Australia’s workers compensation schemes are a legacy of the strong labour movements of the late 19th and early 20thcenturies, with ‘no fault’ statutory compensation implemented in each of the states after Federation.
Since then, state-based workers compensation arrangements have separately evolved to include compulsory insurance, lump sum payments, female workers and injuries that can occur either from orduring employment, rather than both.
Collectively the schemes cover 91% of the workforce, excluding the self-employed, sole traders and independent contractors. They entitle injured workers to income replacement during recovery, reimbursement for medical costs, return-to-work (RTW) plans, death benefits and funeral costs, and lump sum payments for permanent impairment.
Premiums are usually expressed as a percentage of the employer’s payroll. The standardised average Australian premium in 2009–10 was 1.53% but can be as high as 12% for certain high-risk trades.
New South Wales
With more than three million employees covered, 44 work-related fatalities and nearly 44,000 claims for at least a week of compensation in 2009–10, WorkCover NSW has its work cut out.
Unlike other jurisdictions, WorkCover NSW will pay a lump sum for pain and suffering from a physical or psychological injury that leads to 10% and 15% Whole Person Impairment (WPI), respectively.
Lump sum and weekly payments to dependents and spouses are also available for death from dust diseases.
NSW’s RTW programs and policies are the nation’s most sophisticated, offering exemptions and requirements that depend on the category of employer, and unlimited funding for equipment used for workplace modification and training costs.
WorkSafe Victoria covers the second largest cohort of workers and in 2009–10 had the states’ highest dispute rate, with almost 10% of claims referred to medical panels, magistrates or the accident compensation conciliation service.
If an employee dies as a result of their occupation, death entitlements in Victoria can be some of the most generous: lump sum payments of $527,610, funeral expenses of $9300 and up to $5580 for family counselling.
However, the threshold of WPI for access to common law is one of the highest at 30%, and the maximum of $527,610 payable for damages is the highest. The additional requirement to prove a permanent loss of 40% of earning capacity can yield up to $1.2m damages.
Despite Queensland having the highest incidence rate of serious claims in 2009–2010 and as many fatalities as NSW, Q-COMP has the lowest standardised average premium rate of the states: 1.12% of payroll.
Full wage replacement post-incapacity can stretch to 104 weeks and WPI can be of any proportion and only 5% of hearing loss, while common law damages can be sought for work-related impairment of less than 20% or none, although the worker must decide whether to accept the lump sum or seek damages. ‘Reasonable’ funeral costs are reimbursed.
Along with WA, Queensland employers do not have to develop RTW policies in consultation with workers.
WorkCover WA has the lowest dispute rate for claims and, after Queensland, the lowest average premium rate. Like Victoria, South Australia and Tasmania, journeys to and from work are not covered.
Western Australia is the only jurisdiction that limits medical treatment benefits following a work-related injury (to $57,210) but another $50,000 is available if the worker’s socio-economic situation warrants it. If there is greater than 15% WPI and exceptional medical circumstances, a further $250,000 (capped) may be granted.
Brokers are particularly heavily involved in the WA system, with an independent survey last year finding two-thirds of employers purchased their workers’ compensation policy through a broker.
The same survey also found an exceptional level of satisfaction with the role of brokers in the process, with 97% of those who made claims satisfied with their broker.
WorkCover SA has the highest standardised average premium rate and can pay the highest weekly incapacity and funeral payments. However, along with the NT, there is no access to common law damages and only workplaces with at least 30 employees require a RTW policy.
Because of its intensive timber industries, Tasmania has one of the highest incidence rates and the highest frequency rate of serious injuries. To its credit, WorkCover Tasmania has the highest rate of rehabilitated people returning to work.
There are no financial limits on incapacity payments, which can be extended to nine years, or more if WPI is greater than 15%. However, if seeking common law damages, the required WPI is one of the highest, at 20%.
NT WorkSafe covers the least amount of employees and its compensation for WPI of more than 5% is calculated on a sliding scale. Like SA, there is no access to common law damages and its legislation does not mandate RTW programs or policies, although it does have an Alternative Employer Incentive Scheme that funds workplace modifications, training costs and a 12-week work trial.
Australian Capital Territory
The ACT has no threshold for permanent impairment unless it is “boilermaker’s deafness” (where 6% hearing loss is the minimum) and pays the lowest lump sums and funeral expenses. By the same token, there is no threshold for seeking unlimited common law damages.
Insurance brokers and workers compensations
Australia has far too many workers compensation schemes.
In addition to the main schemes in each state and territory, there are special schemes for seafarers, coal miners in NSW, the federal public service, companies that were previously part of the federal public service (such as Qantas), and others.
There is also a mixture of public sector schemes (the largest being the public sector schemes in Queensland, New South Wales and Victoria) and privately underwritten schemes operating in Western Australia, Tasmania, the Northern Territory and the Australian Capital Territory.
Insurance brokers are heavily involved in the privately underwritten schemes. Here, they perform their traditional role: advising clients on their workplace risks (in this instance the risk of workplace injury and disease), and the management of those risks. And while the insurance policy is invariably prescribed by statute, the broker plays an important role in obtaining cover in the right industry classification, with the correct claims experience, and from an insurer who provides the best pricing, service and support for the client.
Unfortunately, many employers in states with public sector schemes do not get the benefit of advice and support from their insurance brokers on workers compensation. This includes advice on risk and risk management, and ways to minimise the potential for workplace injury.
NIBA pointed this out to the current Queensland Parliament Committee of Inquiry on that state’s workers compensation scheme. We await the results of that inquiry’s work.
Brokers play an important role in helping their business clients understand and manage risk. NIBA believes this role is just as important in relation to the risk of workplace injury as it is in relation to other business risks and we will continue to seek opportunities to promote this message wherever possible.
Fried chicken, battered worker
Mr Singh, an assistant nurse, drove to his work at a Randwick nursing home at 9pm and parked in the staff car park. He then walked to the KFC store to buy dinner with the intention of returning to start his shift at 10pm. While buying his meal, Mr Singh was the victim of an unprovoked attack by two men, which resulted in him being hospitalised.
Mr Singh made a claim for workers compensation and during the NSW Workers Compensation Commission proceedings, gave evidence that he was called on by his employer at about 6pm that evening asking him to work the 10pm shift on short notice.
The Commission found that Mr Singh’s usual arrangements for dinner had been changed when he unexpectedly received the request to work the night shift, and resulted in him having to purchase dinner from KFC. The Commission accepted Mr Singh’s evidence that it was his intention to undertake this journey with the aim of returning to commence his duties later.
According to the Commission, this evidence meant the journey from work to KFC could be categorised as a “periodic journey” between his abode and his place of employment. Mr Singh was therefore entitled to receive workers’ compensation for his injuries, including payment of medical and rehabilitation expenses, weekly payments and a possible lump sum.
— Singh v Thompson Health Care Limited, Walker Legal
Airing their laundry
Holy Cross Laundry (HCL) is a commercial laundry that cleans about 90 tonnes of linen per week and employs approximately 175 workers, including 38 workers with an intellectual disability.
In recent years, HCL experienced a high rate of workers’ compensation claims, so the company changed how workers at all levels communicate about work health and safety (WHS), and how they measure their WHS performance.
HCL participated in the Injury Prevention and Management (IPaM) program by Workplace Health and Safety Queensland and WorkCover Queensland, and expanded its WHS performance measures to include positive and proactive WHS initiatives. It now reports monthly on the number of injuries, near-misses and non-injury-related incidents that occur, as well as the number of risk assessments, ‘fix it’ forms, toolbox talks and hazard inspection reports completed.
One performance indicator HCL implemented was a toolbox talk focused on workplace bullying. This led to one team member successfully resolving a personal issue, and further feedback demonstrated some employees did not realise exactly what constitutes workplace bullying.
As a result of participating in IPaM and implementing other positive WHS initiatives (including employing an occupational therapist), HCL saw its 2008–09 stay-at-work rate double by 2012. The average paid days (claim duration) has also decreased from 53.43 in 2011 to 30.75 in 2012.
— WorkCover Qld