Stewart McArthur (Corangamite, Liberal Party) Share this | Hansard source

Over the years I have had an ongoing interest in workers compensation matters, particularly in workers’ safety and in rehabilitation and compensation for those persons who suffer some injury while at the workplace. I come from a farming background, as members would know. That industry has an appalling record of accidents and deaths. So I personally am very aware of the issues involved and have done everything possible to make sure that workers’ safety is a top priority. I remember the Snowy Mountains scheme. Mr Hudson was the managing director of that whole operation. He put an emphasis on safety. He forced all employees to wear seatbelts during that major project, and the safety record in the late 1940s and early 1950s was remarkable, given the prevailing attitude towards safety.

As honourable members would know, workers compensation is basically a prerogative of state governments. There have been a number of changes. It has been alleged that in some cases workers compensation at the state level was rorted by employees and that premiums were too high. Some states have remedied that situation and have ensured that premiums became more reasonable and that industries with different categories of risk suffered a premium relative to their industry. In the timber industry, which I have been fairly close to, the premium for workers compensation was the wage, plus 25 to 50 per cent.

The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 is particularly concerned with travel to and from work and psychological injury. I note from the outset that cases involving psychological injury or stress, in the case of the Commonwealth, constitute seven per cent of the claims but 27 per cent of the costs. Turning to some of the more technical details, the bill seeks to reintroduce common sense into the Commonwealth occupational health and safety legislation and to cut down on potential opportunities for people to rort the workers compensation system. I say that in view of some of the state legislation I referred to which sought to address some of these problems. In particular, the bill seeks to exclude employees’ journeys to and from work from coverage under the Commonwealth workers compensation scheme and also to exclude recess breaks where the employer has no control over the employee.

Another important reform is that the amendment bill strengthens the connection between eligibility for workers compensation and work such that work must have contributed ‘in a significant degree’ to the injury claimed. In particular, the amendment will mean that employees cannot claim ‘stress’ for failing to receive a promotion or for receiving reasonable disciplinary action by an employer. I think most members of this House and most employees would regard that as reasonable. I note over the years some of the claims for stress leave in the teaching profession in Victoria, both at the Commonwealth level and the state level.

The National Occupational Health and Safety Commission estimates that the total economic cost of workplace accidents to workers, employers and the community is in excess of $31 billion annually. That is a huge figure which concerns all of us in this House greatly. The 2004 Productivity Commission report National workers’ compensation and occupational health and safety frameworks discloses that workers compensation schemes across Australia collected more than $5.8 billion in premiums from employers in 2001-02 and paid out more than $3.4 billion to injured workers, $1.26 billion in medical and other costs and $1.23 billion for administration. These figures are huge. That is why some of us have taken so much interest in workers compensation, both from a humanitarian point of view and because of the ongoing costs to everyone involved. The changes to be brought about by this bill will improve the long-term affordability of the Commonwealth workers compensation system by reducing claims against Comcare and providing an estimated saving of $20 million to Comcare’s annual premium pool.

Turning to the specifics of the bill in regard to journeys to and from work, many Australians would be aghast to learn that, under current Commonwealth workers compensation arrangements, employers can be held responsible for injuries sustained by workers while travelling to and from work. An age-old debate at the state level for the last 30 years has been the legal liability of employers for employees travelling to and from work, what time they started at, what injuries they incurred and whether the injuries were bona fide. This is an important issue of relevance to constituents living in my electorate of Corangamite. Thousands of people live in the Geelong region, in Grovedale, Belmont, Highton, Barwon Heads and Torquay, and drive their cars daily to and from work in Melbourne. The trip takes an hour or longer each way on a very busy freeway.

Madam Deputy Speaker, you will be aware that $120 million was provided by the Commonwealth to upgrade the Melbourne to Geelong road to make it safer for travellers. I was pleased that I advocated funding for that road just on the basis of safety. There was also a public campaign. Since the highway from Melbourne to Geelong has been upgraded, I think only one life has been lost. In the situation where an employee lives in Geelong and works in Melbourne, it is their choice that they travel to and from work; it is not their employer’s choice. I think it is unreasonable to expect an employer to be responsible for an employee who has an accident while travelling from their place of residence to their place of work.

The bill also seeks to exclude from coverage injuries sustained during lunch breaks and events held outside of work, where the employer cannot control the safety conditions. Again, time only permits me to provide one example. In Colac, some employees—and this is on the public record—got themselves into difficulties during their break and found themselves in court. They had been skylarking, and as a result sustained some serious injuries. It was possible that their case came under workers compensation.

On the more technical side, referring to the speech of the Minister for Employment and Workplace Relations, the Commonwealth workers compensation scheme has come under growing pressure in recent years from increasing numbers of claims, longer average claim duration and higher claim costs. This has been reflected in workers compensation schemes at the state level. This, in part, is a result of court interpretations of the legislation, some of which have departed from the initial intent of the legislation. The principal amendments contained in the bill are intended to maintain the financial viability of the scheme. The amendments will also improve the administration and provision of benefits under the scheme. This reflects some of the changes that have been administered by Labor state governments, and the Commonwealth—I notice the Minister for Employment and Workplace Relations is seated at the table—has probably been a bit tardy in making some of these changes so as to ensure that the national system was compatible with state jurisdictions.

The definitions of ‘disease’ and ‘injury’ are of central importance in the Safety, Rehabilitation and Compensation Act. These definitions will be amended to strengthen the connection between the employee’s employment and the employee’s eligibility for workers compensation under the scheme. The act currently requires a material contribution by employment to a disease before compensation is payable. When originally enacted, this provision was meant to establish a test—and I quote from the then minister’s second reading speech in 1988—requiring that an employee:

... demonstrate that his or her employment was more than a mere contributing factor in the contraction of the disease.

The issue being addressed—and again I quote from the then minister’s 1988 second reading speech—was:

... the Commonwealth being liable to pay compensation for diseases which have little, if any, connection with employment.

Notwithstanding this clear expression of legislative intent, the courts have read down the expression ‘in a material degree’ to emphasise the causal connection between the employment and the condition complained of rather than the extent of the contribution itself. The bill therefore includes an amendment to restore the initial legislative intent by requiring that an employee’s employment must have contributed in a significant way to the contraction or aggravation of the employee’s ailment. Put in simple language, it means that there needs to be a genuine problem caused to the employee at the workplace, not a technical, legal interpretation of the act.

The current definition of ‘injury’ contains exclusionary provisions which prevent compensation claims being used to obstruct legitimate administrative action by management. These provisions ensure that compensation is not payable in respect of an injury, usually a psychological injury, which arises from reasonable disciplinary action taken against an employee, or a failure by the employee to obtain a promotion, transfer or benefit in connection with employment. The exclusionary provisions are being updated and expanded to include other similar activities which are also regarded as normal management responsibilities—provided, of course, that they are reasonably undertaken. I am very confident in the Minister for Employment and Workplace Relations undertaking these matters at the Commonwealth level. These matters include a reasonable appraisal of the employee’s performance and reasonable counselling action taken in respect of the employee’s employment. These amendments to the definitions of ‘disease’ and ‘injury’ seek to restore the operative effect of the legislation to what the parliament and the then government intended in 1988.

The bill also amends the provisions that set out the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment. In its March 2004 report National workers’ compensation and occupational health and safety frameworks, the Productivity Commission recommended that coverage for journeys to and from work not be provided and that recess breaks and work related events should be restricted to those at workplaces and at employer sanctioned events. The fundamental common-sense principle underlying the Productivity Commission’s recommendations was, of course, that employers should be held liable only for conduct that they are in a position to control.

Consistent with the Productivity Commission’s approach, the SRC Act will be amended to remove coverage for injuries sustained by employees during journeys between home and work and during recess breaks undertaken away from the employer’s premises—for example, lunch breaks during which an employee leaves the employer’s premises to go shopping. Employers cannot control circumstances associated with journeys to and from work or recess breaks away from employer premises, and it is not appropriate for injuries sustained at these times to be covered by workers compensation. I make the observation that sometimes in the courts there can be some interesting interpretations of what I call ‘extraneous events’ that have been covered by workers compensation at the state and federal levels.

The bill also enhances various entitlements available to employees under the principal act. The bill will amend the method for the calculating of retirees’ incapacity benefits to take account of changes in interest rates and superannuation fund contributions since the time the act was first introduced. The change in the interest rate provision would result in increased benefits payable to retirees. Amending the notional superannuation deduction would restore the original policy intent by providing for benefits to affected retirees to be set at 70 per cent of pre-injury normal weekly earnings.

The bill will also increase the maximum funeral benefits payable under the SRC Act and its counterpart act, the Military Rehabilitation and Compensation Act 2004, for members of the defence forces, to bring these closer into line with actual funeral costs.

Finally, the bill includes a number of minor technical amendments to the SRC Act which correct anomalies that adversely affect the efficient operation of the act or are inconsistent with the original policy intent behind particular provisions.

I support the thrust of the bill and the philosophical interpretation of what the government and the minister are trying to achieve with it. This debate has been ongoing for the last 30 years. I am delighted that the Commonwealth is now addressing these difficulties so that genuine employees who suffer injury at the workplace will be compensated but court interpretations of the act that allow the system to be rorted will be prevented. The system cannot sustain such rorting, and to allow it to continue is an indictment against those employees who should be receiving their proper payments as well as those good employers who are doing their best to maintain a safe workplace. I strongly support the bill and commend it to the House.

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