Hines v Workcover/Hih

4 The worker continued to work as a marine supervisor until June 1993, when he accepted voluntary redundancy. He did so primarily because of his wife's deteriorating health. In 1991 the worker's wife underwent surgery for bowel cancer. This followed a course of chemotherapy treatment for about 12 months. In 1992 she was diagnosed with Parkinson's disease and her condition has continued to deteriorate since that time. In 1993 she required major surgery in the nature of a left shoulder reconstruction.

5 Having accepted voluntary redundancy, the worker's then employer offered him a position as a casual marine pilot's assistant. As a result of accepting this position the worker's redundancy payout was reduced. He accepted the job because he anticipated that the hours that he would be required to be work would enable him to spend considerable time looking after his ailing wife.

6 The worker undertook these duties for a period of about six years. These duties required him to advise the marine pilot whilst ships were being berthed and unmoored at Port Stanvac.

7 The worker eventually became to be employed in this capacity with Transfield Maintenance Pty Ltd ("the employer").

8 In undertaking these duties the worker would receive an amount, initially $6.00 and later $7.00 per hour, whilst on call and when actually undertaking the duties of a casual pilot's assistant he would receive a considerably higher amount, initially $25.31 and later $26.58 per hour.

9 The worker usually was on call from the time the ship berthed at Port Stanvac until the time that it had left. Whilst on call he maintained regular contact with the pilot.

10 Because the worker's duties were subject to the vagaries of the weather and the vagaries of shipping movements his hours varied enormously. He never worked a regular 38 hour week. Some weeks he did not work at all. But of average he spent about 16 hours per week working as a marine pilot's assistant and anything up to double that number of hours on call.

11 In 1996 the worker suffered an injury to his right knee. After a period of absence from work he returned to normal duties.

12 On 6 July 1999 he suffered a further injury to his right knee. This was more serious and resulted in a referral to an orthopaedic specialist, Mr Wilson Lee, who performed an arthroscopy. As a result the worker has been and continues to be partially incapacitated for work and is not fit to return to work as a marine pilot's assistant.

13 Initially it was thought that the worker was only entitled to income maintenance in the amount of $425.80 per week reflecting the average of 16 hours actual work that he had undertaken whilst working as a marine pilot's assistant. Presumably, consistent with this belief, when the worker returned to light duties with the employer, he only worked two days per week. This continued for about six months. In the meantime the worker had disputed the correctness of the determination of his average weekly earnings and this was subsequently revised to a figure of $825.56 per week, which reflected the average weekly wages that the worker had earned, both for work actually undertaken by him and payments received by him when he was on call.

14 On 2 March 2000 the worker went to a meeting with Mr Norman Coleman, the Occupational Health and Safety officer for the employer and Ms Jan Faulkner, a rehabilitation consultant employed by IQ consultants. This meeting culminated in the preparation of a second rehabilitation and return to work plan ("the second plan"). The second plan was stipulated to start from 3 March 2000 and to be completed on 1 June 2000. It provided for the performance of light administrative duties, answering telephones, and running messages. As with the earlier plan it stipulated that the worker was to work 16 hours per week.

15 Pursuant to the terms of the plan the worker undertook duties with the employer, as stipulated, at times that were mutually convenient.

16 On 14 March 2000, less than two weeks later, the worker was directed to attend a further meeting with Mr Coleman and with Ms Kate Wigley from IQ Consultants. He was informed that the employer wished to offer him different duties, working full time, 38 hours per week, Monday to Friday. The worker was presented with a further plan described as "rehabilitation and return to work plan number 3" (the third plan). The third plan was stipulated to run for the period from 14 March 2000 to 14 June 2000. The third plan referred to an offer of duties stipulated in a letter dated 6 March 2000 which was a letter from the employer addressed to Mr Hines, Ms Faulkner at IQ Consultants, and to the Corporation's agent, HIH Workers Compensation. The letter stipulated that the main tasks comprised of "Confined space Safety Watcher, Fire Watch, with periodic Stores Assistant and House keeping duties, as required."

17 At that meeting the worker informed Mr Coleman and Ms Wigley that his personal circumstances, and in particular his wife's illnesses, prevented him from working a full 38 hour week, every week, and as a result he would be unable to manage that which was contemplated by the third plan. The worker declined to sign the third plan. He then instructed his solicitors to correspond with the employer and they did so, by letter dated 10 March 2000, in terms which relevantly provide as follows:-

"Accordingly he will not be attending for work on Monday 13 March for his new position, requiring him to work a greater number of hours than at present, although he is quite prepared to attend to continue in the work that he has been doing to date at his current hours."

This offer to continue to undertake those duties was confirmed in a further letter from the worker's solicitors dated 17 March 2000.

18 On 7 April 2000 the worker lodged a notice of dispute challenging the reasonableness of the terms of the third plan.

19 By letter of the same day, the Corporation made a determination that the worker's weekly payments of income maintenance were to be discontinued 21 days hence, in terms that relevantly provide as follows:

"HIH have been advised by your employer that you have failed to undertake reasonable duties made available. Your employer has offered fully productive duties for 38 hours per week as a Confined space Safety Watcher, Fire Watcher with periodic Stores Assistant and Housekeeping duties as required. The Rehabilitation and Return to Work Plan approved by HIH on 16/3/2000 confirms your obligation to attend the worksite to undertake the suitable duties.

Under Sections 36(1)(f) and 36(1A)(d) of the Workers Rehabilitation Compensation Act 1996, as amended (the Act), HIH Workers Compensation (SA) Limited as claims agent acting on behalf of WorkCover Corporation may discontinue weekly payments of income maintenance, where it is satisfied that you have refused or failed to participate in a rehabilitation program.

On the basis of the above information, HIH Workers Compensation (SA) Limited is satisfied that you have breached mutuality as you have refused or failed to meet the obligations specified in a Rehabilitation and Return to Work Plan. Therefore, we have determined under Sections 36(1)(f) and 36(1A)(d) of the Act, that your income maintenance payments will be discontinued. Sections 36(3a) of the Act requires that you be given 21 days notice before the discontinuance takes effect. This letter serves as notice that your income maintenance payments will be discontinued from 21 days after you receive this letter.

An extract of Sections 36(1)(f) and 36(1A)(d) of the Act are attached for your information."

The letter attached a full extract of s 36 (1A) including s 36(1A)(e).

20 On 11 April 2000 the worker lodged a notice of dispute challenging the determination to discontinue his weekly payments.

22 Before I deal with the more substantive issues relating to the disputes before me, I need to deal with a submission that was advanced on behalf of the worker, that the notice of discontinuance was invalid for technical reasons.

23 The notice erroneously refers to a rehabilitation program and it erroneously identifies that the statutory deemed breach of mutuality by reference to s 36(1A)(d) which provides: "the worker refuses or fails to participate in a rehabilitation program under this Act or participates in a way that frustrates the objectives of the program". It should have referred to a rehabilitation and return to work plan, and it should have identified the statutory deemed breach of mutuality by reference to s 36(1A)(e) which provides: "the worker fails to comply with an obligation under rehabilitation and return to work plan under this Act".

24 Mr Harbord cited a number of authorities from the Workers Compensation Appeal Tribunal and the decision of the Supreme Court in Mitsubishi Motors v Sosa (unreported, Supreme Court FC delivered 8 June 1995 s5084) in support of the proposition that the notice requirements prescribed by s 36 and the regulations promulgated thereunder in respect of information to be supplied to a worker, are absolutely mandatory in their terms and that any departure therefrom save one that could be characterised as de minimus would render the notice bad.

25 I agree with this, but I would regard the departure here as de minimus. There was substantial compliance with the requirements of s 36 and the regulations promulgated thereunder. The notice served its purpose. The worker was supplied with sufficient information to be able to make an informed decision as to whether to seek its review, which is precisely what he did, and moreover, his notice of dispute identified the third plan.

26 In my view the worker's technical challenge to the s 36 determination fails.

The relationship between a challenge to the reasonableness of the terms of the rehabilitation and return to work plan and a determination to discontinue on the basis of a failure to comply with the terms with such a plan.

27 An important issue arises as to the effect of s 28B(3) which provides "proceedings on a review under this section (or consequent appellate proceedings) do not suspend obligations imposed by rehabilitation and return to work plans", upon a s 36 notice related to a failure to comply with terms of such a plan.

28 Assume, as is here, that a worker asserts that the terms of the rehabilitation and return to work plan are unreasonable and seeks a review of its terms within the time prescribed. If the worker fails to comply with the challenged rehabilitation and return to work plan, is the worker subject to a discontinuance of weekly payments pursuant to s 36(1)(f) by reason of s 36(1a)(e) irrespective of the outcome of the s 28B review? Or, will a subsequent challenge to a determination issued pursuant to s 36(1)(f) in such circumstances succeed if the Tribunal determines that the terms of the rehabilitation and return to work plan were unreasonable?

"I am inclined to the view, that in contesting a determination made pursuant to section 36(1a)(e), it is not open for a worker to assert that the terms of the rehabilitation and return to work plan are unreasonable. I am inclined to the view, that all that needs to be established, is that the worker has failed to comply with an obligation under such a plan. In my view, if a worker wishes to challenge the reasonableness of the terms of the plan, the appropriate mechanism by which to do so, is through the filing of an application for review in accordance with section 28B of the Act. It is important to note, that in respect thereof, the worker is not relieved of the obligations imposed by the rehabilitation and return to work plan, by virtue of such an application: section 28B(3). If a worker were able to unilaterally decide that the terms of the plan were unreasonable and resolved not to participate in it but rather to challenge the reasonableness of the terms of the plan through a challenge to a determination made pursuant to section 36(1a)(e), section 28B(3) would be of little effect."

30 On an appeal from that decision, the Full Bench (JD95/1998) commented upon those remarks and said:-

"In our respectful view however the learned single Member was correct in concluding that it was not open to the appellant in the subject proceedings to challenge the reasonableness of the Plan at that late stage and that all that needed to be established was that the worker had failed to comply with such an obligation under such a plan. Pursuant to section 28A there is an obligation on the part of the Corporation to establish a rehabilitation and return to work plan for a worker who is receiving compensation by way of income maintenance and is or is likely to be incapacitated for work by compensable disability for more than three months but has some prospect of returning to work. In other cases the establishment of such a plan is discretionary. The section provides that in preparing the plan the Corporation must consult with the worker and the relevant employer and if practicable review medical records relevant to the worker's condition or consult with the worker's treating medical expert. Pursuant to section 28B it is open to a worker or employer to apply for a review of a decision to establish or not to establish a plan or a provision of a plan on the ground that the decision of the provision is unreasonable. Pursuant to section 28B(2) on a review of a plan the plan may be modified to the extent necessary to ensure that the plan does not impose unreasonable obligations on the worker or the employer. Significantly proceedings on a review do not suspend obligations imposed by a plan (section 28B(3)).

It seems to us that given the specific provisions of section 28B appearing as they do in Part 3 of the Act which deals exclusively with the rehabilitation and accident prevention programmes and is clearly a code dealing with that subject matter, if a worker is dissatisfied with the rehabilitation and return to work plan or any part thereof then the appropriate and only course of action is to seek a review by the Tribunal pursuant to section 28B. In our view (and the learned single Member adverted to this in his reasons) it would be an anomalous result if a worker in the face of a specific statutory entitlement to seek a review of a plan which would require work to continue pursuant to the Plan pending resolution of the dispute (and indeed allow for an appropriate modification of the plan in appropriate circumstances) were able to ignore the requirements of the plan and effectively by a `back door' method that challenge the reasonableness of its terms in proceedings pursuant to section 36 in circumstances where there was no obligation on the worker to continue to abide by the terms of the plan pending the resolution of the matter and no apparent power vested in the reviewing authority to modify the plan if appropriate. We are fortified in this view by the provisions of section 36(1)(f) and (1a)(e). Those provisions are quite unambiguous: it is the failure to comply with the obligation that constitutes the breach of mutuality. There is nothing on the face of the relevant provision to indicate that the legal consequences of a failure to comply with an obligation under a plan is open to a defence that the plan is in some respects unreasonable. Had such been intended we consider that Parliament would have made it clear that the option was open."

31 At first blush these remarks suggest that notwithstanding an appropriate challenge to the reasonableness of the terms of the plan lodged in accordance with s 28B(3), a worker will automatically incur the wrath of s 36(1)(f) unless the worker complies with the terms of the rehabilitation and return to work plan, even if it is subsequently found that the terms of the rehabilitation and return to work plan were unreasonable.

32 But a reflection upon some observations made by the Full Bench of the Tribunal in Dunstan v State of South Australia (Department of Education, Training and Employment, and WorkCover Corporation) JD48/1998 throws further light on this issue. In commenting upon the distinction between a rehabilitation program and a rehabilitation and return to work plan the Full Bench said as follows:-

"A disabled worker (and presumably the employer of the disabled worker) has a general right to have a rehabilitation programme established. And there is a general right to seek a review of a decision not to establish such a programme as well as the right to complain about its terms or lack of them. Moreover, and consistent with the observations made by Doyle C.J. in Della-Flora v. WorkCover, (unreported, delivered 26 May 1998; S6691), if a review of the terms of a programme is sought, the obligations created by the programme are suspended pending the outcome of the review.

In contrast to this, there is no general right conferred upon a disabled worker or the employer of a disabled worker to have a rehabilitation and return to work plan established. There is no general right to seek a review of a decision made by a compensating authority not to implement such a plan. The right only exists if the criteria prescribed by section 28A(2) had been met. Whilst there is a right to complain about the terms of the plan, the obligations imposed by it remain in force, notwithstanding the fact that a review of its terms is being undertaken."

33 I think that this explains the real effect of s 28B(3). If the Corporation establishes a rehabilitation program and a worker contends that its terms are unreasonable and files a notice of dispute seeking a review of its terms, the program is suspended and the worker is not obliged to continue to participate in the program. As a result, the compensating authority cannot invoke s 36(1f) and assert that there had been a breach of s 36(1a)(d). A compensating authority can only rely on s 36(1a)(d) where there has been no challenge to the terms of the program or, where the notice of discontinuance is issued subsequent to a determination by the Tribunal (which itself is not being challenged) that the terms of the program were reasonable.

34 In contrast to this, where the compensating authority has invoked s 28A, and created a rehabilitation and return to work plan, the compensating authority is able to invoke s 36(1f) and rely upon a purported breach of s 36(1a)(e) notwithstanding the fact that a review of the rehabilitation and return to work plan is pending. Thus the risk that a worker takes by refusing to submit to the terms of a challenged rehabilitation and return to work plan is that the Corporation may invoke, as it did here, s 36 and if it is subsequently determined that the terms of the rehabilitation and return to work plan were reasonable, the s 36 notice will take effect.

35 Consistent with Alexander (supra) it is not open, in the context of the s 36 dispute, for the worker to be asserting that the terms of the rehabilitation and return to work plan were unreasonable. But, it does not follow that the determination of the Tribunal in respect of the challenge made under s 28B(3) is irrelevant to that inquiry. If as a result of that review, the Tribunal is of the opinion that the terms of the rehabilitation and return to work plan were unreasonable, the s 36 notice based upon the asserted refusal or failure to participate to the terms of that plan, must fail and the worker's challenge in respect thereof, must succeed.

36 Thus, the fate of the worker's challenge to the s 36 notice here is ultimately contingent upon the outcome of his application for a review of the rehabilitation and return to work plan.

37 Mr Harbord made technical challenges to the terms of the third plan. He referred me to the regulations promulgated pursuant to s 28C(1) which state that the compensating authority must stipulate the method by which the plan will be reviewed. He noted that the third plan contained no information under that head and asserted, that as a result, the plan was unlawful.

38 It is true, that s 28C(1) provides: "rehabilitation programs, and rehabilitation and return to work plans, must comply with standards and requirements imposed by regulations." But it does not follow, that the standards and requirements imposed by regulations must in every case be complied with or that a failure to comply with such standards and requirements renders a rehabilitation program or rehabilitation and return to work plan invalid. In the end, what is required is a consideration of the relative importance of the standards and requirements and the consequence of treating their non-observance as invalidatory. As Stephen J observed in Victoria v The Commonwealth and Connor [1975] HCA 39; (1975) 134 CLR 81 at 179:-

"Sometimes the stipulation which has not being complied with is, in its context, so relatively unimportant to the attainment of that general object that, although there has been total non-compliance, a directory construction may be appropriate. In such cases it may not matter that the noncomplaince is complete, not partial. Indeed the stipulation in question may be of a kind which is incapable of partial compliance; to give to such a stipulation a directory interpretation recognizes that it may be wholly disregarded without prejudice to validity because of its relative unimportance in the attainment of the general statutory object and also, perhaps, because of the far reaching and undesirable consequences of treating its non-observance as invalidatory.

Where, on the contrary, a stipulation may be seen to be of importance in attaining the general object of the statute its total non-observance cannot be sought to be excused, and its intended effect circumvented, by the adoption of a directory construction."

39 In my opinion, the fact that the section titled in the rehabilitation and return to work plan "Agents Comments (including the method by which in time (if known) the plan will be reviewed)" is not completed does not render the plan invalid. This technical challenge therefore fails.

40 The next argument that was put by Mr Harbord was that the third plan was invalid or otherwise inheritantly unreasonable by virtue of the fact that the second plan had not been given the opportunity to run its course.

41 In my view, this submission has merit. S 28A has the potential through s 28A(4) to create obligations upon workers and employers that are not to be taken lightly. Pursuant to s 28A(6) "the plan is binding on the worker and the employer". And, for the reasons explained earlier, it remains binding on both the worker and employer, notwithstanding that one or other of those parties has sought a review of its existence or its terms: s 28B(3).

42 In my opinion, it would be incongruous, if, notwithstanding the fact that neither the employer nor the worker had sought a review of the terms of the rehabilitation and return to work plan, the Corporation could suspend its terms and replace it with another during the currency of its proposed life span.

43 Presumably the reason why a rehabilitation and return to work plan contains a start and completion date is so that the parties know exactly where they stand, and that is, absent a contrary ruling by the Tribunal, for the duration of the plan, they are bound by its terms.

44 If the employer was of the view that the terms of the second plan were unreasonable because the worker was only obliged to present himself for work for 16 hours a week whereas it was able to provide productive suitable duties for 38 hours a week, its remedy was to file a notice of dispute and apply for a review pursuant to s 28B(1). Had it done so, pending a determination of that application including appeal proceedings, the status quo created by the second plan would have continued to prevail. Namely, the employer would have been obliged to provide the worker with the stipulated work for 16 hours per week and the worker would have been obliged to undertake those duties.

45 What the Corporation and the employer have sought to do through the creation of the third plan is to in effect, circumvent the review provisions prescribed by s 28B.

46 It would be no different had the worker reached a private agreement with the Corporation to reduce his hours to 8 hours per week instead of 16 and for the Corporation to replace the second rehabilitation and return to work plan with a third plan that made provision for those reduced hours.

47 In those circumstances the employer could rightfully complain and assert that if that is what the worker wished to do, he should lodge a notice of dispute and apply for a review of the plan.

48 Thus, in my opinion, the third plan was made ultra vires and therefore created no obligations on the part of the worker.

49 It follows that the determination to discontinue weekly payments on the basis of the workers failure to submit to the terms of the third plan must be set aside.

50 In case I am wrong about that, I will proceed to consider whether, in any event, the terms of the third plan are reasonable.

51 The Full Bench in Alexander (supra) noted that the observations of Bray CJ in Percic v Broken Hill Pty Co Ltd (1973) 6 SASR 1 at 4 where he said:-

"... suitable for this purpose means suitable having regard to the physical condition of the man, the nature and character of his occupation before his injury, and the nature of the work available after the injury... personal preference, geographical convenience or family circumstances are irrelevant (Eyre v Houghton Main Colliery Co Ltd per Cozens-Hardy MR at pp 697-698; Broughton v London and North Eastern Railway Co)"

may not reflect the modern law. They made reference to the judgment of Zelling AJ (as he then was) in Worker Rehabilitation and Compensation Corporation v James (1992) 57 SASR 365 and 393. There, Zelling AJ said:

"First, speaking as a member of the Court which decided Percic's case (supra), the observations quoted above were not necessary for the decision of the case, which really turned on the point of jurisdiction. Secondly, neither Eyre (supra) nor Broughton (supra) are authority for strictly confining the concept of suitable employment in this way. Fletcher Moulton LJ went further than Cozens-Hardy MR in Eyre at 698 and 700 in considering the workman's personal circumstances. The third judge, Buckley LJ, only agreed in the result. In Broughton, as appears from the judgment of Scrutton LJ (at 581), the workman's terms of employment obliged him to move from place to place in the employer's system as the employer required.

Although this narrow view of suitable employment has been used in other cases in Australia, I think it is a mistake to give almost statutory force to the philosophy of employer and workman which existed two to three generations ago, when a workman was largely an economic chattel whose personal circumstances could be disregarded, and who could be dealt with at the employer's whim.

Thirdly, I do not think that so restricted a view is in consonance with the philosophy of the 1986 Act. This Act is tailored to the rehabilitation of the individual workman, with his individual needs, deficiencies, and personality.

Further, Parliament must be taken to know in 1986 that we are no longer in an age when the male is the sole breadwinner. In these days when both husband and wife work as a matter of routine, employment can hardly be `suitable' for the injured spouse, by forcing him to move elsewhere, if it reduces the family income to that of one earner, or otherwise disrupts the family pattern of earning, because all the family's commitments have been entered into on the basis of two continuing incomes. Injecting that sort of stress into the situation is hardly likely to help anyone's rehabilitation and that is what this Act is there to promote.

What I do say is that in this day and age, `suitable' where used in this Act in relation to employment, must mean suitable in relation to the workman as an individual, and that old concepts of suitability which would oblige a man to go 400 miles from his wife and family just because there was a job at that distance that he could do (cf Roper v Commissioner for Railways (No 2) [1959] WCR 93_)_ belong to the days when an employee was an economic chattel, and have no place in the philosophy or interpretation of this Act."

52 I respectfully agree with these observations. In determining the reasonableness of a rehabilitation and return to work plan or its provisions, consideration must be given to the personal circumstances of the worker. They are not paramount, but they must be taken into account.

53 Whilst I find that the worker is in general terms physically and mentally capable of undertaking the duties prescribed in the third plan, I find that the requirement that he undertake those duties at Port Stanvac between 7.30 am and 4.30 pm Monday to Friday, is, in all the circumstances, unreasonable.

54 This is not a case whereby it was personally inconvenient for the worker to attend work for that time. The reason why the worker had taken this casual position in the first place was because it only obliged him to work for a limited number of hours and thereby enabled him sufficient time to care for his ailing wife.

55 In order to work the hours proposed at Port Stanvac the worker would have to break a pattern that had been in place for over six years and either organise other care-givers to attend to the needs of his wife or leave her unattended for much longer periods than he or she were accustomed to. One can well imagine the distraction that this would cause him. It could hardly be conducive to the worker's rehabilitation and restoration to the workforce to unilaterally impose this obligation upon him and without any provision to give the worker time to adjust his personal circumstances. In his evidence the worker said that he may be able to work at Port Stanvac for 20 hours per week. Maybe he could work for longer than this without causing too much disruption to his commitments to his wife. What was required here was a sympathetic approach that recognised the special needs of the worker and that took that into account. An immediate change from 16 hours per week to 38 hours per week is in my view too dramatic. The Corporation should have explored a gradual increase in the number of hours to be worked and taken into account difficulties experienced by the worker in meeting those objectives. The first and second plans involved administrative duties. Perhaps a reasonable compromise here might have been a mix of the duties stipulated in the third plan and the performance of some of the administrative duties provided for in the earlier plans at the worker's home, thereby making the worker relatively productive for a full week but recognising his need to spend time at home with his wife. If this is feasible it should be explored.

56 For the reasons set out earlier, my primary conclusion is that the third plan is ultra vires such that a review of it does not arise and the s 36 notice based upon an alleged failure to comply with its terms must be set aside.

57 As explained, if I have made an error in law in reaching that conclusion, I would find on the facts, that the provision of the rehabilitation and return to work plan requiring the worker to work at Pt Stanvac between 7.30 am and 4.30 pm, Monday to Friday, is unreasonable. Had the plan still been on foot, pursuant s 28B(2) I would modify its terms. I have raised some possibilities in relation thereto. As the third plan has expired all that I can do is declare that its terms were unreasonable. This alternate conclusion does not alter the fate of the s 36 notice. On either approach it must be set aside.

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 Form 11 within 14 days of the delivery of this decision and must be served on all parties.