In the Western Australian workers’ compensation system, it is generally accepted that entitlements such as medical investigations and treatment, and even vocational rehabilitation, can be funded on a Without Prejudice/ Without Admission of Liability (WOP/WOL) basis while liability on a claim is being determined.
A recent situation experienced by one of our clients has caused us to consider WOP/WOL issues in greater depth.
An insurer advised an employer – a client of both Aurenda and the insurer – to pay wages to an injured worker on a WOP/WOL basis even though the claim was pended and the worker was not at work.
When queried on this advice, the insurer stated that they sometimes advise employers to pay wages when in all probability the claim will be accepted. The insurer believes that paying wages will negate the need for the employee to lodge an application at Conciliation and Arbitration Services (CAS), where an order to pay wages may be granted anyway. The insurer also feels that by paying wages in these circumstances, the employee may be deterred from seeking legal advice.
In our experienced opinion, under NO circumstances should wages be paid – even on a WOP/WOL basis – until the claim has been accepted.
Our reasons for this are as follows:
- If you’re going to pay wages – why pend the claim?
- If you think in all probability the claim will be accepted – why not just accept the claim, why bother with the investigations?
- Paying the wages gives no incentive for the employee to make any attempt to return to work – especially in circumstances when the workers’ compensation rate of pay is greater than their base rate of pay.
- There is no evidence that the employee will not seek legal advice while the claim remains pended.
- If an application is made at WorkCover for wages to be paid (when the claim is pended) an order is not always granted in favour of the employee.
- Once wages payments have commenced, it is difficult to stop them – this would no doubt require a visit to CAS at WorkCover in any case. This could also be an incentive for workers to drag out the resolution process.
- A worker could justifiably assume their employer has accepted liability for their injury if wages are paid prior to investigations taking place.
- It doesn’t set a great precedent for other workers if everyone who lodges a claim is paid, regardless of whether their claim is accepted.
- If the claim is accepted, the employer will be obliged to back-pay wages. If the claim is declined, however, and the employer has paid wages on a WOP/WOL basis, it is not possible to recoup these wages from the worker.
We believe that all workers who suffer a legitimate workplace injury are entitled to fair compensation for their injury. Sometimes, however, claims are pended because more information is required to assess the injury and determine liability – and sometimes injuries are not compensable. A very small percentage of workers fall into this situation. The fact that the employer has identified significant cause for concern, in our opinion, means that they should not bear the additional onus of paying wages when there is no legal obligation to do so. The best interests of all parties are served by everyone, including the worker, focusing on a fast determination of liability. A focus on a solution is always Aurenda’s preference.