This chapter considers the responses of legislation proponents to
matters raised previously by the committee. The committee has concluded its
examination of these matters on the basis of the responses received.
Correspondence relating to these matters is included at Appendix 1.
Rehabilitation and Compensation (Prescribed Ship—Intra-State Trade) Declaration
Rehabilitation and Compensation Act 1992
Last day to
disallow: 13 August 2015
The Seafarers Rehabilitation and Compensation (Prescribed
Ship—Intra-State Trade) Declaration 2015 (the instrument) declares that a certain type of ship which is only
engaged in intra-state trade is not a prescribed ship for the purposes of the
Seafarers Rehabilitation and
Compensation Act 1992
(the Seafarers Act).
Originally, the Seafarers Act provided workers compensation and
rehabilitation arrangements for seafarers in a defined part of the Australian
maritime industry. The effect of the instrument is that workers on ships
engaged in intra-state voyages are no longer covered by the Seafarers Act and
so will no longer be entitled to compensation under that Act.
Measures raising human rights concerns or issues are set out below.
In February 2015 the Seafarers Rehabilitation and Compensation and Other
Legislation Amendment Bill 2015 (the bill) was introduced into the House of
Representatives. The bill amended the Seafarers Act to ensure workers on ships
engaged in intra-state voyages between 1993 and May 2015 are not covered by the
Seafarers Act (or by specific maritime occupational health and safety
The bill passed the House of Representatives in February 2015 and passed the
Senate with amendments on 13 May 2015.
Both the bill and the instrument were introduced following a decision of
the Full Court of the Federal Court
which held that the coverage provisions in the Seafarers Act apply to all
seafarers employed by a trading, financial or foreign corporation, including
ships engaged in purely intra-state trade.
The committee commented on this bill in its Twentieth Report of the
44th Parliament and Twenty-fifth Report of the 44th
The committee commented on the instrument in its Twenty-second Report of the
44th Parliament, and requested further information from the Minister
for Employment as to whether the instrument was compatible with human rights.
The committee notes that this instrument has since been repealed and replaced
by the Seafarers Rehabilitation and Compensation (Prescribed Ship—Intra State
Trade) Declaration 2015 (No. 2) [F2015L00858].
Alteration of coverage of persons eligible for workers' compensation
The committee considered in its previous analysis that the instrument,
in removing ships engaged in intra-state voyages from the coverage of the
Seafarers Act and thereby removing an entitlement to compensation for workers
injured on such ships, engages and may limit the right to social security.
Right to social security
The right to social security is protected by article 9 of the
International Covenant on Economic, Social and Cultural Rights (ICESCR). This
right recognises the importance of adequate social benefits in reducing the
effects of poverty and plays an important role in realising many other
economic, social and cultural rights, particularly the right to an adequate
standard of living and the right to health.
Specific situations and statuses which are recognised as engaging a
person's right to social security, include health care and sickness; old age;
unemployment and workplace injury; family and child support; paid maternity
leave; and disability support. It also includes the protection of workers
injured in the course of employment.
Compatibility of the measure with
the right to social security
The statement of compatibility states that the instrument may limit the
right to social security, but that such a limitation is reasonable and
proportionate as affected employees will retain entitlements to compensation
under state legislation.
As the committee noted in its consideration of the bill, to the extent
that the state schemes are less generous than the scheme under the Seafarers
Act, the measure in the instrument may be regarded as a retrogressive measure.
Under article 2(1) of the ICESCR, Australia has certain obligations in relation
to economic and social rights. These include an obligation not to unjustifiably
take any backwards steps (retrogressive measures) that might affect the right
to social security. A reduction in compensation available to an injured worker
may be a retrogressive measure for human rights purposes. A retrogressive
measure is not prohibited so long as it can be demonstrated that the measure is
justified. That is, it addresses a legitimate objective, it is rationally
connected to that objective and it is a proportionate means of achieving that
The statement of compatibility states that the objective of the
instrument is to ensure the long-term viability of maritime industry employers
and the sustainability of the scheme. While the committee notes that this is
likely to be a legitimate objective for the purposes of international human
rights law, it is unclear, on the basis of the information provided in the
statement of compatibility, whether the measure may be regarded as
proportionate to this objective.
The statement of compatibility characterises the measure as
However, it also states that workers' compensation premiums under the federal
scheme are, on average, significantly more expensive than those of the state
and territory schemes, which could suggest that those schemes provide for
lesser coverage or entitlements.
The committee therefore sought the advice of the Minister for Employment
as to the extent of differences in levels of coverage and compensation between
the scheme under the Seafarers Act and state and territory workers'
This Declaration is a short-term measure, supported by the
industry and unions to address a recent Federal Court decision. The declaration
seeks to maintain the long standing status quo until such a time as the
Government brings forward broader reform to the scheme.
The Seacare scheme is unlike state and territory workers
compensation schemes in that it is industry-specific. It covers a small number
of employers in a defined part of the maritime industry, compared to state and
territory workers compensation schemes that cover most employers operating
within the states and territories across a large number of industries and
Workers compensation schemes across Australia vary
substantially, making it difficult to assess whether an individual would be
better off in one scheme or another. To determine if an injured seafarer would
be better off under the Seacare scheme compared to a state or territory scheme,
a number of factors need to be considered including the injured seafarer's:
level of impairment
subjective preferences for weekly
compensation payments or a lump sum payment
access to common law damages
ability to return to work.
For example, when comparing the Seacare scheme to Western
Australia's workers compensation scheme, as was done by the Maritime Union of
Australia in its submission to the Senate Education and Employment Legislation
Committee Inquiry into the Seafarers Rehabilitation and Compensation and Other
Legislation Amendment Bill 2015. It could be said that in some respects the
Seacare scheme is more generous as:
the Seacare scheme provides weekly
compensation until an injured employee fully returns to work or reaches 65
years of age, while Western Australia's scheme caps weekly compensation
payments at a total monetary value (currently $212,980.00)
the Seacare scheme has no monetary
limit on the amount of compensation for medical expenses; while Western
Australia's scheme has an initial cap of $63,894, with the potential for an additional
$50,000 where this amount is insufficient and a further $250,000 in exceptional
Focusing narrowly on monetary elements of workers
compensation also does not provide the complete picture of the benefits
available for injured workers. The best outcome for an injured worker is a
swift and durable return to work, not an extended period relying on workers compensation
benefits. Claim disputation and resolution rates are also a major factor in a
swift return to work.
Injured employees under Western Australia's workers
compensation scheme, for example, have much better rehabilitation and return to
work prospects than under the Seacare scheme. The Seacare scheme's return to
work rate (59 per cent in 2012-13) is substantially below both Western
Australia's scheme (75 per cent) and the national average (77 per cent). The
Seacare scheme's disputation rate is much higher (18.6 per cent in 2012-13)
than Western Australia's scheme (2.5 per cent) and disputes generally take
longer to resolve. The poorer rehabilitation and return to work performance of
the Seacare scheme highlights that it would be unwise to consider an ad hoc
substantial expansion of the scheme.
The comparison between Western Australia's workers
compensation scheme and the Seacare scheme is broadly indicative of all
comparisons between state and territory schemes in that all schemes present
different advantages and disadvantages compared to others.
All seafarers will continue to have access to workers
compensation following the Declaration. The effect of the Declaration is that
certain seafarers will have access to workers compensation under a state
workers compensation scheme rather than the Commonwealth's Seacare scheme. If
the Committee is of the view that workers compensation benefits under a state
workers compensation scheme insufficiently promote the right to social
security, then it is ultimately a matter for the relevant state government to
ensure that those rights are better promoted.
To the extent to which the human right to social security is
in any way impacted, it is proportionate and appropriate in that the
Declaration ensures continued workers compensation coverage of all workers,
protects the viability of the Seacare scheme Safety Net Fund and maritime
industry employers and provides the opportunity for detailed consideration of
reforms to the Seacare scheme that will produce a scheme that better supports
the rights to social security and safe, healthy working conditions for
During recent consultations with interested parties in the
maritime industry, one party raised an issue about how the Declarations affect
a 'legacy' class of ships i.e. vessels that were immediately before the repeal
of the Navigation Act 1912, covered by a declaration in force under
ss 8A(2) or 8AA(2) of that Act. This issue had not been identified in
consultations during the development of the Declarations. In order to address
this issue, I will be remaking the Declarations to ensure this legacy class of
ships is not affected.
The committee thanks the Minister for Employment for his response. The
committee notes the difficulty in comparing the federal and state workers
compensation schemes and that there are both benefits to, and disadvantages
with, the state and territory schemes. As there are both benefits and
disadvantages with the state compensation schemes it is difficult for the
committee to assess that the measure does not limit the right to social
security, however, the committee considers that the minister's response has
demonstrated that there are safeguards in place to ensure any such limitation
may be proportionate to the legitimate objective sought to be achieved. The
committee also notes that the regulation was time-limited, as it was due to
sunset clause two years after the date on which it took effect.
Accordingly, the committee considers that the measure may be
compatible with the right to social security and has concluded its examination
of this matter.
The Hon Philip Ruddock MP
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