The issue of whether an insured engaging in part-time employment effects their entitlement to benefits under a Total and Permanent Disablement (TPD) is a question that insurers are having to determine with increasing frequency. The recent New South Wales Court of Appeal decision of TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim [2016] NSWCA 68 considered a range of issues relevant to the assessment of TPD claims and affirmed its previously stated position in Manglicmot[1]and Dargan[2] that a capacity for part-time work means an insured cannot be TPD under a definition requiring the Insured Person to be unable to ever work again.[3]

THE MANGLICMOT CASE

In the 2011 decision of Manglicmot the NSW Court of Appeal supported the view that an insured is not TPD if he or she is able to engage in an occupation, albeit on a part-time basis.  In that case the Insured was a bank teller who was injured in November 2002.  He then continued to work part time until he accepted a redundancy in August 2003.  The relevant definition of TPD was:

“(b) having been absent from work through injury or illness for an initial period of six (6) consecutive months and in our opinion being incapacitated to such an extent as to render the Insured Person unable ever to engage in or work for reward in any occupation or work which he or she is reasonably capable of performing by reason of education, training or experience."

The Court had to determine whether or not the fact the insured had continued to work part-time for approximately nine months after the injury excluded him from TPD entitlements under the policy.  The Court found that the insured’s capacity for part-time work meant that he did not satisfy the definition of TPD under the policy and stated:

“The Hannover TPD clause defines total and permanent disablement . It is quite emphatic: the member must be unable ever to engage in or work for reward in any occupation…The clause requires unfitness to work, without distinction between full time work and part time work other than by regard to the work which the member is reasonably capable of performing by reason of education, training or experience.”[4]

THE DARGAN CASE

Two years later, the New South Wales Court of Appeal confirmed this position inDargan. This matter involved a Plaintiff who had been working as removalist and injured his back. Due to the injury he did not return to that employment.  After the Injury the Plaintiff resumed working as a self-employed taxi driver, working approximately 20 hours a week. 

The definition of TPD in the relevant policy, was:

“the Insured Person is unable to follow their usual occupation by reason of accident or illness for six consecutive months and in our opinion, after consideration of medical evidence satisfactory to us, is unlikely ever to be able to engage in any Regular Remuneration Work for which the Insured Person is reasonably fitted by education, training or experience.”

The words “Regular Remuneration Work” were defined in the Policy to mean:

“an Insured Person is engaged in regular remunerative work if they are doing work in any employment, business, or occupation. They must be doing it for reward - or the hope of reward - of any type”.

The Insurer submitted that the relevant definition made no reference to such regular work being full or part-time and submitted that the Plaintiff’s regular part-time work of 20 hours per week fell within the definition of Regular Remuneration Work. 

The Court agreed, finding that the reference to “regular” should be read in the normal sense of the word (i.e., not casual or intermittent).  Although the Plaintiff was employed on a part-time basis, his employment was regular and consistent over a period of two years in a role within his education, training and experience. The Court ultimately found:

“…There is no limitation on the work being full-time or part-time. The limitations are that the work must be remunerative, that is done for reward or hope of reward and must be regular… Thus, it would not in the present context include casual work or other work of an intermittent nature. However, the word regular would not on a literal construction exclude part-time work. In the present case Mr Dargan was able to work regularly, albeit on a part-time basis as a taxi driver, at least from June 2008.... It follows, in my opinion, that Mr Dargan was capable of doing Regular Remuneration Work.”[5]

LESSONS

The decision of Shuetrim confirms the earlier decisions of Manglicmot and Darganwith respect to an Insured Person’s capacity to work part-time. As a result, insurers (subject of course to the wording of the relevant definition of TPD under the Policy) are entitled to determine that an Insured Person is not TPD if they are, or a capable of, working on at least a part-time basis.