Return to Work Act (2014) – Procedure

Prepared by William Duddy

We are pleased to publish, for your general information, this series of papers on the upcoming changes to the workers compensation system. These papers contain an overview of some of the significant features of the Return to Work Act 2014, along with some commentary. These papers contain our opinion on how the new legislation might operate but the information below does not constitute legal advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. If you would like Duddy Shopov to assist you, please contact our office on (08) 8110 5555 for further information and to arrange an appointment.

CLAIMS FOR COMPENSATION

Section 30 of the RTW Act establishes the process by which claims for compensation are made, and is similar to the existing Section 52 of the WR&C Act.

Section 30 details the mandatory (by use of the word “must”) requirement for a claim to be made in the manner and form approved by the Corporation, made within the prescribed period of six months, and must be supported by a Certificate in the designated form.

Section 30(2) provides that if a notice of an injury is required, a claim may not be made in respect of that injury unless notice of the injury has been given as required.

Section 30(3) carries over the provisions from Section 52 of the WR&C Act that the absence of, or a defect in, a Notice of Injury is not a bar to a making of claim if the proper determination of the claim has not been substantially prejudiced or the failure to give notice, or the defect in the Notice, was occasioned by ignorance, mistake or absence from South Australia, or other reasonable cause and the same considerations apply in relation to the failure to make a claim for compensation within the prescribed period of six months.

Of particular note is the provision in Section 30(9), namely that a self-insured employer can dispense with the requirement for a Certificate under Section 30(1)(c) if a claim only relates to Division 2 – medical expenses.

This means that claims for income support, an economic loss lump sum and a non-economic loss lump sum should be supported by a Certificate in the prescribed form. Note that the self-insured employer has power/discretion to dispense with the requirement for a Certificate, but only in circumstance where the claim for compensation is medical expenses. The issue as to whether in fact the requirement for a Certificate should be dispensed is a matter of discretion of the Compensating Authority.

Section 31 of the Act continues the right of the self-insured employer (and as delegated to the self-insured employer pursuant to Section 134 of the Act), to undertake such investigations and enquiries as are necessary in order to achieve an evidenced based decision with respect to the determination of the claim. Section 31(2) includes the power to require a worker to submit to an examination by a recognised health practitioner and Section 31(3) recognises the right to reject the claim in the event that a claimant fails or refuses to furnish information reasonably required pursuant to Section 31(1) or fails to submit to the medical examination as required under Section 31(2).

INTERIM BENEFITS

Section 32(1) provides a discretion to make interim payments to a claimant pending the final determination of a claim. In the event that a claim is not determined within 10 business days, then Section 32(2) provides that the self-insured employer (again this is a delegated power and discretion pursuant to Section 134) must offer to make interim payments and in the event it appears the worker was not entitled to such payments, any interim payments can be recovered as debt.

Section 31(10) provides for the right of a self-insured employer to redetermine a claim, subject to it being an appropriate case and the criteria in Section 31(10)(a) –(e) is met.

It is likely that this provision will be interpreted and applied in the same way as it has been by the Workers Compensation Tribunal as the provisions of Section 31(10) are identical to the current Section 53(7a). “New information” does not mean a new medical opinion (per Arnott’s case).

COMMENT

In my view, because of the requirements and considerations that have to take into account in determining compensability, past medical history is even more important in order to determine compensability issues, and accordingly, the power to request information (including information from the worker) pursuant to Section 31(1) should be used rigorously in relation to both factual matters and medical matters.

EXPEDITION OF DECISIONS

Section 113 of the RTW Act establishes a similar process to the current Section 97 WR&C Act in that where a worker or employer believes there has been undue delay in deciding a claim or other matter affecting the worker or employer, may apply to the Tribunal, for expedited determination of the matter.

The process for the lodgement of a claim and the initial determination of it is substantially similar to the process employed under the WR&C Act. However, note that provisional liability no longer applies and interim payments must be commenced within 10 business days from receipt of the claim.

FURTHER PROCEDURAL REQUIREMENTS

Section 96 of the RTW Act sets out the dispute resolution processes and in particular the role of the SA Employment Tribunal.

Section 95 of the Act details those persons who are able to make application to the Tribunal and Section 97 details what decisions “made by the Compensating Authority are reviewable by the Tribunal pursuant to the Act”.

Again, any application must be lodged within one month of receipt of the notice of the reviewable decision pursuant to Section 100 of the RTW Act albeit that Section 100(2) enables the Tribunal to allow an extension of time if good reason exists and the other party to the dispute will not be unreasonably disadvantaged because of the delay in commencing the dispute proceedings.

Section 104 retains the initial reconsideration process whereby the Compensating Authority/decision maker on receiving an application for review must reconsider its decision “in the light of the matters set out in the application” (Section102(1)(b)) and the process contemplates that a disputed decision in this process can be confirmed or varied. Section 102(5) contemplates that the reconsideration process will be completed within 10 business days after receipt of the copy of an application or for such longer time as allowed by the Registrar on application.

In the event that a disputed decision is confirmed or varied the matter is then referred to the Employment Tribunal. Section 104 of the Act contemplates a Compulsory Conciliation Conference between the parties, with each party disclosing evidentiary material. Section 104(4) provides that surveillance is still treated in a special category and whilst its existence must be disclosed the party need not give the other party access to that material. These are previously established case law authorities such as Rubbins v Harbord on this issue which we think remain relevant.

In the event that a matter does not resolve at the Compulsory Conciliation Conference the matter is then referred for hearing and a determination of the dispute between the parties, then giving rise to an appeal to the Full Bench of the Tribunal and ultimately an appeal to the Full Court of the Supreme Court on the question of law.

Section 121 and Section 122 of the RTW Act sets out the powers and procedures of the Tribunal on a referral for hearing.

In the event that an application for review is made against a notice to reduce or discontinue weekly payments pursuant to Section 48 but where an application for review is made, the operation of the decision is suspended until the matter first comes on before a member of the Tribunal and may be further suspended thereafter but not if the effect of such extension is the continuation of weekly payments after the end of the period of 104 weeks from the date on which the relevant incapacity for work first occurred (except in the case of a seriously injured worker).

ELECTION

The election provisions are mentioned in Section 73(4) and Section 73(5) and (6) and is supported by Regulation 39 – the election must be in writing, furnished to the self-insured employer before the worker commences proceedings at common law or commences redemption negotiations under Part 4 Division 5 of the Act, is subject to advice about the consequences of such an election from a legal practitioner and gazetted costs associated with the provision of such advice. A “seriously injured worker” can redeem liability associated with income support/weekly payments but cannot redeem liability associated with medical services (see Section 54(2)).

SUMMARY

The procedure associated with the lodgement of a claim, its initial investigation, determination, lodgement of an application for review and the reconsideration process remains substantially the same as under the WR&C Act.

I expect that the Employment Tribunal process will still emphasise the initial Conciliation Conference but does recognise expanded powers of the Tribunal to influence and monitor the outcome of a dispute, which if not resolved, ultimately ends up in hearing.
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Return to Work Act (2014) – Entitlement to Compensation

Prepared by William Duddy

We are pleased to publish, for your general information, this series of papers on the upcoming changes to the workers compensation system. These papers contain an overview of some of the significant features of the Return to Work Act 2014, along with some commentary. These papers contain our opinion on how the new legislation might operate but the information below does not constitute legal advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. If you would like Duddy Shopov to assist you, please contact our office on (08) 8110 5555 for further information and to arrange an appointment.

Entitlement to Compensation

The purpose of this paper is to address the entitlement to compensation under the Act, once it has been established that an injury is compensable.

Medical Expenses etc. – Part 4 Division 2

A worker is entitled to be compensated for costs of services that are reasonably incurred in consequence of having suffered a work injury.

Section 33(2) then details the “species” of such “medical services”.

The way Section 33 is framed also carries forward the concept that “recovery/return to work services” must be “approved” and in Section 33(9) it is specifically provided that approved recovery/return to work services is a reference to such services being provided by a person who has an agreement with the Corporation for the provision of those services. This power is delegated to a self-insured employer pursuant to Section 134.

Importantly, Section 33(17) also provides that in relation to certain classes of services, a worker can effectively pre-apply for approval. (This overcomes the Cristea type argument that the worker must incur an expense for the Tribunal to have jurisdiction and the consequence practice of dispute proceedings for a Plan or Program making provision for such medical services.) Regulation 22 contemplates that a specific application must be made and the only “species” of medical costs which does not apply to this process is approved recovery/return to work services.

Section 33(20) effectively sets a “sunset” on the entitlement to medical and like expenses. If the worker does not have an entitlement to receive weekly payments in relation to a work injury for a continuous period of 12 months or has not had any entitlement to receive weekly payments and a period of 12 months has expired, then costs incurred after such periods do not give rise to an entitlement under the Act.

However, this provision does not apply in relation to a seriously injured worker, nor does it apply in relation to any therapeutic appliance required to maintain the worker’s capacity. As the definition of “therapeutic appliance” in Section 3 includes a hearing aid, the liability for such appliances continues irrespective of the sunset clause in Section 32(20). However, there is also another qualification to the sunset on medical expenses and that relates to surgery, medical, nursing or medical rehabilitation costs where application has been made before the end of the sunset period that it is indeed reasonable and appropriate for surgery or other services to be provided after the end of the sunset period (Section 33(21)).

Weekly Payments/Income Support

If a worker suffers an injury that results in incapacity for work, the worker is entitled to weekly payments at 100% of the worker’s notional weekly earnings for a period of 52 weeks, and thereafter at 80% of notional weekly earnings for a further 52 week period.

Section 39(3) specifically provides that a worker has no entitlement to weekly payments in respect of a work injury after the end of the period of 104 weeks from the date on which the incapacity for work first occurs. Therefore entitlement is measured by duration of incapacity – see also Section 4(11) and Section 4(12).

However, Section 40 provides that where the worker undergoes surgery approved by the self-insured employer then the worker is also entitled to supplementary income support payments for up to 13 weeks, if after the two year period.

In the case of seriously injured workers the entitlement is at 100% for the first year, and then 80% thereafter for the balance of the worker’s working life (to adjusted retirement age).

The Act then provides for an economic adjustment to weekly payments (Section 47) for seriously injured workers, an adjustment due to change from original arrangements pursuant to Section 45 of the Act (for example, in relation to a non-cash benefit), and a review of weekly payments process pursuant to Section 46 of the Act.

Section 5 sets out the criteria required to determine average weekly earnings, and is fundamentally based on the formula that has been in place since 2008 – namely the average weekly amount that the worker earned during the period of 12 months preceding the relevant date (being the date of injury) in employment.

Section 50(7) provides that weekly payments may be suspended during any period for which the worker applies, and takes, annual leave. This also applies in relation to a worker who is absent from Australia for a period of in excess of 28 days (Section 51).

Section 48 of the Act sets out the machinery by which a reduction or discontinuance of weekly payments can be undertaken and if such a step is taken, then on application to the Tribunal, the operation of the decision is suspended until the matter first comes before a member of the Tribunal following which the Tribunal as it thinks fit may further suspend the operation of the decision, vary or revoke it.

Division 5 – Section 53 retains the ability of the parties to redeem the liability to make weekly payments, consequent upon professional, financial and medical certification.

A seriously injured worker may entertain redemption negotiations for weekly payments, subject to the “election” we have previously discussed in relation to seriously injured workers and their potential right to pursue an action at common law.

Further, Section 54 retains the provision in relation to a redemption of liability associated with medical expenses, but this cannot apply in relation to seriously injured workers (Section 54(2)) and such a redemption only requires professional advice and medical certification (not financial advice).

Permanent Impairment Lump Sums

The Return to Work Act contemplates two potential entitlements to lump sum payments in Section 56 and Section 57.

In Section 56, so long as a worker is assessed as having a degree of whole person impairment of 5% or more, then the worker has an entitlement to a lump sum payment in accordance with the schedule. Such an entitlement does not arise in relation to a psychiatric injury or consequential mental harm or noise induced hearing loss.

An entitlement to a lump sum for whole person impairment “economic loss” contains a loading having regard to the worker’s age and is designed to compensate by way of loss of future income.

The second form of lump sum payment arises pursuant to Section 57 of the Act for “non-economic loss”. A worker must assess at 5% or more, and has no entitlement in relation to a psychiatric injury or consequential mental harm.

If a trauma gives rise to two or more work injuries, then they may be treated as one pursuant to the Impairment Assessment Guidelines and the Act specifically provides that only one claim can be made under the Act in respect of any impairment or impairments that result from one or more injuries arising from the same trauma.

Death

Where a worker dies as a result of a work injury, a domestic spouse or domestic partner (as defined) is entitled to weekly payments equal to up to 50% of the notional weekly earnings of the deceased in the event of total dependency, or some lesser percentage in the event of partial dependency.

A dependant and orphaned child is entitled to weekly payments up to 25% or some lesser percentage of the notional weekly earnings of the deceased worker.

A non-orphaned dependent child is entitled to weekly payments up to 12.5% or some lesser percentage of the notional weekly earnings of the deceased.

Section 59(1)(d) also provides that dependant relative (as defined) is also entitled to compensation by way of weekly payments as may be determined by the Corporation (this is delegated power pursuant to Section 134 of the Act). The Act retains a power to commute a liability to pay weekly payments, but only if the actuarial equivalent of the weekly payments does not exceed the prescribed sum.

Weekly payments made on account of the death of a worker are reviewed pursuant to Section 60 of the Act.

Section 61 also retains the entitlement to a lump sum payment in the event of the death of a worker as a result of a work injury. Section 61 then sets out a series of formulas that effectively relate to the division of the prescribed sum between a partner, child and other dependents.

Section 62 retains the liability to pay for the cost of a funeral (as per the regulations) and also continues the entitlement to counselling services.

Comment

It can be seen from the foregoing summary that whilst the Return to Work Act puts a definitive timeframe on entitlement to weekly payments and medical expenses (except for seriously injured workers), there is indeed a consequent “trade off” in terms of entitlement to lump sums in two forms – economic loss and non-economic loss.

Put another way, certainty and finality in relation to weekly payments and medical expenses is at the expense of enhanced lump sum payments.

For injuries that develop gradually (Section 188), it is important that the date of injury and the date of incapacity be fixed because that is the pivot from which time will run in determining when the entitlement to weekly payments and medical and like expenses expires.

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Return to Work Act (2014) – Seriously Injured Worker

Prepared by William Duddy

We are pleased to publish, for your general information, this series of papers on the upcoming changes to the workers compensation system. These papers contain an overview of some of the significant features of the Return to Work Act 2014, along with some commentary. These papers contain our opinion on how the new legislation might operate but the information below does not constitute legal advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. If you would like Duddy Shopov to assist you, please contact our office on (08) 8110 5555 for further information and to arrange an appointment.

Seriously Injured Worker

The Return to Work Act 2014 imports a number of provisions and key concepts from the Workers Rehabilitation and Compensation Act, 1986 (as amended).

However, one of the “new” provisions and concepts is that of the “seriously injured worker” – which effectively creates a new category of injured worker and which provides for certain specific entitlements and obligations.

Section 21 “Seriously Injured Worker”

Section 21(2) provides that for the purposes of the Act, “a seriously injured worker is a worker whose work injury has resulted in permanent impairment and the degree of whole person impairment has been assessed under Division 5 for the purposes of this Act to be 30% or more”.

Section 21(3) provides that pending an assessment of permanent impairment, the Corporation (interpolate here self-insured employer as a delegation pursuant to Section 134 of the Return to Work Act) may of its own initiative, or must on application made by the worker, make an interim decision to the effect that a worker will be taken to be a seriously injured worker under this Act if:-

(a) It is satisfied, or it appears, that the worker’s injury has or will result in permanent impairment; and
(b) It appears that the degree of whole person impairment is likely to be 30% or more.

Section 21(5) provides that unless or until a worker is assessed or determined to be a “seriously injured worker” as contemplated by Section 21, the worker will be taken not to be a seriously injured worker for the purposes of the Act.

However, if at a later time the worker is characterised as a seriously injured worker then Section 21(6) provides that the worker will be taken to have been a seriously injured worker from the date of the injury and the worker is entitled to paid any amounts that would have constituted the worker’s entitlement had the worker been taken to be a seriously injured worker at the time.

Section 21(8) specifies that in assessing whether the 30% threshold has been met the following criteria apply:-

(a) Impairment resulting from physical injury is to be assessed separately from impairment resulting from psychiatric injury; and

(b) In assessing impairment from physical or psychiatric injury, no regard is to be had to impairment that results from consequential mental harm (as defined); and

(c) In assessing the degree of whole person impairment resulting from physical injury, no regard is to be had to impairment that results from a psychiatric injury or consequential mental harm; and

(d) The 30% threshold is not met unless the degree of whole person impairment resulting from physical injury is at least 30% or the degree of whole person impairment resulting from psychiatric injury is at least 30%.

Entitlement to Compensation

A worker assessed or determined to be a “seriously injured worker” is entitled to income maintenance beyond 104 weeks (the first two years) and has an entitlement at 80% of notional weekly earnings until retirement age.

The “sunset” to an entitlement to medical and like expenses pursuant to Section 33(2) of the Act does not apply in relation to a seriously injured worker such that a seriously injured worker has an ongoing entitlement for reasonable and necessary medical and like expenses pursuant to Section 33 of the Act.

Finally, Section 72 of the Act provides that a seriously injured worker may be entitled to pursue a claim at common law – where an injury or death has been caused by the negligence or other tort of the worker’s employer, arising from employment, giving rise to an entitlement to damages at common law.

Section 73(4) provides that where a seriously injured worker has a right of action against his employer for damages, then the worker must make an election in accordance with the Regulations.

Regulation 39 provides that such an election must be in writing and furnished to the self-insured employer before the worker commences common law proceedings or before the worker commences negotiations for redemption.

In relation to recovery/Return to Work Plans, Section 25(11) provides that a Plan established under Section 25 “must not impose any obligation on a seriously injured worker to return to work (but may include processes designed to assist a seriously injured worker to return to work at the request of the worker).

Common Law

To qualify for a damages claim, the worker must meet the criteria as a “seriously injured worker”, and therefore have at least a 30% whole person impairment.

In the case of a psychiatric injury resulting in an assessment or determination that a worker is a “seriously injured worker” (assessed in accordance with the gepic criteria), then an award of damages can only be made if the psychiatric injury is primarily caused by the negligence or other tort of the employer.

An action for damages cannot be commenced until and unless the worker has made an election.

A seriously injured worker cannot therefore make a claim for both a redemption of liability to make weekly payment and damages for future economic loss and conversely cannot enter into a redemption agreement to redeem liability to pay weekly payments until or unless the election contemplated by Section 73 has been made.

The election requires that the worker receive independent legal advice, payable by the Compensating Authority and there is to be a gazetted rate applied, and an action for damages cannot proceed to trial unless mediation has occurred (Section 85) and common law proceedings are to be brought against the employer but are to be defended by either the Corporation or the self-insured employer pursuant to Section 93 of the Act.

Common law entitlements can include an entitlement to loss of consortium, pain and suffering, past and future loss of earning capacity and so forth. These entitlements should be measured against entitlements received under a workers compensation claim.

On conclusion of a common law/damages action, the worker ceases to be entitled to further compensation pursuant to the Act except for medical and like expenses (Section 75(2)(a)(i)) or rehabilitation services pursuant to Part 3 of the Act.

Commentary

As the Act creates a new category of worker, and details distinct rights and entitlements applying to “seriously injured workers” (as defined), it is important from a claims administration perspective to try and identify at an early stage whether a worker’s injury will qualify.

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The information on this site is not legal advice. If you require legal advice, you should speak to a solicitor. If you would like Duddy Shopov to assist you, please contact our office on (08) 8110 5555 for further information and to arrange an appointment.

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