Hammer v Department for Correctional Services [2009] SAWCT 8

12

Section 40 of the Compensation Act deals with the relationship between weekly payments of compensation payable under that Act and leave entitlements.

13

Subsection (1) provides:

"Subject to subsection (3), neither the liability to make weekly payments to a worker in respect of a period of incapacity nor the amount of such weekly payments is affected by a payment, allowance or benefit for annual or long service leave to which the worker is entitled in respect of that period."

"Where a worker has received weekly payments in respect of total incapacity for work over a period of 52 weeks or more, the liability of the employer to grant annual leave to the worker in respect of a year of employment that coincides with, or ends during the course of, that period shall be deemed to have been satisfied."

15

Section 89A of the Compensation Act declares what decisions are reviewable. It provides:

(a)

a decision on a claim for compensation including -

(ii) a decision on a claim by the Tribunal, made in the exercise of the Tribunal's special jurisdiction to expedite decisions on claims;

(b)

a decision about the nature of rehabilitation services provided, or to be provided, for a worker;

(c)

a decision to vary, suspend or discontinue weekly payments;

(d)

a decision on an application by an employer to have weekly payments payable to a worker employed by, or formerly employed by, the employer reviewed;

(e)

a decision to disallow or reduce a charge for a medical service (unless the decision merely brings the charge into conformity with a rate of charge prescribed by regulation).

(2) However, a decision is not reviewable if declared not to be reviewable by or under this Act."

16

Compensation is defined in s 3(1) of the Compensation Act as including "any monetary benefit payable under this Act".

17

The reference to the Tribunal's special jurisdiction to expedite decisions on claims in s 89A (1)(a)(ii) concerns an application for expedited decision made in accordance with s 97 of the Compensation Act which provides:

"(1) A worker or employer who believes there has been undue delay in deciding a claim or other matter affecting the worker or employer may apply to the Tribunal, in the manner and form prescribed by regulation, for expedited determination of the matter.

(2) However, an application cannot be made for expedited determination of -

(a) a question about the redemption of a liability ; and

(b) a matter of a class excluded by regulation from the ambit of this section.

(3) An application for expedited determination of a matter cannot be made until at least 14 days after the day the matter was placed before the decision-maker whose decision is required."

18

The PSM Act contains a grievance procedure.

19

Although not conceded, the Industrial Relations Court of South Australia arguably has jurisdiction to deal with Ms Hammer's dispute pursuant to the Fair Work Act 1994 (the FW Act).

20

Mr Warren, counsel for Ms Hammer, submitted that whether or not some other forum has jurisdiction to resolve the issues that divide the parties is not to the point. Moreover, he said that the determination of the issue of total incapacity for work, which is one of the matters upon which the invocation of s 40(3) is based, is the very sort of issue that a specialist tribunal such as this could be expected to resolve.

21

He said that a worker must be able to come to the Tribunal to argue that he or she is entitled to a leave loading. Hence, he said, that worker must be able to come to the Tribunal and say that he or she has no entitlement to the loading.

22

Mr Warren contended that on the proper construction of s 89A of the Compensation Act the Department's decision is a reviewable decision. First, on the basis that the decision that the worker has been totally incapacitated for a period of 52 weeks or more was a decision on her over-arching claim for compensation that had initiated an entitlement to weekly payments. He submitted that it necessarily followed that it was therefore a decision on a claim for compensation.

23

Second, he submitted that the Department's decision was a reviewable decision because it was a decision on a worker's entitlement to a payment "in the nature of an annual leave loading" and that the loading was a monetary benefit that is conferred by the Compensation Act.

24

He contended that it was not to the point that an individual employer might write to a worker indicating its view about the operation of s 40(3). He said ultimately but not a matter for the employer to determine or decide, it is a matter for the compensating authority. He submitted that a worker or an employer could ask the compensating authority to decide the matter. He said that if the compensating authority failed to do so a reviewable decision could be created by the lodging of an application for expedited decision directed to requiring the compensating authority to decide the matter one way or the other.

25

He said that in this case, because the Crown is a deemed compensating authority for the purposes of the Compensation Act, the Tribunal could treat the Department's letter as a decision of the relevant compensating authority.

26

Mr Illingworth, counsel for the Department, contended that the Department's letter of 27 February is nothing more than a notification of the fact of the operation of s 40(3) of the Compensation Act. He contended that if Ms Hammer took issue with that notification her remedy was to either invoke the grievance procedures provided by the PSM Act or to issue proceedings in the Industrial Relations Court of South Australia. He contended that the Tribunal only has jurisdiction in respect of decisions that concern an entitlement to compensation payable under the Compensation Act. He submitted that the issue as to whether or not a period of incapacity is such as to enable the assertion of a deemed entitlement to annual leave is not a decision in relation to an entitlement to compensation conferred by the Compensation Act.

27

Mr Illingworth submitted that s 40(3) is simply a function of the Compensation Act that deems leave to have been taken in prescribed circumstances. He said that the actual entitlement to leave and the entitlement to a leave loading are matters that arise out of the terms of employment.

28

Finally, he contended that in any event the nature of the relief being sought by Ms Hammer is declaratory relief and in line with decisions of the Full Court of the Supreme Court in Mitsubishi Motors Ltd v Harbord[1] and Della Flora v Workers Rehabilitation and Compensation Corporation of South Australia,[2] the Tribunal does not have the jurisdiction to grant declaratory relief.

29

The resolution of the issue before us depends upon the breadth of the expression "decision on a claim for compensation" in s 89A(1)(a).

30

We are in no doubt that it extends beyond the acceptance, rejection of, or quantification of a particular claim. For example, in WorkCover/CGU (Duell's Furniture Removals Pty Ltd) v Davidson the Full Bench had to consider in a case where absence of consent was relied on by WorkCover to discontinue payments whether s 89A(1)(a) enabled the Tribunal to enquire as to the legitimacy of WorkCover's withholding of consent to the worker. In respect of that issue it said:

"At first glance, a decision made by a compensating authority concerning a worker's residence or departure from the State would not appear to relate directly to a claim for compensation. But further reflection reveals that in fact that is all that it is concerned with. This must be so because the effect of granting consent is to sanction what might otherwise amount to a breach of mutuality, which of course may directly impact upon a worker's continuing right to weekly payments. The only effect of the withholding of the consent is that if the worker still chooses to reside outside of the State or live outside of the State for more than 2 months the compensating authority may accrue the right to discontinue the worker's weekly payments.

Given that such a decision has the potential to significantly affect the rights and entitlements of a disabled worker, it would be surprising for Parliament to have intended that such a decision would be immune from review, other than in the limited circumstances provided for by the common law through an action for judicial review in the Supreme Court.

This leads us to conclude that a decision made by a compensating authority to withhold or grant consent for a worker to reside out of the State or live out of the State continuously for a period of 2 months, is not immune from review. Because, ultimately the effect of such a decision is to impact upon the potential continued entitlements to weekly payments of income maintenance to a disabled worker and/or his or her obligations in respect of rehabilitation and return work plans or programs, we think that such a decision can fairly be characterised as 'a decision on a claim for compensation' for the purposes of s 89A(1)(a)."[3]

31

It does not follow, however, that any decision connected with the receipt of compensation falls within its compass. Otherwise there would have been no need for Parliament to have specified that other decisions about claims such as decisions about rehabilitation services to be provided for a worker, decisions to vary, suspend, discontinue or review weekly payments or decisions to disallow or reduce a charge for a medical service are reviewable decisions.[4]

32

The receipt of compensation is a necessary ingredient for the invocation of s 40(3) of the Compensation Act. A decision made under the provision can affect the amount of money that a worker receives. We accept that the Tribunal might seem to be the logical forum within which to debate whether or not the weekly payments that a worker has been receiving were in respect of total incapacity over the designated period. These are factors suggesting that Ms Hammer's contention that the Tribunal has jurisdiction to deal with her dispute may be correct.

33

On the other hand, it is not easy to perceive how the invocation of s 40(3) involves a decision on a claim for compensation, and there are factors pointing to the conclusion that it does not.

34

These become clearer if one considers the position of WorkCover and a registered employer.

35

The Compensation Act does not stipulate that WorkCover must make a declaration that the prerequisites to the invocation of s 40(3) have been met before an employer can act upon the provision. What if an employer does so act without any involvement of WorkCover? Section 89A seems to be concerned with decisions made by compensating authorities. In this example the relevant compensating authority has not done anything. This suggests to us that the action taken pursuant to s 40(3) of the Compensation Act is not a reviewable decision.

36

Moreover, all that WorkCover could ever decide is that the prerequisites for the invocation of s 40(3) of the Compensation Act have been met. It would not necessarily know whether in the circumstances of a particular case the employer could act upon the deemed taking of annual leave that the subsection prescribes. This is so because an entitlement to annual leave is not absolute. Both the FW Act and the Workplace Relations Act 1996 (the WR Act) expressly declare that the minimum entitlement to annual leave that each Act provides does not apply to casual employees.[5] WorkCover might not know whether the worker was a casual employee. Perhaps of greater significance is s 233 of the WR Act. It enables an employee to forgo an entitlement to annual leave in prescribed circumstances through a workplace agreement. Unless it was privy to the terms of that agreement WorkCover would have no way of knowing whether or not a particular worker has an entitlement to annual leave. Ultimately the decision to apply s 40(3) of the Compensation Act is one for the employer, not the compensating authority.

37

This leads us to conclude that an assertion by an employer that pursuant to s 40(3) of the Compensation Act its liability to grant annual leave to a worker is deemed to have been satisfied, does not involve a decision (or decisions) on a claim for compensation for the purposes of s 89A(1)(a) and is not a reviewable decision within s 89A(1) of the Compensation Act.

38

In light of Mr Warren's submission that the Department's letters could be treated as decisions of the relevant compensating authority, we turn to consider whether a compensating authority's declaration that the prerequisites to the invocation of s 40(3) of the Compensation Act have been met is a reviewable decision.

39

There is some support for that. In Davidson the Full Bench held that WorkCover's refusal to consent became reviewable at that point even though without further action, namely the issue of a determination to discontinue weekly payments, compensation would be unaffected.

40

It is instructive, however, to reflect upon why it was that the Full Bench reached that conclusion. It said:

"Arguably the decision does not begin to take effect unless and until the compensating authority decides to invoke s 36 to effect the discontinuance of the worker's weekly payments. In a sense, that is true, but on the other hand, the decision can have serious implications before then. For example, from an employer's perspective, if consent is granted, it presumably will be unable to take steps to minimise its financial detriment as a result of the worker's disability through the offer of suitable duties. Such an offer could scarcely impact on the worker's entitlements if the worker has the Corporation's permission to be absent from the State for an extended period. An employer might have a very real interest in this because that might affect the levies that the employer is obliged to pay in accordance with s 66. Logic suggests that the employer should have the right to challenge that decision at that point. If an employer has the right to seek a review at that point of time, one might think it reasonable to assume that a worker similarly has the right to seek a review of a compensating authority's decision to withhold consent upon the making of its decision to do so. Quite aside from the notion that what might be fair for one party should be presumed to be fair for the other, there are sound practical reasons why the decision ought to be reviewable by a worker at that time. If, for example, having gone through the dispute resolution process the worker knew that the Tribunal supported the compensating authority's decision to withhold consent, the worker would be in a much better position to evaluate whether his or her personal circumstances were so paramount that he or she needed to leave the State, notwithstanding the likelihood that this would result in the discontinuance of weekly payments. All of this leads us to conclude that the decision to grant or withhold consent becomes reviewable upon its making and that the worker or an employer does not have to wait until the decision is relied upon in subsequent initiatives such as the issue of a Notice of Discontinuance in accordance with s 36(1)(g)."[6]

41

Two things emerge from this. The first is that WorkCover's refusal to give consent created the necessary prerequisite for it to act, and act in a way that is expressly declared to be a reviewable decision, namely the discontinuance of weekly payments. The second is that at the moment of granting or refusing consent there were very real consequences.

42

However, in contrast to this, as we have said above, there is no statutory requirement for WorkCover to first make a declaration that the prerequisites for the invocation of s 40(3) of the Compensation Act have been met before an employer can act upon it, and even if it does make the declaration the only entity that can thereafter take action upon it is the employer, not WorkCover. Unless and until that further action is taken the worker's position remains unchanged. If a Notice of Dispute was lodged the Tribunal could not provide any effective relief. If it disagreed with WorkCover's declaration that is all it could say. The Tribunal would be being asked to correct or affirm a declaration that may or may not have any consequences for the worker.

43

Without subsequent action being taken by the employer there would be no action affecting the amount of money that a worker was receiving that the Tribunal could correct. At the point when action affecting the amount of money that a worker is receiving occurs it is the action of the employer, not WorkCover, that the worker might want to challenge.

44

This leads us to conclude that a compensating authority's declaration that the prerequisites to the invocation of s 40(3) have been met does not involve a decision on a claim for compensation so as to be a reviewable decision under s 89A(1)(a) of the Compensation Act.

45

In our opinion a dispute about the invocation of s 40(3) of the Compensation Act is a dispute about leave that arises between an employer and an employee. It is not in our view a dispute on a claim for compensation between a compensating authority and a worker.

46

It follows that the Department's letters of 27 February and 18 May 2006 are not reviewable decisions for the purposes of the Compensation Act. The Tribunal therefore does not have jurisdiction to deal with Ms Hammer's Notice of Dispute and it should be struck out on that basis.

It is the practice of this Tribunal to publish its reasons for decision in full on the Internet. If any party or person contends that these reasons for decision should not be published in full the party or person must make an application within seven days of the delivery of these reasons. The application shall be by an Application for Directions with a supporting affidavit and should be addressed to the presiding member(s). If no such application is lodged within the time specified these reasons will be published in accordance with the Tribunal's usual practice.

[1] [1997] 69 SASR 75

[2] unreported [1998] SASC 691 delivered 26 May 1998.

[3] [2000] SAWCT 32

[4] See ss 89A (1)(b)(c)(d) and (e) of the WRC Act

[5] See Schedule 4 (2) Fair Work Act and s 239 Workplace Relations Act