The Facts

Injured worker receives weekly compensation benefits and lump sum payment

In September 2000, a worker fell while pushing a wheelbarrow in the course of his employment.

He suffered significant injuries to his leg and made a workers compensation claim.

The employer's insurer accepted liability. It paid the worker's treatment expenses and ongoing weekly benefits, along with a lump sum payment for permanent injury.

In June 2012, the worker fell when his leg gave way, breaking his wrist and significantly injuring his back. Under workers compensation law, these injuries were treated as being part of the initial work injury.

New law commences that weekly payments cease after 260 weeks unless permanent impairment greater than 20%

On 1 October 2012, a new workers compensation regime commenced, including the introduction of Section 39(1) of the NSW Workers Compensation Act 1987.

Section 39 provides that a worker is not entitled to weekly payments in respect of an injury after an aggregate period of 260 weeks of weekly payments.

This is loosely referred to as the five year rule, because for people with long-term injuries who receive continuous payments, the 260-week limit works out to be five years.

Under section 39(2), if a person with long-term injuries can establish through medical evidence that their permanent injury exceeds a "20% of Whole Person Impairment" threshold, then they are entitled to continue receiving weekly payments after the five year cut off period.

Worker's weekly compensation payments cease on 26 December 2017

Under section 39, weekly payments made before 1 January 2013 are not counted towards the 260-week period.

Therefore, the worker reached the 260-week limit on 25 December 2017, being 260 weeks after 1 January 2013.

The insurer ceased paying the worker's weekly benefits from 26 December 2017.

Worker disputes cessation of payments and payments reinstated from 16 July 2018

On 6 April 2018, the worker made a claim for ongoing payments of weekly compensation, arguing that his permanent impairment exceeded the 20% threshold under section 39(2).

The insurance company denied the claim, triggering a medical dispute between the worker and the insurance company under the workers compensation law.

This dispute was finally resolved on 16 July 2018, when a medical assessment certificate was issued certifying the worker as having 21% permanent impairment.

The worker's payments were reinstated by the insurance company from 16 July, but the company refused to pay benefits for the intervening period from 26 December 2017 to 15 July 2018.

Worker goes to court seeking back payment for period from 26 December 2017 to 15 July 2018

The worker then went to the Worker's Compensation Commission, seeking payment for the period between 26 December 2017 and 15 July 2018.

The arbitrator at the commission decided in the worker's favour, ordering the insurance company to pay the missing six months' compensation.

The insurance company appealed the arbitrator's decision to the President of the Worker's Compensation Commission. The President ruled in the insurance company's favour, finding that the worker was not entitled to back payment.

The worker appealed the President's decision to the NSW Court of Appeal, Supreme Court.

case a - The case for the insurance company

case b - The case for the worker
  • Before we ceased payments to the worker, we requested that he attend a medical appointment with one of our specialist doctors to enable us to determine whether he would be entitled to weekly payments after the 260-week period expired. Our doctor assessed the worker's degree of permanent impairment resulting from the injury at 5%. This is well below the 20% threshold that would have entitled the worker to ongoing payments.
  • After the weekly payments stopped, the worker applied to the Workers Compensation Commission for referral for assessment by an approved medical specialist. When that specialist issued a medical assessment certificate on 16 July 2018 certifying satisfaction of the 20% threshold, we immediately resumed weekly payments from that date.
  • This is all we were required to do, as there is no entitlement to back pay under section 39. Rather, after an aggregate period of 260 weeks, a worker loses the entitlement to weekly compensation payments, and has no entitlement to payments until, and from, the day they regain entitlement by demonstrating via an assessment that they meet the 20% threshold. Here that was on 16 July.
  • The legislation is intended to work this way to align with the government's objective of reducing the costs of the workers compensation scheme.
  • It also provides greater certainty of operation, in that both the worker and the insurer have a "bright line" identifying when the entitlement to weekly benefits exists and when it does not exist.
  • We are not required to pay the worker for the six month period from 26 December 2017 to 15 July 2018, and the court must reject the worker's claim for back payment.
  • A permanent injury is a permanent injury, regardless of when it is officially assessed or certified. My permanent injury didn't magically go away after 260 weeks and then reappear after being certified on 16 July 2018.
  • Contrary to the insurance company's assertion that my entitlement to compensation flows from the date of the medical assessment, a proper construction of section 39 dictates that compensation flows from the event of my injury.
  • This interpretation of section 39 is consistent with the government's objective of preserving benefits, until retirement age, for seriously injured workers.
  • Therefore, the court must order the insurance company to pay me for the period from 26 December 2017 to 15 July 2018.

So, which case won?

Cast your judgment below to find out

Digby Dunn
Workers compensation claims
Stacks Law Firm

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