Category: government

Flawed basis for OHS decision-making

Most strategic plans made by OHS regulators in Australia are based on workers’ compensation statistics.  Everyone agrees that this is a huge underestimation of the work-related injury and illness rates but no one yet has tackled this information deficiency.

Australia’s OHS harmonisation might attempt this but it will not be until the government harmonises the States’ workers’ compensation system that Australians can have unified and consistent statistics.  Yet even then, the reliance on workers’ compensation data will continue to understate the significance of work-related injuries on the community.

The Australian inaction contrasts to activity undertaken in the United States by the Government Audit Office (GAO).  An October 2009 report by the GAO, released online on 16 November and discussed in blogs and one US newspaper, shows the state of OHS statistical play in the US through its audit of the operations of the Department of Labor’s Occupational Safety and Health Administration.

  • OSHA only audits 250 of the 130,000 high hazard worksites each year.
  • All of the data available is provided by employers.  Workers are not interviewed.
  • If the worker has left the company’s employment, they are unable to be interviewed.
  • “OSHA also does not review the accuracy of injury and illness records for worksites in eight high hazard industries because it has not updated the industry codes used to identify these industries since 2002. “
  • Statistics supplied to the Bureau of Labor Statistics by employers are not verified. (BLS is not required to do this)
  • The GAO identified disincentives on both employers and employees for reporting illnesses and injuries – potential job loss, fear of increasing workers’ compensation premiums or losing out on work contracts.
  • The disincentives may lead to a reduced medical treatment so as to avoid injury reporting and the issues associated with the reporting. (A third of health practitioners interviewed admitted to being pressured about workplace injuries)

On this last point, those OHS professionals who advocate safety incentive schemes may wish to consider the graphic below

Pressure From Workers to Downplay Injuries and Illnesses and Awareness of Incentive Programs

Of the 47% who said they were pressured to downplay injuries and illnesses, over 60% were from workplace s that had incentive programs.  This is a serious statistic that incentive advocates must address in their programs.

Australia has tried to gain greater accuracy to OHS data over many years.  The (then) National OHS Commission published several very useful statistical reports into various industries but they could not provide an easily understood national picture because of State variations on reporting criteria.  Australia is much less complex than the US and the task of achieving better OHS statistics should be easier, as long as there is the political will.

The importance of accurate statistics in decision-making at the policy level as well as that at individual workplaces cannot be overstated.  The GAO report summarises the significance in its report.

“Accurate injury and illness records are important because they assist Congress, researchers, OSHA, BLS, and other agencies in describing the nature and extent of occupational safety and health problems.  These records are also vital to helping employers and workers identify and correct safety and health problems in the workplace.  In addition, these records help OSHA evaluate programs, allocate resources, and set and enforce safety and health standards.  Without accurate records, employers engaged in hazardous activities can avoid inspections because OSHA bases many of its safety inspections on work-related injury and illness rates.”

Kevin Jones

My thanks to Workplace Professor Blog for bringing the report to our attention.

Global OHS statistics and trends

It is very easy to forget that workplace health and safety is a global issue.  The pressures of work and the daily OHS issues can constrict our perspective for so long that we are surprised when we are reminded that people work everywhere and are therefore in danger in some way.

An article (citation below) from the  Scandinavian Journal of Work, Environment & Health released online on 12 November 2009 is just one of those reminders that we need every so often.  The article is called “The global and European work environment – numbers, trends, and strategies” and says

“We have estimated that globally there are 2.3 million deaths annually for reasons attributed to work.”

For the statistics junkies, the article goes on to report that 1.95 million of the annual deaths are due to illness and

“The average rate of disability and absence from work can be some 25% of the workforce in Europe.”

“The biggest causes of work-related illness in Europe are musculoskeletal diseases and psychosocial disorders (mental health)….”

“Work-related stress….affect(ed) an estimated 22% of EU workers in 2005…”

By looking at a variety of statistical records, the authors conclude that

“In the present political situation and serious economic downturn, legal measures need to be supplemented with economic justification and convincing arguments to reduce corner-cutting and avoid long-term disabilities, premature retirement, and corporate closures due to a poor work environment.”

The relationship between fatalities and other outcomes of work injuries and illnesses

The researchers advocate an integrated approach to managing safety in a workplace and list a “toolbox” of suggested areas.  Many of these are already in place in many management systems.

This sort of global data is not going to change the management or operational practices in individual workplaces.  That change will mostly come in response to site-specific events or initiatives.  Governments need to know these statistics and trends so that they may plan strategic programs or structure their legislation but it is equally important for citizens and OHS professionals to be aware of this data for it is the citizens who hold governments accountable.

Kevin Jones

Takala J, Urrutia M, Hämäläinen P, Saarela KL. The global and European work environment – numbers, trends, and strategies. SJWEH Suppl. 2009;(7):15–23.

The “suitably qualified” challenge on OHS

A quick survey of some of the public submissions on the development of Australia’s model OHS Act illustrates the challenges facing the government after it decided not to include a requirement for only people who are “suitably qualified” in OHS to provide advice to business on workplace safety.

Organisations across the political spectrum have spoken in favour of including “suitably qualified” but “suitably qualified” is in the eye of the beholder.  Several labour and trade union organisations believe that health and safety representatives (HSRs) are “suitably qualified” or “suitable qualified” people should assist HSRs in their work.

The Queensland Council of Unions says

“The WRMC [Workplace Relations Ministers Council] committed itself to a Model Act of the highest possible standards. In order to achieve this, the appointment of suitably qualified persons based on the Queensland model should be reconsidered and the recommendations of the Review implemented.”

Queensland’s OHS legislation had a system of Workplace Health and Safety Officers who were required by every company that had over 30 employees.

The Australian Council of Trade Unions said a PCBU [person conducting a business or undertaking] should

“…employ or engage persons who are suitably qualified in relation to occupational health and safety to provide advice to the PCBU concerning the health and safety of workers of the PCBU.”

The Australasian Meat Industry Employees Union says there should be an “employer obligation to engage a suitably qualified person to assist in H&S”.

Others see “suitably qualified” as a criterion that limits who would qualify for an OHS Entry Permit and what their powers can be.  Wesfarmers Industrial Safety wrote:

“We contend that OHS Permit Holders must be competent to provide OHS advice and must provide a valid reason to justify entry, the only valid entry criteria being to assist the resolution of a reasonably suspected, specified contravention of the Health and Safety Act.   To be effective they must comply with and support site/organisational procedures to enhance site health and safety outcomes and must not intentionally and unreasonably hinder or obstruct any business/undertaking or intentionally intimidate or threaten any business/undertaking or employee.

Suitably qualified in this context must also contemplate that they must not disclose information obtained in accordance with the OHS permit for any purpose other than to assist the resolution of the suspected contravention and must not take copies of documents: if serious concerns exist the Regulator can be requested to attend the site, they will request copies of relevant documents if required.

Additionally, the OHS permit holder and any organisation they represent must be held accountable for the actions taken by the OHS Permit holder.”

There are several challenges for the Australian Government on this issue of “suitably qualified”.  Firstly, it needs to decide whether it can reverse its decision not to include a “suitably qualified” element into the legislation.  To do this it would need to acknowledge that the reasons for exclusion do not match the sensitivities of the community.  This could be embarrassing but also indicate a flexibility and capacity to respond to community concerns.

The government also needs to determine where “suitably qualified” fits.  Should and HSR be suitably qualified or should this only reflect the OHS professionals?  In both cases it puts the governmental up against the commercial training organisations and the university educators (the OHS professional associations have far less clout).

Some academics see the lack of the inclusion of “suitably qualified” as providing a lower level of workplace safety.  Many of these submissions see “suitably qualified” as existing well above the level of HSRs to the professional level.

Professor Mike Capra of the University of Queensland, and other tertiary educators made the following plea:

“We the undersigned Professors of Occupational Health and Safety strongly recommend that the words “suitably qualified”* be inserted as appropriate in the model legislation in relation to the acquisition of advice regarding the health and safety of workers.

Our recommendation is based on the continuing high cost to the community in dollar terms and human suffering in relation to both work place (sic) injury and workplace induced illness which often has long latency and serious medical consequences.

Addressing such serious issues requires properly qualified professionals. The professional practice of OHS management requires skilled professionals with a sound foundation in the physical and health sciences as well as a strong knowledge base in the core OHS areas of health, safety, ergonomics, law, hygiene and toxicology and OHS management systems.

The universities across the country are offering professional entry programs at undergraduate and post graduate levels that are developing the OHS workforce. To sustain this workforce and ensure continued reduction in the societal cost of workplace injury, illness and death there must be recognition of the professional basis of OHS practice and it is imperative that this recognition is reflected in the harmonised legislation.

* Suitably qualified to be determined, as in other professions, by the relevant professional association and industry standards.”

Mike is very committed to improving health and safety of the Australian workforce and it is clear that the moral imperative is king.  But it must also be noted that education thrives on the recognition of qualifications and a legislative requirement for suitably qualified OHS professionals would strengthen the case for the viability of tertiary OHS courses which, according to some sources, are in a perilous state.

One submission questioned the sense or practicality of having an HSR trained in safety beyond the skills of the PCBU.  Shaw Idea wrote

“….the Model Act should require PCBUs to obtain advice from suitably qualified advisers. It is inconsistent to require HSRs to be trained, but not require PCBUs to either be trained or be advised by those with competence in relevant areas. The OHS consequences of incompetent or ill-informed actions by employers are far greater than the consequences of HSR actions.”

The OHS training industry has done themselves a disservice for decades by not having a formal OHS management course for safety or business managers.  There is a big difference between training an HSR to manage upward to the employer and training a manager to manage the safety of a workforce.  Leaving executive training to the tertiary sector has exposed a large vocational hole in business management of workplace safety.

It must also be stated that the editor of SafetyAtWorkBlog also made a submission to the Australian Government in which “suitably qualified” was discussed.  Below is the relevant section:

“Many safety professionals are concerned that “suitably qualified” has been omitted for the proposed legislation.  I think the reason given for its omission is poor but I do not support those who advocate the inclusion of the concept.  The push has been particularly strong from Victoria and through a couple of OHS professional associations.  No evidence has been made publicly available for the need for such a concept.  It is something Victoria has had and it is loathe (sic) to relinquish. Good OHS advice is available from good OHS advisers and caveat emptor should apply on OHS advice as with any other.

The “suitably qualified” advocates like to compare themselves to other professions like medicine yet it is recommended even from within the medical profession that second opinions be sought.  The safety profession does not advocate this very sensible suggestion.”

Kevin Jones

PCBUs have begun appearing

A reader has drawn SafetyAtWorkBlog’s attention to one State regulator in Australia who has already begun to apply the broader definition for “employer” in their OHS guidance material.

In September 2009, the ACT Safety Commissioner published a Guidance on “Safe Structures, Systems and Workplaces“.  In that guidance, the Commissioner refers to

…”New general duties to ensure work safety by managing risk apply to a person:

…carrying on a business or undertaking;…”

This anticipates the definition put forward in Australia’s OHS model Act in relation to PCBUs (Peek-A-Boos).

The matter of a “business or undertaker” was also used in the ACT’s Work Safety Act 2008 (effective from 1 October 2009) throughout the document but with slight variation.  Of most interest here are the definitions of employer, worker and “business or undertaking”:

“employer, of a worker, includes a person who engages the worker to carry out work in the person’s business or undertaking.”

“worker means an individual who carries out work in relation to a business or undertaking, whether for reward or otherwise, under an arrangement with the person conducting the business or undertaking.”

“business or undertaking includes—

(a) a not-for-profit business; and

(b) an activity conducted by a local, state or territory government.”

The logic of such an inclusive term is understandable but needs greater clarity which is likely to some from regulations or supportive documents.

Having a Peek-A-Boo is one thing, let’s just hope that the jargon does not develop to start referring to “undertakers”.

Kevin Jones

Justice in workers’ compensation reforms

A South Australian colleague has pointed out some interesting elements in WorkCover SA’s review of employer incentives discussed earlier.

The following text are some of the aims of South Australia’s Workers Compensation and Rehabilitation Act.

(1) The objects of this Act are—

(a) to establish a workers rehabilitation and compensation scheme—

(i) that achieves a reasonable balance between the interests of employers and the interests of workers

(iv) that reduces the overall social and economic cost to the community of employment-related disabilities

(2) A person exercising judicial, quasi-judicial or administrative powers must interpret this Act in the light of its objects without bias towards the interests of employers on the one hand, or workers on the other.

My colleague points out that a review of employer incentives is well and good but what are the incentives for employees, given the objects of the Act concerning balance and bias?

She also criticises

“…the current incentive for employers of paying the first two weeks of the injured workers income payments if the employer supplies the claim agent with the employer section of the injury/incident report goes against the intent as outlined in Objects of the Act, as there is not any corresponding incentive offered to the injured worker.”

Whether the injury report is valid or useful is irrelevant to the incentive as it is the lodgment of the form that generates the incentive rather than any rehabilitation action for the injured worker.

There is no doubt that the workers compensation scheme needed a review.  The recent Return-To-Work (RTW) conference in Adelaide had an atmosphere of hope after the introduction of the RTW coordinator requirements for businesses.

South Australia is different from most other Australian States where a single company handles workers compensation insurance, Employers Mutual.  Not only is there a huge lack of competition in South Australia but the government and the insurer are close.

There is also a political element with Paul Caica being given the portfolio in order to fix it.  In June 2009, the Minister announced a range of projects from a fair pool of funds but many of them are focused on the workers rather than providing structural change to the system.  It is hard not to speculate how workers may benefit if the insurance industry in the State had competition.

The need for reform was clear as the South Australian workers’ compensation scheme was bleeding money but it must have been politically attractive to try to postpone an analysis of the system until the Federal Government started its national review of workers’ compensation system in a few years’ time.  It may have been that such a strategy was planned until the global financial crisis changed the public’s tolerance for government debt forcing the SA government had to act.

Kevin Jones

Fixing what is broken

WorkCover in South Australia has released a discussion paper for public comment on 9 November 2009.  The paper is called “Consultation on a new framework for employer incentives” and poses the following questions:

  • Do you think there should be any financial incentives for employers in relation to workers rehabilitation and compensation?
  • What do you think about the proposed design principles?
  • Do you have any specific ideas for employer incentives that encourage return to work?

cover Employer incentivesThis discussion paper is part of the review process by the WorkCover Corporation and should be supported.  Public comments close on 18 December 2009.

The paper itself has some points of considerable interest.  The existing incentive scheme is called a Bonus/Penalty Scheme which has existed for almost 20 years.  PricewaterhouseCoopers undertook a review and below are the findings, according to WorkCover:

“WorkCover has been working with PricewaterhouseCoopers (PWC) to gain a better understanding of the effectiveness of the Bonus/Penalty Scheme in South Australia.  Only very weak links were found between the Bonus/Penalty rate and claim outcomes.  No evidence was found to suggest that the Bonus/Penalty Scheme has delivered better health and safety outcomes for workers in South Australia.”

That last sentence seems to be a phenomenally honest statement about a scheme that has existed since 1990, been so persistent and continues to be so popular with employers.  Such forthrightness from a government authority about one of its own programs is rare.

At some point in the past there may have been some logic in the scheme as similar elements existed under the WorkCare scheme in Victoria many years ago.  But since the preventative arm, Safe Work SA, split from WorkCover around 2005, the incentive scheme has not sat comfortably with the government’s RTW focus.

The discussion paper goes on to state:

“WorkCover has not seen much evidence that the Bonus/Penalty Scheme has either reduced injury rates or made workplaces safer.  If anything it appears to have had some adverse side-effects, such as encouraging stakeholders to focus excessively on claim costs, the claim costs ‘window’ and coding, instead of return to work.”

Regardless of pointing out the difference between “no evidence” and “much evidence”, WorkCover’s comments illustrate a reality that OHS and RTW professionals have been wrestling with for years, companies have been encouraged to focus on financial cost of Return-To-Work rather than on the injured worker.

As part of WorkCover’s analysis of the existing incentive scheme, it undertook a literature review on experience ratings systems and found the following

“There were some noteworthy findings about experience rating systems, for example:

  • there is no clear consensus that they have reduced injury rates or made workplaces safer;
  • they have created perverse motivations, for example to suppress claims, dispute the coding of claims, or only focus on reducing claims within the ‘experience window’;
  • they may reduce claim numbers but not average claim costs, and average claim severity tends to increase – this is further evidence that the reporting of small claims is sometimes ‘suppressed’; and
  • there is no obvious link between experience rating bonuses/penalties and an employer’s commitment to safety and return to work.”

The Productivity Commission in 2004 (as discussed in Alan Clayton’s workers compensation review for the Tasmanian Government) recommended experience ratings for large employers as a contributor to the full funding of workers compensation schemes. ( p.44)  It is strongly suggested that those wanting to comment on this South Australian WorkCover paper should closely look at the recent changes to workers’ compensation made by the Tasmanian Government.

But it is not all gloom and doom as WorkCover SA has set the parameters for the next scheme.  In the discussion paper, they list 11 proposed design principles for consideration:

  • Focus on return to work
  • Be affordable and sustainable
  • Have a direct and substantial effect
  • Target the right employers
  • Tailor to specific employer groups
  • Loss matters
  • Be simple to explain and run
  • Use a mix of solutions
  • Capitalise on the tools and resources we already have
  • Be transparent
  • Use an evidence-based approach

In anticipation of the Federal Government’s plans to harmonise workers compensation once OHS is out of the way, such discussion papers, reviews and, more importantly, the public submissions, may provide some clues to how Australia workers compensation and RTW programs may look in ten years time.

Kevin Jones

Gas leaks at Esso’s Longford plant

WorkSafe Victoria is investigating two gas leaks that occurred on 6 November 2009 at the Longford gas plant owned by Esso.  This plant was subject to a fatal explosion in 1998 and was recently written about on SafetyAtWorkBlog.

According to an ABC news report on 11 November 2009, repairing one leak led to a consequent leak and a “plant operator suffered minor injuries when he fell during the incident.”

A WorkSafe Victoria spokesperson told SafetyAtWorkBlog that inspectors have been on site for several days, the area of the incident is still not operational and that any restitution work in the area will need WorkSafe’s approval.

Kevin Jones

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