McNeil v GM Holden Limited [2008] SAWCT 7

10

These questions are to be determined on the basis of the facts set out in the Chronology as amended at the hearing[5]. Those passages added at the hearing are italicised:-

"1 The worker submitted a notice of work related injury and claim for compensation form dated 9 May 2006 in respect of a lower back injury suffered on 5 May 2006 arising from employment with the employer.

2

The claim was accepted by the employer by determination dated 12 May 2006.

3

The worker was off work until 24 August 2006.

4

From 24 August 2006 until 14 December 2006, the worker performed modified duties for graduated hours pursuant to rehabilitation and return to work plans in accordance with medical certificates as follows:-

a.

24/8/06 - 13/9/06 3 hours per day, 3 days per week;

b.

13/09/06 - 27/09/06 4 hours per day, 3 days per week;

c.

27/9/06 - 8/11/06 4 hours per day, 5 days per week;

d.

8/11/06 - 6/12/06 5 hours per day, 5 days per week;

e.

6/12/06 - 14/12/06 (certificate ran until 18/12/06) 6 hours per day, 5 days per week

There was an alternative position on capacity as certified by Dr Kelly; namely that the worker was fit for full hours on alternative duties.

5

For the period 8 May 2006 to 14 December 2006, and up until 21 December 2006 at the latest the worker received weekly payments of income maintenance or payments of a different type, that type being either wages or sick leave entitlements. The worker has not received any weekly payments of income maintenance after 21 December 2006.

6

For the period 24 August 2006 to 14 December 2006, the worker received payments in respect of the hours that he performed duties at work. The worker has not received any such payments for any period after 14 December 2006.

7

By notice dated 5 December 2006, the employer determined to discontinue the worker's weekly payments of income maintenance pursuant to section 36(1)(c) of the Act.

8

The determination was disputed by notice of dispute dated and filed at the Tribunal on 18 December 2006 (Action Number 7617/06). The determination was set aside by sealed orders of the Tribunal made on or about 8 February 2007.

9

On 14 December 2006, the worker experienced chest pains at work and left work. He has not performed any duties at work since 14 December 2006.

10

The workplace shut down for Christmas between 18 December 2006 and about 15 January 2007.

11

Subsequent medical certificates to those set out in 4 above have been provided to the employer as follows:

a. Certificate of sickness dated 19/12/06 from Dr Yeend, cardiologist for the period 15/12/06 - 20/12/06;

b.

PMC dated 12/2/07 from Dr Yeend for the period 15/12/06 - 21/12/06;

c.

Certificate dated 11/1/07 (non-PMC) from Dr Latif for the period 11/1/07 - 8/2/07;

d.

Certificate dated 7/2/07 (non-PMC) from Dr Latif for the period 7/2/07 - 13/2/07;

e.

PMC dated 12/2/07 from Dr Latif for the period 11/1/07 -16/2/07;

f.

PMC dated 16/2/07 from Dr Latif for the period 16/2/07 - 23/2/07;

g.

PMC dated 22/2/07 from Dr Latif for the period 22/12/06 -2/3/07;

h.

PMC dated 2/3/07 from Dr Latif for the period 2/3/07 - 8/3/07;

i.

PMC dated 8/3/07 from Dr Latif for the period 8/3/07 - 21/3/07.

12

The worker submitted a notice of work related injury and compensation claim form dated 7 February 2007 in relation to heart attack and mental injuries index cover of letter dated 16 February 2007. The claim was rejected by notice of determination dated 19 October 2007 and the determination was disputed by notice of dispute dated 22 October 2007 (Action Number 5577/07). No concession is made as to the date of receipt of the form by the compensating authority.

13

By notice dated 20 February 2007, the employer issued a re-determination. The worker concedes that he had received a prior redemption lump sum in respect of weekly payments and that the section 35(6a) figure relevant to that prior redemption was $517.59. The worker further concedes that this was new information that was not available and could not reasonably have been discovered by due enquiry at the time that the determination dated 12 May 2006 was made.

14

The redetermination was disputed by notice of dispute dated 7 March 2007 (Action Number 1129/077) and the disputed decision was confirmed on 19 March 2007.

15

An application for expedited decision dated 5 April 2007 was lodged on behalf of the worker on 8 April 2007 (Action Number 1754/07E) in respect of weekly payments covered by the PMC's referred to in 11g -i. A notice of dispute dated 5 April 2007 (Action Number 1749/07) was also lodged on behalf of the worker disputing an alleged unwritten decision to discontinue weekly payments and a confirmation of disputed decision was made on 19 April 2007.

16

By notice dated 23 April 2007, the employer rejected what it took to be the worker's claim for weekly payments of income maintenance for the period from 22 December 2006 to 8 March 2007. The decision was disputed by notice of dispute dated 30 April 2007 (Action Number 2213/07) and the decision was confirmed on 15 May 2007.

17

By notice dated 1 May 2007, the employer made a section 39 adjustment to the worker's notional weekly earnings and also reduced the potential entitlement to weekly payments to 80% of notional weekly earnings due to the passage of time pursuant to section 38A of the Act. The section 38A component of the decision was disputed by notice of dispute dated 15 May 2007 (Action Number 2522/07) and that dispute is now the subject of agreement between the parties as set out in the agreed statement of issues.

18

The only written decisions which the employer has made purporting to reduce or discontinue the quantum of the worker's entitlement to weekly payments of income maintenance are the determinations dated 5 December 2006 and 1 May 2007 and the re-determination dated 20 February 2007."

11

The redetermination dated 20 February 2007 was in the following terms[6]:-

"By determination dated 12 May 2006 we advised your claim for back injury was accepted and that you were entitled to compensation by way of income maintenance from 8 May 2006. Your notional weekly earnings (NWE) were determined at $1013.86 and your weekly payments were determined at that amount less earnings from employment.

For the period from 8 May 2006 to 11 December 2006 you were paid weekly payments calculated on the basis of NWE less your actual earnings from GM Holden Ltd.

In the Claim for Compensation dated 9 May 2006 you failed to advise in Section 7 that you had suffered similar injury previously, that you had made a workers compensation claim previously and that you had had a workers compensation claim redeemed in South Australia.

GM Holden Ltd has received information from WorkCover that you previously have been paid compensation for a number of injuries sustained on 22 June 1993. Those injuries included a lower back disability for which you were paid compensation for a 10% permanent impairment. The amount paid to you also included redemption of liability to make weekly payments and an agreed Section 35(6a) figure of $517.59.

GM Holden Ltd has decided to re-determine your claim under Section 53(7) of the Act.

GM Holden Ltd considers that the re-determination is appropriate on the basis that you deliberately withheld information that should have been supplied namely that you previously had made a workers compensation claim for injuries that you previously had suffered a back injury and that you had had a workers compensation claim redeemed. As a consequence the original determination was based on inadequate information and the determination of weekly payments did not take into account the amount of $517.59 you were taken to be receiving under Section 35(6a) of the Act.

The re-determination replaces the determination dated 12 May 2006 as is follows:

1. Your claim is accepted with respect to medical and like expenses pursuant to Section 32 of the Act.

2. You are entitled to compensation by way of income maintenance as follows:

2.1

For total incapacity for work during the period from 8 May 2006 to 23 August 2006 inclusive.

2.2

For partial incapacity for work during the period from 24 August 2006.

2.3

While totally incapacitated, your weekly payments are calculated on your notional weekly earnings (NWE) figure of $1, 013.86 (including any overtime component) for a 38 hour week, less $517.59 which you are taken to be receiving under section 35(6a) of the Act in consequence of a redemption agreement relating to injuries suffered on 22 June 1993. Weekly payments for that period are $496.27 ($1,013.86 - $517.59).

2.4

While partially incapacitated your weekly payments are calculated on your NWE less $517.59 which you are taken to be receiving under s 35(6a) of the Act in consequence of a redemption agreement relating to injuries suffered on 22 June 1993 and less your actual earnings or the earnings you could earn in suitable employment.

2.5

You have been certified capable of performing suitable employment duties for

(a) 3 hours 3 days per week from 24 August 2006 to 13 September 2006 inclusive:

(b) 4 hours 3 days per week from 13 September to 27 September 2006 inclusive:

(c) 4 hours 5 days per week from 27 September 2006 to 8 November 2006 inclusive:

(d) 5 hours 5 days per week from 8 November 2006 to 6 December 2006 inclusive:

(e) 6 hours 5 days per week from 6 December 2006 to 18 December 2006 inclusive:

2.6

You have undertaken the certified suitable employment duties for the periods referred to in 2.5(a) to (d) and from 6 December 2006 to 15 December 2006 when you were certified totally incapacitated due to chest pain disability. GM Holden Ltd has at all times had and continues to have available to you suitable employment duties complying with restrictions imposed as a result of your back disability.

2.7

Taking into account the matters referred to in paragraphs 2.4, 2.5 and 2.6 above as well as section 35 of the Act, your weekly payments for periods of partial incapacity are:

(a) 24 August 2006 to 13 September 2006 - $256.15 ($1,013.86-$517.59- (9hrs per week x $26.68 hourly rate))

(b) 13 September 2006 to 8 November 2006 - $176.11 ($1,013.86-$517.59- (12hrs per week x $26.68 hourly rate))

(c) 8 November 2006 to 6 December 2006 - Nil ($1,013.86-$517.59- (25hrs per week x $26.68 hourly rate))

(d) From 6 December 2006 - Nil ($1,013.86-$517.59- (30hrs per week x $26.68 hourly rate))

2.8

Payments of income maintenance and/or reimbursement of medical, chemist, travelling or other expenses will be paid into your nominated bank account, or paid by cheque and posted to your last known address.

2.9

If you wish to claim weekly payments for any future period of incapacity arising from your compensable disability, then please note that you will be required to submit a further prescribed medical certificate. Upon receipt of this information, we will issue a further determination if there is any entitlement to income maintenance.

Pursuant to Sections 90 and 90A of the Act, you are entitled to dispute this reviewable decision by lodging a Notice of Dispute with the Workers Compensation Tribunal. Such Notice of Dispute must be made in the prescribed manner and form in accordance with the Regulations. A Notice of Dispute must be lodged within one month of the date that you receive this decision, unless the Workers Compensation Tribunal allows an extension of time pursuant to the provisions of Section 90A."

12

Mr Warren took particular issue with paras 2.6 and 2.9 and the assertion in para 2.7(d) that the worker had a nil entitlement to weekly payments from 6 December 2006.

13

Mr Warren submitted that these passages constitute a discontinuance on the grounds of a breach of mutuality without giving 21 days notice. He said that, in effect, the exempt employer discontinued weekly payments:-

"either because there was suitable employment for 30 hours per week and an application of s 35 (6a) or because there was a total incapacity from chest pain but the effect is to discontinue the entitlement whereas in fact, as of 15 December 2006 and as of all times up until 20 February 2007 there never was any such discontinuance or notice of discontinuance or reduction on foot...".[7]

14

As a consequence he submitted that the worker has an entitlement to weekly payments for total incapacity in the amount of $496.27 from the 15 December 2006 when he was certified unfit for work as a result of chest pain and that such payments should continue until such time as his payments are discontinued in accordance with the Act.

15

He summarised the worker's position as follows[8];-

"So we take no issue on the face of that 12 May 2006 determination in saying, whenever he was at work and was receiving payment for the duties at work, that comes off the notional weekly earnings in calculating the quantum of the entitlement to weekly payments, but it's the applicant worker's position that that is all that can occur in the face of the 12 May 2006 determination. If the worker is not at work for any reason at all, on the face of that 12 May 2006 determination and the construction that the worker urges, insofar as it has effect, is this, in essence: if the worker is not at work, he receives his notional weekly earnings as weekly payments unless and until there is a notice of determination issued by the compensating authority either reducing or discontinuing his weekly payments."

16

He submitted that the worker should have a summary order for ongoing weekly payments and that this renders it unnecessary for the Tribunal to determine whether the worker has an entitlement to weekly payments associated with the other jointly listed Notices of Dispute. These include:-

•

No 1749 of 2007, which challenges the exempt employer's unwritten decision to discontinue the worker's weekly payments for a period of incapacity relating to the back and right leg disabilities from 22 December 2006 to 8 March 2007[9].

•

No 2213 of 2007 which challenges the exempt employer's rejection of a claim for weekly payments for an incapacity relating to the back and right leg from 22 December 2006[10]

•

No 5577 of 2007 which challenges the exempt employer's rejection of a claim for income maintenance for a period of incapacity commencing on 15 December 2006 in relation to mental injuries and heart attack.[11]

17

Returning to the first question posed in para 9, the purpose and effect of the notice will be determined by reading it as a whole and in context.[12] It is the substance of the determination and not its form which determines its effect.[13]

18

It is important to bear in mind that, in the absence of the worker's fraud, the exempt employer has no right of recovery of monies paid under the original determination.[14] It is not clear whether there is an assertion of fraud and, in any event, that is not a matter which concerns this Tribunal.

19

Leaving aside any right of recovery, the primary purpose of the notice must be to put the worker on notice of his entitlement to weekly payments pursuant to s 35 of the Act for all relevant periods of incapacity from the commencement of incapacity up to the date of the redetermination. This is important because the effect of the redetermination is to subsume the original determination[15]. Although there may be no practical consequence upon the worker, absent proven fraud, he is now on notice that his entitlement to weekly payments for any relevant period of incapacity has been calculated by applying s 35(6) of the Act. In other words he has now been advised that he is not entitled to receive, for two or more disabilities, weekly payments in excess of his notional weekly earnings and that accordingly the amount he is taken to be receiving by way of weekly payments from the first disability ($517.59) has been taken into account when calculating any weekly payments.

20

It follows that the redetermination also puts him on notice that any entitlement to weekly payments for any future period of incapacity after 20 February 2007 will be calculated accordingly.

21

The first part of the notice, up to and including para 2.4, sets out the redetermination by vacating the original determination of 6 May 2006 and substituting the amount of weekly payments consistent with s 35(6) and s 35(6a). It does not purport to redetermine the existence or extent of any incapacity for work as at 6 May 2006. So in effect it is an amendment of the original determination in which only that part of the original determination which sets the worker's weekly payments has been subsumed by this later determination.

22

The balance of the notice from 2.5 onwards applies the redetermined weekly payment figure to each changed level of incapacity up to the date of the February 2007 notice. This tracing of the consequential effect of the redetermination upon the worker's entitlement to weekly payments is, as I have indicated, a necessary part to the purpose of the notice.

23

However at the same time as the notice advises of past entitlements to weekly payments it also fulfils another purpose. The determination gives the worker notice of various reductions in weekly payments commensurate with his graduated return to work from 24 August 2006 to 6 December 2006.

24

The worker's weekly payments were reduced for the first time on 24 August 2006. At that point he ceased to be totally incapacitated for work and was no longer entitled to weekly payments for total incapacity. From that time he was partially incapacitated for work and for each week received wages for the suitable work he was able to perform together with the difference between that amount and his notional weekly earnings.[16] As his fitness for suitable duties increased his partial incapacity diminished and this was reflected in the level of income maintenance to which he was entitled from 13 September, 8 November and 6 December respectively.

25

Each change in his capacity for work was supported by presentation of a prescribed medical certificate. In effect each presentation of a new certificate certifying suitability for increased hours constituted a claim to be paid weekly payments in accordance with the certificate. On such occasions the exempt employer adjusted the worker's weekly payments in accordance with the presented certificate. On such occasions this represented a decision to reduce the worker's weekly payments in accordance with the relevant certificate. This was the practical means by which the worker was incrementally rehabilitated to the workforce. The worker's consent to the various reductions was fundamental and was demonstrated by his performance of suitable duties pursuant to a series of agreed rehabilitation and return to work plans.

26

The fact of the worker's consent means that the reductions did not breach s 36(2) and did not require 21 days notice before any of those decisions to reduce took effect. Instead s 36(3a) required the exempt employer to give notice of the reductions as soon as practicable after the decision was made but not necessarily before each took effect.

27

Accordingly the secondary purpose of the notice of 20 February 2007 was to provide compliance with s 36 in relation to the various reductions. Even if notice could have been given earlier that does not affect the sufficiency of the notice.

28

By the time that the worker went off work on 15 December 2006, suffering from chest pain, he was certified fit to work 30 hours per week. Applying the method of calculation of the weekly payments entitlement contained in para 2.7 of the notice of 20 February 2007, the worker had a nil entitlement to weekly payments as at 15 December 2006. If that method accords with the Act the worker had consented to a rehabilitation process by which his payments were eventually reduced to nothing, and no 21 day notice period was required before that discontinuance took effect. In those circumstances the notice dated 20 February 2006 provided the requisite notice.

29

Applying Mr Warren's method of calculation the worker had a weekly payment entitlement of $147 when he was performing 30 hours work per week in December 2006 The worker then went off work for what he initially asserted was a cause unconnected with his employment. He presented a certificate of sickness for chest pain asserting that he was unfit for work from 15 December 2006 to 20 December 2006.

30

The facts surrounding the worker's absence from work from 15 December 2006 are not agreed. On one view the worker was asserting an entitlement to sick leave for that period for a non-compensable cause. If that was the situation it can be inferred that he consented to the discontinuance of the remaining weekly payment of $147 because he intended to access his sick leave entitlement, which was equivalent to his full rate of pay. If that was the situation the exempt employer was entitled to discontinue the weekly payment of $147 without the need to provide 21 days notice. On that view of the facts reference to the circumstances in para 2.6 merely served the purpose of providing notice of the discontinuance in accordance with s 36(3a).

31

If that view is not open then, in any event, the worker did not have an automatic entitlement to weekly payments for total incapacity upon ceasing work on 15 December 2006. A claim for compensation is not a claim that the disability be accepted as compensable.[17] It is a claim for a specific entitlement pursuant to the Act. The initial period of total incapacity, for which the worker was entitled to weekly payments, ended in August 2006 when he was certified partially incapacitated for work. Thereafter until December 2006 his weekly payment entitlement was commensurate with his reducing partial incapacity. If the worker asserted that he was totally incapacitated for work from December 2006 it was incumbent on him to make a fresh claim supported by a prescribed medical certificate. Support for the proposition that a fresh claim was required for any new period of total incapacity from December 2006 is to be found in Minh Ty Lee v Inghams Enterprises Pty Ltd [1998] SAWCT 100 and Laudonia v Workcover JD 78/1998.

32

Paragraph 2.6 together with para 2.9 of the notice explain just that to the worker.

33

In summary the notice of 20 February 2006 had the purpose and effect of redetermining the original determination, insofar as it related to the quantum of the worker's entitlement to weekly payments, it gave notice to the worker of the application of that redetermination to his weekly payments entitlement between May 2006 and 20 February 2006 and it put him on notice that the redetermination would continue to apply to any entitlement to weekly payments after 20 February 2007.

34

The notice also had the effect of giving the worker notice of a series of consent reductions of weekly payment between August and December 2006 and, on one view of the facts, a consent discontinuance of weekly payments from 15 December 2006.

35

In my view there is no statutory impediment to the notice containing a redetermination pursuant to s 53(7) and a notice pursuant to s 36(3a) in relation to consent reductions and a consent discontinuance. There might be other circumstances where it would be unfair to roll-up more than one determination in one notice but this is not such a case. The inclusion of the s 36(3a) notice does not influence the validity of the redetermination of the quantum of weekly payments.

36

If the final discontinuance of a weekly payment entitlement of $147 to nil was not consensual, a matter which remains to be determined, then it may be that the worker has an ongoing entitlement to, a weekly payment of $147 until the payment is discontinued in accordance with s 36. However that does not mean that the worker has an entitlement to weekly payments for a fresh period of total incapacity at the rate of $496.27 from 15 December 2006. The worker is asserting a fresh period of total incapacity, which the exempt employer was not required to determine until the worker lodged a fresh claim, supported by a prescribed medical certificate.

37

In all the circumstances the redetermination was valid and the worker is not entitled to a summary order that weekly payments for total incapacity continue from 15 December 2006.

38

The remaining issue which influences the outcome of this preliminary application is the correct method of calculation of the weekly payment entitlement between August and December 2006.

39

The exempt employer's method of calculation is set out in the notice of 20 February 2007 and in Mr Sargent's further submission dated 2 November 2007. Mr Warren provided an alternative method of calculation by written submission dated 8 November 2007.

40

In my view, Mr Warren's method of calculation is correct because it accords with Ryan v WorkerCover/CGU (Kellyvale (No 40) (No 2) Pty Ltd (Samech Labour)) [2000] SAWCT 196.

41

This means that there was a residual entitlement to weekly payments of $147 as at 15 December 2006. However as I have already indicated, whether the discontinuance of that residual weekly payment was consensual is not clear from the chronology and requires a finding of fact based on evidence.

42

I would adjourn consideration of the worker's entitlement to weekly payments as at 15 December 2006 or any other potential consequences of the error in calculation of the weekly payment entitlement to be dealt with as part of the substantive issues arising in the hearing of the various joined Notices of Dispute.

43

The application for summary relief is dismissed. The joined Notices of Dispute will be listed for hearing at a date convenient to the parties.

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.

[1] Numbers of notice of disputes; 1129, 1749, 2213 and 2522 of 2007.

[2] Section 35(6a) Workers Rehabilitation and Compensation Act 1986.

[3] Exhibit R1 p 32; Determination dated 12 May 2006.

[11] the parties foreshadowed during the pretrial stages that any dispute in relation to this claim would be included in these proceedings see trial orders and tr p 13.

[12] Local Government Association Workers Compensation Scheme (City of Holdfast Bay) v Pointer [2007] SAWCT 62

[13] Workers Rehabilitation and Compensation Corporation v Thuy Thi Vu (1988) 49 SASR 585

[14] s 57(8) of the Act

[15] Local Government Association of South Australia v Delle-Donne (unreported judgment no. S5661)

[16] s 35(1)(a)(ii).

[17]Cristea v The Workers Rehabilitation and Compensation Corporation [1993] SASC 4356; (1993) 61 SASR 487 (King CJ).