March 2009
In this bulletin we review an interesting Court of Appeal decision
(Tan v National Australia Bank Limited [2008]) which has implications for
the jurisdiction of the Workers Compensation Commission.
Background & Facts Tan v National Australia Bank Limited [2008] NSW CA
198. The worker was employed by the National Australia Bank (“NAB”) as a
mobile mortgage manager. On 1 July 2003 she went on sick leave due to
alleged stress and anxiety at work. She lodged a workers compensation
claim for psychological injury on 21 July 2003. NAB disputed the
worker’s claim.
The arbitrator was satisfied section 11A of the Workers Compensation Act
1987 disentitled the worker to compensation for her psychological injury.
This section operates to preclude a worker recovering compensation for
psychological injury if the employer’s actions are reasonable.
However, the arbitrator found the worker was entitled to compensation for a
“further” injury on 5 April 2004, namely the aggravation, exacerbation
and/or deterioration of a pre-existing psychological condition caused by
the failure of NAB to allow her to return to work under suitable supervision
and duties. NAB appealed the decision of the arbitrator.
The Deputy President upheld the arbitrator’s findings in relation to the
July 2003 injury. However, he set aside the arbitrator’s findings in respect
of the 5 April 2004 injury on the basis the Commission did not have
jurisdiction to hear the matter as there was no “claim” ever pleaded or
particularised for the injury. He found it was open to the worker to make a
claim and lodge a further application to resolve a dispute in respect of the
5 April 2004 injury. The worker appealed the decision of the Deputy
President.
Court of Appeal
On 21 August 2008 the Court of Appeal upheld the worker’s appeal and
made the following findings (per Baston and Bell JJA):
If a claim does not comply with the WorkCover guidelines under section 260(1)
of the Workplace Injury Management and Workers Compensation Act 1998
(“WIM Act”) it will still be deemed to be a “claim” for the purpose of the
legislation.
The WorkCover guidelines are primarily intended to assist insurers and are
not mandatory on workers.
If there has been a failure by a worker to make any claim at all, then section
260(5) of the WIM Act is engaged. This section provides a failure to make the
claim as required does not preclude the recovery of compensation in certain
circumstances.
The Commission has discretion to hear and determine a dispute in respect of
which there has been no claim. This approach is consistent with the objectives
of the legislation and the requirements of section 354 of the WIM Act. The
adoption of flexible procedures, including the adjournment of proceedings to
enable an employer to investigate and meet a claim not previously made,
would be more beneficial to achieve the objectives of the Act, namely, to
ensure compensation for work related injury.
Chief Justice Young, in a separate judgment, concluded there was no
requirement for a claim to be articulated in the statutory language of an
“injury” or “aggravation” to be within the jurisdictional ambit of the
Commission. He said:“It is absurd to think that in an Act to assist workers,
a worker could be left without any support at all because after a lengthy
hearing his or her problem was held to be a fresh injury rather than an
exacerbation and a separate piece of paper in the form of a prescribed claim
had not been lodged in respect of it.”
Further, he suggests the Commission has discretion to determine any injury,
whether claimed or not, on the basis of evidence before it, subject to
procedural fairness and providing an employer the opportunity to investigate
and obtain evidence in relation to such an injury.
The worker’s appeal was allowed and the decision of the Deputy President
was set aside. The proceedings were remitted to the Commission and no order
was made as to costs.
Implications
The decision implies a “claim” will not be considered invalid for a lack of
particularity and may be amended as proceedings unfold in the Commission.
However, if this occurs, insurers should be given ample opportunity to
respond to a “claim” with an adjournment in proceedings in the interests
of procedural fairness.
The decision represents a significant divergence from the current regime.
It suggests a move away from a “front end loaded” system to a more “flexible”
approach. It is difficult to reconcile this approach with the statutory
requirements in sections 288(2) and 289A of the WIM Act, which provide
a dispute is not to be accepted for referral to the Commission if it cannot be
referred for determination by the Commission and preclude referral for
determination by the Commission of a matter not previously notified as
disputed.
Comment
This surprising decision apparently fails to impose any limits on the
jurisdiction of the Commission in determining a claim. It creates a level
of uncertainty for insurers as to whether a claim exists which should
be disputed.
At the time of writing it did not appear NAB had sought leave to lodge an
appeal to the High Court. It will be interesting to see the developments as
a result of this decision and the impact on the system generally.
This publication is intended as a source of information only.
No reader should act on any matter without first obtaining professional advice.
Written By: Peter Lichaa
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