Prepared by William Duddy
We are pleased to publish, for your general information, this series of papers on the upcoming changes to the workers compensation system. These papers contain an overview of some of the significant features of the Return to Work Act 2014, along with some commentary. These papers contain our opinion on how the new legislation might operate but the information below does not constitute legal advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. If you would like Duddy Shopov to assist you, please contact our office on (08) 8110 5555 for further information and to arrange an appointment.
Seriously Injured Worker
The Return to Work Act 2014 imports a number of provisions and key concepts from the Workers Rehabilitation and Compensation Act, 1986 (as amended).
However, one of the “new” provisions and concepts is that of the “seriously injured worker” – which effectively creates a new category of injured worker and which provides for certain specific entitlements and obligations.
Section 21 “Seriously Injured Worker”
Section 21(2) provides that for the purposes of the Act, “a seriously injured worker is a worker whose work injury has resulted in permanent impairment and the degree of whole person impairment has been assessed under Division 5 for the purposes of this Act to be 30% or more”.
Section 21(3) provides that pending an assessment of permanent impairment, the Corporation (interpolate here self-insured employer as a delegation pursuant to Section 134 of the Return to Work Act) may of its own initiative, or must on application made by the worker, make an interim decision to the effect that a worker will be taken to be a seriously injured worker under this Act if:-
(a) It is satisfied, or it appears, that the worker’s injury has or will result in permanent impairment; and
(b) It appears that the degree of whole person impairment is likely to be 30% or more.
Section 21(5) provides that unless or until a worker is assessed or determined to be a “seriously injured worker” as contemplated by Section 21, the worker will be taken not to be a seriously injured worker for the purposes of the Act.
However, if at a later time the worker is characterised as a seriously injured worker then Section 21(6) provides that the worker will be taken to have been a seriously injured worker from the date of the injury and the worker is entitled to paid any amounts that would have constituted the worker’s entitlement had the worker been taken to be a seriously injured worker at the time.
Section 21(8) specifies that in assessing whether the 30% threshold has been met the following criteria apply:-
(a) Impairment resulting from physical injury is to be assessed separately from impairment resulting from psychiatric injury; and
(b) In assessing impairment from physical or psychiatric injury, no regard is to be had to impairment that results from consequential mental harm (as defined); and
(c) In assessing the degree of whole person impairment resulting from physical injury, no regard is to be had to impairment that results from a psychiatric injury or consequential mental harm; and
(d) The 30% threshold is not met unless the degree of whole person impairment resulting from physical injury is at least 30% or the degree of whole person impairment resulting from psychiatric injury is at least 30%.
Entitlement to Compensation
A worker assessed or determined to be a “seriously injured worker” is entitled to income maintenance beyond 104 weeks (the first two years) and has an entitlement at 80% of notional weekly earnings until retirement age.
The “sunset” to an entitlement to medical and like expenses pursuant to Section 33(2) of the Act does not apply in relation to a seriously injured worker such that a seriously injured worker has an ongoing entitlement for reasonable and necessary medical and like expenses pursuant to Section 33 of the Act.
Finally, Section 72 of the Act provides that a seriously injured worker may be entitled to pursue a claim at common law – where an injury or death has been caused by the negligence or other tort of the worker’s employer, arising from employment, giving rise to an entitlement to damages at common law.
Section 73(4) provides that where a seriously injured worker has a right of action against his employer for damages, then the worker must make an election in accordance with the Regulations.
Regulation 39 provides that such an election must be in writing and furnished to the self-insured employer before the worker commences common law proceedings or before the worker commences negotiations for redemption.
In relation to recovery/Return to Work Plans, Section 25(11) provides that a Plan established under Section 25 “must not impose any obligation on a seriously injured worker to return to work (but may include processes designed to assist a seriously injured worker to return to work at the request of the worker).
To qualify for a damages claim, the worker must meet the criteria as a “seriously injured worker”, and therefore have at least a 30% whole person impairment.
In the case of a psychiatric injury resulting in an assessment or determination that a worker is a “seriously injured worker” (assessed in accordance with the gepic criteria), then an award of damages can only be made if the psychiatric injury is primarily caused by the negligence or other tort of the employer.
An action for damages cannot be commenced until and unless the worker has made an election.
A seriously injured worker cannot therefore make a claim for both a redemption of liability to make weekly payment and damages for future economic loss and conversely cannot enter into a redemption agreement to redeem liability to pay weekly payments until or unless the election contemplated by Section 73 has been made.
The election requires that the worker receive independent legal advice, payable by the Compensating Authority and there is to be a gazetted rate applied, and an action for damages cannot proceed to trial unless mediation has occurred (Section 85) and common law proceedings are to be brought against the employer but are to be defended by either the Corporation or the self-insured employer pursuant to Section 93 of the Act.
Common law entitlements can include an entitlement to loss of consortium, pain and suffering, past and future loss of earning capacity and so forth. These entitlements should be measured against entitlements received under a workers compensation claim.
On conclusion of a common law/damages action, the worker ceases to be entitled to further compensation pursuant to the Act except for medical and like expenses (Section 75(2)(a)(i)) or rehabilitation services pursuant to Part 3 of the Act.
As the Act creates a new category of worker, and details distinct rights and entitlements applying to “seriously injured workers” (as defined), it is important from a claims administration perspective to try and identify at an early stage whether a worker’s injury will qualify.