Tasmania, State of v Barrett, Penelope Kaye
[1998] TASSC 168
•23 December 1998
168/1998
PARTIES: TASMANIA, STATE OF
v
BARRETT, Penelope Kaye
TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION: APPELLATE
FILE NO/S: FCA 126/1997
DELIVERED: 23 December 1998
HEARING DATE/S: 17 August 1998
JUDGMENT OF: Cox CJ, Crawford J, Slicer J
CATCHWORDS:
Workers Compensation - Assessment and amount of compensation - Cessation of payments - Particular grounds - Weekly payments during total incapacity having reached maximum amount for which employer liable - Employer failing to give notice of intention to terminate - Whether consequence of failure procedural only or giving right to continued payment until notice given.
Workers Rehabilitation and Compensation Act 1988 (Tas), ss69 and 86.
Western Australian Coastal Shipping Commission v Wallner (1980) 144 CLR 110; Burgess v Umina Park Home for the Aged (1993) 2 Tas R 246; Gibsons Ltd v Jeffrey (1993) 2 Tas R 375; Freemasons Homes of Southern Tasmania v Greenwood (1996) 5 Tas R 445; Viney v Roney Management Pty Ltd [1996] 6 Tas R 240, referred to.
Aust Dig Workers Compensation [237]
REPRESENTATION:
Counsel:
Appellant: D J Porter QC and H T Foulds
Respondent: S P Estcourt
Solicitors:
Appellant: Director of Public Prosecutions
Respondent: Page Seager
Judgment category classification:
Court Computer Code:
Judgment ID Number: 168/1998
Number of pages: 19
Serial No 168/1998
File No FCA 126/1997
STATE OF TASMANIA v PENELOPE KAYE BARRETT
REASONS FOR JUDGMENT FULL COURT
COX CJ
CRAWFORD J
SLICER J (Dissenting)
24 December 1998
Orders of the Court
Appeal allowed.
Order of Wright J dated 11 December 1997 set aside.
Determination dated 26 August 1997 of the Chief Commissioner sitting in the Workers Rehabilitation and Compensation Tribunal restored.
Serial No 168/1998
File No FCA 126/1997
STATE OF TASMANIA v PENELOPE KAYE BARRETT
REASONS FOR JUDGMENT FULL COURT
COX CJ
24 December 1998
The appellant was the employer of the respondent worker when she became entitled to payments of weekly compensation in respect of total incapacity caused by a work related injury. The date of this incident is not clear, but it is common ground that her statutory entitlement, calculated in accordance with the Workers Rehabilitation and Compensation Act 1988, s69(6) ("the Act"), amounted to $96,971.80. Weekly payments amounting in total to this sum were made to her up to and including 31 January 1997 upon which date the total liability of the appellant, as her employer, in respect of compensation under the Act, s69 had been discharged. The appellant's officers failed to appreciate that the limit of its liability had been reached until 5 April 1997 and continued to make weekly payments in the meantime. They thereupon ceased and as at the last-mentioned date the worker had received $7,377.39 in excess of the appellant's maximum liability for payments in respect of total or partial incapacity for work. It was not, however, until 2 June 1997 that the worker received from the appellant and its insurers a notice complying with the Act, s86(3)(a). At the time of receiving the notice, the respondent was not in receipt of weekly payments of compensation.
On 14 May 1997, the respondent initiated a referral to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") seeking a determination that she was "entitled to receive payments of weekly compensation until such entitlement is terminated pursuant to the Act". The Tribunal determined that there was no liability on the appellant employer to make payments in excess of the total liability provided for in the Act, s69(6) and as there were agreed facts before it on the referral
"That the worker's statutory entitlement to weekly payments is $96,971.80;
That the worker's statutory entitlement to weekly payments expired on 31/1/1997; and
That to the 5th day of April 1997 the worker was overpaid $7,377.39"
the reference was dismissed. From this decision the worker appealed and in the court below the learned primary judge upheld the appeal, set aside the Tribunal's determination and ordered that the employer pay weekly payments of compensation at the same rate as the worker was receiving prior to 5 April 1997 up to and including 12 June 1997, that is, ten days after service of the notice to which I have referred. The employer now appeals to this Court seeking a restoration of the Tribunal's determination.
The relevant sections of the Act are as follows:
"69 ¾ (1) Subject to this section, where total or partial incapacity for work results from an injury suffered by a worker and where the existence of such total or partial incapacity is supported by a certificate in a form approved by the Board signed by an accredited medical practitioner or accredited person, the compensation payable to him under this Act is, in addition to any lump sum that may be payable under section 71 or 72 in respect of that injury ¾
(a)in the case of the total incapacity of the worker for work, weekly rate payments equal to ¾
(i)the normal weekly earnings of the worker; or
(ii)the ordinary time rate of pay of the worker for the work in which, and for the hours during which, the workers was engaged immediately before the period of incapacity¾
whichever is the greater; or
(b)in the case of the partial incapacity of the worker for work, weekly rate payments for the period of that incapacity equal to the difference between the worker’s normal weekly earnings and the amount that the worker is earning or would be able to earn in suitable employment or business during that period of incapacity.
(2) In this section, 'normal weekly earnings' in relation to a worker who is incapacitated for work, means the average weekly earnings of the worker over the period of 12 months ending at the commencement of the period of incapacity.
(3) If, during the period of incapacity of a worker, the ordinary time rate of pay for the work in which, and for the hours during which, the worker was engaged immediately before the commencement of that period increases or decreases, the weekly rate payment to which the worker is entitled is to be increased or decreased by the like amount.
...
(6) The total liability of an employer in respect of compensation under this section shall not, in any one case, exceed an amount equal to 369 units calculated in accordance with the basic salary applying at the date of occurrence of the injury.
69B ¾ The weekly payment determined under section 69 is to be payable as follows: ¾
(a)100% of the weekly payment for the first 6 weeks following the date of incapacity;
(b)95% of the weekly payment for the period exceeding 6 weeks but not exceeding 25 weeks from the date of incapacity;
(c)90% of the weekly payment for the period exceeding 25 weeks from the date of incapacity.
86 ¾ (1) Except in pursuance of a determination made by the Tribunal under section 88 (2), an employer may, subject to this section, terminate or reduce a weekly payment made to a worker only where ¾
(a)the payment is in respect of total incapacity and the worker has returned to work;
(b)the worker is in receipt of the weekly payment in respect of partial incapacity and is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined;
(c)an accredited medical practitioner who has examined the worker has certified that, in his opinion, the worker has wholly recovered or substantially recovered, from the effects of the injury in respect of which the payment is being made or that the worker’s incapacity is no longer due, wholly or substantially, to that injury;
(d)a worker has failed or refused to undertake or participate in a rehabilitation program or suitable alternative duties recommended by his employer; or
(e)weekly payments made to the worker during a period of total incapacity have reached the amount referred to in section 69(6).
...
(3) An employer who, for the reasons specified in subsection (1)(c), (d) or (e), intends to terminate or reduce a weekly payment made to a worker shall cause to be served on the worker ¾
(a)a notice of his intention to terminate the weekly payment being made to the worker, or to reduce that payment by the amount specified in the notice at the expiration of a period of 10 days from the day on which the notice was served on the worker; and
(b)where the employer’s intention to terminate or reduce is based on a certificate referred to in subsection (1)(c), a copy of that certificate.
(3a) A Notice referred to in subsection (3) (a) is to contain a statement informing the worker of the worker's right to refer the termination or reduction of the weekly payments to the tribunal for determination.
(4) A worker who has been served with a notice under subsection (3)(a) and who wishes to dispute the termination or reduction of the weekly payments being made to him may within a period of 60 days from the date on which the weekly payments were terminated or reduced, refer the matter to the Tribunal for determination.
(5) An employer who terminates or reduces a weekly payment otherwise than in accordance with this section is guilty of an offence and is liable on summary conviction to a fine not exceeding 20 penalty units."
The learned primary judge observed in his reasons for judgment (144/1997) at 5 - 6 that:
"… s69 appears to exhaustively define the circumstances in which an employer is obliged to compensate an injured worker by making weekly payments. Provision is made for changing circumstances, both personal to the worker and within the industry in which he was or is employed. The amount of compensation payable each week is therefore subject to fluctuation from time to time. On this basis alone it is foreseeable that the worker and his employer may differ as to the quantum of the worker's weekly entitlement during the currency of the worker's incapacity. It is therefore sensible that the Act should make provision for the employer to let the worker know when, according to the employer's calculations, the employer's liability to pay weekly compensation is likely to be exhausted by the operation of s69(6). Such a provision is found in s86(1)(e), although I must say that the apparent pre-requisite that 'weekly payments have reached the amount referred to in s69(6)' poses something of a difficulty in interpretation, because s86(3) tends to suggest that a notice of the kind therein specified can only be given after one of the statutory criteria mentioned in s86(1) has been achieved. Zeeman J appeared to suggest in Viney v Roney Management Pty Ltd [1996] 6 Tas R 240 at 245, that a valid s86(3) notice could not be given and thus payments could not legitimately be terminated until at least ten days after the employer had made a payment bringing his total payments up to the amount provided for in s69(6). As a necessary consequence an employer would always have to pay at least ten days' compensation over and above that provided for in s69(6).
I do not see that as a reasonable or appropriate construction of s86(1)(e). In my opinion, consistently with the scheme and purpose of the Act, s86(1)(e) and (3) should be read as permitting an employer who is mindful of the approach of the s69(6) limit, to give a valid notice to the worker that, when that time has been reached and the relevant payment has been made, the employer will terminate weekly payments forthwith."
With all of this I respectfully agree. It is clearly desirable that a worker whose records, unlike those of an employer, may not readily reveal the amount of weekly compensation he has received and how much is left before his employer's liability will cease, should receive forewarning of the imminent cessation of his entitlement. To that end, the penalty provision in s86(5) has been inserted and should provide a powerful incentive for an employer to comply with the requirement to give notice before terminating payments. However, the question is whether or not failure to comply with that requirement has the additional consequence of making the termination ineffectual and of extending the employer's liability, notwithstanding the clear provisions of s69(6) so as to force the employer to continue making weekly payments until notice in compliance with the section has been given. In the present case, that would require an additional payment between 5 April 1997 and 12 June 1997, a matter of several thousands of dollars further bonus to the worker. Had the employer failed to comply with the additional requirement of s86(3A) to inform the worker of her right to refer the termination to the Tribunal for determination, weekly payments would be required to continue until such a notice had been given, as the giving of this information is essential to the efficacy of the notice (see Jones v Jones (1996) 6 Tas R 173, which was approved by the Full Court in Swetnam Bros Pty Ltd v Grundy 9/1998). With respect, such a conclusion appears absurd and unreasonably over-compensates a worker for the employer's failure to give ten days' notice before terminating payments in consequence of the cessation of the employer's liability to make them.
Although recognising the force of the argument that non-compliance with s86, while exposing the offender to a monetary penalty, cannot extend the worker's liability beyond that expressed in s69(6), the learned primary judge took the view that there were competing considerations leading to a contrary conclusion and cited Western Australian Coastal Shipping Commission v Wallner (1980) 144 CLR 110 as:
"… strong authority for the proposition that if an employer terminates payments to a worker in breach of prescribed procedures, even if upon subsequent inquiry he is found to be justified in having done so, he, the employer, remains liable to pay the worker notwithstanding the existence of a monetary penalty for breach of the relevant statutory procedures" (144/1997 at 7).
In that case, the High Court was concerned with the validity of an interim order for the payment of weekly maintenance pending the determination of the employer's liability. The relevant Ordinance prohibited under monetary penalty the discontinuance by an employer, except in accordance with the Ordinance, of weekly payments "due" under the Ordinance. In the particular case, the employer had previously made payments voluntarily and the issue was whether voluntary payments without agreement or award were "due" under the Ordinance. All the members of the court held that they were and that the worker was therefore entitled to continue to receive them. Gibbs J (as he then was) at 112 said:
"It is clear that s 7A of the Workmen's Compensation Ordinance 1949 (NT), as originally enacted, gave to a workman who had been receiving from his employer weekly payments of compensation the right to continue to receive those payments until the question of his entitlement was determined; he would however receive them provisionally only, and was liable to return them if it was ultimately held that he was not entitled."
In their joint judgment, Mason, Murphy and Wilson JJ said at 117:
"Once a payment is made, it represents the entitlement of the worker and hence he has a right to its continuance until the issue of the employer's liability is determined in the latter's favour."
Their decision was in accord with decisions on similar legislative precedents of the type of enactment found in the Ordinance and, at 114, referring to Anchor Donaldson Ltd v Crossland [1929] AC 297, they said:
"Their Lordships reasoned that notwithstanding that the ultimate determination might be in favour of the employer, thereby giving rise to a right of recovery against the workman, the legislature should be taken to have preferred on the balance of convenience that the employer rather than the workman should be at risk during the interim period, with the consequence that the latter should stand possessed of a right to continue to receive the weekly payments pending such determination."
They also referred to Edgar v Pennell [1958] VR 450 where O'Bryan J dealt with a similar provision to the English one, but one which included a monetary penalty for breach by the employer. His Honour had said (at 454):
"Although cl 7 is not couched in precisely the same language as the English s 12 and although there are other differences in the two Acts I think I should hold in accordance with these decisions that the obligation cast upon the employer to continue weekly payments (except as provided by par (1) of cl 7) is an obligation which can be enforced not only by the penal provisions of par (2) but also if the worker commences proceedings for an award under the Act, by an interim award for the continuance of the weekly payments pending the determination of the claim, if the Board sees fit to make such an interim award.
The presence of the penal provisions in par (2) of cl 7 does not in my opinion lead to the conclusion that the obligation cast on the employer to continue weekly payments does not carry with it a co-relative right in the worker to their continuance."
It does not follow, however, that the right to a continuance of weekly payments gives an enforceable claim to their payment or a right of retention of any payments resumed once the issue of the employer's liability has been established in the latter's favour. Hence, Brennan J (as he then was) in the court below in Western Australian Coastal Shipping Commission v Wallner (1979) 26 ALR 591, noting that after the appeal to the Full Court of the Federal Court in respect of the interim order ("the November order") had been instituted but before it was heard, the worker's claim for compensation was finally heard and resulted in an award in his favour ("the award") and that the employer had likewise appealed that decision, said, at 593:
"An appeal against the award has been instituted and is pending. Apart from the orders for costs made against the employers (which they seek to have set aside in this appeal), the effect of the November order may, on one view, be merged in the Tribunal's later award. So long as that award stands, the resolution of this appeal cannot affect the workman's entitlement to retain the moneys paid to him consequent upon the November order, but if that award should be set aside, a question might arise as to whether the November order affects the workman's entitlement to retain those moneys." (My emphasis.)
Where, as here, it was an agreed fact before the Tribunal to which the issue was referred that the employer had met its full liability under s69(6), I see no warrant for reading s86 in such a way that non-compliance with its requirement as to notice should expose the employer, in addition to a pecuniary penalty, to a liability to continue payments until the notice is given, however long that might take.
On the other hand, non-compliance with s86(3) or (3A) where an employer terminates payments in reliance upon s86(1)(c) rightly leads to that consequence. In such a case, there is a conflict of medical testimony to be resolved. On the one hand there is the certificate of incapacity due to a work injury given by an accredited medical practitioner or person which, in effect, constitutes a rebuttable statutory presumption as to the worker's incapacity, while on the other hand there is the certificate of another accredited medical practitioner who has examined the worker to the effect that he has recovered or that his incapacity is no longer due to the work injury. In these circumstances, if the employer, instead of seeking relief from payment by way of a reference by him under s88 chooses to terminate a payment, he must, before doing so, comply with all the statutory requirements of s86 which include:
procuring a certificate of the kind described in s86(1)(c) and (2);
giving notice of his intention to terminate payments in accordance with s86(3)(a);
giving a copy of the certificate to the worker as required by s86(3)(b);
informing the worker in the notice of the latter's right to refer the termination to the Tribunal pursuant to s86(3A); and
giving notice of the time in which such a reference may be made.
Burgess v Umina Park Home for the Aged (1993) 2 Tas R 246; Gibsons Ltd v Jeffrey (1993) 2 Tas R 375; Hawkins v Mercury Walch Pty Ltd A22/1996; Jones v Jones (1996 - 1997) 6 Tas R 273; Swetnam Bros v Grundy 9/1998; and Bowerman v CSR Humes Pty Ltd 69/1998.
If there is a reference, whether under s86(4) or under s42, the employer must establish the fulfilment of these statutory requirements as a condition precedent and thereafter must demonstrate that the medical practitioner's opinion that there has been substantial recovery from the effects of the injury or that the incapacity is no longer due to the work injury is correct (Guthrie v Sherriff (1994) 3 Tas R 399).
While compliance with these statutory requirements has consistently been held essential in respect of matters coming within s86(1)(c), the present case is the first in which the effect of non-compliance with the requirements of notice has been raised in respect of terminations due to s86(1)(e). In Viney v Roney Management Pty Ltd (1996) 6 Tas R 240 at 245, Zeeman J made the following observation concerning s69(6):
"Even where payments have reached the statutory limit an employer must continue making further payments until the expiration of 10 days of the service on the worker of a notice in the terms of s86(3)(a)."
However, that remark, while entitled to respect, was clearly obiter dictum, the question in Viney being whether on a reference under s42 by a worker whose payments were suspended by virtue of an unproved refusal to submit to medical examination, the Tribunal could embark upon a consideration of whether some lower sum could be substituted for the amount paid immediately prior to the suspension. In any event, subject to the reservation of the learned primary judge to which I have already referred, namely that a valid ten day notice in anticipation may be given, Zeeman J's observation is unexceptionable having regard to s86(5). If liability to the penalty is to be avoided, payments must continue until the expiration of the service on the worker of a notice in the terms of s86(3)(a). I do not read Zeeman J's dictum as laying down the proposition that compliance with the statutory requirement for notice is a condition precedent to a termination based on s69(6) and that failure to comply with it extends the employer's liability indefinitely, notwithstanding the last-mentioned subsection.
In the present case, had the employer given the worker formal notice, the only "matter" to be referred to the Tribunal pursuant to s86(4) could have been the question whether or not the statutory limit had in fact been reached. It was common ground that it had been. As notice was not given, a reference under s86(4) was not open to the worker and so she relied upon s42 which permits a "claim for compensation" to be referred to the Tribunal by (inter alios) an injured worker. "'Claim for compensation' means a claim for compensation under this Act and includes any matter or question arising in connection with or incidental to such a claim" (s3(1)). If compliance with the requirement for notice is not a condition precedent in a case such as this, the only matter the subject of the reference can be the factual question of whether the limit has been reached. It could not, for example, put in issue questions of causation or failure to comply with s32(1) which requires a worker, subject to the exceptions in s38, to claim compensation within six months of the occurrence of the injury (Freemasons Homes of Southern Tasmania v Greenwood (1996) 5 Tas R 445). As it was an agreed fact that the limit had been reached, the only proper conclusion would have been for the Tribunal to dismiss the reference as it did.
In my opinion, the appeal should be upheld and the Tribunal's determination restored.
Serial No 168/1998
File No FCA 126/1997
STATE OF TASMANIA v PENELOPE KAYE BARRETT
REASONS FOR JUDGMENT FULL COURT
CRAWFORD J
24 December 1998
The respondent was employed by the appellant and received payments of weekly compensation from it pursuant to the Workers Rehabilitation and Compensation Act 1988, s69. The appellant's liability to make the weekly payments was limited by s69(6), which provided that "the total liability of an employer in respect of compensation under this section shall not, in any one case, exceed an amount equal to 369 units calculated in accordance with the basic salary applying at the date of the occurrence of the injury". The effect of that subsection was to limit the appellant's total liability to pay weekly compensation under the section to a total of $96,971.80. As a result of making the payments, that limit was reached on 31 January 1997. The appellant overlooked that the limit had been reached and continued to make payments, in excess of its statutory liability. By 5 April 1997 it had overpaid the respondent $7,377.39. Weekly payments then ceased and the respondent began to receive payments pursuant to an entitlement to sick leave.
At no time prior to June 1997 did the appellant serve on the respondent the notice required by s86(3), of its intention to terminate the weekly payments. Section 86 provided as follows:
86 ¾ (1) Except in pursuance of a determination made by the Tribunal under section 88 (2), an employer may, subject to this section, terminate or reduce a weekly payment made to a worker only where ¾
(a)the payment is in respect of total incapacity and the worker has returned to work;
(b)the worker is in receipt of the weekly payment in respect of partial incapacity and is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined;
(c)an accredited medical practitioner who has examined the worker has certified that, in his opinion, the worker has wholly recovered or substantially recovered, from the effects of the injury in respect of which the payment is being made or that the worker’s incapacity is no longer due, wholly or substantially, to that injury;
(d)a worker has failed or refused to undertake or participate in a rehabilitation program or suitable alternative duties recommended by his employer; or
(e)weekly payments made to the worker during a period of total incapacity have reached the amount referred to in section 69(6).
(2) A certificate referred to in subsection (1)(c) shall specify the grounds upon which the opinion expressed in it is given.
(3) An employer who, for the reasons specified in subsection (1)(c), (d) or (e), intends to terminate or reduce a weekly payment made to a worker shall cause to be served on the worker ¾
(a)a notice of his intention to terminate the weekly payment being made to the worker, or to reduce that payment by the amount specified in the notice at the expiration of a period of 10 days from the day on which the notice was served on the worker; and
(b)where the employer’s intention to terminate or reduce is based on a certificate referred to in subsection (1)(c), a copy of that certificate.
(3a) A notice referred to in subsection (3) (a) is to contain a statement informing the worker of the worker's right to refer the termination or reduction of the weekly payments to the tribunal for determination.
(4) A worker who has been served with a notice under subsection (3)(a) and who wishes to dispute the termination or reduction of the weekly payments being made to him may within a period of 60 days from the date on which the weekly payments were terminated or reduced, refer the matter to the Tribunal for determination.
(5) An employer who terminates or reduces a weekly payment otherwise than in accordance with this section is guilty of an offence and is liable on summary conviction to a fine not exceeding 20 penalty units."
A notice under s86(3), was served on the respondent in June 1997, at a time when no payments of weekly compensation were being made to her. By the notice the appellant purported to "give notice pursuant to Section 86(1)(e) of the Workers Rehabilitation & Compensation Act 1988 that it is your employers intention to terminate the weekly compensation at the expiration of (10) ten days from the date that this notice is served upon you". The notice explained that as at 31 January 1997, her maximum entitlement to weekly compensation in the amount of $96,971.80, had been paid. It also gave her notice "that at any time you may refer this matter to the Tribunal for determination".
In the meantime however, in May 1997, the respondent had referred to the Workers Rehabilitation and Compensation Tribunal a claim for compensation pursuant to s42, claiming that she was entitled to receive payments of weekly compensation until her entitlement to do so was terminated pursuant to the Act. The reference came on for hearing before the Chief Commissioner who noted that the issues which the respondent wished to have determined were ¾
whether the respondent had been overpaid to the extent that she might be subject to an application for recovery of the amount of that overpayment (see s149)
whether she was entitled to retain the overpayment notwithstanding that the statutory limit had been exceeded, because the appellant had made no attempt to terminate the payments pursuant to the notice provisions of s86(3) prior to her receipt of the overpayment
whether she was entitled to continue to receive further payments of compensation up until she was served with a notice under s86(3), of the appellant's intention to terminate the payments, at a time when she was receiving such weekly payments.
The Chief Commissioner found for the appellant and dismissed the reference. He concluded that the scheme of the Act indicated that an employer was not liable to pay weekly compensation in a total amount greater than the limit prescribed by s69(6) and that the notice provisions of s86(3) were procedural only, and gave no substantive rights to a worker to be paid in excess of that limit. The Chief Commissioner also held that on the hearing of a reference under s42, he had no jurisdiction to order that the respondent repay to the appellant the payments which were made in excess of the statutory limit and he did not determine whether the appellant would be entitled to repayment on an application under s149.
The respondent appealed from the dismissal of her reference. On the appeal the learned judge held that if the statutory limit for weekly compensation has been reached, an employer is only entitled to terminate the making of the payments for that reason if the employee has first complied with the notice provisions of s86(3). Until those provisions have been complied with, his Honour held that the weekly payments must continue to be made, notwithstanding that as a result the total of payments made by the employee will exceed the limit prescribed by s69(6). It followed that the appellant was not justified in terminating the weekly payments when it did in April 1997. It was also held by the learned judge that if the statutory limit for weekly payments has been reached, once an employer has complied with the notice provisions of s86(3), the employer's liability to continue making weekly payments is at an end, notwithstanding that at the time of the service of the required notice on the worker the making of such payments had in fact ceased at some earlier time. That was held in response to a submission for the respondent that a valid notice of intention to terminate payments could not be given unless at that time payments were in the course of being made. As a consequence of what he had held, the learned judge allowed the appeal and declared and determined that the respondent was entitled to receive from the appellant weekly payments of compensation, calculated at the same rate as the respondent was receiving prior to 5 April 1997, up to and including 12 June 1997. Presumably it was determined or assumed that the notice under s69(3), which had given the respondent notice of the appellant's intention to terminate the weekly compensation at the expiration of ten days from the date of service of the notice, was served on the respondent on 2 June 1997.
The appellant appealed to this Court, seeking an order that all of the orders made by the learned judge be set aside, on two grounds:
That the learned judge erred in law when he held that the failure of the appellant to comply with the Act, s86(3)(a) before 2 June 1997 created a liability to pay compensation in a total sum greater than the limit prescribed by s69(6).
That the learned judge erred when he held that because of the failure to comply with s86(3)(a) before 2 June 1997, the appellant was obliged to pay to the respondent weekly compensation from 5 April 1997 up to and including 12 June 1997, notwithstanding that the total of weekly payments which had been made to the respondent had reached the limit prescribed by s69(6).
The learned judge followed Viney v Roney Management Pty Ltd (1996) 6 Tas R 240 at 245 where Zeeman J said:
"It would follow from the respondent's argument as to the operation of s69 that s69(6) is self-operating in that once weekly payments have been made in a total amount which equals that prescribed by that subsection, an employer is entitled to terminate payments. However, that is not the position because of the provisions of s86(1)(e) and (3). Even where payments have reached the statutory limit an employer must continue making further payments until the expiration of 10 days of (sic) the service on the worker of a notice in the terms of s86(3)(a)."
That statement was obiter dicta, for the question of the employer's entitlement to terminate payments once the limit prescribed by s69(6) has been reached, did not arise in that case. However, it was made in the course of dealing with a submission for an employer that the employer had been entitled to reduce the rate of weekly compensation payments, in the circumstances of that case, without the worker's agreement and without the Tribunal's order. Zeeman J rejected that submission, concluding that particular provisions of s69 and s86 supported the proposition that the Act did not permit an employer to apply s69 in such a way that there was a reduction or a termination of a weekly payment without it being authorised by s86 or by an order made under s88. Zeeman J held that Atkinson v Nipper Cleaning Services Pty Ltd A105/1993, was authority for the proposition that s86 comprehensively lays down the circumstances in which an employer may lawfully terminate or reduce a weekly payment. With respect, I do not agree. Having regard to the judgments of the members of the court in Atkinson's case, I am unable to conclude that it is authority for such a broad proposition. Counsel for the respondent did not submit that it was.
It is well known to those who have had to interpret the Act, that from a drafting point of view it is a very bad piece of legislation. Experience has shown that its various provisions do not amount to a coherent and cohesive set. The provisions of s86 possibly amount to the worst example to be found in the legislation. Substantial litigation has been caused by its interpretative difficulties and it is unfortunate that no attempt has been made to replace it with provisions which can be better understood. Substantial time and costs would thereby be saved to litigants and would amount to a real public benefit.
By s86(1) it is provided that, except in pursuance of a determination made by the Tribunal under s88(2), an employer may, subject to the section, terminate or reduce a weekly payment made to a worker only in the circumstances provided for in pars(a) to (e). Section 88 provides for a review of a weekly payment by the Tribunal, on a reference by a worker, an employer or a licensed insurer of an employer. On the hearing of such a reference the Tribunal, under subs(2), may make a determination terminating, reducing or increasing the payment. Read literally therefore, s86(1) provides that except in pursuant of a determination of the Tribunal under s88(2) terminating or reducing a weekly payment, an employer may only terminate or reduce a weekly payment in one of the circumstances provided for in pars(a) and (e). Notwithstanding that is the literal meaning of s86(1), other provisions of the Act suggest that it could not have that meaning. I refer to the following provisions:
If the worker suffered the relevant injury on or before attaining sixty-four years of age, the worker's entitlement to weekly payments ceases when he attains sixty-five years of age, by virtue of s87(1) (subject to a reference to the Tribunal by the worker under subs(2)). Under the same section, in the case of a worker who suffered the injury after attaining sixty-four years of age, the worker's entitlement to weekly payments ceases one year after the occurrence of the injury (subject as aforesaid). Section 87 ought reasonably be interpreted as authorising a termination of weekly payments in accordance with its terms, without the need to comply with s88(2) by applying for a review of the weekly payments, as might be thought from the opening words of s86(1). If that was not so, s87(2) would not leave it to the worker to make a reference to the Tribunal, if he wished to object to a termination of weekly payments purportedly made under the section. In Freemasons Homes of Southern Tasmania v Greenwood A65/1995, Underwood J at 4 thought that s87(1) on its own authorised termination, and I think that is correct.
Pursuant to s81A(5), an employer may dispute liability to continue to pay weekly payments for an injury by referring the matter to the Tribunal. Plainly the Tribunal would have jurisdiction, upon the hearing of the reference, to order the termination of the payments, and that would permit the employer to terminate them other than as prescribed by s86(1).
Under s69B, the weekly payment determined under s69 to be payable to a worker is payable as follows ¾
(a) 100 per cent of that weekly payment for the first six weeks following the date of incapacity;
(b) 95 per cent of that weekly payment for the period exceeding six weeks but not exceeding twenty-five weeks from the date of incapacity;
(c) 90 per cent of the weekly payment for the period exceeding twenty-five weeks from the date of incapacity.
It is clear beyond doubt to me that s69B authorises a reduction in the weekly payment made to a worker, without the need for a determination to be first made by the Tribunal under s88(2). It would be ridiculous to think that the employer would first have to apply to the Tribunal to reduce the weekly payment to the percentage fixed by the Act. In this regard I respectfully reject the suggestion of Zeeman J in Viney v Roney Management Pty Ltd (1996) 6 Tas R 240 at 245, that "s69B does not provide for a reduction in a weekly payment because it provides for the percentage of a "weekly payment" to be paid during particular periods during which a worker is incapacitated for work, without affecting the amount of the weekly payment". To adopt a phrase used by Zeeman J a few lines earlier in his judgment, that is a distinction without a difference. Section 86(1) deals inter alia with the power of an employer to "reduce a weekly payment made to a worker", and that is something which is clearly authorised by s69B. The reference in 86(1) to the "weekly payment made to the worker" is not a reference to the "weekly payment" as calculated under s69, but to the weekly payment actually being made to the worker at the time it is terminated or reduced.
Under s85(6), circumstances are prescribed, such as a refusal by a worker to submit to a medical examination under the section, in which the worker's rights to compensation are "suspended until the matter has been determined by the Tribunal". The effect of such a suspension would be that the employer would be entitled to terminate a weekly payment, until the Tribunal made its determination. The reference in 86(1) to terminating a weekly payment is clearly not intended to refer only to a permanent termination, but to a stopping of a payment, whether for a time or permanently.
It is impossible to understand why s86(1)(e) purports to authorise the termination, on notice, of a weekly payment "where … weekly payments made to the worker during a period of total incapacity have reached the amount referred to in section 69(6)", but not where weekly payments made to the worker during a period of partial incapacity have reached that amount. I can think of no sensible reason why a distinction should have been made between the two situations. Further, I have difficulty accepting that it was intended that if the limit prescribed by s69(6) is reached during a period of partial incapacity the payments may not be terminated, not even by the use of the notice required by subs(3), except by way of a successful reference by the employer to the Tribunal for a review of the weekly payments. Experience shows that references to the Tribunal take a substantial period of time for their determination and those involved in them suffer significant cost. It would be unreasonable to put the parties through that procedure in a case where there is no dispute concerning the limit for weekly payments and whether it has been reached, and it would inevitably cause the employer to have to continue paying well past the limit, in virtually every case, until the Tribunal's determination, almost inevitably favourable to the employer, could be obtained.
The foundation for liability to pay compensation under the Act for an injury is contained in s25(1). In essence it provides that if in any employment a worker suffers an injury, arising out of and in the course of the employment, "the employer is, except as is otherwise provided by this Act, liable to pay compensation in accordance with this Act" to the worker. Other sections provide for the payment of different types of compensation as a consequence of such an injury and the circumstances in which they are payable. It is by s69(1) that it is provided that, subject to that section, where total or partial incapacity for work results from such an injury, compensation in the form of weekly payments shall be payable to the worker. By subs(6) it is provided that the total liability of an employer in respect of such compensation "shall not, in any one case, exceed an amount equal to 369 units calculated in accordance with the basic salary applying at the date of occurrence of the injury". In the vast majority of cases there will be no argument as to precisely what the limit of the employer's total liability is, and I find it ridiculous to contemplate that in cases where the statutory limit is reached during a period of partial incapacity, the effect of the Act is that payments must be made beyond that limit until there has been a review of the weekly payments and a determination by the Tribunal under s88. In my view s69(6) ought to be regarded as definitively establishing the maximum amount which the employer may be required to pay by way of weekly payments, and beyond which the employer is not liable to pay, with or without a review by the Tribunal under s88 or a notice under s86. The notice provisions of s86 for a case where the statutory limit has been reached during a period of total incapacity, should be regarded merely as procedural, for breach of which an offence will be committed.
On the appeal from the Tribunal, the learned judge regarded Western Australian Coastal Shipping Commission v Wallner (1980) 144 CLR 110 as strong authority for the proposition that if an employer terminates payments to a worker without giving the prescribed notice in accordance with s86(3), the employer remains liable to pay weekly compensation to the worker beyond the total limit of the employer's liability prescribed by s69(6). With respect however, that case is of virtually no assistance, involving as it did an interpretation of a section in different terms in a different Act of Parliament of another State.
I acknowledge that the interpretation I would place on the effect of s86, as it applies to the circumstances of this case, may not be entirely consistent with other decisions dealing with the effect of s86 in different factual circumstances. See for example, Burgess v Umina Park Home for the Aged (1993) 2 Tas R 246; Gibsons Ltd v Jeffrey (1993) 2 Tas R 375; Jones v Jones (1996) 6 Tas R 273; Swetnam Brothers Pty Ltd v Grundy unreported 9/1998. That of course, is not a desirable outcome, but it has been brought about by the incoherency of the various provisions of the legislation.
I respectfully agree with the Chief Justice that it would be an absurd and unreasonable conclusion if an employee could be required to pay several thousands of dollars beyond the undoubted limit of the employer's liability, in the circumstances of a case such as this, and particularly so in a case where the worker must have known for much of the time, that the limit for weekly payments had been reached.
For these reasons I would uphold the appeal and set aside all of the orders made on the appeal from the Chief Commissioner, thereby restoring the order of the Chief Commissioner which dismissed the respondent's reference.
Serial No 168/1998
File No FCA 126/1997
STATE OF TASMANIA v PENELOPE KAYE BARRETT
REASONS FOR JUDGMENT FULL COURT
SLICER J
24 December 1998
The respondent was in receipt of payments of workers compensation which, as of 31 January 1997, had reached the maximum permitted by the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s69(6). Due to administrative oversight the appellant continued to make payments until 5 April 1997, by which time the respondent had been paid $7,377 in excess of her statutory entitlement. From that date, the respondent received payments in the form of sick leave entitlements. A notice in prescribed form stating an intention to terminate payments pursuant to the Act, s86 (3)(a), was provided on about 2 June.
The question raised by this appeal is whether an employer is relieved of the obligation imposed by the Act, s86(3)(a), in circumstances where its liability under s69(6) has been met.
The Act, s69, provides for the quantification of the amount of compensation in cases of incapacity. It provides for a variety of circumstances and requires calculations to be made by reference to such factors as "total and partial incapacity", "normal weekly earnings", "ordinary time rate" and the like. Thus differing entitlements can be determined by reference to the section. The section operates as a form of "internal" mechanism whereby rights and obligations arising from other statutory provisions can be quantified. Differing methods of calculation are required by the specific circumstances stated in the section, and notice of the particular calculation is required before the person affected can consider any consequence. That ought be done by service of a prescribed form or certificate. Upon receipt of the notice, the affected party can check the calculations by reference to the terms of the section and challenge them if necessary. A person so served with such a notice would be aware, if for some reason payments continued to be made, that any future claims for recovery would be put at risk.
The Act, s69(6), states:
"The total liability of an employer in respect of compensation under this section shall not, in any one case, exceed an amount equal to 369 units calculated in accordance with the basic salary applying at the date of occurrence of the injury."
The section refers to "total liability … in any one case". There may be circumstances involving an individual worker when further calculation is required because of the existence of a different claim for compensation. Further, the worker might seek to challenge the calculation by reference to the "basic salary applying at the date of occurrence of the injury". Such a worker could seek to do so by reference to the notice afforded by the employer. The matter which might be referred to the Tribunal could include both an enquiry as to whether the certificate complied with statute and whether the facts relied upon for termination exist (Burgess v Umina Park Home for the Aged (1993) 2 Tas R 246). The Act, s69(9), permits reference to the Tribunal when it appears to the employer that the amount of the calculation is excessive, having regard to the earnings of comparable workers.
The relevant portion of the Act, s86, requires that:
"(1) Except in pursuance of a determination made by the Tribunal under section 88(2), an employer may, subject to this section, terminate or reduce a weekly payment made to a worker only where -
…
(e) weekly payments made to the worker during a period of total incapacity have reached the amount referred to in section 69(6)."
Whilst s86(3) provides:
"(3) An employer who, for the reasons specified in subsection (1)(c), (d) or (e), intends to terminate or reduce a weekly payment made to a worker shall cause to be served on the worker -
(a) a notice of his intention to terminate the weekly payment being made to the worker, or to reduce that payment by the amount specified in the notice at the expiration of a period of 10 days from the day on which the notice was served on the worker; and
(b) where the employer's intention to terminate or reduce is based on a certificate referred to in subsection (1)(c), a copy of that certificate."
The provision might be regarded as procedural, but it remains mandatory. The legislative scheme is one based on substantive rights and obligations dependent upon certification. The receipt of a relevant certificate, unchallenged, creates entitlement or obligation. Inadequate or defective certification does not permit cessation of payment, even though the merit giving rise to such cessation is valid. The argument that the notice cannot be given until the statutory limit is reached, is met by the fact that the notice is one of intention to terminate "at the expiration of ten days from the date of service". As the learned primary judge stated in the decision appealed against, 144/1997, at 6:
"I do not see these provisions as being designed to give the incapacitated worker a ten day bonus. They exist to let the worker know that his employer claims that the statutory limit is imminent. Obviously a worker may need to consider firstly, whether the employer's calculations are correct, and secondly, if they are, what arrangements he will need to make for his future income or financial security."
The appellant contended that the requirement to afford notice, or its absence, cannot operate to enlarge a finite liability established by a substantive provision. That contention was rejected by the learned primary judge as being contrary to the ratio of the decision of the High Court in Western Australian Coastal Shipping Commission v Wallner (1980) 144 CLR 110. The appellant seeks to distinguish that authority on the basis that the Court was dealing with different legislation, despite the fact that the decision, at first instance, upheld on the appeal (Western Australian Coastal Shipping Commission and Stevedoring Employers of Australia Ltd v Wallner (1979) 26 ALR 591), has been twice applied in judgments of the Full Court of Tasmania (Precise Timbers Pty Ltd and Anor v Burgess 70/1991; Freemasons Homes of Southern Tasmania v Greenwood (1996) 5 Tas R 445). The appellant seeks to distinguish Wallner on the basis that the Court was considering a penal statute and the implications of the making of an interim order which was discretionary in nature and was dependent on a basis of jurisdiction rather than entitlement. In Wallner, Mason, Murphy and Wilson JJ stated in their joint judgment at 115:
"No reason appears for not according to that provision as it then was the same meaning and effect given to similar laws in Victoria and the United Kingdom. An employer who had commenced, albeit voluntarily, to make weekly payments could not terminate or diminish those payments at will. If he wished to do so he was required to take formal steps to that end prescribed by the relevant statutory provision. In the event that an employer offended the rule, then the worker might seek an interim award pending a determination on liability."
In the decision giving rise to the appeal, the Full Court of the Federal Court was required to consider the effect of the Workmens Compensation Ordinance (NT), s7A, which provided:
"(1) An employer shall not, except in accordance with this Ordinance, an Act or determination of the Tribunal, discontinue, withhold or diminish a weekly or other payment due under this Ordinance to a person.
Penalty: 100 dollars."
The tension between entitlement on merit and a statutory prohibition against cessation of payment, except by reference to defined events, was considered by Brennan J at 593 - 594, when he said:
"Section 7A is a penal provision. The employer is prohibited, under penalty, from engaging in the conduct which sub-s(1) specifies. It does not in terms create a civil liability enforceable for the benefit and at the suit of a workman. Its terms may be contrasted with the sections of the Ordinance which impose upon an employer a liability to pay compensation, and which confer upon a workman a reciprocal right to receive it (cf ss 7, 8, 9 and 11). It is nevertheless a provision which is calculated to ensure that an employer pay money to a workman, and it is a question of legislative intent, to be inferred from the section in the light of all its surrounding circumstances whether a corresponding civil right is conferred upon the workman. (Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 at 404, 405; Atkinson v Newcastle and Gateshead Waterworks Co (1877) 2 Ex D 441 at 448). At first sight, s 7A appears to confer upon the workman (or other beneficiary) a right to the payments which the section requires the employer to make.
…
This construction would deny any effect to s 7A save the imposition of a criminal penalty as a sanction to secure the payment of moneys due to a workman under other provisions of the Ordinance. The section, thus construed, would have some work to do: it would enhance the remedies to protect the workman's rights, though it would not extend those rights. The question in issue in this appeal is whether s 7A extends the workman's rights as well as protecting them. This was the effect judicially accorded to the statutory antecedents of s 7A, in the United Kingdom and in Victoria, and the workman submits that it is the effect which ought to be accorded to s 7A, having regard not only to its textual similarities to sections in the United Kingdom and Victorian Acts, but also to its legislative history in the Ordinance itself."
Following a discussion on differing authorities, Brennan J stated at 596:
"The history of the provision shows that its antecedents were intended to secure to a workman a payment which, although it may ultimately prove not to have been payable, is nevertheless expected to be paid in the ordinary course of making payments the liability for which has been accepted by the employer. The structure of the section shows that, although the liability to make the payment in question must be referable to the Ordinance, the operation of the section extends to payments beyond those which other sections of the Ordinance make payable.",
and concluded at 596:
"In my opinion, the section extends to a payment where the liability upon which the workman (or other beneficiary) relies to make it payable is a liability accepted or admitted by the employer, whether the payment is in truth due or not, and whether or not the payment is ultimately held to have been due. If an employer wishes to resile from or qualify his acceptance or admission of liability, the section requires him to seek the approval of the Tribunal, or to be able to invoke the protection of an Act, or to be within an exemption which overrides the statutory obligation which s 7A superimposes upon the employer's acceptance or admission of liability."
No such exemption is afforded by the Tasmanian legislation. No certification is required in relation to the provisions of the Act, s86(1)(a) and (b), presumably because the worker has knowledge of the factual circumstances provided therein. But the remaining provisions, relating as they do to matters which might be in dispute once a worker is made aware of their consequences, require certification. In those circumstances, the giving of notice is a condition precedent to the exercise of any right by the employer to terminate the payment.
The proposition contended by the appellant is contrary to a number of decisions of this Court and, in my opinion, despite disavowal by counsel, might require reconsideration of Freemasons Homes (supra). In Viney v Roney Management Pty Ltd (1996) 6 Tas R 240, Zeeman J was required to consider a reduction of payment in circumstances where a worker had failed to submit herself to a medical examination as required by the Act, s85. The Tribunal made a finding that the worker had not been given notice in the required form. In dealing with the inter-relationship of the Act, ss69 and 86, Zeeman J said at 244 - 245:
"I do not accept those submissions. I consider them to be contrary to what was held by the Full Court in Atkinson v Nipper Cleaning Services Pty Ltd, A105/1993. That case is authority for the proposition that s86 comprehensively lays down the circumstances in which an employer may lawfully terminate or reduce a weekly payment …
…
It would follow from the respondent's argument as to the operation of s69 that s69(6) is self-operating in that once weekly payments have been made in a total amount which equals that prescribed by that subsection, an employer is entitled to terminate payments. However, that is not the position because of the provisions of s86(1)(e) and (3). Even where payments have reached the statutory limit an employer must continue making further payments until the expiration of 10 days of the service on the worker of a notice in the terms of s86(3)(a)."
A similar approach was taken by Zeeman J in Goscombe v Cadbury Schweppes Pty Ltd (1993) 3 Tas R 19, and Wright J in Keleher v Sherrin Hire Pty Ltd 138/1997. Although not directly concerned with the import of the Act, s86, this Court in Freemasons Homes (supra) adopted a similar conceptual approach. In that case, the worker made a claim for compensation outside of the six month period required by the Act, s32(1). The employer made no payments and instead appeared at the hearing attempting to raise the question of the limitation period. The Court dismissed an appeal against an order requiring the employer to make payments because it had not given notice disputing liability in accordance with the Act, s81A. In relation to the argument that there was no requirement to make payment unless and until the worker had obtained leave to bring proceedings out of time, and that s81 was simply procedural, Cox CJ said at 450:
"In my opinion the appellant's submission is without substance. The clear intent of ss81 and 81A is to require the employer, upon receiving a claim for compensation, to make up his mind promptly whether to pay or to dispute the worker's right to payment. If he fails to do the latter, he is under a clear obligation to do the former and the worker has a corresponding right to receive the payments. The employer in these circumstances still has the right to seek relief from payment under ss81A(5), 86 or 88 and may, on such an application, challenge the worker's right to payment, as the appellant sought to in this case, either by virtue of failure to comply with s32(1) or because the incapacity is not caused by the injury. Those issues are germane to applications of that sort by an employer. The respondent worker in this case had the right to receive payments of weekly compensation for the period covered by the medical certificates from the time allowed in s81(1) and on her application under s42 the only issue was whether the respondent had received a claim for payment of weekly compensation in relation to an injury to a worker employed by it."
In relation to the same proposition, Zeeman J said at 457:
"The appellant submitted that, despite the statutory scheme provided for by ss81 and 81A, an employer may fail to make a payment of weekly compensation upon receipt of a claim for compensation asserting incapacity for work but not invoke the provisions of s81A and place the onus upon the worker to refer the matter to the Tribunal or, at the relevant time, the Commissioner. The appellant further submitted that upon such a reference the Tribunal has, or at the relevant time the Commissioner had, jurisdiction to embark upon a consideration of all questions concerning the worker's entitlement to compensation.
That is contrary to the intent evinced by the statutory scheme. The receipt by an employer of a claim for compensation whereby a worker employed by the employer asserts that he or she has suffered an injury resulting in incapacity for work, accompanied by a relevant medical certificate, is sufficient to impose upon an employer the obligation to commence making a weekly payment. The employer suffers no injustice as a result. If an employer is minded to raise any question as to the entitlement of the worker to receive a weekly payment, whether as the result of the absence of notice of injury, lateness of the claim for compensation, disputing injury or incapacity or any other matter, the employer can effectively do so under s81A. A failure of the employer to do so means that it is under an obligation to commence making a weekly payment."
There is a strong analogy between the circumstances considered in Freemasons Homes and the present case. The question of entitlement, or in this case continuing entitlement, is determined by reference to the giving of notice and/or the provision of certification. In Freemasons Homes, the employer had a right to refuse to make payment with respect to an application made out of time. But it could not give effect to that right until it had met the procedural requirements. Here the employer was entitled to cease making payments because the statutory limit had been reached; but again cannot exercise that right unless and until it has complied with the requirement imposed by the Act, s86(1)(e). This Court was not invited to reconsider its earlier decision, and unless it does so, the approach taken by the learned primary judge is, in my opinion, the one required by authority.
I have had the advantage of reading in draft form the reasons of the learned Chief Justice and agree with the logic of his view that the conclusion of entitlement "appears absurd and unreasonably over-compensates a worker for the employer's failure to give ten days' notice before terminating payments in consequence of the cessation of the employer's liability to make them." However, I do not agree that the opposite conclusion can be readily reconciled with the decision of the majority in Freemasons Homes (supra), nor that a distinction based on the question of enforceability resolves the issue. I feel constrained to follow what I understand to be the ratio in Freemasons Homes, and, absent revisiting, reluctantly adhere to my opinion that the appeal ought be dismissed.
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