The Compensation Act
6 The Compensation Act provides that Comcare is liable to pay compensation to an employee who suffers an injury (s 14) which results in permanent impairment (s 24).
7 The term "injury" is relevantly defined in part as follows in s 5A(1):
In this Act:
injury means:
(a) a disease suffered by an employee; or
(b) an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee's employment; or
(c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), that is an aggravation that arose out of, or in the course of, that employment,
but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee's employment.
Section 5A(2) goes on to provide a non-exhaustive list of that action which constitutes "reasonable administrative action".
8 The term "impairment" is defined in s 4 of the Compensation Act as follows:
"impairment" means the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function.
9 Section 14 provides as follows:
Compensation for injuries
(1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.
(2) Compensation is not payable in respect of an injury that is intentionally self-inflicted.
(3) Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment
10 Section 24 provides in relevant part as follows:
Compensation for injuries resulting in permanent impairment
(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.
(2) For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:
(a) the duration of the impairment;
(b) the likelihood of improvement in the employee's condition;
(c) whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(d) any other relevant matters.
(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).
(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed as a percentage.
(7) Subject to section 25, if:
(a) the employee has a permanent impairment other than a hearing loss; and
(b) Comcare determines that the degree of impairment is less than 10%;
an amount of compensation is not payable to the employee under this section.
The liability to pay compensation for an injury that "results in a permanent impairment", it will be noted, flows from s 24(1); it is only the "degree of permanent impairment" that is determined "under the provisions of the approved Guide" (s 24(5)).
11 The "approved Guide" that is referred to in s 24(5) is further addressed in s 28. Section 28 provides in relevant part as follows:
Approved Guide
(1) Comcare may, from time to time, prepare a written document, to be called the "Guide to the Assessment of the Degree of Permanent Impairment", setting out:
(a) criteria by reference to which the degree of the permanent impairment of an employee resulting from an injury shall be determined;
(b) criteria by reference to which the degree of non-economic loss suffered by an employee as a result of an injury or impairment shall be determined; and
(c) methods by which the degree of permanent impairment and the degree of non-economic loss, as determined under those criteria, shall be expressed as a percentage.
(2) Comcare may, from time to time, by instrument in writing, vary or revoke the approved Guide.
(3) A Guide prepared under subsection (1), and a variation or revocation under subsection (2) of such a Guide, must be approved by the Minister.
(3A) A Guide prepared under subsection (1), and a variation or revocation under subsection (2) of such a Guide, is a legislative instrument made by the Minister on the day on which the Guide, or variation or revocation, is approved by the Minister.
(4) Where Comcare, a licensee or the Administrative Appeals Tribunal is required to assess or re-assess, or review the assessment or re-assessment of, the degree of permanent impairment of an employee resulting from an injury, or the degree of non-economic loss suffered by an employee, the provisions of the approved Guide are binding on Comcare, the licensee or the Administrative Appeals Tribunal, as the case may be, in the carrying out of that assessment, re-assessment or review, and the assessment, re-assessment or review shall be made under the relevant provisions of the approved Guide.
12 When considering the present Guide by reference to s 28, Kerr, Farrell and Mortimer JJ in Comcare v Lilley [2013] FCAFC 121, (2013) 216 FCR 214 at 221 to 222 observed:
[32] A number of matters which bear on the construction and operation of the Guide are set out in the section in Div 1 entitled "Principles of Assessment". These matters flow from the fundamental change of focus brought about by the 1988 legislation, from the "table of maims" in the 1971 legislation to a "whole person impairment" approach. The "whole person impairment" approach was derived from the approach taken in the Veterans' Entitlements Act 1986 (Cth) and also from the Guides to the Evaluation of Permanent Impairment, American Medical Association, Chicago, 1984 (the AMA Guides). Reliance on the AMA Guides is expressly acknowledged in s 5 of the Principles of Assessment, at p 12 of the Guide. Section 5 then states:
Division 1 assembles into groups, according to body system, detailed descriptions of impairments. The extent of each impairment is expressed as a percentage value of the whole, normal, healthy person.
Senior counsel for Comcare accepted that the word "extent" in this paragraph meant "degree".
[33] In describing the concept of "degree of impairment", and after having referred to the definition of "impairment" in s 4 of the SRC Act, the Guide states (at p 11, in s 1 of Pt 1):
It relates to the health status of an individual and includes anatomical loss, anatomical abnormality, physiological abnormality, and psychological abnormality. The degree of impairment is assessed by reference to the impact of that loss on the normal efficient functioning of the whole person.
[34] Section 28(1) of the SRC Act requires the Guide to set out both "criteria" by which the degree of permanent impairment is to be ascertained, and "methods" to express that degree as a percentage (so as to give effect to the requirement in s 24(6)). The approach adopted by the Guide differs depending on the part of the body system under consideration. The determination of the degree of impairment is generally prescribed to be undertaken by reference to tables in respect of particular kinds of impairments arising from injuries ...