New research has recommended the Federal Parliament reject legislation reforming Australia’s workers’ compensation system, warning that the current bill fails the public interest test and risks adversely impacting on workers, small and medium sized businesses, and taxpayers.
The McKell Institute report, “Unsafe and Unfair: A Critique of the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014.”, examines the impact of the Safety, Rehabilitation and Compensation Bill 2014 and was authored by University of Adelaide Law School academic Dr Joanna Howe.
The legislation would see a radical departure from the status quo, where the vast majority of Australian employers are regulated through state and territory schemes, significantly expanding the national workers’ compensation scheme by permitting multi-state employers to obtain a self-insurance licence.
Author Dr Joanna Howe, a senior lecturer of law at the University of Adelaide, former consultant to the International Labour Organisation in Geneva, and consultant with Harmers Workplace Lawyers, found the plan risked cost-shifting from employers to taxpayers, with costs arising from workplace injury falling on the social security, Medicare, and NDIS systems.
The report recommended the bill, in its current form, be rejected, describing it as “a retrograde step that adopts a lowest common denominator approach to workers’ compensation.”
It found no compelling evidence that the vast majority of Australian businesses would experience cost savings, and highlighted that workers’ entitlements and rights in the event of a death or injury would be reduced.
“The expansion of the national workers’ compensation scheme, as proposed, risks leaving workers, taxpayers, and small and medium sized businesses disadvantaged,” Dr Howe said.
“For workers, this plan would result in a national scheme that provides the least entitlements, has the least effective regulator, and the lengthiest dispute resolution process of all the workers’ compensation jurisdictions in Australia.
“The vast majority of businesses would also be disadvantaged as only multi-state employers can move to the national scheme, reducing the premium pool of the state and territory schemes and resulting in increases premiums for the small and medium sized businesses that remain.
“It also shifts the cost of workers’ compensation claims from employers to the public purse as common law access is limited, increasing the cost burden faced by the NDIS, Medicare and welfare systems arising from work-related injuries.”
The report not only found that the proposed legislation would be to the detriment of the vast majority of stakeholders, it also described the evidence backing its introduction as “unsound”.
“The only stakeholders alleged to benefit are multi-state businesses, but even there, this benefit has only been quantified through anecdotal evidence provided by these same businesses,” Dr Howe said.
The McKell Institute report also warned that under the proposed scheme, Comcare could potentially be responsible for 67 times its current workload capacity.
“Comcare already conducts far fewer workplace interventions and visits than its state and territory counterparts, and its investigators issue far fewer improvement and prohibition notices,” Dr Howe said.
“The proposed bill could see nearly 2000 major businesses move to Comcare’s self-insurance scheme, placing a much higher pressure on the national regulator, as well as putting the lives and wellbeing of many more workers at a higher risk.”
Dr Howe was commissioned to write an op-ed for The Sydney Morning Herald which can be found here: