insurance – Page 17 – SafetyAtWorkBlog

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

Australia’s employers’ thoughts on OHS law

The public submission period for commenting on the Australia’s OHS model laws has closed and the submissions are gradually being made available on the Safe Work Australia website.

At the time of writing there are around 15 submissions listed and Safe Work Australia has indicated that there are many more that are being sifted through at the moment.

Each submission had the option for the comments to be confidential. Confidential submitters told SafetyAtWorkBlog that one reason for confidentiality was so that their comments did not reflect on their current employer. This is understandable but also adds an allure to the submission. It will be interesting to note which of the large associations apply confidentiality to their submissions.

One employer association who is “loud and proud” of their submission is the Australian Chamber of Commerce and Industry. The ACCI submission is currently available only from its website. Below is what the ACCI’s Director of Workplace Policy, David Gregory, says in a media statement that accompanied the release of the submission

“…[Gregory ] has rejected union claims that business groups are pushing for changes that would reduce health and safety rights for workers.

ACCI also urged Australia’s governments to work towards a truly uniform national OHS system with respect to the approach by OHS inspectors, regulators and the courts.”

“Employers want a model Act that delivers both improved workplace safety outcomes and an effective legislative framework that will encourage employers and workers to be proactive and collaborative in improving the safety of their workplaces. Unnecessary prescription will ultimately serve only to distract and discourage both employers and employees from delivering safer workplaces. ACCI has provided some positive suggestions in its submission that should be adopted to improve the operation of the Act.”

ACCI has strongly backed the reinstatement of a definition of ‘due diligence’ in the model Act, as the absence of a definition will mean that company officers will be unclear about their duty and how compliance may be achieved.

Employers have also identified a number of aspects of the model OHS Act which are open to potential misuse such as union right of entry, persons assisting health and safety representatives, and procedures for establishing multi-employer workgroups, which require redrafting to ensure that they are fair and balanced and do not undermine the safety objectives of the Act.

ACCI in its submission advocates that the maximum penalty for a corporation under the Act should be set at the current Australian maximum of $1.65 million, arguing that the proposed $3 million maximum will simply fuel a litigious and compliance-based approach to OHS.

Gregory’s first point addresses ideology more than anything else. The trade union movement will always be suspicious and uncomfortable with any organisation that is willing to put productivity before safety. The introduction of the ACCI submission makes it clear that the focus of the submission is not on improving safety but on improving the management of safety, two very different OHS approaches.

Recently a new book from Federation Press, “Work and Strife in Paradise“, a history of labour in Queensland illustrated how industrial harmony existed in that state for decades prior to the introduction of Robens-style legislation. For a long time unions and employer groups knew where they stood ideologically and therefore could anticipate responses and could negotiate from stable philosophical platforms. The industrial relations changes from the 1960s onwards complicated negotiations which did have some impact on OHS in that State.

[For the first time, to SafetyAtWorkBlog’s knowledge, a chapter is included in a labour relations book on research into employer associations.]

One would have to expect a definition of “due diligence” to be included in the upcoming OHS Act is the employers are in favour of this. The consensus in many OHS seminars is that such a definition is required.

The concerns over union rights is a hoary chestnut that has not been seen as a problem in Victoria where many of the suggested legislative features have originated.

The issue of penalties is a little hollow. Many corporate executives are covered by Directors’ & Officers’ Liability insurance as much as is possible. And fines do not generate litigation. The neglect of obligations and duties lead to prosecution and then penalties.

The ACCI submission states more clearly that

“…OHS breaches should generally be subject to civil rather than criminal penalties. Such an approach should be taken for the entire model OHS Act and not just selectively applied to aspects such as breaches in relation to union right of entry.”

It would interesting to know what ACCI’s position is on non-financial penalty options.

The impression obtained from the ACCI statement and submission is that they were principally intended for the audience of the ACCI membership. ACCI has a seat at the Safe Work Australia Council discussion table through its representative Annette Bellamy. It is suggested that it is here where the conservative and capitalist arguments on OHS laws will be put.

Kevin Jones

HWCA could be influential in Australia’s workers’ compensation reforms

Australia and New Zealand have a small strategic organisation called the Heads of Workers’ Compensation Authorities (HWCA, pronounced “howca” by those in the know). It is a regular meeting (some say “love-in”, others say “coven”) of the CEOs of the various workers’ compensation bodies in Australia and New Zealand. Over the next five years, as the Australian Government begins to harmonise/reform the workers’ compensation system, HWCA will be important to watch.

In early October 2009, HWCA met and endorsed a coordination strategy, that has yet to be publicly released. The main objectives of the strategy were noted in a media release (also not yet publicly available) to mark the latest meeting.

“To deliver best practice services to injured workers and employers to assist recovery: and

to build sustainable workers’ compensation schemes.”

The terminology of the first objective may provide a good indication of the type of organisation HWCA seems to be. “Best practice services”??? “Best practice” is one of the worst corporate jargons being used at the moment. This article at Wikipedia outlines the context of the phrase well.

“As the term has become more popular, some organizations have begun using the term “best practices” to refer to what are in fact merely ‘rules’….”

In other words, HWCA has a strategy to do what its member organisations should have been doing all along – enforcing the rules of good customer service and providing the best level of service to injured workers.

Perhaps it is the second strategic objective that best illustrates the aims of HWCA – to make sure that the workers’ compensation schemes do not lose money.

According to the communique that is released after every meeting (top points for open communication)

“HWCA agreed the Bio-psychosocial Rehabilitation Working Group would develop a national action plan regarding prevention of long-term disability and work loss, which will support the strategy.”

Prevention is the role of the OHS authorities in Australia and the Department of Labour in New Zealand. Clearly HWCA will be discussing these strategic aims with those in charge of preventing injuries and illnesses. But can the various WorkCovers and WorkSafes cope with biopsychosocial hazards? Surely HWCA will also be talking with all the NGOs who lobby on depression, anxiety, fatigue, stress, wellness, happiness ………….. (Get ready for even more influence for BeyondBlue)

Consultation will also be needed with the various government departments involved with health promotion, public and occupational. Not to mention the unions, employer associations and health professional bodies.

A strategy of such magnitude would require considerable resources and horse-trading through government ranks in all jurisdictions. It is hard to see this being achieved through a meeting of Chief Executive Officers, and should such a strategy be pushed through individual workers’ compensation bodies anyway?

To achieve true reform of workers’ compensation and to resist the substantial pressure that is likely to come from the Australian and international insurance companies, the Australian government is going to need considerable negotiating skills. Because of the involvement with the financially influential insurance companies, it is doubtful the intended reforms will be achieved. (HWCA already has discussions with the “Heads of Compulsory Third Party Insurers” according to the communique)

Almost as a post-script, it is noted that Greg Tweedly, CEO of WorkSafe Victoria, takes over the chairmanship of HWCA from the CEO of WorkCover NSW, Jon Blackwell. Tweedly is a very busy CEO and will become more so, if the rumour proves true that he will be joining the National Board of the Safety Institute of Australia.

As the chairmanship moves from New South Wales, so will HWCA’s administrative support. The next HWCA meeting is scheduled for 5 February 2010 and will be coordinated through the Victorian Workcover Authority or Comcare.

Kevin Jones

Prophet and Loss – review

I bought tickets to the Jane Woollard play Prophet & Loss in almost total ignorance of the play and, as a result, sat in the old church on a cold Winter’s night wondering what I was in for. The program was detailed but I hadn’t time to read it. I knew the play was about issues related to workplace death. That’s the “loss”. The “prophet” was Isaiah and that was the element that I could not understand without later reflection.

However, finding out about Isaiah could wait till we got home and then we could research a further dimension to what we saw. The stories that told of the impact of workplace fatalities on families and workmates were compelling although a couple were familiar to me. They told of bureaucratic confusion, the disinterest of insurance company call centre staff, the psychological legacy of a traumatic death and the inability to understand the survivor experience without having experienced it firsthand.

The venue was small but high and so the actors were close and the pain and grief was well presented. All of the actors were very good even though I was sure I had seen one of them before somewhere. It wasn’t till I looked at the program that the actor who looked like Helen Morse was indeed Helen Morse.

The stories’ subjects were frustrating and bleak, there is little opportunity for humour on this topic, but there was opportunity for theatricality and motion. Fanny Hanusin broke the rhythm with her portrayal of Merpati who was hyperventilating in panic over the lack of understanding of her situation. As Glynis Angell, the grief counsellor, Merrilyn, began breathing slowly to decrease Merpati’s panic, most of the audience were breath along.

All of the actors interchanged roles, with each taking a turn as an overcoated Isaiah writing on the wall and speaking ancient Hebrew (I later found out). The role changes worked well on reflection but I could not work out the thematic structure of the play until three-quarters in. The different outfits, the stories, Isaiah, were all confusing because the pairing of the characters with the stories took too long to establish. I am not a great wearer of hats but the different characters could have been more readily identified by the audience with hats, as well as the changing of clothing. Hats are more visible and illustrate different identities more clearly. It may have shortened my confusion.

What differentiated this play from a series of monologues, given that I didn’t understand the Isaiah context, was the music. The soloist, Deborah Kayser, the seraphim, sang beautifully and the acoustics of the venue were ideal although the 13^th century language was totally lost on me. (A sample of Kayser’s singing can be heard online) I have never heard a double bass played to such beautiful effect as was played by Nick Tsiavos. The depth of sound from a bow on bass could be felt in one’s chest and how he was able to pluck and stroke those strings at the same time was a mystery until he came into the light in the second half.

Kayser and Tsiavos, the seraphim, were a musical Greek chorus to the tales of grief and frustration. This role was perhaps emphasized by their wings which were effective but initially confusing. Kayser introduced the play in character with words that were cryptic but set the tone for the play.

The staging was effective in its industrial appeal and the use of 44-gallon drums as props and seats worked. Early on the actors slowly rotated these drums to provide a chilling sound which I was hoping for more of throughout the play.

Each character laid out the clothes or uniform of their deceased loved one through the play, providing a useful personal profile that complemented each story. I recall one character had worn her partner’s clothes for three days in a grieving intimacy. She would only relinquish the clothes when they no longer smelt of her partner but now of her.

The play was being performed at the Centre for Theology and Ministry near the University of Melbourne for a limited season and as a lead-in to a major theological conference. The play was supported by the Creative Ministries Network that provides a counselling service for those affected by workplace fatalities.

Prophet & Loss could travel well with its combination of an occupational/social theme, beautiful music and faith. Please look out for it.

Kevin Jones

Workplace safety insurance – podcast

Recently I interviewed workplace lawyer, Andrew Douglas, pictured right, while researching an article concerning the application of statutory liability insurance policies to workplace safety management.

SafetyAtWorkBlog is pleased to provide our latest podcast which includes my interview with Andrew. The interview provides simpler information on the statutory liability issue but also, and perhaps more importantly, we discuss how business perceives the role of insurance in managing safety and risk. We also contemplate the impact of such insurance on OHS regulators’ enforcement policies.

Kevin Jones

Audit report says “could do better”

On 3 June 2009, the Victorian Auditor-General released the audit report, CLAIMS MANAGEMENT BY THE VICTORIAN WORKCOVER AUTHORITY. The objective of the audit was to assess the effectiveness and efficiency of VWA’s claims management.

The report found that the current claims management model

“has not substantially improved RTW [return-to-work] outcomes, or the effectiveness of agents’ case management practices”

Although the report notes that the system has not deteriorated.

The report also says

“Agents’ case management practices, on average, were considered generally adequate, however, there is substantial scope for improving agents’ performance.”

“Adequate” is not a ringing endorsement of the system and the workers’ compensation agents should pay particular attention to criticism of their performance.

Safety managers and professionals have been trying to incorporate psychosocial hazards into their safety management processes but it seems that agents are having similar problems:

“Agents did not systematically consider psychosocial barriers to RTW such as attitudes toward recovery, stress, anxiety, workplace issues, substance abuse, and family matters, when assessing the injured worker’s status, needs and risks to recovery. In most cases assessments were narrowly focused on the physical injury and its impact.”

The report notes that many issues raised are already being addressed by the Victorian WorkCover Authority.

Almost the only statements made on the workers’ compensation scheme by the State Ministers over the last decade have related to premium fluctuations, how the business costs of the system are being controlled or unavoidable. However it seems now that the system has only been cruising, but not improving, or keeping up with the contemporary workplace hazards and employee needs.

The white collar public service, in particular, has a high incidence of stress-related claims. The reality of the hazard has been acknowledged through preventative guidance notes from the OHS regulators and the general growth in the work/life balance movement. Yet in 2009, the workers’ compensation agents are criticised for giving this hazard insufficient attention.

Even when an audit report is politely critical, it remains critical and demands attention.

Kevin Jones

Statutory liability insurance and OHS penalties

nsca-article-0409-001 Recently I wrote an article for National Safety magazine entitled “Trials and Tribulations”. It came about because I heard about an OHS consultancy that was offering safety management services that included a component of insurance. The insurance was explained to me as covering any OHS fines or penalties that may eventuate for the consultancy’s clients.

This combination of services is very attractive and addresses fundamental OHS questions asked by employers of different sizes – “do I comply?” and “how do I know that I have a safe workplace?”. They’re slightly different questions but ones I come across regularly.

OHS regulators are getting better at helping small business establish a compliance benchmark through the use of compliance codes for some elements of workplace safety management – a semi-return to prescription. However, many small business owner do as much as they can to provide a safe workplace and still get prosecuted by the OHS regulator. This is frustrating and demoralising and in this context an insurance policy is attractive. The insurance would cover any penalties that the business receives even if the incident that generated the prosecution was “unforeseeable”.

The National Safety article includes legal opinions and insurance company opinions that don’t quite fit.

Some of the interviews I conducted with insurance brokers did little to assuage my unease at insurance policies. It seems to me that some insurance policies are taken out unnecessarily while other policies often exempt coverage for the very risks one thought the policy covered. I agree with many insurers who recommend that business insurance is best handled by an experienced risk manager. Sadly many OHS professionals do not have those skills.

In the context of the OHS consultancy, clients may be reassured by such an insurance policy but it should be an unnecessary expense. The consultancy provides a monthly assessment service that steers the company through specific workplace hazards. The consultancy provides some initial OHS advice and resources but no independent audits of the OHS system and the monthly monitors are not trained in OHS.

The consultancy says that following this system will provide compliance, and maybe it does. But even compliant workplaces can have incidents that could generate a prosecution. It is here where the insurance policy should apply.

The monthly assessment system needs to be diligently followed and payments kept current because non-compliance with the obligations of the system could leave an “out” for the insurer.

Statutory liability insurance, particularly for small business, needs to be examined by the OHS regulators. Most regulators approached would not comment on the record about such policies, others were dismissive. The article examines the legal issues further and, sadly, the article is not available online.

If the regulators are truly supportive of small business and OHS compliance for this sector, there should be some guidance on statutory liability issued. But like OHS professionals, regulators are not comfortable with policies that compensate (other than workers compensation). They focus on prevention and prosecution. It’s time to establish a broader source of OHS policy development, one which includes insurance companies, brokers and risk managers.

Kevin Jones nsca-cover-0409

Category: insurance

Justice in workers’ compensation reforms

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Australia’s employers’ thoughts on OHS law

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HWCA could be influential in Australia’s workers’ compensation reforms

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Prophet and Loss – review

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Workplace safety insurance – podcast

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Audit report says “could do better”

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Statutory liability insurance and OHS penalties

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