Audit report says “could do better”

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Cover of 20090603_workcover_full_reportOn 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

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nsca-article-0409-001Recently 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 Jonesnsca-cover-0409

Genetic discrimination at the workplace

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In the Men’s Health page (page 59, not available online) of the Australian Financial Review on 16 April 2009 was a mention of a verified case of genetic discrimination in worker’s compensation.

It says that a woman slipped at work and lodged a worker’s compensation application.  The assessment tribunal noted that some members of her family manifested Huntington’s disease which, in its early stages, may cause clumsiness and the tribunal requested a genetic test for the Huntington’s gene.

It is a shame that this article was limited to the Men’s Health page as the issues raised have considerable impact on how safety and return-to-work obligations are handled in workplaces.  

There are two studies quoted in the article and it is unclear which had the worker’s compensation case quoted.  It may have been Genetics in Medicine  but blog readers’ help would be appreciated.

Kevin Jones

An interesting short article on genetic discrimination from late-March 2009 is available online.

 

 

Insurance for OHS penalties

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OHS law is generally structured in a positive way and based on the logic that people will act appropriately if there is a deterrent for doing the wrong thing.  This logic applies to many levels of public administration, commerce and psychology.

Some years ago, this logic was challenged during some consultation I undertook for a prison workshop.  It was necessary to assess the guarding of a machine not just for the “accidental” injuries but for malicious and purposeful injuries.  This established a lower common denominator than in the majority of workplaces. 

In this work environment to some inmates, the penalty for harming oneself and others was worth the risk.  It did not deter everyone.

Recently, an allegation has come to the attention of SafetyAtWorkBlog that a company providing OHS compliance advice to small businesses in Australia is also offering insurance coverage for OHS penalties.  Should a business proprietor be financially penalized by the OHS regulator for a breach of the legislation, the business proprietor would pay an excess of around $2000 and the (unnamed) insurance company would pay the balance.

Such a service places a $2,000 cap on OHS penalties and would remove a major reason behind penalties for unsafe practices and workplaces.

This is of concern to OHS professionals as we “trade” on the importance of OHS having a strong business case as well as a social benefit.

SafetyAtWorkBlog would be interested to hear from anyone who may have come across such insurance options elsewhere or have an opinion on such an option.