Petric v Workcovercorporation/Mercantile Mutual Insurance

Workers Compensation Tribunal (SA)|2000-07-31

1 This preliminary point involves a short but important question of law. It is whether a compensating authority is entitled to reject the worker's claim for compensation for income maintenance when such claim is made more than two years after the commencement of the incapacity of work upon the basis that for the period in respect of which compensation is sought, that period being after the second anniversary of the commencement of the incapacity, the worker was capable of working in a job that would produce a higher income than the worker's notional weekly earnings.

2 That issue arises from the following facts. In about May 1995 Davor Petric ("the worker") commenced employment with Lorenzin Constructions a subsidiary of Consulting and Development Engineers ("the employer") as an estimator, contracts engineering. His work required him to prepare estimates, submissions for tender, contract documentation and the like. It was essentially office work.

3 On 6 February 1996 the worker was performing a site inspection in the course of his employment when he slipped on a wet surface and fell heavily onto his fully flexed right knee. He sustained a skin laceration and his knee was sore. He was taken to the Modbury Hospital where the wound was cleaned and sutured. He was unable to return to work that day but resumed the following day albeit that he continued to be in pain. Two weeks later the worker was retrenched and remained unemployed until early May 1996 when he obtained a position with B&R Civil. He remained with that company for a couple of months and then left of his own accord. He then obtained employment with the City of Noarlunga for about 13 to 15 months and then with the City of Mitcham for about 11 months and with the City of Port Adelaide/Enfield for about 3 months.

4 A medical report prepared by Dr Tony Spriggins dated 19 June 1997 indicates that as a result of the injury, the worker suffered from patella tendinitis. As a result of this he had surgery on 13 December 1996 to attempt to restore the patella tendon. Notwithstanding surgery the worker continued to experience knee pain and in a medical report dated 5 January 1999 Dr Spriggins indicated that the worker continued to be partially incapacitated for work as a result of the injury and that he had suffered a permanent impairment as a result of it. On the basis of this evidence and the worker's statements I find that from the date of the original injury the worker has continuously been partially incapacitated for work.

5 On 28 September 1998 the worker lodged a claim for compensation for weekly payments of income maintenance, that is the subject of this dispute. The date of injury identified in the claim for compensation is the date of the original injury being 6 February 1996.

6 The WorkCover Corporation ("the Corporation") resolved to reject the claim. It did so on the basis that for the period of incapacity in respect of which compensation was sought the worker was only entitled to the difference between his notional weekly earnings and that which he could earn in suitable employment. It asserted that he was capable of working either as a traffic and development officer or a works estimator on a full-time basis. It was further asserted that as the amounts payable by way of wages for those jobs being $767.98 per week and $773.84 per week respectively were greater than the worker's notional weekly earnings even after those earnings were adjusted by reference to the Australian Bureau of Statistics increases for 1997 and 1998 (those figures being $679.21 and $688.71 respectively) the worker had a nil entitlement.

7 It was submitted by the worker, that the issue that I identified at the outset of these reasons in this case did not yet arise because the period of incapacity as that expression is properly understood (as appearing in s 35(2a)(a)) has not yet exceeded two years. However, in view of the decision of the Full Tribunal in WorkCover Corporation/MMI Workers Compensation (SA) Ltd (Griffin Press Pty Ltd) v Gibson [2000] SAWCT 33 that is an argument that I cannot entertain. The Full Bench of the Tribunal overturned the decision of a single member who had interpreted the Act's reference to periods of incapacity as reference to claimed periods of incapacity. The Full Bench took the view that period of incapacity merely refers to the fact of incapacity. In supplementary submissions that were filed on behalf of the worker, it was conceded that notwithstanding the fact that the worker had been in receipt of compensation he could nonetheless be the target of a two year review pursuant to s 35 and s 38 of the Act.

8 The worker submitted however that that was the only process by which the so called two year provisions could come into play. That is, that the Corporation had to pay the worker weekly payments of income maintenance, embark upon the review procedure prescribed by s 38 and, if that process revealed a nil entitlement for it then to invoke s 36 and discontinue the worker's weekly payments of income maintenance.

9 In other words, it was contended that in dealing with this issue, s 38 is an exclusive code that must be applied in all cases and that its principles cannot be invoked on a primary determination made pursuant to s 53 of the Act to accept or reject the claim.

10 I do not accept this submission. In my view s 38 is directed towards a review of weekly payments actually being made. There seems to me to be no logical reason why a compensating authority, having exercised its investigative powers under s 53 and having concluded that the worker is capable of earning in suitable employment an amount equal to or greater than his or her notional weekly earnings, could not in respect of a claim for compensation made more than two years after the incapacity commenced simply reject the claim. It is true that as a result a worker will be denied the protective measures afforded by s 36 and s 38. But the same is true in the case of a claim for weekly payment that is accepted for a closed period on the basis that the worker has ceased to be incapacitated for work at the time of the making of the determination, see for example: WorkCover v Thuy Thi Vu (1988) 49 SASR 505. In my view the argument in favour of the Corporation's approach is even stronger here because the Corporation has not even obliquely relied upon a provision of s 36 to reject the claim, as it arguably did in Thuy (supra). It did no more than heed the directions provided by s 35 itself. It assessed the worker's entitlement to compensation in accordance with s 35(2a). This result may seem harsh, but I think it is the inevitable result of a statutory scheme of compensation which places limits on the amount of compensation payable by reference to the duration of the period of incapacity rather than, for example, the amount of compensation actually received, cf: s 51(4) Workers Compensation Act (1971).

11 For these reasons I hold that the determination of the Corporation is on its face lawful. The worker's challenge to the determination will now have to be heard and determined upon its merits. I would now like to hear from the parties regarding the future conduct of this matter.

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.

Rehabilitation and Compensation Act 1986

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