Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation: Return To Work Act And Scheme

WEDNESDAY 31 MAY 2017

Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation: Return to Work Act and Scheme

The Hon. J.E. HANSON ( 17:01 :23 ): I move:

That the interim report of the committee, on the Return to Work Act and scheme, be noted.

For many years South Australia's previous workers compensation scheme, WorkCover, was often cited as one of the poorest performing in the country. It consistently produced return to work rates well below the national average, required one of the country's highest employer premiums to operate, and was extremely underfunded. Significant reform of that was required.

On 1 July 2015, the Return to Work Act and scheme commenced. Moving away from being focused on medico-legal matters, the return-to-work scheme now better recognises the health benefits of working and has a stronger focus on early intervention and customer service. It uses mobile case managers to provide a greater level of face-to-face service, and utilises systems such as telephone reporting to help reduce administrative processes, connecting employers and workers with the support they need sooner.

Since the introduction of the Return to Work Act, average employer premiums have significantly dropped and the scheme is now fully funded; however, the percentage of injured workers who are at work for one, three, six and 12 months post injury has only marginally improved since the commencement of the reformed scheme. The committee is keen to see whether these figures continue to improve.

Many submissions, mainly from workers and their unions, have stated that the benefit to employers by way of reduced premiums have come at the expense of the support provided to the injured workers. Workers who were on the WorkCover scheme on 1 July 2015 moved to the return-to-work scheme in accordance with the transitional provisions. As a result of wording in these provisions, some workers have been left without income or medical support.

The Full Bench of the South Australian Employment Tribunal found these provisions caused a seemingly unfair outcome for one worker. The committee received submissions with examples of other workers who have had no access to income support on the return-to-work scheme as a result of these provisions. These include workers who were on maternity leave or on non-work-related sick leave at the time the act commenced. The committee even received submissions providing examples where some injured workers who were soldiering on at work had been denied weekly payments due to the wording of some provisions.

In comparison to workers with physical injuries, workers with psychiatric injuries have always had a greater hurdle to overcome when seeking to access the scheme. Workers with a psychiatric injury now need to prove employment is the significant contributing cause of their injury. All of us will go through some sort of psychological trauma or stress at one time or another, it is part of life; however, the committee heard, in evidence, concerns that new wording—the inclusion of the word 'the'—gives case managers too broad a power to reject psychiatric injury claims when a worker has or has had a personal, non-work-related stressor in their life.

The committee received an example where one worker was sexually harassed at work, but had her claim denied. The case manager relied on the fact that the worker had had a miscarriage a year earlier and had sought some counselling for it. They argued that this meant that the employment was not the significant contributing cause. This committee received submissions detailing a number of examples similar to this one.

While there was a slight change of wording for workers with physical injury, case law today indicates that this will have minimal impact for them when accessing the scheme. The Return to Work Act introduced the classification of the 'seriously injured worker'. These are workers who have been assessed as having a whole-person impairment of 30 per cent or more. The committee does not ignore the significant impact that a work injury may have on a worker's life, even if the worker does not meet the arbitrary 30 per cent threshold. However, the act draws a very distinct and inflexible line in the sand. The committee received a great number of submissions which strongly expressed their concern that this approach does not account for the individuality of each worker and nuances of the circumstances.

Workers who meet the act's definition of 'seriously injured' have access to weekly income support until retirement age, continue to have their medical expenses paid and have no obligation to ever return to work. Not seen since 1992 in this state's workers' compensation system, seriously injured workers are also able to access common law rights to sue their employer in the cases of employer negligence. The committee received some submissions supporting this move, citing it may encourage employers to provide safer workplaces as well as give employers their day in court.

However, many submissions did not support this reintroduction, as the process was thought to be too adversarial, to give rise to fractured worker and employer relationships and to go against the objective of supporting workers to return to their workplace. Almost all submissions that provided an opinion on common law stated that, in its current state—it being only accessible to those with the whole-person impairment of 30 per cent or more—it is a token gesture that is most likely not going to be used.

Workers who do not meet the arbitrary 30 per cent threshold—the key that opens the door to access ongoing support—will find the support afforded to them to be limited. Weekly income support payments are now limited to 104 weeks, with a further 12 months of medical expenses covered, or, if no income support is claimed, then just 12 months of medical expenses covered.

It is worth noting that the majority of injured workers—around 70 per cent—will not require income support payments. Of those workers who do, 80 per cent of them have historically not been in receipt of income support by the 104th week. Many submissions raised concern that the biggest impact will be felt by those workers who have had a whole-person impairment of less than 30 per cent and are unable or have reduced capacity to work come the end of that 104-week period. In fact, the committee received some submissions stating that for some complex injuries, including psychiatric injuries, 104 weeks is not enough time to allow for adequate recovery.

I have mentioned 104 weeks a few times. This is important to note, because towards the end of next month marks 104 weeks since the commencement of the Return to Work Act. It is also when the first group of workers will have their income support ceased as a result of the new strict time limit. The committee received a number of submissions from injured workers who are still not able to work as a result of their injuries but have their payments ceasing in 27 days from today.

While some workers may be able to seek support from community organisations, government agencies, friends or family, many submissions were clear that these supports were not available for every worker. Some workers are fearing they will no longer be able to afford mortgage repayments and will lose their home. The committee understands the scheme is still evolving, with the full effects of the reform yet to be realised.

This inquiry has been of great interest, receiving almost 50 submissions, with more than half from workers and their representatives. I would like to thank everybody who has made a submission. They have taken time to assist the committee in its understanding of this very important inquiry. I would also like to thank the presiding member, the Hon. Steph Key. She, like all of the committee's members, takes a keen interest in workers compensation and how it affects workers and employers of this great state. I would also like to thank the member for Fisher and the member for Schubert, as well as the Hon. John Dawkins and the Hon. John Darley, for their contributions. Finally, I would like to express my appreciation to the committee staff: the executive officer Ms Sue Sedivy and the research officer Mr Peter Knapp.

The Hon. J.S.L. DAWKINS ( 17:08 :56 ): I rise to briefly speak to the motion noting this report. I would, initially, commend members of this place and others to read what I think is a very significant summary of the scheme as it stands. As the Hon. Mr Hanson just said, it is approaching 104 weeks since the current scheme was commenced.

It is important to recognise that this inquiry resulted from the motion of the Hon. Tammy Franks about this committee taking up the work. I am pleased to say that in the time I have been on the committee we have actually had a number of significant inquiries, and this has been one that I think has been very informative. It has certainly shown up the changes, the transitions and also perhaps some of the holes in the scheme, particularly in the psychological area. That is one area that I have a great interest in.

Similar to the previous inquiry we did into mental illness and suicide prevention in the workplace, we still get drawn to our attention the weaknesses in the way in which people with a psychological illness are treated or helped through this system or even encouraged to be in this system. There is no doubt there are still some workplaces—some government workplaces—where people do not feel comfortable putting their hand up to actually get into this system. That has been highlighted in evidence.

This interim report is, as I say, a very good one in that it summarises many of the issues. The committee has identified that the scheme is evolving, with the full effects of the reform yet to be realised. As such, the committee decided to produce this interim report, which allowed for a summary of the evidence, submissions etc. up until early March this year. It provides that document as a basis for further discussion and input from the sector.

In a number of committees that I have participated in, we do not have to wait until the recommendations are delivered or responded to. Sometimes, some of the things that are presented in evidence actually have an impact as the committee is going along. Some may say that is an ambitious view. It does not always work that way, but it sometimes does. So, that is one of the reasons that I have been very grateful to participate in this inquiry. Certainly on the committee there are a number of members who have a greater understanding of industrial relations than I do. This is a very valuable document, and I thank the committee staff, Sue Sedivy and Peter Knapp, for their very good work in the preparation of it.

As the Hon. Mr Hanson said, we have great leadership in this area from the Hon. Hon Steph Key. I thank the members for Fisher and Schubert in the other place and my colleagues the Hon. Mr Hanson and the Hon. Mr Darley for their work on this report. As I say, it is not one that brings down recommendations, but it was important in the calendar of the year leading up to an election that we get a summary of the evidence that has been brought to us as a result of the inquiry that resulted from the motion of the Hon. Tammy Franks. I commend the report to the council.

The Hon. J.A. DARLEY ( 17:14 :21 ): On 25 May 2016, the Hon. Tammy Franks moved for the Parliamentary Committee on Occupational Safety Rehabilitation and Compensation to inquire into the Return to Work Act and scheme. I co-sponsored this motion as a result of being contacted by countless constituents with concerns about the new return-to-work scheme. The Return to Work Act has been very successful in reducing the unfunded liability of the state's workers compensation scheme.

I remember when I first came into this place, one of the first bills that I dealt with was the Workers Rehabilitation and Compensation (Scheme Review) Amendment Bill. This bill proposed a number of changes to curtail the $1 billion unfunded liability debt. Currently, the return-to-work scheme is fully funded and that is certainly a great result. However, that is far from the only outcome which matters when it comes to workers compensation. The committee heard how the return-to-work scheme focused on early intervention and customer service. This is a vast improvement to the previous WorkCover scheme and evidence collected by ReturnToWork SA indicates that customer feedback is mostly positive.

However, the committee certainly heard from many injured workers and their supporters who were highly critical of the new scheme. Injured workers are entitled to 104 weeks income maintenance before they are left to their own devices, unless they are deemed to be seriously injured by having a whole-of-person impairment of 30 per cent or more. Whilst the majority of injured workers do return to work within 104 weeks, there is still a glaring gap where people who are injured at work and do not in meet the 30 per cent WPI threshold are not able to return to work. These people are left with no income maintenance and only a further 12 months of medical expenses before they need to fend for themselves.

The committee heard from several witnesses who were extremely anxious about what would happen to them and their families when their income maintenance ceased. People were worried about having injuries which would require lifelong treatment and yet moneys for this would have to be found from their own pockets because they did not meet the 30 per cent WPI threshold. Similarly, the committee heard from witnesses who had had their claims accepted under the WorkCover scheme, only to find out that their income maintenance would cease after 104 weeks. These people had already gone through the rigmarole of having a claim assessed and they had been accepted under the old WorkCover scheme.

The change to the return-to-work scheme meant that their claims would transition over to the new scheme. These people had their claims accepted with some being told that they would be entitled to lifetime income support and yet, with changes made by the government, they discovered that they only had two years of income maintenance before their payments would be discontinued. People worried about their mortgages and how they were going to provide for their families simply because they had the misfortune of being injured at work. Even worse were the workers who have injuries which require lifelong medical care who had been told under the old scheme that these costs would be covered for the rest of their life, only to find out that these expenses would no longer be covered after 27 June 2018.

There was ample evidence that not being able to include psychological injuries unless it was the significant contributing cause of injury had resulted in many people being unable to meet the threshold. This is also coupled with the inability to combine or accumulate injuries as a cause. The committee heard evidence which showed that the transitional arrangements for the new scheme sometimes resulted in unfair outcomes. I hope the government will consider these and make or support amendments as necessary.

I want to thank all parties who took the time to make a submission to the inquiry. I am optimistic that their time and efforts will not go to waste and that this inquiry will result in positive changes to the scheme. Thanks to the committee's staff, Ms Sue Sedivy and Mr Peter Knapp. Thanks also go to the committee members: the presiding member, the member for Ashford and the members for Fisher and Schubert in the other place, the Hon. Justin Hanson and the Hon. John Dawkins. I also want to thank the Hon. Gerry Kandelaars and the member for Reynell for their contributions whilst they were members of the committee.

The Hon. T.A. FRANKS ( 17:19 :16 ): I rise to speak to the return-to-work inquiry interim report and I would also like to echo the thanks of those committee members, including the Chair, Steph Key, the member for Ashford, the member for Fisher, Nat Cook, the Hon. John Darley, the Hon. John Dawkins, the Hon. Justin Hanson and the member for Schubert, Stephan Knoll. I also echo the thanks to the research officer, Peter Knapp, for his work on this interim report.

The committee heard evidence on the operations of the act from workers, unions, and medical and legal professional organisations. Over 25 submissions were received from workers and unions, with 10 submissions from employer groups, nine submissions from medical and legal professional organisations and three from other groups. A number of concerns were raised, most of which the Greens, of course, had previously envisaged, and I will seek to outline some of these findings of the inquiry. I note that the findings are an opportunity for the state government to consider moving amendments to the Return to Work Act.

The submissions noted that the timing of the eligibility criteria for compensation is draconian. The stakeholders remain concerned about the new definition of what constitutes a seriously injured worker. The act defines a seriously injured worker as one having a whole person impairment of 30 per cent or more. I find the committee's evidence of some workers with a 30 per cent whole person impairment returning to work, yet other workers with a lower whole person impairment having their weekly payments ceased, concerning but not surprising. This indicates that the 30 per cent whole person impairment assessment bears no relationship to the extent of the worker's true incapacity for work following a work injury.

The Greens have always held the view that the workers compensation scheme needs to be tailored to the injury and not be a one size fits all scheme. This is clearly showing the tensions of that approach. The Greens approached aspects of the state's workers compensation system when it was debated here in the formation of the new act, particularly the 30 per cent whole person impairment rating. The act's definition of what constitutes a seriously injured worker means that only those workers with near catastrophic injuries, such as quadriplegia and paraplegia, would meet the threshold of a 30 per cent whole person impairment, and that the overwhelming majority would have their compensation payments unfairly terminated.

The inquiry found that stakeholders are concerned about the provision in the act that makes it difficult to claim compensation for psychiatric injuries—again, no surprise to the Greens. The act states clearly that workers must provide employment as 'the significant contributing cause' of their injury. This threshold is too high and it is envisaged that most workers compensation claims for psychiatric injury will be rejected because they will not meet this too strict eligibility criteria.

The inquiry found that there are concerns about injured workers having their entitled reimbursement of medical expenses cut off come 1 July 2017. These injured workers will also have their weekly payments discontinued after 12 months. The report, of course, acknowledges the issues that both myself and the Hon. John Darley raised with regard to workers who were on the WorkCover scheme on 1 July 2015 who were then moved to the return-to-work scheme in accordance with the transitional provisions contained in the Return to Work Act. The report found that, as a result of these provisions, some workers have indeed been left without income or medical support—again, an opportunity for the government to act.

The Greens thank those workers, unions, employer groups and medical and legal professional organisations for taking the time to put in a submission to the inquiry. We say to the government: 'Now the ball is in your court. Please take the time to act on behalf of injured workers, and take this opportunity, with the support of the crossbench, to make this act actually serve injured workers rather than punish them.'

Motion carried.

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