What happened: SIRA cancelled a workplace rehab provider's approval after finding widespread compliance failures, and the provider's emergency bid to reverse it was refused by the court.
Who's involved: 365 Rehab Pty Ltd (workplace rehabilitation provider) and SIRA (NSW workers' compensation regulator).
What's at stake: The provider's ability to operate in the NSW workers' compensation scheme, with its approval set to expire entirely on November 27, 2026.
Why it matters: Insurers and employers dealing with the provider face immediate practical questions about referrals, open files and funding requests.
Where it stands: Emergency relief refused on October 21, 2026; a final hearing and an internal SIRA review are both pending.
A workplace rehabilitation provider that failed compliance checks on three of four approval conditions has lost its emergency court bid to keep operating in the NSW workers' compensation scheme.
The Supreme Court of New South Wales refused all urgent relief sought by 365 Rehab Pty Ltd after SIRA cancelled the provider's approval on September 28, 2026. The decision leaves 365 Rehab operating under a limited transitional approval that expires on November 27 - though the court found that even that transitional approval was probably issued without proper legal authority.
The trouble started with an onsite audit. In May 2026, SIRA evaluated 365 Rehab's operations against the four conditions of its approval under the Workers Compensation Regulation 2016 (NSW). The results were not close: on three of the four conditions where the framework demands 100% compliance, 365 Rehab scored 96%, 63% and 80% respectively. Only the first condition - covering the service delivery model - had a lower threshold of 85%, and the provider scraped past with 86%.
A show cause letter followed in July. 365 Rehab responded in August, accepting that compliance with conditions was mandatory and that failure to comply gave SIRA grounds to cancel, but arguing that cancellation was "neither necessary nor proportionate."
SIRA disagreed. On September 28, it sent a single email containing two PDF attachments: one cancelling 365 Rehab's existing approval effective immediately, and another issuing a new "limited approval" with conditions for winding down its caseload over 60 days.
That structure became the heart of the legal fight. 365 Rehab argued SIRA had tried to do two simultaneous and contradictory things - cancel an approval and impose a new one - without the statutory power to do both at once. If the limited approval was invalid, the argument went, the invalidity should flow through to the cancellation too, leaving the original approval intact.
The court agreed the limited approval was probably beyond power. SIRA's own counsel accepted there was no express statutory authority for granting a new approval without an application from the provider, and could point to no basis for implying such a power. But the court treated the two actions as separate: different documents, different legal bases, and no cross-reference between them in the cancellation reasoning.
"Had the cancellation decision been the only action taken by SIRA that day," the judgment states, "the case that the 28 September Letter did not effect a cancellation of 365's approval would be very weak."
365 Rehab also argued it had not been given a fair hearing, contending the show cause letter had only flagged conditions 2, 3 and 4 as grounds for cancellation. The court was unpersuaded, noting the show cause letter had also put the provider on notice about condition 1 issues, and that the cancellation decision itself stated condition 1 findings were "not the basis for this decision."
The court also made a broader point: it cannot hit pause on a regulatory decision that has already taken effect. After the court raised this line of authority with both parties, 365 Rehab dropped its formal request for a stay - but the court found that its remaining requests for relief amounted to the same thing in different packaging. Asking SIRA to stop "acting on" the cancellation, or requiring it to tell insurers the provider was still fully approved, was effectively asking the court to rewind a decision that was already done.
Two other factors weighed against granting relief. First, SIRA had offered an internal review process that 365 Rehab had not yet taken up despite having roughly three weeks to do so. Second, the regulatory context carried weight: SIRA's cancellation reasons cited risks to injured workers and scheme participants arising from the compliance failures it had found.
365 Rehab was ordered to pay SIRA's costs of the emergency application.
Open files involving the provider now sit in a grey zone - the transitional approval may itself lack legal authority, but the cancellation of the original approval stands, and court intervention to unwind it proved elusive.
The ruling does not determine the final outcome. A full hearing and an internal SIRA review of the cancellation decision are both pending. None of the allegations made by 365 Rehab about SIRA's process have been determined on a final basis, and the court's findings were made under urgent conditions without full argument.
