LawTalk Blog

Some elements of the Return to Work scheme are shameful – the consequence of the Pennington decision

Return to Work legislation shameful

At Andersons, we work closely with many workers who have suffered physical and emotional harm as a result of work related accidents and incidents. Sometimes the harm is minor and the worker is capable of a quick return to their employment, but other times the worker suffers a partial or total incapacity that can render them unable to return to their usual work duties for prolonged periods of time.

A just and equitable workers compensation scheme would ordinarily protect those injured workers and compensate them for their financial losses whilst they recover from their injuries. Many injured workers are incredibly vulnerable, and rely on a supportive and fair system to assist with their rehabilitation. But time and time again, we are seeing the consequences of the Return to Work scheme do nothing but kick these vulnerable South Australians whilst they are down.

"In drafting the Return to Work legislation, it is easy to think that the parliament cared more about statistics and saving money"

 

In drafting the Return to Work legislation, it is easy to think that the parliament cared more about statistics and saving money; reference to arbitrary matters like an alleged ‘unfunded liability’ took centre stage during the legislative debate. But it seems like our leaders forgot that the workers compensation system deals with real people, not abstract data and statistics. These South Australians who crave the protection of a strong workers compensation system have suffered injuries through no other reason than waking up and going to work in order to provide for themselves and their families.

The pinnacle of the Return to Work scheme’s unfairness came into the spotlight in June 2016 when the South Australian Employment Tribunal handed down its decision in the case of Pennington.

The legal facts and arguments surrounding Pennington are complex. But the basic points are:

  1. In June 2013 Ms Pennington injured her back working with an employer called Coast to Coast. She lodged a workers compensation claim and the claim was accepted for income maintenance and medical expenses.
  2. Since the injury, she has remained partially incapacitated (ie, unable to return to her full pre-injury duties), and she is still presently partially incapacitated.
  3. Ms Pennington was able to gain some employment at a company called Zym Export in September 2014. This employment was obtained via the RISE scheme which encouraged employers to hire workers with injuries, and in turn the employer would receive a subsidy of the wages paid.
  4. As Mr Pennington was now earning above her workers compensation income entitlements, she was issued with a notice under section 36 of the repealed Workers Rehabilitation and Compensation Act 1986 (“the WRC Act”), confirming no entitlement to income maintenance because she was now earning too much. Section 36 was a general provision allowing WorkCover case managers to cease income maintenance payments based on a variety of grounds. In this situation, the ground relied upon was that Ms Pennington was now earning too much in her new job. Of course, at this stage she still has her on-going back injury.
  5. The Return to Work Act (“RTW Act”) became operational on 1 July 2015 and Ms Pennington’s claim ‘transitioned’ from the WRC Act into the new scheme;
  6. In late July 2015 Ms Pennington lost her job because Zym went into liquidation. At this time Ms Pennington is without a job but still suffering her on-going back pain and incapacity. She therefore submitted a claim to have her workers compensation income payments reinstated.
  7. Ms Pennington’s claim to resume income maintenance payments was rejected because of specific provisions within the RTW Act and she disputed that decision all the way to the Full Bench of the Tribunal. The Full Bench unanimously found that the RTW Act denies Ms Pennington the right to claim income maintenance even though she still suffers from the work related injury.

The particularly nasty provisions within the RTW Act are part of the overall ‘transitional provisions’. Transitional provisions are a set of rules which try and explain how workers’ claims should be managed when they transitioned from the WRC Act to the RTW Act in July 2015 and beyond.

"The particularly nasty provisions within the RTW Act are part of the overall ‘transitional provisions’."

One of the transitional provisions has the effect of disentitling a worker to income maintenance after July 2015 if they had been the subject of a section 36 notice (that is, ending income maintenance payments) before July 2015. Remember in Ms Pennington’s case, she only received a section 36 notice because she proactively returned to work, but then she lost her job when the company went into liquidation. The Tribunal discussed the following provision which states:

"To avoid doubt, a person who, before the designated day [1 July 2015], has ceased to have an entitlement to weekly payments on account of a discontinuance under section 36 of the repealed Act is not entitled to weekly payments under this clause (or under the repealed Act)."

The worker argued that it was unjust that she was being denied entitlements when she had done everything right. She had actually made an effort to obtain employment even though she was still suffering her back injury. She further argued that the decision to deny her income entitlements was inconsistent with the objectives of the RTW Act which emphasise the rehabilitation of injured workers and their early return to work and the provision of fair compensation when a worker is incapacitated for employment.

The worker effectively questioned the problematic and inconsistent intent of the Parliament. How could politicians have intended for someone like Ms Pennington to be disenfranchised when she did the right thing and returned to work?

The irony and absurdity of the law is that if Ms Pennington sat at home and did not make an effort to return to work, she would not have been issued with a section 36 notice and once 1 July 2015 hit, she would have been potentially entitled to another two years of payments.

Also, had Ms Pennington’s employment with Zym been terminated a month earlier in June 2015 rather than July 2015, she would have been able to apply for potentially another two years’ worth of payments.

"The Tribunal seemed sympathetic of Ms Pennington’s argument...   but they concluded that the unfair and unjust nature of the law is not enough for the Tribunal to reach a different decision."

 

The Tribunal seemed sympathetic of Ms Pennington’s argument, and went as far as confirming that the RTW Act creates an unfair outcome.  But they concluded that the unfair and unjust nature of the law is not enough for the Tribunal to reach a different decision. Courts and Tribunals do not make the law, but rather apply and interpret the law made by Parliament.

The Tribunal concluded that:

"Parliament intended that workers who were not in receipt of weekly payments as at 1 July 2015 due to those weekly payments being discontinued under s.36 of the WR&C Act, are not entitled to receive weekly payments under either the RTW Act or the WR&C Act."

Therefore, despite having an on-going incapacity and constant back pain, Ms Pennington had no entitlement under the RTW Act.

At Andersons we are working closely with our clients and partner unions to do whatever we can to support our clients following the Pennington decision. We will continuously look for ways to distinguish our clients’ particular circumstances from the situation in Pennington, because at the end of the day, each case has to be determined individually on its own merits.

We are also working with our partner unions to urge the Parliament to amend the unfair legislation. It is possible that up to 2,000 South Australian workers will be adversely impacted by the transitional provisions of the RTW Act.

The Pennington ruling does not just apply to situations where a worker was able to find work before 1 July 2015. The strict application of the law is evident from the following real life examples:

  1. An injured worker who had been receiving payments was issued a section 36 notice to cease their payments for the period of an overseas trip in June 2015. This worker is subsequently denied further income maintenance upon their return to Australia after 1 July 2015.
  2. An injured worker on maternity leave and therefore not in receipt of income maintenance as at 1 July 2015 is denied the ability to claim income maintenance once their maternity leave ends.
  3. A worker who was working before 1 July 2015 and therefore not receiving income maintenance now needs time off for surgery related to the work injury, but he is denied income maintenance during the recovery because of the transitional provisions.

These are just a few examples of the absolute unfairness of some of the provisions of the RTW Act.

If you have suffered a workplace injury and you are worried about your rights and entitlements under the Return to Work scheme, get in touch directly with us today. 


Please note, this Blog is posted in Adelaide, South Australia by Andersons Solicitors. It relates to South Australian legislation. Andersons Solicitors is a medium sized law firm servicing metropolitan Adelaide and regional South Australia across all areas of law for individuals and businesses.


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