An overview of the changes to the

An overview of the changes to the Return to Work Act

NATHAN RAMOS, POLICY COORDINATOR, LAW SOCIETY OF SA

The Return to Work (Scheme Sustainability) Amendment Act 2022 Act (proclaimed in part on Thursday 28 July 2022) has been the subject of significant media attention and advocacy from stakeholders such as the Society in recent months, with a raft of changes to the Return to Work Act 2014 (SA) to have significant implications for some injured workers in South Australia.

The frenzy of media coverage began in early June with the introduction of the Return to Work (Permanent Impairment Assessment) Amendment Bill 2022, which sought to overturn the principle established in Return to Work Corporation of South Australia v Preedy, 1 and subsequently confirmed in Return to Work Corporation of South Australia v Summerfield,2 as to the combination of injuries, specifically consequential injuries, to be factored into a total assessment of whole person impairment. The stated reason for this was that an effective reversal of these decisions was urgently required to make South Australia’s workers’ compensation scheme sustainable into the future.

Following advocacy by the Society, other legal bodies and Unions, that Bill was withdrawn and the first version of the Bill which ultimately became the Amendment Act was introduced into the House of Assembly on 15 June 2022, and contemplated amendments to the Return to Work Act 2014 (SA) which were far more complex than the earlier proposal. The Government subsequently tabled amendments to its Bill in the Legislative Council, many of which were reflective of the concerns raised by the Society in its submission of 24 June 2022, with the Bill passing on 5 July 2022 with these amendments as well as other amendments tabled by crossbenchers in the Legislative Council.

As the dust has settled with the public debate and discussion having more or less concluded, this article attempts to summarise some of the key features of the amendments to the Return to Work Act 2014 and their implications.

Confirming the Preedy/Summerfield Principle

While the Government’s first attempt sought to address the perceived financial sustainability issue by doing away with the combination of injuries principle enunciated in Preedy and Summerfield, the current Bill instead enshrines that principle.

Reference was made in the Bill’s second reading speech of 15 June 2022 that the ‘same injury or cause’ test as established in the Summerfield decision would, specifically, “remain the test for combination of impairments under the act.” Despite this reference, the drafting of the Bill itself did not succinctly establish that test to a sufficient level to not give rise to the potential for further test litigation. The Society flagged this concern in its submission noting that the Bill, as it was drafted at that stage, it did not fully reflect the perceived intention to confirm the Summerfield decision.

The Society’s suggestions were subsequently followed when the Government amended sections 56 and 58 of the Act to substitute “same injury or cause” for “same trauma”. The Government’s amendments to section 22 also incorporate a direct reference to the Summerfield decision, noting that it is Parliament’s intention that section 22(8) be interpreted and applied in accordance with Summerfield.

As a result, amendments to the Act now confirm the principle enunciated in the decisions of Preedy/Summerfield and has (hopefully) put its application beyond doubt. the increase by five per cent of the whole person impairment (WPI) threshold to constitute seriously injured worker status under the Act. This is achieved via an amendment to section 21 of the Act to clarify that a “seriously injured worker” constitutes a worker whose work injury has resulted in a permanent impairment of 35% or more (rather than 30% as originally specified). Despite this, the WPI remains fixed at 30% or more for those who have suffered psychiatric injuries.

Practically, this amendment sets a higher threshold to enliven seriously injured worker status and thereby an entitlement to weekly payments ongoing to retirement age, medical expenses for life and a lump sum payment for noneconomic loss.

A range of workers who would have been classified as a seriously injured worker under the Act, prior to the July 2022 amendments, will now not qualify and not be entitled to the range of benefits to which they would previously have been entitled. For those whose work injuries occurred on or after 1 July 2015, this amendment has been accompanied by an entitlement to lump sum compensation for economic loss for those with WPI assessments in the 30% - 34% range.

Option to take a lump sum payment under section 56A

Those who meet the newly defined seriously injured worker status now have the option to elect to receive a lump sum payment, rather than weekly payments as they would have previously, pursuant to new section 56A.

The Society raised some concern at the lack of detail as to how this option would work in a practical sense, in that there was no detail in the initial draft of the Bill about how a lump sum payment would be determined in such a situation.

The Bill was subsequently amended to clarify that such payments are calculated in accordance with preceding section 56.

Before electing to receive a lump sum, there is an obligation for the worker receive a range of advice, being: • professional advice about the consequences of making an election; • advice from a qualified financial adviser about the investment or use of the money to be received on the election; and • advice from a recognised health practitioner about the future progression of their injury and likely impact on capacity to work.

Where the worker’s whole person impairment amounts to 50% or more, their election must be approved by the Tribunal.

Practically, those who meet seriously injured worker status now have another option (providing their injuries are not psychiatric/consequential mental harm or noise induced hearing loss) to receive a lump sum payment. Whether that election is in the best interests of the worker will clearly depend on the intricate facts of each case.

Capping interim seriously injured worker status

Prior to the Bill being passed, a determination that a worker is an interim seriously injured worker pursuant to section 21(3) would remain indefinitely. The amendments to the Act initially sought to place a cap on this, by imposing a 52-week time limit for interim seriously injured worker status (with the possibility of an extension).

The Society’s submission reflected the reality as to how applications for seriously injured worker status via section 21(3) of the Act have been addressed and determined by the corporation in the past. Accordingly, the need for some flexibility in this context, particularly through the conferral of some discretion on the SAET to restore interim seriously injured worker status, was emphasised.

This aspect of the Bill was also subsequently amended along lines suggested by other organisations, with the Corporation now required to give the worker at least 3 months’ written notice of an intention to bring interim status as a seriously injured worker to an end, providing the worker with the opportunity during that time to furnish information to satisfy the Corporation that it is appropriate that interim decision should continue. Similarly, a further amendment ensured that SAET was empowered to continue payments to a seriously injured worker when a dispute is occurring.

As a result, there now appears to be some limit to the time for which interim seriously injured worker status can continue, however is less arbitrarily defined than originally proposed.

Transitional provisions

The Transitional provisions set out in the Bill are quite complex and were the subject of considerable debate and discussion.

The higher threshold of 35%, among other amendments proposed, will apply to those workers who have not had a final examination by any accredited medical practitioner before the “designated day”, which is to be fixed by proclamation. In other words, the new whole person impairment threshold, as well as a suite of other amendments to the Act will operate differently for those who have not managed to have their final whole person impairment assessment progress sufficiently before that particular date.

The Society voiced concern at the retrospective operation of the proposed amendments and as to the details of the proposed scheme by which they were to operate, as initially proposed. The view of the Society was that the application of the amendments should hinge on the date of the original work injury, rather than other dates which could have the potential to retrospectively impact workers who have already been injured, and that the scheme proposed would lead to a chaotic rush towards assessment during the balance of this calendar year.

Subsequently, government amendments to the Bill as it was being considered in the Legislative Council clarified issues such as the operation of the transitional provisions to those existing seriously injured workers and interim seriously injured workers. Specifically, these amendments appear to incorporate a timeframe (understood to be an extra 12 months) before which existing interim seriously injured workers will be subjected to the higher 35% whole person impairment threshold.

Also, the Bill incorporates a broad power which is included in section 115 of the Act which appears to provide the SAET with the ability to give directions it considers necessary to expediate whole person impairments under the Act. Hopefully this provides an ability for the Tribunal to swiftly deal with any issues which arise as a result of the transitional provisions.

It appears that after a chaotic month or so the amendments to the Return to Work Act 2014 are finalised, however the real test will be their practical impact via the transitional provisions as the amendments commence in the coming months. B

Endnotes 1 [2018] SASCFC 58. 2 [2021] SASCFC 17.