This article will focus on the amendments to Section 18 of the RTW Act, being the obligation of an employer to provide work to an injured employee. There are several other provisions which have been amended (including provisions relating to dust diseases), but some of these amendments have not yet come into operation.

Under the RTW Act, the entitlement to weekly payments ceases after 104 weeks (unless the worker is “seriously injured”). With this change to entitlement to weekly payments, a duty is imposed on employers to provide suitable employment to injured workers.

It is important to note that under previous legislative schemes (including the Workers Rehabilitation and Compensation Act 1986 (SA) (WRC Act), there was no equivalent to Section 18 of the RTW Act. However, injured workers were entitled to access weekly payments while they remained incapacitated for work.

The amendments to Section 18 of the RTW Act will be retrospective, that is, they will have application to injuries which occurred before the amendments come into operation.

Supporting evidence

Workers seeking suitable employment under Section 18 are required to provide their employers with their request in writing. They are required to include:

• confirmation that they are “ready, willing and able to return to work with the employer”; and
• details of the type of employment that they consider they are able to perform.

Workers are also required to provide their employer with supporting medical evidence establishing that they have capacity for work. It is envisaged that this evidence could be as simple and as easily obtained as a work capacity certificate.

Capacity for work

Previously, the Tribunal had held that Section 18 of the RTW Act only applied to workers who had a current incapacity for work. The amendments to the RTW Act mean that it also applies to workers who have ceased to be incapacitated for work as a result of the work injury.

However, a worker who has ceased to be incapacitated for work as a result of their work injury, and who seeks employment with their pre-injury employer under Section 18, must provide their employer with written notice of their request, containing the details set out above, within six months of ceasing to be incapacitated.

Timeframe for response

On receipt of a request from a worker for suitable employment pursuant to Section 18, an employer then has one month within which to respond to the worker to advise whether or not they will provide suitable employment.

If the employer refuses to provide suitable employment, or the worker “considers that any employment offered by the pre-injury employer … is not suitable”, then the worker can, within one month of the refusal or offer of unsuitable employment, apply to the Tribunal seeking an order that the employer provide employment.

Serious and wilful misconduct

Section 18 will have no application if the worker’s employment was terminated on account of serious and wilful misconduct. However, the employer bears the onus of establishing that the worker has engaged in serious and wilful misconduct.

The amended Act does not specifically address circumstances in which a worker’s employment has been terminated as a result of performance issues, or otherwise, where performance issues were present during their employment.  It is not clear whether that would be sufficient to defend a Section 18 claim, however, the existence of performance issues, at least in some cases, may provide sufficient basis for an employer to argue it is not “reasonably practicable” for suitable employment to be provided.

It is recommended that employers adhere to the standard performance management steps and procedures

Powers of the Tribunal

The Tribunal will now have the power to make orders which specify:

• the duties to be provided;
• any adjustments that the employer will need to make to allow the worker to perform specified duties; and
• the number of hours of work that the employer must provide to the worker.

The Tribunal may also make an order that these matters be dealt with in stages in a recovery/return to work plan or on some other reasonable basis

It is not clear what would occur in the event there is a more significant change in the worker’s capacity, or circumstances more generally.  In those circumstances, the parties may need to seek further direction(s) from the Tribunal. Without further clarity, it is not unreasonable to expect this will place extra strain on the Tribunal’s time and resources.

Payment of wages

When making an order under Section 18, the Tribunal will have the power to require an employer to pay a worker the wages or salary that they would have expected to receive in the suitable employment if it had been provided from the date they made their request.

This remains the case even where a worker is outside of their entitlement period for weekly payments (as, were they within the entitlement period, they would more than likely have already been in receipt of weekly payments).

As matters can move slowly through the Tribunal, from the time a dispute is lodged up until judgement is delivered (if it has not been resolved prior), this could result in a significant lump sum payable to a worker – and a significant financial implication for an employer. Presumably if an employer appeals a decision of the Tribunal which ordered payment of wages, they could seek a stay of this order until any appeal had been heard and decided (but then the financial implications may be even more significant should they be unsuccessful on appeal).

Further, noting that the WRC Act (and its predecessors) had no equivalent to the Section 56 lump sum entitlement that exists under the RTW Act, there might be a concern that a worker is ‘double dipping’ if they have already received compensation for their economic loss.

Groups of self-insured employers and agencies and instrumentalities of the Crown

The duty of an employer to provide suitable employment, where that employer is a part of a group of self-insured employers or is an agency or instrumentality of the Crown, now extends to other employers within the group and other agencies and instrumentalities of the Crown. The duty is no longer limited to the pre-injury employer.

The other employers, agencies, or instrumentalities should only be considered if there are “good reasons” for employment to be provided by another member, agency or instrumentality.

However, with respect to groups of self-insured employers, these amendments will only apply to groups which are “related bodies corporate”, and so presumably they would share a management structure which would make the movement of the worker from one employer to another a coordinated process.

It will be interesting to see how the Tribunal deals with, in the case of a group of self-injured employers, the legalities of enforcing a separate entity into an employment relationship with someone who is not their employee.

Presumably there will also be issues of retraining and vocational suitability. To use an example from the second reading speech, would a worker who has worked in a warehouse for a number of years, driving trucks and forklifts, have the vocational suitability to work in a retail outlet serving customers?

Further, there is no explanation of what a “good reason” would be for requiring a different employer to provide employment. Presumably this will be defined as matters come before the Tribunal and receive judicial consideration. However, that does not assist groups of self-insured employers or agencies or instrumentalities of the Crown in assessing Section 18 applications in the meantime.

Costs

The amended RTW Act now specifies that an employer (who is not the compensating authority) has the ability to claim costs from the compensating authority for their involvement in a Section 18 dispute (up to the prescribed amounts) regardless of the outcome of the dispute.

This is subject to the standard qualification that the employer has not acted unreasonably or vexatiously in the course of the proceedings.

This ability to claim costs previously existed prior to the amendments to the RTW Act. However, the employer was only able to claim their costs if the Tribunal declined to make an order that the employer provide the worker with suitable employment.

Labour hire workers

Labour hire workers are also protected under the amendments to the RTW Act. There will now be an obligation on host employers to cooperate with the pre-injury employer in offering suitable employment to the labour hire worker.

However, the amended RTW Act does not create any obligation on the host employer to directly employ the labour hire worker. They will remain an employee of their pre-injury employer.

Cessation of Section 18 obligations

The amended Act still does not address when an employer’s obligation to offer suitable employment under Section 18 comes to an end.

Seriously injured workers have no entitlement to weekly payments past retirement age (unless their injury occurred less than 104 weeks before they reached retirement age, or if it occurred after they reached retirement age).

As the RTW Act currently stands, an employer’s obligation to offer suitable employment under Section 18 is ongoing past retirement age and does not come to an end.

Arguably, that obligation never disappears, unless any of the exclusionary factors set out in Section 18(2) of the RTW Act apply.

One of those exclusionary factors is what is “reasonably practicable”. Obviously, what is reasonably practicable will change as a worker ages, and what suitable employment looks like for a forty-year-old may be very different to what suitable employment looks like for an eighty-year-old. However, that being said, on the basis of the current Act that obligation still exists.

Summary

While the amended Act gives significant protections to workers, it also raises more questions than answers for employers.

The implications for groups of self-insured employers, and agencies and instrumentalities of the Crown, could potentially be significant – especially if different members of the group, agencies, and/or instrumentalities, are forced into employment relationships with a worker who was not previously one of their employees.

The financial implications for employers who decline to offer suitable employment following a request pursuant to Section 18, but are then ordered to do so by the Tribunal, may be crippling for smaller businesses. It would not be unheard of for a decision in a dispute that proceeds to trial to be handed down two years following the date of the commencement of the dispute, by the time the dispute has made its way through the Conciliation, pre-trial, and trial process.

Ultimately, for employers, the changes will mean that they will need to turn their mind to any potential Section 18 requests and / or disputes at the beginning of a claim, so that the best outcomes can be achieved for all parties.