Dust off your Karl Marx.
Workers of the ACT unite.
If the ACT Minister for Industrial Relations and Business, Tony De Domenico, has his way, workers’ compensation rights will be substantially reduced. It will be enough to drive ACT workers to seek union help and use collective muscle to oppose them.
The details have not been worked out, but the signs are ominous for injured workers.
Under present arrangements employees are entitled to compensation if they are injured in the course of their employment. That compensation comes in two forms: statutory and common law.
Statutory compensation provides for wages while off work, some set payments for permanent injuries like loss of limb or eye, and a schedule of payments if the worker is permanently off work. Statutory payments are paid if the injury is accidental with no-one at fault of if the worker himself is at fault.
Common-law payments are more generous. The cover payments for pain and suffering, loss of amenity of life, loss of earning power and so on. But they are only recoverable if the employer is negligent.
Every employer is required to take out a workers’ compensation insurance policy for both these types of compensation.
In the past 15 years or so, premiums have increased. The main reasons are increases in white-collar claims for stress and RSI; a general greater awareness of rights to sue, whereas in the past people took in on the chin; and a greater awareness of long-term causality of injury. Previously, people sued for immediate injury, when hit on the head, for example. More recently, people have understood that injury can be caused by thousands of incremental events … exposure to noise and chemicals; lifting; poor posture and so on.
As more workers successfully sue, pay-outs increase and therefore premiums increase.
Mr De Domenico sees the increases as an impediment to business. In the words of his spokesman: “”The Government sees a lot of workers’ compensation law as an impediments to business growth and we wish to review the system to encourage and lessen restrictions in business”.
However, the precise extent of the increases in the ACT has not been quantified, nor has the effect of them on business.
It appears Mr De Domenico wants to cut or abolish common-law rights and reduce long-term periodic payments. These are the two big-money areas and would have the greatest impact on premiums. They are also the most important for workers, because they are not covered by any scheme.
This is because if workers’ compensation did not pick up immediate blood-on-the-floor injuries, Medicare, sick leave and holiday leave would do so. It would still be unfair, but workers would not be destitute.
The big common-law claim or long-term statutory claim are not picked up elsewhere. They often require medical and quasi-medical services that are not on Medicare (physiotherapy, home help and the like) and as they are long-term, all holiday, sick pay and long-service leave could not be used to cover them.
So any attack on common-law claims and long-term periodic payments go to the heart of workers’ compensation … to ensure that workers are covered for major long-term injury.
Common-law claims also have a large effect on premiums because they are the most costly to administer. With statutory claims, it is fairly simple to look at the table of benefits and pay them. Common-law claims require an assessment according to the circumstances. Each case is different. Invariably lawyers are involved because lawyers are usually the people best equipped to make assessments involving fact, law, liability and damages assessment. Lawyers as a group have had a long history of working out personal injuries settlements or contesting them if they cannot be settled.
So what has been De Domenico’s approach? He has set up a review. That review committee contains representatives of employers who pay the premiums, employees and the insurance industry. There are no lawyers on it. That is immediately suspicious.
Sure, lawyers make a lot of money out of pursuing common-law negligence claims against employers, so they have a vested interest. But they also represent both sides in those disputes. Moreover they are often employers themselves, and in precisely the area causing the big premium hikes: white collar areas full of stress and RSI.
A review of workers’ compensation law without engaging the legal profession is untenable. And the recommendations of any such review (in which employees will be outnumbered by employers and the insurance industry) will be still-born on the floor of the Legislative Assembly.
The insurance industry, incidentally, dreads the open-ended nature of common-law claims and long-term cases, though the industry, as a major repository of knowledge of the area should be on the review.
Mr De Domenico is determined to cut premiums because he wants to cut business costs. If he abolishes common-law negligence claims, Mr De Domenico maybe will reduce costs to business, but he will not be reducing society’s costs in general. All he will be doing is shifting the cost burden from business to others, namely injured workers and the community in general which will have to pay to look after the injured.
Cost shifting is not cost cutting.
What should he do?
Well, we know from the experience of the past 15 years that premiums have been increasing for white collar occupations and holding or falling in blue-collar occupations.
What does this tell us? It shows us that, in blue collar occupations, employers have recognised the risks and taken preventative measures. Moreover, they have successfully enlisted their employees to be safety conscious. All those rules about helmets, goggles, tying ladders, harness, mouthguards, warning lights, warning sirens and so on are paying off.
The key then is to do the same thing in white-collar area … to manage people in a way that does not cause medical stress; to ensure people use proper posture and so on.
You have to bear in mind that the common-law compensation under fire here is the result of negligence. Typically, that is permitting unsafe systems of work. It is injury caused through employer fault. If employers escape liability for these injuries, the message is that safety does not matter. At present premiums rise according to the number of claims so there is an incentive to improve safety and society in general benefits.
Let us be generous for the moment and assume Mr De Domenico wants to cut business costs to generate employment and not so the reduced premiums can go straight to profit.
If so, he is not doing the newly employed people any favours by sending them into a world where employers are not liable for injuries to workers caused by employers’ negligence.
Maybe Mr De Domenico wants to cut business costs to ensure that some businesses which are now on the margin do not go under. Well, a business that cannot afford to insure against the consequences of its own negligence should not be in business.
That may sound harsh, but it is sound. Otherwise, virtually anything could be sacrificed to ensuring people stay in business employing people. Businesses could cheaply dispose of toxic and radioactive waste down the stormwater drain because the costs of proper disposal could put them out of business. Why should business have to bother with third-party car insurance? And so on.
In a decent society, the law should provide redress for injury caused by negligence and not let the injured go uncompensated.
Incidentally, the head of the TLC, Jeremy Pyner, is quite wrong when he says the proposals are anti-union. To the contrary; they will drive workers into his arms.