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Merit review WC048/18

Our Reference: 048/18
Date of review: 

Findings

  1. The Insurer’s decision to reduce the amount of the Worker’s weekly payments of compensation to $0.00 stands.

Recommendations

  1. The Authority may make binding recommendations to the Insurer based on the findings of this review. However, no recommendations are made for the reasons below.

Background

  1. In June 2018, the Worker injured their back in a bathroom slip and fall incident at work as a customer service officer for a bank. The Insurer accepted their claim for workers compensation, including weekly payments for incapacity for work.
  2. In December 2017, the Insurer decided to reduce the amount of the Worker’s weekly payments to $0.00 on the basis that, among other things, they had current work capacity and was able to earn $657.68 a week in suitable employment.
  3. In February 2018, the Worker applied for an internal review of that decision. In March 2018, the Insurer affirmed its decision and notified the Worker of the outcome by email.
  4. In April 2018, the Worker made an application for merit review by the Authority. The Insurer says the application was invalid. For the reasons below, I consider the application was validly made.

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’. An injured worker may refer a work capacity decision for merit review by the Authority under section 44BB of the 1987 Act. The Authority is to notify the insurer and the worker of the findings of the review and may make recommendations to the insurer based on those findings under section 44BB(3)(e). Recommendations are binding on the insurer and must be given effect to by the insurer under section 44BB(3)(g).

Documents considered

  1. The documents considered for this review are the application for merit review and the Insurer’s reply form, the documents listed in and attached to those forms, and any further information provided to the Authority and exchanged between the Worker and the Insurer.

Submissions

  1. I have read and considered the submissions made by the Worker and the Insurer. The relevant issues raised by those submissions are dealt with in the reasons below.

Reasons

Validity of the application

  1. The Insurer submits that the Worker’s merit review application is invalid because:
  2. (a)    they did not notify the Insurer of their application for merit review as required by section 44BB(2).

    (b)    they did not make their application within the time required by section 44BB(3)(a).

  3. In my view, a failure to comply with section 44BB(2) does not mean that an application for review of a work capacity decision is invalid. I acknowledge that the sub-section uses the word ‘must’. However, neither the 1987 Act or the 1998 Act expressly state consequences for non-compliance.
  4. The subject matter of section 44BB concerns a worker’s right to have an insurer’s work capacity decision reviewed. Parliament designed it ‘to ensure that workers are treated fairly’: Workers Compensation Legislation Amendment Bill 2012 Second Reading Speech, NSW Legislative Assembly, 19 June 2012 (Mike Baird), page 4.
  5. The structure of section 44BB supports an intention for a worker to get the substance of a decision reviewed efficiently and effectively. The internal review and merit review stages come before the procedural review. An insurer is to notify a worker of an internal review decision ‘as soon as practicable after the review is conducted’. There are also time limits for on applying for later stages of review.
  6. The system objectives of the workers compensation scheme are set out in section 3 of the 1998 Act. They relevantly include:
    • to provide injured workers and their dependents with income support during incapacity
    • to be fair, affordable, and financially viable
    • to deliver the above objectives efficiently and effectively
  7. In my view, the system objectives are best served by an interpretation of section 44BB that puts less technical barriers in the way of a worker getting a fair, affordable and efficient review of the substantial issues in dispute.
  8. The failure of a worker to comply with section 44BB(2) is quite easily remedied. For example, the Authority might clarify the grounds of review with the worker and facilitate the insurer being notified of the application (which is what happened in this case).
  9. The above factors go against a view that an application for review is invalid because it does not comply with section 44BB(2). In my view, the essential purpose of section 44BB(2) is to emphasise that principles of procedural fairness apply during the review process. It emphasises a worker’s opportunity to articulate the grounds for review and the insurer’s opportunity to be heard. Its purpose is to facilitate a fair dispute resolution process, not put up technical barriers to review.
  10. I also do not accept the Insurer’s submission that the Worker’s application for merit review failed to comply with the time limit under section 44BB(3)(a) of the 1987 Act. The time limit imposed by section 44BB(3)(a) for a merit review triggers ‘after the worker receives notice in the form approved by the Authority of the insurer’s decision on internal review of the decision’.
  11. Section 236 of the 1998 Act states:
  12. A notice required or authorised to be given to, or served on, a person by or under this Act or the 1987 Act must be in writing and must be given to, or served on, that person:

    (a) personally or by post, or

    (b) if a manner of giving or serving the notice is prescribed by or under this Act or the 1987 Act, in the manner so prescribed.

  13. The Insurer notified the Worker of its internal review decision by email. However, email is not a manner of giving or serving notice of an internal review prescribed under either the 1987 Act or 1998 Act. In other cases, the legislation allows notice by electronic communication: see for example, section 44(2) of the 1998 Act and Clause 35 of the Regulation. Electronic communication is not a valid form of notice of an internal review decision to an injured worker. Email may supplement notice personally or by post but it cannot substitute for it. The Worker has not yet received valid notice of the internal review decision so the time limit under section 44BB(3)(a) has not started to run. The application is still within time.
  14. The Worker validly made an application for merit review and the Authority can conduct a review of the Insurer’s work capacity decision under section 44BB(1)(b) of the 1987 Act.

Nature of merit review

  1. The Worker has referred the Insurer’s decision to reduce the amount of their weekly payments of compensation to $0.00 for merit review. In a merit review, I consider the matter afresh and make findings on the most correct and preferable decision.

Current work capacity

  1. The Insurer’s decision to reduce the amount of the Worker’s weekly payments of compensation was based on its decision that they had current work capacity.
  2. Section 32A of the 1987 Act defines ‘current work capacity’ and ‘no current work capacity’:
  3. 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, 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

  4. An orthopaedic surgeon examined the Worker for the Insurer in February 2017. His report is dated February 2017. He noted reduced lateral and forward flexion in the thoracolumbar spine as well as ‘very little true extension of their lumbar spine’. He said ‘with regard to work, they tell me that they are currently working three days a week, six hours a day. On the basis of the examination today, I would think they should be able to reach their pre-injury hours of 22.5 hours per week’. He also said ‘Overall, they told me that their normal work was three days a week, eight hours a day and they are just a few hours short of this at this point in time. If this is their pre-injury duties then I think there is some chance that they could get back to that level. They will, however, continue to experience variable back pain as has happened over the last two years’. The orthopaedic surgeon essentially reiterated his opinion in a report in July 2017.
  5. An injury management consultant examined the Worker and made a report in May 2017. He noted ‘slight asymmetric loss of movement in the lumbar spine with end range stiffness. There was about half normal rotation in the thoracic spine. There was no spasm’. On work capacity, he said that the Worker’s ‘pre-injury job involves significant sitting and if that cannot be remedied, they would struggle to do their pre-injury duties’. He said that the Worker ‘would be better suited to a back office role, wherein they can alter their posture according to their level of symptoms, notionally being able to change their posture every 15 minutes. They will benefit from a sit/stand desk, which your documents indicate is available’. He continued ‘I see no reason why they would not be able to work full time in a role such as this where they have maximum flexibility to alter their posture. Any job should not involve any significant manual demands’.
  6. The Worker says that the orthopaedic surgeon and the injury management consultant did not consider injury to their upper back so their reports do not hold weight. I do not accept that submission. The examination findings in the reports support that the orthopaedic surgeon and the injury management consultant examined the Worker’s thoracic spine. The injury management consultant specifically noted that the Worker has ‘persistent interscapular pain’. I am satisfied that both doctors, but particularly the injury management consultant, considered the Worker’s upper back condition in forming opinions about their work capacity.
  7. Since November 2017, the treating doctor consistently certified that the Worker has capacity to work for five hours a day, three days a week with a 30-minute sitting tolerance and 30-minute standing tolerance. In the most recent certificate of capacity before me dated May 2018, the treating doctor has certified that the Worker has capacity to work for five hours a day, four days a week with a 30-minute sitting tolerance and 30-minute standing tolerance. This certificate specifically refers to ‘Lower back disc injury, upper back pain’ in the diagnosis of work injury.
  8. I put decisive weight on the injury management consultant’s opinion. He is an accredited injury management consultant. He has had regard to the full extent of the Worker’s condition, including their upper back pain. The injury management consultant’s opinion on the Worker’s work capacity is firm and clear. On the other hand, the orthopaedic surgeon’s opinion is less certain and primarily addresses future likelihoods rather than the circumstances at the time. I prefer the injury management consultant’s opinion over the treating doctor’s certificates of capacity. The injury management consultant’s report gives a detailed explanation of his examination findings and reasons for his opinion about the Worker’s work capacity. On the other hand, the treating doctor’s certificates of capacity only give very limited information. I am persuaded that the Worker could work full-time in work which did not involve significant manual demands and allows the Worker to alter their posture as needed.
  9. In any event, the medical evidence together supports that the Worker can work at least 20 hours a week. The orthopaedic surgeon’s prognosis was that the Worker ‘should be able to reach’ working 22.5 hours a week. That prognosis adds weight to the treating doctor’s current opinion that the Worker can work 20 hours a week. The injury management consultant’s opinion also supports that the Worker can work at least 20 hours a week (even full time) in a job that allows the Worker to alter their posture as needed and does not involve significant manual demands. So, as the reasons below show, even on the most conservative assessment of the Worker’s work capacity based on the current medical evidence (20 hours a week), the amount of their weekly payments would still be $0.00.
  10. The Worker has a present inability arising from an injury such that they are not able to return to their pre-injury employment. The injury management consultant said that the Worker would ‘struggle’ to do their pre-injury duties due to the ‘significant sitting’ involved. The treating doctor has also not certified that the Worker is fit for pre-injury duties.
  11. The issue is then if the Worker is able to return to work in ‘suitable employment’ as defined by section 32A of the 1987 Act:
  12. Suitable employment, in relation to a worker, meansemployment 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 Workers Compensation 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.

  13. As part of the return to work planning process, an occupational rehabilitation provider prepared an earning capacity assessment report dated October 2016 (‘ECA’). The following was identified as suitable employment for the Worker:
    • Customer service specialist
    • Administration officer
    • Contact care consultant
  14. The occupational rehabilitation provider later prepared a labour market analysis report dated November 2017 (‘LMA’). The following was identified as suitable employment for the Worker:
    • Customer service officer
    • Contact centre consultant
    • Packer
  15. The nature of the Worker’s incapacity is such that they can work at least 20 hours a week if the work allows them to alter their posture as needed and does not involve significant manual demands.
  16. The Worker is 48 years of age. They completed the Higher School Certificate. Page 12 of the ECA lists their transferrable skills. I accept that they have those skills. They have work experience as a department manager for a large supermarket chain (1990–1996), retail manager for a business (1997–2001) and customer service specialist/relationship manager at a bank (since 2002).
  17. Aside from preparing the ECA and LMA as part of the return to work planning process, the occupational rehabilitation provider has also provided some occupational rehabilitation assistance to the Worker, essentially job-seeking skills.
  18. Customer service specialist is a type of bank worker according to the ANZSCO code provided. The Worker works part-time as a customer service specialist at a bank (their pre-injury employer). It is essentially their pre-injury employment but on reduced hours. The Worker’s demonstrated ability in this type of employment since 2002 supports that it is currently suited to their age, education, skills and work experience. They have consistently demonstrated an ability to physically do the work for 15 hours a week in line with the treating doctor’s past certifications. Now, the treating doctor has increased the Worker’s capacity to work to 20 hours a week. In my view, this fortifies the view that this type of work is suited to the nature of the Worker’s incapacity. While their injury stops them from working full pre-injury hours because the work involves significant sitting, the medical information supports that they can work 20 hours a week in such employment.
  19. I accept the occupational rehabilitation provider’s assessment that the Worker is currently suited to employment as a customer service specialist and find accordingly.
  20. Customer service officer is a different option in the LMA. The ANZSCO code refers to inquiry clerk employment. The ‘tasks demands’ are ‘similar’ to a customer service specialist but ‘the role does not require prolonged standing due to provision of a sit/stand stool’. The duties are: ‘responds to personal, written and telephone inquiries about the organisation’s products. These staff may refer customers to other sources’. The LMA gives a list of tasks. The list suggests a job of low physical demand and work that is within the Worker’s physical capability, particularly with a sit/stand stool. The LMA shows that there are many part-time and casual jobs in this area of employment to suit a reduced capacity for work. The Worker is currently employed in a similar type of work environment which also supports they are likely to be physically suited to it.
  21. The Worker has a vocational profile that is suited to customer service officer employment. They have worked in customer service for many years. They have proved an ability to hold employment that involves the skills and experience required of a customer service officer. A ‘senior secondary level of education is recommended’ which the Worker possesses.
  22. I accept the occupational rehabilitation provider’s assessment that this is suitable employment for the Worker and find accordingly.
  23. Administration officer is, on the information before me, not suitable. I note that while the Worker has experience in administrative tasks, they have not had dedicated administration officer employment before. The occupational rehabilitation provider’s LMA report stated that this job option was ‘considered and discarded based on the observation that the Worker would require experience in order to be reasonably competitive for a role of this type’. The Worker has submitted that it is contradictory for the LMA report to suggest that this job is not suitable while a packer role is suitable. However, it is clear from the LMA report that administration officer was discarded because of the Worker’s lack of experience in that role not because the work was physically unsuitable.
  24. Packer is obviously more manually demanding work than the other jobs identified. Based on the injury management consultant’s opinion, I am not persuaded that it suitable for the Worker having regard to the nature of their incapacity.
  25. Contact centre consultants ‘act as the first point of contact for customers and handling a variety of incoming calls from enquiries through to providing information on products and services. Spotting opportunities to cross-sell products and generate leads or referrals for other areas of the bank is also key to your success’. The occupational rehabilitation provider’s reports support that this is not physically demanding work and a worker can frequently change posture from sitting to standing. The nature of the job supports this view. It involves computer work, telephone work and file management. It does not involve direct face-to-face contact with the public. So, it is a more flexible work environment that is likely to be suited to a worker who needs frequent change of posture. The LMA shows that there are many part-time and casual jobs in this area of employment to suit a reduced capacity for work.
  26. A worker needs administrative skills, an ability to use a computer use and other office equipment. The ECA says that ‘no formal training is required’ but ‘computer skills and customer service excellency is necessary’. The Worker’s work experience supports that they have the necessary skills and work experience for this employment. They have experience in administration tasks, customer service and sales. The occupational rehabilitation provider assessed that they have, among other things, strong communication skills, computer literacy, strong problem-solving skills and decision-making skills. That assessment is consistent with the information before me about their age, education, skills and work experience.
  27. I accept the occupational rehabilitation provider’s assessment that this is suitable employment for the Worker and I find accordingly.
  28. I find that the Worker has ‘current work capacity’—a present inability arising from an injury such that they are not able to return to their pre-injury employment but is able to return to work in suitable employment.

Calculation of weekly payments

  1. The Insurer accepted, and the Worker does not dispute, that they meet the special requirements under section 38 of the 1987 Act to be entitled to ongoing weekly payments. I go on the basis that the only issue in dispute is the amount of weekly payments payable to the Worker.
  2. The amount of weekly payments of compensation payable to the Worker is determined by section 38(7) of the 1987 Act:
  3. (7)    The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be at the rate of:

    (a)        (AWE × 80%) − (E + D), or

    (b)        MAX − (E + D),

    whichever is the lesser.

  4. The factors used to determine the rate of weekly payments of compensation are defined by section 35 of the 1987 Act.
  5. AWE’ means the worker’s pre-injury average weekly earnings. There is no dispute in this case that the Worker’s AWE is $657.68.
  6. E’ is the amount to be taken into account as the worker’s earnings after the injury, calculated as whichever of the following is the greater amount:
  7. (a)    the amount the worker is able to earn in suitable employment,

    (b)    the worker’s current weekly earnings.

  8. The Worker earned $657.68 working 22.5 hours a week prior to their injury. This equates to an hourly rate of $657.68 ÷ 22.5 = $29.23. The ECA states on page 8 that ‘the current average wage for a Customer Service Specialist in the open labour market is $27.00 per hour’. I have found that the Worker is able to work at least 20 hours a week. I find that the Worker is able to earn at least 20 x $27.00 = $540.00 per week in suitable employment.
  9. The hourly rates of pay for a customer service officer and contact centre consultant stated in the LMA are more than $27.00. That fortifies that the Worker is able to earn $540.00 per week in suitable employment as either a customer service specialist, customer service officer or contact centre consultant. If I calculated the Worker’s ability to earn in suitable employment based on the injury management consultant’s opinion about their capacity (which is what I ultimately accepted) then the value of ‘E’ would be based on full-time rates of pay and would only be higher. However, taking the value of ‘E’ as $540.00 at a minimum, it still results in the amount of weekly payments of compensation being reduced to $0.00.
  10. D’ is the sum value of non-pecuniary benefits provided by the employer to the Worker, which is $0.00 in this case.
  11. MAX’ is the maximum weekly compensation amount. It does not apply in this case because the formula (AWE x 80%) – (E + D) results in a lesser amount.
  12. The Worker is entitled to weekly payments of compensation at the rate of:
  13. (AWE x 80%) – (E + D)

    = ($657.68 x 80%) – ($540.00 + $0.00)

    = $526.14 – $540.00

    = $0.00

  14. This is the same outcome as the Insurer’s work capacity decision. I do not consider that a recommendation to the Insurer is necessary. The Insurer’s work capacity decision stands.

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