Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise to oppose the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014. This bill, if enacted, will directly and indirectly risk the workplace health and safety of Australian workers. It will also remove the rights of Australian workers to fair and reasonable cover when they suffer the misfortune of a work related illness or injury. The coalition, I content, did not consult regarding these changes and these changes were not flanked by the coalition prior to it gaining government. This bill did not form any part of their election policy, therefore there is no mandate for this bill. This bill has no sound policy justification whatsoever. In fact, it undermines all the existing workers compensation schemes in Australia. This is an ill-conceived bill that ignores the founding principles of Australian workers compensation schemes and why they were established in the first place.

The main purpose of any workers compensation scheme is to prevent work related illness and injury from occurring in the first place. The secondary purpose is to provide adequate benefits to assist and compensate those workers who are unfortunately injured or ill as a result of their work. This bill does the opposite. As a consequence of the proposed legislation there will be workers—who want nothing more than to earn a dignified living—who will in future bear the full brunt of work injuries for life without any assistance from a workers compensation scheme. We will see an unequal and unfair system where two employees—working side-by-side, with different employers—who suffer similar injuries will have different workers compensation rights and different health and safety standards applied to them. The worker who is covered by Comcare will have less rights and less health and safety oversight and protection.

The proposed legislation takes away the rights of injured workers and then provides that companies, on a national basis, should be allowed to exit state workers compensation schemes—to stop paying premiums to state schemes and instead to self-insure and pay licence fees to Comcare. Some companies may be enticed by the chance to save money, with further savings to be had from a further step proposed by the bill: namely, to remove the jurisdiction of the states to regulate health and safety in relation to any Comcare licensee. Workers compensation schemes, however, are designed to provide a safety net for workers injured in workplace accidents, not as a business model to reduce costs for employers.

The government argues this bill might, if enacted, save a bit of money. However, the opposite is true: it will create huge costs by effectively creating high-risk gaps in health and safety monitoring in this country. If the government has any support for this bill, it seems the supporters have gone very quiet. On the other hand, opponents of the bill come from across the country and have been remarkably open in expressing their views. The opponents of the bill have clearly articulated the negative consequences of this bill and warned of the risks associated with the national expansion of the Comcare scheme. This is a government that does not listen, not even to their own conservative state and territory counterparts—their own mates; indeed, Deputy Speaker Griggs, they do not even listen to the government of the state in which you reside.

It is important that all members of this place, including coalition members, are aware of the problem this legislation would create. They should listen to the following critique. In a submission to the recent Senate inquiry on this bill, the Queensland government said it has:

… the potential to lead to increased red tape, increased costs and reduced productivity resulting from duplication and overlap in the regulation of work health and safety arrangements.

The Queensland government's own submission goes on to say:

… small businesses may not be in a position to absorb premium fluctuations from a reduced premium pool.

The Queensland government's submission also raises concerns about the enforcement of work health and safety laws, particularly in high-risk industries such as mining, where Comcare has no history or expertise in regulating the sector. I remind the House: this is the Campbell Newman-led Queensland government. The Queensland government, however, is not alone in being ignored by the Abbott government when raising the very significant consequences of the bill—significant consequences not just for workers but for small- to medium-sized businesses too. I wonder whether the Minister for Small Business had a decent look at this bill; it would appear not. An extract of the submission on the bill by the Northern Territory government to the Senate inquiry says the following:

It is difficult to estimate how many employers would pursue an option to participate in the Comcare scheme but the potential consequence could be:

Why would the coalition ignore the clearly articulated and very serious policy concerns put forward from so many parts of Australia, including state and Territory governments and conservative governments? It is because, in many ways, this proposed legislation demonstrates what the coalition stands for. This legislation strikes a blow to potentially all Australian workers, and it hits the most vulnerable and the disadvantaged the hardest. The blow really hits its mark when a worker is injured.

It has become increasingly apparent that taking away vital support and protection for vulnerable and injured workers is what the coalition represents. Indeed, we have seen this assault on vulnerable Australians before; we saw it writ large when the Treasurer sought to hand down a budget. Currently, if I can return to the bill, workers under a state scheme who are injured during recess or who have undertaken an abnormal risk of injury or who have died or become permanently incapacitated and are alleged to be at fault for the accident would receive (1) the ongoing payment of the reasonable cost of medical treatment, (2) income replacement for periods of incapacity for work, (3) payment of a lump sum for permanent impairment, (4) support to participate in rehabilitation programs, (5) in the case of a tragic loss of life, death benefits for dependent family and (6) access to the common law in cases of employer negligence. If an injured worker were to come under Comcare in future, if this bill were enacted, they would be denied all of these things that I have just outlined. In aid of a meagre saving for big companies, injured workers and their families will bear inestimable financial and emotional costs and hardship by being excluded from workers' compensation benefits.

There are three new additional exclusionary provisions in the proposed legislation, which would not just leave sick and injured working Australians and their families worse off but would drive them into poverty—seemingly something the Abbott government is insistent on doing to all disadvantaged groups in our country. I will take each of the proposed exclusionary provisions and explain why Labor opposes them and why we believe the Senate should oppose them too. The first is off-site recess breaks. This bill proposes the reintroduction of an exclusion from eligibility for compensation during recess breaks. The current act provides that an employee is covered if temporarily absent from work during an ordinary recess. This new bill proposes to repeal this protection and instead to reinsert a new clause modelled on the Howard government provisions. The government in its explanatory memorandum cites the South Australian scheme in support of the removal of recess break coverage, which coincidentally is perhaps the only workers' compensation scheme in the country that is currently challenged financially, more so than even Comcare. The government fails to mention that all other major Australian workers' compensation schemes—New South Wales, Victoria, Queensland and Western Australia—provide cover for off-site recess breaks. In fact, all Australian workers' compensation schemes currently cover injuries during recess breaks except for South Australia. When the Safety, Rehabilitation and Compensation Act was first enacted in 1988 by the then Hawke Labor government, establishing the current Comcare scheme, it provided compensation for workers who were temporarily absent from their place of employment during an ordinary recess.

In 2007, under John Howard's loathed and thoroughly repudiated Work Choices regime, off-site recess claims were removed from the scheme. In 2011, Labor was able to restore this protection to provide coverage to injured workers under Comcare on a similar footing as provided to the vast majority of the Australian workforce. Unfortunately, in line with what this government stands for, the bill now proposes to again remove off-site recess break cover from Comcare—yet another way in which this government seeks to turn its back on Australian workers, make them more vulnerable and indeed look for the lowest common denominator when it comes to affording protection to the Australian workforce. The regulation impact statement tabled with the bill states that this may save Comcare licensees $850,000 per annum. It appears savings would be spread across 31 licensees, including some of Australia's richest corporations—Telstra, Optus, the Commonwealth Bank and so on.

What the government will not tell you, and what they do not want you to know, is that these savings for these companies will be directly paid for by injured workers who will no longer be protected. To justify this unfair measure the minister in his explanatory memorandum has provided a misleading 'illustrative example' designed to provoke sympathy for the removal of off-site recess cover. This example is so out of touch it is bizarre—a mythical construction worker who goes surfing at lunchtime and gets injured. This is just to suit the government's conclusion and is not the real experience of Australian tradespeople, police or nurses, let alone construction workers on a 30- or 45-minute lunch break.

The second provision I refer to is the exclusion of deceased and the seriously and permanently impaired workers as result of wilful misconduct. This provision is truly appalling. This change would see the removal of protection and compensation in cases of 'death or serious and permanent impairment' in cases where 'wilful misconduct' may be alleged. This is perhaps the most gratuitously nasty proposal in the bill because the government acknowledge negligible savings from this measure in its regulation impact statement. There are no individuals, I would contend, no organisations that we know of, that have called for this change. It is just the Abbott government's own thought bubble—a very nasty provision if enacted. To quote from the regulation impact statement:

The potential impact of this amendment in cost savings to licensees and premium payers in claim costs or premiums is expected to be negligible as the cases under this provision are rare.

Rare they may be, but the consequences for those involved if those allegations were to be accepted as possible or fact could be devastating. It is already the case that most jurisdictions have exclusionary provisions that set out circumstances in which workers' compensation will be denied for physical injuries. An injury or disease that is solely attributed to serious and wilful misconduct or is deliberately or wilfully self-inflicted are typical exclusionary provisions in most schemes. However, in the case of death or significant/serious and permanent incapacity, Australian workers' compensation schemes have for more than a century made an exception in cases of deceased workers and significantly and permanently incapacitated workers and provided them and their families with protection. Currently, all Australian workers' compensation schemes provide benefits to deceased and seriously and permanently impaired workers irrespective of serious and wilful misconduct—alleged or real. The Law Council of Australia in its presentation to the Senate inquiry on 20 June this year provided this historical point of significant when they said:

That [this] provision has in fact been a feature of the Commonwealth compensation laws right back to the first … Commonwealth Compensation Act 1912—Section 4(2) (b) of that Act.

The evidence of the Law Council continues:

We think there is great value in consistency when it has in fact been the [current] policy of the Commonwealth and remains the policy of every other jurisdiction.

Amendment of this provision also contradicts the purpose of the Safety, Rehabilitation and Compensation Act, being a no-fault workers compensation scheme. If the bill proceeds, Comcare will be the only workers compensation scheme in Australia to exclude deceased and seriously incapacitated workers from receiving assistance.

The third new exclusionary provision in this bill is 'voluntary assumption of abnormal risk'. Currently under Comcare, a worker who 'voluntarily and unreasonably submits to an abnormal risk of injury' will be denied compensation if the injury is suffered during an ordinary recess—that is, in circumstances where they have not sustained the injuries whilst undertaking their usual employment duties. This legislation proposes that an exclusion from compensation should apply when the worker is at their usual place of employment during their usual working hours. The government's explanatory memorandum and regulation impact statement do not explain the rationale for this measure or estimate savings.

This change is being proposed with so little explanation, it is almost as if the government were hoping that the parliament wouldn't notice. What is or is not a voluntary assumption of abnormal risk when undertaking work duties would, if this bill is enacted, be the subject of endless and costly dispute. There is no protection for vulnerable workers who are asked or directed to do dangerous tasks by their co-workers or for the young worker or the older worker afraid of losing their job. There is also no protection for people in hazardous professions—for police, for nurses, for workers who respond throughout the day and are exposed to risk but must perform tasks to ensure the health, safety and wellbeing of others.

Labor agrees that the Comcare scheme is in need of reform. We need to make the scheme fairer for the injured workers it was designed to protect. However, this bill is not reform, it is a series of exclusions from compensation that will make Comcare an anomaly in Australia for the harsh and unjust way that it would treat injured and deceased workers. If the coalition has its way, if this bill is enacted, many workers will no longer have any support from the Commonwealth workers compensation scheme, support of a kind that has existed for workers in this country since the Commonwealth Workmen's Compensation Act 1912.

A further concern that Labor has with this bill is the proposed national expansion of Comcare. Comcare, I would contend, is not equipped or designed to cope with the expansion that is being proposed by the Abbott government. With only 44 health and safety inspectors to cover the breadth of the nation, Comcare does not have the regulatory capacity to cope with an increase in licensees.

We know there are all types of costs associated with making public policy, but the government, by bowing to the economic interests of big business in this instance, has not considered the economic impacts of injury, disability and death in this legislation. It is of great importance to people in this place who care about good policy and good and co-operative Commonwealth-state relations that this bill should not pass. These proposed changes will undermine the financial viability of state and territory workers compensation schemes, with the rising costs of those schemes falling to employers—mainly the small to medium sized businesses that remain in them.

The coalition, in its search for the love of big business, is ignoring the cost of opening up the Comcare scheme upon small to medium sized businesses. They like to call themselves the government for small business. Well, if enacted, this bill would hurt small business. The reduced premium pool in state workers compensation systems means increasing premiums for remaining businesses in those schemes and will put pressure on workers' entitlements.

The businesses left behind will be small to medium sized businesses, mum and dad businesses that do not have the time to apply for a self-insurance licence. Those covered by state workers compensation schemes will be disadvantaged by a loss of critical rights under the Comcare scheme, particularly the lack of common law protection. Their benefits will also be calculated through a scheme that is based around risks of injury that occur in non-blue collar industries.

Employers who choose Comcare will not have to comply with state health and safety laws, including specialised arrangements in high-risk industries such as the mining industry. The proposed amendments abolish the jurisdiction of state health and safety regulators in relation to Comcare self-insurers that obtain a licence under the Commonwealth act. Can the government assure Australians that workplaces will be as safe as they are now if this bill passes? They cannot. State based schemes each have hundreds of inspectors working to ensure workplaces meet safety requirements; Comcare has 44 inspectors nationwide. Compliance obligations under Comcare are weaker than the state systems, Comcare offers lower payments to injured workers and Comcare's capacity to inspect workplaces and enforce laws will reduce further as more businesses gain coverage.

Labor is concerned that Comcare could be open to abuse by employers whose business is in one state or territory because the definition of 'national employer' does not specify a minimum number of employees required in a particular Australian jurisdiction. For example, a company whose location is in Queensland but who offers a Sydney office with one employee would be determined as a national employer. Self-insurance will be open to abuse by employers who do not wish to assist injured members of their workforce as Comcare is not equipped to monitor performance or hold self-insurers to account on a national scale if they do not meet obligations to assist injured workers to return to work. What is also concerning for workers is that an employer moving to Comcare automatically removes from their workers the rights provided by state jurisdictions. Most workers are not likely to learn they have lost rights until they are injured.

In conclusion, Labor will not support this bill because, if enacted, it will create confusion, anomalies and unfairness. The bill will cause injured workers to lose rights and benefits they would otherwise receive under state schemes. The bill will weaken and create gaps in health and safety protection. The bill re-introduces three unfair and unnecessary exclusions to injured workers accessing workers' compensation. On the government's own analysis, any savings the bill will offer for business are small at best. In comparison to the price that would be paid by injured workers and their families if the bill was to pass, the savings are next to nothing. Labor opposes the bill.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

I rise to support the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014. The bill implements a range of measures in line with the government's red-tape reduction program to reduce the cost of the regulatory burden on business. This government is committed to reducing red tape, thereby increasing productivity for Australian business. As part of the red-tape reduction program, the government is expanding the Commonwealth workers compensation and work, health and safety scheme, Comcare, to national employers meeting self-insurance criteria. The recommendations enacted by the bill anticipate a total reduction of regulatory burden for eligible corporations transferring to the Comcare scheme averaging $35 million each year over the next 10 years.

The bill implements recommendations in line with the 2013 Hanks review of the Safety Rehabilitation and Compensation Act 1988, which governs the Comcare scheme. The SRC Act establishes the statutory framework for workers compensation in the Commonwealth jurisdiction and for eligible corporations to self-insure under the scheme. The bill seeks to amend the SRC Act and the Work, Health and Safety Act 2011, inter alia, to expand the eligibility of corporations to self-insure through Comcare. The amendments remove the requirement for the minister to declare a corporation to be eligible to be granted a licence for self-insurance, while maintaining the ability for the minister to issue directions to the Safety, Rehabilitation and Compensation Commission. This will streamline the current two-stage approval process; remove the outdated requirement that a corporation must be in competition with a Commonwealth authority or a former Commonwealth authority to make application to self-insure under the Comcare scheme; broaden the range of eligible corporations to self-insure under the Comcare scheme to 'national employers', which is defined as an employer that is required to meet workers compensation obligations under the laws of two or more jurisdictions; enable the commission to grant group licences to related corporations; extend the coverage provisions of the WHS Act to those corporations that obtain a licence to self-insure under the act; and exclude access to workers compensation where injuries occur during recess breaks away from an employer's premises or where a person engages in serious and wilful misconduct, even if the injury results in death or serious and permanent impairment.

Prior to 2007, certain employers had the option to self-insure for workers compensation coverage through the Commonwealth's Comcare scheme. In December 2007, the Rudd Labor government imposed a moratorium on new entrants to self-insure under Comcare. This was despite evidence from the Productivity Commission's 2004 inquiry into national workers compensation and occupational health and safety frameworks, which found that the cost for multistate employers insuring with multiple compensation schemes was considerable. The moratorium was announced subject to a wide-ranging review of the Comcare scheme by the federal government in consultation with the various state and territory governments and employer and employee groups. In 2008 this review produced 19 recommendations from the Department of Education, Employment and Workplace Relations. The review also included a report by Taylor Fry actuaries and included consideration of the Productivity Commission's 2004 report. In 2009, the Labor government announced a number of changes, including a continuation of the moratorium and, contrary to DEEWR's recommendation, reinstated compensation for off-site recess breaks. Two key recommendations that the government of the time ignored were eligibility to self-insure under Comcare and journey claims. The Hanks review of the SRC Act, released in March 2013, included over 100 recommendations for substantial changes to the scheme, including the lifting of the moratorium. On 2 December 2013, the coalition government lifted the moratorium.

Self-insurance allows an employer to underwrite their own risk. Self-insurers are responsible for the payment of their claim liabilities and for the management of those claims. Self-insurance relieves an employer from accepting a workers compensation policy under respective workers compensation jurisdictional schemes. The bill introduces the concept of a national employer test. This test will provide corporations operating in two or more states or territories the opportunity to be a national employer under the Comcare scheme. Such a corporation, assuming that it satisfies requirements within the act, will be able to obtain a self-insurance licence, bringing all of its employees under a single workers compensation jurisdiction. The SRCC will still determine eligibility for a corporation to become a self-insurer. Concurrent amendments to the WHS Act ensure that the corporation's employees are also brought under a single work, health and safety scheme.

The 2004 Productivity Commission inquiry found that multistate employers faced increased costs of compliance, sometimes amounting to millions of dollars a year, as a result of workers compensation coverage and work, health and safety obligations in multiple jurisdictions. The amendments in the bill are important productivity reforms which are critical for multistate employers. They will provide these employers with the option of continuing to operate under multilayered workers compensation and work, health and safety regimes or to apply to have one set of national arrangements. Multistate employers have always faced challenges in regard to determining correct workers compensation coverage, particularly in determining the state of connection. The lack of national consensus when it comes to state of connection continues to present confusion and uncertainty for these employers. The option for corporations currently covered by workers compensation systems in two or more states or territories to apply to join the Comcare scheme removes this uncertainty. There are significant advantages in being able to operate within one workers compensation framework. Foremost, savings in regard to compliance are likely to be a significant motivation for self-insuring in the Comcare environment, as opposed to self-insuring in multiple jurisdictions. The costs of complying with up to eight separate regulatory frameworks is a significant burden, particularly as each regulator imposes its own set of licensing criteria, reporting arrangements and standards. Corporations self-insuring in multiple jurisdictions are required to comply with prudential requirements as specified by each jurisdiction in which they self-insure. This involves considerable cost replications in meeting financial capability requirements, bank guarantees, security deposits and reinsurance policies to secure claims liabilities. For example, each bank guarantee requires a separate actuarial report with different requirements set by each jurisdiction, and there are numerous differences within jurisdictions in taking out a reinsurance policy. In their submission to the 2004 Productivity Commission inquiry— (Time expired)

Debate interrupted.