Subscribe Sitemap
Subscribe Sitemap

Claims for ‘back pay’ following application of section 39

  • Newsletter Article
  • Published 22.05.2019

RSM Building Services Pty Ltd v Hochbaum [2019] NSWWCCPD 15 (18 April 2019)

Summary

In the recent decision of RSM Building Services Pty Ltd v Hochbaum [2019] NSWWCCPD 15 (18 April 2018) President Judge Phillips has confirmed that there is no entitlement to ‘back pay’ if the 21% WPI section 39 threshold is obtained at some point after weekly benefits have ceased at 260 weeks.

Background

One of the most significant changes brought about by the 2012 legislative amendments was the introduction of a five year (260 week) limit on the payment of weekly benefits for all workers with 20% WPI or less (section 39 of the Workers Compensation Act 1987).

In many cases, a worker’s degree of impairment will have been determined before the 260 week point and in those cases, weekly benefits will continue or cease depending on whether or not the worker has 21% WPI or more at the time 260 weeks is reached.

In his decision in Hochbaum, published on 18 April 2019, President Judge Phillips has resolved the uncertainty around what happens if the 21% WPI section 39 threshold is obtained at some point after weekly benefits have ceased at 260 weeks. The question for determination was whether the worker is then entitled to receive back payment from the 260 week point or do benefits recommence only from the day that the threshold is satisfied?

At first instance, Arbitrator Bamber considered the phrase in section 39(2) that this section does not apply to an injured worker meant that benefits should be reinstated from the date last paid because section 39 “did not apply” in the intervening period.

In Mr Hochbaum’s case the intervening period was almost 30 weeks.

Decision 

In overturning the Arbitrator’s decision, President Judge Phillips considered that the Arbitrator had overlooked the importance of section 39(3) in giving a proper interpretation to the section as a whole. He also rejected the respondent worker’s submission that section 39(2) was beneficial and should be interpreted accordingly.

In short, the President found that section 39(2) should be read alongside section 39(3), directing attention to whether or not there is an assessment of 21% WPI or more. If there is, then section 39(2) is triggered to restore payments and section 39(1) will not apply.

In other words, a guillotine falls at the end of 260 weeks. It remains in place unless and until the worker obtains an assessment at or over 21% WPI. At that point (and only at that point) section 39(2) is triggered and the guillotine is lifted, restoring an entitlement to weekly benefits that did not exist the day before.

Implications

The decision in Hochbaum creates a dilemma for workers in a system where so much turns on a single WPI assessment. Is it better to bring the claim early in an attempt to avoid any interruption to weekly payments at 260 weeks? Alternatively, is it better to wait and tolerate months or years without weekly benefits post 260 weeks with a view to maximising the eventual WPI assessment?

The decision also confirms the primacy of work capacity decisions. Whilst section 39(2) might operate to lift the guillotine and revive an entitlement to weekly benefits, the amount to be paid, if anything is still determined by the insurer’s latest work capacity decision.