Interpreting Section 39 of the Workers Compensation Act 1987

Technical and Further Education Commission t/as TAFE NSW v Whitton [2019] NSWWCCPD 27 – President Judge Phillips

Section 39 of the Workers Compensation Act 1987 (1987 Act) provides that a worker has no entitlement to weekly payments of compensation in respect of an injury after receiving payments for an aggregate period of 260 weeks, unless the worker’s degree of permanent impairment resulting from the injury is more than 20% whole person impairment.

In Technical and Further Education Commission t/as TAFE NSW v Whitton [2019] NSWWCCPD 27 President Judge Phillips of the Workers Compensation Commission considered whether a worker is entitled to weekly payments of compensation after the expiry of an aggregate of 260 weeks and before an AMS has assessed a degree of permanent impairment as a result of injury that is greater than 20%.

Background

There was no dispute that the worker suffered an injury to her right wrist on 2 November 1999 in circumstances implicating her employment and the workers compensation insurer attended to weekly payments of compensation during the relevant periods.

On 4 November 2013 a work capacity decision was made which found that the worker had no current work capacity and she was transitioned onto the current scheme of weekly payments.

On 10 August 2017 the worker was assessed by the insurer’s qualified medico-legal expert as suffering 13% whole person impairment. As such, on 16 August 2017 the worker was issued a notice in accordance with section 39 of the 1987 Act advising that her weekly payments would cease on 25 December 2017.

The worker commenced proceedings in the Workers Compensation Commission in respect of a permanent impairment threshold dispute. She was referred to Dr Mastroianni, an Approved Medical Specialist, and on 18 June 2018 was assessed at 32% whole person impairment.

The worker’s compensation insurer subsequently reinstated weekly benefits from 18 June 2018, being the date of the Medical Assessment Certificate, but declined to make payments for the period 26 December 2017 to 17 June 2018.

Arbitrator Decision

The claim for weekly benefits during the disputed period proceeded to determination before Senior Arbitrator Bamber.

The Senior Arbitrator found that the language of section 39 of the 1987 Act did not have a temporal component and if the Parliament wished to limit payments to workers from week 260 until after they had an assessment of greater than 20% whole person impairment, it could have so provided.

Accordingly, the Senior Arbitrator awarded the worker weekly payments from 26 December 2017 to 18 June 2018 “at the applicable rate for a worker with no current work capacity.”

On Appeal

The Employer argued that the Senior Arbitrator had erred when construing section 39 of the 1987 Act as giving a worker a retrospective entitlement to weekly payments after the expiry of 260 weeks and before the worker had been assessed as having over 20% whole person impairment.

The Employer submitted that on a proper construction, section 39 of the 1987 Act removed a worker’s entitlement to weekly compensation after 260 weeks and only restored it from the point that the degree of permanent impairment was assessed as provided by section 65 of the 1987 Act as being more than 20%.

Therefore, the worker had no entitled to weekly payments during the disputed period.

Presidential Decision

His Honour found that the Senior Arbitrator erred in her approach to the construction of section 39 of the 1987 Act and adopted his reasoning as set out in RSM Building Services Pty Ltd v Hochbaum [2019] NSWWCCPD 15 to find that the worker did not attain the status of a worker with highest needs until 18 June 2018, stating:

“In the absence of a MAC assessment of greater than 20%, in the circumstances of this case, there is no jurisdiction available to enter an award for weekly payments of compensation beyond the aggregate period of 260 weeks. As I said in Hochbaum, the Senior Arbitrator did not have jurisdiction to enter an award which had the effect of restoring an entitlement to weekly payments of compensation before the relevant criterion was met.”

His Honour found that the Senior Arbitrator had failed to take into consideration the importance of section 39(3) of the 1987 Act in the proper interpretation of section 39 as a whole.

His Honour held that section 39(2) of the 1987 Act should be read alongside s39(3) of the 1987 Act, directing attention to whether or not there is an assessment of permanent impairment greater than 20%. If that threshold was reached, then section 39(2) of the 1987 Act was triggered to restore weekly payments of compensation.

The effect of this decision is that a worker is not entitled to reinstatement of weekly payments of compensation which ceased under section 39 of the 1987 Act until  the worker obtains an assessment in excess of 20% whole person impairment.

Discussion 

The decisions of Whitton and Hochbaum highlight the difficulties for workers where much depends upon the assessment of permanent impairment.

Is it better to seek a determination of whole person impairment at an early stage to avoid cessation of weekly benefits or is it better to wait and ensure the most accurate assessment of permanent impairment at the expense of possibly months or years without payments of weekly compensation?

The decisions also highlight the importance of a work capacity decision. If the worker’s weekly benefits are restored in accordance with section 39(2) of the 1987 Act, the amount to be paid will still be determined by the insurer’s most recent work capacity decision.

This article was written by Brad Quillan, Partner, Jenne Tzavaras, Partner and Amy Corry, Associate.