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Merit review WC049/18

Our Reference: 049/18
Date of review: 

Findings on review

  1. The following are findings made by the State Insurance Regulatory Authority (“the Authority”) on review.
  2. The ‘relevant period’ under section 44D of the 1987 Act is 52 weeks immediately before XX January 2009.
  3. The ‘ordinary hours of work’ under section 44H of the 1987 Act is 27 hours per week.

Recommendations based on findings

  1. In accordance with section 44BB(3)(e) of the 1987 Act, the Authority may make recommendations based on its findings that are binding on the Insurer.
  2. The Authority makes no recommendations in this matter for the reasons below.

Background

  1. The Worker sustained an injury to their back in the course of their employment with the pre-injury employer. They made a claim for compensation in November 2009. The injury has been associated with an incident on XXXXXXXX. The Insurer accepts the date of injury as XXXXXXXX.
  2. In 2010, the Worker underwent surgery for their back. Following treatment, their claim was “closed” in late 2012.
  3. The Worker suffered an exacerbation of their injury in September 2013. Their claim was “re-opened” and they received medical treatment. In August 2014, the claim was again “closed”.
  4. In late 2017, the Worker suffered a further exacerbation of their injury and required time-off work as well as treatment. Their claim was “re-opened”.
  5. In February 2018 the Insurer advised the Worker that their PIAWE had been determined at the amount of $584.93 (not including indexation). The Insurer commenced making weekly payments of compensation to the Worker on the basis of this PIAWE.
  6. The Worker applied for an internal review of the Insurer’s decision about the amount of their PIAWE. The Insurer conducted an internal review in March 2018 and maintained its decision about the amount of PIAWE at $584.93 (not including indexation).
  7. The Worker made an application for merit review by the Authority. The application was received in March 2018. The application has been made within 30 days after the Worker received notice of the internal review, as is required under section 44BB(3)(a) of the 1987 Act. The application has been lodged in the form approved by the Authority.

Legislation

  1. The legislative framework governing work capacity decisions and reviews is contained in the:
  2. Section 43 of the 1987 Act describes a ‘work capacity decision’.
  3. Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Submissions

  1. In the application for merit review, the Worker makes the following submissions:
    • When they were first injured at work, they were a part-time employee working 27 hours per week at a grade 2 level.  They have been a full-time employee since March 2015, working 38 hours per week at a grade 4 level.
    • In December 2017, they had an aggravation of the original injury and had time off work for treatment and recovery. Their PIAWE was “well below their current earnings (grade)”. When they worked on Sunday, their 50% loading rate was no advantage to them.
    • The Workers Compensation Act 1987 states that workers should not be disadvantaged, but it seems they are being severely punished and disadvantaged by $507.34 a fortnight. “This was a total of $2809.92”. Because of this they had to return to work full-time hours and forgoing some treatment. They had to increase medications to manage being at work long hours.
    • After having their internal review rejected, they are now asking for the Insurer’s decision to be externally reviewed.
  2. In reply, the Insurer makes the following submissions:
  • At the time of the Worker’s original injury, the accepted date of injury for their claim was XXXXXXXX.
  • The Insurer provides a number of excerpts from the medical reports of the orthopaedic surgeon dated May 2010 and March 2010 relating to the history of the Worker’s injury and diagnosis.
  • The Worker’s nominated treating specialist recommended surgery in April 2010. In June 2010, the Worker underwent the proposed surgery.
  • In a report dated July 2010, the treating specialist reported: “the Worker is now just approximately two years post-op. They had been doing reasonably well until the end of May when they suffered a sudden increase in lower back pain”.
  • They were issued with a final PMD (permanently modified duties) certificate in October 2012 and their claim subsequently closed. They experienced a further aggravation of back pain in 2013 related to their previous back injury.
  • In December 2017, the Worker completed a Workers Recurrence of Injury Form. The Worker provided a date of original injury of November 2009. The Worker reported: “I have never fully recovered from original injury in 2009, even after surgery”.
  • In December 2017, the treating doctor provided a certificate of capacity which stated: “Back pain last 10 days. No new injury. Likely relapse of old injury”.
  • In January 2018, the physiotherapist provided a report which stated: “the patient first presented to us in December 2017 with severe bilateral lower back pain and lower limb tingling, which they reported as a flare-up of their previous lumbar condition from work related activity”.
  • In January 2018, the treating doctor reported: “Original injury happened around Jan 09 when they were doing yoga. Injured their back. They were then restricted at work but the restrictions were not adhered to and they injured again as they were moved to a checkout role instead of office work”. “Since then they have aggravated the injury in 2013 and more recently again. These relapses are associated with bending and lifting. The nature of this and surgery is so that there are always some symptoms”.
  • The Worker attended an independent medical examination in January 2018 with an independent medical examiner. The independent medical examiner reported the following:
    • - The date of injury is given as XXXXXXXXX.
    • - I understand they also underwent a medical examination at that time which resulted in an assessable impairment of 18% whole person impairment.
    • - Overall, I would consider the diagnosis is of a chronic low lumbar pain which is not uncommon after discectomy in this age group, particularly when there are arthritic facet changes present. Given the Worker’s operative findings and radiology in 2009, it is quite predictable that this person would continue to experience variable back pain, sometimes with acute exacerbations.
  • When the Worker’s 2017 recurrence of injury was accepted, indexation was applied to their PIAWE based on the Average Weekly Earnings report provided to the Insurer by the employer. The Insurer sets out the indexation applied from January 2013. The most recent application is as follows:
  • XX/01/2016 $23.6871 @ 27 hours: $639.5517

  • The Insurer acknowledges the Worker’s submission in relation to their increased work hours and earnings since their 2009 date of injury, however it maintains that pursuant to section 44D of the 1987 Act, the relevant period for the purpose of calculating PIAWE is the 52 weeks immediately before the injury.

Documents considered

  1. The documents I have considered in this review are those listed in, and attached to, the application for merit review, the Insurer’s reply and any further information provided by the parties.
  2. I am satisfied that both parties have had the opportunity to respond to the other party’s submissions and that the information provided has been exchanged between the parties.

Reasons

Nature of merit review

  1. This matter involves a merit review of the Insurer’s work capacity decision in accordance with section 44BB(1)(b) of the 1987 Act.
  2. The review is not a review of the Insurer’s processes in making the work capacity decision and/or the 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.
  3. The Worker has indicated in their application for merit review that they would like the Authority to review the Insurer’s decision in relation to the amount of their PIAWE.
  4. PIAWE is generally defined under section 44C(1) of the 1987 Act as follows:
  5. (1) In this Division, pre-injury average weekly earnings, in respect of a relevant period in relation to a worker, means the sum of:

    (a) the average of the worker’s ordinary earnings during the relevant period (excluding any week during which the worker did not actually work and was not on paid leave) expressed as a weekly sum, and

    (b) any overtime and shift allowance payment that is permitted to be included under this section (but only for the purposes of the calculation of weekly payments payable in the first 52 weeks for which weekly payments are payable).

  6. A decision about the amount of a worker’s PIAWE requires the Insurer to come to a decision about what the ‘relevant period’ is for a worker as well as the ‘ordinary hours of work’, the latter which must be determined to decide ‘ordinary earnings’.
  7. Based on the submissions before me, the dispute between the parties is in respect to the Insurer’s determination of the Worker’s ‘relevant period’ under section 44D of the 1987 Act and ‘ordinary hours of work’ under section 44H of the 1987 Act. These findings and recommendations will therefore be confined to a merit review of these points of dispute.

Relevant period

  1. The ‘relevant period’ is defined by section 44D of the 1987 Act as follows:

    (1)     Subject to this section, a reference to the relevant period in relation to pre-injury average weekly earnings of a worker is a reference to:

    (a)   in the case of a worker who has been continuously employed by the same employer for the period of 52 weeks immediately before the injury, that period of 52 weeks, or

    (b)    in the case of a worker who has been continuously employed by the same employer for less than 52 weeks immediately before the injury, the period of continuous employment by that employer.

    ….

    (3)    If, during the period of 52 weeks immediately before the injury, a worker:

    (a) is promoted, or

    (b) is appointed to a different position,

    (otherwise than on a temporary basis) and, as a result, the worker’s ordinary earnings are increased, the relevant period in relation to the worker begins on the day on which the promotion or appointment takes effect.

  2. The information before me indicates that the Worker was continuously employed by the pre-injury employer for over 52 weeks immediately before the injury. The relevant period for the purposes of determining the Worker’s PIAWE is therefore 52 weeks “immediately before the injury” in accordance with section 44D(1)(a) of the 1987 Act.
  3. The issue of contention between the parties is when this period of 52 weeks is to apply from. The Insurer has determined the relevant period to be 52 weeks immediately before the date of injury of 2009. The Worker submits that the relevant period should be 52 weeks immediately before the exacerbation of their injury in late 2017.
  4. In an email to the Authority dated April 2018, the Worker outlines the history of their injury. They advise that the injury occurred in January 2009 however the claim for workers compensation was not filed until November 2009. They had surgery in June 2010 and entered into a Complying Agreement in March 2012 for “18% Whole person Impairment with compensation payout”. They state that the “initial injury…claim number XXXXXXXX” was “closed” in October 2012 and they received a final medical certificate for permanently modified duties in January 2013.
  5. In the same email, the Worker outlines the two occasions when they experienced an exacerbation of their injury and their claim was “reopened”. The “1st Recurrence XX/9/13…claim number XXXXXXXX” was “closed” in August 2014 and they again received a medical certificate for permanently modified duties.
  6. They experienced the “2nd recurrence XX/12/17 to current: claim number XXXXXXXX”. It was the Insurer’s decision in relation to the amount of their PIAWE following this “recurrence” or exacerbation of their injury that is in dispute.
  7. The Worker submits that when the Insurer determined the amount of their PIAWE in February 2018, it should have determined the relevant period 52 weeks from their current “recurrence” in late 2017. They submit that when they were “first injured at work” in 2009 they worked part-time hours of 27 hours per week and was employed at a grade 2 level. They had however been a full-time employee since March 2015, working 38 hours per week at a grade 4 level. The Worker submits that their PIAWE is “well below their current earnings (grade)”. The Worker also makes a number of submissions in relation to the effect that the Insurer’s decision has had on them financially.
  8. I acknowledge the Worker’s submissions and the effect that having their relevant period determined 52 weeks from their date of injury has on the amount of their PIAWE. I acknowledge that if the relevant period was determined as the 52 weeks immediately before the exacerbation of their injury in late 2017, the amount of their PIAWE would be significantly higher as their earnings have increased and they have been working full-time hours since 2015 as opposed to the part-time hours they worked prior to the date of injury.
  9. The determination of PIAWE however must be made in accordance with the legislation. As outlined above, the ‘relevant period’ is defined under section 44D of the 1987 Act as the 52 weeks “immediately before the injury [emphasis added]”.
  10. “Injury” is defined in section 4(a) of the 1987 Act as a “personal injury arising out of or in the course of employment”.
  11. The ‘injury’ in this case is diagnosed by the orthopaedic surgeon in a report dated March 2010 as musculo-ligamentous injury of the lower back and aggravation of pre-existing L4-5 disc pathology.
  12. The medical information before me indicates that the Worker first injured their lower back in at the age of 15 and has had intermittent lower back pain since this time. The orthopaedic surgeon’s report dated March 2010 states that in January 2009, the Worker felt something “give” in their lower back, while doing yoga at home, accompanied by the development of lower back pain.
  13. The orthopaedic surgeon’s report indicates that the Worker’s job description with the pre-injury employer changed in late 2009 from exclusive office based duties to working on the floor doing checkout and ticketing work. “Whilst on the express lane they indicated that the repetitive bending and twisting that was required to retrieve plastic bags for the customers aggravated their lower back condition”. They reportedly returned to their doctor and medical investigations revealed “evidence of a degenerate L4-5 disc”. It was then, in November 2009, that the Worker reported their injury to their employer.
  14. The date of injury accepted by the Insurer is XXXXXXXX.
  15. I note that each time the Worker’s claim has been “re-opened” by the Insurer, the date of injury has maintained as XXXXXXXX and the medical information before me supports that it is the same ‘injury’ to the Worker’s L4-5 disc that the Worker has required treatment for and/or time off work.
  16. In its submissions, the Insurer reproduces a number of excerpts from documents, particularly medical reports, in support of its determination that the Worker’s current work-related condition is the same ‘injury’ as that of XXXXXXXX.
  17. I accept these submissions of the Insurer and have reproduced below some of the same excerpts as well as some additional excerpts from the medical information before me.
  • WorkCover NSW Certificate of Capacity issued by the treating doctor in December 2017:
  • Back pain last 10 days. No new injury. Likely relapse of old injury. Await MRI.

  • Report of the physiotherapist dated January 2018:
  • The patient first presented to us on December 2017 with severe bilateral lower back pain and lower limb tingling, which they reported as a flare-up of their previous lumbar condition from work related activity.

  • Report of the treating doctor dated January 2018:
  • Original injury happened around Jan 09 when they were doing yoga. Injured their back…Since then they have aggravated the injury on 2013 and more recently again. These relapses are associated with bending and lifting. The nature of this and surgery is so that there are always some symptoms.

    Same diagnosis – recurrent back sprain…

    The injury based on the past history is likely to stabilize.

  • Report of the independent medical examiner dated January 2018:
  • The Worker basically self-managed their problem with light exercises and analgesics for a period of time, but in September 2013, they experienced pain in both legs…

    The incident was regarded as a re-occurrence of the original problem.

    They returned to permanently modified duties and that case was closed in August 2014.

    In November 2017, their situation became worse for no apparent reason. They had severe back pain, limited movement and aching in both legs.

    …Overall, I would consider the diagnosis is of a chronic low lumbar pain which is not uncommon after discectomy in this age group, particularly when there are arthritic facet changes present.

    Given the Worker’s operative findings and radiology in 2009, it is quite predictable that this person would continue to experience variable back pain, sometimes with acute exacerbations.

    …further acute episodes will occur.

  • It is clear from the medical information above that the recurrence or acute exacerbation the Worker experienced in late 2017 is of the same ‘injury’ as that of January 2009, that is to the Worker’s lower back at the L4-5 disc level. The medical information consistently indicates that the nature of the Worker’s injury is such that they will always have some symptoms, “sometimes with acute exacerbations” as described by the independent medical examiner.
  • I note that the WorkCover NSW medical certificates before me dated November 2009, October 2012 and December 2017 are all in respect to the same injury at L4/5 and the date of injury on all of the medical certificates and reports is consistently January 2009.
  • There is no evidence of any physiological change to the Worker’s injury on the information before me [Kennedy Cleaning (2000) 200 CLR 286].
  • The independent medical examiner confirms in his report that there was no particular incident that resulted in the exacerbation of the Worker’s injury in November 2017. He reports that “the Worker’s situation became worse for no apparent reason”. There was accordingly, no incident which may be considered to have broken the ‘causative chain’ from the Worker’s ‘injury’ of January 2009 and their symptoms associated with their claim being “re-opened” in late 2017 [Nicol v Macquarie University [2018] NSWSC 530].
  • The Worker did not suffer a new injury in late 2017 when their claim was “re-opened”, their pathology remains the same and there is no evidence of any physiological changes on the medical information before me.
  • I am satisfied the exacerbation of the Worker’s injury that resulted in their claim being “re-opened” in late 2017 is the same ‘injury’ as that of their claim lodged in 2009.
  • As outlined above, section 44D of the 1987 Act stipulates that the ‘relevant period’ is the 52 weeks immediately before the ‘injury’. The date of injury for the Worker’s ‘injury’, as defined under section 4(a) of the 1987 Act, is January 2009.
  • I find that the relevant period under section 44D of the 1987 Act is 52 weeks immediately before the date of injury.
  • Ordinary Hours of Work

    1. ‘Ordinary hours of work’ are defined in section 44H of the 1987 Act as:
    2. In relation to pre-injury average weekly earnings and current weekly earnings, the ordinary hours of work:

      (a) in the case of a worker to whom a fair work instrument applies are:

      (i) if the ordinary hours of work in relation to a week are agreed or determined in accordance with a fair work instrument between the worker and the employer—those hours, or

      (ii) in any other case, the worker’s average weekly hours (excluding any week during which the worker did not actually work and was not on paid leave) during the relevant period, or

      (b)     in the case of a worker to whom a fair work instrument does not apply:

      (i) if the ordinary hours of work are agreed between the worker and the employer, those hours, or

      (ii) in any other case, the worker’s average weekly hours (excluding any week during which the worker did not actually work and was not on paid leave) during the relevant period.

    3. The information before me indicates that the Worker was employed under the National Supermarkets Agreement 2012 NSW/ACT. A fair work instrument therefore applied to the Worker’s employment.
    4. The information before me also indicates consistently that the Worker was employed on a part-time basis for 27 hours per week in the relevant period. I have found above that the relevant period is 52 weeks immediately before the date of injury.
    5. Given that a fair work instrument applied in the Worker’s case and their hours of work were “agreed or determined…between the worker and the employer” as 27 hours per week, I am satisfied the Worker’s ordinary hours of work should be determined in accordance with section 44H(a)(i) of the 1987 Act. That is 27 hours per week as “…agreed or determined in accordance with a fair work instrument between the worker and the employer”.
    6. I find that the Worker’s ‘ordinary hours of work’ under section 44H of the 1987 Act is 27 hours per week.
    7. Recommendations to the Insurer

    8. Given that I have found above that the Insurer’s determination of the Worker’s ‘relevant period’ and ‘ordinary hours of work’ were the correct and preferable decisions, there are no recommendations made to the Insurer.

    Merit Reviewer
    Merit Review Service
    Delegate of the State Insurance Regulatory Authority