Goudappel decision and its impact

How this affects Workers’ Rights to compensation

The Workers Compensation Legislation Amendment Act, 2012 which was passed by the NSW Parliament on 19 June 2012 made wide ranging changes which significantly reduced injured workers’ compensation entitlements.

While publicly stating that the changes were not retrospective, the amending legislation sought to ensure that workers who had been injured prior to 19 June 2012 were caught by changes to the law. One of the changes made concerned an injured worker’s entitlement to lump sum compensation for permanent impairment caused by an injury. That entitlement arises from Section 66 of the Workers Compensation Act, 1987 (hereafter “the Act”).  Up until 19 June 2012, so long as an injured worker sustained a permanent impairment of at least 1% in whole person impairment terms, then the injured worker was entitled to lump sum compensation for that impairment. As from 19 June 2012, only an injured worker who has a permanent impairment of 11% or more in whole person impairment terms is entitled to lump sum compensation and there is no separate entitlement to compensation for pain and suffering pursuant to Section 67 of the Act as that entitlement was abolished by changes to the law that came into effect on 19 June 2012.

Workers compensation insurers began to deny claims for lump sum compensation pursuant to Section 66 of the Act where the permanent impairment in whole person impairment terms was less than 11%, even where the worker had been injured prior to 19 June 2012.  It was assumed that only those workers who had made a specific claim for permanent impairment compensation pursuant to Section 66 of the Act prior to 19 June 2012 were entitled to compensation under the old law. The New South Wales Court of Appeal delivered its judgment in Goudappel –v- ADCO Constructions Pty Limited [2013] NSW CA 94 on 29 April 2013. It concerns the interpretation of the amendments made to workers compensation law by the Workers Compensation Legislation Amendment Act, 2012.

Mr Goudappel injured his left foot on 17 April 2010. He made a claim for worker’s compensation benefits against his employer on 19 April 2010. Mr Goudappel did not make a specific claim for lump sum compensation pursuant to Section 66 of the Act until after 19 June 2012.

Mr Goudappel was assessed as having a 6% whole person impairment as a consequence of the injury to his left foot. Under the old law, he was entitled to $8,250 but the workers compensation insurer argued the amendments abolished his claim as his whole person impairment was less than 11% and he had not made a specific claim for compensation pursuant to Section 66 of the Act until after 19 June 2012.

The Workers’ Compensation Commission ruled against Mr Goudappel, deciding that the changes to the law applied to his claim. The NSW Court of Appeal then considered the matter and on 29 April 2013 unanimously found in Mr Goudappel’s favour.

The decision of the NSW Court of Appeal in Goudappel means that as long as a worker injured prior to 19 June 2012 had made a claim in the prescribed form for workers compensation of some type as a consequence of the work injury then the injured worker is entitled to claim lump sum compensation for permanent impairment pursuant to Section 66 of the Act under the law that existed prior to 19 June 2012. Put simply, the 11% whole person impairment threshold does not apply to those workers. It also means that if a worker who was injured prior to 19 June 2012 and who made a claim for any type of compensation before that date satisfies the entitlement to compensation for pain and suffering pursuant to Section 67 of the Act then the worker is entitled to receive that compensation.

The State Government cannot overcome the effect of the Goudappel decision by passing further regulations. It must amend the Act. Presently, the employer’s workers compensation insurer is deciding whether it should seek leave to appeal to the High Court of Australia.