The recent Personal Injury Commission (PIC) decision of Principal Member Josephine Bamber in Rush v Our Lady of Consolation Aged Care & Services Ltd [2025] NSWPIC 414 illustrates how an adverse work capacity decision interacts with section 38 of the Workers Compensation Act NSW 1987 and what issues arise in having a decision like this reviewed?
The Injury
This case involved the now 66-year-old Ms Sharon Rush who whilst working as a Cook, injured her right shoulder with a deemed date of injury of 20 June 2022 (para 1).
Return to work
Ms Rush had surgery in late November 2022 on her accepted right shoulder.
Ms Rush returned to work performing suitable light duties on 4 February 2023 (para 43). The suitable light duties were laundry related tasks at the workplace that were tailored around Ms Rush’s capacity for work as part of her rehabilitation (para 59).
The suitable light duties came to an end on or around 20 August 2024 when Ms Rush resigned; a resignation occurring possibly at the encouragement of the workplace (para 53).
Work capacity decision
Around the time of the resignation, the insurer issued a work capacity decision (WCD) pursuant to section 43 of the Act. The insurer assessed “suitable employment” to be work as a clothes sorter, setter/contact centre operator or information officer/customer service officer (para 52).
In determining the “suitable employment” the insurer relied on an earning capacity assessment undertaken on the papers (para 25).
In determining capacity for work, the insurer relied generally on the certificates of capacity issued by the nominated treating doctor but specifically on the capacity for work assessed by an Independent Medical Examiner (IME) Dr Rimmer (para 60).
The impact of the WCD was to reduce Ms Rush’s weekly compensation as of 28 October 2024 (para 2).
Whilst the weekly compensation rate reduced as of 28 October 2024, weekly compensation ceased entirely as of 13 April 2025 due to what appears to be the operation of section 38 (para 2).
The interaction between the WCD and section 38 eligibility
By making a WCD after 130 weeks of weekly compensation had been paid, the insurer activated section 38(3).
This provision creates eligibility requirements for an injured person to meet when they have had 130 weeks of weekly compensation and have been assessed as having current capacity for work. The requirements in this provision are as follows:
(3) A worker (other than a worker with high needs) who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if--
(a) the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period, and
(b) the worker has returned to work (whether in self-employment or other employment) for a period of not less than 15 hours per week and is in receipt of current weekly earnings (or current weekly earnings together with a deductible amount) of at least $155 per week, and
(c) the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker's current weekly earnings.
As Ms Rush was unemployed at the time of the WCD, she failed to meet the relevant eligibility requirements (such as section 38 (3)(b)) to continue to receive weekly compensation after 130 weeks.
The interaction between the WCD and section 38 essentially turned a decision to reduce the rate of weekly compensation (the WCD) into a total cessation of weekly compensation (section 38).
Suitable employment
In considering the insurer’s WCD, the Principal Member found the insurer had not properly identified ‘suitable employment’ as defined in section 32A of the Act nor met the requirements of Wollongong Nursing Home Pty Ltd v Dewar which discusses the importance of suitable employment involving “a real job in employment for which the worker is suited” (para 55).
Concerning the proposed work option of clothes sorter, the insurer submitted this work was like the suitable light work done in the laundry before Ms Rush’s resignation (para 56).
The Principal Member took the view that the suitable duties performed doing laundry related tasks did not amount to a “real job” as a laundry worker stating (para 59):
“As to the argument that the applicant could continue in a role such as provided by the employer in the laundry, I accept this was in reality a modified role designed for the applicant as she went through rehabilitation. But the reality is she was undertaking a significant amount of physiotherapy when performing this work for what could be described as a sympathetic employer, until they forced her resignation because they were no longer prepared to employ her in this role. I consider the applicant’s submissions about Dewar are apt in this situation. I find the work in the laundry was not a “real” job in the sense that such a modified position would not exist in the real labour market.”
The Principal Member did not accept that the advertised role canvassed in the labour market assessment confirmed work as a clothing sorter to be “suitable employment” for Ms Rush stating (para 60):
“The respondent’s argument is to the contrary pointing to the real job identified with the Salvation Army as a clothing sorter. However, I find that Ms Pasic’s opinion, that this type of work is within the applicant’s capacity, was swayed by Dr Rimmer’s opinion, which I have rejected. She underlined in bold Dr Rimmer’s opinion on page 5 of her report and on page 8 in the conclusion she relied on Dr Rimmer’s opinion and the medical certificates of Dr Moussad. I accept the applicant’s submission that Ms Pasic did not speak to the applicant or examine her, and I find, those facts together with her reliance on Dr Rimmer’s opinion, lead me to not accept her conclusion that the applicant has a current capacity for employment as a clothing sorter.”
It seems the WCD may also have suggested “suitable employment” in other office based jobs such as setter/contact centre operator or information officer/customer service officer (para 52).
The Principal Member found this sort of office work to not be ‘suitable employment” noting any office based experience was from 30 years prior, saying (para 62):
“In s 32A (a) (ii) the worker's age, education, skills and work experience need to be considered and as noted earlier the report authored by Ms Josef sets out all such details. The applicant is now 66 years old; she left school at age 16 and for about 30 years she has worked as a cook. Ms Josef found her age and her physical restrictions with her right shoulder are significant factors in returning to any work. I agree. I find the fact that she worked for David Jones doing administration before she had children to be so remote in the past to be not useful in terms of transferable skills, particularly with the technology changes in administration positions over the time since. It also needs to be borne in mind that the applicant is right arm dominant.”
In summary, the Principal Member found that Ms Rush had no capacity for work in suitable employment (para 63).
Section 38(2)
After determining Ms Rush had no current work capacity, the Principal Member next had to consider whether Ms Rush met the eligibility requirements under section 38(2) to receive weekly compensation after 130 weeks. Section 38(2) provides :
(2) A worker who is assessed by the insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity is entitled to compensation after the second entitlement period.
This is an important provision. An injured person like Ms Rush could be found to have no current capacity for work but still not be eligible for weekly compensation, if the evidence suggested this level of capacity for work was not indefinite.
Principal Member John Harris has previously helpfully in Roberts v University of Sydney stated that “indefinitely” “…is akin to an unknown or non-specific period” and agreed in part with the meaning of it relating to being for the “foreseeable future” (para 99-100).
On the facts the Principal Member determined Ms Rush had no current capacity for work on an indefinite basis stating (para 65):
The respondent’s argument about the balance of the provisions in s 38(3) fails because of my finding that the applicant has no current work capacity. Section 38(2) applies in that situation, and I find given her age and the state of her shoulder she is likely to continue indefinitely to have no current work capacity and so she is entitled to compensation after the end of the second entitlement period.
This decision highlights helpfully work capacity decisions on or after 130 weeks of weekly compensation can impact on weekly payments.
If you have had a work capacity decision or a section 38 decision applied in your case please reach out to our office.
