Australia: As The Injured Worker Said To The Employer: "I´ll Be Back...."

Last Updated: 30 September 2008
Article by Janice Nand

The NSW Industrial Relations Commission (IRC) recently ordered two employers to reinstate injured workers despite the continuing nature of the workers' restrictions.

Power to reinstate

In both cases, the IRC exercised its power under the Part 8 of the Workers Compensation Act 1987 (NSW) (the WCA) to order the reinstatement of injured workers within two years of dismissal.1 Part 8 of the WCA applies to workers who have an injury for which they are entitled to workers compensation under NSW legislation (injured workers). In summary, under the WCA, an injured worker:

  1. Cannot be dismissed within six months of becoming unfit for duty due to an injury
  2. If dismissed due to being unfit because of the injury, may apply to the employer for reinstatement to employment which is no more advantageous to the worker than his/her pre-injury position
  3. Must produce to the employer a certificate by a medical practitioner to the effect that the worker is fit for employment of the kind for which the worker applies for reinstatement
  4. May apply to the IRC for a reinstatement order if the employer refuses the request for reinstatement.

The IRC may not make a reinstatement order, except in special circumstances, if the request to the employer was made more than two years after the dismissal.

Hofman v Penford Australia Limited

The case of Hofman v Penford Australia Limited concerned an employee who was employed for 11 years as a plant operator.

In January 2005, he suffered a work-related injury which resulted in him being unable to lift objects more than 10kg and lift objects 5kg above shoulder level.

He returned to full-time work in February 2007 subject to the lifting restrictions and continued in this modified position until the employer dismissed him in July 2007.

The employee subsequently sought to be reinstated in one of the four areas of the production facility: the starch laboratory, the wet circuit area, the warehouse or the office.

The employer said the employee's injuries rendered him unfit for the position of plant operator and that due to downsizing, it could not support the role of a plant operator with lifting restrictions. It was also argued that there would be a significant cost in training the employee for another position.

Commissioner Cambridge noted that the medical evidence relied upon for the dismissal was over 12 months old at the time of the dismissal.

Significantly, he held that there was no particular event or operational change which precipitated the dismissal after the two years of rehabilitation: 'It appeared that the decision to way of removal of suitable duties, arose simply as a consequence of the passage of time'.

Consequently, he found this was the type of situation contemplated by the WCA.

Commissioner Cambridge went on to hold:

It is well established that in circumstances where an employee is unable to fulfil all of the inherent requirements of the job, it remains necessary for the employer to take reasonable steps to accommodate any limitations and only after a proper examination of potential alternatives should there be any move towards dismissal.

Commissioner Cambridge found that while the employee had ongoing restrictions in relation to lifting, there was evidence that the employer had available employment of a kind for which the employee was fit and which would not result in an unreasonable cost impost or operational difficulties.

He ordered reinstatement in any of the four areas requested by the employee.

Diaz v Sydney South West Area Health Service

Mr Diaz was a kitchen hand in a hospital prior to sustaining a work-related shoulder injury. In August 2004, his employment was terminated on the ground that his employer had no work for him as a kitchen hand which was consistent with this restrictions.

In May 2008, the IRC considered his application for reinstatement.

Commissioner Connor of the IRC accepted that there were no appropriate duties as a kitchen hand which would meet Mr Diaz's restrictions.

However, he considered that the hospital was a large employer and ordered that Mr Diaz be re-employed in a clerical position. Mr Diaz had given evidence that he had computer and administrative skills.

In order to avoid Mr Diaz being employed in a more advantageous position than his preinjury position, Commissioner Connor ordered that he be re-employed at a particular classification.

In response to the employer's submission that it was not obliged to create a position, Commissioner Connor found that there would be a range of ward assistant positions 'capable of being used by, or at the disposal or within the reach of the employer'.

There is nothing in the decision to indicate whether the hospital had a vacant position at that classification.


Until recently, the leading case on the reinstatement of injured workers was Leticia Cansino v South Western Sydney Area Health Service.2 In that case, the Full Bench of the IRC held that the employer was not required to fashion a new job for an injured employee.

As a consequence, the employee in that case failed in her application because her ongoing incapacity required re-employment in a position significantly different from her pre-injury position.

The decisions in Hofman and Diaz indicate a trend toward a more generous approach by the IRC when determining whether there is an appropriate position in which to reemploy an injured worker.

Employers cannot simply focus on the preinjury position.

Significantly, the decision in Hofman went further and also considered whether the dismissal was unfair. This is despite the fact that the reinstatement provisions are no longer in the Industrial Relations Act 1996 (NSW) and the fairness of the dismissal is not an express element of the relevant WCA provisions.

Overall, the decisions in Hofman and Diaz give rise to a lack of certainty for employers who are contemplating terminating the employment of injured workers.

The risk of hearing the words 'I'm back' from a former employee is greater than ever.


1 Hofman v Penford Australia Limited [2008] NSWIRComm 1026 (28 March 2008) and Diaz v Sydney South West Area Health Service [2008] NSWIRComm 1034 (23 May 2008)

2 Leticia Cansino v South Western Sydney Area Health Service [1999] NSWIRComm 355 (23 August 1999)

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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