Tribunal finds employer’s decision to unilaterally cease making weekly payments, after it found evidence of apparent over-compensation, to be unlawful.
In issue
- Whether s149 of the Workers Rehabilitation and Compensation Act 1988 (Tas) (the Act) can be relied upon by an employer, in the absence of a determination from the Tribunal, to exercise a unilateral decision to cease making weekly payments of compensation to a worker for the purposes of recovering an apparent overpayment.
The background
On 10 July 2020 the worker was involved in a serious accident at work. His claim for compensation was initially accepted and he continued to serve workers compensation medical certificates verifying his incapacity to work.
The employer sought to review weekly payments pursuant to sections 88 and 60A of the Act on 28 May 2021 by filing a referral with the Tasmanian Civil and Administrative Tribunal. The employer relied on a KPMG report finding the worker had understated his pre and post injury income.
On 24 May 2022 the parties attended a teleconference with a conciliator, who recommended the Tribunal make interim orders suspending the employer’s obligation to make weekly payments. The Tribunal declined to exercise its discretion to make the requested order and asked for further documentation from the worker, which was provided.
Despite the determination of the Tribunal, the employer ceased making weekly payments of compensation to the worker on 3 August 2022 and emailed the worker’s solicitor a payroll schedule showing the deductions to be made to recover the alleged overpayment of weekly payments.
The decision
The Tribunal determined the employer’s decision to unilaterally cease or terminate weekly payments of compensation was unlawful.
The employer relied on s 149 of the Act which allows an employer to recover compensation received in excess of any entitlement as a debt or deduction from money that may be payable.
The employer argued it was entitled to suspend or reduce weekly payments if it determined that an overpayment of weekly payments had been made. It claimed the wording of the section did not require any agreement between parties or a determination by the Tribunal to be made before an overpayment of weekly payments was recoverable.
In reaching her finding, Deputy President Clues stated the law is clear in that an employer cannot unilaterally decide to cease or terminate weekly payments where liability has been accepted and medical certificates are being provided by the worker certifying their incapacity. Deputy President Clues considered that interpreting s 149 under the Act to have that effect would be contrary of the purposes of the Act, and that if the employer wishes to cease or terminate weekly payments for the purpose of recovering a purported overpayment, scrutiny from the Tribunal as to the existence of an overpayment or agreement from the worker is required.
Implications for you
This decision clarifies the operation of s 149 of the Act for employers/compensation payers. In the event an employer/compensation payer suspects overcompensation has occurred, employers/compensation payers must either utilise the legal avenues available under the Act (sections 88, 86 or 81A(5)) or come to an agreement with workers to reduce or terminate weekly payments.
More generally, this decision also reinforces the proposition the Act is to be interpreted beneficially towards workers.
