The length of time that a worker has to serve a claim for workers’ compensation on their employer is not well understood. Employers are increasingly finding themselves being served with claims for workers’ compensation for injuries that are alleged to have occurred more than 12 months prior to a claim being made. Whilst the statutory provisions do offer some protection to employers, a claim will rarely be dismissed on the basis of its late service, alone.
Pursuant to section 178(1)(b) of the Workers’ Compensation and Injury Management Act 1981 (the Act), a claim will not be considered valid if it is served on an employer more than 12 months after an injury is alleged to have occurred. Claims will often be immediately disputed by employers and insurers for this reason.
There is, however, an important (and misunderstood) qualifier in section 178(1)(d) of the Act. That section says that, notwithstanding the failure to serve a claim within the prescribed time of 12 months, a claim will still be valid:
…if it is shown that the employer has not been prejudiced in defending the proceedings by such failure, or if it is found that the failure was occasioned by mistake, absence from the State, or other reasonable cause.
If an employer disputes liability for a claim in reliance on section 178(1)(b), and the worker seeks a determination of liability for their claim at WorkCover WA, the onus is on the employer to prove that they have been prejudiced in defending the claim. It is not enough for an employer to simply say that the claim has not been made within 12 months. An employer must “show a basis in fact” supporting its position that the late notice of the claim has prejudiced its defence: Stevens v The Motor Vehicle Insurance Trust (1978) WAR 232.
Establishing prejudice
Prejudice is difficult for employers to establish, given that if it is accepted by an Arbitrator, the worker’s claim is dismissed. It is the responsibility of the employer to produce compelling factual evidence supporting its claim of prejudice.
The position commonly adopted by employers is that, if the claim had been made earlier, factual and medical investigations would have been undertaken in relation to the claim. From a factual perspective, it may be the case that witnesses of fact are no longer contactable or that records (such as surveillance footage) have been destroyed in the intervening period. From a medical perspective, it may be the case that an independent medical examination would have provided a clearer assessment of the injury at an earlier stage. Obviously, as the length of time between the alleged injury and the service of a claim increases, so does the strength of a potential defence pursuant to section 178(1)(b) of the Act.
That said, the Courts in WA have confirmed that it is not enough for an employer claiming prejudice to merely assert that they “would have made further investigations into the existence and extent of the alleged injuries”. The employer must show “what those further investigations (if done) might have revealed” and “that those revelations are material and why it is no longer possible to obtain information of that kind”: Hunter v Morris (2000) WASCA 23.
Where no evidence of prejudice is able to be provided by an employer, a defence under section 178(1)(b) must fail. This is the case regardless of how old the alleged injury might be, and it follows that there may be (and have been) occasions where an employer is held liable to pay workers’ compensation in relation to an injury sustained many years prior.
In the case of Burswood Nominees Pty Ltd v Sharon Patricia Junior (C47 – 2007), the Magistrate determined that a delay of 15 years between the alleged injury and the service of a claim did not represent prejudice to the employer. The worker, a croupier, had first given notice her bilateral wrist and hand symptoms to her employer in 1991, but she did not make a claim for workers’ compensation until 15 March 2006.
Whilst her employer alleged prejudice in the defence of the claim due to the delay in the claim being made, the Magistrate determined that:
- no evidence of actual prejudice (as discussed above) had been relied upon; and, in any event
- although a claim for workers’ compensation had not been made at the time, the worker had attended her employer’s nursing post in relation to her work-related wrist symptoms in 1991, and as a consequence was prescribed alternative duties. This served as evidence that the employer knew about the injury at that time, and could have taken some action if necessary.
In practice
Whilst it is correct that a claim may be disputed where it is made more than 12 months after the date of an alleged injury, it is important for employers and insurers to appreciate that this defence is very difficult to establish at Arbitration.
Although there may be occasions where an employer genuinely has no knowledge of a work injury, and that the lapse of time has resulted in a real inability to obtain the factual or medical evidence necessary to defend the claim, those situations are rare. The onus is on the employer to show what that evidence might have revealed, why it is no longer able to be obtained and ultimately, how that has prejudiced its defence.
If an employer is aware of an injury being sustained at the time, it is not open to that employer to subsequently submit that they have been prejudiced in the defence of the resultant claim. This is significant for employers and should serve as an important reminder that accurate record keeping and injury management are vital to mitigating the risks that may be posed by future workers’ compensation claims (and assisting in their defence, where necessary).
This article was written by Andrew Davidson, Partner and Matthew Thickett, Senior Associate.