RETURN TO WORK BILL
The Hon. I.K. HUNTER: I want to remind the chamber that in my closing remarks on this bill, I indicated there were a number of members who could not make a contribution at that stage. We would seek the indulgence of the chamber for them to do so now. Now is an appropriate time and I think we have agreement to do that.
The Hon. K.L. VINCENT: I thank the chamber for its indulgence. I will speak briefly today, giving Dignity for Disability’s very reserved and trepidatious support for the Return to Work Bill 2014. I say very reserved support for a number of reasons. Dignity for Disability supports the premise of this bill, a WorkCover improvement project which I believe started in 2012, knowing that our current WorkCover system is certainly not working. Prior to my entering this place, this government’s attempt at reform in this space has been an abject failure.
In the 2012-13 year, I understand that the cost of WorkCover was some $1.34 billion. The premium rate being charged to employers was 2.7 per cent, yet the real cost in terms of liability was more like 3.4 per cent, but this extraordinary cost to businesses, employers, taxpayers and many not-for-profits, as we saw on the front cover of yesterday’s The Advertiser, has not resulted in injured workers receiving a good deal. So, Dignity for Disability does agree that we need significant reform of our WorkCover scheme.
I can think of no-one, whether it is an injured or unwell worker, a union, a doctor, a physiotherapist or other healthcare professional or other employers, for that matter, who has a happy tale to tell about their experience with WorkCover. For this reason, I think Return to Work is a good title and a worthy aim for this bill, this legislation, and we certainly want to see that aim become reality. My support for this bill is very reserved because I cannot agree with many of the features in it. I do not think the capping of the scheme is fair, as it currently stands.
I am also concerned that a number of features of our health and welfare sectors have not been dealt with at the same time as these reforms. For example, a number of people in the most difficult to manage WorkCover cases experience chronic pain. Chronic pain, of course, is a difficult health complaint to manage. There is an 18-month waiting period to see a chronic pain specialist in South Australia, and many people with chronic pain need access to Schedule 8 medications.
No-one can tell exactly how many people with chronic pain require access to Schedule 8 medications, and no-one can tell me how many people with chronic pain, also often caused by workplace accidents, will be impacted by the changes brought about through this potential legislation. This creates reservations for Dignity for Disability—very serious reservations at that.
I also agree with a number of the issues and questions the Hon. Ms Tammy Franks has raised in this place in her second reading, and I look forward to those matters being addressed by the minister in his or her remarks. I would also like to draw attention to the speech given by the Hon. Steph Key in the other place—a long-time and passionate advocate for workers—and some of the concerns that she has echoed. If she is worried, then Dignity for Disability again believe that we have reason to be as well. She has immense experience in this area.
I believe that some of the errors being made by the government with the CTP legislation are being made again here, sadly, denying claimants their rights. I reserve further judgment until some questions are answered. I am yet to have time to analyse the government amendments, and also the amendments filed today by my colleagues the Hon. Ms Tammy Franks and the Hon. Mr John Darley, so I do not believe that we can proceed further with this bill today, and I understand that that is the opinion of some of my parliamentary colleagues as well.
This bill, and its partner bill, the South Australian Employment Tribunal Bill, are lengthy complex pieces of legislation aiming to fix a very broken system. This chamber needs to be given time to consider very seriously and comprehensively the amendments and improvements needed to do this, so I would ask the government to allow the chamber of the council, crossbenchers in particular, some time and due process to analyse and assess the impacts of amendments.
The Hon. J.A. DARLEY: I rise to speak on the Return to Work Bill 2014, and I appreciate the chamber’s indulgence in enabling me to do this during the committee stage of the debate. The bill seeks to repeal the existing scheme established by the Workers Rehabilitation and Compensation Act 1986 and replace it with a new scheme, the return-to-work scheme, aimed at supporting workers and employers where there is an injury.
Some of the key features of the new scheme include the following: ‘injuries’ covered by the scheme will be those that result in a physical injury arising out of or in the course of employment where the employment itself amounts to a significant contributing cause of the injury. For psychiatric injury claims, the employment must be the significant contributing cause and it cannot arise from any one or more exclusionary factors listed in the legislation.
There will also be a distinction between seriously-injured and non seriously-injured workers. Seriously-injured workers will be those with an assessed whole person impairment of 30 per cent or more and non seriously-injured workers will be those with an impairment between five per cent and 29 per cent. Only one assessment of a worker’s whole person impairment will be able to be made in respect of impairment resulting from one or more injuries arising from the same trauma.
Seriously-injured workers will be able to pursue one of three options: they can choose to be supported with income maintenance payments until retirement age and receive lifetime care and support; they can choose to take a redemption in lieu of weekly payments until retirement; or they can choose to pursue common law damages for economic loss where their employer’s negligence caused or contributed to the injury in addition to rights of action against third parties and also receive lifetime care and support.
If they are unsuccessful with a common law claim for negligence against their employer, they will still be entitled to income maintenance payments. Non seriously-injured workers, on the other hand, will receive income maintenance support for up to two years on a step-down basis, and medical expenses for a further year after their income support ceases.
Income maintenance will be provided at a notional rate of 100 per cent during the first year and at a reduced notional rate of 80 per cent during the second year. They will also be entitled to a lump sum payment for permanent impairment and an additional lump sum payment for economic loss, provided that in the first instance the injury is not associated with noise-induced hearing loss, and in both instances the whole person impairment is not less than 5 per cent and the injury is not associated with a psychiatric injury.
The restrictions that currently apply to redemptions will be removed, and where there is agreement between workers and employers redemptions will be able to be paid in place of weekly payments. That said, it is envisaged that redemptions will only be used in exceptional circumstances when recovery and return-to-work options have been exhausted. As already alluded to, if a seriously-injured worker elects to receive a redemption, he or she will be precluded from accessing common law damages.
The South Australian Employment Tribunal will be solely responsible for resolving disputes that arise under the new scheme, and the only matters that will be the subject of appeal to the Supreme Court will be those that involve questions of law. On the face of it, the changes seem fair and reasonable, but as we all know the devil is always in the detail. Make no mistake about it, in this instance the detail could have devastating implications for injured workers and their families.
For example, the government says it has conceded to calls to bring back entitlements to claims for common law damages, yet the provisions around common law claims are so restrictive as to render them futile. As some commentators have put it, it is Clayton’s common law, nothing more, nothing less. The bill provides that, in assessing whether the 30 per cent threshold has been met, impairment resulting from physical injury is to be assessed separately from impairment resulting from psychiatric injury, and in assessing impairment resulting from physical or psychiatric injury no regard is to be had to impairment that results from consequential mental harm.
In assessing the degree of impairment resulting from physical injury, no regard is to be had to impairment that results from psychiatric injury or consequential mental harm, and the 30 per cent threshold is not met unless the degree of permanent impairment resulting from physical injury is at least 30 per cent, or the degree of a permanent impairment resulting from psychiatric injury is at least 30 per cent.
An injured worker is precluded from an entitlement to both a redemption and damages for future economic loss. The usual heads of damages for common law claims have also been restricted, so an injured worker will not be able to claim, for instance, for pain and suffering, past and future loss of earning capacity, voluntary services, care and maintenance, future medical treatment, gratuitous services and loss of superannuation.
I have always advocated for the return of common law rights, but this bill will not deliver. The bar has been set so high that it is going to be virtually impossible for injured workers to attain it. According to the Australian Lawyers Alliance, it is anticipated that the number of injured workers who would qualify would be as low as 1 or 2 per cent. There will be a number of injured workers who are currently on the WorkCover scheme who will be transitioned to the new scheme. Many of those workers will not meet the new 30 per cent impairment threshold that will apply to seriously-injured workers. As such, they will only be eligible for payments for a further two years; after that their entitlements will cease.
Rightly or wrongly, some of these workers have been left to rely on these payments and have probably structured their lives around them. It will come as very little surprise to me if we are left with a number of injured workers unable to meet their financial commitments as a result of the changes.
Moving on now to the feedback I have received on the bill. It stands to reason that the Law Society of South Australia and many members of the legal profession generally are opposed to the key elements. Specifically, concerns have been raised about compensability and restrictions around entry into the scheme, the unfairness of the 30 per cent whole person impairment, uncertainty in determining the start date of incapacity and the two-year cut-off for non seriously-injured workers, costs and the recovery costs for representation, the assessment method for permanent impairment, and issues involving medical expenses.
The Law Society is also critical of the one-month time limit that applies to reviewable decisions under clause 100 as this prevents access to justice, and the 30 per cent threshold for common law damages is also considered to be too high for there to be any sort of meaningful entitlement to damages.
Lastly, it is a concern that significant provisions in relation to the bill are dependent upon the contents of regulations which are yet to be provided. Many of these concerns have also been echoed by the Australian Lawyers Alliance. In particular, it is concerned that the changes to the test for compensability will significantly reduce the number of injured workers entitled to compensation and that the new changes to the test for compensability of medical expenses will have a double limiting effect on the ability to claim and is inconsistent with one of the overarching objectives of the act, namely to ensure that workers who suffer injuries at work receive high-quality service and are treated with dignity and supported financially.
With respect to the termination of medical expenses after 12 months, the ALA considers that the proposed changes are problematic and the current test should be retained and lifetime medical expenses with ability to redeem should also be retained. In terms of permanent impairments, the ALA also considers the requirement that only one claim may be made fails to recognise the medical reality that there are conditions that may worsen and there is no concession for this. The government’s failure to provide the impairment assessment guidelines has also made it difficult to provide appropriate feedback. The ALA considers that the restriction on combining physical and psychological injuries only serves to continue the current discrimination against psychological injuries.
Although the guidelines have not been published, the ALA states that it is not inconceivable that in many instances the physical and psychological injury would not reach the 30 per cent threshold and that there would be many examples of, say, emergency workers who deal with trauma who would fall into this category. Overall the ALA says that the application of the strict threshold will have unfair, harsh and unjust consequences on injured workers who would be regarded as seriously injured but who do not meet the threshold and that the WPI is a blunt tool for an assessment of the worker’s incapacity for work and treatment needs.
With respect to weekly payments, the ALA recommends that injured workers should be entitled to weekly payments of up to two years but if it is determined that a boundary should be placed around these payments, then it would be appropriate for the entitlement to have been taken within a five-year time frame from the date of incapacity.
Whilst the ALA supports the concept of lump sum payments, it also believes that the formula for these payments requires adjustment with respect to the worked hour, as the current proposal will discriminate against those workers such as parents raising children or school students who are engaged in part-time work but intend to work full-time in the future.
As alluded to earlier, in terms of common law claims, the ALA considers that the 30 per cent WPI results in restrictions are such that only 1 or 2 per cent of injured workers will be eligible to claim for common law damages. Its position is that if the government is genuine in its desire to reintroduce common law, then that threshold should be set at 10 per cent.
Lastly, there are also concerns over the introduction of additional restrictions to seek an extension of time on applications to review decisions, especially given that those more stringent requirements will disadvantage those of non-English speaking backgrounds, those suffering from poor understanding, literacy problems and those who are having difficulty dealing with matters as a result of their injuries.
Generally, the feedback appears to be that the legal profession will not be adversely impacted by this bill, so suggestions that personal injury lawyers, the ALA and the Law Society are speaking out against it purely out of self-interest seemed to be rather unwarranted and baseless. The fact that the Australian Medical Association has also highlighted a number of similar issues certainly supports this position.
Very briefly, these issues include concerns that the 30 per cent whole person impairment is an imperfect measure for major injuries, which will result in the need for further recognition of exceptional conditions. The 104-week prescribed period post injury is not long enough for some conditions, especially because some psychiatric injuries may not be fully exposed or stabilised within the two-year limitation requirement, and the absence of any payments of economic loss for hearing and psychiatric injury in relation to redemptions.
The AMA is also concerned about the corporation being able to determine who will be a recognised health practitioner, the insertion of additional tests in consideration for the payment of medical expenses and the scale of charges intended to be used. Above all, I think it is fair to say the AMA is particularly concerned about what it calls the continuation of the current discriminatory approach towards workers suffering psychiatric injury, which is further exacerbated by some of the new provisions being proposed under the bill. Following on from personal discussions that I have had, it would seem that these concerns are also shared by the Royal Australian and New Zealand College of Psychiatrists.
There have, of course, been those organisations that have contacted me in support of the bill. Most acknowledge that there are pitfalls in what is being proposed but support making compromises in the hope that it will result in a better outcome than what we have at present. I respect those views and accept that for some organisations it has become an issue of something has got to give to get our WorkCover system back on track and, importantly, to reduce the associated costs for employers. I think it is fair to say that Aged and Community Services and Leading Age Services Australia fall within the category of respondents.
One thing that has stood out like a sore thumb throughout this debate—and some of my colleagues in this place, including the Hon. Robert Brokenshire and the Hon. Tammy Franks, have highlighted the same point during their contributions—is the deafening silence of the unions. Given their conduct during the election, it would have been a fair assessment for me to think that I was the only one who had missed out on the usual barrage of requests for meetings that we receive when debating WorkCover legislation, but it seems that is not the case this time around.
I am glad it is not just me that finds their absence in this debate to be absolutely remarkable, especially given the magnitude of the changes that are being proposed for the workers they represent. In fact, it is extremely disappointing that union representatives appear to have been hushed into submission by the government. I acknowledge that there is no easy fix to this problem, and I am acutely aware that businesses can no longer afford to bear the brunt of a broken system. That said, I cannot accept that injured workers should become the scapegoats for a problem that was created by this government.
Most of us were here in 2008, urging the government in the strongest possible terms to implement real reform. Those pleas were ignored, and so we sat and watched the government move ahead with yet another failed approach at fixing a broken system. Last year, the Attorney came out and told us the system was buggered and he was going to fix it. With all due respect to the Attorney, fixing a broken system by adopting the measures in this bill is like trying to piece together a broken glass with a glue stick—it just does not gel.
Like the opposition, I am firmly of the view that instead of establishing a new tribunal we should also be trying to ensure that the return-to-work scheme move into the jurisdiction of the SACAT. I would ask the minister to provide an explanation as to why this cannot be achieved in the given time frame, and whether any changes to that time frame would make this a plausible outcome.
In closing, I foreshadow that I will be moving a series of amendments aimed at addressing some of those concerns that have been raised with me. From what I understand there will be some overlap with the amendments that are being proposed by the Hon. Tammy Franks, and I certainly commend her for taking on board the concerns of injured workers and pursuing this further. I hope that, despite what is anticipated this week in terms of the speedy passage of this bill, this chamber will lend itself to a considered and constructive debate.
The Hon. T.T. NGO: I rise to support this bill, and I thank honourable members for allowing me to speak to the second reading on clause 1. I do so not in ignorance of the repercussions that it will have for some South Australian families. Why do we need this reform? The Attorney-General has said that the WorkCover system is buggered.
The scheme is more expensive than any other state’s; the return-to-work outcome for injured workers is worse than any other state’s as well; the unfunded liability has ballooned out to $1.13 billion and the scheme is unsustainable; and, most importantly, both employers and injured workers are not very happy with the current system. The minister and the government should be congratulated for recognising that the current system is not working.
The Hon. R.I. Lucas: Twelve years!
The Hon. T.T. NGO: Twelve years—it is not very often that politicians accept that their policies have not worked. For so long, different ministers have tried to fix WorkCover by tinkering around the edges hoping that it would fix the problem. We all know the result of that: one of the worst schemes in the nation, as I outlined earlier. During the second reading the Hon. Tammy Franks used the example of a buggered knee and a buggered elbow to express her views on this bill. I would like to use one of my best friends (who also had a buggered knee) as a way to demonstrate why we need this reform.
My friend Young Yin injured his knee playing soccer five years ago. He needed a minor knee reconstruction to fix it up. However, he thought that going to the physio and rest would fix his knee so he rested for three years before taking on indoor soccer. In his very first game back my friend Young lasted 30 seconds. The knee buckled under the real game pressure. Because he ran a small Thai restaurant by himself—and I must say it was one of the best Thai restaurants in South Australia—
The Hon. R.I. Lucas: Where is it?
The Hon. T.T. NGO: It is closed now. He decided to rest his knee and, like last time, give it a rest and hopefully it would be fixed. A few months ago he felt such an incredible pain in that knee that he was unable to stand. The doctor told him that because he had kept deferring his knee reconstruction the injury got to the point where it was no longer able to carry his body weight and, instead of a minor knee operation, he required a full knee reconstruction immediately.
Obviously, it will take him a year to rehabilitate and all sorts of other things. He had no choice but to shut down his restaurant so that he could take at least a year off for rehab after the operation. He ran the restaurant by himself and his wife came home at night, after full-time work, to assist him. Because he was the main chef there and he had a buggered knee he was no longer able to do that. I am told that recently he had a successful knee reconstruction and walks about. He told me he regretted not making a tough decision a lot earlier.
Minister Rau ought to be congratulated for making a tough decision to start the scheme from scratch. By starting from scratch, we can focus resources and make the scheme solely focus on getting the injured workers back to work as soon as possible. If the injured workers are permanently injured, then they ought to be looked after for the rest of their life. That should be the number one focus. Obviously, the current WorkCover system does not seem to be doing that.
I must use this opportunity to congratulate the Leader of the Opposition (the member for Dunstan, Mr Steven Marshall), for his leadership in working with the government to have this bill passed and expedited in the other house. Obviously, the Leader of the Opposition and the Liberal Party recognise the benefits to both injured workers and their employers of having this Return to Work Bill pass and having it in operation as soon as possible.
This house should also thank the Hon. Rob Lucas for his part. I am told the Hon. Rob Lucas has the lead on this bill for the opposition in this house. Last week, when the ALP had its caucus gathering in Clare, I was sitting next to minister Rau at the dinner table and I was told the Hon. Rob Lucas has been fair, genuine and constructive in working with the government in support of this bill. The Hon. Rob Lucas should be congratulated for wanting to see the system working.
As honourable members are aware, in the Hon. Rob Lucas’s second reading speech on this bill he gloated about how he raised his concerns in this house over many years regarding elements of the WorkCover system that are not working. I would not go as far as calling him a messiah, but maybe a grandfather who has a lot of life experience, and time has proven that the Hon. Rob Lucas was right about some of the issues that he spoke about over those years. We must praise him for his genuine leadership in wanting to fix the scheme.
We now have both the government and opposition working in a bipartisan way, for once, to have both injured workers and employers in a position to make the scheme work. I have every confidence that this proposed system, once up and running, will be better for many injured workers and employers. We are already seeing some signs that it has gone in the right direction, as shown by WorkCover’s latest annual report. Since the system has put an emphasis on early intervention, it has delivered financial returns and more people have returned to work.
During the second reading debate, the Hons Rob Lucas, Tammy Franks, Rob Brokenshire and John Darley made some remarks about the lack of commentary by the union movement on this debate. I am by no means a spokesperson for the union movement nor am I a spokesperson for the SDA on this matter. However, I will say this: I do believe the SDA has a good track record in dealing with the business community and being open to reforms by promoting collaboration rather than antagonism. The results achieved by Mr Malinauskas and Business SA on the issue of penalty rates are a good example of this.
In my very first speech to this house, I said that during my time at the SDA I had never seen the SDA go out on strike. Very often, the SDA would work with employers to sort out issues behind the scenes. In my opinion, under the current WorkCover scheme workers are not being looked after. You only have to listen to talkback radio to hear criticism of the scheme from injured workers, how unfairly they have been treated and the lack of respect with which they have been treated.
When I was at the SDA I noticed that the WorkCover unit was the busiest area. The WorkCover officers would spend most of their time fixing problems for injured workers that they would not have had to do if the scheme were working. The SDA would be constantly taking employers to the commission to get things resolved; likewise, the employers would be doing the same.
I believe the unions have also realised that the current scheme is not helping their members, and that could be one of the reasons they have not objected to the proposed changes as furiously as previously. I know that minister Rau has consulted with them intensively, and they have put forward many amendments to this bill. The unions have shown their willingness for a system that would give their injured members every opportunity to return to work.
I know, from my previous job as an organiser at the SDA, that I would not like a system that is working well. A system that runs well would be less of an issue in the workplace and would make it really hard to recruit new members into the union. Some people do not want to join a union if they are happy in their workplace, and that would make recruiting for the union a lot harder. Therefore, the unions are putting their own interests aside to work with the government, employers and the opposition to, hopefully, improve the life of many working South Australians.
On the specific issue of advocating for workers rights within this bill that is being proposed, I say this: there is no point pretending that everything will be rosy for every single worker with this proposed legislation. Indeed, the minister has acknowledged this. I am well aware that changes to the scheme will hurt some workers, and of course that is of concern to me, but there is no silver bullet here. This parliament needs to move to ensure that we have a WorkCover scheme that will be sustainable for all workers for many years to come. Before I get into specific discussions on the bill, this is really the heart of the matter. We are here to make tough decisions and supporting this bill is one of them.
The current WorkCover system has been plagued with a number of issues and has let down our workers and employers. Employers have endured high premiums, as I said, while workers, many of whom want to return to work, have not received enough support to do so. This bill will introduce a new scheme that aims to strike a balance between workers, employers and the corporation. It focuses on workers returning to work rather than on what a worker cannot do. It will provide support, including retraining if necessary, for the worker to enter suitable employment.
Under the current system South Australia has a low threshold for an injury to be classified as a work injury, one of the lowest in Australia. It requires only that the injury be sustained during the course of employment. This bill will increase the threshold. For a physical injury to fall within the scheme not only must it be sustained during the course of employment, but the employment must be a significant cause of the injury. This threshold is the same as New South Wales, which has been interpreted by the Supreme Court to require a link between employment and the injury that is ‘real and of substance’.
For a psychiatric entry to fall within the scheme it must arise out of employment and employment must be the significant cause. It also provides the same exception as the current legislation: that the injury does not arise wholly or predominantly from the reasonable actions of the employer, for example, not giving a promotion on reasonable grounds.
Currently, there is a distinction between primary injuries and secondary injuries for premiums. If an injury is classified as a secondary injury (for example, a worker’s employment aggravates an existing injury from previous employment), then WorkCover bears the responsibility with no impact on the current employer’s premium. This encourages employers to classify injuries as secondary to avoid their premiums being increased. In turn, the cost of secondary injuries is passed onto all businesses insured by WorkCover.
This bill seeks to eliminate that distinction. Employers will be responsible for the injury to the extent that the worker’s employment by them was a significant cause of the injury. This will encourage employers to focus on safe working practices. It will put an end to all businesses footing the bill for the behaviour of some.
Return-to-work plans will be required earlier than before: within four weeks as opposed to 12 weeks (previously). These plans outline the steps that the worker and the employer will undertake to get the worker back to work as early as possible. There are also more clear obligations on employers to offer suitable employment to their injured workers. This requirement is also fair to employers, as they are required to appropriately pay the employee for the job they are performing and not what they were doing prior to the injury.
Changes to income maintenance also focus on workers returning to work. Income maintenance will now stop two years after the injury is sustained, unless the worker is seriously injured. It is here where I am completely aware that the scheme may not improve the outcomes for all workers but it is designed to ensure the sustainability of the scheme far into the future.
Workers who are seriously injured will no longer be expected to return to work. However, if they wish to they will receive support to do so. They will no longer have to undergo assessments every two years to continue to receive income maintenance. They will receive weekly income maintenance until retirement age (like some of our members of parliament here), unless they opt to receive a lump sum redemption or, if eligible, pursue common law damages. A medical practitioner who is accredited by the minister will assess whether a worker is seriously injured. The accreditation scheme will ensure that suitable medical practitioners receive accreditation.
Finally, I want to return to the issue of premiums. With the introduction of this new return-to-work scheme, the majority of small businesses should be paying lower premiums. It will aim to achieve an average premium of 2 per cent. Currently, the average premium is around 2.75 per cent. By removing the 7.5 per cent premium cap, businesses in low-risk industries will no longer subsidise businesses in high-risk industries. It will allow the industry premium base rate to accurately reflect the risk associated with each industry. It is estimated that these reforms will save $180 million per year, which will be passed onto businesses insured by the scheme.
I notice that in today’s paper the opposition and the government are working through some of these points to maybe defer some of the high-risk industries for a few more years to, hopefully, give them some time to adapt.
As I said previously in my other speech, the government is willing to listen and negotiate with the opposition and, hopefully, we will get this scheme up and running very soon. Let me take this opportunity to also acknowledge the input that all members have made to this debate, and we can all be proud that we have made a contribution in rectifying this area of important public policy. I commend the bill to the house.
The Hon. I.K. HUNTER: I would like to put on the record some responses to questions that were asked during the second reading stages on the last day but have not yet been addressed. I note that a number of amendments have been tabled today, a couple in my name, a set in the name of the Hon. Mr Lucas, a set in the name of the Hon. Mr Darley, and a set in the name of the Hon. Ms Franks. I understand that there is no desire to proceed with this debate past clause 1 today, but I also understand that some further questions are to be put on the record, so perhaps we could do that at least when I have completed my answers.
The Hon. Tammy Franks spoke about a number of scenarios where workers will be denied access to surgery because the surgery would be required after their entitlement to medical expenses ceases. However, workers can apply to the corporation before their entitlement to medical expenses ceases for the cost of surgery undertaken at a future date to be covered.
The scenario the honourable member spoke about where a worker may have a work-related knee injury and foreseeably require knee reconstruction into the future is a good example of where these provisions will be used to enable the cost of the surgery to be met by the scheme. Additionally, workers are able to receive up to an additional 13 weeks supplementary income support if they are incapacitated because of this surgery to support their recovery at that time.
The Hon. Ms Franks also raised a concern about the provisions for a single assessment of a worker’s degree of whole person impairment. In the scenario described by the honourable member, where a worker suffers a disc bulge as a result of a workplace injury, and then subsequently suffers a second disc bulge which is connected to the original trauma, the second disc bulge would be compensable if the worker’s employment was a substantial contributing cause of the subsequent injury also. In such a case, the worker would be eligible for an assessment of whole person impairment for the second disc bulge, I am advised.
The Hon. Tammy Franks further questioned the requirement for an assessment of whole person impairment to be undertaken ‘at a time determined by the corporation’. I can draw the honourable member’s attention to the fact that this provision was the subject of a government amendment in the House of Assembly and has in fact been removed. The Hon. Ms Franks referred to comments made by the Law Society that the requirement that the tribunal only allow an extension of time if satisfied that good reason exists is potentially harsh.
I draw the honourable member’s attention to the provision in the bill before the council which was the subject of a government amendment in the House of Assembly. This amendment was in response to comments made by the Law Society. Part of their concern was with a requirement for the tribunal to be satisfied that ‘special circumstances exist’. It was for this reason that the test was amended to be that ‘good reason exists’ as this was considered to be a more reasonable test. In the context of aiming for a more expeditious dispute resolution system, it is appropriate that the tribunal have some parameters for when to accept or reject an application for an expedited decision.
The Hon. Tammy Franks indicated her intention to move amendments to ensure the reverse onus of proof provisions that apply to firefighters are equally available to CFS volunteers. The government has since announced its intention to reconcile this issue and will be moving amendments to the Return to Work Bill that include consequential amendments to the Workers Rehabilitation and Compensation Act 1986 such that our Country Fire Service firefighters can enjoy the same access to compensation as career firefighters. I know everyone in this place is keen to see this change and understands its importance.
The Hon. Mr Finnigan mentioned his concern that this bill creates ‘two classes of injured workers’, to use his words, those who are seriously injured and receive ongoing support and those who are not seriously injured. A fundamental change with the return-to-work scheme compared with the scheme we currently have is that it no longer pretends a one-size-fits-all approach is appropriate. The return-to-work scheme recognises that workers who are seriously injured need more support, financial assistance and case management than less seriously-injured workers who have the ability to recover their work capacity and return to work, and this should be seen as a positive change.
With regard to ensuring employers are afforded protection from any sudden premium increase as a result of some of the premium changes included in this bill, I would like to confirm that the WorkCover board chair, Ms Jane Yuile, has written to the Deputy Premier on 27 October and provided the following statement:
At its board meeting today the WorkCover Board resolved to provide for a five-year transitional period in respect of premium changes that could otherwise result in large and sudden increases in employers’ premiums as a result of the removal of the industry cap or inclusion of secondary injuries within the workers compensation scheme, as proposed by the Return to Work Bill 2014 scheme, or as a result of any non-legislative improvements to the premium system.
With regard to consultation, I am advised that WorkCover will establish a stakeholder group, which will include key people in organisations that advocate on behalf of injured workers, and WorkCover will consult with this group on an ongoing basis. I invite other members of the chamber who wish to place further questions on the record for me to respond to early tomorrow or the following day to do so now.
The Hon. T.A. FRANKS: I place on notice for response a few questions, but also I reiterate my strong interest in seeing the actuarial report, the Finity report on the CFS cancer compensation presumptive laws issue. Having had such a debate before, where we have had to wait in this place for the previous Taylor Fry actuarial report on that very issue, I eagerly await seeing the most recent Finity report. My further questions are:
1.How many injured workers were retrenched from their pre-injury employment from 2011 to 2014?
2.How many applications were received from employers to terminate the employment of injured workers?
3.How many applications were approved by WorkCover?
4.How many applications were withdrawn following interventions by WorkCover or its claims agents?
5.How many applications were later rescinded where there was an improvement in the worker’s capacity for employment or the employer’s ability to provide suitable duties?
I look forward to the continuation and speedy response and the tabling of that actuarial report tomorrow.
The Hon. R.I. LUCAS: I rise to indicate from the Liberal Party’s viewpoint our proposed course of action for debate on this bill this week. We accept the position from the minor parties and Independent members of the chamber that, with the final tabling of amendments this morning from all and sundry, proceeding with detailed discussion on those particular amendments today will not be possible. We note, as the Hon. Mr Darley indicated, that his amendments are significantly similar to the Hon. Ms Franks’ amendments. The Hon. Mr Brokenshire’s amendments have been on file for a while now and relate to a specific issue.
We acknowledge that it is probably the first time members would have seen the actual drafting of the amendments for the CFS cancer compensation from the government, although it had announced the details of the scheme, and I will address some comments to that in a moment.
From our viewpoint, we have indicated to the government that on behalf of Liberal members, and within the parameters the member for Dunstan has outlined right from the debate in the House of Assembly, we are broadly supportive of the reform to WorkCover. I outlined our position during the second reading, that we think this is a mess of the government’s creating over 12 years. We have been cynical of the attempts that have been made in the past.
We hope this one is more successful, but only time will tell. Some of us have other views on what could or should have been done, but we do not intend to delay the committee stages with exploring those views. We are prepared to work with the government on their proposed changes and, as I said, we can only hope that this endeavour to fix the WorkCover scheme will be more successful than any of the others the government has attempted over the 12 years.
We have outlined to the minister and the government that from our viewpoint we are prepared to sit tomorrow morning, as we have just been advised, and tomorrow evening to pursue the detailed discussion of the amendments that have been tabled. We are also prepared to sit on Thursday morning and through Thursday in a genuine endeavour to see significant progress made or potentially even the passage of the bill through the Legislative Council.
We have not, as has been demonstrated by the Hansard record, engaged in delay or filibuster during this debate. I think that whilst I made an extensive contribution on behalf of all my colleagues, there has been precious little additional time taken up during the second reading. During the committee stage of the debate we will ask questions of the minister and the government in a number of particular areas, some of which have been canvassed already with the government, but we will not be seeking to delay.
We will be ready to go from 11 o’clock in the morning. Well, frankly, we are ready to go now but we understand the position of the minor parties and the Independents. I am anticipating that the government’s position will be to oppose each and every one of the amendments moved by the Greens and the Hon. Mr Darley, but to be fair to the government and its advisers they would have only received the amendments from the Hon. Mr Darley and the Greens—
The Hon. T.A. Franks: Some of them made copies, so I imagine they might.
The Hon. R.I. LUCAS: I beg your pardon?
The Hon. T.A. Franks: Some of them have copies themselves.
The Hon. R.I. LUCAS: Well, then they will probably agree with those. We will be interested to receive them, and we have asked the minister and his advisers to indicate whether they will be supporting any of the amendments that have been tabled by the Hon. Mr Darley and the Greens. We have today circulated copies of those amendments to stakeholders seeking urgent responses from stakeholders before that continuation of debate at 11 o’clock tomorrow. We have had a quick response from a couple of employer groups but a number of others have not yet responded, and that is understandable in terms of the short turnaround time. For all those reasons, it makes sense to proceed as has been outlined by the minister and by other members as well.
I want to address some general comments at clause 1 because, whilst we will not be debating particular amendments, I think there are some issues that we can explore at clause 1 which will expedite passage of the bill during the actual clauses that are addressed. Some of these issues I have already raised with the government and its advisers. I seek when the minister responds tomorrow to be able to put formally on the record some of the information that has been provided to me as a result of questions I have asked since the last sitting of the parliament. One or two of the questions are actually new questions as well.
The first couple of points I want to make are in response to the minister’s response to the second reading—and also I think to some comments made generally and reinforced by the Hon. Tung Ngo in his contribution at clause 1—and that is in relation to the lack of engagement from the union movement in South Australia. I addressed some comments during the second reading and I will not repeat those.
The only point I would make in response to what the Hon. Mr Ngo has put on the record is that if, as he indicates and the government has indicated, the unions are either happy with or prepared to support the position of the government in the interests of compromise and reform of WorkCover, it is entirely possible for the union representatives to actually express that view to members of parliament as well. They do not actually have to come in and say, ‘Hey, we are opposing the bill. It is the worst thing that the Labor government has ever done.’
If they are actually adopting the position that is suggested by the government and some of its advisers that there are elements of the bill that have led to them to believe that they are prepared to support the legislation, then there would have been nothing wrong, in our view anyway, in them responding to the requests for comment from those of us who asked them for comment by saying, ‘It ain’t the best thing in the world, but we are prepared to accept it for these particular reasons.’ It appears that all of us, or most of us, have been ignored from that viewpoint. We have requested comment and have received virtually nothing from unions. That is, I think, the point to be made in relation to the lack of engagement of unions on behalf of workers in South Australia.
The second point I make is in response to one of the issues that mainly the Hon. Mr Brokenshire raised, and about which I made some comments, in the second reading. It is an issue that I have addressed for four or five years and relates to former board member Sandra De Poi and the access of her companies to a significant degree of contracts over a long period of time with WorkCover. This is an issue that I have pursued for a number of years, I think going back to the Statutory Authorities Review Committee inquiry into WorkCover in about 2007, an issue that had been raised by many people in the rehab industry, the union movement and a number of other stakeholder groups as well.
I do not intend to go back over all the detail of that, other than to quickly record the extent of the contracts that Ms De Poi’s companies enjoyed from WorkCover during that period, as recorded by the Auditor-General’s Report: in 2007-08, total contracts to the value of $2.7 million; in 2008-09, total contracts of $3.1 million; in 2009-10, $5.9 million; in 2010-11, $8.4 million; in 2011-12, $8.6 million; and in 2012-13, $4.3 million; so a total over those years of around about $33 million worth of contracts.
The minister and the government’s position all along—and the minister repeated it again, so I make no specific criticism there—says that the Auditor-General has recorded in a number of reports in the following terms; that is, WorkCover Corporation found that the terms and conditions of Ms De Poi’s contracts were ‘no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-board member related entities on an arm’s length basis’.
The point that I have made previously and I make again today is that that begs the real question, which is that the particular allegations that were being made were not that the details of the contract Ms De Poi was receiving were different but that it was through personal contacts and arrangements through the then claims manager or senior people in EML management that contracts were being awarded to Ms De Poi’s companies to a much more significant degree than other providers, and that that was on the basis of connections that Ms De Poi’s companies had with a senior manager within EML at that particular time.
The oft quoting of the Auditor-General’s reports, as if that resolves all the issues, misses the significant point that those who complained about the arrangements at the time continue to complain about the arrangements made in relation to those particular contracts. I do not intend to pursue that issue now, but I just wanted to respond quickly to the indication on the public record that there was to be no further correspondence entered into in relation to that issue of Ms De Poi’s access to a significant degree of contracts.
On other issues, the minister, on behalf of the government, has just read onto the public record two particular statements. The first one is on behalf of the WorkCover board, and that relates to the very significant issue of the removal of the industry caps. This has been raised in public debate, it has been raised in the second reading debate. The current bill proposes the removal of industry caps. As drafted, this bill would mean that a small number of employers in industries like the racing industry, meat processing industry, and some of the heavy metal industries as well, from 15 July next year would see a very significant increase in WorkCover premiums as a result of the instant removal of the industry cap.
Some of those increases, we are told, would be so significant that a number of employers may well have their future existence threatened; that is, they may well go out of business in a short space of time, given the significant size of the WorkCover premium increase. Credit goes to a whole range of people, particularly a number of the employer organisations (Business SA, the Australian Industry Group, and a whole range of others as well), which have engaged in fruitful discussions with the government and WorkCover on this issue. We raised the issue in the second reading and indicated that we were contemplating amending the bill to provide for a compulsory transition period of five years, or up to five years, for the removal of the industry cap unless the government could indicate, together with and on behalf of the WorkCover Corporation, the implementation of such a policy.
What we have heard this afternoon from the minister in this chamber is the announcement of a policy decision from the WorkCover Corporation, which will mean that the minister for WorkCover will not have to issue a ministerial direction to the board, which, I think, if push came to shove, he may well have been prepared to contemplate, but would have preferred not to. The board has made a sensible decision. I do not have the exact words—I heard what the minister was reading out, but I will have a look at it overnight—but my recollection of the words is to, in essence, implement a five-year transition period for the removal of the industry cap, which will mean that those industries over a period of time will have to prepare themselves for the eventuality that they will have to significantly reform their work performance and their activities or else they are going to have to financially prepare themselves for a very significantly increased WorkCover premium rate, potentially, over that five-year period.
Given that a significant number of these employers would appear to be, potentially, in regional areas as well (meat processing is certainly likely to be concentrated in regional areas, the racing industry will obviously be both regional and metropolitan), it will be important for those industry sectors and employers in those industry sectors—and we have been told the estimate is about 99 employers who might be impacted—to begin to prepare for change over that five-year period. The Liberal Party, on the basis of that undertaking from the WorkCover Corporation, will not be moving amendments in that particular area.
The next area that I want to address is the issue of SACAT and the employment tribunal. I will address some comments to this in the Employment Tribunal Bill, as well. In summary, as we outlined in the second reading stage, the Liberal Party parliamentary party room had a very strong view, and some significant people within the parliamentary party room had a very strong view that we could not and should not support the transfer of the jurisdiction from the Workers Compensation Tribunal to the employment tribunal; and that particularly in a climate where the government was getting rid of 100 plus boards and committees, why would the government be not taking the opportunity to transfer the jurisdiction to SACAT?
It is fair to say that the government’s position has been to strongly oppose that. We have had amendments drafted along those lines. We had further consultation and we also met with Judge Parker from SACAT in relation to the issue of the practicality of a start-up date from July of next year. Without, at this stage, placing on the record all of the details of those discussions—because they can come perhaps in the detailed section of the clauses in the Employment Tribunal Bill as well—the Liberal Party room has adopted what we believe is a compromise position in relation to this transfer, recognising the argument that the minister has put publicly, that it was just impossible to achieve this by July 2015; that it might have been possible in the medium term to transfer responsibility; and that is broadly the same position that Judge Parker put on behalf of SACAT, whilst recognising ultimately that it is up to the parliament to decide what it wishes to do. However, when asked for advice that was the general nature of the advice that he provided.
On that basis, we have tabled amendments today which we ask the crossbenchers and other members in this chamber, including the government, to consider as a genuine endeavour to compromise from our original position of an immediate transfer. This will be a transfer recognising that it cannot occur straightaway but not until July 2018, a period of 3¾ years almost from today—a transfer period. That is generally the time frame that Judge Parker and a number of others, who are familiar with the jurisdiction, have indicated would be a reasonable period to allow SACAT to do all the other things that it is being asked to do, and then be ready to accept responsibility for this particular part of this particular bill.
We will debate that and we have tabled those particular amendments. I think there are seven or eight pages of amendments, but just for the benefit of crossbench members, all of the amendments, with the exception of one, relate to that simple policy issue—that is, transferring responsibility 3½ or 3¾ years down the track to SACAT.
The only other policy issue that we canvass in our amendments is a simple one, I think in relation to clause 137 of the bill or around about there, where the current bill requires the WorkCover b oard, if it cannot meet the 2 per cent average premium target in any particular year—if the GFC has just descended again on the world economy or whatever and the WorkCover b oard makes a decision that it cannot meet a target of 2 per cent average premium or less, in those circumstances it has to provide a report to the minister indicating why it has not been able to meet that legislated target, and also to indicate how it sees the potential for meeting the target in the following year.
Our simple amendment is that that partic ular report from the WorkCover b oard to the minister should be tabled in parliament within six sitting days. In my discussions with the minister he has indicated that it is likely that the government would be prepared to support that particular amendment so it may well be that it is not an issue of dispute between the government and the Liberal Party on that amendment. For the benefit of crossbench members, they are the only two policy issues at this stage that the Liberal Party has canvassed by way of amendment.
I indicated earlier that we had canvassed the possibility of an amendment in relation to a transition period for the removal of industry caps. The other area where we had been consulting about potential amendments but have decided not to proceed is in relation to a particular lobby that group training organisations, through Group Training Australia, had raised through my hardworking colleague the member for Unley, as the shadow minister responsible for this area. The Liberal Party had amendments drafted. We consulted on those with a significant number of employer groups and, suffice to say, in the end, there were a number of reasons why employer groups argued against the Liberal Party proceeding with these amendments.
The more significant arguments that were put to the Liberal Party were, first, to address what Group Training Australia argued was the issue where host employers are not really the employers of the apprentice or the trainee: the group training organisation is. If an apprentice is injured working with a host employer, the apprentice can sue the host employer for negligence and, whilst the injured apprentice might have received, say, $50,000 in medical expenses and income maintenance from WorkCover, if the injured apprentice is then successful in legal action in suing the host employer and gets a payment of $200,000, under the current act WorkCover recovers its $50,000 from the payment and the injured apprentice gets the $150,000 difference.
Group training organisations were arguing that this was impacting on host employers—their access to public liability insurance and the premiums that they might have to pay for that, and there were a lot of related issues that I will not go into that they raised with the member for Unley and the Liberal Party.
As I said, we explored those issues in great detail but virtually all of the other employer groups came back and said, ‘If you are going to make changes to the benefit of group training organisations here in relation to the particular legal position of having host employers, you will have to do exactly the same thing with other industry sectors such as the labour hire industry and the construction industry.’
For those reasons, we certainly did not propose to go down that particular path. We have given an overall commitment not to move amendments or make changes to the bill which will make it harder to achieve the 2 per cent or less average premium target and to remove the $1.1 billion unfunded liability; and these particular amendments, if we were to pursue them, and their flow-on implications, potentially might have impacted in that particular area.
The government and WorkCover also—and we thank them for the detail that they provided us—did indicate that the scheme already provides significant financial subsidies and support to group training organisations to encourage them to employ apprentices and trainees, and did indicate that the equivalent to WorkCover in virtually all other jurisdictions did have the power to recover costs in the sort of circumstances that were being canvassed. For those reasons, and for others, whilst we have consulted with the business groups, and some members might become aware that draft amendments had been circulated, the Liberal Party has decided that it will not be proceeding with those amendments.
The Hon. R.L. Brokenshire: You will or you won’t?
The Hon. R.I. LUCAS: We will not be proceeding. So, for the benefit of the Hon. Mr Brokenshire, we are addressing only two policy issues in our amendments (and I think I have indicated that in an email to the Hon. Mr Brokenshire): the issue of SACAT and the issue of the tabling of reports—
The Hon. R.L. Brokenshire interjecting:
The Hon. R.I. LUCAS: On a delayed basis to July 2018. I am happy to speak to the Hon. Mr Brokenshire on that issue after my contribution.
The Hon. R.L. Brokenshire: That’s a long way away.
The Hon. R.I. LUCAS: It is indeed, but it is for the reasons I have already outlined (I will not repeat them). However, I am happy to have a discussion with the Hon. Mr Brokenshire after my contribution. The other area I should address is that the minister made another statement on behalf of the government and WorkCover today. I will perhaps leave the detailed discussion on this issue to the amendments the Hon. Mr Brokenshire has moved, but in the second reading explanation I did raise the issue of groups that worked on behalf of supporting injured workers.
I also raised the issue that what used to occur, back a number of years ago, was a regular stakeholder forum where groups like that—and others, union representatives and others—were able to meet on a regular basis with WorkCover management to raise issues or concerns they might have about the general operations of WorkCover. It also provided the opportunity for WorkCover management to outline to those groups—unions, and those who advocate on behalf of injured workers—major changes, policy directional changes, that WorkCover might be implementing or particular issues that were confronting WorkCover at any particular point in time.
In our discussions with the government and WorkCover we sought some commitment from the government to, in essence, reinstitute that. Whilst I do not have conveniently in front of me the precise form of that, the minister has today put on the public record a commitment to the reinstitution of a stakeholder forum which will incorporate those who advocate on behalf of injured workers and allow them an opportunity to put a point of view. When we get to the debate on that particular issue I know the value of that will become apparent.
I know a number of letters have just recently been sent to minister Rau from one of those groups, letters dated on 12 and 13 October sent from Work Injured Resource Connection Incorporated, raising a series of questions about this bill and the new scheme, and the impact on injured workers. The letter of 12 October, for example, talks about seeking clarification in regard to the transition of injured workers from the current scheme to the new process. It states:
My reason for writing is the large number of injured workers who have b een contacting me in regard to what they are being told by the claims agen t in that as of midnight June 30 th2015 if the injured worker is over 130 week s their compensable claim will cease. There is a massive amount of confusion in regard to what the process will be.
Clearly, when there is major change there is concern, particularly among groups of injured workers, their families and friends, and I think these sorts of issues can be handled through a forum like this where, on a regular basis, issues can be raised.
It might mean that the minister of the day does not get quite as many letters from people advocating on behalf of injured workers if management at WorkCover, on a regular basis, is meeting with those who do have questions. They can raise issues and, hopefully, management can raise with these groups (unions and those who advocate on behalf of injured workers) and say, ‘Okay, this is the change we’re implementing. We’re going to have a new rating system,’ or, ‘We’re going to be paying rehab providers under a new contract,’ or whatever it might happen to be.
That forum will give the opportunity for both information and education to be provided to some in these particular stakeholder groups and equally, as I said, for them to be able to raise questions and hopefully head off some of the misinformation that eddies around any major change that goes on. We can address the detail of that in the particular amendment the Hon. Mr Brokenshire is moving. I did indicate that we were seeking a commitment along those lines and we welcome the announcement from the government today.
I need to place on the record now that the Liberal Party in the House of Assembly did indicate that it would not oppose the three new sets of government amendments moved to the original bill on the basis that we had not had an opportunity to consult with industry and we would reserve our position in the Legislative Council. I place on the record now that we have advised the government that industry groups have indicated their support for those original three sets of amendments which are incorporated in the bill we have before us now, and we will be supporting those aspects of the bill that are currently before us.
In relation to the three new sets of amendments the government is now tabling, I think since the introduction of the bill in the House of Assembly there have been six separate sets of amendments moved by the government to its own legislation. In relation to the three most recent sets of amendments, thus far the response we have had from employer groups is—and if I can separate out the CFS cancer compensation for the moment; the other two sets—to support them. So, the Liberal Party’s position is to support them.
We have had no opposition from unions or anyone else to those particular amendments either; we have had no opposition from anyone to those amendments at this stage. Subject to not receiving any strong opposition from any groups before we can recommence the debate at 11am tomorrow, our intention will be to support those two further sets of amendments the government has made to the bill in the Legislative Council.
The sixth and final set of amendments are the CFS cancer compensation amendments, which have been tabled as well. My colleague, Dr Duncan McFetridge, has contacted the CFS volunteers in relation to these amendments. They have indicated to him, and to the Liberal Party, that they support the government amendments and would like the Liberal Party to support their inclusion into the bill. There was an alternative that the government could have introduced separate legislation, which would mean a slightly longer delay before that could have been introduced and passed through both houses of parliament. The Liberal Party’s position, on the basis of the advice we have received from the CFS volunteers, is to support the CFS cancer compensation clauses.
I do put a question to the government, however, and it is similar to questions the Hon. Tammy Franks has put; that is, that the costs of this particular package are significantly less than what the claimed costs of the package were to be that the Liberal Party and others canvassed prior to the state election. We are interested in seeing on the public record a response from the government to the actuarial advice it has received as to what particular aspects of the scheme have resulted in the significant reductions in the estimated total annual cost of the CFS cancer compensation. So I flag, together with the Hon. Tammy Franks, our wish to explore that during those particular clauses, and we would hope the government would be ready when we debate that tomorrow potentially to answer questions in relation to specifically what aspects of the new arrangements have led to the significant reduction in the estimated cost of the scheme.
An issue I have raised privately with the government, and I wish the response to be placed on the public record, is the removal of the position of the WorkCover Ombudsman. My questions to the minister and to the government are: given the removal of this position, what was the current contractual arrangement with the WorkCover Ombudsman; that is, was he on a five-year contract and, if he was, how much of that period was left to run, and what are the termination arrangements in relation to the current incumbent for the position if this bill passes?
My understanding from the discussions with the government is that if the bill passes, the only payment the WorkCover Ombudsman will receive will be any accrued long service leave and untaken recreation leave, but I want to see on the public record the government’s response to that particular question. I also ask whether, given if the bill is passed that position disappears, has any alternative offer been made to the current incumbent? Does he have a long-term position within the state public sector within any government department or agency once this position is abolished and, if he does not have a long-term position to return to, has the government made any offer to him of alternative employment with any government department or agency once the bill has passed?
The other issue that I want to place on the public record, and I will seek some answers, is in relation to the issue of claims management contracts. This is an issue that has had a long history as well. The Liberal Party’s position dating back to 2006-07 when the government installed a monopoly claims manager, was to oppose that particular position and support a position of competition in terms of claims management. We were critical at the time of the very big increase—and I think I made comment in the second reading so I will not repeat it—in claims management costs which jumped from $25 million in 2007 to $48.9 million in 2009.
The Auditor-General’s figures, as I read them since that big jump to $48.9 million in 2009, have shown that in the following year, 2010, it was $44 million and then in 2011 it dropped to $31 million. In 2012 it jumped to $42 million; in 2013 it jumped to $44 million; and in 2014, the most recent year, it actually jumped to $65 million in claims management fees being paid to EML and Gallagher Bassett. So the total claims management fees in the space of seven years have jumped from $25 million to $65 million. That is a very significant increase, and I seek a response from the government and from WorkCover as to the reasons for the $21 million increase in claims management fees from one year to the next, from 2013 to 2014.
That is an increase of almost 50 per cent in one year in the claims management fees. Under the new scheme it would appear that there should be a significant reduction in claims management fees, because under the new arrangements there will be much less required of claims managers. I seek a response from the government and from WorkCover as to what they believe will happen to claims management fees should this bill pass.
I guess the first issue I ask is: what is the estimate for claims management fees for this year, 2014-15, because that will all occur under the current legislation? It will not be until 2015-16 that we will see the impact of the new legislation. Are the government and WorkCover anticipating total claims management fees in 2014-15 around the $65 million that was paid in 2013-14 and, if so, why is that the case? I then assume that the government and WorkCover will be seeing, potentially, a significant reduction in claims management fees under the new scheme. Each year the Auditor-General will report on this, so we will have a chance to monitor it.
I also ask whether WorkCover has commenced discussions or negotiations with claims managers about the arrangements to be entered into for 2015-16. My understanding is that they have commenced. I also understand from discussions I have had thus far with WorkCover representatives that there will be some things that WorkCover will not be able to put on the public record as a result of commercial confidentiality. I recognise that that is the case, but I think that the parliament should be able to ask these questions and we should be able to receive some general information from the government and from WorkCover about the expectations for claims management and whether or not there are discussions about claims managers taking on other roles in relation to workers compensation management.
I put those questions to the government and minister today and would like to explore them during the appropriate stages later in committee. That is a general indication of the Liberal Party’s approach to the committee stages of the debate. By raising a number of those issues at clause 1, given that we are about to report progress, I assume, from our viewpoint that will mean that in a number of those cases we will not need to address them in any great detail on the specific clauses later in the debate, and we hope that will help expedite the committee stages of the debate tomorrow and Thursday.
The Hon. I.K. HUNTER: I thank honourable members for their contributions and cooperation during the debate. Given that we will address this issue again tomorrow, I suggest that we report progress.
Progress reported; committee to sit again.
RETURN TO WORK BILL
(Continued from 28 October 2014.)
The Hon. R.I. LUCAS: There is an issue that does canvass a number of clauses and I want to ask the government to put its position on the record. I have had email correspondence from the minister’s office confirming the government’s position but this is for the sake of the record.
One of the issues in this debate is about SACAT and the employment tribunal. As I have indicated before, the Liberal Party’s preferred position was to use SACAT right from the word go in July 2015. For all the reasons I outlined yesterday, we have been prepared to move a compromise position, which is July 2018. I know from discussions with some of my colleagues that they would prefer our original position but in the interests of getting this bill through we have adopted the compromise position. The government now has another option about that which we will discuss in the committee stage.
During this whole debate one of the issues I canvassed with the minister was that, if there was to be a delay of three years, could he and the government indicate that when making critical appointments to the employment tribunal their approach would be to at least consult with both employer representatives and employee representatives, which would give some confidence to employer organisations and the officers who work within the structure of the employment tribunal. I ask the minister whether he would place on the public record the government’s response to the issues that I have raised with the government.
The Hon. I.K. HUNTER: I would like, at this stage, to provide some responses to those additional questions that were raised in the second reading contributions and at clause 1 yesterday. The Hon. Mr Darley noted his concern that significant provisions in relation to the bill are dependent upon the content of regulations which are yet to be provided. I can advise that, last week, draft regulations for comment have been provided to all unions and employer associations, as well as various interested parties including lawyers and associations representing professions. I can make the draft regulations for comment available to members for their further information, noting that there may be changes arising from the current consultation and any amendments made to the bill during its passage through parliament.
The Hon. Mr Darley also noted the concern raised by the Australian Lawyers Alliance in relation to the hours worked factor for the economic loss lump sum. The government shares the concern about parents, often mothers, who have returned to work part-time on a temporary basis being disadvantaged by the formula for the payment for economic loss. The government filed an amendment to this provision on 23 October 2014 which provides that, if a worker is working part-time when injured and there is evidence that they had a legally-enforceable right to return to full-time work, then they will be taken to be working full-time for the basis of the economic loss lump sum calculation.
In relation to the Hon. Mr Darley’s comments about whether it is plausible for SACAT to have the dispute resolution jurisdiction by 1 July 2015, I rely on my earlier comments and the contribution of the Hon. Mr Lucas yesterday following his discussions with Mr Justice Parker. I understand the request from honourable members the Hon. Ms Franks and the Hon. Mr Lucas about the provision of the most recent actuarial report on the CFS cancer compensation. We will be putting that actuarial advice on the public record.
Currently CFS volunteers who attend on average 175 fire incidents over any five-year period have the reverse onus of proof in relation to certain cancers. The cost is estimated to be $1.8 million per annum using the original actuary report by Taylor Fry, I am advised, or about $5 million using the most recent actuary report by Finity Consulting.
The government committed to reviewing the legislation within four weeks if re-elected. The cost for total CFS volunteer coverage estimated in the most recent actuary report, which was between $28 million and $42 million per year, is consistent with the results provided by the previous actuary, which was between $25 million and $36 million per year. This includes coverage for all past and present operational and non-operational CFS volunteers with no threshold, is my advice.
The amendments proposed here provide presumptive coverage for operational CFS volunteers who are registered as active members on or after 1 July 2013 who retained that presumption for 10 years after a CFS volunteer ceases operational activities.
The CHAIR: Minister, obviously some people are having trouble hearing what you are saying. If you can just try to speak up a little bit louder, they would appreciate it.
The Hon. I.K. HUNTER: I will speak more directionally into the microphone, Mr Chair. It removes the incident thresholds, meaning that CFS volunteers will no longer be required to attend 175 incidents over a five-year period to qualify. This is estimated to have an initial liability of $7.8 million per year, rising to $13.4 million per year by year 10, as the effect of including a rolling 10 years’ worth of retirees takes hold.
The 10-year retirement threshold limits the cost. The CFS Volunteers Association supports this option, I am advised, as all current operational volunteers are covered regardless of the number of incidents attended. This provides greater coverage and more equity with the paid MFS firefighters. It is important to note that past members can still make a compensation claim but are not entitled to the presumption.
The Hon. Ms Franks asked questions about the detachment of injured workers from their pre-injury employer. Section 58B of the Workers Rehabilitation and Compensation Act 1986 outlines an employer’s duty to provide suitable employment. It has various exemptions from providing suitable employment for employers, including those employing less than 10 employees. This exemption has not been included in the Return to Work Bill.
The provisions of clause 15 allow a worker to request the corporation to investigate noncompliance of their employer, with a requirement of the act as regards to their employment. This is a new provision. Clause 18 also provides a process for workers to apply to the South Australian Employment Tribunal for an order that the pre-injury employer provides suitable employment. I provide this additional information to highlight that any data from the existing scheme in terms of an employer’s duty to provide work will not be comparable to what is proposed in this bill. It is a different process with a stronger, enforceable right for workers to seek a return to work with their employer.
It is well known that the current provisions of the Workers Rehabilitation and Compensation Act 1986 are not adequate in supporting workers returning to their pre-injury employer. The responsibility for assessing and determining the goal’s for an injured worker’s retraining and return to work is managed by the claims agents. The process is different for each claim depending on the circumstances of the injured worker and employer. Many different options may be explored, including retraining at a different employer with the goal of returning to the pre-injury employer. This means that what may be considered as a detachment from the pre-injury employer is not clear.
The two claims agents, while operating within the WorkCover framework, have slightly different processes aligned to their claims management models. WorkCover revised the framework for the enforcement and regulation of section 58B in February 2014. This was to provide a greater focus on ensuring decisions about whether it is reasonably practicable for an employer to provide suitable employment are timely and evidence-based. The revised framework includes provisions for an employer or injured worker to seek a WorkCover review of the claims agent’s decision. Decisions to change the return-to-work goal to a different employer is recorded in the claims management system, where the employer has an obligation to provide suitable employment. This may result in multiple instances of a change of goal for an individual worker.
Given this, it is difficult to provide responses to the Hon. Ms Franks; however, I can advise that in relation to the first question about the numbers of injured workers detached from their pre-injury employer in the period of 2011-14, I am advised that, using a proxy indicator of activity, in the 2011-12 financial year there were 940 changes in return-to-work goal to a different employer; in 2012-13 financial year, there were 1,035 changes in return-to-work goal to a different employer; and in 2013-14 financial year, there were 945 changes of return-to-work goal to a different employer. It should be noted that these figures do not include any workers for self-insured employers.
In relation to the Hon. Ms Franks’ second question: there is no application process for employers to terminate the employment of their workers; rather, the way the section currently operates is that, if one of the exemptions applies to the employer, they do not have a duty to provide suitable employment or pay wages. However, where they are not exempt, they are required to provide notice of their intention to terminate. These notices are sent to claims agents and are not recorded in the claims management system.
In relation to the Hon. Ms Franks’ question about the number of applications approved by WorkCover, again I note there is no application process; however, I can advise that WorkCover will review decisions relating to a change of return-to-work goal to a different employer. Given the number of changes this review and investigation process has had over the last three financial years, it is not very useful to provide further details. The Hon. Ms Franks also asked about the number of applications withdrawn and the number rescinded. I can advise that any such information is not recorded in the claims management system and therefore cannot be accurately provided.
The Hon. Mr Lucas asked a number of questions in relation to the position of the WorkCover Ombudsman. I draw his attention to Hansard from Thursday 16 October, on page 1268, where I put on the record responses to most of his questions. In terms of the additional questions asked by the Hon. Mr Lucas, I can advise that Mr Wayne Lines, who currently holds the office of WorkCover Ombudsman, does not have the substantive position on expiry of his current acting appointment. I am advised that he has not been offered any position or been guaranteed that one will be found for him in the department.
Mr Lines will be involved in assisting the department with implementing the transfer of complaint-handling functions from the WorkCover Ombudsman to the state Ombudsman. One option is that the staff of the WorkCover Ombudsman transfer to the Ombudsman to undertake this function, but this is not guaranteed. The staff would then be employees of the Ombudsman, not employed as a statutory officer.
The Hon. Mr Lucas noted recent increases in claims agent fees and has also asked what is the estimate for claims management fees for 2014-15? WorkCover currently contracts Employers Mutual and Gallagher Bassett to deliver claims management services. I can confirm the Hon. Mr Lucas’s observation that claims management fees have increased in 2013-14. I am advised the increase reflected the significant change in WorkCover’s approach to managing the scheme with once-off performance fees available to the claims agents to invest in, achieving significant scheme improvements.
This increase of about $20 million in fees, as noted by the Hon. Mr Lucas, resulted in unprecedented improvements in the scheme’s finances and performance. The investment in additional once-off fees achieved more than 10 times its return on investment in 2013-14, with claims liability savings of $298 million; an improvement in the scheme funding ratio of 7.3 per cent to 71 per cent; unparalleled return-to-work outcomes, with approximately a 17 per cent improvement at each of the key milestones of two, 13 and 26 weeks; an 8 per cent improvement at 52 weeks; and a reduction in the breakeven premium rate of 15 per cent to 2.87 per cent.
In 2014-15, WorkCover expects to pay the claims agents a portion of the performance fees related to the unprecedented improvements in outstanding claims liability savings of return-to-work performance. Additionally, the claims management fees for 2014-15 include building the infrastructure for the new return-to-work scheme, whilst continuing to deliver the current scheme—a temporary doubling of activity.
Costs are expected to increase during the transition period due to the changes in service model, updating systems for the new scheme, ensuring staff and service providers are appropriately trained and have the right support to deliver the outcomes required by the new scheme. Due to these two major factors, WorkCover estimates that claims agents fees for this uncharacteristic year will be the highest ever.
WorkCover is awaiting finalisation of the bill to complete project plans for its implementation and final estimates. It should be noted that these setup and performance fees are factored into the 2 per cent average premium rate proposed for the return-to-work bill. Claims agent fees under the new scheme will provide a base fee which relates to the cost of the scheme. The profitability of the claims agents will be dependent on the return-to-work outcomes they achieve. It is expected that after the transition period of two years, claims agent fees will reduce as the cost of the scheme reduces.
I have asked my advisers to get me answers to the Hon. Mr Lucas’s two questions that he asked moments ago as soon as possible. We have one. I am advised that the minister has confirmed that a structured approach, arm’s length from the minister, will be adopted in ensuring that unions and employers are consulted on appointments related to the work of the South Australian Employment Tribunal. The minister will establish a structure of unions, employers and government representatives forming a panel who will make recommendations to the minister on such appointments. I believe that that will address the questions raised by the Hon. Mr Lucas in that regard.
The Hon. R.I. LUCAS: Thank you for that, minister. I was momentarily distracted through part of the minister’s response on claims management issues so I will have a look at that during the lunch break, and when we return to the later clauses in the committee stages I am sure I will find an appropriate clause if there is a follow-up question on claims management issues. I thank the minister for the response in relation to the government’s approach to appointments in relation to the work of the employment tribunal.
I want to raise a further issue as a result of the answers the minister has provided on behalf of the government to questions raised by the Hon. Tammy Franks and myself on the actuarial advice on the new CFS cancer compensation scheme, and I am happy for it to be taken on notice to allow the government to take advice. Again, I was momentarily distracted in the middle of the minister’s response so I am not sure whether it was covered in that period, but I do not think it was.
The minister outlined a number of the changes and I think he said that the government after the election had done an estimate of the original promised scheme which was the broadest possible option, and I think he said that confirmed a figure of somewhere between $28 million and $42 million. This new scheme is obviously much less than that. The minister outlined some broad differences. I am wondering whether the minister could take on notice an answer sometime later today or tomorrow as we proceed through the committee stages of the debate: what was the one most significant change that the government has introduced which has led to the significant reduction from the $28 million to $42 million down to the estimated cost?
There are clearly a range of issues which the minister has canvassed but I am wondering whether, on the basis of the actuarial advice—and I am assuming there are one or two issues which would have led to the most significant difference in the original actuarial advice and the most recent actuarial advice.
But can I just confirm again which actuary provided the most recent actuarial advice that the government is using for its new cancer compensation scheme amendments, which we will be debating in this committee stage? I do not want to delay the debate on clause 1; I am happy for the minister to take that on notice and get considered advice and, at an appropriate or even at inappropriate stage later in the committee, put it on the record.
The Hon. I.K. HUNTER: I will take at least the first part of the question on notice. The paragraph I read out earlier, for the honourable member’s benefit, was that the most recent actuary report was by Finity Consulting. The $28 million to $42 million per year is consistent with the results by the previous actuary, so that is the most recent advice; the previous actuarial advice was between $25 million and $36 million per year.
The Hon. R.I. Lucas: But the 28 to 42 was done by Taylor and Fry wasn’t it—not Finity?
The Hon. I.K. HUNTER: No, the most recent actuary report, between $28 million and $42 million would be Finity and is consistent with the results provided by the previous actuary, between $25 million and $36 million. In relation to the first part of the question—
The Hon. T.A. Franks: With what thresholds is the issue.
The Hon. I.K. HUNTER: If the honourable member wants to make a contribution, she might stand and give us the benefit of that.
The Hon. T.A. Franks: I was attempting to, but the chair pays no attention to me when I stand, so I just—
The Hon. I.K. HUNTER: Well, that is probably because I am standing at the moment. In relation to—
The Hon. T.A. Franks: I just wanted to know what the thresholds were.
The Hon. I.K. HUNTER: —the most significant change the government introduced to reduce the cost, I will come back to the honourable member with that. Mr Chairman, I think the Hon. Ms Franks has a question.
The CHAIR: The Hon. Ms Franks.
The Hon. T.A. FRANKS: I just wanted to know what thresholds were applied in those particular figures given.
The Hon. I.K. HUNTER: I thank the honourable member and will come back to her as soon as I can.
The Hon. R.L. BROKENSHIRE: Based on what the Hon. Rob Lucas had to say, and given a commitment that I have to work through at midday, I wanted to speak to the situation regarding when the tribunal comes under the SACAT Board. In doing so I wanted to refer to the relevance of clause 1 with respect to the government’s attitude and also that of Business SA. I want to put on the public record my annoyance that effectively, both through the government and Business SA, I was told that neither of them were interested in looking at any amendments, that they had worked too hard on getting this bill together to the point where it is now and that, effectively, they did not want crossbenchers interfering with what they had worked with outside the parliament to actually get to the point where they are now. I want that on the public record.
It infuriates me that I have been told that by both the government and Business SA. Where was Business SA over the last 12 years when this government took a WorkCover system that had been fixed after a mess by the previous Labor government, worked on very hard by the then Liberal government—that is the history and truth—from 1993 to 2002 to get a proper system back in place to then see it absolutely destroyed on two or three occasions over that 12-year period? I did not hear much at all from Business SA, and as a result of that we saw more mess occurring and fewer and fewer people being employed. When they were injured we saw them being treated in a disgusting way, in my opinion, on many occasions because of the legislative changes, and we saw a government blow something out to $1.4 billion.
As one of member of the crossbenches, and as an elected democratic representative of the people of this state, we do have a right to put forward amendments, and the community expect us to put forward those amendments. The reason we are now here supporting a bill that we may not necessarily think is as good as it could be or should be, or as fair as it could be, is because of the mess in which this government put WorkCover in this state. I say to the government: work with the crossbenchers and do not infuriate us by saying, ‘No, no, we’ve done all the hard work, we don’t want to upset the unions and therefore we’re not interested in looking at any your amendments.’
We hear the message that we need to fix this mess, and the parliament in a democratic way is doing its best to do that, but whether it is the government or Business SA, do not tell the crossbenchers that we will not get due consideration or a hearing from them if we have to put up amendments.
The next point I would make is that we have been consistently with the Hon. Tammy Franks right through her attempts to get proper, fair and equitable compensation for CFS volunteers, as the government were very happy to do for the MFS paid firefighters but not the volunteers.
The Hon. T.A. Franks: Not the retained ones at first, but eventually.
The Hon. R.L. BROKENSHIRE: And not even the retained, initially, but that was just to make the union happy. The point is that now we have seen some compromise there, and we will therefore sit comfortably with that, given that my understanding from this morning is that the CFS Volunteers Association have indicated that they are now prepared to accept what is being put up. I will have to read the rest of my email on that to be 100 per cent sure, but I will do that when I get a chance.
The final point that I want to put on the public record with clause 1 is that, whilst we were told by the government that they were not interested in any amendments, I note that even now, in the last half an hour, we are still getting amendments from the government. So, it is alright for the government to bring amendments in to fix a bill, but it is not alright for the crossbenchers to want to represent the democracy of this state.
The Hon. I.K. HUNTER: I move:
Amendment No 1 [SusEnvCons–3]—
P age 11, line 5—Delete ‘This Act’ and substitute: ‘ Subject to this section, this Act ‘
This is a technical amendment. I understand it is consequential to our amendment No. 2 that outlines the commencement of provisions that relate to firefighters. I would like to acknowledge at this stage that the Greens have consistently over recent months pursued changes to the arrangements applicable to CFS volunteers.
The government amendments reflect an agreement arrived at with the CFS Volunteers Association, which was announced two weeks ago. The Greens amendments filed last night seem to substantially repeat the government’s amendments, and for that I say thank you. They are of course unnecessary, but we welcome the support of the Greens for the government’s amendment. It is noted and is appreciated.
The Hon. T.A. FRANKS: As noted, the Greens have this same series of amendments. It goes to a longstanding campaign that began under minister Snelling in response to a Greens federal bill that was passed that gave recognition to the presumptive cancer laws under presumptive assumptions to be made where firefighting was linked to a particular set of cancers. At the federal level, that was initially 13 but it was, after analysis, whittled down to 12, and that is the schedule that we now have in South Australia and that other states are looking at adopting as, indeed, has happened in Tasmania.
The Greens have fought really hard and stood side-by-side with the CFS volunteers on this issue. We recognise that under WorkCover firefighting has been recognised as a work activity since the inception of WorkCover under this regime. We queried why the CFS volunteers were shut out of the original discussions and announcement made by government, given we as Greens took this issue to the government under minister Snelling and had hoped to work collaboratively with the government. We were shocked when the government then announced that only MFS firefighters would be covered by the presumptive laws. Indeed, at that stage, it was not even retained MFS firefighters: it was only the full-time firefighters.
Certainly, the UFU had the ear of government, but the CFS volunteers struggled to get a hearing with government. Had they not continued to fight, and had not the crossbenchers and minister Brock persisted with this issue, I do not think we would be seeing this amendment here in this Return to Work Bill happening today.
It was a week ago that you made the announcement that you were finally going to listen to the evidence. The government had finally stopped with their arguments. The original argument was that they said the science was not settled. Well, the Monash study showed that the science was settled on this issue and there should not be any further wait for presumptive laws. The work of these volunteer firefighters was indeed the work that could be shown to have causal links to these particular cancers.
Structural fires are often fought by the CFS firefighters in this state, which is different to some jurisdictions in Australia and the world. I would say that around the world volunteer firefighters are covered under this legislation in all of the jurisdictions in which it has taken a lead; however, those volunteers are actually paid volunteers. Whilst they are called volunteer firefighters in the US and Canada, they are often actually paid, so the distinction was not even on the fact that there was money going into their pockets for the act of saving and protecting life and property.
The work of the CFS in this state is invaluable and incalculable, and the amount of money we are talking about with these presumptive laws is a drop in the bucket of what we would lose if we lost the goodwill of the CFS. The Greens will be persisting with this amendment today because the government has railed against the workplace rights of the CFS volunteers right from the start, even refusing to meet with them and work with them.
Had the government sat down with the CFS volunteers before the March state election, they would have understood that the work of the CFS volunteers is relevant and, indeed, the government now recognises this. It is no different from the paid firefighters of this state with regard to this presumptive cancer compensation issue. The government should not take lightly giving credit where credit is due. The Greens have stood with the CFS volunteers, and I understand that Sonia St Alban has sent members an email today saying that the CFS volunteers support the Greens’ amendment to recognise that we supported them.
The government is welcome to join this party, but it should not go unnoticed that every non-Labor elected member in this place and in the other place has previously voted for this legislation and that the only people who have not were those who were elected Labor—the government. The Weatherill government time and time again has opposed equality for CFS volunteers, so we welcome you to join with us, and we look forward to your support of the Greens’ amendment.
The Hon. J.A. DARLEY: I rise to support this suite of amendments, and I want to congratulate and commend the Hon. Tammy Franks for the considerable amount of work that she did in bringing this matter forward. I am more than convinced that without that work the government would not be putting forward these amendments today.
The Hon. R.I. LUCAS: On behalf of Liberal members, I acknowledge the work the Greens, and the Hon. Tammy Franks in particular, have done on this issue. The Liberal parliamentary party has nailed its colours to the mast, as the honourable member will know. There are many to pay tribute to but, just thinking quickly, certainly Liberal leader, Steven Marshall, and shadow minister, Duncan McFetridge, were two amongst a number who worked actively on this issue with the Hon. Tammy Franks, CFS volunteers and others.
I think the Hon. Tammy Franks will acknowledge that sometimes the assistance of one of the major parties in terms of supporting initiatives and amendments from the community, such as CFS volunteers, and then reflecting it through the crossbenchers, such as the Greens, does assist in putting pressure on governments ultimately to do backflips, change their mind, or adopt new positions, whichever phrase you want to use to describe the government’s current position. So, I want to acknowledge the work of the member for Dunstan and the member for Morphett, as well as others I have not named within the Liberal parliamentary party room.
For the reasons that have been outlined publicly, the Liberal Party supports the compromise position that has been adopted and has now been accepted by the CFS volunteers, and we will be supporting the amendments.
The Hon. R.L. BROKENSHIRE: I advise the house that Family First will be supporting the amendments. I commend the Hon. Tammy Franks for her efforts over a long period of time on this matter, and I put on the public record, so that history is not rewritten, that the Hon. Tammy Franks raised this issue. It was brought to our attention at about the same time, and Family First would have introduced a bill similar to the one presented by the Hon. Tammy Franks, but when she put forward the bill, we supported it. We supported it in a select committee as well, and that select committee strongly recommended this probably nearly a year ago. So, it has been clear that the Hon. Tammy Franks—
The Hon. T.A. Franks interjecting:
The Hon. R.L. BROKENSHIRE: Well, that’s right, it was not the majority of the select committee into emergency services, police and community safety: there was a dissenting report from Labor, but the rest were absolutely locked together on this. The fact is that this matter has put a lot of grief around the CFS at a time when they already have other challenges, such as the massive hike in the ESL and also the fact that this government is about to, in one way or another, attempt to dismantle a long-standing independent structure, namely the CFS, the SES and the MFS. We need to be very careful in considering this so that we do not have another mess for the CFS and the SES.
However, to come back to the point, I also do not want to see the member for Frome (the Hon. Geoff Brock) claim the credit for this. He was put in a situation where he had to put forward a deal. Because of the pressure that had been applied through what I have just highlighted in this council and because the CFS was actually knocking on the door of the member for Frome, he thought he had to get a score on the board. I acknowledge that he did support a review, but there was some time and a fair bit of silence between him signing off on an arrangement with the Premier and coming out and saying that things had progressed.
I am saying this because I am tired of the government rewriting history in this place. We see it time and time again. Whilst this is still a compromise—it is not as good as some of us would have liked—it is the best we can do at this point in time. With those words, I am happy to support this amendment.
The Hon. K.L. VINCENT: Very briefly, Dignity for Disability will continue to support the Hon. Ms Franks on this important issue. We are certainly pleased to see a crossbench member get credit for the hard work that they have done.
The Hon. T.A. FRANKS: I just want to note that the Liberal opposition took this to the state election as an election policy, and I acknowledge the work on that. Indeed, the government acknowledged that a review needed to happen before the election, although I think minister Brock’s involvement is to be commended in driving that issue forward over these past months.
There are two things that can happen now. The Liberal opposition has indicated that they will vote for the government amendment, in which case the government amendment will get up and the Greens’ amendment will lapse, given they are the same. We could also look at recommitting this clause. However, what I will do at this stage is withdraw my amendment and thank the government—however insincere I think those words earlier were—for finally seeing sense and actually supporting those who support and protect us.
The Hon. I.K. HUNTER: I move:
Amendment No 2 [SusEnvCons–3]—
P age 11, lines 6 and 7—Delete subclause (2) and substitute:
(2) Part 7A of Schedule 9 will be taken to have come into operation on 1 July 2013 immediately after the Workers Rehabilitation and Compensation (Firefighters) Amendment Act 2013 is taken to have come into operation.
(3) Clause 27 of Schedule 9 will come into operation on 1 January 2015.
This amendment provides for the retrospective commencement of consequential amendments to the Workers Rehabilitation and Compensation Act 1986 that relate to the reverse onus proof provisions for Country Fire Service firefighters. I thank honourable members for their indication of support for this suite of amendments. I can only note that policy and success has many parents; I commend that.
Amendment carried; clause as amended passed.
The CHAIR: The next amendment is to clause 3 to be moved by the Hon. Ms Franks. The Hon. Mr Darley has the same amendment. The Hon. Ms Franks.
The Hon. T.A. FRANKS: I move:
Amendment No 1 [Franks–1]—
P age 11, line 19—After ‘financially’ insert ‘ by the provision of fair compensation ‘
The Sickness Bill became law in 1883 and the Accident Bill in 1884, under the Chancellor of the German Empire, and introduced programs to assist workers in the event of accidental injury, illness or old age. This initial system was financed by workers and employers and shows the long tradition we have of recognising the role of workers compensation in a civil society. It is a social insurance scheme and it should be a no-fault scheme.
The government, by not having the words ‘fair compensation’ in the objective clause of this bill, gives an indication that it is perhaps not willing to provide fair compensation to injured workers. The Greens are moving this amendment, which echoes the Law Society’s submission which suggested that the fair compensation for employment-related disability should be included as it is integral to the entirety of the objectives of any WorkCover or to be called ‘return to work’ scheme. Any workers compensation should have that as a fundamental principle. If we believe in fair compensation, let’s put it in the legislation.
The Hon. J.A. DARLEY: At the outset, honourable members will note that there is a great deal of overlap between the amendments proposed by the Hon. Tammy Franks and the amendments proposed by me; as such, I indicate that I will be supporting all of the amendments proposed by the honourable member and, once again, I commend her for her strong stance on this bill. I think the writing is on the wall and many, if not all, of our attempts to inject some fairness back into the equation are going to be in vain, but it is still a worthy exercise.
The purpose of the amendment is to enshrine in the objects of the act the provisions of fair compensation for workers who suffer injury at work. This is an integral element of the objectives of the scheme and should be included in the bill. Unfortunately, this bill appears to be more about actuarials and number crunching than injured workers who are going to be abandoned in droves. If unamended, it will result in shifting responsibility for the care of those who are injured at work from one system to another, namely, the welfare system.
The Hon. I.K. HUNTER: I thank the Hon. Mr Darley for his point of clarification; it simplifies processes for us somewhat. I will speak now to the Hon. Ms Franks’ amendment. This amendment applies to the objects of the act and introduces compensation into the Return to Work Bill. This proposed amendment is counter to the primary aim of the new scheme, which is to support workers to recover and return to work.
The return-to-work scheme has been designed to support the recognised health benefits of work, increase objective and evidence-based decision-making, maximise return to work through early intervention, and reduce benefit dependency. The use of the term ‘compensation’ promotes an entitlement culture that is one of the problems with the current scheme. The term ‘fair’ may sound good, but it is something that is very subjective in a scheme that requires the interests of workers and employers to be in balance. The question then becomes: fair to whom? The objectives in the bill are meaningful and direct as they are, and the government opposes this amendment
The Hon. R.I. LUCAS: As I outlined in the second reading, the position the Liberal Party and Liberal Party members will be adopting has been outlined by the member for Dunstan, Liberal leader, Steven Marshall, publicly and during the debate in the House of Assembly: he committed himself and the party to fundamental reform of the workers compensation scheme. He indicated that he had given a commitment to the government to work with the government to introduce significant amendments to the scheme.
As I said in the second reading, and in the debate at clause 1, whilst we have heard many attempts by this government to supposedly reform WorkCover over the last 12 years—all of which have failed to now—we are hopeful that this one might be more successful than the previous endeavours. For the reasons the member for Dunstan has outlined, we are supporting in general terms the reform attempts by the government in relation to this bill. For those reasons, we will not be supporting this amendment and a number of the other amendments which potentially cut across the attempts to reform.
The Hon. T.A. FRANKS: Could the minister clarify what he means by ‘this is the end of the age of entitlement’, and does he believe that it is an entitlement for a worker not to be injured or killed at work?
The Hon. I.K. HUNTER: The honourable member should be very careful what she claims I said. I said no such thing.
The Hon. T.A. FRANKS: Does the minister believe that a worker is entitled not to be injured or killed at work?
The Hon. I.K. HUNTER: Clearly, that is the key aim of the bill.
The Hon. T.A. FRANKS: Does the bill do that?
The Hon. I.K. HUNTER: The objectives of the bill, as I said, are to support people who are injured at work, but of course if you look at the way the penalty structures or the effective premium structures are in place, they reward those businesses who actually put effort into occupational health and safety, prevent workplace injury and, indeed, death in the first place.
The Hon. T.A. FRANKS: I fear the minister thinks I am trying to be a nuisance, but what I am actually putting to the minister is: does not having a fair compensation objective actually ensure that some parties ensure that there is a safe workplace?
The Hon. I.K. HUNTER: It appears, from history, that that is not the case.
Amendment negatived; clause passed.
The Hon. R.I. LUCAS: I move:
Amendment No 1 [Lucas–1]—
P age 16, after line 30—Insert: ‘ jurisdiction transfer date means 1 July 2018; ‘
As I outlined in the second reading, given that the Hon. Mr Brokenshire may well have to leave soon, I will not speak at length on this, so that he can put down his position on this particular amendment. My understanding is that the one potentially remaining difference of opinion between the government and Liberal members, at least in relation to this bill, does relate to this issue of the start-up date for the transfer to SACAT.
Very quickly, the government’s position, as enunciated by the minister, has been, ‘Look, it probably does make some sense in terms of transferring to SACAT, but it’s just impossible to do it in the short term. In the medium term, it may well be an option.’ I think that is a fair statement of the position put down in the House of Assembly and to a number of other interested stakeholders, certainly from the employer organisation side.
Our position had been to support the transfer from 15 July from the start but, for the reasons I outlined, having listened to Justice Parker and to various other groups, we have adopted a compromise position and that is that we lock in a transfer consistent with the statements the minister did make as a possible option in the House of Assembly, but also consistent with the discussions I have had with Justice Parker, and indeed others, in terms of when it would be possible.
Can I hasten to say that Justice Parker would not adopt a position that placed him in conflict between the government and the opposition but, in terms of the question of the practicality of when it could be achieved, if that policy decision was taken by parliament or government, the answer to that question was in and around about three years’ time. July 2018 is approximately three years and three months away in terms of the transfer.
For those reasons, we are moving this amendment, and we would firstly hope the government might adopt a position where it is prepared to support it, but it has canvassed another amendment this morning—I think the Hon. Mr Brokenshire has referred to that—which would seem to indicate that they are opposing this amendment and that their position will be to have a review at some future stage which may make a decision to transfer it. We strongly oppose that particular potential amendment from the government. We would urge crossbenchers to support this position that we lock in what is a sensible decision to transfer it to SACAT, albeit delayed by 3¾ years until July 2018.
The Hon. I.K. HUNTER: I hate to be the one to dash the Hon. Mr Lucas’ hopes in this matter, but the government will be opposing this amendment. The Hon. Mr Lucas has proposed a set of amendments that would cause the jurisdiction for review of matters under the Return to Work Act to automatically transfer from the South Australian Employment Tribunal to the South Australian Civil and Administrative Tribunal on 1 July 2018. I understand, as he has explained to the chamber, this is a compromise on his party’s initial position.
The government is open to considering such a transfer at a future date, at which point we would anticipate the South Australian Civil and Administrative Tribunal would be up and running and in the position to expand its work with a dedicated stream to the return-to-work scheme. However, the government would prefer for this not to be an automatic transfer as provided in the suite of amendments proposed by the Hon. Mr Lucas. We would rather consider the decision as undertaken after reflection on the position of the South Australian Civil and Administrative Tribunal to take on this jurisdiction and considering any learnings from the dispute resolution process under the new return-to-work scheme.
The government has filed an amendment to clause 203, which requires a review of the return-to-work scheme three years after its commencement. This amendment will expand the scope of the review to include an assessment of the merits of moving the jurisdiction for review of matters under the Return to Work Act from the Employment Tribunal to a stream of the South Australian Civil and Administrative Tribunal. The government proposes that this is a preferable way of managing this issue and the government is therefore opposing this amendment and all others that are related to the automatic transfer of jurisdiction to the South Australian Civil and Administrative Tribunal.
The Hon. R.L. BROKENSHIRE: I rise to say that, notwithstanding what I said this morning and in my second reading contribution, generally the Family First Party will be supporting this legislation through. However, I believe that the opposition’s amendment is a fair amendment, it is a sensible amendment and it ensures that in July 2018 the responsibilities of the Employment Tribunal go to SACAT.
Having worked with Justice Parker when he was a senior legal adviser in the justice department and based on what the Hon. Rob Lucas said today, I clearly respect and understand what Justice Parker is saying about it not being possible to look at this thing right now. However, just for the history, I have never actually felt comfortable with all of the processes of appointment when it comes to the Industrial Relations Tribunal in this state. I know for a fact that the government, when in opposition, promised one person that, if they were to make my life difficult as a minister at that point in time, they would duly rewarded with a position in the Industrial Relations Commission. That is something that never sat comfortably with me but, whilst it was corridor chat, it proved to be factual.
I would actually support a more independent process in how we look after both workers and employers in the matters around remuneration and therefore I will be absolutely supporting the Hon. Rob Lucas’ amendment.
The Hon. J.A. DARLEY: I will also be supporting the opposition’s amendment.
The Hon. T.A. FRANKS: The Greens will be strongly opposing the opposition’s amendment. We do not see a reason for the Employment Tribunal to be moved to SACAT. We also had some concerns that I hold some hesitations about regarding the Guardianship Board’s inclusion in that without due process, so we will look and ensure that that does work out. We think that there is specialised expertise here and there is an environment that demands that the Employment Tribunal stand alone.
The committee divided on the amendment:
Lucas, R.I. (teller)
Hunter, I.K. (teller)
Amendment thus carried.
The Hon. I.K. HUNTER: I indicate that, in relation to the previous amendment passed, moved by the Hon. Mr Lucas, the Hon. Mr Lucas had the numbers for support of that, and the government will treat that as a test clause and will not seek a division on any further amendment.
The Hon. T.A. FRANKS: I move:
Amendment No 2 [Franks–1]—
P age 18, lines 17 and 18—Delete the definitions of psychiatric injury and pure mental harm and substitute:
psychiatric injury means mental harm (including consequential mental harm);
This amendment deletes the definitions of psychiatric injury and pure mental harm and substitutes ‘psychiatric injury means mental harm (including consequential mental harm)’. The Greens move this amendment because the government has removed ‘consequential mental harm’ from its proposed bill. If you are, for example, a construction worker and you witness the death of your colleague through an industrial accident, you may be in shock and suffer, of course, post traumatic stress, so it is only fair that you should have access to compensation for mental harm. This is the case under the current act, and the Greens do not believe it is necessary to have this excluded from the bill before us.
The Hon. J.A. DARLEY: Again, this amendment is identical to my second amendment. I think the Hon. Tammy Franks would agree that it serves as a test clause for a number of related amendments that deal with the issue of psychiatric injury. It seeks to delete the current definitions of psychiatric injury and pure mental harm and replace them with one definition that includes consequential mental harm. In so doing, consequential mental harm will compensable, in line with other psychiatric injuries, and with the wording of the current legislation. This is an extremely important amendment. Without it we can continue to expect to see an exacerbation of the discriminatory approach that injured workers suffering from psychiatric injuries continue to face.
The Hon. I.K. HUNTER: The Hon. Ms Franks’ amendment applies to the definition of ‘psychiatric injury’ and has the effect of allowing consequential mental harm claims to be compensable. This amendment offers a significant risk to the scheme and is likely to materially increase the costs to the new scheme. Consequential mental harm emerges over time and, if work related, receives the relevant income and medical support during the life of the claim. This is the appropriate approach on advice for supporting the treatment and recovery of consequential mental harm.
This amendment seeks to make consequential mental harm a work injury in its own right, restarting further time banded periods of income and medical support. This is not in the best interests of the scheme. The scheme is focused on recovery and return to work for workers. If I understand the Hon. Ms Franks example correctly, she talked about in fact not consequential health harms but about a primary mental health issue. A consequential mental health issue is more like a worker with a back injury through work and then becomes depressed as a result of that down the track. That is the definition of ‘consequential mental harm’ and not the example the honourable member related of someone observing an injury at work and then developing depression or other mental health issue as a result of that. My advice is that that would be considered a primary mental health issue. The government will therefore oppose the amendment.
The Hon. R.I. LUCAS: For the reasons I outlined earlier, given the position adopted by the member for Dunstan on behalf of Liberal members, we will not be supporting this amendment.
The Hon. R.I. LUCAS: I move:
Amendment No 2 [Lucas–1]—
P age 19, after line 4—Insert:
SACAT means the South Australian Civil and Administrative Tribunal established under the South Australian Civil and Administrative Tribunal Act 2013;
This amendment is consequential on the earlier vote.
The Hon. I.K. HUNTER: The government accepts that it is consequential.
The Hon. R.I. LUCAS: I move:
Amendment No 3 [Lucas–1]—
P age 19, after line 5—Insert:
SAET means the South Australian Employment Tribunal established under the South Australian Employment Tribunal Act 2014;
This amendment is consequential.
The Hon. R.I. LUCAS: I move:
Amendment No 4 [Lucas–1]—
P age 20, lines 5 and 6—Delete the definition of ‘Tribunal’ and substitute:
(a) until the jurisdiction transfer date—SAET; and
It is consequential.
Amendment carried; clause as amended passed.
Clauses 5 and 6 passed.
The Hon. T.A. FRANKS: I move:
Amendment No 3 [Franks–1]—
P age 25, lines 12 to 34—Delete subclauses (1), (2) and (3) and substitute:
(1) This Act applies to an injury if it arises out of employment.
(2) Subject to this section, an injury arises out of employment if—
(a) in the case of an injury that is not a secondary injury or a disease—the injury arises out of or in the course of employment; or
(b) in the case of an injury that is a secondary injury or a disease—
(i) the injury arises out of employment; or
(ii) the injury arises in the course of employment and the employment contributed to the injury.
(3) An injury consisting of a psychiatric injury arises out of employment if (and only if)—
(a) the employment was a substantial cause of the injury; and
(b) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).
I am assuming that this is also consequential on my previous amendment, so I indicate that I have already spoken to these issues and that it is consequential. Obviously, the Greens will be voting in support, and expect the Liberals and the government to vote us down.
The Hon. J.A. DARLEY: Again, this amendment is consistent with my third amendment and, as such, I will be supporting it.
The Hon. I.K. HUNTER: I am not absolutely sure that this is consequential. In fact, it seeks to change the employment test. This amendment concerns the test for compensability of injuries, taking it back to the current threshold provided for the Workers Rehabilitation and Compensation Act 1986.
The requirement for employment to be a significant contributing cause has been abandoned in this amendment. This amendment will materially increase the proposed cost of the scheme and maintain the current culture that requires only a trifling connection between the employment and the injury to establish compensability. This amendment reduces the economic benefits for South Australia, as well as promoting an entitlement-based compensation culture; therefore, the government opposes this amendment.
The CHAIR: The Hon. Mr Darley, your amendment is not exactly the same, so we will move them together, if you can move your amendments 3 and 4.
The Hon. J.A. DARLEY: I move:
Amendment No 3 [Darley–1]—
P age 25, lines 14 to 22—Delete paragraphs (a) and (b) and substitute:
(a) in the case of an injury other than a secondary injury, a disease or a psychiatric injury—the injury arises out of or in the course of employment; or
(b) in the case of a secondary injury (other than a secondary injury that is also a psychiatric injury) or a disease—
(i) the injury arises out of employment; or
(ii) the injury arises in the course of employment and the employment contributed to the injury; or
(c) in the case of a psychiatric injury—
(i) the employment was a substantial cause of the injury; and
(ii) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).
Amendment No 4 [Darley–1]—
P age 25, lines 23 to 34—Delete subclause (3)
Clause 7 of the bill provides that an injury must arise from employment in order for the act to apply. It establishes the criteria for assessing compensability of an injury. In addition to establishing that the injury arose out of or in the course of employment, injured workers would also be required to establish that the employment was a significant contributing cause of the injury.
The Law Society has expressed concern that the introduction of this new compensability test for physical injuries could result in substantial additional disputation and the potential savings do not justify the additional cost to be incurred through disputation and the likely absence of measures directed to return the injured worker back to work during that period.
In determining whether an injury arises from employment, the bill also draws a distinction between physical injuries and psychiatric injuries, with the latter subjected to a more onerous test. Specifically, clause 7(2) provides that an injury arises from employment if:
(a) in the case of an injury other than a psychiatric injury—the injury arises out of or in the course of employment and the employment was a significant contributing cause of the injury; and
(b) in the case of a psychiatric injury—
(i) the psychiatric injury arises out of or in the course of employment and the employment was the significant contributing cause of the injury; and
(ii) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).
In its submission, the AMA states that, under common law, there is a position that anything less than a significant contributing cause is considered trivial and of no consequence. It is concerned that the insertion of the term ‘the’ into clause 7 provides opportunity for legal argument, creating an unnecessary barrier to the objects of the bill. As such, the AMA has strongly recommended that ‘the’ be removed and replaced by the term ‘a’ or ‘the most’ as alternatives.
This recommendation also has the support of the Law Society and the Australian Lawyers Alliance (ALA). The Law Society states that this change is also likely to be the subject of further disputation about the meaning of the new term, particularly as it appears that the intention of that employment must have contributed more than any other causal factor to the psychiatric injury. Society refers to a number of cases where it has been acknowledged by courts and tribunals that the cause of psychiatric injury arising from the workplace is often multifactorial.
Given the concerns that have been highlighted by the Law Society, the ALA and the AMA, the amendment moved by the Hon. Tammy Franks seeks to delete the new qualifying provisions and replace them with those principles that apply under sections 30 and 30A of the current act. This includes removing the more onerous test for psychiatric injuries, while still maintaining the current disqualifying factors for psychiatric disabilities that are now listed in subsection 4. This is a sensible approach and should be supported.
The Hon. I.K. HUNTER: The government opposes both amendments standing in the name of the Hon. Mr Darley. His first amendment, or amendment No 3, we oppose for similar reasons outlined in our position to the Hon. Ms Franks’ amendment. Amendment No 4 [Darley-1] removes a requirement that employment must a significant contributing cause of the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury (non-psychiatric) and the significant contributing cause of the injury in terms of psychiatric. So, for similar reasons we will oppose this amendment.
The Hon. R.I. LUCAS: For the reasons that I outlined earlier, we will not be supporting the amendments either.
The Hon. Ms Franks’ amendment to subclause 1 negatived.
The Hon. Mr Darley’s amendments negatived.
The CHAIR: We now go to [Franks-1] Amendment No 4. Is that consequential?
The Hon. T.A. FRANKS: It is indeed consequential. I think the numbering issues have now been sorted out.
The CHAIR: The next amendment to clause 7 is Amendment No 5 [Franks-1]. Is this consequential?
The Hon. T.A. FRANKS: No, Mr Chair, it is not. I move:
Amendment No 5 [Franks–1]—
P age 27, after line 22—Insert:
(12) In this section—
secondary injury means an injury that is, or results from, the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury.
In this section the Greens are concerned about the government’s changes to secondary injuries. We believe this will lead to further discrimination against injured workers and will result in increased reluctance by employers to take on injured workers with secondary injuries. The doctors already say that secondary injuries are difficult to measure. Trying to separate the aggravation symptoms arising from aggravation and from the original injury will lead to more disputation and artificial distinctions under the government’s scheme.
The Hon. I.K. HUNTER: It is arguable whether this is, in fact, consequential. It relates to amendments 3 and 4 proposed by the Hon. Tammy Franks that concern a test for compensability, but strictly it is probably not consequential. This amendment reintroduces the definition of secondary injury as it is currently provided for in the Workers Rehabilitation and Compensation Act 1986. For similar reasons outlined in relation to previous amendments, the government will be opposing this amendment.
The Hon. R.I. LUCAS: Whilst the Liberal Party’s position on the amendments is clear, I did want to clarify an issue. This was an issue raised by the Australian Rehabilitation Providers Association and some of the information the government has provided via WorkCover. I am not entirely clear whether it is on the public record or not to be honest.
I seek clarification as to what advice the government has had in relation to the situation that is being proposed here regarding the treatment of secondaries and the treatment of them in similar jurisdictions elsewhere in the nation, because one of the issues that rehab providers raised was the issue of the potential impact of employers in terms of employing people with work-related injuries.
As I recollect, the government’s position was obviously not to agree with that particular argument. It used the argument that other jurisdictions (if not all of them) had exactly this provision, or a similar one, and there had been no indication that the situation in South Australia was any different from other jurisdictions, or words to that effect. I ask the government to place on the record again, if it has not already, its response to that series of questions.
The Hon. I.K. HUNTER: I will attempt an answer. The South Australian workers compensation scheme currently excludes the costs associated with secondary injury when calculating experience rating premiums for medium and large employers. All other workers compensation jurisdictions, I am advised, treat the cost of primary and secondary injuries the same and include them when calculating the experience rating premiums for employers. Their treatment of claim costs has not adversely affected employment behaviour, is my advice.
The Equal Opportunity Act 1984 in South Australia prohibits discrimination on the basis of disability in eight areas, one of which is at work. The Equal Opportunity Commission’s annual report shows that disability discrimination related to employment accounted for about 12 per cent of all discrimination complaints in 2012-13. However, the proportion of complaints regarding disability discrimination relating to employment has declined since it peaked in 2006-07. This downward trend continues, even during the two-year period when South Australia removed its Experience Rating System from 1 July 2010.
During that same time South Australia continued to have a worse return-to-work rate compared to other major workers compensation jurisdictions, and the rate worsened over that time. We have no evidence to suggest that the inclusion of costs associated with secondary injuries will have any effect on employers when considering prospective employees. It should be noted that secondary injuries are not premium neutral for self insurers. They manage the liability associated with secondary injuries of their employees well, focusing their attention on safe and durable return to work.
Amendment negatived; clause passed.
Clauses 8 to 17 passed.
The Hon. I.K. HUNTER: I move:
Amendment No 1 [SusEnvCons–2]—
P age 35, after line 9—Insert:
(6a) If on an application under subsection (3) the Tribunal declines to make an order in favour of the worker under subsection (5), the Corporation is liable, subject to subsection (7) and to limits prescribed by the regulations—
(a) for the employer’s reasonable costs of the proceedings before the Tribunal (unless those costs are covered by an award under subsection (8)(a)); and
(b) for the costs payable to the worker under subsection (6).
The amendment changes the arrangements for the awarding of costs in applications before the tribunal where a worker is seeking an order for their pre-injury employer to provide suitable employment. The bill currently provides for costs of representation to be awarded against an employer in all matters. This amendment will provide for the corporation to be liable for the costs of representation in matters where the tribunal declines to make an order in favour of the worker. This limits an employer’s expenses in matters that are resolved in their favour.
The Hon. R.I. LUCAS: In relation to clause 18, this is an issue which has prompted a lot of correspondence, I am sure, to all members who have been considering the changes in this particular bill, that is, the employer’s duty to provide work. This particular amendment, as the minister has just outlined, is a partial response to some of the issues that have been raised.
I must admit I have only just received in the last 24 hours some correspondence from a lawyer with considerable previous experience in the jurisdiction with one of the industry associations who is now in private practice. He has raised a number of questions, and I want to place them on the record and seek the minister’s response to the issues that he raises. The view that this lawyer has put to us is that he supports the amendments that are moved but says that they are marginally better than the problems with the existing clause 18 but not by much. He argues:
The employer would still be liable to pay the workers’ costs out of their own pocket as a starting point. If the employer was successful in their argument, then they would receive costs from WorkCover (as would the worker). However, if the employer lost, they would have to pay both parties’ costs.
The principles in employment laws are long-standing that each party would bear their own costs unless they acted frivolously or vexatiously. This includes unfair dismissal, adverse action and all other matters under the Fair Work Act 2009, even prosecutions for breaches. This clause creates a remedy in respect of employment and therefore should be treated the same.
However, if this is not to be the case it is manifestly unfair as the employee faces no costs risks except where frivolous or vexatious. Both parties should face the same consequences for their conduct or longstanding principles of fairness before the law would be undermined.
As such, either the insurer should pay both parties’ costs (as is currently the case under Workers Comp dispute) or neither party should pay the costs. It is acknowledged that the costs of such a dispute will still likely have levy implications for the employer but at least they don’t have the very real threat of tens of thousands of dollars of legal fees to pay.
Bear in mind that existing s58B issues invariably arise in th e case of redundancies (i e. at a time when they can least afford it) or termination for misconduct (ie. at a time when industrial issues are at stake). As such, disputes under this provision will be de facto unfair dismissals and the existing balance in the Fair Work Act should not be undermined, if nothing else because the tribunal will be inundated with cases.
I put that view a lawyer has raised with us and asked us to put to the minister. I acknowledge that this has only just been raised, although I suspect somewhere amongst the minister’s advisers that these issues will have been long argued.
However, the more immediate question is whether the minister has any general comment in in relation to that advice. As to whether or not the government accepts this claim—that, as such, currently either the insurer should pay both parties’ costs as this person indicates is currently the case under workers compensation disputes—that it is an accurate reflection of the current position, if it is an accurate reflection why is it that the government, even with this amendment, is seeking to change that position?
I also seek from the minister whether, even with the government’s amendment, the position is different from other jurisdictions in relation to these issues. The final point this person is raising is that, as a result of his analysis of the issues, in the end the tribunal may well see a significant increase in the number of cases being argued as a result of the government’s new position in relation to costs. Does the government have a response to say, ‘Well, no, that won’t be the case’? If that is its position, what are the reasons for that position?
The Hon. I.K. HUNTER: I understand that the original proposal in the bill was that employers effectively would be responsible for all costs. This amendment effectively changes that. The Hon. Mr Lucas has information that says it might only be a marginal change. That is a matter of opinion, I suppose, at this stage. Effectively, though, I am advised that this is a new provision that is really an application by a worker to access their return-to-work rights and that it is not directly easily related to current legislation.
My advice is that the government does not expect this to give rise to any onerous or significant new rise in cases to be argued. I am also advised that there is a provision under clause 15 where a worker can request the authority to investigate that an employer has the ability to provide return to work. The expectation is that that will be the first port of call, I suppose, in this regard, and then the current provision we are arguing at the moment would be the last port of call. The responsibility of the corporation would be actually to short-circuit that and get a worker back into employment.
The Hon. R.I. LUCAS: Does the minister have any information in relation to the new position after this particular amendment from the government in relation to costs as to how that compares with other jurisdictions in terms of their approach to the costs issue?
The Hon. I.K. HUNTER: I am advised that I will need to take that on notice and bring back a response as soon as I can.
Amendment carried; clause as amended passed.
Clauses 19 and 20 passed.
The Hon. T.A. FRANKS: I move:
Amendment No 6 [Franks–1]—
P age 36, line 37—Delete ‘30%’ and substitute ‘ 15% ‘
The Greens strongly oppose the 30 per cent threshold, as indicated in our second reading speech. It is a highly restrictive definition of injury and one that has, as its impetus, the budget bottom line rather than a realistic assessment of a serious injury. Indeed, we think it is a gross abuse of the English language. Most seriously injured workers will be excluded under what the government will now define as a serious injury under this bill and, when it becomes law, under this act.
This threshold has been taken from an interstate jurisdiction and, most notably, I cite the New South Wales Workers Compensation Act. In New South Wales, workers who have sustained an injury that resulted in the amputation of a limb are having their cases dismissed as not serious enough to deserve ongoing payment of medical bills. There have been a number of amputees who have been refused ongoing medical cover because they failed to reach the required 30 per cent WPI threshold.
My colleague the Hon. David Shoebridge MLC of the Greens in the New South Wales parliament has worked with a number of amputees, and I would like to share one injured worker’s case from that jurisdiction. Kris Carroll was forced to have his leg amputated after a workplace injury in 2005 and has had his claim to payments for medical expenses ceased from 2013. The reason given for this was that his injury was not serious enough to warrant ongoing protection. For Mr Carroll, who was required to regularly replace his prosthesis, this is likely to cost him around $40,000 in medical expenses each year.
Under New South Wales’ controversial changes to the Workers Compensation Act that were made in 2012, injured workers are now only entitled to receive payments for medical expenses related to their injury, such as doctors’ bills, the cost of surgery, prosthetics and medication, for a maximum of 12 months after they last received weekly payments or, if they did not receive weekly payments, then 12 months from the date of the injury. The only exception is when a worker has a ‘serious injury’ as defined. This is an injury that is assessed at 30 per cent WPI. Astoundingly, amputations such as Mr Carroll’s are not assessed at this level; indeed, that was assessed at 28 per cent WPI.
A 15 per cent WPI threshold will allow more workers to access ongoing financial support in the form of weekly income maintenance, compensation for medical expenses and rehabilitation, and return-to-work activities. A 15 per cent WPI can and will result in some workers having no capacity for work, and indeed those workers will need support. Under the government’s proposal, they will not be supported at all. We have received legal advice to note that while the 15 per cent threshold is not perfect, it is indeed a dramatic improvement from the government’s approach.
We acknowledge that the government is here looking at the bottom line (the budget) and expect them to oppose this. Certainly, when we raised this figure with them in our briefing on this bill, we asked why 15 per cent was chosen. It seems clear that it was chosen because it balances the budget; it does not necessarily bring the best results for injured workers.
The Hon. I.K. HUNTER: One of the most significant changes for the return-to-work scheme is that it recognises that workers who are seriously injured require different support and services to those workers who are not seriously injured. The return-to-work scheme makes special provision for people with serious injury with income support paid until retirement age and lifetime care and support. People with serious injury are also able to pursue a claim for common law damages where the employer’s negligence has caused or contributed to the injury.
This clause establishes that a worker whose work injury results in a whole person impairment of 30 per cent or more will be characterised as a seriously injured worker for the purposes determining their support under the scheme. The Hon. Ms Franks has proposed quite a number of amendments that seek to reduce the threshold for a worker being characterised as seriously injured from 30 per cent degree of whole person impairment to 15 per cent. The government will be opposing this amendment and all others that seek to achieve this change to the threshold for serious injury.
Moving the threshold for serious injury from 30 per cent whole person impairment to 15 per cent would have a material effect on the culture and sustainability of the new return-to-work scheme. Having a 15 per cent whole person impairment threshold for serious injury would increase the estimated number of workers characterised as having a serious injury by about 800 per cent, and significantly erode much of the savings that the original reform package aimed to achieve. It is broadly recognised that being at work and returning to work are essential parts of an effective recovery. The return-to-work process, as well as being essential for the health and wellbeing of workers, long-term absences from work in general have a negative impact on health and wellbeing.
One of the key differences for workers who are non-seriously injured compared to those who are seriously injured is the return-to-work obligations. The bill specifically states that a recovery return-to-work plan must not impose any obligation on a seriously injured worker to return to work. Without those return-to-work obligations in place, we are likely to see workers who could, with the right support, return to work on a sustainable basis instead of ending up in a cycle of benefit dependency. This is at a significant cost to their own health and wellbeing and at a significant financial cost to the scheme, the community and their families.
The return-to-work scheme sets a threshold for differentiating between seriously injured and non-seriously injured workers, with recognition of the fact that it is important for most injured workers to receive active case management focused on the health benefits of work. While there is certainly debate about whether 30 per cent is an appropriate threshold, this scheme is about moving away from the one size fits all approach and it is necessary to make a differentiation.
We must not forget that workers who are not seriously injured are not left without support. For example, a worker who is 30 years of age and is assessed as having a 20 per cent whole person impairment could receive, I am advised:
up to two years of income support, which if paid at the state average wage would be about $150,000;
up to three years of medical expenses at an average cost of about $21,000;
up to three years of return-to-work services paid at an average cost of about $11,000;
a non-economic loss lump sum of about $45,000-$46,000; and
an economic loss lump sum of about $145,000.
In total, this hypothetical worker would receive about $373,000-$374,000 in compensation and services from the insurer. If the worker has not returned to work at the end of the three year period, the return-to-work facilitation fund can then be used towards providing additional job-seeking services and retraining for the worker. With regard to the financial impact of amending the serious injury threshold, I am advised that such a change would make the proposed return-to-work reforms unviable.
WorkCover advises that it estimates there would be about 315 people injured at work each year who would meet a 15 per cent threshold of being seriously injured, which is 280 more claims than if the threshold were to remain at 30 per cent whole person impairment. In this one change the new return-to-work scheme could move from a balanced scheme, with appropriate support for those people who are more unlikely to be able to return to work easily, back to the equivalent of a pension scheme for many people. The government will oppose this amendment and subsequent ones.
The CHAIR: Any further comment, the Hon. Mr Lucas?
The Hon. R.I. LUCAS: I suspect that as these reforms are indicated, many of us will see this as one of the more challenging aspects of the WorkCover reforms in terms of what happens in practice—and, certainly, the issues that have been raised with the Hon. Tammy Franks have been raised with a number of us—but for the reasons I outlined earlier, the Liberal parliamentary party’s position has been to support this feature of the bill, as challenging as it might be.
There are two issues I want to raise: one is that this particular clause and the amendment that the Hon. Tammy Franks is moving just reinforces for me my incredulity at the fact that, on an issue like this, given the lobby that has been put to the Hon. Tammy Franks, I have not received one letter from SA Unions or any of the more prominent unions in relation to this particular issue—not one lobby.
As I said, the only employee association that has made any public statement has been the police association, which issued a press statement and a public statement. So, on an issue as challenging as this particular one, and for someone like me, as I said in the second reading, who has lived through probably every one of the workers compensation debates from the early eighties onwards, it is extraordinary that an issue as fundamental as this to the workers compensation scheme can be reformed and changed without anyone raising concerns on behalf of employee associations.
The minister has outlined some of the alternative provisions in the bill which will be available for injured workers below a 30 per cent WPI, but I just wanted to clarify on the record, because this was one of the issues I did raise with WorkCover representatives when I met with them recently and I received some advice from WorkCover on the issue. I place on the record that advice that I have received from WorkCover in relation to this issue.
4.1 We noted that the proposed scheme has a relatively low threshold for access to seriously injured support benefits of lifetime care and income support to pension age.
4.2 94% of workers are back at work prior to 2 year income support ceasing—expected to improve with RTW Bill and the new active service model.
4.3 Workers who reach 2 years with no job and a permanent impairment do receive a significant lump sum: eg
4.3.1 A 25 year old full time worker with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $486,880;
4.3.2 A 30 year old with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $469,380;
4.3.3 A 55 year old with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $346,880;
The minister in giving his example, which I think was of an injured worker with 27 per cent WPI—was that correct, 27 per cent?
The Hon. I.K. HUNTER: 20 per cent.
The Hon. R.I. LUCAS: The ones I have put on the record, provided by WorkCover, were for 29 per cent permanent impairment. The minister gave a breakdown and a total cost. I just wanted to clarify: the numbers I have been given here by WorkCover say a ‘total lump sum of $486,000’, for example. Is that an apples and apples comparison where the minister broke down income maintenance, medical expenses and whatever? My interpretation was that this was just the lump sum for economic loss calculation, but I wanted to seek clarification, given that the minister gave a disaggregated figure with a total at the end and the numbers I have been given by WorkCover do use the phrase ‘total lump sum of $486,880’. Just a clarification of the difference in terms of the calculation I have been given and the one the minister has put on the public record.
The Hon. I.K. HUNTER: I will try to confirm that for the honourable member. My suspicion is that in the cases of the examples provided by the Hon. Mr Lucas, as in the cases I provided, is that his total lump sum provided to him by WorkCover is probably an amalgamation of non-economic loss lump sum and economic loss lump sum. I will get confirmation before the end of the day on that. The parts I described involve two lump sums, and those are the non-economic loss lump sum and economic loss lump sum.
The PRESIDENT: The Hon. Ms Franks, you have a number of consequential amendments.
The Hon. T.A. FRANKS: Yes, amendment No. 7 is a consequential amendment, as are at least the next five or six, so I will not move them.
The Hon. J.A. DARLEY: I move:
Amendment No 7 [Darley–1]—
P age 37, lines 31 to 41 and page 38, lines 1 to 3—Delete subclause (8)
Clause 21(8) of the bill deals with seriously injured workers and provides that, in assessing whether the 30 per cent threshold has been met, impairment resulting from the physical injury is to be assessed separately from impairment resulting from psychiatric injury. In assessing the impairment resulting from physical injury or psychiatric injury, no regard is to be had to impairment that results from consequential mental harm, and in assessing the degree of whole-of-person impairment resulting from physical injury, no regard is to be had to impairment that results from the psychiatric injury or consequential mental harm, and the 30 per cent threshold is not met unless the degree of whole-person impairment resulting from physical injury is at least 30 per cent, or the degree of whole-person impairment resulting from psychiatric injury is at least 30 per cent.
The net effect of this clause is that the physical injuries are treated as separate to psychiatric injuries for the purposes of establishing whether an injured worker has a WPI of 30 per cent or more, and as such dramatically impacts the payments that workers will receive. It is unfair and will result in harsh and unjust consequences for injured workers. It will mean that most of those workers who are transitioned on to the new scheme will not meet the new 30 per cent impairment threshold. It will also mean that those workers will not be entitled to common law damages claims.
As I mentioned during my earlier contribution, one of the key criticisms of this bill is that the WPI is a blunt tool for an assessment of workers incapacity for work and treatment needs. It fails to address issues around major injuries, including complex multi-traumas and multi-skeletal injuries and it fails to address the medical reality of serious conditions generally. The restriction on combining physical and psychological injuries not only exacerbates this harsh approach but also serves to continue discrimination about psychological injuries.
The ALA has provided us with the example of the bank worker or health worker who was wounded in an armed hold-up or attacked by a mentally ill patient and suffers from both physical and psychological injuries as a result. Although the worker is able to recover from the physical injuries, they are not able to recover from the psychological injuries. These workers who are unable to work as a consequence of combined injuries will not reach the threshold and, as such, would not receive entitlements commensurate with the injuries they have sustained.
The fact that the bill goes on to limit the number of assessments for injuries arising out of the same trauma to one just adds insult to injury. What we should be considering are entitlements based on the effects on individual workers. I cannot and will not support these measures, and I urge other honourable members to do the same.
The Hon. I.K. HUNTER: This amendment applies to the threshold to gain access to the serious injury support workers and removes the criteria to be applied when determining whether the 30 per cent whole person impairment threshold is met. Specifically, it removes the separation of assessments for physical and psychiatric injuries and allows, as we debated earlier, consequential mental harm to be included in both physical and psychiatric assessments.
This amendment, I suggest, will have significant cost impact on the scheme. Additionally, it is contrary to practices, I am advised, that are pursued in other Australian workers compensation jurisdictions. For those reasons, the government will oppose the amendment.
The Hon. T.A. FRANKS: The Greens will be supporting the Hon. John Darley’s amendment. We believe that we should be adding injuries to injuries, not insult to injuries.
The Hon. R.I. LUCAS: For the reasons we have outlined earlier, we will not be supporting the amendment either.
Amendment negatived; clause passed.
The Hon. J.A. DARLEY: I move:
Amendment No 8 [Darley–1]—
P age 38, line 32—After ‘consult with’ insert:
the Australian Medical Association (South Australia) Incorporated, and with other’
This amendment is consistent with feedback received from the Australian Medical Association. Clause 22 of the bill sets out the scheme for assessing the degree of impairment that applies to an injured worker and provides that an assessment must be made in accordance with the impairment assessment guidelines and made by a medical practitioner who holds a current accreditation. Subclause (5) goes on to provide that the minister must, before publishing or amending any such impairment assessment guidelines, consult with professional associations representing the class or classes of medical practitioners who hold accreditation.
The AMA is the peak stakeholder body representing medical professionals. As such, it seems appropriate to make it clear in the bill that the minister is to consult with that body before publishing or amending any guidelines. I am sure the government will tell us it has every intent of doing this already, but this amendment simply serves to remove any doubt.
The Hon. I.K. HUNTER: This amendment creates a specific requirement for the minister to consult with the Australian Medical Association (South Australia), in addition to other professional associations, on permanent impairment assessment guidelines. It is important to point out that the AMA does not represent all health practitioners.
As already required in the Return to Work Bill, consultation on the permanent impairment guidelines will occur with the relevant professional associations. This will include the AMA where the issue being discussed is relevant to the AMA’s membership base, just as other associations will be contacted when the contact is relevant to their membership base. I repeat: the AMA does not represent all health practitioners. Whilst this amendment is not material to the operation of the scheme, it is considered important that consultation be targeted at the relevant bodies for the relevant matter. The government, therefore, opposes this amendment.
The Hon. R.I. LUCAS: The Liberal Party’s position is not a strong one in relation to this particular amendment. We understand the government’s position in relation to the AMA not representing all medical professionals. Having been a shadow minister for health, albeit for a relatively short period of time, that is indeed correct. There are a range of other organisations which do represent medical professionals across the board and so on balance, as I said, whilst we do not hold particularly strong views one way or another, we would hope that practice will show that the AMA is consulted when they should be and that we do not have examples where the AMA will come to us afterwards saying, ‘We should have been consulted on this particular issue and we were not.’
It just seems to make sense that where the AMA needs to be consulted they should be, but on balance we do accept the argument that there are other groups that do represent medical professionals. If you list one then the argument from the others, having been a shadow minister for health, will be, ‘Well, if they are listed, then why aren’t we?’ On balance, for the reasons outlined, we will support the government’s position.
The Hon. J.A. DARLEY: I move:
Amendment No 9 [Darley–1]—
P age 39, lines 16 to 23—Delete paragraphs (d), (e) and (f)
It is strictly a consequential amendment, but I will move this as a stand-alone amendment based on the reasons outlined in my amendment No 7 to clause 21.
The Hon. I.K. HUNTER: This amendment does the same work effectively as amendment No 7, but in relation in this case to all permanent impairment assessments, that is, it removes a requirement for separation of assessments for physical and psychiatric injuries. It allows consequential mental harm to be included in assessments for both physical and psychiatric injuries and consistent with amendment No 7 this would have a significant cost impact on the scheme and be contrary to practices in other jurisdictions across the nation and therefore the government opposes this amendment.
The Hon. T.A. FRANKS: I move:
Amendment No 16 [Franks–1]—
P age 39, lines 34 to 44 and page 40, lines 1 to 5—Delete subclauses (10) to (15)
This clause sets out the method for assessing permanent impairment. Such an assessment must be made in accordance with the impairment assessment guidelines. These guidelines are yet to be published and so we are being asked to support a section of the bill where there is a lack of detail.
Just at this point, I do want to query whether the government’s amendments do address my amendments on this issue. They are not jumping up and down, so no.
Further, to illustrate this, consider a worker who suffers a disc bulge which amounts to a 5 per cent whole person impairment. This worker can apply for a lump sum payment under both the existing and the new systems; however, under the new bill if that worker suffers a subsequent disc bulge amounting to another 5 per cent whole person impairment which is connected to the original trauma or develops as a consequence of the original trauma, this second disc bulge, I am informed, is not compensable.
Similarly, with a worker who injures their knee is assessed at 5 per cent WPI, then limps around for a couple of years until they develop a back injury which amounts to 7 per cent WPI, my information is that that person will not be entitled to compensation for the 7 per cent permanent impairment to their back.
The new bill also provides that an assessment of permanent impairment will be determined at a time determined or approved by the Return to Work Corporation of South Australia. One can imagine a situation where the corporation adopts a policy position of delaying assessments, the current system of assessments being made once injuries have stabilised works, and this change does nothing to add to that system.
I would note that the CFMEU does not support this section of the government’s bill and would like to see it deleted from the bill.
The Hon. J.A. DARLEY: Again I rise to support this amendment, which is identical to my amendment No. 16. Clause 22(10) provides that there is to be one assessment made in respect of the degree of a worker’s permanent impairment from injuries arising out of the same trauma.
As I mentioned earlier, this provision fails to recognise the medical realities of serious injuries. You cannot, as the government has tried to do, adopt a one-size-fits-all approach to this issue. The harshness of this approach will be felt by most of those workers who are assessed as having injuries that fall shy of 30 per cent. This is because the difference in entitlements that apply to a worker with a WPI of 28 or 29 per cent is so starkly different from those that apply to a worker with a WPI of 30 per cent.
Try as it may to justify its position, the government has failed to convince me that two years of weekly payments, a further year of medical expenses and even a couple of lump sum payments are going to make up for the losses that injured workers will sustain in real terms. This should not be about limiting multiple permanent impairment assessments: it should be about fairness, something that is very lacking throughout this bill.
The Hon. I.K. HUNTER: This amendment removes the provision stipulating that only one permanent impairment assessment can be undertaken. The limit to one permanent impairment assessment is critical to the operation of the new scheme. This amendment will add significant cost, I am advised, to the new scheme and is contrary to good practice. A permanent impairment assessment should only be done once the work injury is stabilised and all factors can be taken into account. Allowing more than one permanent impairment assessment may also encourage doctor shopping and increase disputation in the scheme. For all of these reasons the government opposes the amendment.
The Hon. R.I. LUCAS: For the reasons we outlined earlier, we will not be supporting the amendment either.
Amendment negatived; clause passed.
Progress reported; committee to sit again.