Back pay: WCC President resolves uncertainty for section 39 affected workers

Key Points
  • There is no entitlement to weekly compensation payments for periods between when a worker’s payments cease under s 39(1) (having received 260 weeks of weekly compensation) and any future date when they obtain an assessment of more than 20% WPI from an AMS.

Hicksons Lawyers successfully acted for the appellant employer before President Judge Phillips in RSM Building Services Pty Limited v Hochbaum [2019] NSWWCCPD 15.    

On 18 April 2019 President Judge Phillips published his decision in RSM Building Services Pty Limited v Hochbaum finding that the bar provided by s 39(1) Workers Compensation Act 1987 to the payment of weekly compensation benefits continues to operate until such time as it is lifted by s 39(2) of the 1987 Act following an assessment in accordance with s 39(3).
2012 legislative changes led to the introduction of Section 39, which limits weekly payments for workers with less than 21% Whole Person Impairment (WPI) to a period of 260 weeks.
The President’s decision confirms what happens when a worker obtains an assessment of more than 20% WPI after payments have ceased under s 39(1) and whether they subsequently have an entitlement to weekly compensation for the period between when payments ceased and are subsequently recommenced upon receipt of an assessment of more than 20%. 
At first instance, the Senior Arbitrator found that s 39(2) should be interpreted such that once an assessment of more than 20% is obtained; section 39 in its entirety never applied and the worker is entitled to back payment of weekly compensation benefits from the date payments were ceased under s 39(1).
On appeal, President Judge Phillips agreed with the statutory construction of s 39 urged by the appellant employer and the State Insurance Regulatory Authority who had intervened in the proceedings.     
He accepted that s39(2) must be read in the context of s 39 as a whole and that s 39(1) only ceases to apply once an assessment has been obtained in accordance with s 39(3). Where there is a dispute, this requires a Medical Assessment Certificate to be issued by an AMS in accordance with s 65 of the 1987 Act and Chapter 7 of the Work Place Injury Management and Workers Compensation Act 1998.

The effect is that where there is no assessment that the worker has more than 20% WPI, s39(1) bars recovery of weekly compensation benefits. If at a subsequent time there is an assessment of greater than 20% WPI, weekly payments are reinstated, pursuant to s39(2), from the date of that assessment. 

This decision now resolves the uncertainty as to the operation of s39(2) of the 1987 Act.
While this appeal did not require the President to consider the effect of clause 28C of Schedule 8 of the Workers Compensation Regulation 2016, the President’s decision will provide guidance to arbitrators required to address the entitlements of existing recipients under the transitional provisions in the future.
For further information with regarding the ongoing implications for employers and insurers following the 2012 introduction of Section 39 contact Mitchell Strachan or Loren Riddell.   

Post by Mitchell Strachan and Loren Riddell.

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