Intended and unintended consequences – Transitional provisions of the Return to Work Act (2014) SA

21 June 2016

As a result of the decision of the Full Bench of the SAET in Pennington v Return to Work SA [2016] SAET 2 (“Pennington“), if pre 1 July 2015 a worker’s weekly payments were discontinued pursuant to section 36 of the Workers Compensation Act (1986) (“WRC Act“), that worker could have no entitlement to weekly payments after 1 July 2015, whether pursuant to the Return to Work Act (2014) SA (“RTW Act“) or at all.

Pennington considered the effect of clause 37(6) of the transitional provisions of the RTW Act which provides:

“To avoid doubt, a person who, before the designated day [1 July 2015], has ceased to have an entitlement to weekly payments on account of a discontinuance under section 36 of the repealed Act is not entitled to weekly payments under this clause (or under the repealed Act).”

Ms Pennington had suffered an injury before 1 July 2015 which gave rise to a short period of total incapacity and thereafter partial incapacity.  After the period of total incapacity, Ms Pennington was able to secure more lucrative employment than that which she had previously had.  Consequently, the compensating authority issued a section 36 Notice, discontinuing weekly payments.

When the RTW Act came into force on 1 July 2015, Ms Pennington was still working and receiving more by way of income than her notional weekly earnings.  However, not long after the introduction of the RTW Act, her employer went into liquidation.
As Ms Pennington was at all material times partially incapacitated, she argued that she had an entitlement to resume weekly payments of compensation.

The compensating authority relied on clause 37(6).  Principally, the worker argued that, in effect, the entitlement to weekly payments was a potential or eligibility to receive weekly payments that did not have to materialise.  That is to say, if there was an underlying incapacity, the entitlement could be reinvigorated.

The Tribunal seemed to have some sympathy with this position, noting that had the worker’s employer ceased trading before 1 July 2015, the worker would have been immediately entitled to receive weekly payments and, therefore, those weekly payments would have continued under the RTW Act.

The Tribunal decided that the wording of clause 37(6) was so clear that it must mean that only workers who immediately prior to 1 July 2015 were receiving weekly payments or had not received a section 36 Notice to discontinue weekly payments could continue to receive benefits after 1 July 2015.

The Tribunal said:

“Parliament intended that workers who were not in receipt of weekly payments as at 1 July 2015 due to those weekly payments being discontinued under s.36 of the WR&C Act, are not entitled to receive weekly payments under either the RTW Act or the WR&C Act.”

Therefore, despite having an ongoing incapacity, Ms Pennington had no entitlement under the RTW Act.

As a result, workers who have had their weekly payments discontinued, even if temporarily because, for example, they went overseas or on maternity leave, would not be entitled to receive weekly payments after 1 July 2015.

Section 18

Section 18 of the Return to Work Act 2014 (‘the Act‘) provides an obligation for employers to provide suitable employment to a worker who has been incapacitated due to a work injury, unless it is not reasonably practicable to do so.

The first of a number of cases concerning the interpretation of aspects of section 18, namely Walmsley v Crown Equipment Pty Ltd and Return to Work Corporation of South Australia has been heard and decided.

The worker Walmsley was employed by Crown Equipment Pty Ltd, a registered employer (not a self-insured employer) and had sustained a number of injuries in the course of his employment. Ultimately, the worker was dismissed from his employment and made an application pursuant to the Fair Work Act 2009 (“the FWA”), which was unsuccessful as it was lodged out of time.

The worker sought to invoke section 18 of the Act and demand the employer provide ‘suitable employment’, which the employer refused, asserting that section 18 of the Act was inconsistent with provisions of the FWA, which dealt with unfair dismissal and reinstatement. The employer also argued it was not reasonably practicable to provide suitable duties to the worker as a result of the worker’s injuries, skills and the employer’s business operations.

Deputy President Judge Hannon handed down his decision on 18 March 2016 and held that there is no relevant inconsistency between the Fair Work Act and section 18 of the Return to Work Act.

Further, the employer had not established that it was not reasonably practicable to provide suitable employment in accordance with section 18(1) of the Act and that under section 18(5) of the Act, the Tribunal should order the employer to provide to the worker specified employment.

This was held in the context of Judge Hannon’s finding that the employer did not adequately review the worker’s skills, experience and qualifications with reference to his possible suitability for employment other than full time pre-injury work that was available.

Judge Hannon considered that even if the Tribunal is satisfied that it is not unreasonable to order that the employer provide specified employment, consideration must be given to any matters that mitigate against an order for the provision of employment, which may include evidence as to alleged misconduct or workplace conflict which that compromise the ability of the parties to maintain or renew a productive employment relationship or operational development.

The effect of this decision is that it is evident that employers must consider all possible duties available to an injured worker, even if this is a combination of duties that may require restructuring of other roles. Further, it is necessary to ensure that all relevant medical and workplace assessments have been undertaken and considered in relation to available duties.

This article was written by David Johns, Partner and Kimberley Miller-Owen, Solicitor.

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