The difference between a suspension of payments and termination of payments under the Workers Rehabilitation and Compensation Act 1988 (Tas)
A major source of argument under the workers compensation scheme in Tasmania is the circumstances in which an employer may terminate or suspend a worker’s entitlements. With the approach of the end of the year, it is an opportune time to review the differences between a termination or suspension and the questions that should be asked before making a determination.
The circumstances in which a worker’s weekly payments may be terminated are limited to those detailed under section 86(1) of the Workers Rehabilitation and Compensation Act 1988 or a determination by the Tribunal. Following a termination, as opposed to a suspension, there is no obligation on an employer to recommence weekly payments upon presentation of a new certificate.
While it is understandable that an employer may consider a suspension of a worker’s entitlements akin to a termination, it is important to remember that it is not. All that occurs when a worker’s entitlements are suspended is that the obligation to make payment is left in abeyance until such time as a relevant medical certificate is provided supporting incapacity. Putting it simply, once the lawful reason for suspending a worker’s entitlements has ceased, an employer must recommence weekly payments.
The circumstances where a worker’s entitlements may lawfully be suspended are varied. They include (but are certainly not limited to) the failure to provide appropriate medical certification to the employer, the refusal of a worker to submit for independent medical examination (i.e. section 90C), or simply by order of the Tribunal (e.g. where TASCAT makes orders under section 143Q when a worker has failed to meet their return to work obligations).
The distinction between a suspension and termination has renewed importance in light of the recent decision in Pearson v State of Tasmania [2024] TASSC 42, where it was confirmed that suspended payments in the absence of medical certification must resume upon provision of further certification despite there having been a gap in certificate of 14 days pursuant to section 69(13) of the Act.
It is important to remember that effectively speaking, once a worker has rectified the situation which lead to a lawful suspension of their payments, they are entitled to the resumption of weekly payments; including in some circumstances those which accrued during the period of the suspension.
Questions to be asked when determining whether there are valid grounds for lawfully terminating or suspending a worker’s entitlements depend on the circumstances of the claim. As a rule of thumb when making any decision, the first question should always be for ‘what reason’ or ‘under which provision’ is the determination being made and work backwards from there. This can often be a complex task and seeking legal advice before making any determination may significantly ameliorate the risks associated with an unlawful suspension or termination.
Summary
Understanding the differences between suspensions and termination is critical to the foundational knowledge required for effectively managing and understanding workers compensation claims. Employers should be mindful of whether there are indeed valid grounds for lawfully terminating or suspending a worker’s entitlements to compensation. Seeking legal advice prior to making a determination may reduce the risks associated with any determination and may assist with the overall management of the claim.
