Latest review into workers compensation provides OHS clues

Cover of src_act_review_reportThe Australian Government has released its report into a review of its national workers’ compensation scheme, Comcare, and the Safety, Rehabilitation and Compensation (SRC) Act.  Some of the media (and politicians), as it often does, has focused on the seemingly absurd compensation claims.  Few cases have gained the same degree of national and international attention as the sex case for instance, and although most workers’ compensation reports focus on post-incident treatments, there is a glimmer of  hope on occupational health and safety (OHS) in this latest review.

The report, the latest undertaken by Peter Hanks QC, states that one of the guiding principles of the SRC Act should be an acknowledgement that

“The benefit and premium structure should promote incident prevention and reduce risk of loss.” (page 25)

This would be a wonderful benchmark to apply but is likely to be overshadowed by the compensation and rehabilitation issues of the review, unless OHS professionals and practitioners continue to remind regulators that prevention is better than cure.

Peter Hanks admits in a 2012 video interview on his review that injury prevention is not part of the terms of reference but there are elements of his report that require serious consideration by OHS professionals in consultation with their Human Resources (HR) colleagues.

Enforceable Undertakings

The OHS profession has been known to try to enter issues that fit oddly with OHS principles but this latest Hanks review indicates a detailed awareness of OHS and Work Health and Safety (WHS) changes in Australian legislature.  When considering the regulation of  workers’ compensation and rehabilitation programs, Hanks pays close attention to the Productivity Commission reports and the work of Richard Johnstone, in considering the application and effectiveness of enforceable undertakings (page 80).  Enforceable undertakings provide attractive options in rehabilitation practices and, particularly for psychosocial issues, due to their compatibility with restorative justice processes.

Enforceable undertakings on OHS matters still require refinement so that the close outs are clearly defined and verified. The publication of these close outs is almost non-existent so the educative benefit is dubious however there is a basis for an effective regulatory tool of great potential for physical and organisational change and it is heartening to see this being considered in the workers compensation context.

“apparently wasteful” claims and psychosocial issues

Several days after the report’s release, measured commentary is appearing.  In the Canberra Times of April 2 2013, the National Secretary of the Community and Public Sector Union, Nadine Flood, is quoted as saying

“I think it is worthwhile remembering that for every apparently wasteful example there are 10 cases of people being successfully rehabilitated and able to get back to work…”

The article also quotes Hanks on a discussion about psychological injuries

“The increased incidence of psychological injury claims has been attributed to a range of causes, including the increased pressures of work life, employment instability, increases in employee expectations and a more litigious society.  It may be reasonable to suggest that a principal explanation for the increased incidence of psychological injury claims can be found in the increasing demands placed on employees through such mechanisms as efficiency dividends, constant performance evaluation and the restructuring of employment arrangements.  A further explanation may be found in poor management practices, which might be said to reflect a low priority given to preventing or resolving workplace stress.” (page 43, emphasis added)

Sadly Hanks provides no specific Australian research to support this paragraph.  “Poor management practices” is frequently mentioned in discussions on psychosocial issues but rarely are solution options also provided.

Hanks discusses the medical and/or human resources basis for such psychosocial hazards. His reference to possible intervention from Fair Work Australia will prick the ears of some but the option is quickly dismissed.  Hanks’ mention of human resources deserves more public discussion. As the quote above shows Hanks suggests that one of the reasons for the increased incidence of psychological claims is “constant performance evaluation”, an activity that sits firmly in the Human Resources discipline.  It is also common for workers to be “performance managed” out of a job, a nasty process that can only be undertaken with the cooperation of human resource professionals.

Fair and reasonable performance management practices were recurring elements in the Australian Government’s draft Code of Practice for Preventing and Responding to Workplace Bullying released in 2011.

Hanks concludes his discussion on psychosocial issues by saying

“Nor is there any reason to treat psychological injuries differently from physical injuries. Provided that scientific rigour is applied to the diagnosis of psychological injuries, incapacity resulting from those injuries should be compensated in the same way as incapacity resulting from physical injuries.” (page 44)

The challenges within this paragraph include

  • the need for rigorous scientific evaluation of psychological issues – an unavoidable topic for further discussion;
  • the determination of incapacity – a matter that is likley to require case-by-case analysis; and
  • compensating psychological injuries in the same way as physical injuries.

The latter is likely to result in substantial management changes in many companies and should lead to a review of OHS and HR strategies.  OHS professionals and practitioners should not handball psychosocial issues to the HR department without reviewing their own practices and policies to ensure that both types of injuries are similarly covered.

Companies, and OHS professionals, that plan for the continuum of worker health through good job design, healthy workloads, injury prevention and rehabilitation should already be “employers of choice” and should have no demarcation between OHS and HR or injury prevention and post-incident treatment.  These companies are very well-placed to take advantage of the opportunities provided by the OHS and workers compensation changes being introduced by the Australian Government, indeed they should be ahead of these changes and be leading by example.

It is always important for professionals to be aware of developments in disciplines other than their own.  This provides a solid context for their own skills and knowledge and a solid base for innovation and better application of those skills and knowledge.  To build intellectual, and operational, bridges between OHS and HR, it is necessary to read and to try to understand the publications and reports of the “other side”.  The latest Hanks review provides useful insight to workers compensation and rehabilitation challenges, but also clues to changes that may affect OHS management.

Kevin Jones

reservoir, victoria, australia

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