Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

Labor opposes the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006. Labor opposes this legislation because, like all legislation on industrial relations matters presented by this government, this legislation is ultimately not in the interests of working Australians. Like the government’s extreme industrial relations legislation more generally, this bill has at its heart the stripping away of the terms and conditions of our workforce. Labor is driven by a desire for genuine improvements in the area of occupational health and safety across Australian workplaces and believes that appropriate compensation is an important and essential part of that. This legislation will erode the compensation component payable to Australian employees.

The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 is the latest in a number of amendments made to Australia’s occupational health and safety legislative framework by this government. It follows on from previous legislation introduced by this government since the election in 2004, including: the National Occupational Health and Safety Commission (Repeal, Consequential, and Transitional Provisions) Bill 2005; the Australian Workplace Safety Standards Bill 2005; the Occupational Health and Safety (Commonwealth Employment) Amendment Bill 2005; the Occupational Health and Safety (Commonwealth Employment) Amendment (Promoting Safer Workplaces) Bill 2005; and the Occupational Health and Safety and Safety, Rehabilitation and Compensation Legislation Amendment Bill 2005. Labor opposed these bills for good reason. Each of these bills reduced, compromised or put at risk the occupational health and safety conditions of Australian workplaces. At its heart, this bill is no different.

This bill is the government’s formal response to recommendations made by the Productivity Commission that changes in this area were needed. It follows on from earlier legislative changes also made following Productivity Commission recommendations. Principally, this includes the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, which amends the Safety, Rehabilitation and Compensation Act 1988.

The bill before us today has as its principal objective minimising the cost of work related injury and disease for Comcare. The principal amendments will change the definition of ‘disease’ to strengthen the connection between the disease and the employee’s employment. In particular, it will require a worker to prove that employment has made a ‘significant’ rather than ‘material’ contribution to a disease for it to be compensable. The amendments will change the definition of ‘injury’ to exclude injuries arising from reasonable administrative action taken in a reasonable manner. The bill also expands the exclusionary provisions for stress claims to specifically include performance appraisals and counselling in relation to performance. The amendments will remove claims for non-work related journeys and recess breaks where the employer has no control over the activities of the employee, such as meal breaks away from the workplace, and they will change the calculation of retirees’ incapacity benefits to take account of changes in interest rates and superannuation fund contributions.

The amendments will update measures for calculating benefits for employees, including the definitions of normal weekly earnings and superannuation schemes. The amendments will mean that all potential earnings from suitable employment can be taken into account when determining incapacity payments. The amendments will enable determining authorities to directly reimburse healthcare providers for the cost of their services to injured employees and increase the maximum funeral benefits payable. In addition, an amendment to the funeral benefit provisions of the Military Compensation and Rehabilitation Act 2004 is proposed to maintain parity with benefits under the SRC Act.

This bill should be seen in the context of associated legislation, particularly the Occupational Health and Safety Legislation Amendment Bill 2005, which allows corporations licensed as self-insured under the Safety, Rehabilitation and Compensation Act 1988 to be covered under the Occupational Health and Safety (Commonwealth Employment) Act 1991, administered by Comcare.

I now address some of these matters in detail. Let me start with item 11 of the bill, which deals with definitions of injury and disease and the proposed change from ‘material contribution’ to ‘significant degree’. The bill changes the extent to which an injury, illness or disease must have been contributed to by an employee’s work before the injury is compensable. At present, the word ‘material’ is used. The bill seeks to replace ‘material’ with ‘significant degree’, which is defined as ‘a degree that is substantially more than material’. So, on the wording of the bill, the government is narrowing the circumstances in which employees may claim compensation. The government argues this is because courts have misinterpreted the meaning of the word ‘material’. However, the government’s true intent is betrayed by the wording of the explanatory memorandum, which argues that the government is seeking to significantly amend the legislation to reflect its desire to decrease the number of injuries covered by the scheme.

If the government were simply concerned about wording and interpretation, it could have inserted a clarifying statement into the bill. However, by its own admission it is seeking to significantly amend the legislation for the purpose of decreasing the number of injuries covered by the Comcare scheme. Regrettably, the government is not concerned about injury prevention, employee protection or care. The one aim of the government, as we have seen in all of its occupational health and safety and Comcare legislation, is to lower levels of protection for employees and workplaces covered by the Commonwealth jurisdiction, and now it wants to further reduce the sorts of injuries for which employees may be eligible for compensation.

Let me move to the ‘reasonable administrative action’ provision of the bill. The proposed section 5A includes a new definition of injury. Labor has two concerns about this proposed change. Firstly, Labor is of the view that there should be no difference between how different sorts of injuries are treated. The broadening of the exclusions from the definition of injury, or aggravation, purports to apply to all injuries covered by the act. However, Labor is of the view that in practice it is likely to be a restriction on the ability of employees to make claims for compensation relating to stress related illnesses. These sorts of injuries are particularly relevant to the demographics of workers covered by the Comcare regime. Labor is of the view that where an injury arises in the course of or as a result of an employee’s work then they should be eligible for appropriate compensation.

Secondly, the bill sets out what is a reasonable administrative action as actions in relation to appraisals, counselling, suspension and discipline of employees. The only way the bill provides that these are reasonable is to say ‘reasonable appraisal’, ‘reasonable counselling’ et cetera. It provides no steps or guidance as to what is reasonable. Here the government is trying to make what will be in practice a broad exclusion sound innocuous by including the word ‘reasonable’. The wording of the proposed section 5A betrays this intention. It requires that a reasonable administrative action be conducted in a reasonable manner. It might sound harmless, but in practice I fear there will be grave difficulties. At its best, this is poor drafting which will not assist employees to determine whether or not they have a valid claim for compensation.

Let me now move to item 12, which deals with injuries occurring at work during temporary absences or when travelling. This is yet another example of the government trying to reduce its expenditure in workers compensation. The proposed new section 6(1)(b) represents another attempt by the government to narrow the range of circumstances in which an injury sustained is covered by Comcare. Firstly, by removing almost all journey claims from the coverage of the legislation, the government is engaging in a significant cost shift back to state governments to cover through CTP claims. Labor notes that not all state jurisdictions have excluded journey claims from their state workers compensation systems: for example, New South Wales still covers workers when they are injured on their way to or from work.

Secondly, although the proposed section has five subsections detailing various circumstances in which an injury may occur, the bill is unclear about injuries arising in a number of respects. For example, how will an injury be treated when an employee is out of the workplace on work business but diverts for personal business? Will an injury they sustain be covered by Comcare under these amendments?

Finally, Labor believes that where an employee is injured during travel for the purpose of attending work or returning home from work there is an argument that the travel is for work purposes. This bill automatically excludes injuries arising in these circumstances from coverage. This is of concern and Labor believes the government has not established a case to depart from the general principle that injuries sustained during work related travel should be compensable unless broken by a substantial deviation. In summary, the legislation leaves gaps in coverage and uncertainty which will create problems for the Commonwealth, other federal employers, employees and administrators in the future.

Let me move to item 15, the index formula in the regulations. Labor notes that item 15 provides where the normal weekly earnings of an employee must be increased for the purposes of determining appropriate future payments. Whilst the new subsection 8(9D) refers to ‘the index prescribed by the regulations’, no indication has been given as to the methodology, relevant factors or appropriate formula the government intends to use to calculate these wage increases.

Labor is concerned about the government’s recent tendency, particularly in relation to industrial relations and occupational health and safety legislation, to include important matters in the regulations, to be released only after the relevant bill has passed through the parliament.

Let me move to item 18, Comcare payment of medical bills directly to service providers. Item 18 changes the rules relating to when and where Comcare is to direct payments for medical and other services and that Comcare can later recover the amount from any damages awarded to the employee. In that context, items 30 and 31 of the bill are relevant. Labor is concerned that difficulties may arise in practice as a result of these amendments: the bill does not require Comcare to inform employees when payment to a provider, and not to the employee, is made; secondly, it is unclear whether Comcare or the employee will bear the burden of fees and charges arising from accounts paid outside the due date; thirdly, it is unclear from the bill whether there is a mechanism for employees to receive information about the quantum of payments Comcare has made on their behalf, so that they can monitor that information against the assessment of likely damages.

I would like to touch briefly on the superannuation provisions of the bill. Subsection 20(3) sets out the formula for payment. The new formula provides that the weekly amount of compensation payable in accordance with section 19 is reduced by the combined superannuation amount and five per cent of the employee’s normal weekly earnings. The military are required to pay five per cent super contributions, so the reduction in this case is understandable, but Commonwealth employees are required to pay only a minimum two per cent contribution and, as such, this could be considered unfair if they were only paying the minimum two per cent but were then deemed to forfeit five per cent compensation. In our view, a fairer option would be to determine a person’s average contribution over their Comcare-covered working career.

It has historically been the case that we have seen through the evolution of occupational health and safety policy in this country the overriding objective of preventing workplace injury and illness. This has been a principle that has historically underpinned both Commonwealth and state legislation in this area. The government’s objective with this bill departs from that longstanding approach. Instead, it has as its principal objective the reduction of the cost of the Comcare scheme by narrowing the eligibility criteria for compensation under the scheme. This in turn would decrease the number of injuries covered by the scheme. This is the wrong approach for the simple value proposition that it places a premium on cost over rehabilitation. For those reasons, Labor opposes the legislation.

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