Guide to Workers Compensation Act 1998

INFORMATION FOR
WORKERS ON

THE WORKPLACE INJURY MANAGEMENT & WORKERS
COMPENSATION ACT
1998

FOCUS ON INJURY MANAGEMENT AND
EARLY RETURN TO WORK

BACKGROUND INFORMATION

The workers compensation and occupational health and safety climate in NSW has substantially changed. The workers compensation system is moving from a publicly underwritten and managed fund to a "file and write system" similar to that in the Motor Traffic Accidents Scheme. This was a recommendation of Richard Grellman in his report titled Inquiry into the NSW Workers Compensation System released in September, 1997.

The Grellman report which was commissioned by the Government as a result of the underlying fund deficit of $800 million also recommended establishing a Workers Compensation Advisory Council.

The NSW Government established an Interim Workers Compensation Advisory Council in November, 1997. This interim Council was comprised of an equal number of employers and chaired by the General Manager of WorkCover NSW. In addition, the Employee Representatives on the Council were Peter Sams, Labor Council of NSW; Steve Hutchins, TWU; Sam Moait, NSW Nurses; Andrew Ferguson, CFMEU; Ian West, LHMU (Miscellaneous Division); and Kirsty Campbell, FSU. Other representatives on the Council were from the Insurance Industry (including their actuary), the AMA and Law Society.

The Advisory Council was given the task of:

· Reviewing the recommendations within the Grellman report and advising the Government accordingly
· Recommending reforms to the current Workers Compensation Scheme
The Interim Advisory Council designed a new Scheme and the major focus is on injury management and early return to work. Unions were very critical of the current workers compensation scheme because:

(1) its inability to adequately return injured workers back into the workplace
(2) the complete lack of focus by employers to manage and prevent workplace accidents and injuries

Therefore these were the major objectives for unions in the design of the new Scheme and this is proper injury management and preventative strategies. This is reflected throughout the new Act in the administration structure which provides for greater stakeholder involvement and control of the decision making process, also in its title.

The new Act is titled Workplace Injury Management and Workers Compensation Act 1998.

The new scheme primarily focuses on early intervention and will facilitate injury management and return to work by placing mandatory provisions on employers to provide suitable duties/employment. The Advisory Council is hopeful that this will also drive prevention as a primary focus, and that emphasis will be placed on the reduction of accidents and injuries. Insurers will have the ability to use risk management as a mechanism for determining premium rates. Therefore employers who do not have adequate injury management or safety systems in place will be charged higher premiums by insurers. It will be a similar to other insurance polices where the policy holder has to provided relevant information to the insurer regarding the implementation of certain preventative measures for example installing fire and security alarms.

In addition the new scheme will include the following legislative provisions:

· Early notification by employer of injuries, ie within 48 hours
· Insurers to facilitate rehabilitation, prior to liability being determined
· Costs of injury management to be met prior to acceptance of liability
· Exit provisions
· Job subsidy schemes
· Employers fined for not providing suitable employment
· Incentives through premium structure on good performing employers
· Incentives for small employers to provide suitable work through second injury scheme
· Enhanced conciliation
· Automatic exchange of information between parties in conciliation
· Legal representation at all levels of dispute resolution
· Weekly benefit structure to be maintained
· Transfer of risk to insurance companies

STAKEHOLDER OWNERSHIP

The new scheme provides the primary stakeholders, that is employers and employees, with total control of the decision making process. This will be achieved through the establishment of a permanent Workers' Compensation Advisory Council - Occupational Health & Safety Council and Industry Reference Groups (which will be mini OH&S and Workers. Compensation bodies).
NEW AND MORE PROACTIVE ROLE FOR UNIONS

The Workers Compensation Advisory Council will be working very closely with the OHS Council. The intention is that the Workers Compensation Advisory Council will not usurp the OHS Council's role but will refer OHS matters to it for its consideration and recommendation.

More importantly, to support the structure of the Advisory Council, there will be a number of Advisory Council sub-groups known as Industry Reference Groups. These groups will have equal employer and employee representation and will liaise with the OHS Council and, more importantly, will provide important advice to the Advisory Council on matters related to their industry on:

· Workers Compensation
· Return to Work strategies
· Preventative strategies

The Labor Council and its affiliates have been extensively involved in recommending to the Advisory Council the proposed industry reference group structure. Labor Council's final submission has been forwarded to the Advisory Council. A copy of the final proposal is attached as Appendix B.

The recommended groups are:

· Rural· Construction· Mining· Transport and Storage · Health and Community Services · Wholesale · Retail · Consumer Services· Business Services· Government Administration· Education· Emergency Services· Light Manufacturing· Industrial Manufacturing

TRANSFER OF RISK TO INSURERS

The Advisory Council supported the move to transfer the risk from the Government to the Insurers. Under the file and write system there will be scope for the insurers to change the premium calculation formula to be more reflective of the risks within an industry and, in particular, target poor performing employers within that industry group. Insurers will be able to discount premiums for good performing employers. However, they will also have the ability to increase the premium for poor performing employers.

The Insurers will require all employers, as a prerequisite for underwriting a workers compensation policy, to have in place a systematic approach for managing risks and injuries. This will be regardless of the employer's size. The Insurers therefore will be working very closely with the Industry Reference groups to ensure poor OHS performance is targeted.

WORKERS COMPENSATION ADVISORY COUNCIL

The new Act will allow for a fundamental reform of administration of the scheme by providing the following:

(1) The Workers Compensation Advisory Council with extensive powers and will comprise of:

· 10 voting members - 5 employer (nominated by Labor Council) and 5 employee;
· General Manager of WorkCover
· Insurers (non voting)
· Rating Bureau Actual (non voting)
· AMA & The Law Society

(2) The functions of the Workers Compensation Advisory Council are as follows:

· Provide direction to WorkCover regarding policy issues
· Be responsible for the formulations of recommendations to the Minister
· Undertake consultation regarding current or proposed legislation relating to any scheme it thinks fit
· Monitor and report to the Minister on the operation and effectiveness of any such legislation
· Monitor and review key indicators of financial viability and other aspects of any such schemes

(3) It is envisaged that the Industry Reference Groups will provide this assistance and strategic planning by:

· Developing model safety management systems (injury prevention)
· Developing model injury management systems (return to work)
· Developing audit protocol strategies for industry
· Conducting research into industry specific hazards and focus on developing new designs to eliminate hazards. (Sweden and Norway, whilst focusing on safety management systems, are more importantly, funding research into new designs

(4) The Industry Reference Groups will be responsible for:

· Liaising with WorkCover on preventative strategies
· Providing education on injury management and prevention to their industry
· Producing practical guidance material for industry
· Monitor compliance with workers compensation compliance wage declaration strategies and provide assistance to employers and unions regarding injury management and prevention
· Provide advice to employers regarding OHS and Workers Compensation
· Conduct seminars and briefings for the industry ie: industry specific on all aspects of the workers compensation and OHS schemes
· Target poor industry performance in OHS, workers compensation and rehabilitation compliance
· Prioritise preventative strategies ie: coding statistics/guidance notes, return to work committees
· Establish a bank of return to work positions
· Establish return to work industry based committees based on the Grellman model
· Establish an appeals mechanism re premium calculations

WORKCOVER'S NEW ROLE - THE ENFORCER AND REGULATOR

WorkCover's role will be redefined. WorkCover's' primary responsibilities are as follows:

· Managing the Scheme Operations
· Providing Advice and Support to Workers' Compensation Advisory Council
· Report to Minister on matters relevant to its operation
· Ensure Compliance with OHS and Workers Compensation Acts and Regulations
· Provide an Advisory Service to Workers and Industry on all aspects of OHS and Workers' Compensation
· Provide Funds for Injury Prevention
· Collect, Analyse and Publish Statistics
· Provide relevant data to the Workers' Compensation Advisory Council and the Occupational Health and Safety Council and the Industry Reference Groups

For further information

Contact	:	OHS & Workers Compensation Officer - Mary Yaager
Phone	:	(02) 9264 1691
Email	:	m.yaager@labor.net.au
WWW	:	http://ohs.labor.net.au/ohsnet/news/

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