2. The parties have leave to apply in respect to the quantum of any back payments of weekly payments of compensation.

3. Within 14 days the parties are to file a joint memorandum for proposed agreed orders in respect to the costs arising in connection with the referral.

4. If the parties are unable to agree proposed orders for the purposes of (3) then within 21 days the parties are to each file and serve submissions in respect to costs.

Workers compensation - Entitlement to compensation - Whether employer entitled to permanently terminate weekly payments where worker receives overtime payments in excess of weekly rate

Workers Rehabilitation and Compensation Act 1988

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41;

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28;

The Queen v A2 [2019] HCA 35;

Walker v J & A Freeman Building Services [2006] TASSC 90;

Attorney-General (Tas) v CL [2018] TASFC 6;

Director of Housing v Lefevre [2021] TASSC 33;

Parsons v State of Tasmania [2001] TASSC 101;

White v Vero Insurance and Police Citizens & Youth Club [2007] TASSC 88;

Dianne Atkinson v Nipper Cleaning Services Pty Ltd A105/1993;

Rebecca Anne Viney v Roney Management Pty Ltd [1996] TASSC 27;

Parsons v State of Tasmania [2001] TASSC 101

The decision has been anonymised for the purpose of publication.

1. The worker has filed a referral pursuant to s 42 of the Workers Rehabilitation and Compensation Act 1988 (the Act) in connection with a back injury he sustained on 16 May 2023.
2. The worker's claim for workers compensation was accepted by the employer. Since the date of his injury the worker has been certified as incapacitated for work, either totally or partially, with no gap in certification. The worker's weekly rate payment is $1,690.08.
3. The worker's usual employment with the employer was as a field service technician, servicing equipment such as forklifts.
4. Prior to 12 July the worker was certified as incapacitated for work. Between 12 July 2023 and 21 October 2023 the worker undertook work for the employer as part of an agreed return to work plan. During that time he was certified as fit for suitable duties, being "administrative duties only". His certification was subject to restrictions requiring rest breaks every 30 minutes, a lifting limit of 5kg and no operation of machinery. The certification recognised that he had reduced capacity for bending, squatting and twisting, pulling and pushing, and standing and driving. The certification was unrestricted in terms of hours of work. Following 20 October 2023 the worker continued to undertake duties for the employer but at no time was certified as fit for normal duties.
5. During 11 of the 12 pay weeks between 20 July 2023 and 12 October 2023 the worker earned in excess of his weekly compensation rate.
6. It was an agreed fact that the employer terminated the worker's entitlement to weekly payments of compensation on or about 26 September 2023.
7. Since September 2023 the worker has had periods in which his earnings were less than the weekly payment rate. The agreed facts included a summary of payments between 8 June 2023 and 17 October 2024. In respect to the 54 pay weeks after the date of termination the worker earned in excess of the weekly payment figure on 9 occasions and equal to or less than that figure on the remaining 45 occasions.
8. Since 29 February 2024 the worker has topped up his earnings using his leave entitlements.
9. It was an agreed fact that the termination of the worker's weekly payments by the employer was made in reliance on s 86(1)(b) of the Act. Section 86 sets out circumstances where an employer may terminate or reduce payments without an order by the Tribunal. Section 86(1)(b) applies in the circumstance where a worker is in receipt of weekly payments in respect of partial incapacity and is receiving weekly earnings in excess of the amount upon which the amount of the weekly payment was determined.

1. Put simply, the issue before me is that the employer contends that s 86(1)(b) permits it to permanently cease making weekly payments and the worker contends that the entitlement to cease weekly payments is only for the period that the worker is receiving weekly payments in excess of the amount upon which such weekly payment was determined.
2. The issue turns on the interpretation of s 86. Section 86 provides:

86. Cases in which employer may terminate or reduce payments > > (1) Except in pursuance of a determination made by the Tribunal under section 88 (2), an employer may, subject to this section, terminate or reduce a weekly payment made to a worker only where - > > (a) the payment is in respect of total incapacity and the worker has returned to work; > > (b) the worker is in receipt of the weekly payment in respect of partial incapacity and is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined; > > (c) a medical practitioner who has examined the worker has certified that, in his opinion, the worker has wholly recovered or substantially recovered from the effects of the injury in respect of which the payment is being made or that the worker's incapacity is no longer due, wholly or substantially, to that injury; or > > (d) . . . . . . . . > > (e) a worker's entitlement to weekly payments has expired as provided by section 69B(2E) . > > (2) A certificate referred to in subsection (1) (c) shall specify the grounds upon which the opinion expressed in it is given. > > (3) An employer who, for the reasons specified in subsection (1) (c) , (d) or (e) , intends to terminate or reduce a weekly payment made to a worker shall cause to be served on the worker - > > (a) a notice of his intention to terminate the weekly payment being made to the worker, or to reduce that payment by the amount specified in the notice at the expiration of a period of 10 days from the day on which the notice was served on the worker; and > > (b) where the employer's intention to terminate or reduce is based on a certificate referred to in subsection (1) (c) , a copy of that certificate. > > (3A) A notice referred to in subsection (3) (a) is to contain a statement informing the worker of the worker's right to refer the termination or reduction of the weekly payments to the Tribunal for determination. > > (4) A worker who has been served with a notice under subsection (3) (a) and who wishes to dispute the termination or reduction of the weekly payments being made to him may within a period of 60 days from the date on which the weekly payments were terminated or reduced, refer the matter to the Tribunal for determination. > > (5) An employer who terminates or reduces a weekly payment otherwise than in accordance with this section is guilty of an offence and is liable on summary conviction to a fine not exceeding 20 penalty units.

1. The approach to construction of a legislative provision is well settled. The meaning of s 86 is to be determined according to the ordinary and grammatical meaning of the text having regard to the context and purpose of the surrounding sections and of the Act: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [4] and [47] and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 at [69]. A purposive approach is to be taken and context is to be considered at the first stage of the process of construction: The Queen v A2 [2019] HCA 35 at [32] to [37].
2. The objects of the Act are set out in s 2A. They include to establish a rehabilitation and compensation scheme for workplace injuries that provides fair and appropriate compensation to workers and is fair, affordable, efficient and affective. The scheme of the Act includes provisions relating to entitlement to compensation in Pt III, provisions regulating claims for compensation in Pt IV, provisions in respect to the amount of compensation payable in Pt VI and provisions relating to the payment of compensation in Pt VII. Section 86 falls within Pt VII. The Act is beneficial legislation that as a general rule ought be given an interpretation favourable to workers, subject to the confines of the actual language employed, which may be relevant to construing a provision which is ambiguous: Walker v J & A Freeman Building Services [2006] TASSC 90 [71] and Attorney-General (Tas) v CL [2018] TASFC 6 [36]-[38].
3. It is useful to first note s 69, which falls within Pt VI. Section 69(1) establishes the rate at which weekly payments are to be paid for total and partial incapacity:

69. Amount of compensation in case of incapacity > > (1) Subject to this section, where total or partial incapacity for work results from an injury suffered by a worker and where the existence of such total or partial incapacity is supported by a certificate in a form approved by the Board signed by a medical practitioner or accredited person, the compensation payable to him under this Act is- > > (a) in the case of the total incapacity of the worker for work, weekly payments equal to- > > (i) the normal weekly earnings of the worker; or > > (ii) the ordinary time rate of pay of the worker for the work in which, and for the hours during which, the worker was engaged immediately before the period of incapacity- > > whichever is the greater; or > > (b) in the case of the partial incapacity of the worker for work, weekly payments for the period of that incapacity equal to the difference between the worker's weekly payment calculated in accordance with paragraph (a) and the amount that the worker is earning or would be able to earn in suitable employment or business during that period of incapacity.

4. Sections 69 and 70 determine how normal weekly earnings are calculated for the purposes of s 69(1)(a)(i).
5. In Rebecca Anne Viney v Roney Management Pty Ltd [1996] TASSC 27 at [12] Zeeman J observed that "section 69(1)(b), in its application, may call for a reduction" in the context of the relationship between s 69 and s 86. His Honour said at [11]-[12]:

11. ...There is no warrant for distinguishing between a reduction within the meaning of s 86 and a decrease in the weekly payment payable by operation of s 69. > > 12. The supposed distinction between a reduction and a decrease in a weekly payment is a distinction without a difference. In any event, particular provisions of ss 69 and 86 support the proposition that the Act does not permit an employer to apply s 69 in such a way that there is a termination or reduction of a weekly payment without that being authorised by s 86 or by an order made under s 88.

6. In Parsons v State of Tasmania [2001] TASSC 101 at [8] Blow J, as he then was, said in the context of an issue concerning a further claim after a lawful termination and the operation of s 81AB before the insertion of s 80A:

8. ...An employer that has not invoked s 81AA or s 81A but who wishes to dispute liability for the continuation of weekly payments can only do so by referring the matter to the Tribunal pursuant to s 81A(5) or s 88. The employer may not unilaterally terminate or reduce weekly payments unless one of the exceptional situations listed in s 86(1) applies.

7. His Honour's approach is consistent with s 69(1) setting the relevant amount of the weekly payment and s 86(1)(b) providing the authority to the employer to terminate or reduce a weekly payment from time to time to reflect the entitlement in s 69(1)(b).
8. Section 86(1) provides four circumstances where an employer may unilaterally terminate or reduce a weekly payment being made to a worker, set out in (1)(a), (b), (c) and (e). The section provides a practical distinction between terminations or reductions under (1)(a) and (b) and terminations or reductions under (1)(c) and (e). As noted by Slicer J in White v Vero Insurance and Police Citizens & Youth Club [2007] TASSC 88 at [16] s 86(1)(b) governs weekly payments, incapacity.
9. Section 86(3) requires that an employer who intends to terminate or reduce a weekly payment in accordance with s 86(1)(c) or (e) must serve a notice of intention to terminate the weekly payment on the worker. There is no such obligation to provide notice in respect to termination or reduction under s 86(1)(a) and (b).
10. Section 86(4) provides that a worker who has been served with a notice under s 86(3) may refer the termination or reduction to the Tribunal. Section 86(4) does not apply to terminations pursuant to s 86(1)(a) and (b).
11. Section 86(1)(c) and (e) apply in circumstances where the employer contends that the worker has wholly or substantially recovered or the worker's entitlement to weekly payments has ceased by expiration of the time limited for weekly payments in the Act. In each case the termination or reduction is made in circumstances where, subject to challenge pursuant to s 86(4) there is no further entitlement to weekly payments.
12. The Full Court of the Supreme Court considered s 86(1)(a) in Dianne Atkinson v Nipper Cleaning Services Pty Ltd A105/1993. In that case a worker suffered a back injury as a result of which she was totally incapacitated for work. Following a period of total incapacity she continued to be incapacitated for work with the respondent employer but resumed work with another employer. Cox CJ, with whom Underwood J agreed said:

I agree that as the employer only showed a return to work in respect of a portion of the worker's employment, termination of the whole of the weekly payment was not justified. Section 21 of the 1927 Act spoke of the employer's right to terminate or diminish a weekly payment "where the circumstances are such as to justify termination or diminution, as the case may be". In Upston v Tasmanian Electro Metallurgical Company Pty Ltd (supra) I expressed a view that if the worker returned to work and as a result received a sum equal to or greater than the weekly compensation payment, then the circumstances were obviously such as to justify the termination of that payment, for so long as this situation continued he could not expect to receive both wages and weekly compensation; but if on returning to work he received less than the weekly compensation payment, those circumstances would justify a diminution of the weekly payments. Notwithstanding the absence of those express words from s86, I think it is implicit in that provision that a like approach should be adopted.

13. His Honour's approach, referring to circumstances of earnings "for so long as this situation continued" contemplates the possibility of a fluctuation in earnings and would be consistent with a reduction or termination under s 86(1)(a) being limited to the period of the relevant earnings.
14. In Onestop Metal Recycling Pty Ltd v Young [2017] TASSC 41 Estcourt J considered a situation where a worker was initially partially incapacitated and was provided with suitable employment for which she was paid her normal weekly earnings, and then subsequently experienced total incapacity for work. His Honour dismissed a contention that the worker would require an order from the Tribunal to establish his entitlement to payment for total incapacity. At [18] his Honour said:

18. ... it is entirely commonplace for workers to suffer compensable injury which at times results in a partial incapacity for work and is so certified, and at other times results in total incapacity for work and is so certified. The scheme of the Act is that such fluctuations should not present an obstacle to the continued receipt of weekly payments of compensation by the worker or routinely require a fresh claim for compensation.

24. It is beyond argument, in my view, that where a foundational liability is established under the Act by the making of a claim which is not disputed and is thus deemed to be accepted, then compensation continues to be payable in accordance with the provisions of the Act until they may be lawfully ceased. The payments of weekly compensation may at times be for a partial incapacity, and at other times for a total incapacity, but there is only one claim for compensation to which s 81A applies in the case of any claim for compensation by a worker against an employer in respect of an injury for which the worker has not previously made a claim for compensation. Unless there is a break in the continuity of the provision of supporting medical certificates as contemplated by s 69(13), an employer is not entitled to treat the provision of certificates, albeit different in terms of the extent of the incapacity certified, as a claim for compensation to which s 81A applies. > > 25. That the appellant in the present case was able to provide suitable duties for the respondent for which he was paid his normal weekly earnings, does not mean that the appellant's liability under s 69(1) had not crystallised. It merely means that during periods when the respondent was certified as fit for suitable duties, the amount of weekly compensation to which he was entitled, which entitlement was calculated it must be emphasised in accordance with the very provisions of s 69(1)(a) and (b), was nil. That state of affairs could have changed at any time. It did change on 23 and 24 November 2015 and it changed again and has remained so since 11 December 2015. It is simply the case that s 69(1)(b) expresses a limitation on the amount of compensation payable during such periods. I do not regard anything in the judgment of the majority in Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171 at 178 in relation to the concept of partial incapacity for work as suggesting otherwise.

16. His Honour did not refer to s 86(1), but he clearly contemplated that weekly payments may fluctuate with fluctuating capacity, and that after a period of partial incapacity during which the worker was receiving payments equal to his normal weekly earnings a subsequent period of incapacity would entitle the worker to weekly payments.
17. Section 86(1)(b) provides that a termination or reduction may be made where "the worker is in receipt of the weekly payment in respect of partial incapacity and is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined". The paragraph uses the present tense 'is receiving'. This may be compared to paragraphs (a) (c) and (e) which use the terms "has returned to work", "has certified that...the worker has wholly recovered", and "has expired", where the auxiliary verb 'has' and the past participles 'returned', 'certified', 'recovered' and 'expired' describe past actions connected to the present circumstance of the worker.
18. A grammatical approach to s 86(1)(b) would therefore apply its operation to the individual periods of weekly earnings, that is, earnings received by the worker for the relevant week.
19. That literal meaning would result in a circumstance where a reduction or termination of weekly payments applies for the period of earnings.
20. Thus, the power to terminate or reduce under s 86(1)(b) is for a defined period or periods, not indefinitely. If in the next relevant period the worker earns less than the amount upon which the amount of the weekly payment was determined the worker would be entitled to a payment of compensation.
21. Section 86(1)(b) so construed would apply the calculation of payments for partial incapacity in s 69(1)(b) in a flexible manner. Such an approach is consistent with the recognition that capacity may fluctuate, the beneficial nature of the legislation and the principle that a worker not receive more while on workers compensation than if the worker had continued in his usual employment: s 70(2)(a).
22. If the entitlement to weekly payments of compensation terminated permanently in the same that it does under s 86(1)(c) and (e) then it would be expected that s 86(1)(b) would be included in the requirement to provide notice in s 86(3) and the right to refer in s 86 (4). The absence of an obligation by an employer to give notice of termination or reduction is also consistent with this interpretation. The use of 'may' in s 86(1) indicates that the power to terminate or reduce is a discretionary one that and employer must choose to exercise: Director of Housing v Lefevre [2021] TASSC 33 [48]. A reduction or termination for the relevant pay period as a set off against earnings will be apparent to a worker. A decision to permanently terminate or reduce would not require notice and will not be apparent to a worker unless communicated by the employer.
23. The alternative construction is that the termination or reduction is permanent in effect. If so, a worker who receives an atypical or occasional increase in earnings while partially incapacitated, for example by temporarily undertaking higher duties with a higher pay rate, or being required to work a period of overtime, or undertaking a trial of additional hours of substantive work which proves unsuccessful, would be subject to permanent termination or reduction of weekly payments notwithstanding the workers subsequent ongoing partial incapacity and reduction in earnings. Another common circumstance is that a worker who is partially incapacitated and undertaking work may require treatment for the work injury, such as surgery, that results in the worker experiencing total incapacity. If the termination or reduction is permanent then the worker will not have an immediate right to receive weekly payments for the total incapacity. Such an interpretation and outcome is inconsistent with the ordinary meaning of the text of the section, the context of Pt VII and the beneficial nature of the Act.
24. There is no prejudice to an employer in a construction that the right to terminate or reduce applies to the period of earnings. If a worker continues to receive earnings in excess of the weekly payments the employer will not be required to make payments. If the worker's earnings reduce below the weekly payment figure and the employer contends that that figure should be reduced to reflect the worker's retained capacity or that the worker has fully recovered capacity for work the employer can seek a review of the weekly payments under s 88 or use s 86(1)(c).

1. On the facts of this case the worker has been incapacitated for his pre-injury work since the date of his injury. He has experienced fluctuating levels of capacity, but they constitute a single period of incapacity: White v Vero Insurance and Police Citizens & Youth Club at [18]. The worker has only been able to earn more than his weekly payment rate when the employer has paid him overtime. He is entitled to make up payments where his weekly earnings are less than the workers compensation rate.
2. The employer ceased paying the worker's entitlement to medical and other expenses on 26 September 2024 pursuant to s 75(2) of the Act. The parties did not address this in submissions. The obligation to make such payments will flow from the orders that I will make in respect to weekly payments and it is not necessary for me to make a separate order or to hear the parties in respect to that matter.
3. The worker has taken periods of leave to top up his pay in lieu of weekly payments. Section 84A and s 84B provide respectively for the recrediting of sick leave and annual and long service leave taken during periods in respect of which an employer is subsequently found to be liable to pay weekly payments.
4. I am satisfied that the employer's permanent termination of weekly payments from 26 September 2023 was unlawful. Accordingly:
   1. The employer is to reinstate weekly payments of workers compensation to the worker as from 26 September 2023 to be paid in accordance with the Workers Rehabilitation and Compensation Act 1988.
   2. The parties have leave to apply in respect to the quantum of any back payments of weekly payments of compensation.
   3. Within 14 days the parties are to file a joint memorandum for proposed agreed orders in respect to the costs arising in connection with the referral.
   4. If the parties are unable to agree proposed orders for the purposes of (3) then within 21 days the parties are to each file and serve submissions in respect to costs.