Bills Digest no. 78 2009–10
Occupational Health and Safety and Other Legislation
Amendment Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date
introduced: 26 November
2009
House: House of Representatives
Portfolio: Education, Employment and Workplace
Relations
Commencement:
Schedules 1 4 on the day
after the Royal Assent; all other provisions on the day of the
Royal Assent.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The primary purpose of the Bill
is to amend the Safety, Rehabilitation and Compensation Act
1988 (SRC Act) to:
- consider claims arising from off‑site recess
injuries[1]
- allow for compensation for medical expenses to be paid, where
payment of other compensation is suspended
- require that claims for workers compensation are determined
with specified time limits, and
- authorise Comcare to access the Consolidated Revenue Fund to
pay compensation claims in respect of certain diseases with a long
latency period.
In Australia, constitutional
responsibility for workers compensation has traditionally resided
with state and territory governments. As a result, there are
significant inconsistencies between the compensation schemes in
areas such as:
- eligibility for workers compensation
- the range and level of payments
- access to common law damages
- premium setting principles
- injury management arrangements, and
- dispute resolution mechanisms.[2]
Issues arising from these inconsistencies have, from time to
time, attracted the attention of policymakers and scheme
administrators.[3] In
March 2004, the Productivity Commission released a report entitled
National Workers Compensation and Occupational Health and
Safety Frameworks (the Productivity Commission report) which
put the matter back on the political agenda.[4]
The Productivity Commission proposed a model to move Australia
progressively to nationally consistent arrangements in particular
that the Government develop an alternative national workers
compensation scheme to operate in parallel with existing state
schemes under a three step process.[5]
The first step was confined to corporations deemed capable of
meeting the competition test . This test is set out in section 100
of the SRC Act which provides that the Minister may determine that
a corporation is eligible to be granted a self-insurance
licence[6] if it:
- is, but is about to cease to be, a Commonwealth authority
or
- was previously a Commonwealth authority, or
- is carrying on business in competition with a Commonwealth
authority or with another corporation that was previously a
Commonwealth authority.
The second and third steps related to the establishment of a
national workers compensation scheme.
The Howard Government accepted that self-insurance licences
could be granted under the existing provisions of the SRC
Act.[7] However it
did not support the other steps of the Productivity Commission s
proposed model.[8]
Shortly after the Productivity Commission s report in March
2004, Optus Administration Pty Ltd (Optus) made application under
section 100 of the SRC Act seeking a self-insurance licence. That
licence was subsequently granted in November 2004 on the grounds
that Optus was able to satisfy the competition test in that it was
carrying on a business in competition with a Commonwealth authority
or with another corporation that was previously a Commonwealth
authority, being Telstra. This was followed by applications for
national self-insurer status from other major Australian
corporations including Toll Transport Pty Ltd, the National
Australia Bank, John Holland Pty Ltd and ADI Limited.[9]
However, those corporations which were granted a self-insurance
licence under the SRC Act were still required to comply with
relevant state and territory OHS laws, rather than federal laws.
The Productivity Commission report had recommended that the
Occupational Health and Safety (Commonwealth Employment) Act
1991 be amended to enable those employers who are licensed to
self-insure under the Australian Government s workers compensation
scheme to be covered by the Australian Government s occupational
health and safety legislation.[10] The Howard Government subsequently enacted
amending legislation in 2006 the effect of which was to cover
national self-insurers under federal workplace health and safety
laws.[11]
On 11 December 2007, the newly elected Rudd Government announced
a moratorium on corporations joining the Comcare scheme and a
review of self-insurance arrangements under the scheme.[12]
The Report of the Review of Self-insurance arrangements under
the Comcare Scheme (Review report) was published in January
2009.[13] The
Review report states that:
The Department found that, overall, the scheme s range of
compensation benefits, and approach to OHS regulation, were
comparable with other Australian workers compensation schemes. In
this respect, the provision of self-insurance licenses to
private-sector corporations was not seen as placing them or their
employees at a disadvantage. Similarly, the Department found no
evidence that licensing posed risks to the scheme s viability or
the viability of state or territory schemes.[14]
Despite this conclusion, the moratorium on corporations joining
the Comcare scheme will continue until the Intergovernmental
Agreement for Regulatory and Operational Reform in Occupational
Health and Safety (IGA) comes into effect.[15] The IGA outlines the commitment of
all states and territories and the Commonwealth to work together to
develop and implement model OHS legislation. Minister Gillard
stated that:
Given the progress towards harmonised national OHS laws and the
proposed transfer of OHS coverage for Comcare self-insurers to the
states and territories, the Government will maintain the moratorium
[on private sector companies seeking to join the Comcare scheme]
until 2011 when uniform OHS laws have been implemented in all
jurisdictions.
To do otherwise would cause unnecessary dislocation in that
companies would need to adapt to Comcare and then quickly change
again to adapt to the new model laws.
The Government will introduce legislation to give effect to the
moratorium for this further period.[16]
In response to the Review report, the Rudd Government announced
that it would make a number of improvements to the Comcare
scheme.[17] Some of
those improvements have already been made, such as the increase in
the amount of death benefits payable.[18] This Bill contains further
improvements.
The Bill has been referred to the Education, Employment and
Workplace Relations Legislation Committee for inquiry and report by
25 February 2009.[19] At the time of writing this Digest, no submissions had
been received by the Committee.
According to the Explanatory Memorandum, the proposed amendment
to the SRC Act which will reinstate coverage for off‑site
recess breaks is estimated to cost Comcare $1.7m for the 2009 10
financial year, and the same for the forward years (adjusted for
indexation of 4.5 percent per annum). However, these increased
costs are expected to be partially offset by an estimated net
savings to the Pharmaceutical Benefits Scheme of $130 000 for the
2009 10 financial year and the same amount, indexed for medical
cost inflation, over the forward years.[20]
The remaining amendments are expected to have a nil financial
impact.[21]
Under the Occupational Health and Safety
Act 1991 (OHS Act), it is the employer s responsibility to
take reasonably practicable steps to:
- protect the health and safety at work of the employer s
employees[22]
- provide and maintain a working environment (including plant
systems of work) that is safe and without risk to their employees
health,[23]
and
- ensure that workplaces under the employer s control are safe
and without risk to their employees health, and that safe means of
access to, and exit from, the workplace is provided and
maintained.[24]
Lifts are not currently included in the definition of
plant under the OHS Act and they are not
covered by any other relevant regulations. Item 2
of Schedule 1 to the Bill amends the OHS Act by
inserting a definition of lift in
existing subsection 5(1). Item 3 inserts an
example at the end of the definition of
plant so that it is clear that any
references to plant in the OHS Act will include a reference to a
lift. Item 13 inserts proposed subsection
19(4) to remove the supply of a lift in a workplace from
the operation of that section.
Items 5, 7 and 9 11 repeal
references to notice in writing and substitute references to
legislative instrument . These are technical amendments to reflect
the terms of the Legislative Instruments Act 2003
(Legislative Instruments Act). Items 4, 6 and
12 are consequential amendments arising from those
substitutions.
Items 1 and 2 of
Schedule 2 to the Bill make technical amendments
to the Occupational Health and Safety (Maritime Industry) Act
1993 which clarify that approval of, or amendment to, a Code
of Practice under that Act is a legislative instrument in
accordance with the Legislative Instruments Act. Similarly a notice
of revocation of a Code of Practice is also a legislative
instrument.
Schedule 3 amends the SRC Act, as discussed
below.
Item 1 of Schedule 3 amends
existing paragraph 6(1)(b) of the SRC Act so that an injury to an
employee is taken to have arisen out of, or in the course of,
employment if it occurs while the employee is temporarily absent
from his or her place of work during an ordinary recess. The right
to workers compensation in respect of injuries that occur during an
off-site recess was removed by the Safety, Rehabilitation and
Compensation and Other Legislation Amendment Act 2007 with
effect from 13 April 2007. The Explanatory Memorandum for that Act
stated:
The effect of the provision is that workers compensation could
be payable, for example, where an employee sustains an injury while
shopping or playing sport during a lunch break. This is
notwithstanding the fact that the employer has no control over the
activities of the employee or the environment in which the employee
engages in those activities.
The Productivity Commission Inquiry found that the employer s
ability to exert control over workplace recess breaks and social
activities is a relevant consideration. It recommended that
coverage for recess breaks and work-related events be restricted,
on the basis of employer control, to those undertaken at workplaces
and at employer-sanctioned events.[25]
The reinstatement of eligibility for workers compensation in
respect of injuries sustained off-site is based on the need to
realign the Comcare scheme with most jurisdictions and removed the
inequity in coverage for employees whose employers do not provide
on-site facilities for meal breaks .[26]
Where a person sustains an injury arising out of, or in the
course of, his or her employment that person is entitled to be paid
compensation in accordance with the SRC Act.[27] Compensation generally has two
components a weekly benefits payment for loss of wages due to the
person s incapacity to work,[28] and a payment for hospital, medical and
pharmaceutical expenses incurred as a result of the injury.[29]
Section 36 of the SRC Act provides that an injured worker may be
required to be assessed to determine his or her capacity to
undertake rehabilitation. Where the injured worker refuses to be
assessed, or fails to attend the assessment without reasonable
excuse , his or her right to compensation is suspended in
accordance with subsection 36(4) of the SRC Act. The rationale for
such a provision is that it acts as an incentive to claimants to
comply with the requirement. Item 2 inserts
proposed subsection 36(4A) which will limit the
suspension to weekly benefits only. This amendment responds to
concerns that the suspension of medical benefits under the Comcare
scheme can, contrary to the purpose of the scheme, undermine
efforts towards early rehabilitation and return to work.
Item 3 inserts proposed subsection
37(7A) into the SRC Act to limit the suspension of a
person s right to compensation to weekly benefits only, if he or
she refuses or fails to undertake a rehabilitation program without
a reasonable excuse . Item 4 inserts
proposed subsection 50(5A) in similar terms to
limit any suspension of a person s rights to compensation to weekly
benefits only.
Existing section 61 of the SRC Act requires that a claimant for
compensation be given a written statement setting out the terms
under which his or her claim has been accepted or rejected, and the
reasons for that decision. Item 5 of Schedule 3
inserts proposed subsection 61(1A) which requires
that each claim for compensation is considered and determined
within the period prescribed by regulations.
Item 6 inserts proposed subsection
62(6) which will require that each request for
reconsideration of a decision to accept or reject a claim for
compensation is considered and determined within the period
prescribed by regulations. There is no indication as to the length
of the proposed period in the Explanatory Memorandum or the second
reading speech. However the Review report states:
The Department envisages that statutory limits could be imposed
along the following lines.
Time would start to run from lodgement of a claim with the
determining authority, with scope for extension of that time frame
to accommodate later lodgement of supporting evidence (say, 20
business days for injuries). A longer time frame (to be determined
after consultation) could apply to the determination of disease
claims, bearing in mind that these can be more difficult to
assess.[30]
Unfortunately the Bill does not include any sanctions for
failure to meet the proposed statutory time limits. As the primary
focus of the Comcare scheme is rehabilitation and return to work,
the absence of sanctions for a failure to meet statutory time
limits for decision making may detract from the achievement of this
goal.
Item 7 of Schedule 3 inserts
proposed paragraph 90B(ab) into the SRC Act. The
effect of the new provision will allow Comcare access to the
Consolidated Revenue Fund for payment of its liabilities in respect
of events which happened before 1 December 1988 but which did not
result in an injury until after that date. This item is directed
towards long latency injuries, for example lung disease or skin
disease.
Items 8 and 9 of
Schedule 3 are consequential amendments. Together,
items 7 9 operate to restore Comcare s access to
the Consolidated Revenue Fund which was closed off in response to
comments about the interpretation of section 128 of the
Commonwealth Employees Rehabilitation and Compensation Act
1988 which were made by the Full Court of the Federal Court of
Australia in the decision of Comcare v Etheridge.[31]
Schedule 4 of the Bill makes a number of
technical amendments to the Seafarers Rehabilitation and
Compensation Act 1992 (Seafarers Act) to take into account the
commencement of the Legislative Instruments Act. None of the
amendments affect the operation of the existing provisions of the
Seafarers Act.
Members, Senators and Parliamentary staff can
obtain further information from the Parliamentary Library on (02)
6277 2434.
Paula Pyburne
6 January 2010
Bills Digest Service
Parliamentary Library
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