A worker received lump sum compensation in respect of 6% Whole Person Impairment of the lumbar spine. Five years later, he was assessed at 6% WPI, again, but this time in respect of more than one body part. If the percentage of impairment remained the same but additional body parts were found to be impaired, was the Worker entitled to further lump sum compensation?
Author: Chad Farah Judgment Date: 27 August 2018 Citation: Ilic v 2/11 Leonard Ave Pty Ltd (in liquidation)  NSWWCCPD 34 Jurisdiction: Presidential Appeal – Workers Compensation Commission
Lump sum compensation is awarded in respect of a date of injury, and not in respect of any particular body part that was injured on that date or injured later as a consequence.
The body parts that make up Whole Person Impairment are irrelevant in determining whether further lump sum compensation is payable; only an increase in the total figure (not an increase in the impaired body parts) will attract further compensation.
The Arbitrator's reasons need not be lengthy or elaborate as long as they adequately address all the relevant factual and legal issues. Brevity, in itself, is no ground for appeal.
The Applicant, Mr Ilic, was employed by 2/11 Leonard Ave Pty Ltd (the Respondent) as a handyman. On 12 August 2009, he sustained injury to his lumbar spine while pulling a wheel barrow from a truck.
Primary liability was admitted by the workers compensation insurer under Sections 4 and 9A of the Workers Compensation Act 1987 (the 1987 Act). In other words, it was admitted that the injury was compensable under the 1987 Act because it arose out of employment with the Respondent and to which that employment was a substantial or the main contributing factor.
On 30 May 2012, the Applicant entered into an agreement with the insurer for receipt of lump sum compensation under Section 66 of the 1987 Act in respect of 6% Whole Person Impairment (WPI) arising from the lumbar spine injury (the agreement).
The matter lay dormant for some time.
On 10 November 2017, The Applicant made a further claim for lump sum compensation. He alleged that he had suffered additional injuries to his right shoulder, right hip and right knee as a consequence of using a walking stick which in turn was a consequence of his original back injury.
Liability for the consequential injuries was not in dispute but rather the level of impairment arising from same. The dispute proceeded to the Workers Compensation Commission and, eventually, to an Approved Medical Specialist (AMS) for the assessment of WPI in respect of the lumbar spine and the additional consequential injuries claimed.
On 5 March 2018, the AMS found a total of 6% WPI. This figure was made up of 2% for the lumbar spine, 4% for the right lower extremity and 0% for the right upper extremity.
The Arbitrator determined that there was no entitlement to lump sum compensation under Section 66 because the overall percentage of impairment remained unchanged.
The Applicant argued the appeal on two grounds:
- That the original award for 6% WPI was in respect of the lumbar spine only, meaning that figure of WPI was affixed by virtue of the award so that the impairment of the lumbar spine could not be lower in future. On that logic, a WPI assessment for additional body parts (i.e. 4% for the right lower extremity) can only form a surplus that is compensable; and
- That the Arbitrator failed to provide adequate reasons for the determination.
President Keating referred to Section 66A(3) of the 1987 Act which states:
(3) The Commission may award compensation additional to the compensation payable under [the agreement] if it is established that:
a) the agreed degree of permanent impairment is manifestly too low, or
b) the worker has been induced to enter into the agreement as a result of fraud or misrepresentation, or
c) since the agreement was entered into, there has been an increase in the degree of permanent impairment beyond that so agreed.
The President then said at paragraph 64:
'Mr Ilic is not entitled to be awarded a further 4% whole person impairment for the right lower extremity, as he submits, merely because it is a separate impairment to the lumbar spine and was not the subject of the complying agreement. As I have said, the impairments concern the same injury [emphasis added] and must be assessed together and not separately.'
The President also noted that the Arbitrator was under a statutory duty to provide reasons for the determination, albeit in nothing more than a 'brief statement'.1 It was said that the issue in this case was restricted to whether there was an increase in the level of permanent impairment. In President Keating's view, the Arbitrator disposed of that issue succinctly but lawfully.
Further, it was held that nothing would turn on the issue even if the Arbitrator had fallen short in the reasoning process because no error of law could be made out.
The appeal was dismissed and the Arbitrator's Certificate of Determination was confirmed.
Why this case is important
Workers who received lump sum compensation prior to 19 June 2012 are entitled to one further 'top up' claim.2 The promise of additional compensation or being able to meet the threshold for work injury damages (15%) is always appealing and there is a view that the more body parts included in a claim the merrier.
One way to aggregate WPI from several body parts is by alleging consequential injuries. While there is a general assumption amongst practitioners that the mere presence of consequential injuries will give rise to additional compensation, we must remember the fickle nature of what is considered 'permanent' impairment. The results tend to vary from one AMS to another and from one time period to another.
So, while further body parts can be included in a claim for lump sum compensation some years later, there is always the possibility that the original injury has in fact improved in that time. It follows that no further compensation is payable unless the overall WPI has increased.