Return to Work (Weekly Payments Under Transitional Provisions) Amendment Bill 2016

Legislative Council
November 2, 2016


second reading speech


Second Reading

Adjourned debate on second reading.

(Continued from 27 July 2016.)

The Hon. T.A. FRANKS ( 17:22 :50 ): I rise on behalf of the Greens to make a second reading contribution to the Return to Work (Weekly Payments Under Transitional Provisions) Amendment Bill 2016. From the outset, I say that the Greens will be strongly supporting this bill. The Hon. John Darley has introduced this bill because the Xenophon Team believed there was a simple loophole created unintentionally by this Labor government within the Return to Work Act 2014. The Greens agree.

This bill merely seeks to ensure that injured workers who returned to work on 30 June 2015 are eligible for income support. There is a solid argument for why these injured workers should be eligible for income support, and I will lay it out for the understanding of the Minister for Industrial Relations and members of the government benches in this place and in the other place: one, if an injured worker had returned to work on 29 June 2015, they would be eligible for income support; two, for a worker who is injured in the days leading up to 1 July 2015, but who takes no time off work before 1 July 2015, the Return to Work Act does not provide a mechanism for that worker to receive any form of income support payments at all. There is no way to overcome that outcome without this amending bill being passed.

Because of this loophole, my office has received numerous cases of injured workers from lawyers who have no way of representing their clients' cases. These injured workers returned to work on 30 June 2015 and are now no longer qualified for income support. They returned to their workplace on 30 June 2015 for a number reasons, including not wanting to be a burden on their employer by leaving them short-staffed, and not realising the extensive injury that they had sustained at work.

Through no fault of their own, despite returning to work, having sustained a significant workplace injury, these people are now worse off than they would have been if they had stayed away from work that day. Surely, this completely counters the objectives of the Return to Work Act under section 3(1)(a) in realising the health benefits of work and (c) in returning to work, including if required, after retraining. I have some examples for the information of those here in this debate today, but also to put these on the record.

Aaron Gaston of Munno Para West, sustained a workplace injury on 28 June 2015 and was forced to remain at work by the Adelaide Casino. Aaron had no ability to take time off work before 1 July 2015. The extent of his injury resulted in him becoming unfit for work after 1 July 2015. Just because of the dates of enactment, Aaron is now not eligible for income support, because he returned to work. Could it be that the lawyers working for the Adelaide Casino, knowing that this loophole existed, suggested to the employer that Aaron must be kept at work so that he would not be eligible for income support? Perhaps not, but this is, indeed, the case that we find ourselves with.

Wayne Schroeder of Morphett Vale was injured in 2012. He underwent surgery in 2012 and successfully returned to work. Wayne was supported by his employer, who valued their employee's contributions to the workplace but, as a result of this, Mr Schroeder did not claim income maintenance after the section 36 discontinuance was issued in 2013 and before 1 July 2015. Wayne underwent surgery on 30 March 2016. This required a neurostimulator implant in his right leg, yet he is not eligible to be paid for time off work whilst recovering from his injury. Wayne has exhausted his sick leave, annual leave and personal leave.

Despite all the evidence suggesting that the worker has achieved the objects and principles of both the prior act and the current act, he remains precluded from protection of the system because of the arbitrary wording of clause 37. The interpretation of clause 37 has now been affirmed by the employment tribunal in two decisions: Pennington and Watkins. Due to this set precedent, Wayne has extreme difficulty and it may be impossible that he will be able to succeed with his dispute without an amendment to the act.

Another case of an injured worker who is now ineligible for the protection of the act is Bianca Sutton of Munno Para West. Bianca worked four to five days and was losing one day per week from her pre-injury earning, as of 1 July 2015. In May 2015, she received a notice ceasing top‑up payments, subject to section 35B. At that time, unfortunately, the worker did not understand the significance of that notice and sought no legal advice. She returned to work and achieved the objects and principles of the act by achieving the best possible return to work she could and relied upon the system in a responsible manner. Without amendment to the current act through this bill, her claim for top-up payments is in jeopardy and will likely have to be fought all the way to the Supreme Court.

Another injured worker, whom I believe lives in the electorate of what was formerly Ashford, a teacher by trade, and who was employed by the Department for Education and Child Development, was injured in 2011. That worker took minimal time off work and received a notice ceasing payments under section 36 of the previous act, advising that the teacher must return to work. Due to the significance of the worker's injury, this worker was unable to return to work on a full-time basis between 2011 and 2016 whilst accessing medical treatment that supported the worker's pain management.

In 2016, the worker suffered a change of capacity and sought workers’ compensation payments for a short period of time. This was denied on the basis of the wording of clause 37. This is yet another example of a worker who had returned to work before 1 July 2015 and is being prejudiced, solely by reason of the wording of that clause 37, simply because this worker achieved the objects of the previous Workers Rehabilitation and Compensation Act 1986, despite suffering ongoing pain and reduced capacity from a workplace injury.

As of 30 June 2016, this worker has no right to claim medical expenses associated with the work injury and this compromises the worker's ability to seek medical treatment and maintain work capacity. Yet, we are told and advised by minister Rau that we should ignore all of this and simply bring these cases to his office's individual attention so that they can possibly sit in an abandoned filing cabinet with all the other cases of injured workers who have been unfairly treated by the draconian Return to Work Act.

We are told, I believe ill-advisedly, to simply trust the minister to sort this mess out. We are told that the minister believes this particular section of the act does not really impact on injured workers. If that is the case, then this government should have no problem in supporting this bill before us because this government should be standing up for injured workers. If they are to believe the current minister's word that he can sort this mess out individually, case-by-case, through referrals to his office, then indeed while the members of the government may well be happy to trust that word, the members of the Greens in this place certainly do not trust this minister on workers’ compensation and will not take his word for it that he will sort this mess out because he created this mess in the first place.

I note that ReturnToWorkSA's 2015-16 annual report has submitted a $325 million surplus. It states that the scheme's net assets, which are the amount by which the scheme's assets exceed the liabilities, is at $325 million for this financial year. That is on page 7 of that particular annual report. I cannot help but observe that, given we are here facing debate on a bill which fixes what I believe kindly to be unforeseen outcomes of the changes that we saw to this legislation. I guess we will test it today and see whether they were unforeseen outcomes or deliberate outcomes. Were these outcomes accidental, or was a Labor government in the business of doing over injured workers?

It is disheartening to see a minister for industrial relations from a Labor government act in this way. It is not appropriate for that minister not to address a systemic issue, and certainly to offer an option of individual members of parliament referring individual cases to his office where we know for example in the case of the Casino it is not possible to resolve that, that is not an acceptable solution. That is why we commend the Hon. John Darley for bringing this bill before us today. We have worked closely with his office and strongly support it. With those few words, I commend this bill to the chamber.

The Hon. R.I. LUCAS ( 17:32 :53 ): I rise on behalf of Liberal members to speak to the second reading of the bill. As other members have noted, in part this legislation has been driven by a response from opponents to the legislation as a result of some recent tribunal decisions, and in particular the tribunal ruling in relation to Pennington versus ReturnToWorkSA where lawyers who have lobbied members of parliament on this particular issue have cited the fact that the employment tribunal described the outcome of one of its rulings as unfair and unfortunate for the injured worker. I note that the tribunal judgement actually states on its cover page:

Although the construction urged upon us by Return to Work SA produces a seemingly unfair outcome in this case the statute evinced an unequivocal intention of Parliament to draw a line in terms of the continued receipt of weekly payments in connection with workers injured under the WR&C Act.

I think in part that responds to the rhetorical question the Hon. Ms Franks put to the Minister for Industrial Relations as to whether or not it was a loophole or whether indeed it was a deliberate act by the government, and ultimately a majority in the parliament. The tribunal notes that in their view this was an unequivocal intention of the parliament to draw a line in terms of the continued receipt, that it was not a loophole. It was a deliberate and unequivocal decision of the minister, the government and ultimately the parliament in supporting the legislation. A note from HWL Ebsworth to its client group, signed by David Johns and Kimberley Miller-Owen at the bottom, summarises the decision in the following words:

The Tribunal decided that the wording of clause 37(6) was so clear that it must mean that only workers who immediately prior to 1 July 2015 were receiving weekly payments or had not received a section 36 Notice to discontinue weekly payments could continue to receive benefits after 1 July 2015.

The Tribunal said:

'Parliament intended that workers who were not in receipt of weekly payments as at 1 July 2015 due to those weekly pay ments being discontinued under [section] 36 of the [ Workers Reh abilitation and Compensation] Act, are not entitled to receive weekly payments under either the [Return to Work] Act or the [ Workers Reh abilitation and Compensation] Act.'

Therefore, despite having an ongoing incapacity, Ms Pennington had no entitlement under the [Return to Work] Act.

What the tribunal has said, and what lawyers who are interpreting the decision have said, is that there was an unequivocal intention from the minister, from the government and from the parliament to, in essence, draw a number of lines in the sand, but this is one line in particular. The reality is that when the minister, the government and ultimately the parliament draws a line in the sand, there will inevitably be very powerful arguments about people who just miss out and people who just are included.

You will not hear about people who are just included because they happen to be on the right side of the line that the minister, the government and the parliament have supported. The ones who are just on the other side will inevitably have some concerns which are expressed directly by themselves and by those who advocate on their behalf. I might say that this particular cut-off provision is not the only one that the minister, the government and the parliament have constructed in the new legislation. There are a number of others were periods of time are set, and there will be people who will be included and people who will not.

As members would know, there are also significant arguments about whole-person incapacity measures—that is, percentages of WPI. If you happen to be just under a level or just over a level, you are treated differently, and there have been significant issues raised about the unfairness of the cut-off in relation to that. Whilst I was not a minister or in the government that introduced it, I was a member of parliament who supported it on behalf of our party. We have to accept our responsibility for these inevitable arguments and disputes about the unfairness for the people who just miss out.

As I understand it, that is part of the government's response. That is certainly the response they have put to us when we have raised these issues. Another part of their response, which I understand the Hon. Ms Gago is going to give on behalf of the government, is that there is a review built into the legislation. That will enable a review of some aspects but it will not assist some of the people who have concerns about the impact of the legislation prior to the introduction of the review.

The Liberal Party has not only received that argument from the government and its advisers, together with others. A number of industry association employer organisations have expressed very strong opposition to the provisions of the legislation. They certainly argue that it is not just going to resolve the issues of Ms Pennington and others that have been referred to, but will open up many other significant provisions in the legislation as well. I put on the record the views put to the Liberal Party by the Self Insurers of South Australia.

Rightly, I accept the cynicism of some members about the minister saying, 'Well, don't worry about the legislation, I'll sort these things out myself.' I too would have some degree of scepticism about that claim from Minister for Industrial Relations. Clearly, the minister has no control over those who are covered under the self insurers association of South Australia. They are self insured and the minister has no direct control other than through any parliamentary change to that legislation. Self Insurers of South Australia have been very strongly opposed to it, and they have corresponded in part, and I quote the opposition by saying:

The effect of this particular Bill would be to:

1. Provide an entitlement to weekly payments to transitional claims where weekly payments under the repealed Act were not ceased by way of a s.36 notice, and the worker becomes incapacitated for work due to the injury after 1 July 2015. An example of the effect of this would be to create an entitlement if a worker's claim had been accepted under the repealed Act for a closed period without that period being terminated by a s.36 notice (a fairly common practice as I understand it).

The bill, if enacted, would seem to have an open-ended transitional effect in that it does not set an expiry date—a worker could revive an entitlement to payments for up to two years at any time. The Bill is also retrospective in effect (see clause 2, which sets a commencement date of 1/7/15).

They advised, back in July, their very strong opposition to the bill. Subsequently, by way of an email to my office, the Self Insurers association again corresponded with my office and again repeated:

SISA remains strongly opposed to the Bill because it goes far further than simply helping out the Penningtons of the world. It would open us [that is, the Self Insurers] and the Corporation up to two years of payments to anyone who had a closed period claim acceptance at any time under the repealed Act if they did not receive a discontinuance notice. There would be thousands of them. We consider the bill cynical in its ill-conceived attempt to use the Pennington decision as a Trojan horse to rip a wide hole in the transitional provisions.

The Self Insurers association were trenchantly opposed, as that particular email indicates, to the legislation, and they certainly want to make quite clear that they do not believe that the legislation will only apply to a small number of injured workers; it would apply in their view to many thousands of workers, when they say that the minister, the government and the parliament had drawn a clear line in the sand, and the tribunal's decision has repeated that decision as well.

That position from SISA was supported to my office by a number of the other industry associations—the Motor Traders Association and one or two others—which indicated by way of email that they had seen the views of the Self Insurers association and certainly supported the position the Self Insurers association was putting in relation to the legislation. So, for those reasons the Liberal Party has indicated that it is not prepared to support the second reading of this bill.

The Hon. G.E. GAGO ( 17:43 :00 ): I rise on behalf of the government to oppose this bill. As you are aware, parliament passed the Return to Work Act in October 2014, with the new scheme coming into effect on 1 July 2015. The new return-to-work scheme ushered in the most substantial changes to work injury insurance in nearly 30 years, and are vital for the benefit of workers, employers and the state.

The return-to-work scheme is designed to improve health outcomes for people injured at work, and this will be achieved by face-to-face case management, lifetime care for seriously injured workers, simple and effective dispute resolution and a strong focus on recovery and return to work—just some of the key features of the scheme.

Although the scheme is still in its infancy, disputes are down, return-to-work rates are up, non-economic loss payments are up, new economic loss payments have been introduced and the cost of the scheme is significantly less. The government's position is that the average premium rate should be between 1.5 per cent and 2 per cent of remuneration. That allows the scheme to balance the interests of workers and employers, while having high-quality, personalised services available.

This amendment bill, introduced by the Hon. John Darley, should be opposed on the basis that it is inimical to the balance of these interests, as I have outlined. The intent of the Return to Work Act's traditional provisions is to transition workers from a WorkCover scheme to a return-to-work scheme, while drawing a clear line between the two schemes. There was never any intention that the return-to-work scheme would operate in the same way as its predecessor, nor was it envisaged that an entitlement to income support, properly discontinued under the old scheme, could be revived to establish an entitlement in the new scheme in absence of a new claim made under the new scheme.

Under the new scheme, workers receive much earlier, intensive face-to-face support to ensure services are tailored and person centred. This approach is intended to eliminate or, at the very least, significantly reduce the small number of injured workers who have not returned to work within the two-year entitlement period. If, for whatever reason, a person reaches the two-year cap for income support they will continue to receive financial support for another year to cover medical expenses and return-to-work services.

A review of the amendment bill undertaken by ReturnToWorkSA indicates that the amendment bill, if passed, would virtually neutralise the intended effect of the transitional provisions of the act and would come at a cost of over $50 million. The associated cost of any reversion to the old act must either be offset against other entitlements provided for in the Return to Work Act or see a return to higher premiums. Among other things, the transitional provisions of the Return to Work Act set the threshold for transitioning from the old WorkCover scheme to the new return-to-work scheme.

If a worker was entitled to receive weekly payments immediately before the commencement of the new scheme on 1 July 2015, then they remain entitled under the return-to-work scheme. However, a person who before 1 July 2015 had ceased to have an entitlement to weekly payments on account of a discontinuance under section 36 of the old act, is not entitled to weekly payments. This amendment bill, if passed into legislation, seeks to wipe out this threshold. In his second reading speech, the Hon. John Darley, included four examples of injured workers he considered would be adversely impacted by clause 37. The first example reads:

…if a person was working on 30 June 2015, even if it was only for a few hours, they are completely ineligible to receive income support payments. If the same worker worked on 29 June 2015 but did not work on 30 June, that worker would be entitled to income support payments.

I am advised that income support payments are calculated on a weekly not a daily basis. If a worker was entitled to income support payments in the week before 1 July 2015, they meet the transitional provisions requirement of clause 37(1) and transition to the new scheme. The amendment bill has no application to this first example of the Hon. John Darley. The second example is:

… if a worker was first injured on 29 or 30 June 2015 but they did not take time off work until 1 July 2015, they are not entitled to claim income support payments due to this provision.

I go on to quote:

Similarly, take an injured worker who had continued working, despite ongoing incapacity, before 1 July 2015. If they later required medical treatment, including surgery, which rendered them incapacitated after 1 July 2015, they would not be entitled to claim income support for the time off required to recover from the treatment.

I am advised that the worker in these scenarios, subject to the usual eligibility provisions, would have a claim under the Return to Work Act 2014 for income support in respect of incapacity which occurred on or after 1 July 2015. Therefore, the amendment bill has no implication to this scenario outlined by the Hon. John Darley. The third example is:

Also, an injured worker who was on voluntary leave on 30 June and was not entitled to a weekly payment due to being on this leave, is not entitled to payments.

I am advised, under the repealed act, that the taking of leave by an injured worker does not automatically result in them not being entitled to weekly payments. I am also advised that the Minister for Industrial Relations office is unaware of any examples of workers taking leave, not having consented to a discontinuance and then being prevented from recommencing weekly payments. An amendment to the Return to Work Act for a hypothetical scenario is obviously totally inappropriate. The fourth example is:

If a worker who previously had a compensable injury returns to work on a one day a week basis and happened to be working on 30 June, they are unable to receive weekly payments for the other four days they are unable to work due to the injury they suffered.

I am advised that, as with the first example, if the worker was entitled to income support payments on the week before 1 July 2015 they meet the requirement in clause 37(1) and transition to the new scheme. Therefore, the amendment bill has no application to this scenario.

This amendment bill represents an erosion of one of the clear boundaries established by the Return to Work Act and comes at a significant cost to the scheme. The amendment bill does not operate to address the examples cited by the Hon. John Darley in his second reading speech. In addition, it should be highlighted that the cost of any reversion to the old act must necessarily be either offset against other entitlements to workers provided for in the Return to Work Act or result in a return to higher premiums for employers.

It is worth noting that the Return to Work Act requires a review of the new return-to-work scheme to be undertaken three years after its commencement, at which time issues raised by the Hon. John Darley present an opportunity to be considered. However, having said this, minister Rau has indicated a commitment to consult with unions and to also look at those individual cases referred to him where it is believed that these transitional anomalies have occurred, and attempt to address those anomalies where possible. So, it is for these reasons that the government cannot support this bill.

The PRESIDENT: I would like to welcome little Mitchell to the parliament; it is lovely to see him here.

The Hon. J.A. DARLEY ( 17:51 :29 ): I would like to thank all honourable members for their contributions. As I said during my second reading contribution, this bill is not to give people an opportunity to have a second bite at the pie; it is merely to fix a gap that has been created by the new act and will only affect those who rightfully had a claim to entitlements had it not been for the wording of schedule 9.

I have met with the Attorney-General to see if this issue could be addressed without having to amend the act; however, I understand that the government will not be supporting this bill. I recognise that the Attorney and his office have undertaken to examine the examples that I have provided, which the Hon. Tammy Franks spoke of in her second reading contribution, and gave a commitment to look at other cases I am aware of; however, this relies on people speaking up and approaching me. Not everyone who is affected by this will know to speak out and they will be unfairly disadvantaged.

The Attorney has also indicated that he is willing to consult with the unions on these matters and consider other ways of addressing any anomalies. I applaud this but do not see why this could not have been done while the bill was between houses; however, I am aware that I do not have the numbers. I again thank the Hon. Tammy Franks and her staff for their assistance with this bill and now move that the bill be read a second time.

The council divided on the second reading:

Ayes: 6

Noes: 14

Majority: 8


Brokenshire, R.L.

Darley, J.A. (teller)

Franks, T.A.

Hood, D.G.E.

Parnell, M.C.

Vincent, K.L.




Dawkins, J.S.L.

Gago, G.E. (teller)

Gazzola, J.M.

Hunter, I.K.

Lee, J.S.

Lensink, J.M.A.

Lucas, R.I.

Maher, K.J.

Malinauskas, P.

McLachlan, A.L.

Ngo, T.T.

Ridgway, D.W.

Stephens, T.J.

Wade, S.G.


Second reading thus negatived.

Sitting suspended from 17:57 to 19:46 .

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