Australia: Workplace injury and attempting to return to work in New South Wales

Last Updated: 29 December 2016
Article by Dane Twohill

Since the introduction of the Workers Compensation Legislation Amendment Act 2012 (the 2012 Amendments), there have been dramatic changes in respect of entitlements to weekly payments of compensation when a worker has a partial capacity to work but no such duties are provided by the employer. There is a stark contrast between the state of play prior to and after the drastic 2012 Amendments.

State of the law prior to the 2012 amendments

Where a worker was partially incapacitated for work as a result of their injury and where such suitable duties could not be provided by an employer, a worker was entitled, for the first 26 weeks of incapacity, 80% of their award rate of pay, and thereafter for a further 26 weeks, the statutory rate (the minimum statutory rate at the time of the 2012 amendments was $432.50). In order to remain entitled to such payments a worker was required to be seeking suitable employment (ie applying for jobs, undertaking retraining programs, seeking assistance from employment providers).

After that initial 52 week period, a worker was then entitled to remain on weekly payments of compensation calculated in accordance with Section 40 of the Workers Compensation Act (as it then was), that is, the difference between what they would have been earning had they not been injured and their capacity for work in suitable employment. The maximum payment was set to a Statutory Maximum, for a single worker with no dependents at the time of the 2012 Amendments being $432.50. In order to remain entitled to such benefits a worker was obliged to be seeking suitable employment within their restrictions.

Workers were therefore protected for a minimum of one year whilst they sought suitable employment with another employer.

Where a dispute arose in relation to the entitlement to weekly payments of compensation, during, or following the first 52 weeks, disputes were determined by an independent body, the Workers Compensation Commission of NSW.

These rights are retained for workers who were exempted from the 2012 Amendments, namely Police Officers, Paramedics and firefighters.

State of the law post-2012 amendments

The 2012 Amendments removed this 12 month protection in its entirety. There is now, no 12 month buffer period in which an injured worker is entitled to be paid a minimum amount of weekly compensation whilst they attempt to obtain alternative work.

The most likely timing of a refusal to provide suitable duties is in the period known as the second entitlement period. In simple terms, where a worker has some capacity for work and the employer will not provide duties within that workers restrictions, the worker is entitled to the difference between 80% of their pre-injury average weekly earnings (95% in the first 13 weeks following injury) minus their current capacity for work (determined by the insurer). The fact that a worker is not working is irrelevant.

Take the example of Ellen who injured her shoulders as a consequence of the heavy and repetitive nature of her work as a meat packer. Prior to her injury, Ellen earned $750 per week. Ellen initially had some time off work for the purposes of surgery and was paid her entitlements by the insurer. She subsequently returned to work performing suitable duties, but can never return to her pre-injury duties. Unfortunately her employer notified her they could not provide her with suitable duties on a long term basis and terminated her employment as she could not fulfil the inherent requirements of her duties due to her injuries. The insurer subsequently made a 'work capacity decision' in which they determined Ellen had the capacity to earn $650.00 per week in suitable work where she was not required to lift greater than 10kg using her arms on a repetitive basis. As a consequence Ellen was not entitled to any weekly payments of workers compensation as the insurer determined she had the capacity to earn greater than 80% of her pre-injury earnings (80% of $750.00 = $600) ($600.00 – $650.00 = NIL).

The insurer can make binding decisions in relation to a worker's entitlement to weekly payments of compensation and what constitutes suitable employment. If this decision is disputed you must request the insurer to internally review the decision. If you are dissatisfied a review may be requested to SIRA, who will review the merits of the decision. If SIRA confirms the decision, a worker can request that the Workers Compensation Independent Review Officer (WIRO) review whether the insurer/self insurer has complied with the appropriate procedures. On 16 December 2016 a Regulation was introduced entitling workers to obtain independent legal advice in relation to a work capacity decision and subsequent merit review of that decision through SIRA. The costs of such advice is to be borne by the insurer. This regulation applies to work capacity decision made on or after 16 December 2016.

Under the new scheme, the definition of "suitable employment" is very broad (a topic for another article) and therefore the insurer can theorise that a job is available anywhere in NSW which is suitable for a worker of reduced capacity therefore reducing, and more likely, ceasing the worker's entitlement to weekly payments of compensation.

After 130 weeks a worker has no entitlement to weekly payments of compensation if they have a current work capacity and no suitable duties have been provided by their employer and they remain without work and they have not been assessed as suffering greater than 20% whole person impairment.

Interestingly Section 49 of the Workplace Injury Management and Workers Compensation Act 1998 makes it an offence for an employer not to provide suitable duties where they are requested by a worker, although I am unaware of any prosecutions undertaken by SIRA (or their predecessor, WorkCover) in relation the failure of an employer to provide an injured worker suitable duties.

As a consequence of the the 2012 Amendments, there is little or no protection for injured workers if they have a current work capacity and the employer will not provide suitable duties.

This state of affairs opens other complex discussions such as the appeal rights of workers following the 2012 Amendments, the new definition of 'suitable employment', work capacity decisions of insurers/self insurers. These are perhaps topics for future articles.

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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