Cramer v Schefenacker Vision Systems Australia Pty Ltd [2003] SAWCT 9

5 The employer, an exempt employer under the Act ("the respondent"), adopted a practice of making a fresh determination upon the receipt of each medical certificate. This resulted in the issuing of a sequence of determinations accepting the worker's claims for income maintenance for consecutive closed periods. The respondent did not require the worker to lodge a fresh claim beyond the original claim lodged in August 2001.

6 On 23 September 2002 the respondent issued the last of its standard determinations:-

"Schefenacker Vision Systems is an exempt employer and has certain powers delegated to it in accordance with Section 63 of the Workers Rehabilitation & Compensation Act, 1986 as amended, (`The Act').

We advise that we have determined pursuant to Section 30 of the Act to accept your claim for compensation for a lumbar back strain which occurred on 07/08/2001 whilst employed with Schefenacker Vision Systems for a further closed period of incapacity.

We have further determined that you will be partially incapacitated for work for the period 06/07/02 to 04/10/02 at the difference between your average weekly earnings and your earnings from employment.

On receipt of further worker's compensation medical certificates we will further determine your entitlement to income maintenance.

You remain entitled to reasonable medical and travel expenses incurred as a consequence of sustaining your compensable disability.

All accounts and further medical certificates you receive must be provided to Anita Michael as soon as they are received to avoid delays in determining your entitlements.

If you have any questions please phone Anita Michael on 8301 7600.

Pursuant to Section 90 of the Workers Rehabilitation and Compensation Act, 1986 you have the right to request a review of this decision by an Officer of the Workers Compensation Tribunal within one month of the receipt, by you, of this letter.

A copy of Section 30 of the Act and information regarding the dispute resolution process is attached for your information."

7 On 5 October 2002 the payment of income maintenance to the worker stopped. No s 36 procedure was invoked. At that time the worker was working almost, but not quite, full time on modified duties, in accordance with then current medical certification. Certificates issued by the worker's general practitioner Dr Kumar on 4 October and 18 October certified the worker's continuing partial incapacity for work.

8 On 11 October 2002 the respondent arranged a meeting with the worker and his union representative at which meeting a video was shown of the worker engaging in various physical activities that the respondent considered to be inconsistent with his claim of ongoing incapacity for work.

9 On 23 October 2002 the worker's solicitors lodged a Notice of Dispute asserting that:-

"The exempt employer has determined to discontinue income maintenance payments from 5 October 2002 by way of a non-written Determination.

The applicant continues to suffer a partial incapacity and continues to be entitled to income maintenance payments."

10 On 12 November 2002 the worker was examined by Dr G McCulloch at the behest of the respondent.

11 By letter to the worker dated 21 November 2002 the respondent made the following determinations:-

"... We advise that we have determined pursuant to Section 30 of the Act to accept your claim for compensation for a lumbar back strain which occurred on 7 August 2001 whilst employed with Schefenacker Vision Systems for a further closed period of incapacity.

We have further determined that you have been partially incapacitated for work for the period 5 October 2002 to 20 November 2002 on the workers compensation medical certificates provided by Dr R Kumar for those dates, and the report of Dr G McCulloch of 19 November 2002, a copy of which has been provided to you.

We have therefore determined that you are entitled to interim payments of income maintenance, but only for the above period from 5 October 2002 to 20 November 2002 inclusive at the difference between your average weekly earnings and your earnings from employment.

We refer to the opinion of Dr McCulloch where he says `I believe that his hours of work should be increased quite markedly. Indeed, at this present time, I consider him capable of working a full 38 hours per week with the restrictions regarding weight already imposed by Dr David Worth. Please note that I have read his report and I agree with his assessment'. We hereby determine that you are fit to carry out your modified duties on a full-time basis, and therefore, you are not entitled to any further interim payments of income maintenance.

You remain entitled to reasonable medical and travel expenses incurred as a consequence of sustaining your compensable disability.

All accounts and further medical certificates you receive must be provided to Anita Michael as soon as they are received to avoid delays in determining your entitlements."

12 These determinations of 21 November 2002 are not before me for adjudication and are mentioned only to complete the relevant historical setting for the issue that is before me, namely, whether the worker is entitled to an order for ongoing income maintenance payments from 5 October 2002.

13 Mr Mellows, for the respondent, submitted that it was in order for the respondent to approach the worker's claim in this way, accepting liability only for a specified period, or sequence of specified periods, identified by prescribed medical certificates, and he submitted that s 36 had no role to play. He disputed that this amounted to a circumvention of the protection given to workers by s 36 of the Act, rather being simply the exercise by the respondent of its rights and obligations under the Act (tr 35).

14 Mr Mellows submitted that the Supreme Court decision of Workers Rehabilitation and Compensation Corporation v Vu (1988) 49 SASR 585 sanctioned the action taken by the respondent here and confirmed the irrelevance of s 36 to the situation.

15 Mr Mellows denied that a decision had been made by the respondent to discontinue the payment of income maintenance, and submitted that there was therefore no decision to review.

16 Mr Rossi submitted that there clearly had been a decision made to stop the payment of income maintenance as from 5 October 2002, and that s 36 applied.

17 On any view of the facts of this matter, it is clear that as at 5 October 2002 the worker remained partially incapacitated for work as a result of his accepted compensable disability, and that as at that date the income maintenance that he had received continuously from the date of his injury in August 2001 was discontinued.

18 On any reading of the Act, and relevant case authorities, the applicability of s 36 to these circumstances is manifest.

19 In Mitsubishi Motors Australia Ltd v Sosa, unreported SA Supreme Court Judgment No S5084 delivered on 8 June 1995, the compensating authority sought to avoid compliance with the procedural stipulations of s 36 by arguing that s 35 impliedly authorised the discontinuance of weekly payments. The Full Supreme Court rejected this judgment, King CJ saying at 8:-

"The construction of s35 advanced by the appellants carries with it the implication, in my opinion, that whenever the entitlement under s35 ceases or diminishes, the Corporation or exempt employer is entitled automatically to discontinue weekly payments. That is plainly contrary to the policy of the Act. The legislature in prescribing procedures for the discontinuance or reduction of weekly payments, has recognized that injured workers are dependent for livelihood upon the weekly payments. Arbitrary cessation or reduction could cause great hardship. Procedures are set in place to protect injured workers against arbitrary cessation or reduction of their means of livelihood. The procedures in ss36, 37, 38, 39 and 41 are designed for that purpose. It is unthinkable that the legislature, having adopted those protective measures, would largely negate them by conferring in s35 a power on the Corporation or exempt employer to discontinue or reduce weekly payments unilaterally and without compliance with the protective procedures."

20 What the respondent has sought to do here is no less plainly contrary to the policy of the Act. The worker had been continuously in receipt of income maintenance for some 14 months. The discontinuance of his income maintenance was clearly an action that Parliament intended to be regulated by s 36. To dispute that it was a discontinuance of payments, or that there was no decision taken to discontinue payments, is no more than pedantry.

21 There is nothing in the Supreme Court decision of Workers Rehabilitation and Compensation Corporation v Thuy Thi Vu (1988) 49 SASR (585) to assist the respondent. In that matter the worker on 23 November 1987 lodged a claim for income maintenance and medical expenses. Interim payments were paid to her pursuant to s 106 of the Act pending the determination of her claim. On 29 December 1987 the compensating authority wrote to her advising that it had approved the payment of medical expenses, but that payment of income maintenance was authorised only for the period 23 November to 2 December. The letter stated that the compensating authority had taken into account s 36(1) of the Act, and gave notice that the compensating authority would recover any interim payments made beyond the date authorised, 2 December 1987.

22 The worker argued that she had remained incapacitated for work beyond 2 December 1987 and that the payments she had received had been made pursuant to s 35 of the Act and could only be discontinued after the compensating authority had given her 21 days notice as prescribed by s 36(3) of the Act.

23 The Court held that the compensating authority's determination of 29 December 1987 was a final determination discharging its duty under s 53 to determine the worker's claim and that notwithstanding the "unfortunate" reference to s 36 in the determination, that section had nothing to do with the matter as there had been no discontinuance of weekly payments, merely an identification of the period for which liability to make payments was admitted.

24 The facts in Vu's case are quite different to those we have here. In Vu at the time of the making of its determination the compensating authority was asserting that the worker had ceased to be incapacitated. Moreover, this was the compensating authority's only determination on this claim. Here, the respondent is asserting, repeatedly and over an extended period, a continuing partial incapacity for work and entitlement to income maintenance.

25 There is no doubt that a compensating authority can, as it did in Vu's case, accept liability for a closed period without exposing itself to the notice provisions of s 36. However, that does not much assist the respondent here.

26 Leaving aside whether or not a determination accepting a claim and entitlement to income maintenance for a stipulated period into the future is a valid determination, it is my view that what the respondent has done here, in issuing successive favourable determinations over a period of a year or so, and then discontinuing weekly payments without reference to s 36, constitutes an abuse of process. No amount of rhetoric can hide the fact that the worker's weekly payments have been discontinued outside of the procedures and protection that the Act so clearly intends to give workers in these circumstances.

27 I find that the respondent on or about 5 October 2002 made a decision to discontinue the worker's weekly payments as from that date. I find that in so doing it failed to comply with the mandatory procedural requirements of s 36 of the Act, including the giving of 21 days' notice and advice as to the grounds of the discontinuance. The termination of payments was therefor unlawful.

28 I order that income maintenance be paid to the worker as from 5 October 2002 and that payments continue until discontinued or otherwise varied in accordance with the provisions of the Act.

29 Whilst the respondent's further determination dated 21 November 2002 is not before me for adjudication, it is clear that this determination is equally as ineffective in legally discontinuing the worker's entitlement to income

maintenance. The sooner the worker is accorded his due rights under s 36, the sooner any real issues about his ongoing incapacity and entitlements can be determined.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with the form titled Notice of Appeal within 14 days of the delivery of this decision and must be served on all parties.