Section 52A Appeal Cases since De Brito. Author: Maryan Lee, Partner

Transcription

1 Section 52A Appeal Cases since De Brito Author: Maryan Lee, Partner

2 Edwards Michael Lawyers Section 52A Appeal Cases since De Brito Maryan Lee is admitted as a legal practitioner of the Supreme Court of New South Wales and of the High Court of Australia. After completing a Bachelor of Laws degree at the Queensland University of Technology, she moved to Sydney where she completed her Graduate Diploma in Legal Practice at the College of Law. Maryan has worked in the field of Commercial Litigation prior to commencing with the firm on 15 June She has experience in matters before the Court of Appeal, Supreme Court, District and Local Courts, Dust Diseases Tribunal, Workers Compensation Commission, Compensation Court and the Industrial Relations Commission. Maryan s practice consists principally of Workers Compensation and Industrial Accident claims, Medical Negligence, Public Liability, Occupiers Liability, Motor Accidents and Victims of Crime Compensation. 2

3 Introduction Tim Wardell, Special Counsel, has previously presented a Paper entitled Section 52A: Does the Tiger have any Teeth? which comprehensively deals with the introduction of Section 52A into the Workers Compensation Act 1987, and the evolution of the interpretation of Section 52A up to the last of the De Brito cases (PCR Plaster Settings Pty Ltd v. De Brito (No. 3) [2008] NSW WCC PD 82). This Paper will not repeat the detailed analysis set out by Mr Wardell, but will concentrate on the three Appeal cases which have been heard since De Brito (No. 3). It is recommended that Mr Wardell s Paper Section 52A: Does the Tiger have any Teeth?, be reviewed, particularly in light of the background and requirements for each of the grounds upon which payments may be discontinued. As a very short summary, it is necessary for an insurer, relying upon Section 52A in discontinuing payments, to prove the following: That weekly payments of compensation in respect of partial incapacity for work have been paid for at least 104 weeks AND (relevant time): (s.52a(1) (a): the worker is not suitably employed (within the meaning of Section 43A0 and is not seeking suitable employment (as determined in accordance with Section 38A), or (s.52a(1) (b): the worker is not suitably employed (within the meaning of Section 43A) and has previously unreasonably rejected suitable employment (within the meaning of Section 40(2)(b)), or (s.52a(1) (c): the worker has sought suitable employment but has failed to obtain suitable employment primarily because of the state of the labour market (rather than because of the effects of the worker s injury). The relevant time, is defined by Section 52A(2) as the time at which the notice under Section 54 of intention to discontinue payment of compensation pursuant to this Section is given. The expression relevant time was held in Hughston v. Hughston & Sons Pty Ltd [1999] NSWCC 35 (Curtis J), to mean a period of time, rather than an instant or moment. It is important to note that in that case, the finding that the relevant time represented a period of time, was made in favour of the worker, who had attended last upon his employer seeking work approximately one month prior to the Section 54 Dispute Notice being received. The Appeal cases since De Brito (No. 3) have gone both ways i.e. of the three Presidential Appeal cases which have been heard since De Brito (No. 3), one was determined in favour of the worker, and two were determined in favour of the employer. 3

4 Edwards Michael Lawyers Section 52A Appeal Cases since De Brito The appeal cases deal primarily with Section 52A(1)(a) where workers are not suitably employed and are not seeking suitable employment. Frost v. JJP Vineyard Contractors Pty Ltd [2008] NSW WCC PD 128 (date of Decision 31 October 2008) Mr Frost injured his left foot and ankle when a tractor ran over it at work on 26 January GIO was the relevant insurer, and issued a Section 54 Dispute Notice on 29 January 2008 seeking to terminate payments on the basis of Section 52A. There had been a history of alleged non-compliance with the worker s Injury Management Plans, and a number of letters were forwarded by GIO to Mr Frost as Notices of Non-Compliance. In one of these letters, dated 3 December 2007, GIO stated that Mr Frost had demonstrated an unsatisfactory level of participation in his Injury Management Plan. The letter stated: You have repeatedly failed to apply for any positions, and demonstrate correctly that you have been applying for positions by completing and returning correct job search diaries, after repeated requests and warnings. You have been re-trained with RSA and RSG, and applying for such jobs as a butcher in which you have not been re-trained and a courier driver, when you have previously lost your licence and have a foot injury, are seen as acts of self-sabotage in your job seeking. It has also been reported that you have submitted job search diaries that list nude model. Obviously, GIO does not see this as being reasonable, gainful employment which is suitable to your work capacity. GIO relied upon a Vocational and Functional Assessment prepared on 24 April 2007 by Integrated Assessments. The report concluded that Mr Frost would be suitable for work as a service station attendant, retail sales person, call centre operator, enquiry clerk and other sedentary positions which would comply with his medical restrictions. The worker s GP confirmed Mr Frost s allegation that he was unable to walk more than 500 metres without problems. A Case Closure Report prepared by A W Workwise, the Rehabilitation Provider involved in the case, on 14 March 2007 indicated that Mr Frost had presented with a number of barriers including having a suspended driver s licence, alcohol related problems and ongoing commitments associated with the custody of his child. A W Workwise had apparently referred Mr Frost for his training in RSA and RSG (Responsible Service of Alcohol and Responsible Service of Gambling). Despite this, Integrated Assessments and Dr Wijetunga, Occupational Physician, agreed that Mr Frost was not in fact suitable for bar service work. At the time of the Arbitration Hearing, Mr Frost was aged 22 years. The Arbitrator noted that Mr Frost s experience had been limited to unskilled jobs and specifically farming style jobs. However, he accepted the finding of Integrated Assessments, that the worker had suitable skills to be employed in positions being an enquiry clerk, staff assistant and service station console operator. The Arbitrator set out in detail the contents of various job search diaries, and determined that Mr Frost had scanned papers and internet sites to see what jobs were available. As the Section 54 Dispute Notice was issued on 29 January 2008, the Arbitrator determined that the relevant time was the end of January 2008, and concentrated on the job search diaries submitted by Mr Frost at that time. The job search diary submitted by Mr Frost immediately pre-dating the issuing of the Section 54 Dispute Notice was dated 23 January 2008, and recorded six applications for bar work in the Kurri Kurri area. The Arbitrator determined that Mr Frost was applying for jobs for which he was not suited, given his physical requirements and therefore found that he was not suitably employed and not seeking suitable employment at the relevant time being at the end of January An Award was entered for the Respondent with respect to the claim for weekly compensation. On Appeal, Acting Deputy President Deborah Moore considered when reviewing the case that Section 43(A)(1)(e) and (f) were the most relevant to Mr Frost s claim. Thos sub-sections provide that suitable employment means employment in work for which the worker is suited, having regard to the following: 4

5 e. e. The provisions of any Injury Management Plan for the worker; Any suitable employment for which the worker has received rehabilitation training. ADP Moore found that the Arbitrator s reliance, particularly on the Integrated Assessment report and the suitability of employment options referred to therein, was somewhat misplaced. This was by reason of the fact that there was no evidence that the Integrated Assessment report had ever been sent to Mr Frost or even seen by him, it was not annexed to the Section 54 Dispute Notice, and none of the suitable employment options referred to by the Integrated Assessment authors were listed in the letter of non-compliance dated 3 December ADP Moore found that the Arbitrator failed to give appropriate weight to a number of factors set out in Section 43A when he found that Mr Frost was not seeking suitable employment at the relevant time. Mr Frost had also given evidence to the effect that a number of jobs for which he had applied, including that as a nude model, and courier driver, had actually been recommended to him by his Rehabilitation Provider, A W Workwise. Whilst ADP Moore accepted on the face of it that the jobs Mr Frost was applying for were not suitable, given his physical restrictions, there had been no indication given in the letters from the Rehabilitation Provider or GIO that he ought to seek employment, for example, as a telephone sales representative or an enquiry clerk. ADP Moore therefore determined that, for the purposes of Section 52A(1)(a), Mr Frost was seeking suitable employment at the relevant time and was entitled to an Award in his favour. Hadchiti v. NSW Police Force (No. 1) [2009] NSW WCC PD 87 (date of Decision 29 July 2009) Ms Hadchiti suffered injury by the reason of the nature and conditions of her employment as a data entry operator and submitted a claim for workers compensation in Whilst it appears that the claim was initially for the right arm, further body parts were added to the claim, including the left hand and shoulder, neck and chest. Liability to pay compensation was denied early in the piece, resulting in proceedings before Davidson CCJ in the Compensation Court who entered an Award in favour of the worker in the sum of $ per week from 6 September 1993 on the basis of partial incapacity. On 31 August 2006, Allianz issued a Section 54 Dispute Notice indicating that payments would cease as from 26 September 2006 in accordance with Section 52A. Reliance was placed upon a statement made by the worker to a Rehabilitation Consultant that the worker was not at work, was currently certified fit to perform suitable duties for 15 hours per week, and had not completed any job seeking activities since 2002 as she did not hold an appropriate vocational goal. In this case, there were many issues concerning Ms Hadchiti s credit, with a number of inconsistencies between her statement and contemporaneous medical records in evidence. Further, the worker had suffered a fall in a supermarket in June 2004, for which she had received a Common Law settlement and suffered further injury to the same body parts, the subject of her workers compensation claim. On 31 May 2006, the worker s GP indicated that the worker could perform work with a lifting restriction of 5 kilograms, not including repetitive bending, pulling, pushing, use of either arms, or excessive walking. The Rehabilitation Consultant, Ms Pyke, of Work Solutions Australia, thought the worker perceived herself as crippled. Ms Pyke identified that the worker had refused previous rehabilitation attempts by refusing vocational options presented to her, had a strong focus on re-training, and was very litigation focused, insisting that all conversations were recorded in writing and presented to her solicitor. It was noted that the worker had not held a job for longer than one month in the previous thirteen years, and lost a great deal of skill base and physical conditioning. 5

6 Edwards Michael Lawyers Section 52A Appeal Cases since De Brito In the Compensation Court proceedings, Davidson CCJ had recorded that the worker s doctors had found little, if anything, on objective clinical examination to explain the worker s extensive symptomatology. His Honour further found that the symptomatology far exceeded the extent caused by the injuries she had suffered. His Honour entered an award pursuant to Section 40 of the 1987 Act for partial incapacity. When the matter was before Arbitrator Jennifer Conley, there was no Statement from the worker addressing the Section 52A issue. Therefore, it was determined that the employer had discharged its onus by the worker s Statement recorded in the report of Ms Pyke of Work Solutions, that she had not completed any job seeking activities since It was further found that since the worker had received the Award in the Compensation Court, she had regarded herself as being totally incapacitated. Arbitrator Conley noted that the only dispute was whether Ms Hadchiti was seeking suitable employment within the meaning of Section 38A at the relevant time. Whilst it had been submitted that this could be inferred from the material before the Commission including the Statement of the worker, there had been no reference at all in the Statement of her efforts to seek suitable employment at the relevant time or at any stage, and did not deny the allegations raised by the employer in the Work Solutions report. Having regard to the totality of the evidence, Arbitrator Conley found that the worker was not, at the relevant time, suitably employed nor was she taking reasonable steps to obtain suitable employment. Accordingly, the grounds relied upon by the employer when ceasing payments were made out. The first ground of Appeal before Acting Deputy President Anthony Candy, was that the Decision was not supported by the evidence. ADP Candy found that despite prior rehabilitation consultants, the worker was merely going through the motions with no real intention of co-operating in her rehabilitation. With respect to the worker perceiving herself as crippled, ADP Candy stated at [91]: Section 52A has no application where the worker is totally incapacitated (sub-section (6)) however no such claim was made. On the contrary, submissions made by the employer that the worker was psychologically incapacitated were resisted by the worker. I would conclude that the worker had no real intention to return to any form of paid employment at all because she considered that, contrary to medical opinion, she was incapable of doing so. Thus I conclude that the worker was not seeking or receiving rehabilitation training by attending upon Work Solutions for an initial assessment and vocational review. There was evidence that the worker had obtained voluntary work at the Liverpool Hospital which ADP Candy determined could not be seen as suitable employment or taking reasonable steps to obtain such employment and further, did not constitute rehabilitation training. Accordingly, ADP Candy found that the first ground of Appeal failed. The second and third grounds of Appeal were that the Arbitrator took into consideration irrelevant matters and ignored relevant evidence. ADP Candy found that these grounds were not made out. In relation to the fourth ground of Appeal, that the Arbitrator erred in reversing the onus of proof in relation to Section 52A and was critical of the worker for not adducing evidence that she was seeking suitable employment, ADP Candy determined that this ground also failed. The onus was on the employer and not the worker, and the only evidence before the Commission was that she was not seeking suitable employment which was incorporated in the Work Solutions report of Ms Pyke. Whilst the employer was criticised by the worker for not applying to crossexamine the worker, and thereby giving the worker an opportunity to explain those matters upon which the employer relied which were inconsistent with her evidence, it was noted that these factual matters had been clearly brought to the attention of the worker in documents filed and that she had the opportunity to adduce evidence and to make submissions in reply. Therefore, the admission made by the worker to Ms Pyke of Work Solutions was found to be sufficient, if unexplained, to bring into successful operation the provisions of Section 52A. 6

7 J & K Bricklaying Pty Ltd v. Brown [2009] NSW WCC PD 89 (date of decision 31 July 2009) Mr Brown was a bricklayer and suffered injury to his right shoulder on 1 July CGU served a Section 54 Dispute Notice relying upon Section 52A(1)(a) on 17 December There was no dispute that Mr Brown was unfit for his pre-injury employment as a bricklayer. Advance Personnel Management (APM) prepared a Vocational Assessment Report on 7 June 2007 which identified suitable vocational options for Mr Brown. APM concluded that whilst Mr Brown had limited transferrable skills, he had an ability to drive for long distances. APM recommended re-training to increase skill level, and two vocational options of truck driver and store person were identified. Other vocational options were considered suitable, including sales assistant, grounds person, bus driver, courier driver and console operator. In subsequent rehabilitation reports, it was noted that the worker was experiencing personal issues and APM started experiencing difficulties in maintaining contact with Mr Brown. He failed to attend rehabilitation meetings, return telephone calls, and twice failed his RTA licence theory test. A further Injury Management Plan was issued by CGU specifically referring to Mr Brown s unsatisfactory level of participation in his occupational rehabilitation and that his failure to co-operate with any obligations may jeopardise his ongoing entitlements to weekly compensation. The CGU Case Manager also encountered difficulties maintaining contact with Mr Brown, with episodes such as Mr Brown hanging up on her, not returning calls, switching off his mobile phone, and again failing to attend an appointment with APM. In one of many Injury Management Plans prior to issuing the Section 54 Dispute Notice, CGU identified that Mr Brown was to contact APM and to comply with taking a truck driving test to secure a truck driver s licence as per APM s recommendations. CGU forwarded Job Logs to Mr Brown, for completion and return to their office. Further attempts to contact Mr Brown by CGU were unsuccessful, and Mr Brown indicated he was experiencing family issues, and had relocated. Mr Brown indicated to the CGU Claims Officer that he could not do anything more than sit at home and do nothing. The relationship between Mr Brown and CGU deteriorated further, with Mr Brown subjecting the Claims Officer to abusive language over the telephone. In August 2003, Mr Brown had received an Award in his favour. It was noted that he was aware at all times that even with the Award of compensation made in August 2003, he was able to earn up to $ per week without affecting his entitlement to workers compensation. Arbitrator Bruce McManamey found that the Job Search Forms which were submitted by Mr Brown were sufficient evidence to satisfy him that Mr Brown was engaging in a search for employment at the relevant time. The Arbitrator found that, on the Job Search Form, Mr Brown s statements that certain jobs were not applicable or not suitable with injury were appropriate. The Arbitrator specifically determined that if Section 52A intended that a failure to seek rehabilitation or to cooperate with an Injury Management Plan was to be a ground for discontinuance under that section, it could easily have said so. Deputy President Bill Roche closely scrutinised the Job Search Forms submitted by Mr Brown in determining whether he was seeking suitable employment at the relevant time. Apart from picking up glasses and window cleaning, the worker had not identified the jobs for which he had allegedly applied. DP Roche did not accept Mr Brown as a reliable and credible witness, and had real reservations as to whether he had genuinely sought employment from the businesses identified in his Job Logs. Deputy President Roche determined at [103]: In any event, assuming that Mr Brown sought employment of the kind listed in the Job Logs, the majority of the jobs he allegedly applied for were clearly not suitable. The requirement in Section 52A is for a worker to seek suitable employment. A worker is not to be regarded as seeking suitable employment unless he or she is taking reasonable steps to obtain suitable employment from some other person (Section 38A(2)(d)). Merely approaching several businesses, regardless of whether those businesses have, or are likely to have, suitable employment available does not satisfy that requirement. 7

8 Edwards Michael Lawyers Section 52A Appeal Cases since De Brito Consistent with the finding of ADP Candy in Hadchiti, Deputy President Roche found that the failure to cross-examine Mr Brown did not result in procedural unfairness. In relation to Section 38A(5), DP Roche found that whilst Mr Brown was a person of limited education, he did not accept that Mr Brown did not understand the importance of the meetings with APM, or of his obligation to attend them. He determined at [117], that Section 38A(5)(a) is not concerned with the content or form of the Injury Management Plans or an insurer s alleged lack of good faith. It is concerned with whether the worker has unreasonably refused to have an assessment made of his employment prospects. For that reason, DP Roche was satisfied that the worker s failure to attend the appointments with APM amounted to unreasonable refusal to have an assessment made of his employment prospects, and he was therefore not to be regarded as seeking suitable employment. 8

9 Conclusion As can be seen from the above cases, whilst some Arbitrators remain sympathetic to workers attempting to defeat a Section 52A discontinuance of payments, the Presidential Decisions which have issued since De Brito (No. 3) are relatively consistent. In the only case in which the worker successfully had an Award reinstated, being Frost, it was noted that whilst the insured did not determine the jobs for which applications made been made were suitable, these were jobs which had been recommended by the Rehabilitation Provider engaged by the insurer. The cases of Hadchiti and Brown outline the importance of a worker complying with rehabilitation efforts, and to submit job seeking logs which correctly reflect their genuine attempts to obtain suitable employment. In both of those cases, credit issues were raised, and both workers argued that the failure of the insurer to crossexamine them on the issues raised pertinent to Section 52A caused procedural unfairness. In both of those cases, the Presidential Decisions have determined that a failure to cross-examine a worker on a Section 52A application does not amount to procedural unfairness. Whilst there is no mention in Brown, it was confirmed in Hadchiti that the onus is on the employer to establish the grounds set out in Section 52A(1). However, in the absence of any evidence to the contrary submitted by the worker, such grounds will be made out by statements to, for example, a rehab provider that the worker is not seeking any employment. The decision of Hadchiti is particularly important, having regard to the finding of the Compensation Court that she was partially incapacitated for employment, but with the worker subsequently forming her own view that she was crippled. Whilst in that case the worker made no claim for total incapacity, it is important to ensure that medical evidence is capable of establishing that the worker remains partially incapacitated for work, to enliven the effect of Section 52A. The finding of ADP Candy in that case that the worker, contrary to medical opinion, considered that she was incapable of returning to any form of paid employment, is significant. In conclusion, Section 52A has proven to be an effective tool to discontinue payments where on the grounds set out in Section 52A(1) can be established. The failure to submit Job Seeking Logs at the same time as a failure to cooperate with Injury Management Plan obligations and/or rehabilitation training or reviews, appears to be the strongest combination in proving that the worker is not seeking suitable employment in accordance with Section 38A. As Mr Wardell has outlined in the Paper Section 52A: Does the Tiger have any Teeth?, whilst Section 52A remains a difficult Section for insurers to invoke due to forensic challenges, it remains a powerful tool for insurers to discontinue payments on claims where the grounds under Section 52A(1) are clearly made out. MARYAN LEE Partner, Edwards Michael Lawyers September

10 Edwards Michael Lawyers Level Level 11, 11, Elizabeth Street, Sydney DX DX Sydney Phone: (02) Fax: Fax: 02)