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 Amendment (Improving the Comcare Scheme) Bill 2015. This is the third bill proposed by this government that attacks the rights of Australian workers to fair and reasonable compensation when they suffer a work related illness or injury. This bill, with its Orwellian title, will exclude workers from the Comcare scheme and significantly reduce the compensation available for those who remain eligible. This bill attempts to reduce the liabilities of the Comcare scheme at the expense of people injured at work.

Labor agrees with the government, which said:

It is vital that people injured in the course of their employment are given every opportunity to get better and return to work.

It also said:

Early and effective rehabilitation, as well as appropriate financial compensation, are essential to helping people recover and get back to doing the things that are important to them, including their jobs.

Unfortunately, this bill does none of these things. The Law Council of Australia describes these changes as the 'most fundamental amendment' of the act since it was introduced. It goes on to note '… changes to the eligibility provisions, rehabilitation requirements and new sanctions provisions are unnecessary' and '… there is a lack of evidence of widespread misconduct or abuse of the system that would warrant such changes'.

The government relies upon the 2012 review of the Safety, Rehabilitation and Compensation Act, by Dr Allan Hawke AC and Mr Hanks QC, to justify its position in respect of a number of the changes. It is worth noting, however, Hanks' observations that his recommendations 'should not be viewed in a disparate or piecemeal manner'. This government has selectively adopted the recommendations which benefit employers and has ignored the recommendations which benefit workers. For example, the government has ignored the recommendations to include contractors, pursuant to 5.1, to provide access to compensation when someone is injured on their way to work, when on call, and for an injury management and rehabilitation code of practice that includes obligations for employers.

The bill restricts eligibility to compensation in a number of ways, despite the fact that the Comcare annual report tells us the incidence of injury claims has been steadily falling 2008-09. Most egregious is the significant broadening of the 'reasonable administrative action' exclusion and the new framework for determining whether employment contributed to an injury. The bill proposes to expand the scope of the current reasonable administrative action exclusion to apply to reasonable management action and to an employee's anticipation or expectation of administrative action. An exhaustive list of what may constitute 'management action' is also included. These changes are said to be consistent with recommendations 5.2 and 5.5 of the review. This is patently untrue. Hanks actually recommended a narrowing of the reasonable administrative action exclusion. The Law Council observes that these changes are likely to lead to uncertainty and complex litigation.

The Australian Council of Trade Unions suggest that this provision is drafted so broadly that it will have the effect of placing the onus on workers to prove that any operational direction that resulted in injury, whether physical or psychological, was unreasonable. Further, they note that there is no requirement for the management action to be wholly or predominantly the cause of the injury. If it were even a modest contribution it would be sufficient to exclude the worker from compensation. This is contrary to the Hanks recommendation that the reasonable administrative action be a significant factor in the injury to warrant exclusion from compensation.

Presently, a worker should be compensated where an injury to a worker, or a worker's disease, results in their incapacity to work, impairment or death. Disease and injury are treated differently. The compensable injuries are those which arise out of or in the course of employment. Compensable diseases require the employment to have contributed to the disease in a significant degree.

The bill makes a number of interrelated changes to what will constitute a compensable injury. First, there will be a new legislative instrument called a 'compensation standard'. This will allow Comcare to set out the factors that must be present before an employee's condition can constitute a compensable injury. There is nothing in the bill or the explanatory memorandum that tells us exactly what those factors will be or the extent to which they will exclude ailments from compensation. The bill creates a new class of designated injury, which will be treated at the higher threshold presently applied to diseases. The designated injuries include heart, brain and spinal injuries but also allow regulations to broaden this list of designated injuries.

The Law Council notes that the inclusion of intervertebral disc injuries on the list, in the bill, is inconsistent with the approach in a number of other jurisdictions. The bill also expands the criteria to be taken into account, in determining whether employment contributed, to a significant degree, to a designated injury or disease. This includes the employee's health prior to the event, whether the event would have occurred anyway, including genetic predisposition, and personal and social factors. Concerns have been raised, in evidence to the Senate inquiry into the bill, but the effect of this new provision is to adversely affect older workers and those with a disability and it effectively overturns the principle that for the purposes of workers compensation you take the worker as you find them. The government's claim that these reforms ensure the scheme will remain one of the most generous in Australia is contested by the opposition. Indeed, it must be an ironic definition of 'generous' that this government has in mind.

The Department of Employment's submission to the Senate inquiry concedes that in relation to the proposed stepdown in incapacity requirements, for total incapacity, the proposed Comcare scheme will be the second worst in the country after 52 weeks, the third worst between 26 and 52 weeks, equal third between 13 and 26 weeks and the same as all but three jurisdictions for the first 13 weeks.

Presently, an incapacitated worker is entitled to normal weekly earnings for the first 45 weeks of incapacity and 75 per cent of those earnings while they remain incapacitated until the age of 65. The government claims that step-downs provide an incentive for employees to return to work as quickly as possible. The step-downs proposed in the bill mean an incapacitated worker is worse off after the first 13 weeks, receiving 90 per cent of income instead of 100 per cent for 13 weeks, 80 per cent instead of 100 per cent for the next 19 weeks, 80 per cent instead of 75 per cent for the next seven weeks and 70 per cent instead of 75 per cent thereafter. The review did not recommend the fourth step that the government has adopted. The ACTU has estimated that a seriously and permanently incapacitated low- to medium-income worker could lose between $120,000 and $325,000 over 20 years.

Step-downs are not the only reduction in compensation that the workers would face as a result of this bill. In relation to medical expenses, the bill attempts to limit the types of treatment that are reasonable using clinical framework principles. This legislative instrument is required to be taken into account in deciding whether particular treatment was reasonably obtained. The principles will apparently be based on principles issued by Worksafe Victoria but, again, have not been developed for the parliament to consider. The bill would also restrict the amount of compensation payable for any given medical treatment or medical examination, potentially leaving the injured worker out of pocket. The medical services table and the medical examination rates determination will be created by more, as yet unseen, legislative instruments. Further, an injured worker who wants to see their family doctor is not compensable at all.

The bill does allow a relevant authority to make a provisional medical expense payment of up to $5,000 before a claim for compensation is determined, which is positive, although I do note that the review actually recommended a payment of up to $3,000 for medical expenses and 12 weeks of incapacity payments. Further, the changes described above will significantly restrict the utility of the provisional medical expense payment. It is also unclear whether anyone will ever benefit from this provision, though, as the relevant authority can refuse to make a payment on 'reasonable grounds', as long as they notify the employee in writing. Further, the fact that these payments are to be considered in determining the employer's premium would logically discourage the employer from making such payments. In addition to these key changes, the bill restricts the inclusion of allowances to the first 104 weeks of incapacity, leaving workers who remain incapacitated and cannot return to work worse off. This restriction is another punitive creation of this government, not a recommendation of the review.

The bill also proposes to restrict compensation for household services, which are for the proper running and maintenance of the employee's household, and attendant care services, which are for personal care of the employee. The bill introduces the term 'catastrophic injury' to determine the amount and duration of compensation payable for household services and attendant care. Those who are deemed to have a non-catastrophic injury will only be able to access attendant care and household services for up to three years. In the case of catastrophic injury, there is no limit for how long services will be compensated, but the amount of compensation must be assessed as being reasonable. It is unacceptable that such a determinative distinction will depend on as yet unseen regulations. The bill also abolishes the amounts payable as compensation for permanent impairment and non-economic loss like pain and suffering in relation to a secondary psychological or psychiatric condition.

Presently, as long as someone receiving payments for incapacity informs the relevant authority of any overseas travel, they may continue to receive compensation. The bill proposes to suspend compensation payments when someone is absent from Australia for more than six weeks. This proposal fails to consider the circumstances of persons who may have been working in Australia under visa or other arrangements, which mean that they have no choice but to leave Australia when they cease work. The government appears to have made no attempt to cater for these circumstances.

The government is justifying some of these changes on the basis of return to work rates being at 80 per cent, having fallen from 89 per cent in 2008¬09. This is, however, an incomplete and somewhat misleading statistic. The annual report for Comcare notes that the returned to work rate of 92 per cent in 2013-14 is above the national rate and the best result since 2008-09. Even the current return to work rate is described as remaining relatively stable at 81 per cent in 2013-14 and above the national average rate of 77 per cent.

The government claims that the bill will improve return to work outcomes under the scheme by emphasising the vocational nature of rehabilitation services. Presently, a return to work plan must have regard to a range of factors that balance the needs of the employee and the employer. The employee is required to attend assessments and participate in rehabilitation programs, and if they do not do so without reasonable excuse their payments may be suspended. This plan is reviewable. The changes contained in the bill will introduce a new concept, the workplace rehabilitation plan. There is no obligation on the employer to devise such a plan, and it is unclear what will happen in the event that the employer decides there is no need for a plan. This plan, devised by the employer, may direct an employee to engage in certain activities. Failure to do so can result in a new sanctions regime, which I will come to shortly. There is no opportunity for review of the plan. The plan can also require an employer to engage in certain activities, but it is unclear what, if any, sanctions apply if the employer does not hold up their end of the bargain.

Finally, an employer is required to consult with the employee and their medical practitioner about the plan, but there is no requirement to agree with the medical advice, opening up the possibility that a plan, with which the employee has no choice but to comply, is directly contrary to medical advice. This puts both the employer and the employee in an invidious position. Comcare can intervene in the rehabilitation of an injured employee if satisfied that the employer is not meeting their obligations. These obligations include taking all reasonably practicable steps to ensure rehabilitation and providing suitable employment or assisting the employee to find suitable employment.

Under the current act, suitable employment for permanent employees is employment by the same employer. For everyone else, suitable employment could be any employment, including self-employment. The bill now says that for any employee, irrespective of their status in the workplace, suitable employment could be any employment, including self-employment. The consequence of noncompliance is that Comcare becomes responsible for finding suitable employment.

Interestingly, the return-to-work hierarchy cited by the Department of Employment in their submission to the Senate inquiry into the bill does not include self-employment. An employee who does not take up an offer of suitable employment, including self-employment, is again subject to the sanctions regime. The government also writes a blank cheque for Comcare to provide financial incentives to employers to provide suitable employment. This further undermines the basic duty of the employer to provide suitable employment for their injured employee without any such incentive.

The decision to specify statutory time limits for determining liability is welcome. The time frames proposed—30 days in respect of an injury and 70 days for a disease—are, however, woefully inadequate. Further, any failure to comply with the time frames is deemed to have been rejected, with the requirement for the employee to then pursue reconsideration of the decision. A 60-day time frame is also specified for the reconsideration decision. Again, it is woefully inadequate. Again, the consequence of failure to comply with the time frame is deemed to be a rejection, with the employee required to pursue their claim with the Administrative Appeals Tribunal. The result of these provisions is that after 130 days the employee could find themselves without any assistance whatsoever and would need to take action through the AAT.

The bill introduces a new castigatory sanctions regime. An injured employee must comply with certain obligations of mutuality. Failure to do so results in escalating sanctions, concluding with cancellation of compensation rights. An employee who refuses or fails to seek suitable employment commits a breach that is irremediable. A first breach of this kind will result in the employee's weekly incapacity payments being reduced by the amount that the employee is able to earn in suitable employment.

For other breaches—for example, relating to medical examinations, assessments and complying with a workplace rehabilitation plan—the employee can be directed to remedy. While the first breach is on foot, the employee's right to compensation is suspended until the breach is remedied. Failure to remedy within 30 days is a second breach. Second breaches are much the same as the first. However, after a third breach, the employee's rights to compensation in respect of all current and future associated injuries are permanently cancelled. The government has clearly decided that people who have suffered a workplace injury are malingerers. This is an unfair and unreasonable conclusion to draw given that 85 per cent of employees receiving income replacement have returned to work less than 13 weeks after leaving.

Finally, the government talks about the scheme's ratio of assets to liabilities falling below 70 per cent. The Law Council of Australia suggests that the bill:

… seems to do little to improve the overall viability of the scheme ... [and] represents a missed opportunity to address those issues.

The bill proposes to increase the current weekly rate of incapacity payments that can be redeemed from $110.65 to $208.91 per week. The government anticipates that this will increase the employees who qualify for the payment of a lump sum in lieu of ongoing weekly incapacity payments. It is worth noting that unlike state and territory compensation schemes, there is no mechanism for workers to redeem payments voluntarily or to enable an employee to separate from Comcare. It is the view of the Law Council that:

Providing for redemptions at a higher level is likely to reduce the long-tail nature of the Comcare scheme …

Before I conclude, I want to touch on a few miscellaneous issues covered in the 17 schedules of this bill. Schedule 13 of the bill relates to the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014. Labor also opposes this bill, because it undermines all the existing workers' compensation schemes in Australia and because it is an ill-conceived bill that ignores the founding principles of Australian workers' compensation schemes and why they were established in the first place. Schedule 16, in recognition of the unique nature of military service, retains the existing entitlements for Australian Defence Force members whilst also ensuring that they will not ever receive less compensation by an employee covered by Comcare. While this is a positive for the ADF, it is also recognises that this is tacit acceptance that the changes in this bill negatively affect all the workers it covers.

Considering the bill in total, it is clear that once again this government is using the language of reform when they mean retrograde changes that leave workers worse off. Labor opposes the bill.

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

I rise today to support the Safety, Rehabilitation and Compensation Amendment (Improving the Comcare Scheme) Bill 2015. Every Australian has the right for their workplace to be safe, flexible, and productive, with minimal risk of workplace injury and disease. For those who are injured in the course of their employment, it is essential that they are provided every opportunity to recover and to return to work as quickly as possible. Australia needs a modern workers' compensation scheme that meets the needs of today's workforce and is sustainable into the future.

There are two important elements that can assist workers returning to work following a workplace injury: firstly, early and effective rehabilitation and, secondly, appropriate financial compensation. Having a job provides people with a strong sense of confidence and self-worth. This is why it is important that we continue to encourage many Australians to gain employment as soon as possible. This principle underpins our determination to encourage many job seekers to go from welfare to work. While circumstances injured workers are different to those of job seekers, the principle of returning people to work is the same.

The Safety, Rehabilitation and Compensation Act 1988—also known as the SRC Act—covers Australian and ACT government employees and the employees of the 33 self-insurers under the Comcare scheme. Since it was introduced in 1988, the SRC Act has failed to keep pace with advancements in workplace relations. Today, it is out of step with community standards and evidence-based practices. Since the act was devised in 1988, there have been important changes in workplaces and working conditions, health care and rehabilitation, technology, and individual and social behaviour, along with community expectations. The Comcare scheme has seen return to work rates fall from a high of 89 per cent in 2008-09, to approximately 80 per cent in recent years. In 2012, the former government commissioned the first comprehensive review of the scheme since its introduction. The review found that the scheme does not provide enough support or incentives for injured workers to return to the workplace. In fact, the scheme creates barriers and disincentives for injured workers to recover at work.

Debate adjourned.