respondent has made an assessment of work capacity. Payment cannot be made without an assessment of capacity. The assessment having been made, the impediment raised by Lee [referring to Lee v Bunnings Group Limited [2013] NSWWCCPD 54] does not exist. Section 38A of the 1987 Act stands alone as a special provision. In the alternative, Mr Melides submitted that Lee was wrongly decided. I reject the submission that I can infer that the respondent has made the work capacity decision Mr Melides has suggested. While s 38A of the 1987 Act is a special provision, I am bound by the relevant legal principles referred to above and espoused in Lee.
110. The respondent submitted that the Commission cannot make an order directing the respondent to commence payments at the s 38A rate after the end of the second entitlement period, even for what I refer to as the shortfall period, being 9 June 2017 to 7 July 2017. The respondent also submitted that the insurer has determined, by way of their conduct, that after 7 July 2017, Mr Melides had an entitlement to be paid at the s 38A rate and that there is nothing the Commission can act on in this case beyond what the insurer has effectively determined. I accept the respondent’s submissions in this regard. However, the respondent did concede that, based on its own submissions, it would be difficult to argue against the s 38A rate payment commencing on 9 June 2017, that is, from the date of the issue of AMS Medical Assessment Certificate.
…
117. Mr Melides is entitled to payments of weekly compensation pursuant to s 38A of the 1987 Act from the date of the issue of the Medical Assessment Certificate on 9 June 2017.”
The appellant submits:
“26. The decision in Lee v Bunnings [2013] NSWWCCPD 54 was only that a determination of entitlement under s 38 required that the insurer had assessed the worker’s current work capacity and that the Commission could not make that assessment. …
27. The Arbitrator also erred by relying upon the Court of Appeal decision in Sabanayagam v St George Bank Limited [2016] NSWCA 145 as supporting the proposition that there is no jurisdiction in the third entitlement period. …
28. If the insurer had not made an assessment, then the circumstances are that at the time of consideration by the Arbitrator, there had not been a work capacity decision. The prohibition on the Commission reviewing a work capacity decision had been removed on 1 January 2019. Accordingly, if a work capacity decision had been made, then the Commission would have had the full power to review that decision and to make the decision which should have been made. In other words, the Commission now has full power to make its own decision and to impose that decision upon the insurer regardless of what decision the insurer initially made. …”
The respondent in a commendably brief submission says this:
“24. Section 38 of the 1987 Act states that a worker is only entitled to weekly benefits if he or she is assessed by the insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity. The decision referred to in s 38 is a ‘work capacity decision’ …
25. It is not possible to infer that an assessment in the nature of a work capacity decision has been made. Section 43 of the 1987 Act clearly refers to ‘a decision’. Where there is evidence of a decision an inference that it is a ‘work capacity decision’ may be drawn. However, where there is no evidence of any decision it is impermissible to infer that a decision has been made, let alone that a work capacity decision has been made.
26. The Arbitrator at [109] of his decision correctly found that he could not infer that a work capacity decision had been made.
27. Pursuant to ss 43(3) and 44BB(5) of the 1987 Act, insurers, until 1 January 2019, had sole jurisdiction to make a work capacity decision. There being no evidence of the insurer having made a work capacity decision on the facts of this appeal. The Commission had no jurisdiction in respect of the period in 2017.” (emphasis in original)
In my view, the respondent’s submissions are correct.
In Lee v Bunnings Group Limited[12] the worker conceded at the arbitration that if the Arbitrator found that she was not an existing recipient of weekly compensation immediately before 1 October 2012, she had no entitlement to weekly compensation beyond 31 December 2012 because she had exhausted her entitlements under ss 36 and 37. That being so she was not entitled to further weekly compensation unless she could satisfy the provisions of s 38.
[12] [2013] NSWWCCPD 54 (Lee).
The Arbitrator found that Mrs Lee was not an existing recipient and further that she could not currently satisfy the provisions of s 38. The Arbitrator made an award for the respondent in respect of the claim for weekly payments from 1 January 2013.
The issue determined in the appeal by the President was “whether the Commission had jurisdiction to make orders beyond 31 December 2012, and whether immediately before 1 October 2012, Mrs Lee was an ‘existing recipient’ of weekly compensation.”[13]
[13] Lee, [19].
The President observed that the Commission’s jurisdiction to make orders beyond 1 January 2013 was not argued before the Arbitrator.[14]
[14] Lee, [27].
The President held:
“57. It is clear from the unambiguous terms of s 38 that an entitlement to compensation under that section must be assessed by the insurer, not by the Commission.
58. The complaint in this case is that the assessment of the entitlement under s 38 was effectively undertaken by the Arbitrator when he concluded that the worker had no entitlement under s 38 and thus entered an award for the respondent.
59. It is common ground that the insurer has not undertaken a work capacity assessment of Mrs Lee’s residual capacity for work following the expiration of the second entitlement period. In those circumstances, the Arbitrator erred by concluding that Mrs Lee had no ongoing entitlement to weekly compensation in the absence of such an assessment. Those rights have not yet been determined. In the circumstances, the Arbitrator should have declined to make any order in respect of the period from 1 January 2013. It follows that this award entered in favour of the respondent must be revoked.”
The amendment to repeal s 43(3) removes the privative clause that deprived the Workers Compensation Commission of jurisdiction to review work capacity decisions made by insurers. Such an amendment does not confer on the Workers Compensation Commission a jurisdiction to make the assessment required by s 38.
In Sabanayagam v St George Bank Limited[15] it was argued that a letter the insurer wrote to the appellant stating that it had carried out an assessment of all available evidence on the claim and advising that liability had been denied as from 16 March 2015 on the basis that the worker was fit for pre-injury duties with the St George Bank was a “work capacity decision”. The Court rejected that submission.[16]
[15] [2016] NSWCA 145 (Sabanayagam).
[16] Sabanayagam, [23], [144], [145].
In Rawson v Coastal Management Group Pty Limited,[17] Roche DP accepted that the insurer had made such an assessment, even though it had not explicitly said so. However, that was a finding of fact based on inferences available on evidence more extensive than merely the making of weekly payments by the insurer.
[17] [2015] NSWWCCPD 3 (Rawson).
The nature of the evidence before Roche DP in the matter of Rawson is recorded at paragraph [30]:
“The payment that covered the period from 12 October 2014 to 18 October 2014 was for $778.32 gross ($673.32 net). The document includes the claim number, Mr Rawson’s name and the name of the respondent. The Arbitrator inferred from exhibit A, and from an admission from Mr Levick that the insurer had been paying weekly compensation to Mr Rawson under s 38 since September 2014, that, there had been ‘an assessment for the purposes of s 38(2) in or about September 2014’ (T52.10) (Mr Levick having conceded this point at T43.16-28).”
This part of the appeal relates to the period from 9 February 2017 to 9 June 2017. The appellant seems to accept that there was no express work capacity assessment decision made by the insurer. There is in my view no evidence from which to draw an inference that in respect of the period the insurer had made the assessment requisite for the operation of s 38. The Arbitrator’s finding of fact at [108] should not in my view be disturbed.
It follows that there is no work capacity decision for the purpose of s 38. In my view, the absence of subs (3) in s 43 does not affect that conclusion.
I dismiss Ground 3 of the appeal.
For the reason previously expressed in respect of Ground 1, I uphold Ground 4.
CONCLUSION
The Arbitrator’s construction of s 38A that the entitlement to the special payment “commences at the time the worker ‘has been assessed’ with a permanent impairment in excess of 30% whole person impairment” is affected by error of law that requires correction.
Grounds 1 and 4 of the appeal are allowed. Ground 3 fails. It is unnecessary to determine Ground 2.
The determination concerns the correct construction of s 38A. In this circumstance it is appropriate that I re-determine the matter rather than remit the proceeding to the Arbitrator.
DECISION
Pursuant to s 352(5) of the 1998 Act I order:
“The Orders of the Arbitrator made 26 February 2019 are revoked.
The respondent to the appeal is to pay to the appellant weekly compensation at the rate prescribed by s 38A of the Workers Compensation Act1987 from 14 August 2014 to 8 July 2017, with credit to be given for weekly payments of compensation between 14 August 2014 and 8 July 2017.”
Geoffrey Parker SC
ACTING DEPUTY PRESIDENT
10 September 2019
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