workers compensation – Page 28

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?

This 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

Combining safety and RTW awards

Finally, a State-based safety awards night that has both OHS and Return-to-Work awards. On 27 October 2009, Workplace Health & Safety Queensland held its annual safety awards night as part of Safe Work Australia Week. In a media release, the Minister for Industrial Relations, Cameron Dick, said

“The inaugural Return to Work Awards are run by Q-COMP – the statutory authority that oversees workers’ compensation in Queensland – to showcase the state’s top employers who understand the importance of helping injured workers make a successful return to work.”

It is curious that other States do not also have combined awards. The logic of the combination would, perhaps, be easiest for Victoria as the Victorian Workcover Authority handles rehabilitation through VWA as well prevention through WorkSafe Victoria. The combination may be simpler for those States that have a single insurer for workers compensation.

It is noted that one workers compensation insurer in Victoria, xchanging (formerly Cambridge), has conducted its own awards for several years. (The author was a judge of these awards several years ago) The judging process was tripartite with applicants from a pool of the insurer’s clients. Whether an insurer would relinquish such a role is unknown but the opportunity for State recognition of RTW performance should be attractive.

It should also be noted that winners of State OHS awards are also nominated for national OHS awards conducted by Safe Work Australia.

SafetyAtWorkBlog has questioned the plethora of OHS awards nights in the past as Australia has a fairly small industry and as OHS and workers compensation laws are becoming harmonised, it seems sensible for Safe Work Australia, or the Australian Government more generally, to start harmonising the award processes. Just imagine how many corporations would be champing at the bit to receive an award for safety that covers all aspects of their safety management. It would be an award for leadership that may just be warranted.

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

Civil liability and work-related diseases

On 4 October 2009, Queensland’s Attorney-General Cameron Dick released details of his intentions to increase the compensation available for individuals and their relatives through his Civil Liability and Other Legislation Amendment Bill. Below is a table which shows the level of the increase.

It needs to be pointed out that this is not workers’ compensation but OHS legislation is blurring the demarcation between workers compensation and civil liability in the context of safety management. New Australian legislation is placing OHS obligations on workers and employers for the off-site effects of workplace activities.

The Attorney-General, who is also the Minister for Workplace Relations had this to say about the importance and breadth of the draft Bill:

“This legislation will increase the maximum caps, for the first time in six years, on general damages available under the Civil Liability Act 2003 for personal injuries,” Mr Dick said…. “These amendments will afford injured persons the monetary compensation they need to help them get on with their lives. The amendments also ensure a de facto partner of an injured person is now able to claim for loss of earnings.”

Dick goes on to discuss the good news concerning dust-related diseases as the amendments will also abolish the statutory limitation period for dust-related disease claims including asbestosis, mesothelioma and silicosis. It is unclear whether workers’ compensation insurance has similar limitations.

“The removal of the statutory limitation period for dust-relates (sic) diseases will deliver significant benefits to sufferers, by improving their access to justice and reducing the costs and stress associated with pursuing a claim,” Mr Dick said. “This amendment will have retrospective effect to ensure it captures current cases of dust-related disease originating from exposure during the 1950s, 1960s and 1970s.”

Dick said the amendments also ensure that the caps will be annually indexed to average weekly earnings.

These changes raise the possibility that a workplace may have an event that directly injures workers and also affects people outside the worksite. This could generate two processes for compensation – the workers and members of the public. The business operator would be involved in both processes, of course.

But Australian OHS legislation is moving towards one OHS “Act” that would involve the management of a hazard and its potential off-site effects. Why then split the compensation mechanisms? Would it not be easier for the business owner to manage the environmental, public and worker impacts of the one event in an integrated fashion?

The model OHS legislation deals with multiple parties affected by work processes surely the government should be looking at a single compensation process that also addresses multiple parties?

The workers’ compensation harmonisation review is still a couple of years away but potential changes should be anticipated. The table below perhaps should be compared to the Table of Maims used in workers’ compensation in the spirit of harmonisation to determine a broader social justice.

Perhaps in this period of public comment on draft OHS model legislation, the government and stakeholders should anticipate the social consequences of the OHS management obligations it is currently considering. If environmental legislation and management imposes a “cradle-to-grave” context, why should safety management legislation not?

Kevin Jones

Injury	Injury Scale Value	Currently worth	Maximum from 1 July 2010 will be worth
Serious Facial Injury	14 to 25	$16,600 to $35,000	$19,550 to $41,220
Loss of one eye	26 to 30	$37,000 to $45,000	$43,560 to $53,000
Loss of one testicle	2 to 10	$2000 to $11,000	$2360 to $12,950
Loss of both kidneys	56 to 75	$110,360 to $166,400	$130,000 to $196,000
Loss of one arm from the shoulder	50 to 65	$93,800 to $136,100	$110,500 to $160,300
Loss of one hand	35-60	$56,000 to $121,400	$65,950 to $143,000
Loss of a finger	5 to 20	$5000 to $26,000	$5900 to $30,600
Loss of one leg above the knee	35 to 50	$56,000 to $93,800	$65,950 to $110,500
Loss of one foot	20 to 35	$26,000 to $56,000	$30,600 to $65,950
Total loss of hair on head	11 to 15	$12,400 to $18,000	$14,600 to $21,200

Comcare’s RTW performance has some worrying trends

RTWMatters, an Australian return-to-work website, has analysed some of the data that has been released through the annual data – Aust & NZ RTW Monitor. The statistics show that the Australian Government’s workers’ compensation insurer, Comcare, has performed well on some performance indicators but others are raising concerns, particularly

“The cost of claims has risen from $15 000 in 2005-06 to almost $20 000 in 2008-09. This is substantially higher than the national average.

Around 1/3 of Comcare workers can identify a person who made it harder to RTW, which is higher than the national rate. Over the last three years there has been a significant increase in Comcare employees reporting their employer has hindered return to work.

Over the last two years, Comcare workers have found it increasingly difficult to find the information they need to make a claim.

Comcare workers rated their insurer customer service lower than the national average, with communication, advice about the claim and understanding the situation rated lowest.”

Paul O’Connor, at last week’s Comcare Conference in Canberra was very upbeat but was well aware of the challenges ahead particularly for the next five years during a period when the Australian government will attempt to harmonise the OHS laws in each jurisdiction. It should be noted that Paul has been Comcare’s CEO since 1 September 2009. He was formerly with the Transport Accident Commission in Victoria.

O’Connor quoted the Australian Finance Minister, Lindsay Tanner, during his conference presentation. (The Tanner quotes are from August 2009)

“It is unlikely that we will see any major reform in this area in the near future, as Australia’s various governments are grappling with the challenging task of building uniform national industrial relations and occupational health and safety systems.

“Nevertheless, the current campaign for a national catastrophic injury compensations scheme should trigger a wider debate about injury compensation in our society generally. The present system is fragmented, inequitable, inefficient and arbitrary. Reform could be some time coming but it’s certainly long overdue.”

RTWMatters has identified that more groundwork is going to be needed in the lead-up to the reform process if any measurable improvements are to be achieved. In their media statement, they say

“Real collaboration requires that all stakeholders be able to access information to assess the impact of legislative and systems changes on workers compensation and return to work outcomes.”

The road to reform that Geoff Fary described as very difficult will be an important one to watch.

Kevin Jones

[Kevin Jones is a feature writer with RTWMatters]

The changing asbestos campaigns

As the incidence of asbestos-related diseases increases, the issues associated with asbestos have evolved beyond occupational health and safety.

The corporate conduct of James Hardie Industries and the prosecuting of its directors by the Australian Government had asbestos as the product around which corporate misbehaviour occurred. The prosecution has not improved the lot of the victims. The compensation fund which the director’s lied about will still be inadequate to deal with work-related claims.

Asbestos has become a true public-health hazard and issue, in a similar way that lead went from work to the community or even, perhaps, how cigarette smoke went from the personal to the public. Increasingly, useful results will be gained from lobbying the government through the public health sphere rather than through OHS.

Today in Tasmania, Matt Peacock‘s book called “Killer Company” was launched with the support of the Australian Workers’ Union. According to a media release in support of the event, the AWU National Secretary Paul Howes will “call for the creation of a federal National Asbestos Taskforce to manage the prioritised recall of all asbestos containing materials in all forms from the nation.”

Howes says

“The Federal Government must establish a national body with a regulatory mandate to map priority areas for asbestos product removal, such as schools and public places, and oversee its careful and total removal.”

“A National Asbestos Taskforce could facilitate and resource an Asbestos Summit, to bring together industry leaders, regulatory bodies and the nation’s top medical asbestos disease experts. Together with Governments, state, federal and local, such a summit could identify urgent priority areas for asbestos removal and develop a national strategy to deal with this ‘slow burn’ national emergency once and for all.”

Businesses in Australia must have an asbestos register but Paul Howes is also calling for

“…the establishment of a National Asbestos Register for all Australians ill from, or exposed to asbestos. He will also call for the establishment of a Register of all priority areas linked to a national Asbestos Present in Buildings Register.”

“We believe that [an] actuarial study will show that it is cheaper to remove asbestos containing materials completely from Australia, than fund the extraordinary medical cost of treating thousands of Australians contracting very serious asbestos-related disease over some decades to come.”

Unions have a proud history of effecting social change. Asbestos fits this tradition as it concerns the spread of a manufacturing component that is, arguably, going to have more of a social cost than it ever had as a social benefit.

There is enough of a social awareness of the complexity of issues related to asbestos that traction should be achievable with the government on a public health scheme. The challenge for the union movement and asbestos-safety advocates is that the campaigns still need to convince the whole community that this cannot be dismissed as a “union issue” but is a public health issue “championed by the unions”.

As more and more cases of asbestosis and mesothelioma start appearing in people who have not been involved in manufacturing or using asbestos, or washing the dust out of clothing, or living near asbestos mines, the seriousness of the health hazard will become evident. But we should not have to wait till then and a socially-aware government as the Rudd Labor Government in Australia claims to be should be able to acknowledge the sins and mistakes of the past and plan for the future, as it has done on other social concerns.

Kevin Jones

A video and audio interview with Matt Peacock is available online .

UPDATE: 17 September 2009

Tasmania’s Minister for Workplace Relations, Lisa Singh, has released a media statement about her launch of Matt Peacock’s book. In the statement she outlines her government’s action on asbestos:

“Shortly after becoming the Minister for Workplace Relations, I arranged a forum on Asbestos which was held by Workplace Standards on the 18th of March this year.

“A whole of Government Steering Committee was established following the forum and will make recommendations to me later this year.

The Committee is considering a range of issues including prioritised removal, mandatory reporting and disclosure, disposal, current legal and compensation issues and community awareness and education.

An audio report on the call for asbestos registers by the AWU was in the ABC Radio program AM on 17 September 2009 and is available online.

Return-To-Work and OHS

Many OHS professionals do not understand the return-to-work (RTW) process. Many OHS professionals choose to avoid RTW like the swine flu. In Australia, rehabilitation and compensation come under different legislation to OHS so it is easy to delude one’s self that they are different beasts.

On September 15 2009 at the WorkCover SA Conference, it was possible to argue the same ideological isolation as above but from the RTW stance. RTW can be as isolationist as OHS. Admittedly, the conference was about workers’ rehabilitation and injury management but it was surprising how many speakers talked about integrated management without mentioning OHS.

Is this demarcation widening? Was it formalised by the different Acts of Parliament? By different training backgrounds and criteria? By the different work-related government departments (they often inhabit the same office, share the same board members, but report to government separately?!)? Is the demarcation between the human resource specialists and the safety engineers?

In most workplaces such a demarcation would be unmanageable. Most workplaces, certainly the smaller ones, have the official RTW Coordinator role as part of the duties of an existing staff member, whoever is already juggling the personnel duties and often payroll as well. It is often a luxury to have a full-time RTW Coordinator.

It is noted that the Australian conferences of the OHS professionals rarely include RTW, and vice versa. Isn’t is just possible that some bright spark may offer a safety management conference that unites the complementary disciplines, professionals and government departments so that business managers can receive a combination of information that matches the reality?

Kevin Jones

Kevin Jones attended the conference with the support of www.rtwmatters.org an (increasing prominent) online RTW website, and WorkCoverSA.

Category: workers compensation

Fixing what is broken

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Combining safety and RTW awards

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

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Civil liability and work-related diseases

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Comcare’s RTW performance has some worrying trends

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The changing asbestos campaigns

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Return-To-Work and OHS

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