WORK CAPACITY DECISION OR DENIAL OF LIABILITY?

Legal Directions

When can the Workers Compensation Commission (‘WCC’) determine the issue of weekly compensation?

Sabanayagam v St George Bank Ltd [2016] NSWCA 145

The insurer issued a section 74 notice purporting to dispute liability for weekly compensation on the basis the worker had recovered from the effects of her injury.

At first instance, the Commission found that a work capacity decision (‘WCD’) had issued and that the WCC had no jurisdiction. On appeal, the Deputy President found that it could be inferred by the terms of the s74 notice that a WCD had been made, and that therefore s43(3) of the 1987 Act applied, depriving the WCC of jurisdiction to make a decision inconsistent with that decision.

The Court of Appeal unanimously overturned the Deputy President’s decision, finding that:

  1. There was ‘no evidence’ to support the Deputy President’s finding that a WCD had been made prior to issue of the s74 notice;
  2. The s74 notice was not a WCD because nothing in the dispute notice indicated the insurer was exercising powers given to it by the 1987 Act, such that the insurer ‘was not making a decision “about a worker’s current work capacity” within s 43(1)(a)’;
  3. Section s43(1)(f) does not permit an insurer to rely upon s43(3) (which deprives the WCC of jurisdiction in respect of a dispute about a WCD) in respect of a decision which the insurer had no power to make.
  4. Basten JA held that the s74 notice was clearly not a WCD because it purported to be a decision to dispute liability, and so was excluded from the definition of WCD by the operation of s43(2)(a).

Implications

Following issue of the Deputy President’s decision, the distinction between a dispute notice and a WCD became less clear, as did the WCC’s authority to determine an issue about weekly compensation in circumstances where a s74 notice had issued on the basis that a worker had ‘recovered’.

The Court of Appeal’s decision resolves that issue, and it is now abundantly clear that an insurer’s decision to dispute liability for weekly compensation (for whatever reason) by issue of a s74 notice, and in the absence of action taken within the legislative framework consistent with the issue of a WCD, is a matter falling within the exclusive jurisdiction of the WCC.

It remains to be seen whether icare will revisit the issue by way of further instruction to scheme agents, clarifying the precise circumstances in which a s74 notice concerning payments of weekly compensation can issue.

 Authored by Bradley Stringer, Partner, Sydney


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