Australia: Work incapacity not simply a matter of physical capacity

The Court of Appeal has clarified the definition of "no current work capacity" in the case of Richter v Driscoll [2016] VSCA 142, for the purposes of assessing a worker's entitlement to weekly payments of compensation beyond the expiration of the second entitlement period.

The Court of Appeal's decision reinforces that, in determining whether a worker has a "current work capacity", it is not sufficient to find that they have a physical capacity for the tasks required in a particular role羊egard must also be given to the worker's personal circumstances, including their age, education and employment history, location, and the length of any period of time out of the workforce.

Background

The Applicant, Ms Richter, was a 59 year-old woman living in Wodonga. She was educated to Year 7 and had difficulties with literacy and numeracy. Before commencing work as a nursery assistant with the Respondents, Ian Malcolm Driscoll, Ms Richter had engaged in very little employment and had "virtually no acquired employment skills or experience".

In the course of her employment, Ms Richter suffered a lower back injury requiring surgery. As a result of the injury, she ceased work in 1994 and never returned. By the time of the Court of Appeal hearing, she had been unemployed for about 20 years.

Between 1994 and 2013, Ms Richter received weekly compensation payments. However, her payments were terminated by the WorkCover agent from 28 December 2013 on the grounds that she had a current work capacity or that her incapacity for work was not likely to continue indefinitely. The evidence relied upon in support of the termination included a vocational assessment report, which identified a number of potentially suitable alternative roles.

Medical Panel decision

Ms Richter commenced proceedings in the County Court seeking the reinstatement of weekly payments. The County Court referred a number of medical questions to the Medical Panel, the most important of which was whether Ms Richter had no current work capacity, which was likely to continue indefinitely. The Panel found that Ms Richter did not have no current work capacity, in that she had a current work capacity for employment as a light process worker熔ne of the roles identified by the vocational assessment report.

Supreme Court decision

Ms Richter issued an originating motion in the Supreme Court seeking an order to quash the opinion of the Medical Panel. The grounds of appeal relied upon were, firstly, the Panel failed to take into account relevant considerations and, secondly, the Panel failed to provide adequate reasons for its decision.

The presiding judge, Her Honour Judge Zammit, concluded that the Medical Panel had correctly interpreted "no current work capacity". She also found that the Panel gave adequate reasons for its opinion and, as such, Ms Richter's application was dismissed.

Court of Appeal decision

Ms Richter issued an application for leave to appeal the decision of the Supreme Court to the Court of Appeal. The grounds of appeal included that the primary judge incorrectly interpreted the term "no current work capacity" and that the judge incorrectly found that the Panel's reasons were adequate.

The Court of Appeal, constituted by Ashley, Osborn and Kaye JJA, found the definition of "no current work capacity" is focused on a worker's inability to engage in employment. Importantly, Their Honours also held that a return to work requires more than a physical capacity to perform a particular task, as there is "more to an ability to work in employment...than the ability to perform a task that happens to be required in that employment".

The Court found the primary judge applied an unduly narrow interpretation of the term "no current work capacity". It also found that the Medical Panel incorrectly focused entirely on Ms Richter's physical capacity for the duties of a light process worker described in the vocational assessment report. It was found that the Medical Panel "did not mention at all"Ms Richter's 20 years of unemployment following her injury, which was "surely a matter which required consideration". Similarly, it failed to take into account her minimal education and very limited work experience. While the Panel was not required to determine whether Ms Richter would actually succeed in obtaining employment, it was still required to consider the entirety of her circumstances. As such, Their Honours upheld Ms Richter's appeal on the basis that the primary judge incorrectly interpreted the term "no current work capacity".

In addition, the Court found the Medical Panel's reasons "decisively failed" to describe its reasoning in determining that Ms Richter had a physical capacity to engage in light process work (contrary to the finding of the primary judge). Essentially, the Panel had simply relied on the description of the duties in the vocational assessment report, which only contained a generic description of the physical demands of the role as light to medium.

The Court was also critical of the vocational assessment report itself, noting that the descriptions of the duties for each alternative role identified in the report were based on internet searches and that it was unclear what actual knowledge the assessor had of the work required for each role. Accordingly, it stated the report was a "most unsatisfactory document" to use as the basis for a conclusion regarding Ms Richter's physical capacity for work. The Court also highlighted that in finding Ms Richter had an ability to engage in employment involving the duties described in the report, the Panel was required to properly explain its reasoning by giving "some practical content to the job involved". Further, the only evidence that a job was actually available was an assertion in the report that there were "four potentially suitable roles" within travelling distance of Ms Richter's residence. Consequently, Their Honours found the Panel's reasons were inadequate.

Implications

The Court of Appeal's decision confirms what factors need to be taken into account to conclude whether a worker has current work capacity. While it is not necessary to find that a worker will actually obtain employment on the open labour market, the decision-maker is essentially still required to consider the worker's employability in all the circumstances. The decision also makes clear that a medical panel must thoroughly explain its reasoning in concluding that a worker has a current work capacity.

For self-insurers and employers, it is important to ensure any vocational assessment report relied upon for the purposes of terminating weekly payments, provides more than just a generic description of alternative duties and a brief description of the physical requirements.Such reports may be found to be unreliable for the purposes of assessing a worker's capacity, as in this case. However, it should be kept in mind that Ms Richter's case was unusual as she had virtually no work experience or skills, had been unemployed for 20 years and had received weekly payments for 19 years before her payments were terminated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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