Powers of Deduction – Applying Section 323 of the 1998 Act
Published by Darran Russell
Willoughby City Council v Lu [2023] NSWPICMP 162
The Claimant was an After-School Care Educator who commenced with the insured Council in February 2019. The Claimant alleged that she was subject to bullying and harassment whilst performing her duties and ceased work in February 2020.
The matter was referred to a Medical Assessor (MA). In the Medical Assessment Certificate, the MA assessed 19% WPI with a 1/10th deduction pursuant to section 323 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act) due to a previous psychological injury.
The employer appealed the decision on the basis that the MAC was made on the basis of incorrect criteria and the MAC contains a demonstrable error. Specifically, the Appellant employer appealed against the 1/10th deduction, submitting that it was inappropriate and a greater deduction should have been applied.
The Medical Assessor decision
The MA observed that the Claimant denied any pre-existing mental health conditions, which was noted by a number of her treating doctors. However, clinical notes indicated that the Claimant had been under scrutiny and alleged bullying and harassment through the mid and latter part of 2018 in her previous employment. The Claimant resigned from her previous employment in December 2018, a few months before commencing her work with the Appellant employer.
The MA stated that the Claimant had denied any previous mental health problems to several assessors, even when confronted with evidence to the contrary. The MA accepted that the Claimant had a pre-existing condition, however found that it was difficult to determine the nature or extent of these problems. The MA would apply a 1/10th deduction under section 323 of the 1998.
Decision
The Appellant employer submitted that the 1/10th deduction was inadequate in the circumstances. It was submitted that it would not be too difficult or costly to determine the extent of the previous psychological injury as there were contemporaneous clinical notes which should have been given more weight that the Claimant’s untruthful accounts.
The Appeal Panel states that while it may not be uncommon for an injured worker to fail to mention prior injuries or conditions, further motives may be examined if this occurs on a regular basis. The Panel noted that in the Claimant’s statement dated 15 March 2022, she denied any previous formal disciplinary action in the workplace. While this may have been technically correct, the Appeal Panel noted that the evidence in the clinical notes established complains of bullying and harassment in the Claimant’s previous employment.
The Appeal Panel observed that the MA had noted that the Claimant’s experiences in her previous employment were “almost identical” to what occurred with the Appellant employer. The Appeal Panel was satisfied that the previous complaints in December 2018 were a relevant factor and agreed that section 323 should apply and an appropriate deduction made.
The Appeal Panel considered that while the MA gave careful consideration of the evidence, he did not engage with the effect that the Claimant’s pre-existing condition had on her current impairment. The Panel noted that the MA did not make any findings of the Claimant’s honesty beyond stating that her consistent denials make it difficult to properly determine her mood and anxiety issues prior to her commencement with the appellant employer.
The Appeal Panel disagreed with the MA on this point, stating that;
“The contemporaneous records describe a psychological problem in almost identical circumstances to those which had occurred in 2018, for which psychological treatment was still being given the month before Ms Lu commenced her employment with the appellant employer.”
The Appeal Panel considered that the MA did not explain how the 2018 condition only warranted the statutory assumption 1/10th deduction. In failing to do so, the Appeal Panel considered that the MA had applied a deduction that was glaringly improbable. As such, the Appeal Panel determined that the MAC should be revoked. In the Appeal Panel’s view, the similarity and temporality of the pre-existing condition warranted a 3/10th deduction. The Appellant employer had also made Appeal submissions with respect to three PIRS categories. However, the Appeal Panel determined that the assessment was open to the MA.
Implications
This case provides an example of the type of evidence that may be considered when making a deduction beyond that of the presumed 10% pursuant to section 323 of the 1998 Act. In this case, significant weight was placed on clinical notes that indicated the Claimant was receiving treatment for her prior condition shortly before the commencement of her employment.
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