Back Pay Uncertainty for s39 Assessed Workers Resolved

May 29, 2019

RSM Building Services Pty Ltd v Hochbaum [2019] NSWWCCPD 15

 

Background

 

In the recent decision of RSM Building Services Pty Ltd v Hochbaum [2019] NSWWCCPD 15 (18 April 2019) President Judge Phillips confirmed that there is no entitlement to ‘back pay’ if the s39 threshold is obtained at some point after weekly benefits have ceased at 260 weeks.

 

One of the most substantial changes brought about by the 2012 amendment reforms was the introduction of a 5 year (260 week) limit on the payment of weekly benefits for all workers with 20% WPI or less (s39 of the Workers Compensation Act 1987).

 

In many cases, a worker’s degree of impairment will have been determined before the 260 week point and in those cases, weekly benefits will continue or cease depending on whether or not the worker has 21% WPI or more at the time 260 weeks is reached.

 

Decision

 

In Hochbaum, President Judge Phillips has resolved the uncertainty around the circumstance of when a worker attains the 21% WPI s39 threshold at some point after weekly benefits have ceased at 260 weeks.

 

The question for determination was whether the worker is then entitled to receive back payment from the 260 week point or do benefits recommence only from the day that the threshold is satisfied?

 

At first instance, Arbitrator Bamber considered the wording in s39(2) did not apply to an injured worker, which meant that benefits should be reinstated from the date last paid because s39 “did not apply” in the intervening period.

 

Mr Hochbaum’s case the intervening period was almost 30 weeks.

 

In overturning the Arbitrator’s decision, President Judge Phillips considered that the Arbitrator had discounted the importance of s39(3) to the proper interpretation to the section as a whole. He also rejected the respondent worker’s submission that s39(2) was beneficial and should be interpreted accordingly.

 

The President found that section 39(2) should be read alongside s39(3), directing attention to whether or not there is an assessment of 21% WPI or more.

 

If there is, then section 39(2) is triggered to restore payments and section 39(1) will not apply. In other words, payments cease at the end of 260 weeks. This bar remains in place unless and until the worker obtains an assessment at or over 21% WPI. Then and only then is s39(2) triggered and the bar is lifted, restoring an entitlement to weekly benefits that did not exist the day before.

 

Implications

 

This decision creates a dilemma for workers in a system where so much turns on a single WPI assessment; and confirms the importance of work capacity decisions. Whilst section 39(2) might operate to lift the bar and revive an entitlement to weekly benefits, the amount to be paid, if anything is still determined by the insurer’s most recent work capacity decision.

 

For further information regarding the implications of this decision for employers and insurers contact SMK Lawyers.

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