Current work capacity or no current work capacity – is that the only question? – Sabanayagam v St George Bank Limited [2016] NSWCA 145
Originally Published by Lauren McLean on Monday, June 27, 2016 12:00:00 AM
Principles
- A decision to dispute liability for weekly payments is one which is made on the basis of a primary liability dispute.
- An insurer does not have the power to make a decision whether a worker is entitled to weekly compensation or to a continuation of weekly compensation after the expiry of the second entitlement period on the basis of whether they continue to suffer from an injury or do not have any incapacity resulting from injury.
A worker's entitlement to weekly compensation under s 38 of the Workers Compensation Act 1987 (NSW) (the WCA) is dependent only on whether the special requirements in that section have been met.
Background
- The worker was employed by St. George Bank Ltd (St. George) when she sustained injury to her left knee on 3 October 2006.
- St. George accepted liability for her injury and she was able to return to work.
- Her position was ultimately made redundant by St. George, however the worker was subsequently employed by various other employers. The worker's last employer made her position redundant as of 4 March 2013. The worker never returned to work.
- On 20 March 2015, St. George's insurer (the insurer) issued a 'Section 74 Notice' (Notice) to the worker. The Notice disputed the worker had any incapacity resulting from her injury and asserted that she was fit for pre-injury duties. The worker commenced proceedings in the Commission seeking weekly payments from the date of the cessation of payments following the Notice.
Decision
At first instance, the Senior Arbitrator found that the Commission did not have jurisdiction to determine a dispute as to weekly payments after the second entitlement period because such entitlement must be assessed by an insurer.3 The worker appealed the Arbitrator's decision.
Presidential decision
The Deputy President of the Commission (the Deputy President) rejected each of the grounds of the appeal and the worker's appeal failed. The Deputy President considered that the insurer made a decision at some time prior to 20 March 2015 that was a 'work capacity decision' and therefore, the Commission did not have the jurisdiction to determine the dispute with respect to the decision. The worker appealed to the New South Wales Court of Appeal (Court of Appeal).
Court of Appeal decision
The primary issues in dispute were whether the decision to terminate weekly compensation payments after the second entitlement period was a 'work capacity decision' and within the Commission's jurisdiction.
The majority of the Court of Appeal allowed the worker's appeal, and set aside the orders of the Deputy President as well as the determination of the Arbitrator. Sackville AJA provided the primary judgment. Beazley P agreed with the reasons of Sackville AJA and her Honour also agreed with the substance of the comments of Basten JA.
Basten JA stated the Notice did not purport to be, nor was it in fact, a 'work capacity decision'. His Honour further stated that the word 'about' in s 43(1)(a) of the WCA is awkward in the context of s 32A and s 38, but it is necessary to note the exclusion in s 43(2). He stated the various sections work coherently if a 'work capacity decision' does not include a decision rejecting any degree of incapacity resulting from an injury. He therefore concluded the Deputy President was wrong to hold the Commission had no jurisdiction with respect to the dispute raised by the worker.
The primary findings made by Sackville AJA included that:
If the Deputy President intended to find that the insurer made a 'work capacity decision' prior to 20 March 2015, that finding was in error because the making of findings and the drawing of inferences in the absence of any evidence to support them is an error of law
Even if a worker has a partial or total incapacity resulting from an injury, their entitlement ceases after 130 weeks unless he or she can satisfy the special requirements under s 38(1) of the WCA
Division 2 of pt 3 of the WCA does not confer a general or comprehensive power on insurers to decide whether workers are entitled to weekly compensation or to a continuation of weekly compensation after the expiry of the second entitlement period. His Honour went on to state that insurers are not given power to decide that a worker no longer has a total or partial incapacity and thus no longer satisfies the requirements of s 33 the WCA
Nothing in the Notice indicated the insurer was exercising or even purporting to exercise the powers conferred on it by div 2 of pt 3 of the WCA because it does not record or refer to any assessment of either 'no current work capacity' or 'current work capacity'
It was noted that it is quite possible that the insurer might have concluded that the worker did not have 'no current work capacity' or 'current work capacity'
Section 43(1)(f) of the WCA is not a discrete grant of decision making power to an insurer, rather its purpose is to describe a category of decision that is to be regarded as work capacity decisions. The scope of s 43(1)(f) is determined by the nature of the powers conferred on insurers by other provisions in div 2 of pt 3 of the WCA
The reference in s 43(2)(a) to a 'decision to dispute liability for weekly payments of compensation' is a reference to a decision to dispute liability for weekly payments, for example, on the basis that the claimant or worker did not sustain injury.
The Court of Appeal has held that an insurer does not have the power to make a decision whether a worker is entitled to weekly compensation or to a continuation of weekly compensation after the expiry of the second entitlement period on the basis of whether they continue to suffer from an injury or do not have any incapacity resulting from injury.
A worker's entitlement to weekly compensation after 130 weeks is dependent only on whether the special requirements have been met. This would suggest that the majority of decisions will be 'work capacity decisions' because they will be a decision about a worker's 'current work capacity' (and where a worker has returned to work for 15 hours etc) or whether a worker has 'no current work capacity' (and this is likely to continue indefinitely).
The Court of Appeal has noted that it is quite possible that an insurer might conclude that a worker does not have 'no current work capacity' or 'work capacity' because they are fit for their pre-injury employment. In that case it might be argued the worker is not entitled to payments under s 38. A decision of this nature might be characterised as a 'work capacity decision' falling within s 43(1)(f) because if the scope of the powers conferred on the insurer is to make an assessment of 'current work capacity' and 'no current work capacity' then arguably the scope extends to a finding that a worker is fit for pre-injury employment.
An interesting issue is whether the Court of Appeal's findings as to an insurer's powers to determine a worker's entitlement to weekly compensation in the context of a s 38 claim equally apply to a determination of a worker's entitlement under ss 36 and 37 of the WCA.
- Beazley P, Basten JA and Sackville AJA.
- [2016] NSWWCCPD 3.
- Rawson v Coastal Management Group Pty Limited [2015] NSWWCCPD; Lee v Bunnings Group Limited [2013] NSWWCCPD 54.