ABBOTT GOVERNMENT ATTACKS THE RIGHTS OF INJURED WORKERS
A Bill amending the Safety Rehabilitation and Compensation Act (the SRCA) has been introduced in Federal Parliament ( Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015 ) the aim of which is to make the Comcare scheme more sustainable according to Workplace Relations Minister Eric Abetz. These are weasel words which actually mean the aim of the Bill is to reduce worker’s entitlements and providing savings to employers.
(See Angela Sdrinis Legal's full submission to the Senate Standing Committee on Education and Employment on the Safety,Rehabilitation and Compensation Amendment (Improving the Comcare Sceme) Bill 2015 by clicking on the link below)
There is no doubt workplace injuries do cost too much. Work injuries cost employers and they cost workers. The SRCA has never provided common law type damages the aim of which is to put a worker in the position they would have been had they not been injured. Increasingly, with limits on and reduction of benefits, workers who are in receipt of compensation under the Comcare scheme, find that they struggle to make ends meet. Many workers with long term injuries go so far backwards after a work injury that they never recover, either psychologically or financially. Of course the effects are worse for those workers whose claims are denied altogether and the proposed changes to the SRCA will mean that some workers will lose the right to compensation at all or their benefits under the scheme will be substantially reduced.
If the Government and employers want to save money in the long term the emphasis should be on health and safety and not on trying to reduce benefits once an injury occurs. In the area of mental health in particular, where we are seeing an increasing incidence of psychological injury because of bullying in the workplace, the changes proposed in the Bill will make it even harder for these workers to successfully claim compensation. This means that there will be less pressure on employers to provide a safe workplace and injured workers will end up on the scrap heap at the cost of tax payers rather than employers.
The Changes can be found under a number of broad headings contained under Schedules in the amending Bill:
Schedule 1 amends the Act to alter eligibility requirements for compensation and includes a new definition for significant degree which now means a “degree that is substantially more than material”. At this stage it is hard to know how this definition will play out in practical terms. In addition, certain matters are to be taken into account in determining whether an ailment or aggravation was contributed to, to a significant degree, by an employee‘s employment and new eligibility criteria for compensation for designated injuries (such as heart attacks, strokes and spinal disc ruptures) and aggravations of designated injuries will apply. The threshold for perception-based disease claims will be effectively raised and the scope of the “reasonable administrative action” exclusionary provisions will be widened to encompass injuries suffered as a result of reasonable management action generally (including organisational or corporate restructures and operational directions) as well as an employee‘s anticipation or expectation of such action being taken. Effectively these proposed changes mean that it will be harder for workers to claim for a range of injuries (particularly psychological injuries) and many workers (who would presently be eligible to claim compensation under the current legislation) will be locked out of successfully claiming compensation.
The fact that spinal injuries are to be covered by these changes is very disturbing. Since the Comcare scheme was expanded to include licensees such as Linfox, Transpacific Industries, K & S Freighters and other companies where the work is largely manually based, there are many more workers suffering serious spinal injuries which are being covered by the scheme. All workers suffer degeneration in the spine as they age. The changes will mean that many workers with back injuries will no longer be eligible to receive compensation.
Schedule 2 amends the rehabilitation and return to work requirements in the Act. Positive changes include more emphasis on getting workers back to work and putting pressure on employers to provide suitable duties. Notably however, there are no penalties which apply to employers who fail to provide suitable work but workers can request rehabilitation plans and under the proposed changes, decisions regarding rehabilitation can be appealed to the Administrative Appeals Tribunal (AAT).
The proposed changes will however put more pressure on workers to return to work even where they believe that they are not yet ready to return to work and/or where they do not believe the rehabilitations plan is suitable and failure to return to work in these circumstances will mean that liability to pay incapacity payments can be suspended. Further the definition of suitable employment has been expanded “to include any employment with any employer, including self-employment”. This means that it will be easier for employers to argue that workers have a “deemed capacity to earn” thereby more readily allowing for a reduction in incapacity payments even where the worker is not actually physically working and receiving other income.
Schedule 5 amends the Act to impose more rigorous requirements in relation to determining the amount of compensation payable under section 16 of the Act in respect of medical expenses incurred by an injured employee including claims for household and attendant care services. This means that it will be harder for workers to successfully claim for these services. Further, a tiered approach will be introduced which will limit the periods that compensation for these services can be paid to workers with “non-catastrophic” injuries. The proposed changes also require that attendant care services to be provided by accredited, registered or approved providers and not by relatives or household members.
Schedule 7 amends the Act to suspend compensation payments when an injured employee is absent from Australia for non-work related purposes for a period of more than 6 weeks. Schedule 8 amends section 116 of the Act to provide that an employee is not entitled to take or accrue any leave entitlements while on compensation leave. Currently workers accrue annual and sick leave during the first 45 weeks of compensation leave and continue to accrue long service leave beyond that date. Schedule 9 contains amendments that align with some state and territory workers‘ compensation schemes. These amendments alter the method of calculating an employee‘s weekly incapacity payments and introduce new “step down” provisions to taper the amount of weekly compensation payments an injured employee is entitled to. This means that workers will no longer be entitled to full pay for the first 45 weeks.
Schedule 10 amends the Act to increase the compulsory redemption threshold where weekly payments of incapacity benefits are up to $208.91 per week. This figure is still way too low to make redemptions (ie pay-outs) an attractive option for workers.
Schedule 11 contains a range of amendments regarding payment of legal costs. One positive change includes that legal costs may be payable with respect to the reconsideration processes. However, an extremely risky change for workers is that workers may be ordered to pay an employer’s costs if an application before the AAT is unsuccessful. Currently, workers cannot be ordered to pay their employer’s legal costs if a claim for compensation is lost in the AAT. The proposed amendments also include that Comcare can introduce a compulsory scale of costs which means that if this scale is less generous than the current 75% of Federal Court Scale which applies in AAT matters, workers will end up paying more in solicitor/client costs which is the shortfall in costs incurred by a claimant and the costs payable by the other side.
Schedule 12 contains amendments that increase the maximum benefit payable under section 24 of the SRCA ie lump sum impairment to $350,000 (the current maximum is about $235,000). However Schedule 12 also provides for a new method for calculating permanent impairment compensation which means that less money is awarded to those who have lower impairment levels, particularly at 10%, which is obviously the most common impairment rate. However, multiple injuries arising out of the same incident or injury will be able to be combined which means that it might be easier to get to 10% or more. On the other hand, access to permanent impairment compensation for secondary psychological or psychiatric ailments and injuries (which is the most common type of secondary injury) will be excluded under the proposed changes.
Some positive changes include that claims are likely to be determined more quickly and that an employer can make provisional medical expenses payments (capped at $5,000) to allow for treatment of an injury before liability has been determined. Comcare will also be able to pay compensation for detriment caused by defective administration. Another positive change is to link the payment of incapacity payments to the pension age, rather than cutting off these payments at a set age currently age 65. Further, the 5% deduction on compensation payments to employees who are accessing superannuation benefits will be removed.
Some of the changes are retrospective whilst others will apply to injuries sustained after the Bill is passed. Whether the Bill will find its way through Parliament in its entirety is of course questionable given the make-up of the Senate and the difficulties that the Abbott Government has generally experienced in passing its legislative agenda.
For example, the Abbott Government introduced a Bill to amend the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) on 19 March 2014. The Bill can be found here. The Bill includes changes aimed at easier access to companies who wish to enter the Comcare scheme and removes compensation cover for injuries which occur during off site recesses including lunch breaks. The bill passed the lower house on 26 November 2014 but is yet to pass the Senate.