workers compensation – Page 13

Harmonising workers compensation

Gabrielle Lis raised an issue in an article for Return To Work Matters that deserves to be seriously considered. The Australian Government is set on a path of harmonising OHS laws through the coordination role of Safe Work Australia. One of the key policies for Safe Work Australia is also to

“develop proposals relating to… harmonising workers’ compensation arrangements across the Commonwealth, States and Territories…”

Wow, this is more of a challenge than harmonising OHS laws. As Gabrielle writes

“Workers and employers don’t always see eye to eye on the issue, not to mention the differing interests of big businesses and small and medium enterprises, and the entrenched positions of the states and territories, who all tend to prefer “how we do things” to how things might best be done.”

Safe Work Australia is going to be dealing with over a dozen worker’s compensation insurers, around half a dozen workers’ compensation bureaucracies and thousands of stakeholders in the compensation, insurance, healthcare and return-to-work sectors.

This challenge is phenomenal and will not fit into any short-term schedule. This challenge differs from OHS in that it directly involves money, millions of it. The negotiations on OHS between government, unions and employer groups will be nothing compared to when the insurance companies move in on workers compensation.

Kevin Jones

(Disclaimer: Kevin Jones is a regular columnist for www.rtwmatters.org)

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

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-0409-001 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

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

Tag: workers compensation

Harmonising workers compensation

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Audit report says “could do better”

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WorkHealth concerns increase

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Statutory liability insurance and OHS penalties

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Genetic discrimination at the workplace

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Cost of occupational injuries and illnesses rise

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Financial dive for WorkCover NSW

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