Australia: Injury on a work trial and the question of incapacity

THIS UPDATE WAS CO-AUTHORED BY RHONDA CARSON, LAWYER

ENGINE PROTECTION EQUIPMENT PTY LTD V MILLER [2017] WADC 72

Although presently under appeal, the decision of Scott DCJ on an appeal against an award made by the arbitrator in favour of the respondent raises some important questions and merits review.

This was His Honour's decision on an appeal by Mr Miller's employer, Engine Protection Equipment Pty Ltd (EPE) against an order that they pay weekly payments to Mr Miller for total incapacity resulting from a back injury. The issue was whether Mr Miller suffered a personal injury by accident while he was on his return to work program at Bunnings, thereby falling within the extended definition of 'injury', pursuant to s19(1)(b) of the Workers' Compensation Injury and Management Act 1981 (WA) (the Act).

In the course of his employment with EPE, Mr Miller suffered an injury to his left knee on 9 November 2009. EPE accepted liability for the knee injury and weekly payments for the knee were made until 12 December 2014 when Mr Miller reached the prescribed amount pursuant to the Act.

While in receipt of weekly payments for the knee injury, on or about the 19 January 2011, Mr Miller commenced a return to work program at a host employer, Bunnings. On 12 April 2011, while on the program, his knee gave way resulting in him falling and striking a pallet with his right buttock which caused his previously asymptomatic lumbar spine degeneration to become symptomatic (back injury).

Liability was accepted for his back injury and weekly payments were made to Mr Miller from February 2015, but subsequently suspended by way of a s60 application.

Mr Miller lodged an application to reinstate his weekly payments for his back injury. It was common ground that the back injury had occurred because of the prior knee injury, and EPE argued that the injury and consequent incapacity should fall under the original claim. Mr Miller argued that the back injury was a 'fresh injury' sustained in the course of a vocational rehabilitation (return to work) program and fell within s19(1)(c) of the Act as a personal injury by accident deemed to be in the course of the original employment.

The arbitrator accepted this argument and found Mr Miller's back injury was a personal injury by accident and he was totally incapacitated as a result of both compensable injuries (his knee and back). Because the back injury was a material contributing cause of the incapacity, he was found to be entitled to weekly payments for that injury.

Mr Miller's weekly payments were reinstated and EPE lodged an application for leave to appeal the decision.

On appeal, Scott DCJ noted that in order to fall within s19(1) of the Act, the 'injury' must be a personal injury by accident rather than an aggravation of a pre-existing condition/injury (subsection (d) of the definition of injury).

For the purpose of the first ground of appeal, after again considering the evidence and reviewing the law, His Honour agreed with the findings of the arbitrator, that Mr Miller had suffered a personal injury by accident. That conclusion was reached on the basis of the recognised legal tests as applied to the known facts and very much reflected common sense. The fact that the ensuing incapacity was regarded as due to the aggravation of pre-existing degeneration did not displace the initial cause as a proper basis on which to characterise the 'injury'.

The second ground of appeal questioned the arbitrator's finding that there should be a new prescribed amount applicable to the injury, based on the agreed fact that the second injury had 'resulted from' the first. His Honour dismissed this argument on the basis that although the injury had resulted from the prior injury, this did not mean that on the facts, it could not properly be regarded as a personal injury by accident in its own right.

These findings by His Honour largely disposed of the appeal, and in doing so has left employers and insurers with good cause to review work trial arrangements. The level of exposure of an employers' indemnity insurer to risks arising out of work trials ought to be low (as no doubt rehabilitation providers would assert), however, where such risks do materialise into a further claim, the prospect of paying a further prescribed amount may be a consequence not generally considered.

Implicit in the arbitrator's award of weekly payments for total incapacity was the proposition that total incapacity for work resulted from the injury. However, a part of the process of reasoning that is not exposed in the decision of Scott DCJ is how the arbitrator arrived at the conclusion that total incapacity had 'resulted from' the back injury. If Mr Miller was already totally incapacitated, the conclusion is not obvious and is arguably inconsistent with the High Court's long established approach to causation (Ward v Corrimal-Balgownie Collieries [1938] 61 CLR 120) and recently applied by Troy DCJ in Smith v WA Plantation Resources Pty Ltd, [2017] WADC 8. Was it necessary for a finding to be made that Mr Miller had ceased to be totally incapacitated from the knee injury and therefore had a capacity for work, now lost, 'resulting from' the back injury?

With the possibility that greater scrutiny may be given to work trial arrangements as a result of this timely reminder of the effect of s19(1)(b), the basis on which weekly payments, as opposed to other entitlements may be awarded, will no doubt be carefully scrutinised.

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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