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austlii:cth/SCTA/2002/84
appellant. The Tribunal set aside the Trustee's decision and substituted its own decision that the Complainant is entitled to payment of a Disablement Benefit from the Fund. Interest was awarded from 2 June...
A superannuation fund member who suffered back and psychological injuries claimed a disablement benefit after leaving work. The fund trustee rejected the claim, saying he left voluntarily to accept a retirement package, not because of disability. The Superannuation Complaints Tribunal found this was the wrong legal test. The Tribunal ruled that disablement did not need to be the main reason for leaving work, and that the trustee must consider whether the member could realistically get and keep suitable work given his medical condition, education and experience—not just whether he could theoretically do certain tasks. The Tribunal found the member lacked clerical skills and had physical restrictions making employment unlikely, so it overturned the trustee's decision and awarded the benefit with interest.
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Conducted under the provisions of the Superannuation (Resolution of Complaints) Act (Cth) ('Complaints Act').
No linked legislation citations have been extracted yet.
On 2 June 1999 the Trustee decided to reject the Complainant's claim for a Disablement Benefit. The Complainant was notified in a letter dated 4 June 1999.
On 29 July 1999 the Trustee affirmed its decision to reject the claim for a Disablement Benefit and informed the Complainant in a letter dated 3 August 1999.
*Copied with names deleted, for public distribution.
The Complainant sought leave to be represented by a lawyer. The Tribunal considered this request and granted leave for representation, as it is entitled to do pursuant to s.23 of the Complaints Act.
The Tribunal conducted the Review on the papers and had before it all the documents submitted by the Parties including:
All documents are retained on the Tribunal file for record purposes and had been copied and distributed to the Parties before the Review meeting.
The Complainant's solicitors submitted that it is essential that they and a representative of the Trustee should appear before the Tribunal in order to ascertain precisely what materials were before the Trustee or the Review Committee. The Tribunal having reviewed the whole file was satisfied that it had available to it all information that was needed to make a determination as to whether the decision of the Trustee was fair and reasonable without the appearance of representatives of the Trustee or the Complainant. Given the de novo nature of this review the decision is made on all the information now available which is relevant to the issue that the Trustee was required to decide.
Pursuant to s.101 of the Superannuation Industry (Supervision) Act 1993 ("the SIS Act") the Trustee of a regulated superannuation fund other than a self managed fund, or of an approved deposit fund must have procedures in place for dealing with inquiries or complaints within a ninety day time frame.
The Complainant communicated his complaint to the Trustee on 17 July 1999 but the complaint was not resolved within ninety days.
On 20 August 1999 the Complainant lodged a complaint with the Tribunal claiming that the decision of the Trustee to deny his disablement claim was unfair or unreasonable because in his view, the Trustee had interpreted its discretion too widely and had failed to question suitable employment in terms of the Complainant's education training and experience. It was also maintained that the Trustee had made a decision against the weight of evidence and had failed to give reasons for the decision.
The Tribunal is satisfied on the material before it as to the following facts:
The version of the Trust Deed applicable on the date when the Complainant permanently ceased employment (30 September 1998) was that amended to 25 August 1998. The Complainant was a member of Division B, Part 10, Section A (Defined Contribution Division) of the Fund.
means in relation to a Part 10 Contributory Member or former Part 10 Contributory Member his Final Interest in the Fund calculated as at the date of his death or of his Service being terminated by reason of Disablement as the case may be together with an amount (if any) equal to the product of the number of whole months yet to run from the date as at which the calculation is being made until the date upon which the Part 10 Contributory Member will attain or would have attained the age of 65 and one twelfth of the annual amount of the aggregate of the Contributions of the Part 10 Contributory Member and his Employer made pursuant to Rules 2.1 and 2.2 at the date as aforesaid.
means physical or mental disablement caused through illness infirmity or accident to a degree which the Trustee in its absolute discretion, after obtaining the advice of one or more registered medical practitioners considers likely to render the Member permanently incapable of obtaining or continuing in suitable employment as determined by the Trustee having regard to the Member's qualifications training and experience.
A number of medical reports were available to the Tribunal. Many of these related to the Complainant's Workers' Compensation claim. Although all medical reports were examined by the Tribunal, only those relating to the Complainant's work capacity at or around the time he ceased work in September 1998, or addressing his work ability after that time are summarised below.
16 December 1998 - Dr CS provided this report to the Trustee. He noted the Complainant's history of spina bifida affecting the lower spine since birth and requiring operation and the Complainant's subsequent kidney and urinary tract problems and depression. Dr CS also noted the Complainant's three work accidents in January 1991, February 1992 and February 1995 causing low back pain. With respect to his work ability, Dr CS concluded:
...[The Complainant] is unable to do heavy lifting or climbing. ...His back injury is not amenable to surgical treatment. ...His prognosis is not good. He has inherent weakness of his back which has been aggravated by three injuries. The condition has not settled.
His capacity for physical work is very limited. He is unable to lift. He cannot sit for any length of time. He does not have any marketable skills for clerical duties. He has difficulties in concentrating. I do not think he will be able to do any sedentary type of work. ...[The Complainant] has been handicapped since birth, but he has worked until now. His back injuries, depression and other medical problems make him unsuitable for work now.
28 June 1999 - Dr CS provided a note addressed To Whom It May Concern:
...[The Complainant] is totally and permanently disabled and as a result he cannot work at ...[the Employer] or any other work which ...[the Complainant] would be reasonably qualified to do by education, training or experience.
17 November 1998 - Dr BJ provided this report to the Trustee. He had been the Complainant's treating psychiatrist since July 1996 after the Complainant was referred by his general practitioner Dr CS. Dr BJ diagnosed the Complainant as suffering "Medical Condition Affecting Mood and Major Depression." The Complainant was treated with medication and "the response ...was quite satisfactory in the sense that he returned to full -time work subsequently."
With respect to the Complainant's work capacity Dr BJ concluded:
...[The Complainant] has very limited education. ...He has never done clerical type of work. He said he had difficulty sitting for a long time. He becomes nervous and restless. He has difficulty in sustaining attention and concentration. With all these problems I don't think that he is suitable for sedentary/clerical type duties...
...[The Complainant] has lost the willpower to work. He feels very uncomfortable at the work place. He always thinks that people make fun of him over the things that happened to him in the past. ...Considering the above total situation it will be appropriate to grant him Total and Permanent Disablement Benefit from the ...[Employer's] Superannuation Fund.
11 April 1999 - Dr JG examined the Complainant on 30 March 1999 at the Trustee's request. He provided a comprehensive report on the Complainant's psychiatric and medical history and examination and concluded:
The psychiatric diagnosis appears to be that of Major Depression which has now largely resolved ...but there are still features of generalised anxiety and social phobia.
...It is clear that ...[the Complainant's] level of physical impairment and consequent pain, combined with his precarious psychological state, would render him incapable of work requiring significant physical duties. ...His general level of anxiety ...is likely to be a major problem in any employment situation. ...In view of the above factors, I consider it unlikely that ...[the Complainant] would be able to function adequately in sedentary/clerical employment. ...His supervisor indicated that he was not capable of performing most of his required duties and this is consistent with my clinical assessment of him.
15 April 1999 - Dr HM examined the Complainant on 30 March 1999 at the Trustee's request. He diagnosed him as suffering "lumbosacral strain (recurrent), spina bifida with neural involvement and renal tract complications." With respect to the Complainant's work capacity, Dr HN concluded:
The prognosis is, in general, that strains in ...[the lumbo-sacral spine] are self-limiting, and settle in time. In my opinion, this is the case with ...[the Complainant]. In my opinion, his work capacity for physical duties is minimally restricted and he remains unfit for heavy, physical labouring work. This does not prevent ...[the Complainant] from carrying out light labouring duties. I consider that ...[the Complainant's] capacity for sedentary and clerical type duties is moderately good if he is able to sit or stand as needed, whilst carrying out light bench work or clerical duties.
...It appears that from the job description [of duties/alternate duties offered to the Complainant by ...the Employer] ...[the Complainant] will be unable to perform this work, particularly as it involves carrying/lifting 20kg or more in weight. I therefore consider that the work, as described, is incompatible with ...[the Complainant's] abilities.
In my opinion, continuing heavy work would result in further episodes of aggravation of symptoms.
12 August 1999 - Dr FL provided this letter at the Complainant's request addressed To Whom It May Concern. Dr FL had treated the Complainant in August 1994 with respect to left elbow symptoms. In his letter of August 1999, Dr FL states:
...[The Complainant] has chronic back pain dating back to 1991. MRI at that time showed degeneration and narrowing of the L5/S1 disc.
...His back pain has been getting worse in recent times. I am of the opinion that his back pain has now deteriorated to the extent that he is totally and permanently incapacitated for any work that he would be reasonably qualified to do by education, training or experience.
16 December 1999 - Dr NG provided this report to Dr CS after the Complainant was referred to assess his potential to be rehabilitated for undertaking sedentary work. Dr NG noted:
His current complaints is (sic) chronic back pain and right knee pain. ...With regard to ...[the Complainant's] activity, he has not been working since 1998. He does some light work around the house ...but he is unable to undertake any heavier gardening. ...He is computer illiterate and has difficulty with mathematical problems as well as spelling, reading, etc.
...My opinion here is that he is quite severely disabled, but whether he will be able to undertake sedentary work or not will really depend mainly on his level of education, and his ability to retrain, his ability to sit for a long time, stand for a long time, and his ability to perform repetitive use of his arms. It appears that he does not meet the majority of these requirements and therefore he could be simply classified as totally and permanently disabled.
Ms DT, Rehabilitation Consultant: Vocational Assessment
**14 February 2001 -**The Complainant underwent a Vocational Assessment on 14 February 2001 at the Trustee's request to identify suitable job options with a different employer, as he was no longer able to work as a machine operator with the Employer. Ms DT noted:
...[The Complainant] stated that he did not like any jobs other than machine operating and was not interested in discussing any other options. [He] reported that he was not interested in undertaking any further training, even on the job training. He did not think he was capable to returning to work.
A number of potential jobs were identified as being within the Complainant's capabilities:
...[The Complainant] is physically capable of performing all of these job options, according to the medical advice at the time this report was completed, however he may find it difficult whilst living in ...[city] due to his social phobia.
Mr DB, Occupational Therapist: Functional Capacity Evaluation
20 February 2001 - The Complainant underwent a Functional Capacity Evaluation on 20 February 2001 at the Trustee's request. The following work restrictions were recommended:
Avoid sitting for longer than 1 hour without a changing posture for at least 10 minutes
Avoid standing constantly for longer than 15-20 minutes without a brief change in posture.
Limit standing to a frequent basis throughout the day
Avoid squatting or kneeling more often than on a once off occasional basis
Avoid walking constantly for longer than 20 minutes
Avoid climbing stairs repetitively, or climbing, working from ladders
Avoid tasks requiring a high degree of fine dexterity
Avoid movement of the trunk such as twisting, stooping or movements to the extremes of range
Avoid manual handling outside of assessed capacity.
...From a physical capacity perspective, ...[the Complainant] should be able to work in a range of sedentary job options, with some examples including console operator (providing there is seating available for regular postural change), static security/gate guard, car park attendant, cahier (sic) radio operator, transport/despatch clerk, control panel based machine operator.
Dr NR, Government Health Service Medical Officer
21 August 2001 - Dr NR provided a report on the Complainant for the purposes of the Complainant obtaining a Government Disability Pension. He concluded:
Overall, he is totally and permanently unfit for open employment, training or rehabilitation by virtue of his distracting lower back pain. The applicant would be a very poor candidate for vocational rehabilitation assistance at this time.
5 November 2001 - The Complainant underwent a further Vocational Assessment at his own instigation to respond to the recommendations provided in Ms DT's report of 14 February 2001.
Ms AC addressed each of the potential occupations identified in that report, refuting the Complainant's capacity to undertake any of the positions suggested due to his physical limitations or his lack of education, training or experience.
In summary, it is my opinion that due to physical limitations, lack of experience and training, ...[the Complainant] would not be fit for any of the occupation (sic) identified in vocational planning. ...[The Complainant's] suitability for vocational rehabilitation and return to work has recently being (sic) assessed by Dr NR who concluded that ...[the Complainant] would make a poor candidate for vocational rehabilitation. I concur with this opinion.
The Complainant completed the Tribunal's Education, Training, Experience & Activities Questionnaire.
He completed Year 9 at High School in 1970 and in 1991 underwent further education to improve his maths and spelling skills.
He obtained some on-the-job training in computer introduction and completed several Employer-sponsored safety and other training courses during his employment.
5/97-9/98 "Surplus" position in Administrative Services section, Employer
1985-1991 Labourer, Operating Heavy Machinery, Employer.
1973-1985 Operating heavy machinery, Another Employer
The Complainant's solicitors made a submission that raised concerns about what materials were under consideration by the delegated sub-committees of the Trustee in arriving at its decision. The Complainant suggested that it was necessary for the Tribunal to allow representatives of the Complainant and the Trustee to appear before the Tribunal. The Complainant also suggested that the hearing should not proceed with the documents before the Tribunal in a state that he believed represented some level of confusion.
The Complainant objected to the Committee of the Trustee having before it reports relating to the settlement of the Complainant's Worker's Compensation claim as it was submitted that this represented an irrelevant issue.
The Complainant raised objection to the Trustee maintaining that the Complainant was engaged in work that was meaningful or indicative of the Complainant's capacity to work. The submission stated:
In fact the so called "administration services" work amounted to ...[the Complainant] being placed in a room each day with other injured workers who were referred to as 'the Pool' and were all said to be 'surplus to requirements'. He was not given any work to do save at 3 to 6 monthly intervals he was given the task of placing some 300 or so $50 goods vouchers into envelopes addressed to certain employees in recognition of their good "work safety records". There was no attempt to rehabilitate ...[the Complainant] either at ...[the work site] or by attending external institutions.
The Complainant's solicitors also submitted that the Tribunal had to have regard to the circumstance faced in the regional town in which the Complainant had worked and lived and that his likelihood of obtaining and maintaining a job had to have regard to both his condition and his location.
The Trustee submission did not provide any further comment and referred to earlier attachments to a letter dated 10 January 2002 to the Tribunal. This letter indicated that the Trustee gave further consideration to the Disablement Benefit application on 18 December 2001 following the receipt of further medical information. The documents current at that time gave a listing of all the relevant documents but no information about the reason for the decision that might be of assistance to the Tribunal.
The Complainant's solicitor took issue with a number of the matters raised by the Trustee and particularly the contention that the availability of a job in a community was not a relevant consideration in respect of the Disablement Benefit definition.
The Trustee provided various documents to the Tribunal including the relevant instruments of delegation from the Trustee to local "review committees". It responded to a number of issues raised by the Complainant's solicitors relating to the processes followed by the Trustee.
... under the definition of Disablement in the Fund Rules the Trustee is not required to determine what particular jobs are available in a community at any particular point in time. The jobs available will fluctuate over time in line with economic conditions.
The Complaint relates to the decision of the Trustee to reject the disablement claim and whether, in its operation in relation to the Complainant, the decision was fair and reasonable in the circumstances. If so, the Tribunal must, pursuant to sub-s.37(6) of the Complaints Act, affirm that decision.
In making its determination, the Tribunal took all of the evidence before it into account, including the submissions of the Parties and the doctors' reports even though many of them related to a claim by the Complainant for Workers' Compensation purposes.
The Complainant suffered an acute back injury at work in January 1991 after lifting a bag of chemicals. He required some months off work. Due to an underlying congenital weakness of his back caused by spina bifida, he had progressive back pain after that incident. According to Dr FL's report of 12 August 1999, an MRI investigation at that time also showed "degeneration and narrowing of the L5/S1 disc." After the 1991 incident, the Complainant was given light duties, initially clerical work and then truck driving.
In 1993, the Complainant struck his left elbow whilst alighting a truck and in 1995 he suffered muscular strain of the lower back due to lifting. In 1996 the Complainant developed psychological injuries as a result of suffering personal embarrassment at work and thereafter found the workplace stressful.
After the truck driving work was tendered out to another company, the Complainant "was made surplus and placed in the Admin Services Department, where all jobs are modified." The Complainant remained in that position for about 18 months and according to the Employer's HR officer "couldn't do much at all."
On 30 September 1998 he ceased work due to a "Worker's Compensation Settlement agreement and Acceptance of Voluntary Resignation/Retirement Settlement (VRS)..." Accepting the VRS package was a condition of a successful Workers' Compensation payout. The original decision of the Trustee was that the Complainant did not satisfy the definition of Disablement Benefit because "the main reason for termination of ...[the Complainant's] employment was to accept the Voluntary Retirement Scheme Package and not by reason of disablement". The relationship between the Complainant and the Employer is separate from the relationship between the Complainant and the Trustee. The test is not whether disablement was the sole or primary reason for termination but whether it is fair and reasonable to also regard it as a reason. The interpretation adopted by the Trustee at that time would leave it open for an employer to take action in terminating an employee with a view to avoiding any liability otherwise faced by a superannuation fund.
The Employer noted that it could not have provided the Complainant with suitable employment even if he had not left work in 1998 because "due to nature of injuries and personal health problems, placement in an alternative position was very limited. Any project work trialled while surplus ...[the Complainant] failed to complete either due to work performance issues or restrictions". In other words, the Employer had no position for him and the Tribunal does not believe there is evidence to point to the Complainant having either the skills or the physical capacity to perform sedentary work.
On the strength of this evidence the Tribunal believes it is fair and reasonable to conclude that for the purposes of the Fund the Complainant left work in September 1998 because of disablement as he was not able to do any real job for the Employer.
In the later deliberations of the Trustee and in its final submissions this ground for rejection was not mentioned.
The medical evidence before the Tribunal suggests that the Complainant is unfit for the heavy manual labour he had performed pre-injuries. In December 1998, the Complainant's general practitioner, Dr CS, noted "...[the Complainant] is unable to do heavy lifting or climbing. His capacity for physical work is very limited. He is unable to lift. He cannot sit for any length of time."
Dr HM, an orthopaedic surgeon, reported in April 1999 that the Complainant "remains unfit for heavy, physical labouring duties." Dr FL, the Complainant's treating orthopaedic surgeon noted in August 1999 that the Complainant's back had deteriorated to the extent that "he is totally and permanently incapacitated for any work." Dr NG, another orthopaedic surgeon concluded in December 1999 that the Complainant "is quite severely disabled." Mr DB, the occupational therapist, recorded in February 2001 that the Complainant's abilities were restricted in many areas involving physical exertion and a vocational assessment in February 2001 identified only sedentary-type jobs as being suitable for the Complainant. Dr NR, a Government Medical Officer, concluded in August 2001 that the Complainant was "totally and permanently unfit for open employment."
Based on this evidence, the Tribunal is satisfied that the Complainant is unfit for the type of heavy manual work he performed prior to his back injury.
The medical evidence also looked at the Complainant's capacity for sedentary work and was divided on his ability to do this. Dr CS stated "...[the Complainant] does not have any marketable skills for clerical duties. He has difficulties in concentrating. I do not think he will be able to do any sedentary type of work." Dr BJ, the Complainant's treating psychiatrist, noted "...[the Complainant] has very limited education...He has never done clerical type of work. He said he had difficulty sitting for a long time. He becomes nervous and restless. He has difficulty in sustaining attention and concentration. With all these problems, I don't think he is suitable for sedentary/clerical type duties." Dr JG, another psychiatrist noted that the Complainant's "general level of anxiety ...is likely to be a major problem in any employment situation. ...I consider it unlikely that ...[the Complainant] would be able to function adequately in sedentary/clerical employment."
Dr NG also stated that "whether he will be able to undertake sedentary work or not will really depend mainly on his level of education, and his ability to retrain, his ability to sit for a long time, stand for a long time, and his ability to perform repetitive use of his arms. It appears that he does not meet the majority of these requirements."
However, Dr HM stated that the Complainant's disabilities did "not prevent [him] from carrying out light labouring duties. I consider that ...[the Complainant's] capacity for sedentary and clerical type duties is moderately good if he is able to sit or stand as needed" and Ms DT identified several occupations she considered the Complainant physically capable of performing. These, however, were disputed by another rehabilitation counsellor, Ms AC who considered the Complainant had neither the skills, training nor physical capabilities to perform the identified occupations.
The Tribunal finds little evidence that the Complainant has marketable clerical abilities. He lacks literacy and numeracy skills and his physical restrictions, in particular his inability to sit for any length of time, make it unlikely that he would be able to work in any sedentary position, even an unskilled one.
More importantly, the test of Disablement Benefit requires that a view be formed as to the likelihood of the Complainant obtaining and continuing employment in a suitable occupation, given his medical condition. This is different from simply identifying a task the Complainant may be able to perform. The Trustee has to have regard for the probability of the Complainant having reasonably available to him jobs that he can perform and the probability of an employer, aware of the Complainant's circumstances, recruiting the Complainant to that role.
The Tribunal believes the Trustee has applied an unreasonably narrow interpretation of the Disablement Benefit definition. The Tribunal therefore finds that the Trustee's decision to deny the Complainant's claim was unfair and unreasonable.
Pursuant to sub-ss.37(1)(a) and (2)(a)(b) of the Complaints Act, the Tribunal has all the powers, obligations and discretions of the Trustee. Sub-section 37(6) of the Complaints Act provides that the Tribunal must affirm the Trustee decision if it is satisfied that its operation, in relation to the Complainant, was fair and reasonable in the circumstances. The Tribunal is not so satisfied. By virtue of s.37(3) the Tribunal may make a determination:
The Tribunal determines to set aside the decision of the Trustee on the grounds that it was not fair and reasonable and substitute its own decision that the Complainant is entitled to payment of a Disablement Benefit from the Fund. The Disablement Benefit must therefore be paid to the Complainant.
The Tribunal has determined that interest is payable based on the Net Earning Rate of the Fund.
The period in respect of which interest is payable is the period commencing on the day as from which it was unreasonable for the Trustee to have withheld payment of the amount and ending on whichever is the earlier of the following days;
In this case, the Tribunal has determined that the date from which it was unreasonable for the Trustee to have withheld the amount was 2 June 1999 being the date on which the Trustee's decision to reject the claim was made.
The Tribunal set aside the Trustee's decision and substituted its own decision that the Complainant is entitled to payment of a Disablement Benefit from the Fund. Interest was awarded from 2 June 1999 based on the Net Earning Rate of the Fund.