The State of Western Australia (Department of Education) v Leek

The worker sustained an injury to her back whilst working as a school cleaner on 17 June 2011. Liability was admitted and weekly payments commenced.

In November 2011, the worker’s General Practitioner approved referral of the worker to a rehabilitation provider, which was also supported by the worker’s neurosurgeon, Mr Liddell.

The worker participated in an initial interview with the rehabilitation provider on 29 November 2011 but failed to respond to numerous subsequent attempts to contact her to implement a programme. An application by the employer for orders under s156B to direct the worker to participate in rehabilitation did not succeed despite the Arbitrator finding the worker had failed to participate in a return to work programme.

The worker also failed to attend a medical examination with Dr Lai on 6 December 2012 arranged by the employer’s insurer, RiskCover.

The worker told an investigator appointed by RiskCover that she had not been in contact with anyone as she was too stressed by matters unrelated to her injury (her son having been committed to a mental ward and the recent murder of a nephew) and would be willing to participate in the rehabilitation process when she was feeling better mentally.

The employer sought orders pursuant to s60 for suspension of weekly payments on the grounds that it genuinely disputed liability to continue to make weekly payments.

The employer firstly contended that the worker had continually refused to participate in rehabilitation and/or a return to work programme in which case the worker was failing to mitigate her loss as lawfully required to do. In the circumstances, the nature and extent of the worker’s capacity was unable to be distilled.

Secondly, the worker’s failure to attend a medical appointment with Dr Lai meant the employer was unable to ascertain the worker’s current medical capacity for work.

Thirdly, the worker was incapacitated for work due to being too stressed by issues unrelated to her injury, in the absence of which she would be fit at least for rehabilitation.

On the basis of these 3 factors, the employer contended that there were grounds to dispute the worker’s incapacity and put in issue its liability to pay compensation. The employer contended that the worker had failed to mitigate her loss and that her conduct prevented a proper assessment being made of her capacity for work.

At first instance, the Arbitrator held that the dispute raised by the employer was not genuine and found that:

(a) the employer’s proposition that the chain of causation of injury may have been broken by the intervention of other factors contributing to incapacity was speculative and did not, in any event, eliminate the injury as a cause of incapacity;

(b) it was not open to the employer to dispute liability to make weekly payments on the basis of a failure to submit to medical examination as s72A provided a discrete remedy for failure of a worker to submit to medical examination and such failure could not ground a s60 application;

(c) the employer fundamentally misconceived the relationship between failure to mitigate and causation and that the failure to mitigate did not sever the chain of causation between injury and incapacity.

His Honour stated that the question of whether there is a genuine dispute is to be determined having regard to all of the materials filed in support of the application as a whole. The Arbitrator was required to give consideration to the combined effect of the employer’s contentions. The Arbitrator had purported to determine not whether the employer’s contentions grounded a genuine dispute but whether they were likely to be made out as facts which would disentitle the worker to compensation. Such threshold was too high and not in accordance with established authorities on the construction and application of s60 (see Taylor v. Star Broken Meats).

The factual contentions of the employer demonstrated that by reason of the worker’s failure to mitigate, the employer was not in a position to assess the worker’s capacity for work and therefore was not in a position to accept ongoing liability to pay compensation. A s60 application was open to the employer in such case as applications pursuant to s61 or s62 were not. The 3 factual contentions of the employer taken together grounded a dispute as to its liability which dispute was sincerely and genuinely taken with a factual basis on the evidence.

On this basis, the Arbitrator erred in law in deciding the employer did not genuinely dispute its liability to pay compensation. His Honour therefore allowed the appeal and set aside the order dismissing the employer’s s60 application and substituted his own decision ordering that weekly payments be suspended from the date on which that order ought to have been made until such time as an order for weekly payments is made by an Arbitrator on the application of the worker.

This is an important decision for employers/insurers as it puts s60 applications “back on track”. This decision will be useful in supporting s60 applications in situations where a worker has unreasonably failed or refused to participate in the injury management/rehabilitation process and has arguably failed to mitigate their loss by doing so.

This CASE LAW UPDATE is intended for general information only and you should not act upon it or omit to act on the basis of anything contained herein without first obtaining legal advice in relation to any particular matter or issue.
© Copyright 2014, SRB LEGAL – All Rights Reserved
Date: 4 February 2014

Should you require any further information relating to the above decision, please contact one of the following partners on telephone (08) 9221 3110.