The Statutory Setting
6 Divisions 3 and 4 of Part II of the 1988 Act provide respectively (a) for compensation to be payable to an employee "who is incapacitated for work" as a result of an injury and (b) for compensation where an injury to an employee results in "a permanent impairment". A permanent impairment is defined by the Act to mean the loss, the loss of the use, or the damage of malfunction, of any part of the body or bodily system or function or part thereof, which is likely to continue indefinitely.
7 Mrs Pantic was in receipt of regular incapacity payments (seemingly under s 19, then s 21, of Division 3) between 1990 and April 2004. Her 2007 compensation claim for a permanent impairment was founded on s 24(1) and s 27 of Division 4.
8 The effect of those two sections along with s 28 (a machinery provision) was, as indicated by the Full Court in Hoyle v Telstra Corporation Ltd (1997) 145 ALR 148 at 149-150, that:
a permanently impaired employee becomes entitled to receive a specific lump sum, on top of any other compensation to which he or she is entitled.
As will be seen, such was not the case in respect of claims made under the 1971 Act. It is for this reason that the effect of the transition provisions in the 1988 Act are of such significance in this matter.
9 Turning to them, s 124(1) to (4) provide insofar as presently relevant that:
(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day. [Ie 1 December 1988]
(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the … 1971 Act.
(2) A person is not entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was not payable in respect of that injury, loss or damage …
(c) … under the 1971 Act as in force when the injury, loss or damage was suffered.
(3) A person is not entitled to compensation under section 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing date, if:
…
(b) the person was not entitled to receive compensation of a lump sum in respect of that impairment …
(iii) … under the 1971 Act as in force when the impairment … occurred.
(4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under …
(c) … the 1971 Act as in force when the impairment … occurred.
10 Reverting again to Hoyle, the Full Court's characterisation of the burden of s 124 was that (at 152):
… it is clear that the parliament proceeded on the basis that, where the entitlement to compensation under the [1988] Act has a relevant nexus with a period before the commencing day, the appropriate general principle should be that an employee is not to be deprived of any compensation that would have been payable under the 1971 Act but for its repeal, but is not to be entitled to any greater compensation than would have been payable under that Act.
11 Because it provides a convenient encapsulation of the relevant provisions of the 1971 Act for present purposes, it is appropriate to quote Hoyle further at a little length: at 152-153.
Part III of the 1971 Act provided for the payment of compensation under the three heads [of certain out of pocket expenses, lump sum payments [and] weekly payments during periods of incapacity for work]. Thus, s 37 imposed a liability to pay compensation in respect of the cost of medical treatment obtained in relation to an injury … Section 45 of the 1971 Act provided for the payment of weekly compensation to an employee where an injury to the employee resulted in the employee's being totally incapacitated for work. Section 46 provided for the payment of weekly compensation where an injury to an employee resulted in the employee's being partially incapacitated for work …
The provision of the 1971 Act which corresponded, in general terms, with s 24 of the [1988] Act, in providing for payment of a lump sum, was s 39. Section 39(3) provided that, where an injury to an employee resulted in a loss specified in s 39(4), the compensation payable in respect of that injury was to be an amount equal to such percentage of the amount stated in s 39(3) as was specified in s 39(4) in relation to that loss.
Section 39(4) contained a table which specified, in one column, the nature of loss to be compensated and, in the second column, the relevant percentage. The nature of loss column comprised, for the most part, losses of parts of the body … Clearly enough, those provisions created entitlements to receive compensation of a lump sum in respect of losses which could constitute permanent impairment within the meaning of s 124(3) of the [1988] Act.
However, s 39(14) provided that compensation under that section was not payable in respect of an injury:
so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury.
(Emphasis added.)
Further, ss 45(9) and 46(5) of the 1971 Act provided that, where a determination was made that an amount of compensation was payable under s 39, weekly compensation was not payable to the employee in respect of any period of incapacity for work resulting from that injury occurring after the date of the making of that determination. Under s 50(1), where an injury in respect of which a lump sum was paid to an employee in pursuance of s 39 resulted in the employee, at any time after the payment of that lump sum, being totally incapacitated for work, and the incapacity was likely to continue indefinitely, weekly compensation was to be payable in accordance with s 50 during the period of the total incapacity. The compensation was to be determined by reference to a formula, the effect of which was that the lump sum payment was to be treated as payment in advance of the weekly compensation payable under s 50.
The effect of ss 39(14), 45(9), 46(5) and 50, therefore, was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a period of total incapacity. Consistently with that policy, and in order to prevent totally incapacitated employees taking a lump sum payment, s 39(14) of the 1971 Act made it clear that the lump sum provided for in s 39(3) was not to be payable so long as an employee was, or is likely to become, totally incapacitated for work, where the incapacity resulted, or would result, in whole or in part from that injury.
(Emphasis added.)
12 It is important to note for present purposes that the Act was structured so as to create a distinct disincentive for an employee to claim a s 39 lump sum compensation payment for a loss suffered, where the injury occasioning it was one which was likely to result in subsequent periods of partial or total incapacity for work. An employee who had received a lump sum payment could not thereafter receive weekly payments for periods of incapacity for work save in the exceptional circumstances prescribed by s 50 (and, though not presently relevant, s 49).
13 As was noted in Hoyle the distinction between total incapacity for work and partial incapacity for work which exists under ss 45 and 46 of the 1971 Act does not exist under the 1988 Act. The relevant concept under the latter Act is simply "incapacity for work" see s 19. In the present matter, because of s 39(14) of the 1971 Act, total incapacity for work can disqualify a person from receipt of a lump sum under of s 24 of the 1988 Act because of the operation of s 124 of that Act.
14 Section 26 of the 1971 Act, which dealt with total incapacity for work provided that:
an employee shall be deemed to be totally incapacitated for work if his incapacity is such that he is fitted only for employment of a kind that is not commonly available and employment of that kind is not reasonably available to him.
What needs to be emphasised is that total incapacity for work does not presuppose an enduring incapacity for an indefinite period. As the Act makes plain, the incapacity may be for a period, and for a very short one at that: see eg s 47; see also s 50(1) which does require for its purposes that the total incapacity is "likely to continue indefinitely".
15 A presently relevant consequence of this was acknowledged by the Full Court in Hoyle in its consideration of the temporal operation of the s 39(14) disentitlement to compensation. That disentitlement subsists "so long as the employee is, or is likely to become, totally incapacitated for work". Hence the Court observed of the appellants in that case who were precluded from receiving lump sum compensation because of s 39(14):
If, at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement to compensation under s 39(3) of the 1971 Act. Further, if either of the appellants ceased to be totally incapacitated at some time after the commencement day, s 124(3) might not preclude entitlement to compensation under s 24 of the Compensation Act. The factual issues arising in relation to that question were not fully investigated below and we do not decide that question: (at 156).
The Court also was not required to, and did not, consider was the converse situation to that to which it referred ie where, having received s 39(3) compensation because no longer totally incapacitated, the employee later became totally or partially incapacitated again and sought compensation by way of weekly payments for that incapacity for work. Nonetheless, it is clear that in either case the employee would be precluded by s 45(9) or s 46(5) from receiving such weekly payments for the period of that incapacity. The only presently relevant exception to this preclusion is provided by s 50 of the 1971 Act. It applies only to total incapacity which is "likely to continue indefinitely" and the weekly payments are required to be discounted to take account of the lump sum previously paid under s 39.
16 In contrast to the 1971 Act, the 1988 Act uses the concept of "incapacity for work": see s 19; a formula which is tied in turn to what is described as "suitable employment". Both are defined terms. The former is defined in s 4(9) as follows:
A reference in this Act to an incapacity for work is a reference to an incapacity suffered by an employee as a result of an injury, being:
(a) an incapacity to engage in any work; or
(b) an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened.
17 "Suitable employment" is defined in s 4(1) to mean:
(a) in the case of an employee who was a permanent employee of the Commonwealth or a licensee on the day on which he or she was injured and who continues to be so employed - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to:
(i) the employee's age, experience, training, language and other skills;
(ii) the employee's suitability for rehabilitation or vocational retraining;
(iii) where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or her place of residence; and
(iv) any other relevant matter; and
(b) in any other case - any employment (including self-employment), having regard to the matters specified in subparagraphs (a)(i), (ii), (iii) and (iv).
18 The point to be emphasised is that there is a discontinuity between the concept of "total incapacity" under s 39(14) of the 1971 Act and the concept of "incapacity" as used in Division 3 of the 1988 Act: see eg s 19. It will be necessary to return to this later in these reasons.
19 During the hearing of the appeal to this Court it became apparent that Mrs Pantic had been in receipt of periodic incapacity payments from Comcare from 10 October 1990 until she turned 65 on 25 April 2004 when they ceased to be payable by virtue of s 23(1) of the 1988 Act. While the initial payments she received were made under s 19 of the 1988 Act, they were from her redundancy on 23 November 1990 paid under s 21 of the Act. That provision (which it is unnecessary to refer to in detail) is concerned with the calculation of the compensation that is payable for injuries resulting in incapacity where the employee is in receipt of a lump sum benefit under a superannuation scheme as a result of the employee's retirement.
20 Neither the Tribunal, nor the parties in their submissions attributed any significance to either of these matters.