Preparing for change - Update on amendments to the Return to Work Act Scheme

Return to Work (Employment and Progressive Injuries) Amendment Act 2024

The proposed RTW Amendment Act has now passed in both houses and the majority of the proposed amendments commenced on and from 1 December 2024, with the remaining changes likely to come into effect in the near future.

The most significant proposed changes include:

• New definitions have been provided in s 4 of the Return to Work Act 2014 (RTW Act) to assist workers with terminal conditions to pursue compensation at an earlier stage, and with greater certainty:
  • Stabilised is now taken to mean a worker’s condition is unlikely to change within the next 12 months (with or without treatment), notwithstanding any temporary fluctuations that may occur.
  • This is coupled with the inclusion of that same defined term within s 22 of the RTW Act which will replace the concept of maximal medical improvement (MMI) being a requirement for a permanent impairment assessment to take place.
  • ‘Terminal condition’ is defined to mean incurable conditions which in the opinion of a medical practitioner cause death, with an associated definition related to the qualifications that a relevant medical practitioner must hold.
• Section 5 of the RTW Act, which relates to Average Weekly Earnings, has been amended to address a particular issue relating to latency of onset of dust/fibre diseases in fixing a date of injury.  The focus of the amendments is to enable a worker to set the relevant date of injury on the date that the worker is diagnosed with a dust/fibre disease or when the exposure occurred.
• Section 17A of the RTW Act now precludes an employer or insurer from being present during a treatment consult with a worker, absent express consent from a worker.
• Widespread amendments to s 18 of the RTW Act are proposed, relating to an employer’s duty to provide work, which will have the following effects:
  • Procedurally, there is now a requirement for an employer to produce all relevant documents relating to a s 18 application within 21 days of proceedings being lodged. This mirrors the practice of filing a ‘Book of Documents’ in mainstream review proceedings.
  • Present authorities decided under the current iteration of s 18 had described a requirement that a worker can only pursue an application for ‘suitable employment’, being a defined role as opposed to a collection of duties. However, the amendments may weaken this position by allowing the South Australian Employment Tribunal (SAET) to consider employment not nominated by the worker, and to take a broader view of the types of duties involved, rather than just roles available.
  • Efforts have been made to unwind the effect of SAET decisions, which have held that a worker cannot bring a s 18 application if they have ceased to be incapacitated from the effects of their work injury. Previously, the provisions of s 18 were interpreted to allow an application only where suitable duties were required (i.e., where the worker had a partial incapacity for work). Under the new provisions, workers will now have a six-month grace period after they are certified as having ceased to be incapacitated to give notice of their s 18 application.
  • The exceptions under s 18(2) have been supplemented to include a further defence, where a worker has validly been terminated for serious and wilful misconduct with the onus of proof resting on the employer to establish that defence applies. This is complementary to the amendments to s 48(2) of the RTW Act (discussed below).
  • Employers who operate as part of a group may, at the discretion of the SAET, be treated as one overarching indivisible entity. This is subject to limitations in that there must be ‘good reasons’ to make a s 18 order against someone other than the pre-injury employer in the cases of grouped employers, this is a defined change, which will potentially require broader consideration of the availability of roles/duties and the suitability or feasibility of a s 18 request.
  • The SAET may, when an order is made in favour of a worker in a s 18 application case, have the ability to issue an order requiring payment an amount equivalent to the wages or salary that the worker would have been expected to receive from suitable employment (or some other, more appropriate amount) during the period that the s 18 application is active. The order for that payment may be back dated to the date that the application was lodged. This effectively introduces a financial benefit attached to a s 18 application, whereas previously the provision was primarily related to a right or entitlement to work itself. The power to make such an order appears to be discretionary and so we expect that over time, mitigating factors could lead the SAET to adopt a lesser amount or withhold payment of compensation for wages/salary if a worker is successful.
  • There is also now a requirement that a host employer cooperate with any labour hire employer who is involved in a s 18 application in circumstances where the worker was working with both parties. This is a novel introduction to the provision. There is no requirement that a host employer contract with the worker directly or be forced to do so, but in effect this amendment would seem to require at least cooperation and communication with a worker and insurer if a suitable duties application was accepted and at its highest, may require a host employer to accommodate a worker who is the subject of a s 18 order at a particular site.
  • However, a significant limitation of the Labour Hire Licensing Act 2017 (SA) is that it only applies to labour hire arrangements involved in ‘prescribed work’.  This includes specific activities such as cleaning work, horticulture processing, seafood processing work, trolley work (collection/stacking trolleys within a supermarket premises).  Currently, there are no additional activities defined as ‘prescribed work’ in the accompanying regulations, but new regulations could be introduced in the future.
  • A range of complementary amendments to s 25 of the RTW Act, relating to Recovery and Return to Work Plans, have been made to accommodate the grouped and host employer amendments to s 18, if an appropriate order or favourable decision is made.
• Section 48(2)(e) of the RTW Act has also been amended. Previously the provision related to discontinuances where a worker was terminated for serious and wilful misconduct. The provision will now provide that a worker’s employment has been ‘properly terminated on the ground of serious and wilful misconduct’. As the authorities relating to this provision always placed an onus on the relevant insurer to establish that a termination for serious and wilful misconduct was valid, this appears to be a clarifying amendment.

Statutes Amendment (South Australian Employment Tribunal) Act 2024

The SAET Amendment Act was passed in both houses and also largely became operative on and from 1 December 2024.

Whilst far less extensively focused on RTW Act matters than the amendments discussed above, there are a number of important changes within the RTW jurisdiction of note.

• Section 43 of the RTW Act that relates to Compulsory Conciliation Conferences has been amended to reflect to main changes. Firstly, the maximum period for conciliation has been extended from six to 10 weeks. However, the criteria for referral have also been amended.
  • Whereas under the current SAET Act, a Commissioner would need to be satisfied that there is a reasonable prospect of settlement to grant an extension, they must now be satisfied that ’a substantial likelihood the proceedings will resolve by settlement if the extension occurs’.
  • The referral criteria appear to suggest that parties will need to be well advanced toward settlement to maintain proceedings at conciliation, rather than establish that they are merely working towards a settlement.
  • We anticipate that this may result in matters being listed for a conciliation conference at a time further removed from the Initial Directions Hearing, but that there will be a reduced tolerance for extensions to be granted.
• Section 65 of the RTW Act, which relates to enlarging the scope of proceedings, has been amended. Whilst previously enlargement had to occur by consent, it may now occur upon unilateral application for one party, should the interests of justice suggest that the enlargement is appropriate.
  • We believe this approach has both advantages and disadvantages.  On one hand, it could help streamline disputes, ensure that all issues are before the SAET and reduce costs.  On the other hand, we anticipate that workers might use this provision to initiate disputes before investigations are concluded.  This could potentially limit your ability to exercise your powers to investigate and arrange Independent Medical Examinations (IMEs) that exists under s 31 of the RTW Act.
  • We expect that if early applications are made under this provision, which could infringe on an insurer’s investigation powers, there may be valid grounds to resist an expansion of those powers.  Additionally, conditions may need to be considered to preserve those powers, such as requiring a worker to agree to attend an IME.

In addition, the SAET has recently updated the South Australian Employment Tribunal Rules with the 2024 edition now superseding the previous version published in 2022.

Our dedicated team of worker’s compensation experts is well versed in these changes. If you require assistance in understanding how the relevant amendments might affect you, please feel free to contact our team.