Category: workers compensation

WorkHealth concerns increase

Victoria’s WorkHealth program is due to roll-out its next stage of worker health assessments.  However, the program has been seriously curtailed by the failure of its funding model.  According to The Age  newspaper on 18 may 2009, employer associations have begun to withdraw their support compounding the embarrassment to the Premier, John Brumby, who lauded the program in March 2008.

The Master Builders Association will not be supporting the program due to WorkHealth’s connection with WorkSafe.  The Victorian Automobile Chamber of Commerce (VACC) thinks likewise.  There are concerns over the privacy of worker health records and that data from health checks may affect worker’s compensation arrangements or future claims.

The VACC is also concerned that employers will be blamed for issues over which they have little control – the health of their workers.

Many of these concerns could have been addressed by locating WorkHealth in the Department of Health, where health promotion already has a strong role and presence.  It is understood that the funding of WorkHealth from workers compensation premium returns on investment caused the program to reside within the Victorian WorkCover Authority.  There has also been the suggestion that WorkHealth was a pet program of the WorkCover board.

The program aims of free health checks for all Victorian workers was admirable and still achievable but the program was poorly introduced, poorly explained, based on a flawed funding model and now seems to be, if not dead, coughing up blood.

Kevin Jones

Statutory liability insurance and OHS penalties

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

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.

 

 

Cost of occupational injuries and illnesses rise

According to a report in the Australian Financial Review (page 5, not available online) on 14 April 2009, the costs of work-related injury and disease has increased to $A57.5 billion.  This represents 5.9% of the country’s gross domestic product, up from 5% in 2000-01.

Of perhaps more concern is the sectors of society which are estiimated to bear these increasing costs.  49% of costs are borne by workers, 47% by the community and 3% by the employers.  Even if the insurance costs were allocated to employers, this would only amount to 18% of the injury and diseases costs.

The figures from the report conducted by the Australian Safety & Compensation Council could justify the push by some in the OHS profession to move workplace safety into the area of public health.  Regardless, the spread of the cost should be borne in mind when OHS organisations lobby government for more support and attention.

Kevin Jones

Financial dive for WorkCover NSW

SafetyAtWorkBlog recently reported on the financial results of the workers’ compensations schemes in South Australia and Victoria.  WorkCover New South Wales results were released on 7 April 2009.

According to an article in the Australian Financial Review (page 4, not available on line) the WorkCover NSW fund fell by $2.3 billion – the $625 million surplus in 2007-08 has plunged to a $1.77 billion deficit.  

WorkCover NSW has talked in the past about its positive achievements, and historically, they are right.  In their Annual Report 2007-08, they say (page 8 )

“The WorkCover Scheme’s financial position has improved from a deficit of $3.2 billion in 2002 to a surplus of $625 million in June 2008.”

“Accentuate the positives” is the government mantra across all departments but how do you continue to do this when your funding model has collapsed.  The AFR report says that Standard & Poor has estimated that this deficit represents 3% of the government’s consolidated revenue.  WorkCover is just one authority that relies on stockmarket returns

The Minister, Joe Tripodi is quoted in media reports as saying that the deficit was expected and is understandable and that the workers compensation scheme is “sound”.

Richard Gilley, a risk management consultant, said that economic downturns often coincide with an increase in the “frequency and severity of claims”.  

Tripodi has pledged not to increase premiums as that is the insurance cost to business, but one has to ask why not?  Premiums have been reduced throughout Australia during the “good” economic times with the understanding that this would increase the profitability of business and, maybe, just maybe, provide additional funds for business to reinvest in the safety levels of the business.

Perhaps this is the wrong time to increase premiums but the question should be asked nevertheless.

It is recommended that those government authorities who accept their excessive high premiums as the cost of operating in their sector be audited and the results presented to the board and the governing authority.  There are government authorities who do not recognize that the millions they pay in premiums originate from taxpayers and that, in 2008, maybe the community deserves the money that is being wasted in poorly-managed OHS and Return-To-Work systems in the public sector.

Kevin Jones

Global pressures on Australian workers compensation schemes

Around 18 months ago the Victoria Government launched WorkHealth, a health prevention program that would be funded from the interest generated from the pool of workers compensation funds.  SafetyAtWorkBlog has previously questioned how the program will be funded when its income source is likely to have been severely reduced due to the global economic problems.

On 1 April 2009 WorkCover in South Australia reported a half-year net loss of $313 million. WorkCover CEO Julia Davison said in a media release that

“the global crisis is, as expected, taking its toll.  In the last six months stock markets have declined, investors have experienced significant losses, and interest rates have fallen significantly,” she said  “Like all investors, WorkCover has been hit hard by the global financial downturn.”

Earlier in March 2009, the Chair of the WorkSafe Board Elana Rubin said 

“the significant downturn on the world financial markets and reduction in interest rates had combined to drive a net loss of $1.42 billion for the half year.  Whilst interest rate reductions are good news for those of us with mortgages, they have the opposite effect on our scheme – in the half year to 31 December 2008, the unprecedented level of interest rate cuts negatively impacted our net result by $645 million.”

On 1 April 2009 SafetyAtWorkBlog asked John Merritt why WorkHealth was not mentioned as part of his keynote presentation at the Safety In Action Conference.  He reiterated the importance of the program in easing the recovery time, particularly, for manual handling injuries but acknowledged that the program’s funding source was based on interest

“from the [$600 million of the assets of the] workers compensation scheme over the next five years ….well there used to be interest from assets – there should be one day, there will be again –  around $40 million each year for the next five years will be invested in worker health.”

It is good to hear that the WorkHealth program is going to continue but the fragility of the program’s funding should have been evident in the planning phase.  Governments around the world are pulling back on government funded programs in a wide range of areas.  Ideas that seem good in the good times are now looking like luxuries.  It will be interesting to see if WorkHealth continues in the WorkCover area or moves to Health, where many of its critics have always said it belongs.

Kevin Jones

Latest Australian OHS Statistics

Below is an edited summary of the findings from the latest compendium of statistics issued by the Australian Safety & Compensation Council.  The stats relate to 2006-07 primarily but with some comparative data from 2000-01 onwards.  The full report is available for download as is a media statement from the Council Chairman, Bill Scales.compendium200607-cover

132 055 serious workers’ compensation claims in 2006-07  = to 14 claims per 1000 employees or 9 claims per million hours worked.

Men accounted for 68% of all serious claims

Incidence rates for male employees almost twice that of females

There were 9 claims per 1000 employees aged 15-19 years, which increased to 17 claims per 1000 employees aged 60-64 years.

“The Manufacturing, Transport and storage, Agriculture, forestry and fishing, and Construction industries had incidence rates substantially above the national rate of 14 claims per 1000 employees.”

The occupational group with the highest incidence rate of serious claims was Labourers and related workers (39 claims per 1000 employees).

Transport workers and some others had the second highest rate with 29 claims per 1000 employees.

The majority (73%) of the serious claims involved injury or poisoning (95 910 claims)

The remaining 27% (36 145 claims) were disease related.

The most common injury (41%of all serious claims leading to a serious claim was Sprains and strains of joints and adjacent muscles.

Fractures and Open wounds (8% of all serious claims )not involving traumatic amputation were the next most common injuries

The most common diseases were:

  • Disorders of muscle, tendons and other soft tissues (7% of all serious claims),
  • Dorsopathies – disorders of spinal vertebrae (6%), and
  • Mental disorders (5%).

23% of all serious claims involved the Back. Hand (13%), Shoulder (9%) and Knee (9%).

Manual handling mechanisms (Body stressing) were the cause of 41% of all serious claims, with: 

  • lifting objects (18%)
  • handling objects (15%)

The most common mechanism was Falls on the same level (13%).

Non-powered handtools, appliances and equipment represented 26% of all serious claims.

Over the period 2000-01 to 2005-06, the number of serious claims decreased 6% from 144 740 claims to 136 575.

“The Agriculture, forestry and fishing industry recorded the highest time lost from work of 4.6 working weeks in 2005-06 but due to the lower salaries in this industry, it recorded one of the lowest median payment amounts ($5100 in 2005-06 compared to the all claims median of $6100).  The highest median payments were recorded in the Mining industry ($10 400 in 2005-06).”

Compensated Fatalities

Preliminary data show that in 2006-07 there were 236 compensated fatalities = an incidence rate of 2.5 fatalities per 100 000 employees.

Of the fatalities, 91% were male employees.

Over the period from 2000-01 and 2005-06, the number of fatalities fell 21%.

Industry

The Construction industry recorded the highest number of fatalities (50).

Transport and storage industry = 45 fatalities (of which 31 were in Road freight transport).

Mechanism of injury or disease

A third of the fatalities (81) were due to Vehicle accident

33 deaths due to Long term contact with chemicals or substances,

19 due to Being hit by moving objects and

18 due to Being hit by falling objects.

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