8.10.1 Loss of efficient use for the purposes of employment

Background

Permanent impairments resulting from injuries sustained between 1 September 1971 and 30 November 1988 inclusive were covered by the provisions of the 1971 Act. Under the transitional provision of the SRCA and subsequent legal precedents, permanent impairments which have resulted from injuries incurred while the 1971 Act was current – but which are being assessed for compensation now – are assessed using a mix of 1971 Act and 1988 Act provisions.

Most such cases involve assessing the client's percentage loss of efficient use (LOEU) of the impaired part(s) of the body under Section 39 of the 1971 Act. [Some other cases, for example those involving loss of sexual function, facial disfigurement and sense of taste and smell are covered by different sections of the 1971 Act.] Section 39 (11) requires two LOEU figures to be obtained for assessing the amount of compensation payable:

LOEU for general purposes: i.e. the straightforward LOEU suffered by the client due to the injury, compared with his or her condition immediately before the injury, and

LOEU for the purposes of employment: i.e. the LOEU suffered by the client compared with his or her condition immediately before the injury for the purposes of the employment in which the client was engaged immediately before the injury.

The section stipulates that the greater of these two figures is to be used in calculating the compensation payable.

LOEU is calculated separately for each part of the body which has been impaired. The effect of this is that a client may have several impairments, each of which will need to be assessed for both types of LOEU.

LOEU for general purposes is likely to be the higher of the two figures for clients involved in sedentary occupations, such as clerical work. Many physical impairments, even serious ones, do not restrict a person's capacity to undertake that type of work, even though they may dramatically affect the sufferer's general lifestyle.

LOEU for the purposes of employment is likely to be higher for clients involved in more active occupations, such as flying. An impairment which only moderately affects such a person's general lifestyle life may inhibit them from undertaking a notable proportion of their normal work tasks.

Interpretation of Section 39 (11)

Section 39(11) does not mean that clients who are no longer able to undertake their pre-injury employment because of their injuries should be assessed automatically as having an LOEU of 100% for the injured parts of their bodies for the purposes of employment.

Section 39(11) is based in part on Sections 12(5) and 12(6) of the Commonwealth Employees' Compensation Act 1930, which contain similar assessment provisions. In a 1955 High Court case under the 1930 Act, Commonwealth v Matheson, Judge Kitto stated in the judgment:

It is a mistake to suppose that, where there is a permanent loss of portion only of the efficient use of the leg in and for the purposes of the employment at the date of injury, the case is to be treated as one of permanent and total loss of the leg in and for the purposes if the partial loss makes it impossible for the injured man to obtain a job in the same line of employment. A serious, though only partial, loss of efficient use may well be described as making it impossible for the recipient to carry out his old duties in full and as a consequence it may deter employers from engaging him at all, yet it remains a partial loss of efficient use.

Subsection (5) (of the 1930 Act) operates in such a case as to limit the compensation to an amount proportionate to the loss of efficient use for the purposes of the employment, notwithstanding the fact that even so limited a loss puts the former duties of the employment considered as a whole, outside the man's capacity.

The question was simply how far the efficient use of his leg in his old employment was reduced.

In other words, the LOEU for the purposes of employment can be established by determining the tasks a client can no longer perform – as a consequence of his or her work-related impairment – as a proportion of his or her full range of duties in the employment s/he undertook immediately before the injury.

This proportion should be weighted for the amount of time the person would normally have spent on each duty, so that tasks which were undertaken infrequently do not unduly influence the LOEU calculation.

Section 39(11) states that LOEU for the purposes of employment is to be assessed in terms of a client's employment immediately before their injury (emphasis added). This is to be interpreted to mean the duties normally undertaken by a member holding the same rank and type of position as the client. It does not mean that if the client has sustained his or her impairment whilst on an unusual posting or while undertaking uncommon tasks, the LOEU should be assessed solely against those exceptional duties.

For example, if a mess steward is impaired while undertaking stretcher-bearer duties on exercise, her employment immediately before her injury is to be taken as that of a steward soldier (with all the duties that position entails, including fitness requirements and the odd stretcher-bearer duty), but not that of a full-time stretcher-bearer.

LOEU Assessment

The two LOEU figures will be assessed by the doctor who undertakes the PI examination. The definition of the LOEU figure for general purposes should be straightforward and need no further explanation to the examining doctor. Nonetheless, in cases where the delegate is aware that the client has suffered a pre-injury condition which might affect calculation of any loss, the assessing doctor must be advised before the assessment is undertaken.

As far as the LOEU for the purposes of employment is concerned, in most cases it will be sufficient to advise the assessing doctor of the client's pre-injury employment category, with the doctor then able to question the client on the duties he or she undertook in that position.

In exceptional cases, such as when the delegate is concerned that the client might not correctly represent his or her pre-injury duties to the assessing doctor, or when a doctor reports an LOEU figure that does not fit with the delegate's experience, it may be necessary to provide more information to the doctor on the work actually done by the client. In these rare cases, descriptions of the client's pre-injury duties can be obtained from the relevant Service office.