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Findings and recommendations on merit review 002/14

Merit Review Service decision reference: 002/14

Date of review: December 2014

Findings on review

The following are findings made by the WorkCover Authority of New South Wales (the Authority) on review.

  • The worker has an inability arising from an injury such that they  are not able to return to their pre-injury employment.
  • The worker is able to, and has, returned to work in suitable employment.
  • The worker has current work capacity.
  • The worker does not meet the special requirements for continuation of weekly payments as provided in section 38(3) of the Workers Compensation Act 1987 Act (the 1987 Act).

Recommendation based on findings

The following recommendation made by the Authority is binding on the Insurer and must be given effect to by the Insurer in accordance with section 44(3)(g) of the 1987 Act.

  • In accordance with section 38 of the 1987 Act, the worker is not entitled to weekly payments of compensation.

Background

On  March 2003, the worker sustained an injury to their arm whist working as a Machine Operator and has been diagnosed with “reflex Sympathetic Dystrophy and Pain Syndrome”.

Although the worker  underwent a graduated return to work program initially, they were  unable to sustain it. The worker  was terminated from their pre-injury employment in 2005. The worker  is currently working as an Administrative Assistant with an employer, which commenced in July 2013.

In light of the amendments made to the 1987 Act by the Workers Compensation Amendment Act 2012, the Insurer made a work capacity decision in May 2013 ceasing the worker’s entitlement to weekly payments of compensation under Section 38 of the 1987 Act.

The worker made an application for internal review of the Insurer’s work capacity decision, following which the worker  lodged an application to the WorkCover Authority of New South Wales (the Authority) for merit review of the Insurer’s work capacity decision. The Authority conducted the review and issued a decision in October 2013. The Authority determined that the worker had current work capacity as defined in section 32A of the 1987 Act and was entitled to $443.80 of weekly payments of compensation in accordance with section 38(7) of the 1987 Act.

The Insurer made a further work capacity decision in September 2014 again ceasing the worker’s entitlement to weekly payments of compensation under Section 38 of the 1987 Act.

In October 2014, the worker lodged an application for internal review of the Insurer’s work capacity decision. The Insurer undertook an internal review and made a decision in October 2014. The decision was communicated to the worker under letter dated that day.

In July 2013, the worker made an application to the Authority for merit review of the Insurer’s work capacity decision. The application was received by the Authority in July 2013.

The worker made an application to the Authority for merit review of the Insurer’s work capacity decision. The application for merit review was received by the Authority in November 2014.

The application for merit review is made within 30 days and in the form approved by the Authority , as is required under section 44(3)(a) of the 1987 Act.

No issues have been raised in either the submissions or in the other materials before me about the validity of this application for review by the Authority.

Legislation and guidelines

The legislative framework governing work capacity decisions and reviews is contained in the:

  • Workers Compensation Act 1987 (the 1987 Act);
  • Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act);
  • Workers Compensation Regulation 2010 (the Regulation);
  • Guidelines for work capacity decision Internal Reviews by Insurers and Merit Reviews by the Authority applicable from 11 October 2013 (the Review Guidelines); and the
  • WorkCover Work Capacity Guidelines as amended (the Work Capacity Guidelines).

Section 43 of the 1987 Act defines a “work capacity decision”.

Section 44 of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Documents considered in undertaking this review

The documents I have considered in undertaking this review are those listed in, and attached to, The worker’s application for merit review, the Insurer’s reply and the following additional information provided and exchanged between the parties:

  • Letter from the worker to the Insurer dated June 2014;
  • Report of the worker's nominated treating doctor dated August 2013;
  • Insurer’s file note dated August 2014;
  • Insurer’s letters to the worker dated August 2014, August 2014, October 2014 and November 2014.

Submissions

In the application for merit review, the worker makes reference to their letter to the Insurer dated September 2014. The letter contains the worker’s response to the Insurer’s notice of work capacity decision to cease weekly payments of compensation.

The worker disagrees with the Insurer’s decision to discontinue weekly payments of compensation as the worker is “currently exercising my maximum earning capacity of 15 hours per week”. The worker states that the worker was educated overseas and left school at the age of 15. The worker immigrated to Australia in 1980 and upon arrival obtained work with the pre-injury employer, where the worker worked for approximately 14 years until the worker’s employment was terminated due to the injury.

The worker submits that “I was lucky to obtain employment with the employer who was able to provide me with a position that suited my restriction”. The worker states that duties involved very straight forward tasks like collecting/opening mail between the 3 display homes, running errands and daily banking duties.  The worker works at their own pace and takes rests as required.

The worker submits that they have been working 15 hours per week “most weeks” and that from time to time, due to increased symptoms from injuries, has time off work or works reduced hours but the employer pays “my normal pay”.

The worker states that due to their level of education and lack of experience and skills is unable to work in the fields identified by the Insurer and that the current job is the only job the worker has capacity to perform. The worker attempted a number of work trials but was unsuccessful due to difficulties relating to the injury.

In reply, the Insurer submits that the worker is certified as having capacity for employment for 3 hours per day, 5 days per week with a lifting restriction of 5kg and limited pushing and pulling ability. The worker has the functional and vocational capabilities to work as a Sales Assistant and Administrative Assistant.

The Insurer refers to the worker’s letter dated September 2014 which is provided as part of the merit review application. The Insurer states that the letter was also part of the worker’s application for internal review of the Insurer’s work capacity decision and was considered in assessing current work capacity.

The Insurer confirms that the worker has received 130+  weeks of weekly payments of compensation and given that the worker  has not returned to work for not less than 15 hours per week and does not satisfy the requirements of section 38(3)(b) of the 1987 Act. The Insurers refers to the internal review decision and submits that the decision illustrates that “although the worker’s payslips show that they are working more than 15 hours, surveillance reports do not correspond with the payslips”.

Reasons

Nature of merit review

This matter involves a merit review of the work capacity decision of the Insurer in accordance with section 44(1)(b) of the 1987 Act.

The nature of this review is a merit review of the Insurer’s work capacity decision by the Authority. It is not a review of the Insurer’s processes in making the work capacity decision and/or internal review decision. The review requires that I consider all of the information before me substantively on its merits and make findings and recommendations that, in light of the information before me, are most correct and preferable.

Current work capacity and suitable employment

The worker was issued with a final WorkCover NSW medical certificate dated September 2012. The certificate is issued by the worker’s nominated treating doctor, and certifies that the worker had reached maximum medical improvement and is fit for permanently modified duties.

More recent WorkCover NSW certificates of capacity before me, also issued by the nominated treating doctor, are for the period between May 2014 and January 2015. The certificates certify the worker as having capacity for some type of employment for 3 hours per day, 5 days per week with a 5kg lifting/carrying capacity and “very limited” pulling and pushing ability.

In June 2014, in response to the Insurer’s request for further information regarding the worker’s “current status”, the nominated treating doctor states that there has been no improvement in the worker’s condition in the past six months as the condition is chronic and “resisted attempts to resolve it”.  The nominated treating doctor also states that the worker is coping with current employment but is unable to work more than 3 hours per day, 5 days per week.

I do have medical reports before me that are now dated, but apart from the certificates of capacity provided by nominated treating doctor, the only other recent medical report before me is the report of a specialist dated July 2014. The specialist states that “it is difficult to me to pass comment on whether the worker has functional capacity for full time work. Based on symptoms, the worker would struggle to work full time”. The specialist opines that the worker would have the capacity to work between 4 and 7 hours per day, as long as such was sedentary in nature. In considering the medical information before me, in particular the worker’s current certificates of capacity, I accept that the worker has capacity for some type of employment for 3 hours per day, 5 days per week with a lifting restriction of 5kg and limited pulling and pushing ability.

Section 32A of the 1987 Act defines ‘current work capacity’ as:

current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment

“No current work capacity” is defined in section 32A of the 1987 Act as:

no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment

In considering the worker’s current incapacity, the restrictions on  hours of work, and the fact that the worker  was unable to return to pre-injury employment despite efforts,  I am satisfied that the worker has a present inability arising from an injury such that the worker  is unable to return to work in pre-injury employment.

In order to determine whether the worker has current work capacity, I am also required to consider whether the worker is able to return to work in “suitable employment”. Suitable employment is defined in section 32A of the 1987 Act as:

employment in work for which the worker is currently suited:

(a) having regard to:

(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker’s age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the WorkCover Guidelines may specify, and

(b) regardless of:

(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker’s pre-injury employment, and
(iv) the worker’s place of residence.

In the application for merit review by the Authority, the worker submits that they are working within the family who is the employer. The worker states that duties involve very straight forward tasks like collecting/opening mail between the 3 employers, running errands and daily banking duties.  The worker works at their own pace and takes rests as required. The worker commenced their current role in July 2013.

A workplace assessment was conducted by an occupational rehabilitation provider at the worker’s place of employment in July 2013. The workers position title is noted as Administrative Assistant and the nature of work is described as sedentary. The tasks performed in the role are listed to include opening mail, daily deliveries, customer service and general administration duties.

The report concludes that following completion of the workplace assessment and discussions with key parties including information provided by the nominated treating doctor, it is agreed by all parties that the worker is able to participate in the current duties.

The occupational rehabilitation provider’s vocational assessment report dated July 2013 also notes that the worker advised that they commenced work for an employer on approximately July 2013 completing administrative tasks and that the worker is able to complete all the tasks required in the role with minimal difficulty.

In light of the worker’s submissions and the nominated treating doctor’s approval for the worker to undertake the duties in their current role, I am satisfied that the worker is currently in a role which is suitable having regard to the nature of their incapacity.

As the worker has been able to perform the duties of the role since July 2013, I am also satisfied that the worker has the necessary skills and experience to perform the role.

Accordingly, I find that the worker has the ability, and has, returned to work in suitable employment. Therefore, the worker has “current work capacity” as defined in section 32A of the 1987 Act. Given my findings and reasons below, I do not consider it necessary to assess the suitability of alternative suitable employment options as provided in the occupational rehabilitation provider’s vocational assessment report dated July 2013.

Existing recipient of weekly payments

An ‘existing recipient of weekly payments’ is defined in Division 1, Part 19H, Schedule 6 of the 1987 Act as:

existing recipient of weekly payments means an injured worker who is in receipt of weekly payments of compensation immediately before the commencement of the weekly payments amendments.

In the reply to the application for merit review by the Authority, the Insurer has confirmed that the worker is an existing recipient of weekly payments. The worker was in receipt of weekly payments of compensation immediately before the commencement of the weekly payments amendments. Therefore the weekly payments amendments as provided in Division 2, Part 19H, Schedule 6 of the 1987 Act apply to the workers entitlement to weekly payments of compensation.

Entitlement periods for ongoing weekly payments

The following provisions of the 1987 Act provide the basis for determination and calculation of The worker’s weekly payments entitlement:

(a) Weekly payments in the first 13 weeks are to be determined in accordance with section 36 of the 1987 Act (“the first entitlement period”)

(b) Weekly payments in weeks 14–130 are to be determined in accordance with section 37 of the 1987 Act (“the second entitlement period”); and

(c) Weekly payments after the second entitlement period (after week 130) are to be determined in accordance with subsections 38(6) or (7), but only if the special requirements for continuation of weekly payments after the second entitlement period are met in accordance with section 38 of the 1987 Act (“post-second entitlement period”).

In the reply to the application for merit review, the Insurer has confirmed that the worker has received 130+ weeks of weekly payments of compensation. Accordingly, I find that the workers entitlement to weekly payments of compensation currently falls in the “post second entitlement period” and is to be calculated in accordance with section 38 of the 1987 Act.

Special requirements for continuation of weekly payments after second entitlement period (after week 130)

Section 38 of the 1987 Act provides that an entitlement to weekly payments after the second entitlement period is only available if special requirements are met as follows:

(2) A worker who is assessed by the Insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity is entitled to compensation after the second entitlement period.
(3) A worker who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if:

(a) the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period, and
(b) the worker has returned to work (whether in self-employment or other employment) for a period of not less than 15 hours per week and is in receipt of current weekly earnings (or current weekly earnings together with a deductible amount) of at least $168 per week, and
(c) the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker’s current weekly earnings.

I have found that the worker has current work capacity. The worker is therefore entitled to weekly payments of compensation only if they meet the special requirements as specified in section 38(3) of the 1987 Act. In order for the worker to continue to be eligible to receive weekly payments of compensation, the worker must meet all three of the requirements set out in section 38(3) of the 1987 Act.

There is no information before me to suggest that the worker does not satisfy the special requirement specified in section 38(3)(a) of the 1987 Act.  The worker is an existing recipient of weekly payments and in the absence of information that the Insurer notified the worker of the requirement in section 38(3)(a) of the 1987 Act, I am satisfied pursuant to clause 16, Schedule 8 of the Regulation, that the requirement in section 38(3)(a) of the 1987 Act is satisfied.

The worker made submissions that they are currently working 15 hours per week with an employer. An email from the employer to the Insurer in October 2014, provides that as a result of a restructure the worker’s employment has been transferred to an employer and will continue on the previous terms and conditions. Payslips for the period between September 2014 and November 2014 are attached and indicate that the worker is paid for 30 hours a fortnight at a rate of $12.00 per hour equating to gross weekly earnings of $180.00.

In the reply to the application for merit review by the Authority, the Insurer submits that the worker does not satisfy the special requirement as provided in section 38(3)(b) of the 1987 Act. It is submitted that although the worker’s payslips show that they are working 15 hours per week, the surveillance reports relied upon do not correspond with the payslips.

The surveillance reports relied upon by the Insurer are provided by a surveillance company and are for the period between August 2013 and August 2013; October 2013 and October 2013; and more recently between March 2014 and March 2014. The reports outline video footage of the worker’s activities during the mentioned 3 weeks, and conclude that during each given week the worker was only observed to be at the place of employment for less than 15 hours per week. The reports indicate that during certain days the worker only spent minutes at the place of employment and was then observed to return to their place of residence for the remainder of the day.

The Insurer also provided the Authority with a file note detailing the Insurer’s communication via a telephone call which took place in August 2013. The file note details the conversation between the Insurer and the worker. It is noted that the worker advised the Insurer that they work 3 hours per day, from 10am to 1pm, but that on that given day the worker was advised by the son not to attend work as there was no electricity available. The worker also advised the Insurer that they works 3 hours per day, 5 days per week and that the worker does not undertake any work duties from home.

The worker was advised of the surveillance footages that shows that they were not observed as being at the place of employment during hours stated and that therefore “the worker is not working to their capacity”. The worker was also advised that they also do not meet the criteria of earning at least $173.00 per week as the worker is currently only earning $168.00 per week. The worker asked for the information to be put in writing and the Insurer confirmed that the surveillance reports will be sent as requested.

In November 2014, the Authority emailed the Insurer and made reference to paragraphs 9.25 and 9.26 of the Review Guidelines, which deals with the Insurer’s obligations regarding surveillance images that form part of their reply to an application for merit review. The Authority sought confirmation from the Insurer that a copy of the surveillance DVDs and reports were provided to the worker and that an opportunity had been provided to respond.

In November 2014, the Insurer confirmed that a copy of both the DVDs and reports were provided to the worker. The reports were provided to the worker on August 2014 and August 2014 and that the DVDs were provided to the worker in October 2014 and then again as part of the Insurer’s reply to the application for merit review in November 2014. The Insurer also provided the Authority with copies of letters to the worker attaching the reports and DVDs.

In November 2014, the Authority wrote to the worker stating that the Insurer has confirmed that they have  been provided with the surveillance DVDs and reports as outlined above and gave the worker a further opportunity to provide the Authority with any further submissions in response to the surveillance reports and DVD footage.

In November 2014, an email from the employer to the Authority restates that the worker has been working for 15 hours per week and is earning at least $173 per week. The email also attaches the nominated treating doctor’s letter dated August 2013, the Insurer’s reply to the application for merit review and the worker’s payslips. No specific submissions regarding the surveillance DVDs or reports have been provided to the Authority.

I note that the Insurer’s work capacity decision dated September 2014 and internal review decision dated October 2014 outline the findings of the surveillance reports with details of attendance at the place of employment during the 3 weeks which were subject of the surveillance footage and that the worker is not working for 15 hours per week. The decisions also detail the worker’s conversation with the Insurer on August 2014, including confirmation of hours of work between 10am and 1pm and that the worker does not undertake any work duties at home.

In light of the above, I am satisfied that the worker has been aware of the surveillance footage and reports since at least August 2014. The worker has been provided with the reports and DVDs on 4 occasions and the details have also been restated in the Insurer’s work capacity decision and internal review decision. Further, the Authority also provided the worker with an opportunity to address the surveillance findings as detailed in an email to the worker in November 2014. Further, I am also satisfied that the worker has been given an opportunity to address the findings of the surveillance investigations and to provide submissions in response. However, the worker has not directly provided any submissions or explanation regarding the surveillance footage that indicate that during the 3 distinct weeks which were the subject of the investigation, the worker  was not at their place of employment and working between the hours of 10am and 1 pm.

However, the worker has made a general submission that they have been  working 15 hours “most” weeks and that from time to time, due to increased symptoms,  has time off work or works reduced hours but the employer pays the worker  “my normal pay”.

Although I accept that the worker is employed by the employer and as provided in the payslips is also paid for working 15 hours per week, the weight of information before me does not support that the worker has returned to work for at not less than 15 hours per week as required under section 38(3)(b) of the 1987 Act.

I am not of the view that getting paid for 15 hours per week necessarily equates to having returned to work for 15 hours per week. The worker’s submissions indicate that at times they work reduced hours but is paid for 15 hours per week. Further the surveillance reports and DVDs also support that during the 3 weeks that were the subject of the investigation, the worker was not observed as being at work for 15 hours per week.

In light of my finding above, I am not satisfied that the worker has returned to work for 15 hours per week. Accordingly, I find that the worker does not meet the special requirement as specified in section 38(3)(b) of the 1987 Act.

Given that the worker has current work capacity but has not returned to work for a period of not less than 15 hours per week, the worker is not entitled to weekly payments of compensation under section 38 of the 1987 Act.