Short-sighted redefinition of worker

In May 2013, Workcover Queensland supported the government’s intention to change the definition of worker to match that of the Australian Taxation Office (ATO).  The definition re-emphasises the significance of the employer/employee relationship.  Workplace health and safety laws through most of Australia have recently changed to remove the reliance on the employer/employee relationship with the intention of clarifying the lines of responsibility for preventing harm.  The diversity between workers’ compensation and OHS definitions unnecessarily complicates the management of a worker’s health through the linear experience of employment.

The government believes such changes will reduce “red tape” but only in the narrow context of workers compensation.  The Work Health and Safety Act expands the definition of worker but another piece of legislation in the same State restricts it.  Inconsistencies of concepts are likely to lead to duplications, confusion and arguments that may generate as much unnecessary business and legal costs as the initiatives were intended to save.

One example of confusion of worker definitions can be found in the licenced brothel industry.  For years the brothel owners and their lobbyists have clung to the ATO definition of worker refusing to acknowledge the broader definition of worker under OHS laws.  Issues, such as safety and worker welfare, are seen as non-monetary and therefore of secondary importance.

There is also a focus on various types of business insurance, of which workers compensation is the most relevant here.  Insurance compensates for injury and does not prevent harm but insurance is an accepted, or unavoidable, business cost.  It can be managed, minimised or, sometimes, manipulated but it “stays on the books” and the accounts.  The cost of workers compensation is not enjoyed but it is understood by business.

Keeping the worker defined by an economic relationship allows a business owner to have their closest professional relationship with their financial officer rather than with operations or, heaven forbid, the safety manager (if they have one).  It allows for some to see workplace injury as an SEP, “someone else’s problem”. That someone else could be the Return-To-Work Coordinator, the Workcover agent, the human resources officer, the part-time paymaster, but most commonly, the worker.

The brothel worker case discussed in an earlier SafetyAtWorkBlog illustrates how a focus on workers compensation, instead of on the harm prevention of OHS, can lead to extended pain and disruption to the worker, legal costs, reputational damage and workers compensation costs.  Most of these business costs can usually be avoided by good safety management and the valuing of workers, what many describe as a business’ most important asset.

By hanging on to an ATO definition of worker because it fits how one wants to manage one’s personnel and ignoring other legal and social obligations is an unsustainable, short-sighted and immoral stance.  The Queensland Government  may think it is helping businesses and reducing red tape by applying the ATO definition of worker to its workers compensation arrangements but it is also encouraging the business sector to look at managing an incident instead of managing a hazard.  It weakens the authority (such as it is) of the recently introduced Work Health and Safety laws.

Kevin Jones

reservoir, victoria, australia

3 thoughts on “Short-sighted redefinition of worker”

  1. Graham Dent has agreed for me to upload his comment from a LinkedIn discussion forum:

    Kevin, perhaps it is OHS / WHS which has \”muddied the water\” by moving from the definition of \”employee\” to the definition of \”worker\”.

    I have no problem with the different scope of the definitions because the OHS/WHS Acts and Workers Compensation laws have always had very different purposes.

    It is entirely appropriate (in my view) for a business to have a duty of care for the impact of its activities on workers (which extends to employees, contractors, students, labour hire etc and indeed to \”other persons\”) but I think most would agree that having obligations to provide workers compensation insurance (as opposed to public liability) should be a far more limited one.

    You say \”The diversity between workers’ compensation and OHS definitions unnecessarily complicates the management of a worker’s health through the linear experience of employment.\”

    Are you suggesting that a PCBU should be obliged to obtain workers compensation insurance for genuine contractors, labour hire employees and others in the extended definition?

    Doing so would lead to complexity through overlapping obligations and totally alter the economics of the way many businesses are structured – based not on the avoidance of obligations – but core business / highs and lows in work demand / expertise / specialist equipment etc.

    The confusion you speak of exists under current WC laws, not only under the amended laws in Qld. In short I do not agree that the definitions under OHS/WHS and Workers Comp should be aligned.

    Have I misunderstood your position?

    Cheers, Graham

  2. Previously, WorkCover Queensland purportedly assessed the definition of a worker, using the criteria of the Taxation Department, in conjunction with the Workers Compensation and Rehabilitation Act 2003. However, their own interpretation of the act, Schedule 2, Part One, depends on their own personal view. In addition, having had many encounters with WorkCover over classifying who and who is not a worker, the outcome is not cut and dried.
    There are major problems with relation to how contractors are used in the construction industry with WorkCover Queensland tending in most cases to classify them as workers, even though they provide their own vehicles and tools et cetera et cetera. WorkCover tends to interpret the fact that they are paid by the meter of guttering, or brick as being pieceworkers of all things as building materials are usually supplied by the main contractor, therefore, not by the subcontractor.
    In addition, I’ve seen WorkCover Queensland classify a subcontractor as an employee because he was wearing a reflective shirt with the company logo (advertising), as it was supplied at no cost, therefore, it must be a supplied uniform.
    In addition, WorkCover Queensland also have an additional checklist, which cannot be divulged and connects with the checklist use by the taxation Department.
    My take, is that the decisions are basically political, taking into account the executive appointed by the previous Bligh government, most of whom are still present

  3. Hi Kevin,
    I agree with your article but I beleive it is worthwhile to clarify that there is a difference in focus between the WHS legislation, the Workers Compensation legislation and the Taxation legislation, and hence it is not unreasonable to see differing definitions for essentially same or similar \’persons\’.

    WHS is focussed on ALL people doing work on behalf of the \’PCBU\’ and it is about managing risk with a view to preventing injury to ANYONE doing work, or anyone affected by that work, . It INCLUDES employees, volunteers, contractors and members of the public. Hence it covers both [employer/employee] and [employer/other persons] relationships.

    Workers compensation is focussed soley on those people who are employees of the \’PCBU\’ whose capacity to earn a living is adversely affected by injury or ill health caused in relation to the work of the \’PCBU\’. Hence it covers ONLY [employer/employee] relationships. This DOES NOT INCLUDE volunteers or \’contractors\’ who are not covered by an employer\’s workers compensation insurance but these other persons may be able to seek damages or recompense through other insurances.

    Taxation legislation is focussed on government obtaining income from a variety of sources and includes taxation on monies paid to employees through \’payroll\’. The significance of defining the \’worker\’ here [employer/employee focus] is about making sure responsibility for paying the appropriate taxes to government are clearly allocated.

    With these differing focii it is not unreasonable to have differing definitions for the people that the relevant act is aimed at.
    Maybe we would be better served if they used a different term in each case, but at the root there is an [employer/employee relationship] and similarly but separately there is an [organisation/other persons] relationship. These need to be seen as distinct because they are treated differently in the various contexts.

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