Bills

Return to Work Bill

Committee Stage

In committee.

(Continued from 28 October 2014.)

Clause 1.

The Hon. R.I. LUCAS: There is an issue that does canvass a number of clauses and I want to ask the government to put its position on the record. I have had email correspondence from the minister's office confirming the government's position but this is for the sake of the record. One of the issues in this debate is about SACAT and the employment tribunal. As I have indicated before, the Liberal Party's preferred position was to use SACAT right from the word go in July 2015. For all the reasons I outlined yesterday, we have been prepared to move a compromise position, which is July 2018. I know from discussions with some of my colleagues that they would prefer our original position but in the interests of getting this bill through we have adopted the compromise position. The government now has another option about that which we will discuss in the committee stage.

During this whole debate one of the issues I canvassed with the minister was that, if there was to be a delay of three years, could he and the government indicate that when making critical appointments to the employment tribunal their approach would be to at least consult with both employer representatives and employee representatives, which would give some confidence to employer organisations and the officers who work within the structure of the employment tribunal. I ask the minister whether he would place on the public record the government's response to the issues that I have raised with the government.

The Hon. I.K. HUNTER: I would like, at this stage, to provide some responses to those additional questions that were raised in the second reading contributions and at clause 1 yesterday. The Hon. Mr Darley noted his concern that significant provisions in relation to the bill are dependent upon the content of regulations which are yet to be provided. I can advise that, last week, draft regulations for comment have been provided to all unions and employer associations, as well as various interested parties including lawyers and associations representing professions. I can make the draft regulations for comment available to members for their further information, noting that there may be changes arising from the current consultation and any amendments made to the bill during its passage through parliament.

The Hon. Mr Darley also noted the concern raised by the Australian Lawyers Alliance in relation to the hours worked factor for the economic loss lump sum. The government shares the concern about parents, often mothers, who have returned to work part-time on a temporary basis being disadvantaged by the formula for the payment for economic loss. The government filed an amendment to this provision on 23 October 2014 which provides that, if a worker is working part-time when injured and there is evidence that they had a legally-enforceable right to return to full-time work, then they will be taken to be working full-time for the basis of the economic loss lump sum calculation.

In relation to the Hon. Mr Darley's comments about whether it is plausible for SACAT to have the dispute resolution jurisdiction by 1 July 2015, I rely on my earlier comments and the contribution of the Hon. Mr Lucas yesterday following his discussions with Mr Justice Parker. I understand the request from honourable members the Hon. Ms Franks and the Hon. Mr Lucas about the provision of the most recent actuarial report on the CFS cancer compensation. We will be putting that actuarial advice on the public record.

Currently CFS volunteers who attend on average 175 fire incidents over any five-year period have the reverse onus of proof in relation to certain cancers. The cost is estimated to be $1.8 million per annum using the original actuary report by Taylor Fry, I am advised, or about $5 million using the most recent actuary report by Finity Consulting.

The government committed to reviewing the legislation within four weeks if re-elected. The cost for total CFS volunteer coverage estimated in the most recent actuary report, which was between $28 million and $42 million per year, is consistent with the results provided by the previous actuary, which was between $25 million and $36 million per year. This includes coverage for all past and present operational and non-operational CFS volunteers with no threshold, is my advice.

The amendments proposed here provide presumptive coverage for operational CFS volunteers who are registered as active members on or after 1 July 2013 who retained that presumption for 10 years after a CFS volunteer ceases operational activities.

The CHAIR: Minister, obviously some people are having trouble hearing what you are saying. If you can just try to speak up a little bit louder, they would appreciate it.

The Hon. I.K. HUNTER: I will speak more directionally into the microphone, Mr Chair. It removes the incident thresholds, meaning that CFS volunteers will no longer be required to attend 175 incidents over a five-year period to qualify. This is estimated to have an initial liability of $7.8 million per year, rising to $13.4 million per year by year 10, as the effect of including a rolling 10 years' worth of retirees takes hold.

The 10-year retirement threshold limits the cost. The CFS Volunteers Association supports this option, I am advised, as all current operational volunteers are covered regardless of the number of incidents attended. This provides greater coverage and more equity with the paid MFS firefighters. It is important to note that past members can still make a compensation claim but are not entitled to the presumption.

The Hon. Ms Franks asked questions about the detachment of injured workers from their pre-injury employer. Section 58B of the Workers Rehabilitation and Compensation Act 1986 outlines an employer's duty to provide suitable employment. It has various exemptions from providing suitable employment for employers, including those employing less than 10 employees. This exemption has not been included in the Return to Work Bill.

The provisions of clause 15 allow a worker to request the corporation to investigate noncompliance of their employer, with a requirement of the act as regards to their employment. This is a new provision. Clause 18 also provides a process for workers to apply to the South Australian Employment Tribunal for an order that the pre-injury employer provides suitable employment. I provide this additional information to highlight that any data from the existing scheme in terms of an employer's duty to provide work will not be comparable to what is proposed in this bill. It is a different process with a stronger, enforceable right for workers to seek a return to work with their employer.

It is well known that the current provisions of the Workers Rehabilitation and Compensation Act 1986 are not adequate in supporting workers returning to their pre-injury employer. The responsibility for assessing and determining the goal's for an injured worker's retraining and return to work is managed by the claims agents. The process is different for each claim depending on the circumstances of the injured worker and employer. Many different options may be explored, including retraining at a different employer with the goal of returning to the pre-injury employer. This means that what may be considered as a detachment from the pre-injury employer is not clear.

The two claims agents, while operating within the WorkCover framework, have slightly different processes aligned to their claims management models. WorkCover revised the framework for the enforcement and regulation of section 58B in February 2014. This was to provide a greater focus on ensuring decisions about whether it is reasonably practicable for an employer to provide suitable employment are timely and evidence-based.

The revised framework includes provisions for an employer or injured worker to seek a WorkCover review of the claims agent's decision. Decisions to change the return-to-work goal to a different employer is recorded in the claims management system, where the employer has an obligation to provide suitable employment. This may result in multiple instances of a change of goal for an individual worker.

Given this, it is difficult to provide responses to the Hon. Ms Franks; however, I can advise that in relation to the first question about the numbers of injured workers detached from their pre-injury employer in the period of 2011-14, I am advised that, using a proxy indicator of activity, in the 2011-12 financial year there were 940 changes in return-to-work goal to a different employer; in 2012-13 financial year, there were 1,035 changes in return-to-work goal to a different employer; and in 2013-14 financial year, there were 945 changes of return-to-work goal to a different employer. It should be noted that these figures do not include any workers for self-insured employers.

In relation to the Hon. Ms Franks' second question: there is no application process for employers to terminate the employment of their workers; rather, the way the section currently operates is that, if one of the exemptions applies to the employer, they do not have a duty to provide suitable employment or pay wages. However, where they are not exempt, they are required to provide notice of their intention to terminate. These notices are sent to claims agents and are not recorded in the claims management system.

In relation to the Hon. Ms Franks' question about the number of applications approved by WorkCover, again I note there is no application process; however, I can advise that WorkCover will review decisions relating to a change of return-to-work goal to a different employer. Given the number of changes this review and investigation process has had over the last three financial years, it is not very useful to provide further details. The Hon. Ms Franks also asked about the number of applications withdrawn and the number rescinded. I can advise that any such information is not recorded in the claims management system and therefore cannot be accurately provided.

The Hon. Mr Lucas asked a number of questions in relation to the position of the WorkCover Ombudsman. I draw his attention to Hansard from Thursday 16 October, on page 1268, where I put on the record responses to most of his questions. In terms of the additional questions asked by the Hon. Mr Lucas, I can advise that Mr Wayne Lines, who currently holds the office of WorkCover Ombudsman, does not have the substantive position on expiry of his current acting appointment. I am advised that he has not been offered any position or been guaranteed that one will be found for him in the department.

Mr Lines will be involved in assisting the department with implementing the transfer of complaint-handling functions from the WorkCover Ombudsman to the state Ombudsman. One option is that the staff of the WorkCover Ombudsman transfer to the Ombudsman to undertake this function, but this is not guaranteed. The staff would then be employees of the Ombudsman, not employed as a statutory officer.

The Hon. Mr Lucas noted recent increases in claims agent fees and has also asked what is the estimate for claims management fees for 2014-15? WorkCover currently contracts Employers Mutual and Gallagher Bassett to deliver claims management services. I can confirm the Hon. Mr Lucas's observation that claims management fees have increased in 2013-14. I am advised the increase reflected the significant change in WorkCover's approach to managing the scheme with once-off performance fees available to the claims agents to invest in, achieving significant scheme improvements.

This increase of about $20 million in fees, as noted by the Hon. Mr Lucas, resulted in unprecedented improvements in the scheme's finances and performance. The investment in additional once-off fees achieved more than 10 times its return on investment in 2013-14, with claims liability savings of $298 million; an improvement in the scheme funding ratio of 7.3 per cent to 71 per cent; unparalleled return-to-work outcomes, with approximately a 17 per cent improvement at each of the key milestones of two, 13 and 26 weeks; an 8 per cent improvement at 52 weeks; and a reduction in the breakeven premium rate of 15 per cent to 2.87 per cent.

In 2014-15, WorkCover expects to pay the claims agents a portion of the performance fees related to the unprecedented improvements in outstanding claims liability savings of return-to-work performance. Additionally, the claims management fees for 2014-15 include building the infrastructure for the new return-to-work scheme, whilst continuing to deliver the current scheme—a temporary doubling of activity.

Costs are expected to increase during the transition period due to the changes in service model, updating systems for the new scheme, ensuring staff and service providers are appropriately trained and have the right support to deliver the outcomes required by the new scheme. Due to these two major factors, WorkCover estimates that claims agents fees for this uncharacteristic year will be the highest ever.

WorkCover is awaiting finalisation of the bill to complete project plans for its implementation and final estimates. It should be noted that these setup and performance fees are factored into the 2 per cent average premium rate proposed for the return-to-work bill. Claims agent fees under the new scheme will provide a base fee which relates to the cost of the scheme. The profitability of the claims agents will be dependent on the return-to-work outcomes they achieve. It is expected that after the transition period of two years, claims agent fees will reduce as the cost of the scheme reduces.

I have asked my advisers to get me answers to the Hon. Mr Lucas's two questions that he asked moments ago as soon as possible. We have one. I am advised that the minister has confirmed that a structured approach, arm's length from the minister, will be adopted in ensuring that unions and employers are consulted on appointments related to the work of the South Australian Employment Tribunal. The minister will establish a structure of unions, employers and government representatives forming a panel who will make recommendations to the minister on such appointments. I believe that that will address the questions raised by the Hon. Mr Lucas in that regard.

The Hon. R.I. LUCAS: Thank you for that, minister. I was momentarily distracted through part of the minister's response on claims management issues so I will have a look at that during the lunch break, and when we return to the later clauses in the committee stages I am sure I will find an appropriate clause if there is a follow-up question on claims management issues. I thank the minister for the response in relation to the government's approach to appointments in relation to the work of the employment tribunal.

I want to raise a further issue as a result of the answers the minister has provided on behalf of the government to questions raised by the Hon. Tammy Franks and myself on the actuarial advice on the new CFS cancer compensation scheme, and I am happy for it to be taken on notice to allow the government to take advice. Again, I was momentarily distracted in the middle of the minister's response so I am not sure whether it was covered in that period, but I do not think it was.

The minister outlined a number of the changes and I think he said that the government after the election had done an estimate of the original promised scheme which was the broadest possible option, and I think he said that confirmed a figure of somewhere between $28 million and $42 million. This new scheme is obviously much less than that. The minister outlined some broad differences. I am wondering whether the minister could take on notice an answer sometime later today or tomorrow as we proceed through the committee stages of the debate: what was the one most significant change that the government has introduced which has led to the significant reduction from the $28 million to $42 million down to the estimated cost?

There are clearly a range of issues which the minister has canvassed but I am wondering whether, on the basis of the actuarial advice—and I am assuming there are one or two issues which would have led to the most significant difference in the original actuarial advice and the most recent actuarial advice.

But can I just confirm again which actuary provided the most recent actuarial advice that the government is using for its new cancer compensation scheme amendments, which we will be debating in this committee stage? I do not want to delay the debate on clause 1; I am happy for the minister to take that on notice and get considered advice and, at an appropriate or even at inappropriate stage later in the committee, put it on the record.

The Hon. I.K. HUNTER: I will take at least the first part of the question on notice. The paragraph I read out earlier, for the honourable member's benefit, was that the most recent actuary report was by Finity Consulting. The $28 million to $42 million per year is consistent with the results by the previous actuary, so that is the most recent advice; the previous actuarial advice was between $25 million and $36 million per year.

The Hon. R.I. Lucas: But the 28 to 42 was done by Taylor and Fry wasn't it—not Finity?

The Hon. I.K. HUNTER: No, the most recent actuary report, between $28 million and $42 million would be Finity and is consistent with the results provided by the previous actuary, between $25 million and $36 million. In relation to the first part of the question—

The Hon. T.A. Franks: With what thresholds is the issue.

The Hon. I.K. HUNTER: If the honourable member wants to make a contribution, she might stand and give us the benefit of that.

The Hon. T.A. Franks: I was attempting to, but the Chair pays no attention to me when I stand, so I just—

The Hon. I.K. HUNTER: Well, that is probably because I am standing at the moment. In relation to—

The Hon. T.A. Franks: I just wanted to know what the thresholds were.

The Hon. I.K. HUNTER: —the most significant change the government introduced to reduce the cost, I will come back to the honourable member with that. Mr Chair, I think the Hon. Ms Franks has a question.

The CHAIR: The Hon. Ms Franks.

The Hon. T.A. FRANKS: I just wanted to know what thresholds were applied in those particular figures given.

The Hon. I.K. HUNTER: I thank the honourable member and will come back to her as soon as I can.

The Hon. R.L. BROKENSHIRE: Based on what the Hon. Rob Lucas had to say, and given a commitment that I have to work through at midday, I wanted to speak to the situation regarding when the tribunal comes under the SACAT Board. In doing so I wanted to refer to the relevance of clause 1 with respect to the government's attitude and also that of Business SA. I want to put on the public record my annoyance that effectively, both through the government and Business SA, I was told that neither of them were interested in looking at any amendments, that they had worked too hard on getting this bill together to the point where it is now and that, effectively, they did not want crossbenchers interfering with what they had worked with outside the parliament to actually get to the point where they are now. I want that on the public record.

It infuriates me that I have been told that by both the government and Business SA. Where was Business SA over the last 12 years when this government took a WorkCover system that had been fixed after a mess by the previous Labor government, worked on very hard by the then Liberal government—that is the history and truth—from 1993 to 2002 to get a proper system back in place to then see it absolutely destroyed on two or three occasions over that 12-year period? I did not hear much at all from Business SA, and as a result of that we saw more mess occurring and fewer and fewer people being employed. When they were injured we saw them being treated in a disgusting way, in my opinion, on many occasions because of the legislative changes, and we saw a government blow something out to $1.4 billion.

As a member of the crossbenches, and as an elected democratic representative of the people of this state, we do have a right to put forward amendments, and the community expect us to put forward those amendments. The reason we are now here supporting a bill that we may not necessarily think is as good as it could be or should be, or as fair as it could be, is because of the mess in which this government put WorkCover in this state. I say to the government: work with the crossbenchers and do not infuriate us by saying, 'No, no, we've done all the hard work, we don't want to upset the unions and therefore we're not interested in looking at any of your amendments.'

We hear the message that we need to fix this mess, and the parliament in a democratic way is doing its best to do that, but whether it is the government or Business SA, do not tell the crossbenchers that we will not get due consideration or a hearing from them if we have to put up amendments. The next point I would make is that we have been consistently with the Hon. Tammy Franks right through her attempts to get proper, fair and equitable compensation for CFS volunteers, as the government were very happy to do for the MFS paid firefighters but not the volunteers.

The Hon. T.A. Franks: Not the retained ones at first, but eventually.

The Hon. R.L. BROKENSHIRE: And not even the retained, initially, but that was just to make the union happy. The point is that now we have seen some compromise there, and we will therefore sit comfortably with that, given that my understanding from this morning is that the CFS Volunteers Association have indicated that they are now prepared to accept what is being put up. I will have to read the rest of my email on that to be 100 per cent sure, but I will do that when I get a chance.

The final point that I want to put on the public record with clause 1 is that, whilst we were told by the government that they were not interested in any amendments, I note that even now, in the last half an hour, we are still getting amendments from the government. So, it is alright for the government to bring amendments in to fix a bill, but it is not alright for the crossbenchers to want to represent the democracy of this state.

Clause passed.

Clause 2.

The Hon. I.K. HUNTER: I move:

Amendment No 1 [SusEnvCons–3]—

Page 11, line 5—Delete 'This Act' and substitute: 'Subject to this section, this Act'

This is a technical amendment. I understand it is consequential to our amendment No. 2 that outlines the commencement of provisions that relate to firefighters. I would like to acknowledge at this stage that the Greens have consistently over recent months pursued changes to the arrangements applicable to CFS volunteers.

The government amendments reflect an agreement arrived at with the CFS Volunteers Association, which was announced two weeks ago. The Greens amendments filed last night seem to substantially repeat the government's amendments, and for that I say thank you. They are of course unnecessary, but we welcome the support of the Greens for the government's amendment. It is noted and is appreciated.

The Hon. T.A. FRANKS: As noted, the Greens have this same series of amendments. It goes to a longstanding campaign that began under minister Snelling in response to a Greens federal bill that was passed that gave recognition to the presumptive cancer laws under presumptive assumptions to be made where firefighting was linked to a particular set of cancers. At the federal level, that was initially 13 but it was, after analysis, whittled down to 12, and that is the schedule that we now have in South Australia and that other states are looking at adopting as, indeed, has happened in Tasmania.

The Greens have fought really hard and stood side-by-side with the CFS volunteers on this issue. We recognise that under WorkCover firefighting has been recognised as a work activity since the inception of WorkCover under this regime. We queried why the CFS volunteers were shut out of the original discussions and announcement made by government, given we as Greens took this issue to the government under minister Snelling and had hoped to work collaboratively with the government. We were shocked when the government then announced that only MFS firefighters would be covered by the presumptive laws. Indeed, at that stage, it was not even retained MFS firefighters: it was only the full-time firefighters.

Certainly, the UFU had the ear of government, but the CFS volunteers struggled to get a hearing with government. Had they not continued to fight, and had not the crossbenchers and minister Brock persisted with this issue, I do not think we would be seeing this amendment here in this Return to Work Bill happening today.

It was a week ago that you made the announcement that you were finally going to listen to the evidence. The government had finally stopped with their arguments. The original argument was that they said the science was not settled. Well, the Monash study showed that the science was settled on this issue and there should not be any further wait for presumptive laws. The work of these volunteer firefighters was indeed the work that could be shown to have causal links to these particular cancers.

Structural fires are often fought by the CFS firefighters in this state, which is different to some jurisdictions in Australia and the world. I would say that around the world volunteer firefighters are covered under this legislation in all of the jurisdictions in which it has taken a lead; however, those volunteers are actually paid volunteers. Whilst they are called volunteer firefighters in the US and Canada, they are often actually paid, so the distinction was not even on the fact that there was money going into their pockets for the act of saving and protecting life and property.

The work of the CFS in this state is invaluable and incalculable, and the amount of money we are talking about with these presumptive laws is a drop in the bucket of what we would lose if we lost the goodwill of the CFS. The Greens will be persisting with this amendment today because the government has railed against the workplace rights of the CFS volunteers right from the start, even refusing to meet with them and work with them.

Had the government sat down with the CFS volunteers before the March state election, they would have understood that the work of the CFS volunteers is relevant and, indeed, the government now recognises this. It is no different from the paid firefighters of this state with regard to this presumptive cancer compensation issue. The government should not take lightly giving credit where credit is due. The Greens have stood with the CFS volunteers, and I understand that Sonia St Alban has sent members an email today saying that the CFS volunteers support the Greens' amendment to recognise that we supported them.

The government is welcome to join this party, but it should not go unnoticed that every non-Labor elected member in this place and in the other place has previously voted for this legislation and that the only people who have not were those who were elected Labor—the government. The Weatherill government time and time again has opposed equality for CFS volunteers, so we welcome you to join with us, and we look forward to your support of the Greens' amendment.

The Hon. J.A. DARLEY: I rise to support this suite of amendments, and I want to congratulate and commend the Hon. Tammy Franks for the considerable amount of work that she did in bringing this matter forward. I am more than convinced that without that work the government would not be putting forward these amendments today.

The Hon. R.I. LUCAS: On behalf of Liberal members, I acknowledge the work the Greens, and the Hon. Tammy Franks in particular, have done on this issue. The Liberal parliamentary party has nailed its colours to the mast, as the honourable member will know. There are many to pay tribute to but, just thinking quickly, certainly Liberal leader, Steven Marshall, and shadow minister, Duncan McFetridge, were two amongst a number who worked actively on this issue with the Hon. Tammy Franks, CFS volunteers and others.

I think the Hon. Tammy Franks will acknowledge that sometimes the assistance of one of the major parties in terms of supporting initiatives and amendments from the community, such as CFS volunteers, and then reflecting it through the crossbenchers, such as the Greens, does assist in putting pressure on governments ultimately to do backflips, change their mind, or adopt new positions, whichever phrase you want to use to describe the government's current position.

So, I want to acknowledge the work of the member for Dunstan and the member for Morphett, as well as others I have not named within the Liberal parliamentary party room. For the reasons that have been outlined publicly, the Liberal Party supports the compromise position that has been adopted and has now been accepted by the CFS volunteers, and we will be supporting the amendments.

The Hon. R.L. BROKENSHIRE: I advise the house that Family First will be supporting the amendments. I commend the Hon. Tammy Franks for her efforts over a long period of time on this matter, and I put on the public record, so that history is not rewritten, that the Hon. Tammy Franks raised this issue. It was brought to our attention at about the same time, and Family First would have introduced a bill similar to the one presented by the Hon. Tammy Franks, but when she put forward the bill, we supported it. We supported it in a select committee as well, and that select committee strongly recommended this probably nearly a year ago. So, it has been clear that the Hon. Tammy Franks—

The Hon. T.A. Franks interjecting:

The Hon. R.L. BROKENSHIRE: Well, that's right, it was not the majority of the select committee into emergency services, police and community safety: there was a dissenting report from Labor, but the rest were absolutely locked together on this. The fact is that this matter has put a lot of grief around the CFS at a time when they already have other challenges, such as the massive hike in the ESL and also the fact that this government is about to, in one way or another, attempt to dismantle a long-standing independent structure, namely the CFS, the SES and the MFS. We need to be very careful in considering this so that we do not have another mess for the CFS and the SES.

However, to come back to the point, I also do not want to see the member for Frome (the Hon. Geoff Brock) claim the credit for this. He was put in a situation where he had to put forward a deal. Because of the pressure that had been applied through what I have just highlighted in this council and because the CFS was actually knocking on the door of the member for Frome, he thought he had to get a score on the board.

I acknowledge that he did support a review, but there was some time and a fair bit of silence between him signing off on an arrangement with the Premier and coming out and saying that things had progressed. I am saying this because I am tired of the government rewriting history in this place. We see it time and time again. Whilst this is still a compromise—it is not as good as some of us would have liked—it is the best we can do at this point in time. With those words, I am happy to support this amendment.

The Hon. K.L. VINCENT: Very briefly, Dignity for Disability will continue to support the Hon. Ms Franks on this important issue. We are certainly pleased to see a crossbench member get credit for the hard work that they have done.

The Hon. T.A. FRANKS: I just want to note that the Liberal opposition took this to the state election as an election policy, and I acknowledge the work on that. Indeed, the government acknowledged that a review needed to happen before the election, although I think minister Brock's involvement is to be commended in driving that issue forward over these past months.

There are two things that can happen now. The Liberal opposition has indicated that they will vote for the government amendment, in which case the government amendment will get up and the Greens' amendment will lapse, given they are the same. We could also look at recommitting this clause. However, what I will do at this stage is withdraw my amendment and thank the government—however insincere I think those words earlier were—for finally seeing sense and actually supporting those who support and protect us.

Amendment carried.

The Hon. I.K. HUNTER: I move:

Amendment No 2 [SusEnvCons–3]—

Page 11, lines 6 and 7—Delete subclause (2) and substitute:

(2) Part 7A of Schedule 9 will be taken to have come into operation on 1 July 2013 immediately after the Workers Rehabilitation and Compensation (Firefighters) Amendment Act 2013 is taken to have come into operation.

(3) Clause 27 of Schedule 9 will come into operation on 1 January 2015.

This amendment provides for the retrospective commencement of consequential amendments to the Workers Rehabilitation and Compensation Act 1986 that relate to the reverse onus proof provisions for Country Fire Service firefighters. I thank honourable members for their indication of support for this suite of amendments. I can only note that policy and success has many parents; I commend that.

Amendment carried; clause as amended passed.

Clause 3.

The CHAIR: The next amendment is to clause 3 to be moved by the Hon. Ms Franks. The Hon. Mr Darley has the same amendment. The Hon. Ms Franks.

The Hon. T.A. FRANKS: I move:

Amendment No 1 [Franks–1]—

Page 11, line 19—After 'financially' insert 'by the provision of fair compensation'

The Sickness Bill became law in 1883 and the Accident Bill in 1884, under the Chancellor of the German Empire, and introduced programs to assist workers in the event of accidental injury, illness or old age. This initial system was financed by workers and employers and shows the long tradition we have of recognising the role of workers compensation in a civil society. It is a social insurance scheme and it should be a no-fault scheme.

The government, by not having the words 'fair compensation' in the objective clause of this bill, gives an indication that it is perhaps not willing to provide fair compensation to injured workers. The Greens are moving this amendment, which echoes the Law Society's submission which suggested that the fair compensation for employment-related disability should be included as it is integral to the entirety of the objectives of any WorkCover or to be called 'return to work' scheme. Any workers compensation should have that as a fundamental principle. If we believe in fair compensation, let's put it in the legislation.

The Hon. J.A. DARLEY: At the outset, honourable members will note that there is a great deal of overlap between the amendments proposed by the Hon. Tammy Franks and the amendments proposed by me; as such, I indicate that I will be supporting all of the amendments proposed by the honourable member and, once again, I commend her for her strong stance on this bill. I think the writing is on the wall and many, if not all, of our attempts to inject some fairness back into the equation are going to be in vain, but it is still a worthy exercise.

The purpose of the amendment is to enshrine in the objects of the act the provisions of fair compensation for workers who suffer injury at work. This is an integral element of the objectives of the scheme and should be included in the bill. Unfortunately, this bill appears to be more about actuarials and number crunching than injured workers who are going to be abandoned in droves. If unamended, it will result in shifting responsibility for the care of those who are injured at work from one system to another, namely, the welfare system.

The Hon. I.K. HUNTER: I thank the Hon. Mr Darley for his point of clarification; it simplifies processes for us somewhat. I will speak now to the Hon. Ms Franks' amendment. This amendment applies to the objects of the act and introduces compensation into the Return to Work Bill. This proposed amendment is counter to the primary aim of the new scheme, which is to support workers to recover and return to work.

The return-to-work scheme has been designed to support the recognised health benefits of work, increase objective and evidence-based decision-making, maximise return to work through early intervention, and reduce benefit dependency. The use of the term 'compensation' promotes an entitlement culture that is one of the problems with the current scheme. The term 'fair' may sound good, but it is something that is very subjective in a scheme that requires the interests of workers and employers to be in balance. The question then becomes: fair to whom? The objectives in the bill are meaningful and direct as they are, and the government opposes this amendment

The Hon. R.I. LUCAS: As I outlined in the second reading, the position the Liberal Party and Liberal Party members will be adopting has been outlined by the member for Dunstan, Liberal leader, Steven Marshall, publicly and during the debate in the House of Assembly: he committed himself and the party to fundamental reform of the workers compensation scheme. He indicated that he had given a commitment to the government to work with the government to introduce significant amendments to the scheme.

As I said in the second reading, and in the debate at clause 1, whilst we have heard many attempts by this government to supposedly reform WorkCover over the last 12 years—all of which have failed to now—we are hopeful that this one might be more successful than the previous endeavours. For the reasons the member for Dunstan has outlined, we are supporting in general terms the reform attempts by the government in relation to this bill. For those reasons, we will not be supporting this amendment and a number of the other amendments which potentially cut across the attempts to reform.

The Hon. T.A. FRANKS: Could the minister clarify what he means by 'this is the end of the age of entitlement', and does he believe that it is an entitlement for a worker not to be injured or killed at work?

The Hon. I.K. HUNTER: The honourable member should be very careful what she claims I said. I said no such thing.

The Hon. T.A. FRANKS: Does the minister believe that a worker is entitled not to be injured or killed at work?

The Hon. I.K. HUNTER: Clearly, that is the key aim of the bill.

The Hon. T.A. FRANKS: Does the bill do that?

The Hon. I.K. HUNTER: The objectives of the bill, as I said, are to support people who are injured at work, but of course if you look at the way the penalty structures or the effective premium structures are in place, they reward those businesses who actually put effort into occupational health and safety, and prevent workplace injury and, indeed, death in the first place.

The Hon. T.A. FRANKS: I fear the minister thinks I am trying to be a nuisance, but what I am actually putting to the minister is: does not having a fair compensation objective actually ensure that some parties ensure that there is a safe workplace?

The Hon. I.K. HUNTER: It appears, from history, that that is not the case.

Amendment negatived; clause passed.

Clause 4.

The Hon. R.I. LUCAS: I move:

Amendment No 1 [Lucas–1]—

Page 16, after line 30—Insert: 'jurisdiction transfer date means 1 July 2018;'

Given that the Hon. Mr Brokenshire may well have to leave soon, I will not speak at length on this, so that he can put down his position on this particular amendment. As I outlined in the second reading, my understanding is that the one potentially remaining difference of opinion between the government and Liberal members, at least in relation to this bill, does relate to this issue of the start-up date for the transfer to SACAT.

Very quickly, the government's position, as enunciated by the minister, has been, 'Look, it probably does make some sense in terms of transferring to SACAT, but it's just impossible to do it in the short term. In the medium term, it may well be an option.' I think that is a fair statement of the position put down in the House of Assembly and to a number of other interested stakeholders, certainly from the employer organisation side.

Our position had been to support the transfer from 15 July from the start but, for the reasons I outlined, having listened to Justice Parker and to various other groups, we have adopted a compromise position and that is that we lock in a transfer consistent with the statements the minister did make as a possible option in the House of Assembly, but also consistent with the discussions I have had with Justice Parker, and indeed others, in terms of when it would be possible.

Can I hasten to say that Justice Parker would not adopt a position that placed him in conflict between the government and the opposition but, in terms of the question of the practicality of when it could be achieved, if that policy decision was taken by parliament or government, the answer to that question was in and around about three years' time. July 2018 is approximately three years and three months away in terms of the transfer.

For those reasons, we are moving this amendment, and we would firstly hope the government might adopt a position where it is prepared to support it, but it has canvassed another amendment this morning—I think the Hon. Mr Brokenshire has referred to that—which would seem to indicate that they are opposing this amendment and that their position will be to have a review at some future stage which may make a decision to transfer it. We strongly oppose that particular potential amendment from the government. We would urge crossbenchers to support this position that we lock in what is a sensible decision to transfer it to SACAT, albeit delayed by 3¾ years until July 2018.

The Hon. I.K. HUNTER: I hate to be the one to dash the Hon. Mr Lucas' hopes in this matter, but the government will be opposing this amendment. The Hon. Mr Lucas has proposed a set of amendments that would cause the jurisdiction for review of matters under the Return to Work Act to automatically transfer from the South Australian Employment Tribunal to the South Australian Civil and Administrative Tribunal on 1 July 2018. I understand, as he has explained to the chamber, this is a compromise on his party's initial position.

The government is open to considering such a transfer at a future date, at which point we would anticipate the South Australian Civil and Administrative Tribunal would be up and running and in the position to expand its work with a dedicated stream to the return-to-work scheme. However, the government would prefer for this not to be an automatic transfer as provided in the suite of amendments proposed by the Hon. Mr Lucas. We would rather consider the decision as undertaken after reflection on the position of the South Australian Civil and Administrative Tribunal to take on this jurisdiction and considering any learnings from the dispute resolution process under the new return-to-work scheme.

The government has filed an amendment to clause 203, which requires a review of the return-to-work scheme three years after its commencement. This amendment will expand the scope of the review to include an assessment of the merits of moving the jurisdiction for review of matters under the Return to Work Act from the Employment Tribunal to a stream of the South Australian Civil and Administrative Tribunal. The government proposes that this is a preferable way of managing this issue and the government is therefore opposing this amendment and all others that are related to the automatic transfer of jurisdiction to the South Australian Civil and Administrative Tribunal.

The Hon. R.L. BROKENSHIRE: I rise to say that, notwithstanding what I said this morning and in my second reading contribution, generally the Family First Party will be supporting this legislation through. However, I believe that the opposition's amendment is a fair amendment, it is a sensible amendment and it ensures that in July 2018 the responsibilities of the Employment Tribunal go to SACAT.

Having worked with Justice Parker when he was a senior legal adviser in the justice department and based on what the Hon. Rob Lucas said today, I clearly respect and understand what Justice Parker is saying about it not being possible to look at this thing right now. However, just for the history, I have never actually felt comfortable with all of the processes of appointment when it comes to the Industrial Relations Tribunal in this state. I know for a fact that the government, when in opposition, promised one person that, if they were to make my life difficult as a minister at that point in time, they would duly rewarded with a position in the Industrial Relations Commission. That is something that never sat comfortably with me but, whilst it was corridor chat, it proved to be factual.

I would actually support a more independent process in how we look after both workers and employers in the matters around remuneration and therefore I will be absolutely supporting the Hon. Rob Lucas' amendment.

The Hon. J.A. DARLEY: I will also be supporting the opposition's amendment.

The Hon. T.A. FRANKS: The Greens will be strongly opposing the opposition's amendment. We do not see a reason for the Employment Tribunal to be moved to SACAT. We also had some concerns: I hold some hesitations about regarding the Guardianship Board's inclusion in that without due process, so we will look and ensure that that does work out. We think that there is specialised expertise here and there is an environment that demands that the Employment Tribunal stand alone.

The committee divided on the amendment:

Ayes 10

Noes 9

Majority 1

The Hon. I.K. HUNTER: I indicate that, in relation to the previous amendment passed, moved by the Hon. Mr Lucas, the Hon. Mr Lucas had the numbers for support of that, and the government will treat that as a test clause and will not seek a division on any further amendment.

The Hon. T.A. FRANKS: I move:

Amendment No 2 [Franks–1]—

Page 18, lines 17 and 18—Delete the definitions of psychiatric injury and pure mental harm and substitute:

psychiatric injury means mental harm (including consequential mental harm);

This amendment deletes the definitions of psychiatric injury and pure mental harm and substitutes 'psychiatric injury means mental harm (including consequential mental harm)'. The Greens move this amendment because the government has removed 'consequential mental harm' from its proposed bill. If you are, for example, a construction worker and you witness the death of your colleague through an industrial accident, you may be in shock and suffer, of course, post traumatic stress, so it is only fair that you should have access to compensation for mental harm. This is the case under the current act, and the Greens do not believe it is necessary to have this excluded from the bill before us.

The Hon. J.A. DARLEY: Again, this amendment is identical to my second amendment. I think the Hon. Tammy Franks would agree that it serves as a test clause for a number of related amendments that deal with the issue of psychiatric injury. It seeks to delete the current definitions of psychiatric injury and pure mental harm and replace them with one definition that includes consequential mental harm. In so doing, consequential mental harm will be compensable, in line with other psychiatric injuries, and with the wording of the current legislation. This is an extremely important amendment. Without it we can continue to expect to see an exacerbation of the discriminatory approach that injured workers suffering from psychiatric injuries continue to face.

The Hon. I.K. HUNTER: The Hon. Ms Franks' amendment applies to the definition of 'psychiatric injury' and has the effect of allowing consequential mental harm claims to be compensable. This amendment offers a significant risk to the scheme and is likely to materially increase the costs to the new scheme. Consequential mental harm emerges over time and, if work related, receives the relevant income and medical support during the life of the claim. This is the appropriate approach on advice for supporting the treatment and recovery of consequential mental harm.

This amendment seeks to make consequential mental harm a work injury in its own right, restarting further time banded periods of income and medical support. This is not in the best interests of the scheme. The scheme is focused on recovery and return to work for workers. If I understand the Hon. Ms Franks example correctly, she talked about in fact not consequential health harms but about a primary mental health issue.

A consequential mental health issue is more like a worker with a back injury through work and then becomes depressed as a result of that down the track. That is the definition of 'consequential mental harm' and not the example the honourable member related of someone observing an injury at work and then developing depression or other mental health issue as a result of that. My advice is that that would be considered a primary mental health issue. The government will therefore oppose the amendment.

The Hon. R.I. LUCAS: For the reasons I outlined earlier, given the position adopted by the member for Dunstan on behalf of Liberal members, we will not be supporting this amendment.

Amendment negatived.

The Hon. R.I. LUCAS: I move:

Amendment No 2 [Lucas–1]—

Page 19, after line 4—Insert:

SACAT means the South Australian Civil and Administrative Tribunal established under the South Australian Civil and Administrative Tribunal Act 2013;

This amendment is consequential on the earlier vote.

The Hon. I.K. HUNTER: The government accepts that it is consequential.

Amendment carried.

The Hon. R.I. LUCAS: I move:

Amendment No 3 [Lucas–1]—

Page 19, after line 5—Insert:

SAET means the South Australian Employment Tribunal established under the South Australian Employment Tribunal Act 2014;

This amendment is consequential.

Amendment carried.

The Hon. R.I. LUCAS: I move:

Amendment No 4 [Lucas–1]—

Page 20, lines 5 and 6—Delete the definition of 'Tribunal' and substitute:

Tribunal means—

(a) until the jurisdiction transfer date—SAET; and

(b) thereafter—SACAT

It is consequential.

Amendment carried; clause as amended passed.

Clauses 5 and 6 passed.

Clause 7.

The Hon. T.A. FRANKS: I move:

Amendment No 3 [Franks–1]—

Page 25, lines 12 to 34—Delete subclauses (1), (2) and (3) and substitute:

(1) This Act applies to an injury if it arises out of employment.

(2) Subject to this section, an injury arises out of employment if—

(a) in the case of an injury that is not a secondary injury or a disease—the injury arises out of or in the course of employment; or

(b) in the case of an injury that is a secondary injury or a disease—

(i) the injury arises out of employment; or

(ii) the injury arises in the course of employment and the employment contributed to the injury.

(3) An injury consisting of a psychiatric injury arises out of employment if (and only if)—

(a) the employment was a substantial cause of the injury; and

(b) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).

I am assuming that this is also consequential on my previous amendment, so I indicate that I have already spoken to these issues and that it is consequential. Obviously, the Greens will be voting in support, and expect the Liberals and the government to vote us down.

The Hon. J.A. DARLEY: Again, this amendment is consistent with my third amendment and, as such, I will be supporting it.

The Hon. I.K. HUNTER: I am not absolutely sure that this is consequential. In fact, it seeks to change the employment test. This amendment concerns the test for compensability of injuries, taking it back to the current threshold provided for the Workers Rehabilitation and Compensation Act 1986. The requirement for employment to be a significant contributing cause has been abandoned in this amendment.

This amendment will materially increase the proposed cost of the scheme and maintain the current culture that requires only a trifling connection between the employment and the injury to establish compensability. This amendment reduces the economic benefits for South Australia, as well as promoting an entitlement-based compensation culture; therefore, the government opposes this amendment.

The CHAIR: The Hon. Mr Darley, your amendment is not exactly the same, so we will move them together, if you can move your amendments 3 and 4.

The Hon. J.A. DARLEY: I move:

Amendment No 3 [Darley–1]—

Page 25, lines 14 to 22—Delete paragraphs (a) and (b) and substitute:

(a) in the case of an injury other than a secondary injury, a disease or a psychiatric injury—the injury arises out of or in the course of employment; or

(b) in the case of a secondary injury (other than a secondary injury that is also a psychiatric injury) or a disease—

(i) the injury arises out of employment; or

(ii) the injury arises in the course of employment and the employment contributed to the injury; or

(c) in the case of a psychiatric injury—

(i) the employment was a substantial cause of the injury; and

(ii) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).

Amendment No 4 [Darley–1]—

Page 25, lines 23 to 34—Delete subclause (3)

Clause 7 of the bill provides that an injury must arise from employment in order for the act to apply. It establishes the criteria for assessing compensability of an injury. In addition to establishing that the injury arose out of or in the course of employment, injured workers would also be required to establish that the employment was a significant contributing cause of the injury.

The Law Society has expressed concern that the introduction of this new compensability test for physical injuries could result in substantial additional disputation and the potential savings do not justify the additional cost to be incurred through disputation and the likely absence of measures directed to return the injured worker back to work during that period.

In determining whether an injury arises from employment, the bill also draws a distinction between physical injuries and psychiatric injuries, with the latter subjected to a more onerous test. Specifically, clause 7(2) provides that an injury arises from employment if:

(a) in the case of an injury other than a psychiatric injury—the injury arises out of or in the course of employment and the employment was a significant contributing cause of the injury; and

(b) in the case of a psychiatric injury—

(i) the psychiatric injury arises out of or in the course of employment and the employment was the significant contributing cause of the injury; and

(ii) the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).

In its submission, the AMA states that, under common law, there is a position that anything less than a significant contributing cause is considered trivial and of no consequence. It is concerned that the insertion of the term 'the' into clause 7 provides opportunity for legal argument, creating an unnecessary barrier to the objects of the bill. As such, the AMA has strongly recommended that 'the' be removed and replaced by the term 'a' or 'the most' as alternatives.

This recommendation also has the support of the Law Society and the Australian Lawyers Alliance (ALA). The Law Society states that this change is also likely to be the subject of further disputation about the meaning of the new term, particularly as it appears that the intention of that employment must have contributed more than any other causal factor to the psychiatric injury. Society refers to a number of cases where it has been acknowledged by courts and tribunals that the cause of psychiatric injury arising from the workplace is often multifactorial.

Given the concerns that have been highlighted by the Law Society, the ALA and the AMA, the amendment moved by the Hon. Tammy Franks seeks to delete the new qualifying provisions and replace them with those principles that apply under sections 30 and 30A of the current act. This includes removing the more onerous test for psychiatric injuries, while still maintaining the current disqualifying factors for psychiatric disabilities that are now listed in subsection 4. This is a sensible approach and should be supported.

The Hon. I.K. HUNTER: The government opposes both amendments standing in the name of the Hon. Mr Darley. His first amendment, or amendment No 3, we oppose for similar reasons outlined in our position to the Hon. Ms Franks' amendment. Amendment No 4 [Darley-1] removes a requirement that employment must a significant contributing cause of the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury (non-psychiatric) and the significant contributing cause of the injury in terms of psychiatric. So, for similar reasons we will oppose this amendment.

The Hon. R.I. LUCAS: For the reasons that I outlined earlier, we will not be supporting the amendments either.

The Hon. Ms Franks' amendment to subclause 1 negatived.

The Hon. Mr Darley's amendments negatived.

The CHAIR: We now go to [Franks-1] Amendment No 4. Is that consequential?

The Hon. T.A. FRANKS: It is indeed consequential. I think the numbering issues have now been sorted out.

The CHAIR: The next amendment to clause 7 is Amendment No 5 [Franks-1]. Is this consequential?

The Hon. T.A. FRANKS: No, Mr Chair, it is not. I move:

Amendment No 5 [Franks–1]—

Page 27, after line 22—Insert:

(12) In this section—

secondary injury means an injury that is, or results from, the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury.

In this section the Greens are concerned about the government's changes to secondary injuries. We believe this will lead to further discrimination against injured workers and will result in increased reluctance by employers to take on injured workers with secondary injuries. The doctors already say that secondary injuries are difficult to measure. Trying to separate the aggravation symptoms arising from aggravation and from the original injury will lead to more disputation and artificial distinctions under the government's scheme.

The Hon. I.K. HUNTER: It is arguable whether this is, in fact, consequential. It relates to amendments 3 and 4 proposed by the Hon. Tammy Franks that concern a test for compensability, but strictly it is probably not consequential. This amendment reintroduces the definition of secondary injury as it is currently provided for in the Workers Rehabilitation and Compensation Act 1986. For similar reasons outlined in relation to previous amendments, the government will be opposing this amendment.

The Hon. R.I. LUCAS: Whilst the Liberal Party's position on the amendments is clear, I did want to clarify an issue. This was an issue raised by the Australian Rehabilitation Providers Association and some of the information the government has provided via WorkCover. I am not entirely clear whether it is on the public record or not to be honest.

I seek clarification as to what advice the government has had in relation to the situation that is being proposed here regarding the treatment of secondaries and the treatment of them in similar jurisdictions elsewhere in the nation, because one of the issues that rehab providers raised was the issue of the potential impact of employers in terms of employing people with work-related injuries.

As I recollect, the government's position was obviously not to agree with that particular argument. It used the argument that other jurisdictions (if not all of them) had exactly this provision, or a similar one, and there had been no indication that the situation in South Australia was any different from other jurisdictions, or words to that effect. I ask the government to place on the record again, if it has not already, its response to that series of questions.

The Hon. I.K. HUNTER: I will attempt an answer. The South Australian workers compensation scheme currently excludes the costs associated with secondary injury when calculating experience rating premiums for medium and large employers. All other workers compensation jurisdictions, I am advised, treat the cost of primary and secondary injuries the same and include them when calculating the experience rating premiums for employers. Their treatment of claim costs has not adversely affected employment behaviour, is my advice.

The Equal Opportunity Act 1984 in South Australia prohibits discrimination on the basis of disability in eight areas, one of which is at work. The Equal Opportunity Commission's annual report shows that disability discrimination related to employment accounted for about 12 per cent of all discrimination complaints in 2012-13. However, the proportion of complaints regarding disability discrimination relating to employment has declined since it peaked in 2006-07. This downward trend continues, even during the two-year period when South Australia removed its Experience Rating System from 1 July 2010.

During that same time South Australia continued to have a worse return-to-work rate compared to other major workers compensation jurisdictions, and the rate worsened over that time. We have no evidence to suggest that the inclusion of costs associated with secondary injuries will have any effect on employers when considering prospective employees. It should be noted that secondary injuries are not premium neutral for self insurers. They manage the liability associated with secondary injuries of their employees well, focusing their attention on safe and durable return to work.

Amendment negatived; clause passed.

Clauses 8 to 17 passed.

Clause 18.

The Hon. I.K. HUNTER: I move:

Amendment No 1 [SusEnvCons–2]—

Page 35, after line 9—Insert:

(6a) If on an application under subsection (3) the Tribunal declines to make an order in favour of the worker under subsection (5), the Corporation is liable, subject to subsection (7) and to limits prescribed by the regulations—

(a) for the employer's reasonable costs of the proceedings before the Tribunal (unless those costs are covered by an award under subsection (8)(a)); and

(b) for the costs payable to the worker under subsection (6).

The amendment changes the arrangements for the awarding of costs in applications before the tribunal where a worker is seeking an order for their pre-injury employer to provide suitable employment. The bill currently provides for costs of representation to be awarded against an employer in all matters. This amendment will provide for the corporation to be liable for the costs of representation in matters where the tribunal declines to make an order in favour of the worker. This limits an employer's expenses in matters that are resolved in their favour.

The Hon. R.I. LUCAS: In relation to clause 18, this is an issue which has prompted a lot of correspondence, I am sure, to all members who have been considering the changes in this particular bill, that is, the employer's duty to provide work. This particular amendment, as the minister has just outlined, is a partial response to some of the issues that have been raised.

I must admit I have only just received in the last 24 hours some correspondence from a lawyer with considerable previous experience in the jurisdiction with one of the industry associations who is now in private practice. He has raised a number of questions, and I want to place them on the record and seek the minister's response to the issues that he raises. The view that this lawyer has put to us is that he supports the amendments that are moved but says that they are marginally better than the problems with the existing clause 18 but not by much. He argues:

The employer would still be liable to pay the workers' costs out of their own pocket as a starting point. If the employer was successful in their argument, then they would receive costs from WorkCover (as would the worker). However, if the employer lost, they would have to pay both parties' costs.

The principles in employment laws are long-standing that each party would bear their own costs unless they acted frivolously or vexatiously. This includes unfair dismissal, adverse action and all other matters under the Fair Work Act 2009, even prosecutions for breaches. This clause creates a remedy in respect of employment and therefore should be treated the same.

However, if this is not to be the case it is manifestly unfair as the employee faces no costs risks except where frivolous or vexatious. Both parties should face the same consequences for their conduct or longstanding principles of fairness before the law would be undermined.

As such, either the insurer should pay both parties' costs (as is currently the case under Workers Comp dispute) or neither party should pay the costs. It is acknowledged that the costs of such a dispute will still likely have levy implications for the employer but at least they don't have the very real threat of tens of thousands of dollars of legal fees to pay.

Bear in mind that existing s58B issues invariably arise in the case of redundancies (ie. at a time when they can least afford it) or termination for misconduct (ie. at a time when industrial issues are at stake). As such, disputes under this provision will be de facto unfair dismissals and the existing balance in the Fair Work Act should not be undermined, if nothing else because the tribunal will be inundated with cases.

I put that view a lawyer has raised with us and asked us to put to the minister. I acknowledge that this has only just been raised, although I suspect somewhere amongst the minister's advisers that these issues will have been long argued.

However, the more immediate question is whether the minister has any general comment in relation to that advice. As to whether or not the government accepts this claim—that, as such, currently either the insurer should pay both parties' costs as this person indicates is currently the case under workers compensation disputes—that it is an accurate reflection of the current position, if it is an accurate reflection why is it that the government, even with this amendment, is seeking to change that position?

I also seek from the minister whether, even with the government's amendment, the position is different from other jurisdictions in relation to these issues. The final point this person is raising is that, as a result of his analysis of the issues, in the end the tribunal may well see a significant increase in the number of cases being argued as a result of the government's new position in relation to costs. Does the government have a response to say, 'Well, no, that won't be the case'? If that is its position, what are the reasons for that position?

The Hon. I.K. HUNTER: I understand that the original proposal in the bill was that employers effectively would be responsible for all costs. This amendment effectively changes that. The Hon. Mr Lucas has information that says it might only be a marginal change. That is a matter of opinion, I suppose, at this stage. Effectively, though, I am advised that this is a new provision that is really an application by a worker to access their return-to-work rights and that it is not directly easily related to current legislation.

My advice is that the government does not expect this to give rise to any onerous or significant new rise in cases to be argued. I am also advised that there is a provision under clause 15 where a worker can request the authority to investigate that an employer has the ability to provide return to work. The expectation is that that will be the first port of call, I suppose, in this regard, and then the current provision we are arguing at the moment would be the last port of call. The responsibility of the corporation would be actually to short-circuit that and get a worker back into employment.

The Hon. R.I. LUCAS: Does the minister have any information in relation to the new position after this particular amendment from the government in relation to costs as to how that compares with other jurisdictions in terms of their approach to the costs issue?

The Hon. I.K. HUNTER: I am advised that I will need to take that on notice and bring back a response as soon as I can.

Amendment carried; clause as amended passed.

Clauses 19 and 20 passed.

Clause 21.

The Hon. T.A. FRANKS: I move:

Amendment No 6 [Franks–1]—

Page 36, line 37—Delete '30%' and substitute '15%'

The Greens strongly oppose the 30 per cent threshold, as indicated in our second reading speech. It is a highly restrictive definition of injury and one that has, as its impetus, the budget bottom line rather than a realistic assessment of a serious injury. Indeed, we think it is a gross abuse of the English language. Most seriously-injured workers will be excluded under what the government will now define as a serious injury under this bill and, when it becomes law, under this act.

This threshold has been taken from an interstate jurisdiction and, most notably, I cite the New South Wales Workers Compensation Act. In New South Wales, workers who have sustained an injury that resulted in the amputation of a limb are having their cases dismissed as not serious enough to deserve ongoing payment of medical bills. There have been a number of amputees who have been refused ongoing medical cover because they failed to reach the required 30 per cent WPI threshold.

My colleague the Hon. David Shoebridge MLC of the Greens in the New South Wales parliament has worked with a number of amputees, and I would like to share one injured worker's case from that jurisdiction. Kris Carroll was forced to have his leg amputated after a workplace injury in 2005 and has had his claim to payments for medical expenses ceased from 2013. The reason given for this was that his injury was not serious enough to warrant ongoing protection. For Mr Carroll, who was required to regularly replace his prosthesis, this is likely to cost him around $40,000 in medical expenses each year.

Under New South Wales' controversial changes to the Workers Compensation Act that were made in 2012, injured workers are now only entitled to receive payments for medical expenses related to their injury, such as doctors' bills, the cost of surgery, prosthetics and medication, for a maximum of 12 months after they last received weekly payments or, if they did not receive weekly payments, then 12 months from the date of the injury. The only exception is when a worker has a 'serious injury' as defined. This is an injury that is assessed at 30 per cent WPI. Astoundingly, amputations such as Mr Carroll's are not assessed at this level; indeed, that was assessed at 28 per cent WPI.

A 15 per cent WPI threshold will allow more workers to access ongoing financial support in the form of weekly income maintenance, compensation for medical expenses and rehabilitation, and return-to-work activities. A 15 per cent WPI can and will result in some workers having no capacity for work, and indeed those workers will need support. Under the government's proposal, they will not be supported at all. We have received legal advice to note that while the 15 per cent threshold is not perfect, it is indeed a dramatic improvement from the government's approach.

We acknowledge that the government is here looking at the bottom line (the budget) and expect them to oppose this. Certainly, when we raised this figure with them in our briefing on this bill, we asked why 30 per cent was chosen. It seems clear that it was chosen because it balances the budget; it does not necessarily bring the best results for injured workers.

The Hon. I.K. HUNTER: One of the most significant changes for the return-to-work scheme is that it recognises that workers who are seriously injured require different support and services to those workers who are not seriously injured. The return-to-work scheme makes special provision for people with serious injury with income support paid until retirement age and lifetime care and support. People with serious injury are also able to pursue a claim for common law damages where the employer's negligence has caused or contributed to the injury.

This clause establishes that a worker whose work injury results in a whole person impairment of 30 per cent or more will be characterised as a seriously-injured worker for the purposes determining their support under the scheme. The Hon. Ms Franks has proposed quite a number of amendments that seek to reduce the threshold for a worker being characterised as seriously injured from 30 per cent degree of whole person impairment to 15 per cent. The government will be opposing this amendment and all others that seek to achieve this change to the threshold for serious injury.

Moving the threshold for serious injury from 30 per cent whole person impairment to 15 per cent would have a material effect on the culture and sustainability of the new return-to-work scheme. Having a 15 per cent whole person impairment threshold for serious injury would increase the estimated number of workers characterised as having a serious injury by about 800 per cent, and significantly erode much of the savings that the original reform package aimed to achieve. It is broadly recognised that being at work and returning to work are essential parts of an effective recovery. The return-to-work process, as well as being essential for the health and wellbeing of workers, long-term absences from work in general have a negative impact on health and wellbeing.

One of the key differences for workers who are non seriously-injured compared to those who are seriously injured is the return-to-work obligations. The bill specifically states that a recovery return-to-work plan must not impose any obligation on a seriously-injured worker to return to work. Without those return-to-work obligations in place, we are likely to see workers who could, with the right support, return to work on a sustainable basis instead of ending up in a cycle of benefit dependency. This is at a significant cost to their own health and wellbeing and at a significant financial cost to the scheme, the community and their families.

The return-to-work scheme sets a threshold for differentiating between seriously-injured and non seriously-injured workers, with recognition of the fact that it is important for most injured workers to receive active case management focused on the health benefits of work. While there is certainly debate about whether 30 per cent is an appropriate threshold, this scheme is about moving away from the one size fits all approach and it is necessary to make a differentiation.

We must not forget that workers who are not seriously injured are not left without support. For example, a worker who is 30 years of age and is assessed as having a 20 per cent whole person impairment could receive, I am advised:

up to two years of income support, which if paid at the state average wage would be about $150,000;

up to three years of medical expenses at an average cost of about $21,000;

up to three years of return-to-work services paid at an average cost of about $11,000;

a non-economic loss lump sum of about $45,000-$46,000; and

an economic loss lump sum of about $145,000.

In total, this hypothetical worker would receive about $373,000-$374,000 in compensation and services from the insurer. If the worker has not returned to work at the end of the three-year period, the return-to-work facilitation fund can then be used towards providing additional job-seeking services and retraining for the worker. With regard to the financial impact of amending the serious injury threshold, I am advised that such a change would make the proposed return-to-work reforms unviable.

WorkCover advises that it estimates there would be about 315 people injured at work each year who would meet a 15 per cent threshold of being seriously injured, which is 280 more claims than if the threshold were to remain at 30 per cent whole person impairment. In this one change the new return-to-work scheme could move from a balanced scheme, with appropriate support for those people who are more unlikely to be able to return to work easily, back to the equivalent of a pension scheme for many people. The government will oppose this amendment and subsequent ones.

The CHAIR: Any further comment, the Hon. Mr Lucas?

The Hon. R.I. LUCAS: I suspect that as these reforms are indicated, many of us will see this as one of the more challenging aspects of the WorkCover reforms in terms of what happens in practice—and, certainly, the issues that have been raised with the Hon. Tammy Franks have been raised with a number of us—but for the reasons I outlined earlier, the Liberal parliamentary party's position has been to support this feature of the bill, as challenging as it might be.

There are two issues I want to raise: one is that this particular clause and the amendment that the Hon. Tammy Franks is moving just reinforces for me my incredulity at the fact that, on an issue like this, given the lobby that has been put to the Hon. Tammy Franks, I have not received one letter from SA Unions or any of the more prominent unions in relation to this particular issue—not one lobby.

As I said, the only employee association that has made any public statement has been the police association, which issued a press statement and a public statement. So, on an issue as challenging as this particular one, and for someone like me, as I said in the second reading, who has lived through probably every one of the workers compensation debates from the early eighties onwards, it is extraordinary that an issue as fundamental as this to the workers compensation scheme can be reformed and changed without anyone raising concerns on behalf of employee associations.

The minister has outlined some of the alternative provisions in the bill which will be available for injured workers below a 30 per cent WPI, but I just wanted to clarify on the record, because this was one of the issues I did raise with WorkCover representatives when I met with them recently and I received some advice from WorkCover on the issue. I place on the record that advice that I have received from WorkCover in relation to this issue.

4.1 We noted that the proposed scheme has a relatively low threshold for access to seriously injured support benefits of lifetime care and income support to pension age.

4.2 94% of workers are back at work prior to 2 year income support ceasing—expected to improve with RTW Bill and the new active service model.

4.3 Workers who reach 2 years with no job and a permanent impairment do receive a significant lump sum: eg

4.3.1 A 25 year old full time worker with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $486,880;

4.3.2 A 30 year old with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $469,380;

4.3.3 A 55 year old with a 29% permanent impairment (not eligible for serious injury) will receive a total lump sum of $346,880;

The minister in giving his example, which I think was of an injured worker with 27 per cent WPI—was that correct, 27 per cent?

The Hon. I.K. HUNTER: 20 per cent.

The Hon. R.I. LUCAS: The ones I have put on the record, provided by WorkCover, were for 29 per cent permanent impairment. The minister gave a breakdown and a total cost. I just wanted to clarify: the numbers I have been given here by WorkCover say a 'total lump sum of $486,000', for example. Is that an apples and apples comparison where the minister broke down income maintenance, medical expenses and whatever?

My interpretation was that this was just the lump sum for economic loss calculation, but I wanted to seek clarification, given that the minister gave a disaggregated figure with a total at the end and the numbers I have been given by WorkCover do use the phrase 'total lump sum of $486,880'. Just a clarification of the difference in terms of the calculation I have been given and the one the minister has put on the public record.

The Hon. I.K. HUNTER: I will try to confirm that for the honourable member. My suspicion is that in the cases of the examples provided by the Hon. Mr Lucas, as in the cases I provided, is that his total lump sum provided to him by WorkCover is probably an amalgamation of non-economic loss lump sum and economic loss lump sum. I will get confirmation before the end of the day on that. The parts I described involve two lump sums, and those are the non-economic loss lump sum and economic loss lump sum.

Amendment negatived.

The PRESIDENT: The Hon. Ms Franks, you have a number of consequential amendments.

The Hon. T.A. FRANKS: Yes, amendment No. 7 is a consequential amendment, as are at least the next five or six, so I will not move them.

The Hon. J.A. DARLEY: I move:

Amendment No 7 [Darley–1]—

Page 37, lines 31 to 41 and page 38, lines 1 to 3—Delete subclause (8)

Clause 21(8) of the bill deals with seriously-injured workers and provides that, in assessing whether the 30 per cent threshold has been met, impairment resulting from the physical injury is to be assessed separately from impairment resulting from psychiatric injury. In assessing the impairment resulting from physical injury or psychiatric injury, no regard is to be had to impairment that results from consequential mental harm, and in assessing the degree of whole-of-person impairment resulting from physical injury, no regard is to be had to impairment that results from the psychiatric injury or consequential mental harm, and the 30 per cent threshold is not met unless the degree of whole-person impairment resulting from physical injury is at least 30 per cent, or the degree of whole-person impairment resulting from psychiatric injury is at least 30 per cent.

The net effect of this clause is that the physical injuries are treated as separate to psychiatric injuries for the purposes of establishing whether an injured worker has a WPI of 30 per cent or more, and as such dramatically impacts the payments that workers will receive. It is unfair and will result in harsh and unjust consequences for injured workers. It will mean that most of those workers who are transitioned on to the new scheme will not meet the new 30 per cent impairment threshold. It will also mean that those workers will not be entitled to common law damages claims.

As I mentioned during my earlier contribution, one of the key criticisms of this bill is that the WPI is a blunt tool for an assessment of workers incapacity for work and treatment needs. It fails to address issues around major injuries, including complex multi-traumas and multi-skeletal injuries and it fails to address the medical reality of serious conditions generally. The restriction on combining physical and psychological injuries not only exacerbates this harsh approach but also serves to continue discrimination about psychological injuries.

The ALA has provided us with the example of the bank worker or health worker who was wounded in an armed hold-up or attacked by a mentally ill patient and suffers from both physical and psychological injuries as a result. Although the worker is able to recover from the physical injuries, they are not able to recover from the psychological injuries. These workers who are unable to work as a consequence of combined injuries will not reach the threshold and, as such, would not receive entitlements commensurate with the injuries they have sustained.

The fact that the bill goes on to limit the number of assessments for injuries arising out of the same trauma to one just adds insult to injury. What we should be considering are entitlements based on the effects on individual workers. I cannot and will not support these measures, and I urge other honourable members to do the same.

The Hon. I.K. HUNTER: This amendment applies to the threshold to gain access to the serious injury support workers and removes the criteria to be applied when determining whether the 30 per cent whole person impairment threshold is met. Specifically, it removes the separation of assessments for physical and psychiatric injuries and allows, as we debated earlier, consequential mental harm to be included in both physical and psychiatric assessments. This amendment, I suggest, will have significant cost impact on the scheme. Additionally, it is contrary to practices, I am advised, that are pursued in other Australian workers compensation jurisdictions. For those reasons, the government will oppose the amendment.

The Hon. T.A. FRANKS: The Greens will be supporting the Hon. John Darley's amendment. We believe that we should be adding injuries to injuries, not insult to injuries.

The Hon. R.I. LUCAS: For the reasons we have outlined earlier, we will not be supporting the amendment either.

Amendment negatived; clause passed.

Clause 22.

The Hon. J.A. DARLEY: I move:

Amendment No 8 [Darley–1]—

Page 38, line 32—After 'consult with' insert:

the Australian Medical Association (South Australia) Incorporated, and with other'

This amendment is consistent with feedback received from the Australian Medical Association. Clause 22 of the bill sets out the scheme for assessing the degree of impairment that applies to an injured worker and provides that an assessment must be made in accordance with the impairment assessment guidelines and made by a medical practitioner who holds a current accreditation. Subclause (5) goes on to provide that the minister must, before publishing or amending any such impairment assessment guidelines, consult with professional associations representing the class or classes of medical practitioners who hold accreditation.

The AMA is the peak stakeholder body representing medical professionals. As such, it seems appropriate to make it clear in the bill that the minister is to consult with that body before publishing or amending any guidelines. I am sure the government will tell us it has every intent of doing this already, but this amendment simply serves to remove any doubt.

The Hon. I.K. HUNTER: This amendment creates a specific requirement for the minister to consult with the Australian Medical Association (South Australia), in addition to other professional associations, on permanent impairment assessment guidelines. It is important to point out that the AMA does not represent all health practitioners.

As already required in the Return to Work Bill, consultation on the permanent impairment guidelines will occur with the relevant professional associations. This will include the AMA where the issue being discussed is relevant to the AMA's membership base, just as other associations will be contacted when the contact is relevant to their membership base. I repeat: the AMA does not represent all health practitioners. Whilst this amendment is not material to the operation of the scheme, it is considered important that consultation be targeted at the relevant bodies for the relevant matter. The government, therefore, opposes this amendment.

The Hon. R.I. LUCAS: The Liberal Party's position is not a strong one in relation to this particular amendment. We understand the government's position in relation to the AMA not representing all medical professionals. Having been a shadow minister for health, albeit for a relatively short period of time, that is indeed correct. There are a range of other organisations which do represent medical professionals across the board and so on balance, as I said, whilst we do not hold particularly strong views one way or another, we would hope that practice will show that the AMA is consulted when they should be and that we do not have examples where the AMA will come to us afterwards saying, 'We should have been consulted on this particular issue and we were not.'

It just seems to make sense that where the AMA needs to be consulted they should be, but on balance we do accept the argument that there are other groups that do represent medical professionals. If you list one then the argument from the others, having been a shadow minister for health, will be, 'Well, if they are listed, then why aren't we?' On balance, for the reasons outlined, we will support the government's position.

Amendment negatived.

The Hon. J.A. DARLEY: I move:

Amendment No 9 [Darley–1]—

Page 39, lines 16 to 23—Delete paragraphs (d), (e) and (f)

It is strictly a consequential amendment, but I will move this as a stand-alone amendment based on the reasons outlined in my amendment No 7 to clause 21.

The Hon. I.K. HUNTER: This amendment does the same work effectively as amendment No 7, but in relation in this case to all permanent impairment assessments, that is, it removes a requirement for separation of assessments for physical and psychiatric injuries. It allows consequential mental harm to be included in assessments for both physical and psychiatric injuries and consistent with amendment No 7 this would have a significant cost impact on the scheme and be contrary to practices in other jurisdictions across the nation and therefore the government opposes this amendment.

Amendment negatived.

The Hon. T.A. FRANKS: I move:

Amendment No 16 [Franks–1]—

Page 39, lines 34 to 44 and page 40, lines 1 to 5—Delete subclauses (10) to (15)

This clause sets out the method for assessing permanent impairment. Such an assessment must be made in accordance with the impairment assessment guidelines. These guidelines are yet to be published and so we are being asked to support a section of the bill where there is a lack of detail. Just at this point, I do want to query whether the government's amendments do address my amendments on this issue. They are not jumping up and down, so no.

Further, to illustrate this, consider a worker who suffers a disc bulge which amounts to a 5 per cent whole person impairment. This worker can apply for a lump sum payment under both the existing and the new systems; however, under the new bill if that worker suffers a subsequent disc bulge amounting to another 5 per cent whole person impairment which is connected to the original trauma or develops as a consequence of the original trauma, this second disc bulge, I am informed, is not compensable.

Similarly, with a worker who injures their knee is assessed at 5 per cent WPI, then limps around for a couple of years until they develop a back injury which amounts to 7 per cent WPI, my information is that that person will not be entitled to compensation for the 7 per cent permanent impairment to their back.

The new bill also provides that an assessment of permanent impairment will be determined at a time determined or approved by the Return to Work Corporation of South Australia. One can imagine a situation where the corporation adopts a policy position of delaying assessments, the current system of assessments being made once injuries have stabilised works, and this change does nothing to add to that system. I would note that the CFMEU does not support this section of the government's bill and would like to see it deleted from the bill.

The Hon. J.A. DARLEY: Again I rise to support this amendment, which is identical to my amendment No. 16. Clause 22(10) provides that there is to be one assessment made in respect of the degree of a worker's permanent impairment from injuries arising out of the same trauma.

As I mentioned earlier, this provision fails to recognise the medical realities of serious injuries. You cannot, as the government has tried to do, adopt a one-size-fits-all approach to this issue. The harshness of this approach will be felt by most of those workers who are assessed as having injuries that fall shy of 30 per cent. This is because the difference in entitlements that apply to a worker with a WPI of 28 or 29 per cent is so starkly different from those that apply to a worker with a WPI of 30 per cent.

Try as it may to justify its position, the government has failed to convince me that two years of weekly payments, a further year of medical expenses and even a couple of lump sum payments are going to make up for the losses that injured workers will sustain in real terms. This should not be about limiting multiple permanent impairment assessments: it should be about fairness, something that is very lacking throughout this bill.

The Hon. I.K. HUNTER: This amendment removes the provision stipulating that only one permanent impairment assessment can be undertaken. The limit to one permanent impairment assessment is critical to the operation of the new scheme. This amendment will add significant cost, I am advised, to the new scheme and is contrary to good practice. A permanent impairment assessment should only be done once the work injury is stabilised and all factors can be taken into account. Allowing more than one permanent impairment assessment may also encourage doctor shopping and increase disputation in the scheme. For all of these reasons the government opposes the amendment.

The Hon. R.I. LUCAS: For the reasons we outlined earlier, we will not be supporting the amendment either.

Amendment negatived; clause passed.

Progress reported; committee to sit again.