Comparison of Workers’ Compensation Arrangements in Australia and New Zealand (2012)


Chapter 1: Recent developments in workers’ compensation schemes in Australia and New Zealand



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Chapter 1: Recent developments in workers’ compensation schemes in Australia and New Zealand


In Australia, there are 11 main workers’ compensation systems. Over time, each of the eight Australian States and Territories has developed their own workers’ compensation laws. There are also three Commonwealth schemes: the first is for Australian Government employees, Australian Defence Force personnel with service before 1 July 2004 and the employees of licensed self insurers under the Safety, Rehabilitation and Compensation Act 1988; the second is for certain seafarers under the Seafarers Rehabilitation and Compensation Act 1992; and the third is for Australian Defence Force personnel with service on or after 1 July 2004 under the Military Rehabilitation and Compensation Act 2004.

This chapter will focus on recent developments that came into effect between July 2010 and September 2011 or which will come into effect after that time. The historical section on the evolution of the workers’ compensation schemes can be found in Appendix 1.


Victoria


New return to work rights and obligations commenced from 1 July 2010 which replaced prescriptive return to work requirements with a performance based regulatory framework. These changes were part of extensive amendments to the Accident Compensation Act 1985 assented to in March and October 2010, with the majority of changes commencing on 5 April 2010. Further information on Return to Work can be found at WorkSafe Victoria.

On 7 April 2011 WorkSafe Victoria announced its new panel of Agents to manage premium and claims from 1 July 2011 following a comprehensive expression-of-interest and tender process which began in July 2010.

As part of the tender process, WorkSafe Victoria outlined at a high level its intent to continue to make enhancements to the claims model to further improve services to Victorian employers and injured workers while ensuring scheme viability. The enhanced claims model extends the specialist model, incorporating two new specialist roles and modifications to segmentation:


  • Eligibility Officer

  • RTW Specialist

In addition WorkSafe Victoria will take an active role in training and capability development and lead industry-wide training in critical areas of RTW and entitlement.

On 1 July 2011, the new ANZSIC 2006 based Workcover Industry Classification (WIC) system commenced.


Queensland


Amendments to the Workers’ Compensation and Rehabilitation Act 2003 (the Act) commenced on 1 July 2010 to ensure WorkCover Queensland’s ongoing financial viability, while maintaining full access to common law for injured workers. Amendments included:

  • aligning common law claims brought under the Workers’ Compensation and Rehabilitation Act 2003 with those brought under the Civil Liability Act 2003, with modifications to take account of the workplace context. For example, voluntary assumption of risk provisions do not apply because the courts have recognised that it is inappropriate in employment situations

  • abolishing the notion of strict liability attaching to employers because of the Queensland Court of Appeal decision in Bourk v Power Serve Pty Ltd & Anor [2008] QCA 225

  • increasing obligations on third party tortfeasors to participate meaningfully in pre-court processes

  • confirming the ability of a court to award costs against plaintiffs whose claims are dismissed

  • increasing the employer excess to one week’s compensation or 100 per cent of Queensland Ordinary Time Earnings, whichever is less

  • removing the option for employers to insure against the excess, and

  • allowing self-insurers to take on a higher statutory reinsurance excess in order to lower reinsurance premium.

On 1 November 2010 the Act was further amended giving the Queensland Industrial Relations Commission responsibility for the bulk of appeals against Review Decisions of Q-COMP

Additional amendments came into effect from 6 June 2011, which included:



  • providing that a worker will continue to accrue annual leave, sick leave and long service leave while they are receiving workers’ compensation

  • introducing information provisions for the building and construction industry, allowing the release of project-specific injury data to principal contractors in charge of construction projects. The purpose of the amendments is to strengthen insurance and data collection arrangements in the construction industry, with the data able to be used internally to monitor project safety performance.

  • requiring the Minister to ensure the workers’ compensation scheme is reviewed at least once every 5 years.

Western Australia

Revised fees for medical and allied health treatment costs

Revised fees for medical and allied health treatment services in the WA workers’ compensation system came into effect from 1 November 2011. The revisions brought about a 3.55% increase to fees derived through application of the medical and allied health fees composite index, which is used by WorkCover WA for annual indexation purposes.
Legislative Review

The Workers’ Compensation and Injury Management Amendment Act 2011 (the Amendment Act) came into effect in 2011.

The changes effective from 1 October 2011 include:



  • the removal of all aged based limits on workers’ compensation entitlements

  • extention of the safety net arrangement for workers awarded common law damages against uninsured employers

  • various amendments of an administrative nature.

In addition, a new Concilliation and Arbitration Service was established on 1 December 2011, replacing the Dispute Resolution Directorate.
Removal of age based entitlement limits

Prior to the 2011 legislative changes injured workers in Western Australia aged 64 years or more had an entitlement to only 12 months of weekly income payments. In addition, compensation was not payable for workers who suffered noise-induced hearing loss after age 65.

The State’s workforce has changed and includes an increasing number of workers over the age of 65 years. The skills held by older workers are important to the State’s economic and social life. In recognition of this the Government has removed age based limitations from the Workers’ Compensation and Injury Management Act 1981. The new arrangements will not operate retrospectively.


New provisions for a common law safety net


Prior to the 2011 changes to the Act, claims for statutory benefits made by injured workers whose employers were uninsured were able to be met from WorkCover WA’s General Account. However there was no ability for WorkCover WA to meet the costs of common law damages when an employer was uninsured.

The 2011 amendments enable common law awards against uninsured employers to be met by the WorkCover WA General Account, under certain circumstances from 1 October 2011. The amendments also make it mandatory for all employers to have insurance covering both statutory and common law liabilities.

The common law safety net provisions do not operate retrospectively.

Other legislative amendments


Other legislative amendments to the Workers’ Compensation and Injury Management Act 1981 include:

  • an extension in time to lodge a claim with insurer ($1000 penalty applies)

  • new penalty for failure to make weekly payments

  • clarification of the effective date of redemptions

  • removal of time limit to issue writ after common law election (Limitations Act applies)

  • ability to define “remuneration” in regulations

  • removal of exclusion of family member from definition of worker, and

  • inclusion of “diffuse pleural fibrosis” as an asbestos related disease.
New Concilation And Arbitration Services Division

WorkCover WA’s Dispute Resolution Directorate (DRD) was replaced by the new Conciliation and Arbitration Services (CAS) Division from 1 December 2011.

The new dispute resolution system has established:



  • the Conciliation Service headed by a Director

  • firm timeframes governing process and certain powers for conciliation officers to make directions for the payment, suspension and temporary reduction of benefits

  • the Arbitration Service headed by a Registrar in which arbitrators and the Registrar are legal practitioners. The sole focus of the Arbitration Service will be the determination of matters not resolved by the Conciliation Service

  • clear rules to govern procedure in both services, with a focus on timeliness

  • simplified access to the process of conciliation by the removal of the requirement to provide all documentation at the commencement of the process (i.e. no front loading)

  • retention of legal representation and costs at both stages (conciliation and arbitration), and

  • transfer of appellate jurisdiction to the District Court of Western Australia.

South Australia

Claims management and claims legal services

On the 23 May 2011, WorkCoverSA announced its intention to commence a procurement process for the provision of future claims management services and claims legal services for the WorkCover Scheme.

Current contracts for claims management services and claims legal services expire in December 2012.


Employer Payments

The Workers Rehabilitation and Compensation (Employer Payments) Amendment Act 2011 (No 48 of 2011) is expected to commence on 1 July 2012. The Act will amend the Workers Rehabilitation and Compensation Act 1986; and make consequential amendments to the Occupational Health, Safety and Welfare Act 1986, the Stamp Duties Act 1923 and the WorkCover Corporation Act 1994.

The Act will enable a new approach to employer payments in the South Australian workers compensation scheme which will provide a financial incentive for employers to achieve the best possible work health and safety practices leading to fewer workplaces injuries. Where workplace injuries do occur, the system will provide a financial incentive to employers to support injured workers to stay at work wherever possible or to achieve an early and safe return to work.

The new approach to employer payments includes.:


  • a mandatory Experience Rating System for medium and large employers registered with the Scheme

  • an optional Retro Paid Loss arrangement for large employers registered with the Scheme

  • minimal change to private and Crown self insured arrangements, and

  • changes to terminology, definitions and practices within the Scheme, aimed at achieving cultural change.
Definition of worker

Currently volunteer fire-fighters are prescribed as volunteers under section 103A of the Workers Rehabilitation and Compensation Act, 1986. At the time of preparing this report the South Australian Government is in the process of considering broadening the provision of workers compensation cover to include South Australian State Emergency Service and South Australian Volunteer Marine Rescue volunteers.

This change, if approved is intended to come into effect on 1 February 2012.


Revised training for Rehabilitation and Return to Work Coordinators

At the time of preparing this report, a revised 1 day and 2 day (previously 3 day) training program was being developed through Deakin Prime. The program is scheduled to be released on Monday 2 July 2012.

Tasmania

Workers Rehabilitation and Compensation Amendment Act 2009

The Workers Rehabilitation and Compensation Amendment Act 2009 was passed by Parliament in late 2009 and commenced on 1 July 2010. The amendments had four main purposes:

1. to implement the Government’s response to the Clayton report;

2. to establish the legal framework for the WorkCover Return to Work and Injury Management Model

3. to amend the timing and level of weekly payment step-downs; and

4. to reduce the common law threshold from 30% whole person impairment to 20%.

The amendments:



  • introduced a statement of scheme goals;

  • encourage early reporting by holding the employer liable for claims expenses until the claim is reported;

  • provide for the payment of counselling services for families of deceased workers;

  • provide for the payment of medical and other expenses for up to 12 months after a worker ceases to be entitled to weekly compensation (with the possibility of extension on application to the Tribunal);

  • increase the maximum lump sum payable to a dependent on the death of a worker to 415 units. At September 2011, this was $289 192.75;

  • increase weekly payments payable to a dependent child of a deceased worker from 10% basic salary to 15% basic salary;

  • increase the maximum lump sum payable for permanent impairment to 415 units. At September 2011, this was $289 192.75;

  • provide for the extension of weekly payments from nine years to 12 years for workers with a whole person impairment (WPI) between 15 per cent and 19 per cent; to 20 years for workers with a WPI of between 20 per cent and 29 per cent and until the age of retirement for workers with a WPI of 30 per cent or more;

  • amend the first step-down to 90 per cent of normal weekly earnings rather than 85 per cent of normal weekly earnings;

  • delay the operation of the first step-down, so that it comes into effect at 26 weeks of incapacity rather than 13 weeks;

  • provide that the step-downs are not to apply where a worker has returned to work for at least 50 per cent of his or her pre-injury hours or duties;

  • provide that the step-downs are to be discounted in circumstances where an employer refuses or is unable to provide suitable alternative duties;

  • reduce the threshold for access to common law damages from 30 per cent whole person impairment to 20 per cent whole person impairment;

  • repeal section 138AB requiring a worker to make an election to pursue common law damages.

The amendments also included a range of measures that support the WorkCover Return to Work and Injury Management Model including:

  • requirements for return to work and injury management plans

  • obligations on employers to encourage early reporting of injuries and claims

  • providing an entitlement to the payment of limited medical costs before the claim is accepted

  • introduction of an injury management coordinator to oversee the injury management process.
Asbestos-Related Diseases (Occupational Exposure) Compensation Act 2011

The Asbestos-Related Diseases (Occupational Exposure) Compensation Act 2011 commenced on 31 October 2011.

The Act establishes a scheme for the payment of compensation to workers who develop or developed asbestos-related diseases (ARD) through exposure to asbestos during the course of their employment. A person may still come within the scope of the Act notwithstanding that he or she may have retired some time ago. Compensation may also be available to certain family members of a worker that has died from an ARD.

Compensation is not available where a worker has already received compensation for the same ARD at common law or under legislation in another jurisdiction or under the Tasmanian Workers Rehabilitation and Compensation Act 1988 or the Workers Compensation Act 1927.

To be entitled to compensation under the Act, the worker must have or have had a compensable disease. A person has a compensable disease if:



  • the person has an ARD; and

  • the contraction by the person of the disease is reasonable attributable to exposure to asbestos in the course of the person’s employment as a worker during a relevant employment period in which the person’s employment is connected with Tasmania.

Compensation under the Act:

Where the worker has an imminently fatal compensable ARD (less than 2 years’ life expectancy from the date of correct diagnosis):



  • The worker is entitled to lump sum compensation of 360 compensation units (as at 31 October 2011, a compensation unit was $696.85, on 1 January 2012, a compensation unit increased to $737.77) plus a further age-based payment (if under 80 years of age).

  • The worker is also entitled to have their reasonable medical expenses paid for by the scheme. However, when total medical expenses reach $87,000 a review is to be held to ensure that the worker is receiving the correct treatment.

Where the worker has a non-imminently fatal compensable ARD (more than 2 years’ life expectancy from the date of correct diagnosis):

  • A worker with a non-imminently fatal ARD must undergo an impairment assessment. Compensation is only payable if the worker has a whole person impairment of 10% or more.

  • Three lump sum payments are payable to the worker depending on the degree of impairment up to a total of 360 compensation units. However, if the worker is assessed at 51% or more whole person impairment at their first assessment, they will receive all three lump sums at the same time – 360 compensation units.

  • The worker is also entitled to the payment of reasonable medical expenses. There is no dollar cap on the payment of these expenses.

  • Where the worker is still employed, weekly payments are payable based on incapacity.

  • Where a worker has received compensation in relation to a non-imminently fatal ARD which is subsequently diagnosed as being imminently fatal or they develop a different imminently fatal ARD, they will be paid any remaining lump sum compensation up to 360 compensation units. They will also receive the age-based payment if eligible.

Members of the family:

  • Where a worker has died from a compensable ARD, the members of the worker’s family are entitled to the same amount of lump sum compensation (not including payment of medical expenses or weekly payments) that the worker would have received had they not died. They may also be entitled to funeral expenses in relation to the deceased worker.

  • Members of the family include a spouse (including a person in a significant relationship with the worker within the meaning of the Relationships Act 2003), and a child who is less than 22 years of age (natural child, adopted child and in some circumstances, a step-child)

Further information can be found at www.asbestos.tas.gov.au and in the publications: Tasmanian Asbestos Compensation Information Brochure and Asbestos Compensation in Tasmania - A Guide

Northern Territory


The Northern Territory Government is currently considering changes to the definition of worker. For many years the Northern Territory has used the provision of an ABN to identify independent contractors from workers who are covered by the scheme. The proposed change is to adopt the results test in line with the test used by the Australian Taxation Office. Enquiries should be made in the Northern Territory for information on the latest arrangement www.worksafe.nt.gov.au.

Comcare


On 7 December 2011 a number of changes to the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) came into effect:

  • the reintroduction of the ability to claim for off-site recess breaks - employees may claim for an injury which occurs off site during an ordinary recess from their place of employment, such as a lunch break

  • the introduction of continuous coverage for certain employees working outside Australia where the Minister declares—by legislative instrument—the country or class of employees covered

  • continuing the rights of an injured worker to claim compensation for medical expenses even where other forms of compensation are suspended

  • enabling Comcare to access the Consolidated Revenue Fund to pay compensation to an injured worker with a long latency disease, where their employment was prior to 1 December 1988 but the disease manifested after that date

  • enabling the development of regulations that prescribe time limits for claim determinations and reconsiderations
Firefighter amendments

Also on 7 December 2011, the Safety, Rehabilitation and Compensation Amendment (Fair Protection for Firefighters) Act 2011 came into effect. This Act introduced the presumption that, where a claimant has undertaken firefighting duties for certain periods and has acquired a prescribed cancer, the cancer is presumed to be the result of the firefighting employment. The resulting changes to the SRC Act apply to claims with a date of injury on or after 4 July 2011.


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