Hee v State Transit Authority of New South Wales

The ultimate question in this appeal is whether the appellant worker (Mr Hee), a “worker with highest needs” within Workers Compensation Act 1987 (NSW) (1987 Act), s 32A, is entitled to the benefit of the “Special provision for workers with highest needs” made by s 38A. That section, although not enacted until 2015, forms part of the revised scheme for the payment of weekly benefits to injured workers introduced in 2012. It provides:

The answer to that question turns on the construction of subsection (1). That exercise involves giving effect to the language of s 38A(1), taking account of its context and purpose, as reflected in the 1987 Act and any extrinsic material: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 8; Interpretation Act 1987 (NSW), s 34.

Mr Hee’s case before the Workers Compensation Commission (Commission), first as constituted by an arbitrator and then by its President, and in this Court was that he could receive a benefit under s 38A irrespective of whether he was entitled to a determination of weekly compensation in accordance with ss 36, 37 or 38 of the 1987 Act, provided he established that he was a “worker with highest needs” whose injury had resulted in a “total or partial incapacity to work” within s 33. Consistent with that being his case, there being no issue before the Commission that he was a “worker with highest needs”, Mr Hee sought only to establish that his injury had resulted in “partial incapacity”. As I understand the materials before this Court, it was not part of that case that he was entitled to a determination under s 37 as a worker with “current work capacity”, even if the amount of that determination was nil. On the construction of ss 33 and 38A contended for by Mr Hee no question about that entitlement arose. In response his employer (STA) contended that s 38A only applied if the worker was entitled to an “amount”, being more than a nil amount, of weekly compensation determined in accordance with Pt 3, Div 2, Subdiv 2; and that such a determination required a finding that Mr Hee had “current work capacity”, which could not have been the position if he was able to return to his “pre-injury employment”.

For the reasons which follow, s 38A(1) has the meaning contended for by the respondent with one qualification, namely that a determination which produces a weekly payment “amount” of zero or less than zero (see s 35(2)) will nevertheless attract the application of s 38A. It follows that Mr Hee’s appeal to this Court under Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 353(1) must be dismissed. That is because grounds of appeal 1, 3, 4 and 5, which propound his construction of s 38A, should be rejected. That leaves grounds 2 and 6. The former is directed to the absence of any finding by the arbitrator of “partial incapacity” within s 33 and the President’s treatment of that issue. The latter is directed to the meaning of that expression as used in s 33. However success on either or both of those grounds could not result in an entitlement under s 38A in the absence of a finding that Mr Hee had “current work capacity”; and no such finding was sought by Mr Hee before or made by the arbitrator, and the President’s holding to the contrary is not expressly challenged by any of the grounds of appeal to this Court. Accordingly whilst ground of appeal 2 may be made out the appeal must nevertheless fail because success on that ground could only lead in any further hearing in the Commission by way of remitter to a finding of “partial incapacity” in circumstances where there was no challenge made to the President’s conclusions in relation to “current work capacity” for the purposes of s 37.

It is convenient first to set out the relevant statutory provisions and then to summarise the background facts and issues before the President, whose decision – Hee v State Transport Authority of NSW [2018] NSWWCCPD 6 – is the subject of this appeal limited to questions of law.

Part 2 of the 1987 Act describes the circumstances in which an employer is liable for compensation, s 9 providing that an injured worker is entitled to receive compensation from his or her employer “in accordance with” the Act. The compensation benefits, and circumstances in which they are payable, are described and specified in Divs 1 to 5 of Pt 3. They include compensation payable on death (Div 1), weekly compensation by way of income support (Div 2) and compensation for medical, hospital and rehabilitation expenses (Div 3).

The immediately relevant provisions of Pt 3, Div 2, Subdivs 1 and 2 that apply to Mr Hee’s claim for weekly compensation are set out below. They form part of the scheme for the payment of weekly benefits introduced by Workers Compensation Legislation Amendment Act 2012 (NSW) (2012 Act), s 2, Sch 1. They are as follows:

Section 33 was not changed by the 2012 Act amendments. It provides that if “total or partial incapacity for work” results from an injury, the compensation payable includes a weekly payment during the period of incapacity. The expression “total or partial incapacity for work”, although not defined, has a well-understood meaning and describes from the injured worker’s perspective a physical incapacity for actually doing work, not in the abstract, but in the labour market in which the employee was working or might reasonably be expected to work: per Mason, Wilson, Deane and Dawson JJ in Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 176-178; [1985] HCA 2; Sabanayagam v St George Bank Limited [2016] NSWCA 145 at [131] (Sackville AJA).

However that section did not, and continues not to, describe how the amount of weekly compensation is to be calculated, and it does not follow from the fact of an injury causing “partial incapacity” that the worker was entitled to a “weekly payment”. Under the previous scheme, in the case of partial incapacity that depended on whether the injury resulted in a loss of earning power measured as a “reduction in the worker’s weekly earnings” (former s 40(1)), being the difference between the amount the worker would probably have been earning but for the injury in the same or some comparable employment, and the amount the worker is earning “or would be able to earn in some suitable employment” (former s 40(2)). Thus if there was no loss of earning power resulting from partial incapacity, no compensation was payable by way of a weekly benefit: see Arnotts Snack Products at 176-177 citing the statements of Starke and Dixon JJ in Williams v Metropolitan Coal Ltd (1948) 76 CLR 431 at 444, 449; [1948] HCA 8 in relation to the substantially similar provision for compensation for partial incapacity made by Workers’ Compensation Act 1926 (NSW), s 11(1).

The 2012 Act amendments were described in the Explanatory note to the bill for that Act as making the following significant changes to the then-existing scheme for the payment of weekly benefits:

The changes made to that scheme by the Workers Compensation Amendment Act 2015 (NSW) (2015 Act), s 2, Sch 2, included the introduction of s 38A together with the definitions of “worker with highest needs” and “worker with high needs”, the former to replace the earlier definition of “seriously injured worker”. They were described in the Explanatory note to the bill for that Act as including:

In the Legislative Assembly the object of s 38A was described by the Minister for Finance, Services and Property in the following terms:

Mr Hee was a bus driver. On 17 October 2013 he sustained an injury to his cervical spine when he tripped and fell while helping a passenger with a broken trolley board the bus he was driving. He later underwent surgery and did not work from 24 January to 31 May 2014, returning to his pre-injury duties on 1 June 2014.

He then made a claim for compensation. Following a conciliation conference the STA’s insurer agreed to pay compensation based on his pre-injury average weekly earnings of $1,391 for the period from 21 January to 31 May 2014 pursuant to 1987 Act, ss 36 and 37. On 9 March 2017 the parties entered into a “complying agreement” under 1987 Act, s 66A, agreeing the degree of permanent impairment resulting from the injury at 34%. Mr Hee was entitled to compensation under Pt 3, Div 4 for that permanent impairment.

On 17 March 2017 Mr Hee made a claim for weekly compensation under Pt 3, Div 2 equal to the “specified” amount in s 38A. That claim was disputed by the insurer and on 28 April 2017 Mr Hee filed an Application to Resolve a Dispute, referring his claim for determination by the Commission. As amended in October 2017, that claim was for compensation from 1 June 2014 and in the “second entitlement period” (s 37). The STA continued to dispute that claim and also maintained that the Commission did “not have jurisdiction” to determine any dispute about a work capacity decision of the insurer, and that it could not make a decision in respect of a dispute before the Commission that was inconsistent with any such decision of the insurer (s 43(3)). In this context a “work capacity” decision includes a determination as to whether a worker has “current work capacity” (s 32A).

The dispute before the Commission was first heard and determined by senior arbitrator Glenn Capel: Hee v State Transit of NSW (Workers Compensation Commission, 27 October 2017, unrep). He held that Mr Hee was not entitled to any “payments of weekly compensation pursuant to s 38A” because the worker was not entitled to monetary compensation under s 37. Although noting the requirement that the worker have “no current work capacity” or “current work capacity” for a determination under ss 36, 37 or 38, the arbitrator assumed that Mr Hee did have “current work capacity” so as to be entitled to a weekly payment rate under s 37 calculated at zero, which he held did not give Mr Hee any benefit under s 38A: see his reasons at paras [174], [181], [195], [198]. In doing so the arbitrator did not make findings as to Mr Hee’s “partial incapacity” under s 33 or “current work capacity” for the purposes of s 37. To make a finding as to the latter the arbitrator would have had to address whether Mr Hee was able to return to his “pre-injury employment”. The arbitrator also concluded that s 43(3) had no application because the insurer had not made any “work capacity decision”.

Broadly speaking there were three issues raised for determination in the appeal from the arbitrator to the President pursuant to Workplace Injury Management Act, s 352. The first, raised by the STA, was whether the arbitrator had erred in not finding that the insurer had made a “work capacity decision”. The second concerned the construction and application of s 38A. The third, which only arose if the worker’s construction of s 38A was upheld, was whether the arbitrator had erred in not holding that Mr Hee had “partial incapacity” for the purposes of s 33. This last issue, raised by ground (a) in the appeal to the President, was not concerned with the absence of a finding that Mr Hee had “current work capacity” for the purposes of s 37, as on Mr Hee’s case his entitlement to a benefit under s 38A was enlivened by his being a “worker with highest needs” having a “partial incapacity for work” under s 33.

As to the first of these issues, the President rejected the challenge to the arbitrator’s conclusion on the application of s 43(3). That conclusion is not said to give rise to any question of law challenged in the appeal to this Court.

As to the question of construction of s 38A, the President rejected the appellant’s argument that s 38A applied if he was a “worker with highest needs” with an injury resulting in “partial incapacity” under s 33 (Judgment [145]). His Honour held that s 38A only applied if there was an entitlement to a “determination” under ss 36, 37 or 38 to an “amount of weekly payments of compensation payable” (Judgment [141]).

His Honour then proceeded to address whether Mr Hee was entitled to compensation under s 37 for the second entitlement period, concluding:

Having observed (Judgment [149]) that the arbitrator calculated Mr Hee’s entitlement “as if” he was a worker with “current work capacity” and that the outcome of doing so was a “nil result” (Judgment [150]), the President rejected the worker’s submission that “an assessment of nil does not equate to a finding of no entitlement to benefits”, concluding (Judgment [151]):

Thus the President rejected Mr Hee’s construction of s 38A, did not make a finding as to whether Mr Hee’s injury had resulted in “partial incapacity” and found that he did not have “current work capacity”. That last conclusion was unnecessary as a basis for rejecting Mr Hee’s claim because it was not part of his case that he was entitled to a benefit under s 37. Furthermore, the President’s “work capacity” conclusion relied on the “effect” of findings said to have been made by the arbitrator as to Mr Hee’s ability to undertake the same level of overtime work as he had undertaken before his injury (Judgment [147]). His Honour’s conclusion as to the construction of s 38A is challenged in this Court by grounds of appeal 1, 3, 4 and 5. Those questions are dealt with below.

Of the remaining grounds, ground of appeal 2 is that the President “erred in point of law when he held that the Arbitrator had found there was no loss of income due to the injury when no such finding had been made”; and ground of appeal 6 is that his Honour “erred in point of law when he held that probable earnings are irrelevant when determining whether [Mr Hee] has a partial incapacity within the meaning of s 33”. It is convenient to deal with these grounds first.

By ground (a) of his appeal to the President from the arbitrator’s decision, Mr Hee argued that the arbitrator had erred in not making a finding of “partial incapacity” for the purposes of s 33. STA responded that there had been a finding of wage loss but did not make a submission as to whether the arbitrator had made the finding sought. The President did not deal with this ground. Instead his Honour addressed the different factual question of whether Mr Hee had “current work capacity”, an issue which did not arise on Mr Hee’s case but which did arise on the President’s construction of s 38A. That question ultimately turned on whether Mr Hee could undertake the same level of overtime work as he had undertaken before his injury. The President concluded that he could (Judgment [178]). It followed in the President’s judgment that Mr Hee was not entitled to the benefit of s 38A for two reasons. First, he was not entitled to a determination under s 37 because he did not have “current work capacity”; and secondly any such determination resulted in a zero weekly payment outcome meaning that there was no “amount” to which s 38A could apply. As will become apparent, this second conclusion does not take account of the operation of s 35(2).

As the worker’s written and oral submissions to this Court show, ground 2 is not concerned with any failure of the arbitrator to determine that he had “current work capacity” for the purposes of s 37, or to hold that Mr Hee was entitled to a determination under that section. Rather it was contended on behalf of Mr Hee that the President had erred in failing to hold that the arbitrator had not determined that his injury had resulted in “partial incapacity”, which was submitted to be a broader concept than “current work capacity” and relevantly not limited to cases where there had been a loss of earnings. That submission also engaged ground 6 which is concerned with the interpretation of s 33.

It follows that I respectfully disagree with White JA’s description of the issues raised by the grounds of appeal (see [48] and [75] below) as including whether the arbitrator had determined that Mr Hee was able to return to his pre-injury employment and accordingly could not satisfy the descriptions of “current work capacity” or “no current work capacity”. The issue to which grounds 2 and 6 are addressed is whether the President erred in concluding that the arbitrator had found that there was a loss of earnings, that question said to be relevant to whether there was “partial incapacity” under s 33. If these grounds were upheld, Mr Hee seeks that the proceeding be referred back to the Commission to determine only whether there was “partial incapacity” under s 33.

The President did not in his dispositive reasoning rely on the arbitrator as having made a finding in the terms contended and in relation to “partial incapacity”. The arbitrator made two related findings. The first was that the worker had “resumed his full pre-injury duties on 1 June 2014” (see para [206]). In the President’s reasoning, that finding was material to the application of s 38A because he considered it informed a conclusion as to whether Mr Hee had “current work capacity”. The second was that the worker’s actual earnings since 1 June 2014 exceeded 95% of his pre-injury average weekly earnings (see para [209]). In his Honour’s assessment (Judgment [147]), that finding confirmed that Mr Hee was able to return to his pre-injury employment, which was relevant to whether he had “current work capacity”.

At Judgment [174] and following the President addressed the arbitrator’s factual findings in considering whether Mr Hee was a worker with “current work capacity”, a matter assumed but not addressed by the arbitrator. The President noted that the evidence in support of the findings referred to above included Dr O’Sullivan’s opinion “that Mr Hee continued to be fit for full-time work as a bus driver working 9 hour shifts, six days a week” (Judgment [175]). At Judgment [185] the President concluded that the “Senior Arbitrator’s findings concerning Mr Hee’s ability to return to his pre-injury employment were open and do not disclose error”.

This last conclusion involved error if the arbitrator did not make findings as to Mr Hee’s capacity to return to his pre-injury employment in the context of determining his “work capacity”. However in my view that error is not the subject of ground of appeal 2, which is directed in the worker’s case only to the making of a finding for the purposes of s 33. If that error is established, as appeared to be conceded in the appeal, the worker’s case must nevertheless fail in the face of the correct construction of s 38A requiring proof of an entitlement to a determination under s 37 and the absence of any claim in that case, or finding, that he had “current work capacity” establishing such an entitlement.

My conclusions in these respects also depart from those of Simpson AJA (at [155]ff below). As I have understood Mr Hee’s case as made before the Commission and in this Court, it was that neither the arbitrator nor the President decided whether there was “partial incapacity” under s 33, so that if the appeal was successful it was only that question which should be referred back to the Commission for determination. Relevantly, it was not submitted that the separate question whether Mr Hee had “no current work capacity” within s 37 also should be remitted for decision.

The structure and terms of s 38A(1) confirm that it only operates in circumstances where there is an entitlement to an amount of weekly compensation, determined in accordance with ss 36, 37 or 38(6) or (7), and irrespective of whether that amount is zero, or less than zero. If the condition enlivening the “special provision” is satisfied, that provision is to be made by treating the amount which is the outcome of that earlier and necessary “determination” as being the specified amount, initially $788.32. Section 38A does not in terms provide that a worker with highest needs with partial incapacity for work is entitled to weekly compensation at the specified or any other rate. It applies if there is an entitlement to an “amount” determined in accordance with one of those earlier provisions, and then only to specify a minimum amount which is to be payable. Section 35(2) recognises that the outcome of such a determination may be zero or less than zero, in which case the “amount” is to be treated as zero. To the extent that the President has held otherwise at Judgment [151]-[152], his analysis in that respect overlooks s 35(2) and is not correct.

The “determination” describes the outcome of the calculation of the rate of weekly payments to which an injured worker is entitled under one of the relevant provisions. The use of the word “payable” in s 38A(1) confirms that outcome is the weekly payment to which the injured worker is otherwise entitled under Pt 3, Div 2. As Giles JA observed (Allsop P and Hodgson JA agreeing) in Speirs v Industrial Relations Commission of New South Wales [2011] 81 NSWLR 348; [2011] NSWCA 206 at [76], in this context “an employer’s liability to pay compensation and a worker’s entitlement to receive compensation each express compensation being payable”.

All of this is consistent with the language of s 33 and the scheme of Pt 3, Div 2. The general provision in s 9 makes clear that the injured worker is entitled to compensation “in accordance with this Act”. Section 33 does not provide for the calculation of any “weekly payment” to which the worker is entitled for partial or total incapacity. It is the other provisions of Div 2, Subdiv 2 that do so. That is confirmed by the language of s 35(1) which defines the integers to be used in those calculations and in doing so describes the operative sections – ss 36, 37 and 38 – as “the provisions of this Subdivision used to determine the rate of weekly payments payable to an injured worker in respect of a week”. Accordingly the reference to a “weekly payment” in s 33 is to a payment determined in accordance with those operative sections. In that context s 38A applies to a “worker with highest needs” entitled to a determination of a weekly payment amount, even if the amount determined is zero.

Finally this literal construction of the language is consistent with the explanations given in the second reading speech and the Explanatory note to the bill for the 2015 Act, although it gives rise to the not inconsiderable difficulties referred to by White JA at [99]-[114]. Nevertheless I agree with his Honour that engaging in a rewriting of the section is beyond the scope of judicial interpretation.

The appeal to this Court is concerned only with the worker’s entitlement under s 38A construed as contended for by Mr Hee. That construction was correctly rejected by the President. It follows that the appeal must be dismissed with costs.

WHITE JA: The appellant, Mr Hee, appeals from orders of the President of the Workers Compensation Commission made on 26 February 2018 (Hee v State Transit Authority of New South Wales [2018] NSWWCCPD 6). The President’s order was that the Senior Arbitrator’s determination of 27 October 2017 was confirmed. The Senior Arbitrator’s determination and orders were as follows:

Mr Hee suffered injury in the course of his employment as a bus driver on 17 October 2013. He was off work from 24 January 2014 to 31 May 2014. The following findings at [38]-[41] below were made by the Senior Arbitrator (“the Arbitrator”) and are not in dispute.

At a conciliation conference on 22 August 2016 the respondent’s insurer agreed to pay Mr Hee weekly compensation based on his pre-injury average weekly earnings of $1,391.35 pursuant to ss 36 and 37 of the Workers Compensation Act 1987 (NSW) (“the WC Act”) from 21 January 2014 to 31 May 2014.

On or about 9 March 2017 the parties entered into a Complying Agreement (viz. an agreement under s 66A of the WC Act for payment of lump sum compensation) in respect of 34 per cent of whole person impairment due to injury to Mr Hee’s cervical spine sustained on 17 October 2013.

On 17 March 2017 Mr Hee’s solicitor served a notice of claim for weekly compensation at the rate of $788.32 per week as adjusted, “from 17 October 2013 to date and continuing” pursuant to s 38A of the WC Act on the basis that he was a “worker with highest needs”.

By his application registered in the Commission on 28 April 2017 and amended at the conciliation conference on 10 October 2017, Mr Hee claimed weekly compensation pursuant to s 38A from 1 June 2014 and continuing.

That claim was rejected by the Arbitrator and the Arbitrator’s decision was confirmed by the President.

The appeal from the Arbitrator to the President was brought pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the WIM Act”). Section 352(5) of the WIM Act provides:

The appeal from the Commission constituted by the President to this Court lies where the party is aggrieved by the decision of the President “in point of law” (WIM Act, s 353(1)).

Almost all relevant provisions of the WC Act are quoted in the reasons for judgment of Meagher JA which I have had the advantage of reading in draft. Other tangentially relevant provisions are s 44C (definition of “pre-injury average weekly earnings”) and s 44I (definition of “current weekly earnings”). The effect of these definitions is that overtime and shift allowance payments are taken into account in calculating pre-injury average weekly earnings only for the first 52 weeks for which weekly payments of compensation are payable, but are to be taken into account in any calculation of current weekly earnings.

It was common ground that Mr Hee is a “worker with highest needs” within the definition of that expression in s 32A of the WC Act. Mr Hee claimed weekly payments pursuant to s 38A of the WC Act.

The right of a worker with highest needs to weekly payments under s 38A is predicated on there being a “determination of the amount of weekly payments ... in accordance with this Subdivision ...”.

The issues arising on the appeal and my conclusions on them are as follows:

Mr McManamey, who appeared for Mr Hee, submitted that Mr Hee suffered a partial incapacity for work as a result of his injury and was thus entitled to a weekly payment by reason of s 33. He submitted that the weekly payment to which Mr Hee was entitled was that provided for by s 38A. Meagher JA has referred to the meaning of the expression “total or partial incapacity for work” used in earlier versions of the WC Act. As his Honour observes (at [9]), s 33 does not describe how the weekly compensation is to be calculated, and it does not follow from the fact of an injury causing incapacity that a worker will be entitled to a payment of weekly compensation.

Mr McManamey relied on the decision of this court in Kesen v Luke Singer Pty Ltd where in the context of s 11 of the 1926 Act this court said of s 11(1) that if partial incapacity were found, a weekly payment was to be made (at 568).

Section 9(1) of the WC Act provides that a worker who has received an injury (as defined) shall receive compensation from the worker’s employer “in accordance with this Act”. Section 33 is also to be understood in the sense that it provides that in the case of total or partial incapacity for work resulting from an injury the compensation payable by the employer is to include a weekly payment “in accordance with this Act” so far as is presently relevant, that directs attention to s 34 (that provides the maximum weekly compensation amount is $1,838.70 as adjusted by Div 6) and to ss 35-38A.

Section 35 partially defines the expressions “AWE”, “D”, “E” and “MAX” that are used in ss 36 and 37 for the determination of weekly payments of compensation.

Subsection (2) of s 35 is important. It provides in effect that for the purposes of Subdivision 2 where a determination is made for the purpose of determining the rate of weekly payments payable to an injured worker and that determination results in an amount that is less than zero, the amount is to be treated as zero. Thus, Subdivision 2 of Div 2 (in which ss 34-38A are found) provides that where there is a determination of an amount for the purposes of determining the rate of weekly payments pursuant to ss 36 or 37 that results in an amount of less than zero, the amount so determined is to be treated as zero. For the purposes of Subdivision 2, including s 38A, zero is an amount.

One ground upon which Mr Hee’s claim failed in the Commission was that if no weekly compensation benefits were payable under ss 36, 37 or 38 then there could be no determination resulting in an amount of less than $788.32 being payable to Mr Hee. The respondent submitted that nil was not an amount.

I address that submission further below at [93]-[114]. It is inconsistent with the express terms of s 35(2).

Section 38A only applies if there is a “determination of the amount of weekly payments of compensation payable to a worker with highest needs in accordance with this Subdivision”. That refers to a determination to be made under s 36, s 37 or s 38.

As noted above, on 22 August 2016 the respondent’s insurer agreed to pay the applicant weekly compensation pursuant to s 36 for the first 13 weeks from 21 January to 22 April 2014 and for about five and a half weeks from 23 April 2014 pursuant to s 37. The amounts so paid were more than the amounts provided for by s 38A and no claim is made by Mr Hee in respect of those periods. He claims payments under s 38A from 1 June 2014.

It is sufficient to refer to s 37, this being the section that would apply to that claim until the expiry of the second entitlement period (that is, approximately two years from 23 April 2014). A determination of an amount of weekly payments of compensation can only be made in the case of an injured worker who has “no current work capacity” or who “has current work capacity”. One might think that those expressions would cover the field. That is not so. Because of the definitions of those expressions, they do not cover the field. A worker who is able to return to “his or her pre-injury employment” neither has “current work capacity” nor “no current work capacity”. Hence, no determination of amounts of weekly compensation could be made in accordance with Subdivision 2 in respect of a worker who had returned to his or her pre-injury employment and such a worker, even if a worker of highest needs, would not be entitled to benefits under s 38A.

Before the Commission, Mr Hee said that although he had returned to full-time employment with the respondent, he was not able to undertake the same amount of overtime as he had worked before his injury. Mr McManamey, who appeared for Mr Hee, submitted that if this were accepted, it would follow that he was not able to “return to his or her pre-injury employment” within the meaning of the definitions of “current work capacity” and “no current work capacity”. When pressed, I did not understand the respondent to submit to the contrary.

I accept that if a worker returns to work for his or her employer, but is not able to perform all of his or her duties, or is not able to perform all of his or her duties as fully as he or she were able to do before the injury, then that worker is not able “to return to his or her pre-injury employment” within the definitions of “current work capacity” and “no current work capacity” in s 32A. Such a construction is required to accommodate the terms of s 33. That section provides that in the case of partial incapacity for work resulting from an injury, a weekly payment of compensation during the incapacity is payable under the Act. Were it otherwise, a worker who returned to work with his or her employer on reduced hours, reduced duties and reduced wages would not be entitled to weekly payments under ss 36-38 because he or she could be said to be “able to return to his or her pre-injury employment”.

The respondent submitted that Mr Hee had neither “work capacity” nor “no work capacity”. This was because, so the respondent submitted, Mr Hee had returned to his pre-injury employment. It submitted that findings to this effect had been made by the Arbitrator and the President.

As quoted at [36] above, the Arbitrator determined that “the applicant resumed his full pre-injury duties on 1 June 2014”.

The materials that were before the Arbitrator and the President were not before this Court. The Arbitrator’s reasons included the following:

The Arbitrator referred to medical reports, including a report of a Dr Mellick whom he said recorded that “the applicant was still able to work as a bus driver on a full-time basis” (para 32), and a report of a Dr O’Sullivan who recorded that “... the applicant continued to work full-time as a bus driver for nine-hour shifts/six days per week” (para 35). He referred to evidence of a staff supervisor of the respondent, a Mr Singleton, and recorded that Mr Singleton “... indicated that the applicant had performed his pre-injury duties and hours since he was cleared to return to work on 22 May 2014”. The Arbitrator recorded Mr Singleton’s evidence as follows:

Mr Singleton’s evidence as recorded at para 45 of the Arbitrator’s reasons corroborated Mr Hee’s evidence to the extent that it confirmed that he “mostly declined overtime”.

The Arbitrator referred to evidence given by Mr Singleton as to Mr Hee’s earnings. He recorded that Mr Singleton stated that Mr Hee’s paysheets showed that he earned $75,992 in the financial year ended 30 June 2013, $81,584 in the financial year ended 30 June 2015, and $82,419 in the financial year ended 30 June 2016 and $82,748 in the financial year ended 30 June 2017 (para [48]). Mr Hee’s earnings in the financial year ended 30 June 2014 were reduced as a result of his injury. The Arbitrator also said:

Later in his reasons the Arbitrator made a calculation of any wage loss for the second entitlement period. He adopted the figure of Mr Hee’s pre-injury average weekly earnings of $1,391.35 that had been accepted by the parties in consent orders made on 22 August 2016. He noted that that figure would remain the same for the first 52 weeks and then overtime and shift allowances would be deducted (s 44B(1)(c) of the WC Act) (Reasons at [164]).

In making this calculation the Arbitrator made the following findings:

The summary of the medical evidence provided by the Arbitrator does not indicate that the doctors whom Mr Hee consulted, or by whom he was examined, addressed Mr Hee’s capacity to perform overtime duties. The submission of counsel for the respondent before the Arbitrator (which the Arbitrator accepted) was that there was no medical evidence to support the contention that Mr Hee was unable to perform overtime, not that the medical evidence was inconsistent with Mr Hee’s evidence that he was unable to perform overtime. Mr Hee’s evidence that since he returned to work he did not perform overtime (i.e. any overtime) was evidently not accepted in the light of Mr Singleton’s evidence. The evidence of Mr Singleton referred to in the Arbitrator’s reasons referred to the overtime that Mr Hee worked. It did not and could not address what overtime he would have been capable of working but for his injury.

The Arbitrator made a calculation applying the formula in s 37(2)(a) of the WC Act as follows:

This calculation is only called for if the worker has “current work capacity”, that is, is not able to return to “his or her pre-injury employment”.

The Arbitrator concluded (at [206]) that:

This was not a finding that Mr Hee was able to return to his pre-injury employment. The finding would mean that Mr Hee was able to drive all of the routes with the same breaks as he had done before his injury and perform whatever else are the full duties of a bus driver. It was not a finding that Mr Hee could perform all the duties he had performed before his injury to the same extent as he could do before his injury.

The notice of appeal from the Arbitrator’s decision to the President was not before this Court, but the grounds were summarised in the President’s reasons at [75] as follows:

The ground relevant to the present issue is ground (a), namely that the Arbitrator failed to determine that Mr Hee had a partial incapacity within the meaning of s 33. It was not an express ground of appeal that the Arbitrator failed to determine whether Mr Hee was not able to return to his “pre-injury employment” in the sense that he was not able to return to the carrying out of his duties as a bus driver to the full extent that he had been able to do before his injury. But it was clear that that was the reason for which Mr Hee contended that he had a partial incapacity within s 33.

The question before the President on this ground was whether or not the Arbitrator had failed to determine that Mr Hee had such a partial incapacity. In determining that question the President was confined to determining whether the Arbitrator’s decision was affected by an error of fact, law or discretion (WIM Act, s 352(5)). The appeal to the President was not by way of review, let alone rehearing.

Section 352(5) of the WIM Act was enacted in its present form by clause 16 of Sch 2 to the Workers Compensation Legislation Amendment Act 2010 (NSW) which took effect on 1 February 2011. Prior to then s 352(5) provided that an appeal to a Presidential member from a decision of an arbitrator was by way of review of the decision appealed against. Prior to the decision of this court in Tan v National Australia Bank Ltd [2008] NSWCA 198; (2008) 6 DDCR 363 (“Tan”) that provision had been interpreted in the Commission as meaning that a successful appeal required establishment of error on the part of an arbitrator, whether by way of law, fact or discretion. If such an error were established and but for the error the decision would have been different, then the Presidential member could substitute a different decision in place of that of the arbitrator (The King Island Company Ltd v Deery [2005] NSWWCCPD 1 at [19]; Eraring Energy v Brownlie [2008] NSWWCCPD 42 at [20], [24]; Tan v National Australia Bank Ltd [2006] NSWWCCPD 115 at [30]).

The majority of this Court in Tan held that this understanding was incorrect and a Presidential member could conduct a fresh hearing and could intervene without being constrained to identify error by the arbitrator (per Basten JA at [5]-[12], Bell JA agreeing). The 2010 amendment returned the position to what it had been before this Court’s decision in Tan.

On the question of Mr Hee’s ability to work overtime to the same degree as he had before his injury, the President made the following findings:

The President concluded that the effect of the Arbitrator’s factual findings was that Mr Hee was able to return to his pre-injury employment. This was an error because the Arbitrator did not make that finding. Nor did the factual findings made by the Arbitrator necessarily lead to that conclusion. Rather, the Arbitrator found that Mr Hee resumed his full duties, which was not the same thing. This was a misconstruction of the Arbitrator’s reasons, which involved an error in point of law.

The President went on to make his own findings (at Reasons [175], [178], and [182] (as underlined above)) that:

The President also appears to have concluded (at Reasons [180] and [181]) that because Mr Hee worked some overtime and his earnings were not diminished after recovery from injury, that his ability to return to his pre-injury employment was not reduced.

These were findings of fact. Had the President accepted Mr Hee’s contention that the Arbitrator erred in not determining partial incapacity then it would have been open to his Honour to have concluded that the error made no difference on the basis of facts as found by the President. No further appeal would lie unless in so concluding the President erred in point of law.

But that is not what the President did. He concluded (wrongly) that the effect of the Arbitrator’s findings was that Mr Hee was able to return to his pre-injury employment within the meaning of the definitions of “current work capacity” and “no current work capacity”. Because the President found that there was no error of fact, law or discretion on the part of the Arbitrator and because the appeal to him was not by way of review or new hearing, his factual findings are not relevant.

The grounds of appeal to this court include that:

The argument was fully ventilated on appeal. In his written submissions Mr McManamey submitted that the Arbitrator did not make the necessary findings to allow the matter to be reassessed, particularly as to whether Mr Hee had a partial incapacity or whether there was a wage loss attributable to injury. The latter consideration, which is the subject of ground 6, could be a factually relevant consideration in a determination of whether the worker was able to return to his pre-injury employment within the meaning of the definitions. He also submitted that the Arbitrator did not make a determination on whether Mr Hee was capable of performing the same amount of overtime as he was before his injury. These issues were fully ventilated during oral argument.

For these reasons the Commission has not validly decided whether there could be a “determination” under s 38A that the amount of weekly payments of compensation payable to Mr Hee in accordance with ss 36 and 37 resulted in an amount that was less than zero, and hence less than $788.32.

Before the Commission, the respondent successfully argued that it would only be if such a determination resulted in the worker being entitled to be paid a sum more than zero, although less than $788.32, that s 38A would be invoked. If this submission is correct the appeal fails even if it might be found that Mr Hee was not able to return to his pre-injury employment (see the Arbitrator’s reasons quoted at [70] above).

On a literal construction of s 38A, especially when read with s 35(2), that construction is not available. Zero, or an amount less than zero, is less than $788.32. Section 35(2) expressly provides that an amount less than zero is to be taken to be zero. If zero is an amount then the “amount payable” under s 38A(1) can be zero. A zero amount can be the amount of weekly compensation “payable” under s 33 if the worker is not entitled to weekly compensation under s 36 or 37. That is less than $788.32.

Reading s 38A literally, it must be decided whether Mr Hee was not able to return to his pre-injury employment, meaning that he was not able to return to his full duties to the same extent as he had been able to perform them before his injury, and if so, whether the compensation payable to him under s 37 (being the relevant provision) was less than $788.32. The answer to the second question is “yes” because the amount payable to him would have been less than zero and that would be taken to be the amount.

On a literal construction, if the requisite finding of fact that Mr Hee was not able to return to his pre-injury employment were made in the Commission, then Mr Hee would be entitled to the benefits claimed under s 38A, notwithstanding that he was not entitled to weekly compensation benefits under ss 36 or 37. (Whether absence of entitlements to benefits under s 38 would preclude an entitlement to benefits under s 38A was not the subject of submissions.)

The respondent contends and the Arbitrator and the President found that the literal construction should not be applied.

The respondent submitted that ‘nil’ was not an amount, citing this court’s decision in Kesen v Luke Singer Pty Ltd (1989) 18 NSWLR 566 at 568. That decision concerned s 11(1) of the 1926 Act, which provides:

In Kesen v Luke Singer Pty Ltd the worker suffered partial incapacity on 16 October 1982. He was awarded weekly compensation benefits from 21 September 1985 but none for the period from 16 October 1982 to 20 September 1985 (at 567). This was because he left Australia to attend to his dying father in Turkey and remained absent from Australia for three years, choosing not to seek or obtain work for reasons unaffected by his partial incapacity (at 568).

The Court of Appeal noted that s 11(1) required the Compensation Court:

It was held that the Compensation Court judge did not address steps (1) or (2), but went straight to step (4) (at 568). (Another possible view was that the judge considered that the worker would probably not have earned wages if uninjured because he chose not to seek or obtain work for reasons unaffected by his partial incapacity and so resolved the issue at step (1). That is not how the appeal was decided.) The Court said (at 568):

The Court’s conclusion that a figure of zero bore no relation to a figure derived from a subtraction of actual weekly earnings and probable earnings if the worker were uninjured for the purposes of construing s 11(1) of the 1926 Act says nothing about whether zero can be an amount for the purposes of s 38A(1). Section 35(2) shows that it can be, at least on a literal construction of the provision.

Both the Arbitrator and the President referred to the Explanatory Memorandum and to the Second Reading Speeches in relation to the Workers Compensation Amendment Bill 2015 that introduced s 38A. These are set out in the reasons for judgment of Meagher JA at [10]-[11]. The Explanatory Memorandum and the Second Reading speeches in both the Legislative Assembly and the Legislative Council stated that the entitlement of a worker with the highest needs to receive the minimum amount of $788 per week would be assessed having regard to a combined total of compensation benefits and post-injury earnings.

There is nothing in the text of s 38A that states that the right of a worker with highest needs to receive the amount payable under s 38A depends upon the worker’s earnings, although a “determination of the amount of weekly payments of the compensation payable to [the worker]” requires a consideration of the worker’s earnings. To the extent that ss 36 and 37 are engaged so as to yield a determination that some weekly compensation payments are payable, s 38A has the effect described in the Explanatory Memorandum and the Second Reading speeches, although in a curious way. It is curious because a worker with highest needs who is entitled to benefits under ss 36 or 37 of more than $788.32 (as adjusted), reflecting a substantial reduction in earnings, is not entitled to benefits under s 38A, but a worker with highest needs whose post-injury earnings more closely approximates his or her pre-injury earnings is so entitled, at least if some amount of weekly compensation is payable. But that is the effect of the section.

To illustrate, assume a worker with pre-injury average weekly earnings of $1,000 is assessed with whole person impairment of 31 per cent and returns to work earning $800 per week. Under s 37(2) the worker would be entitled to benefits of $950 - $800 = $150 per week. These would be increased under s 38A to $788.32, giving the worker a weekly income of $1,588.32. [1]

Compare the case of a more severely injured worker, assessed with whole person impairment of 50 per cent, with pre-injury average earnings of $1,000 per week, who returns to work earning $500 per week. He or she will be entitled to benefits under s 37(2) of $950 - $500 = $450 per week. This would be increased under s 38A to $788.32, giving the worker a weekly income of $1,238.32.

A still more severely injured worker with highest needs who has no current work capacity and had pre-injury average weekly earnings of $1,000, would be entitled to compensation payments under s 37(1) of $800 and no additional compensation under s 38A. That worker’s weekly income would be $800.

Section 38A achieves the result that workers with highest needs will receive at least $788.32. If a worker with highest needs and no current work capacity were earning less than $985 (as adjusted), his or her compensation payments would be topped up under s 38A to $788.32 (as adjusted).

The curious results illustrated above arise because the benefits payable under s 38A are not adjusted by reference to an injured worker’s other earnings but by reference to the amount of weekly payments of compensation payable to the worker. The less compensation payable, because of higher post-injury earnings, the greater are the benefits available under s 38A to a worker with highest needs. The result contended for by Mr Hee is consistent with that outcome.

This may well not be what Parliament intended. Can it be addressed by adopting a purposive construction?

The President said:

The construction for which Mr Hee contends may well be said to give rise to a perverse outcome. But it is consistent with the perversity inherent in the statutory scheme as illustrated above.

The literal meaning of s 38A is not necessarily its legal meaning. Its legal meaning is to be ascertained with regard to the context of the provision understood in the widest sense as including the mischief or object to which the provision was directed. Section 33 of the Interpretation Act 1987 (NSW) requires the adoption of a construction of a provision of an Act that would promote the purpose or object underlying the Act to one that would not promote that purpose or object. Section 34 of the Interpretation Act provides in substance that extrinsic materials not forming part of the Act (such as the Explanatory Memorandum or the Second Reading speeches in relation to the 2015 amendments) may be considered to confirm that the meaning of a provision is the ordinary meaning conveyed by the text of the provision, taking into account the purpose or object underlying the Act, or to determine the meaning of s 34A if the provision is ambiguous or obscure or the ordinary meaning conveyed by the text of the provision, taking into account its context and the purpose or the object underlying the WC Act, leads to a result that is manifestly absurd or unreasonable.

In Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531; [2014] HCA 9, French CJ, Crennan and Bell JJ addressed the extent to which a purposive construction can justify the addition or omission of words from the text of the provision. This involves a judgment of matters of degree to which the three conditions formulated by Lord Diplock in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-106, and as reformulated in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592 per Lord Nicholls of Birkenhead are relevant, albeit not necessarily necessary or sufficient (at [37]-[39]). In Wentworth Securities Ltd v Jones, Lord Diplock said (at 105-106):

In Taylor v The Owners – Strata Plan No 11564 (2013) 83 NSWLR 1; [2013] NSWCA 55, McColl JA at [65] added a fourth condition that the modification to be made to the literal terms of a provision to give it its intended purposive effect must be consistent with the wording otherwise adopted by the draftsman. These principles were accepted by the majority of the High Court in Taylor v Owners – Strata Plan No. 11564, albeit that the majority concluded that in the circumstances of that case, the conditions were not met.

As to the first issue, namely identifying precisely what was the mischief s 38A was intended to address, the answer, as it appears from the Second Reading Speeches was to assist workers with highest needs who were on very low pre-injury average weekly earnings. As to the second, it does not appear that the draftsman overlooked the eventualities to be provided for, but the drafting did not achieve the intended purpose.

The difficulties lie with the third and fourth issues. I do not know with what words the draftsman or Parliament would have addressed the issue if it had been raised, nor how redrafting would be consistent with the wording otherwise used by the draftsman. One might think that if the issue had been raised attention would need to have been given not only to the circumstances of this case where the calculation under ss 36 and 37 produces a determination of an amount that is taken to be zero, but to other cases illustrated by the examples above where, apparently perversely, for any given worker with the highest needs, the more the worker is able to earn after injury and hence the lower the weekly payment under ss 36 or 37, the higher the benefit under s 38A. The issue could be addressed by reading s 38A as if it provided:

That would confine the operation of s 38A to the provision of a floor for workers with the highest needs who are on low wages in accordance with the stated policy. Some such re-writing of the provision would be required to so confine the operation of the section. It goes well beyond the legitimate scope of judicial interpretation.

It follows that if a determination referred to in s 38A can be made because Mr Hee was a person with “current work capacity” as defined, he is entitled to the benefits claimed, at least for the second entitlement period.

Because the Arbitrator did not decide whether Mr Hee was able to return to his pre-injury employment (as that expression is explained above), and because the resolution of Mr Hee’s claim to benefits under s 38A depends upon whether there had been a “determination” under s 37 which required a decision on that question, the matter should be remitted to the Commission to make the necessary factual finding. Section 353(2) of the WIM Act provides that on the hearing of an appeal from a decision of a Presidential member, this Court may remit the matter constituted by a Presidential member for determination by the Commission in accordance with the decision of the Court. It will be for the Presidential member to decide whether the proceeding should be remitted for rehearing to an arbitrator to make the necessary finding of fact or whether the finding should be made by the Presidential member. In either case the parties will be entitled to be heard further as to the finding that should be made and the procedure to be followed for the making of that finding.

For these reasons I propose the following orders:

SIMPSON AJA: I have had the advantage of reading in draft the judgments of Meagher JA and White JA. Although I have no wish to add to the volume of words generated by the simple injury that gives rise to this appeal, I find it necessary to express my own conclusions.

The basic facts are uncontroversial. Mr Hee was a bus driver employed by the respondent (“the STA”). In addition to his usual rostered shifts, he undertook significant amounts of overtime, which boosted his income.

On 17 October 2013 Mr Hee sustained injury to his cervical spine in circumstances that entitled him to compensation under the Workers Compensation Act 1987 (NSW) (to which, in conformity with the reasons of Meagher JA, I will refer as “the 1987 Act”). Appropriate payments were made under the relevant provisions of the 1987 Act, to some of which I will shortly refer.

Pursuant to s 65 of the 1987 Act Mr Hee was assessed to have suffered, as a result of the injury, permanent impairment of 34 percent. He was paid compensation in accordance with an agreement reached with the STA under s 66A of the 1987 Act.

Mr Hee returned to work on 1 June 2014 without restriction as to his usual rostered shifts. He claims, however, that on his return to work, he was not able to undertake as much overtime as before his injury. He applied to the STA for weekly compensation in accordance with s 38A of the 1987 Act. For the purposes of the 1987 Act, the STA was a self-insurer. It may be taken that those provisions of the 1987 Act that confer powers or impose duties on an insurer apply equally to employers who are self-insured. The basis for Mr Hee’s claim was that, although he had returned to work, he was partially incapacitated for work (see s 33, set out below) because he was not able to undertake overtime to the same degree as previously. The STA rejected that application, saying that he was not entitled to further weekly compensation because he had resumed his pre-injury duties:

Pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the WIM Act”), Mr Hee appealed to the Commission constituted by a Presidential Member. By subs (5) of s 352 such an appeal is limited to a determination of whether the decision appealed against:

The appeal came before the President of the Commission, Mr Keating. Mr Keating determined the appeal without the need for a further hearing, on the documentary materials that had been before the arbitrator. He dismissed the appeal and confirmed the decision of the arbitrator. From that decision Mr Hee appeals to this Court. By s 353(1) of the WIM Act, such an appeal lies only where a party to proceedings is aggrieved “in point of law” by the decision.

Part 2 of the 1987 Act is concerned with liability of employers to pay compensation to workers who have received injury arising out of or in the course of employment. Part 3 deals with the benefits to which injured workers are entitled. The presently relevant provisions are all to be found in Part 3, Division 2, which provides for weekly compensation “by way of income support”. Subdivision 2 of Division 2 (ss 33-42) specifies the entitlement to weekly payments. Generally speaking, the entitlement varies according to the time that has elapsed since the injury and the severity of the injury, measured against the capacity of the injured worker to return to work.

Division 2 of Part 3 was inserted into the 1987 Act by the Workers Compensation Legislation Amendment Act 2012 (NSW). Further amendments were made to Division 2 by the Workers Compensation Amendment Act 2015 (NSW) (“the 2015 Act”). Section 32A, which defines the terms used in Division 2, was amended by the introduction of the terms “worker with high needs” and “worker with highest needs”, and, importantly for present purposes, by the insertion of s 38A.

Section 38A, under which Mr Hee’s claim was brought, makes “special provision for workers with highest needs”. Subsection (1) provides:

In order to understand s 38A, it is necessary to be familiar with some other provisions of the 1987 Act. The following definitions are presently relevant:

“Work capacity decision” is defined by reference to s 43, which identifies a number of decisions by insurers (or employers who, as here, are self-insurers) as work capacity decisions. Relevantly, “a decision about a worker’s current work capacity” is a “work capacity decision”.

By subs (3) (since repealed) of s 43, the Commission did not have jurisdiction to determine any dispute about a work capacity decision of an insurer (or self-insured employer) and was not permitted to make a decision in respect of a dispute before the Commission that was inconsistent with a work capacity decision of an insurer.

Section 33 provides:

Sections 34-38 specify the basis on and the manner in which weekly payments of compensation are to be calculated, varying according to what are called the “first entitlement period” (s 36, the first thirteen weeks), the “second entitlement period” (s 37, weeks 14-130), and thereafter (s 38). It is s 37 that is presently relevant. Section 37 provides for alternative entitlements for three categories of injured workers in the second entitlement period:

That factors that make up the formulae are defined in s 35(1). They include (relevantly) the worker’s pre-injury average weekly earnings (“AWE”) and “the amount to be taken into account as the worker’s earnings after injury” (“E”), being the greater of the amount the worker is able to earn in suitable employment and the worker’s (actual) current weekly earnings.

Section 35(2) provides:

As set out above, s 38A makes special provision for “workers with highest needs” – that is (relevantly) for workers whose degree of permanent impairment has been assessed to be more than 30 percent. An Explanatory note that accompanied the introduction of the Bill that became the 2015 Act explained that the existing scheme providing for payment of weekly compensation to injured workers would be changed in various ways, including:

It may here be observed that the words in the Explanatory note that I have italicised did not find their way into s 38A as enacted. By reason of the assessment of his injury as giving rise to 34 percent permanent impairment, Mr Hee was a “worker with highest needs”.

Before the arbitrator, the STA first argued that the jurisdiction of the Commission was limited by reason of s 43(3). That subsection applies where an insurer (or self-insured employer) has made “a work capacity decision” (that is, in this case, a decision about Mr Hee’s “current work capacity”). It will be recalled that “current work capacity” is defined, in effect, as diminished or reduced capacity for work. The importance of the STA’s position was that, if the STA had made a work capacity decision, the jurisdiction of the Commission was, at best, limited. The arbitrator was not satisfied that the STA had made such a decision, and the Commission was therefore not precluded, by s 43(3), from determining the dispute. That decision is not in issue on this appeal.

It was common ground that, by reason of the time that had elapsed since Mr Hee’s injury, and that he had returned to work for not less than 15 hours per week, the relevant provision for the calculation of any weekly payments to which he was entitled (other than under s 38A), was s 37(2). The formula provided by s 37(2) relevantly entitled an injured worker to whom that subsection applied to compensation calculated at 95 per cent of pre-injury weekly earnings less current weekly earnings. Mr Hee’s current weekly earnings exceeded the sum resulting from the application of that formula. The calculation therefore yielded a negative figure. Mr Hee therefore accepted that he did not qualify for payments of weekly compensation as prescribed by the application of the s 37(2) formula. His claim, however, was that, because he was not able to undertake the same amount of overtime as previously, “partial incapacity” within the meaning of s 33 had resulted from the injury and this, in conjunction with his status as a “worker with highest needs”, entitled him to payment of compensation in accordance with s 38A. That was because of the mandatory term in which s 33 is framed. The section provides, relevantly:

On Mr Hee’s argument, it was not to the point that application of the s 37(2) formula yielded a negative figure: s 35(2) specifically required that amount to be treated as “zero”.

The arbitrator considered that Mr Hee was not so entitled. In effect, the arbitrator gave little weight to Mr Hee’s evidence that his capacity to undertake overtime was reduced, having regard to documentary evidence of Mr Hee’s post-injury payments. He found that Mr Hee had:

The arbitrator’s factual conclusions were stated in a summary of findings, relevantly as follows:

A critical determination of the arbitrator was the construction of s 38A. In coming to that construction, the arbitrator had regard to the Explanatory note and the Second Reading Speech that accompanied the 2015 introduction of s 38A into the 1987 Act.

The relevant part of the Explanatory note has been set out above. In the Second Reading Speech, the Minister said:

The arbitrator then concluded:

The documentary material (which, it may be assumed, included written submissions of the parties’ legal representatives) presented to the President was not before this Court. The evidence, the arguments addressed and, indeed, the grounds of appeal are to be gleaned from the reasons of the President, which are detailed and comprehensive.

The President identified six grounds of appeal by which it was asserted that the arbitrator had erred “in fact, law or discretion”. The first was that the arbitrator had failed to determine that Mr Hee had a partial incapacity within the meaning of s 33 of the 1987 Act (such as to entitle him to weekly payments of compensation in accordance with Part 3, Division 2, Subdivision 2 of the 1987 Act). The remaining grounds attacked the arbitrator’s construction of s 38A. The grounds identified by the President do not include any challenge to the arbitrator’s finding that Mr Hee had “returned to his full pre-injury duties”.

The STA sought, by Notice of Opposition analogous to a notice of contention in this Court, to argue that the arbitrator had erroneously failed to find that it had made a “work capacity decision” within the meaning of s 43. The President declined to embark upon a consideration of that contention, saying that no grounds of (relevant) error had been identified. That is no longer in issue.

The President does not appear to have addressed, directly, the argument advanced in support of the first ground of appeal. So far as can be discerned, the argument was that, once an injured worker established total, or (relevantly) partial, incapacity within the meaning of s 33, it was necessary to proceed to a calculation in accordance with ss 36-38 (here, s 37). Even if that calculation resulted (as here) in a nil or negative sum, the worker would still be entitled to the benefit provided by s 38A of $788.32 per week. Support for that proposition was drawn from s 35(2).

With respect to the construction of s 38A, the President (at [140]-[143]) identified three pre-conditions for entitlement:

The President then said:

At [161] the President rejected the argument advanced on behalf of Mr Hee to the effect that, once a worker has established incapacity within the meaning of s 33 and has satisfied the definition of “worker with highest needs”, the worker is entitled to the benefit of s 38A irrespective of whether any entitlement to weekly compensation under ss 34-38 has been established. He considered that argument to be “directly contrary” to the text and context of s 38A. He placed emphasis on the words “determination of the amount of weekly payments payable …” (italics added) in s 38A (see [151]).

The President found error in the arbitrator’s reliance, in the construction of s 38A, on the Explanatory note and other extrinsic material, noting that the words “the worker’s actual earnings” in those documents do not appear in s 38A. The President nevertheless considered the error to be immaterial, since it resulted in the same construction as would have resulted from the application of “the ordinary grammatical meaning of the text” (at [173]). That, again, appears to have been a reference to the words “amount of weekly compensation payable” in s 38A. The President stated his conclusions as:

The President confirmed the decision of the arbitrator.

Six grounds of appeal were identified:

Grounds 1, 3, 4 and 5 are directed to the construction of s 38A. By Ground 2, complaint is made that the President misconstrued the arbitrator’s findings concerning Mr Hee’s loss of income. Ground 6 is directed to the construction of s 33.

The competing positions of the parties may be stated briefly. On behalf of Mr Hee, it was contended that:

Counsel for Mr Hee did not shrink from the consequences of the construction advanced; on that construction, a partially incapacitated worker whose loss of income was small (say, $1 per week) would, under s 38A, be entitled to payment of $788.32 per week – in addition to his or her actual earnings. Counsel also accepted that anomalies will arise on either interpretation of s 38A.

The STA’s position was that Mr Hee had returned to his pre-injury employment, as found by the arbitrator, and he therefore was not a worker “with current [that is, diminished] work capacity”. This argument equated “pre-injury employment” with “pre-injury duties”. In taking this position, the STA expressly accepted that Mr Hee did, within the meaning of s 33, suffer “partial incapacity”.

Although the grounds of appeal to this Court are framed as disparate errors, the essence of the appeal is that neither the arbitrator nor the President addressed the case Mr Hee sought to make in each proceeding; the arbitrator erroneously failed to make the necessary findings of fact to do so, and the President failed to correct those errors. And the President misconstrued the finding of the arbitrator with respect to whether Mr Hee met the definition of “worker with current work capacity” by failing to appreciate the difference between the finding that Mr Hee had returned to his full pre-injury duties, and a finding (which should have been, but was not, made) as to whether Mr Hee had returned to his pre-injury employment.

As indicated above, the case Mr Hee sought to make was that s 33 provides a direct route, where total or partial incapacity is established, to compensation under s 38A. It is not necessary, on that argument, in order to entitle an injured worker to compensation under s 38A, to establish that an amount is “payable” under ss 36, 37 or 38. It is sufficient to establish that the worker is within one of the categories for which ss 36, 37 and 38 provide. In this case, Mr Hee claimed to be, within s 37(2), “an injured worker with current [that is, diminished] work capacity [who] has returned to work for not less than 15 hours per week …”. It is immaterial that the application of the s 37(2) formula yielded a negative amount. By s 35(2) that negative amount was to be treated as “zero”, and allowed the pathway into s 38A.

The case advanced on behalf of Mr Hee called for a factual determination, under s 33, of whether he was partially incapacitated for work, as that term is ordinarily understood – that is, whether he had:

In order to determine Mr Hee’s case, whether he was able to return to his pre-injury employment was an essential question of fact. That finding was also necessary for a determination whether Mr Hee had “current [that is, diminished] work capacity” in order to permit a quantification of any weekly amounts “payable” under s 37(2).

It appears to have been assumed by the arbitrator that, because Mr Hee had returned, essentially, to his pre-injury work regime, he had returned to his “pre-injury employment”. Contrary to the STA’s submissions, that was not the finding the arbitrator made. That finding was that Mr Hee had “resumed his full pre-injury duties”. The distinction is, in this case, significant. The arbitrator’s assumption failed to take into account Mr Hee’s claim that he was working less overtime than he had pre-injury, and had therefore not returned to his “pre-injury employment”. It is true that the arbitrator referred to the conflicting evidence concerning the amount of overtime which Mr Hee had worked pre-injury and post-injury, and gave indications that he held doubts about Mr Hee’s claims. But he did not make a clear finding rejecting Mr Hee’s claim. It was a critical finding, because the determination of whether Mr Hee had “current [diminished] work capacity” depended on it. In failing to address the case Mr Hee sought to make, the arbitrator at least failed to accord natural justice: Dranichnikov v Minister for Immigration [2003] HCA 26; (2003) 77 ALJR 1088 at [24]; AAI Ltd t/as GIO as agent for the Nominal Defendant v McGiffen [2016] NSWCA 229; that failure constituted a constructive failure to exercise jurisdiction: Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105 at [39]. The same error infected the decision of the President.

At the risk of repetition, the case advanced on behalf of Mr Hee before both the arbitrator and the President involved the following steps:

However, that is not the end of the appeal. By s 353(2) of the WIM Act, this Court has power to remit the matter to the Commission constituted by a Presidential member for determination in accordance with any decision of this Court.

The ultimate question is the proper construction of s 38A. Unless the construction advanced by Mr Hee is correct, there is no utility in remitting the matter to the Commission. That is because it is accepted on all sides that, on the application of the formula prescribed by s 37(2), no amount would be “payable” to Mr Hee under that subsection. If, as he asserts, an amount of “zero” is an “amount payable”, then, if it is found that he had “current [that is, diminished] work capacity”, the Commission would be obliged to determine in his favour that he was entitled to a weekly payment of $788.32, regardless of his current earnings. If, on the other hand, the construction adopted by the President is correct, then, even if he is found to be a “worker who has current [diminished] work capacity”, s 38A does not operate to entitle him to payment. That is because there is no amount of weekly payments “payable” under s 37(2).

As the judgment of White JA demonstrates, either construction is apt to give rise to anomalies. In some respects, Mr Hee’s argument is an unattractive one. If his construction of s 38A is correct, he will be the recipient of an unwarranted windfall – $788.32 per week, in addition to his current weekly earnings, in circumstances where his loss of income is not such as to entitle him to any payment under s 37(2).

If, on the other hand, the President’s construction (adopted by the STA) is correct, the very workers who, according to the Minister, were intended to benefit from the provision, will not.

The words in the Explanatory note and the Minister’s Second Reading Speech are a powerful indicator that the intention was to create an entitlement that took into account post-injury earnings of the claimant worker. Those words were not enacted. The task of this Court is to construe the legislation as it is enacted. The literal construction of s 38A is as contended for on behalf of Mr Hee. The words omitted cannot be inserted by judicial decree.

An alternative approach is to treat s 33 as a prelude to ss 36-38, which sections then amplify the entitlement and specify the method of calculation of the payments contemplated by s 33. But to adopt that construction would be to read into s 33 words that the legislature did not enact.

The conundrum in this debate is the meaning of s 35(2) which is, to say the least, obscure. Section 35(2) does not provide that “zero” is an “amount”. It deals with amounts that are less than zero which are then to be treated as “zero”. In fact, that is precisely what the application of the s 37(2) formula to Mr Hee’s pre- and post-injury earnings yields. By reason of s 35(2), Mr Hee’s entitlement is to be treated as “zero”. That is the amount payable under s 37(2), and the amount to be taken into account for s 38A purposes.

I appreciate that this result may well not be what the legislature intended. It is the consequence of what it enacted.

This construction to which I have come is not to be treated as any conclusion that Mr Hee is entitled to payment under s 38A. That, as indicated above, will depend on findings of fact not yet made. The analysis has been necessary to determine what order should be made following the conclusion that neither the arbitrator nor the President addressed the case advanced on behalf of Mr Hee, and that the necessary fact finding exercise was not undertaken.

With some hesitation, I have come to the conclusion that the orders proposed by White JA ought to be made.