Return to Work (Employment and Progressive Injuries) Amendment Bill

Introduction and First Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:37): Obtained leave and introduced a bill for an act to amend the Return to Work Act 2014. Read a first time.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:37): I move:

That this bill be now read a second time.

During debate over the Return to Work (Scheme Sustainability) Amendment Act 2022, I foreshadowed the government's intention to investigate reforms to section 18 of the act to improve the process for achieving return to work outcomes for injured workers. I also indicated the government's intention to address concerns raised about disadvantage experienced by workers who work with dust-related diseases and terminal illnesses, particularly in the determination of income support and access to permanent impairment assessments.

The government has carefully considered these issues and consulted with stakeholders including ReturnToWorkSA, unions, the legal profession and peak business and self-insured bodies. This bill makes important reforms to improve the operation of the duty to provide suitable employment, and to remedy any unfairness currently faced by victims of dust diseases and terminal illnesses.

Section 18 of the act deals with an employer's duty to provide suitable employment to an injured worker once that worker can return to work. It also provides an independent process where the South Australian Employment Tribunal can resolve return to work disputes. It is important to reflect on why this duty exists. It is about making sure the act does what it says on the tin: return injured workers to work.

Over the past 15 years, this parliament has had to make difficult decisions about the financial benefits available under our workers compensation system to ensure that it remains financially viable and can continue to support injured workers long into the future. In doing so, we have moved from a scheme under the 1986 act, where an injured worker was entitled to income support for the duration of their incapacity, to a scheme under the 2014 act, where income support for the overwhelming majority of workers ceases after two years.

In that context, the duty to provide suitable employment makes it clear that, regardless of the duration of an injured worker's income support, their employer has both a moral and a legal obligation to help that worker return to work insofar as it is reasonably practicable. That duty operates in the interests of the entire community.

A scheme that supports injured workers achieving an early return to work delivers better outcomes for the worker but also delivers better outcomes for employers by getting workers back to the workplace, reducing income support payments and creating downward pressure on premiums. That duty is also vitally important in supporting those workers who may not reach the seriously injured threshold but nonetheless continue to experience partial incapacity for work after their income support period comes to an end. It means those workers cannot simply be cast aside. Employers must consider suitable employment options, having regard to the nature of the worker's ongoing incapacity.

For these reasons, the duty to provide suitable employment is not merely an accessory to a successful workers compensation scheme, it is an essential element of the 2014 act and a core component of any scheme that operates fairly and in the interests of injured workers. Many stakeholders have expressed concern that that duty is not currently operating as effectively as it could be, particularly due to issues including overly technical dispute resolution requirements and an absence of effective remedies for noncompliance. This bill seeks to address some of those shortcomings.

The bill amends the procedural requirements before a section 18 dispute can be commenced, to encourage parties to fully communicate about suitable employment options at an early stage. This is intended to promote the parties reaching a negotiated outcome; however, where a dispute does occur it means parties will be in a better position to expeditiously progress proceedings before the tribunal.

Subsections 18(3) through 18(4c) require the worker to advise their employer in writing of their request for suitable employment, including the type of employment the worker considers they are capable of performing. They must also provide evidence of their medical capacity for work. There is no prescribed form of evidence and this is not intended to be a high bar; it could include things like a work capacity certificate or a letter from their doctor outlining their work restrictions.

The employer then has one month to consider the request and advise the worker in writing as to whether they will provide suitable employment, either of the kind requested by the worker or any other kind of employment the employer is willing to provide. The employer must give reasons for any refusal to provide suitable employment or why it considers alternative employment options to be suitable.

If the worker and the employer cannot agree on suitable employment following that exchange, the worker then has one month to make an application to the tribunal to deal with the dispute. That gives some further time for negotiation between the worker and the employer to see if a resolution can be reached.

A section 18 dispute may take many months to work its way through the tribunal from an initial application, through conciliation and mediation, to a final hearing and judgement. If the tribunal ultimately finds that an injured worker should have been provided suitable employment, orders made by the tribunal only apply prospectively. No compensation is available for the loss the worker has endured over the time the dispute has awaited determination.

This bill inserts a new subsection 18(5e), which gives the tribunal the power, when making a section 18 order, to also order that the employer make a payment to the injured worker for the wages or salary they would have received if the suitable employment had been provided.

Subsections 18(5f) and 18(5g) provide additional guidance to the tribunal on how the calculation of this backpay order should be approached, emphasising that the purpose of the order is to place the worker in the financial position they would have been if the suitable employment ordered by the tribunal had been provided from the outset.

That means that, where the worker has been in receipt of weekly payments while the dispute is on foot, the tribunal can effectively order payment of an amount to top-up the remuneration the worker actually received to the amount they would have received if the suitable employment had been provided. Where the worker was not entitled to weekly payments during the period of the dispute, the tribunal can order a payment of an amount to reflect the wages or salary the worker would have earned from the suitable employment during the dispute.

To avoid double dipping, the tribunal must have regard to any remuneration the worker received from other employment or work during the period. This ensures the worker cannot walk away better off than they would have been if the suitable employment had been provided. The tribunal also has a broad discretion under subsection 18(5h) to reduce the amount of payment having regard to the particular circumstances of the case.

This would allow the tribunal to take into account matters such as any unreasonable delay in the conduct of the proceedings by the worker or evidence that the worker only reached medical capacity to undertake suitable employment at some date midway through the proceedings after the original request for employment was made.

In relation to self-insured employers, while most employers under the Return to Work scheme are registered and insured by ReturnToWorkSA, the act also allows for the registration of group self-insured employers, who are responsible for the management of their own work injury claims. These self-insured employers include, for example, the state government and large corporate groups such as BHP, Hungry Jacks, Coles and Woolworths.

The bill inserts subsection 18(16d) to confirm that, where a worker is injured working for a group self-insured employer, the duty to provide suitable employment applies across the self-insured group and is not siloed to the pre-injury employer alone. This means, for example, that a worker who is injured while working at a Coles warehouse could be provided with suitable employment at a Coles supermarket instead. Similarly, a worker injured in one government department could be redeployed to a different department, having regard to the nature of their restrictions following the injury.

This bill inserts subsection 18(5c) to enable the tribunal, when making a section 18 order, to determine where a worker should be provided suitable employment within the self-insured group. The bill also inserts subsection 18(5d) to create a clear expectation that any section 18 order should require that employment be provided by the pre-injury employer, unless there are good reasons for it to be provided by a different member of the self-insured group. This ensures that the dispute process cannot be used as an opportunity to simply shop around for a different employment option if suitable employment can reasonably be provided by the pre-injury employer.

It is important to note that these amendments only apply to group self-insured employers comprised of related bodies corporate, because these groups can have a common management structure which can coordinate the employment of injured workers across the group. These amendments do not apply, for example, to local government entities which form part of the Local Government Association Workers Compensation Scheme, as these are not related bodies corporate and do not have a common management structure.

In relation to host employers or labour hire: some of the worst return to work outcomes under our scheme are seen in sectors with a high use of labour hire employment. That is, at least in part, because labour hire providers are often dependent on host employers to cooperate in returning injured workers to work following a work injury. Without the cooperation of the host employer, there is often no suitable employment that can reasonably be provided. The bill remedies this by inserting provisions based on similar obligations in the Victorian workers compensation legislation to require host employers to cooperate with labour hire providers in relation to return to work matters.

Subsection 18(16a) requires host employers to cooperate with labour hire providers by communicating about suitable employment options, participating in return to work planning and providing access to the workplace for the performance of duties by the injured worker. The bill also inserts subsection 18(5b) to allow the tribunal to make orders about the extent of this cooperation in a section 18 dispute.

The host employer is not required to cooperate if it is not reasonably practicable to do so. This is the same principle that applies to section 18 orders more broadly and allows the tribunal to take into account the unique circumstances of the labour hire provider and host employer in determining any orders about the cooperation required.

Subsection 18(16b) makes clear nothing in the bill requires a host employer to directly employ a labour hire worker following a work injury. For the purposes of these cooperation obligations, it is expected that the injured worker will remain employed by the pre-injury labour hire provider.

Consequential amendments are also made to section 25 of the act, which concerns recovery and return to work plans. These amendments enable a recovery or return to work plan to include obligations on a host employer or another member of a self-insured group to whom the duty to provide suitable employment applies under section 18. This is particularly important to help facilitate return to work planning in circumstances where there may be no substantive dispute about the provision of suitable employment, but there are matters of detail that are appropriate to include in a recovery or return to work plan.

No order is required from the tribunal under section 18 before a recovery or return to work plan can be made. However, a host employer or a self-insured group member does not have standing to dispute a plan if they disagree with the existing dispute process. The amendments to section 25 also provide that a recovery or return to work plan cannot change a worker's return to work goals or abandon attempts to return the worker to their pre-injury employer without the agreement of the worker.

Amongst the amendments to improve the operation of section 18, there are also some significant benefits for employers. The bill amends subsection 18(2) to make clear that an employer's duty to provide suitable employment ceases if the worker's employment has been properly terminated on the basis of serious or wilful misconduct. This ensures that employers are not required to continue providing suitable employment where an injured worker has fundamentally breached their employment obligations, such as through deliberate fraud or theft.

It is important to be clear that an employer cannot evade the section 18 duties by simply making an allegation of misconduct. If there is a dispute, then it is ultimately for the tribunal to fully examine the circumstances of the dismissal and determine whether the worker has in fact engaged in serious or wilful misconduct.

The bill also modifies the cost regime in section 18 disputes so that employers are entitled to have their costs paid in the same way as workers are under general compensation disputes. This means that legal costs of all parties to disputes will generally be paid by the compensating authority, up to prescribed limits and subject to exemptions where a party has acted unreasonably or vexatiously. This amendment provides a level playing field for all parties in section 18 disputes and is consistent with the cost rules that apply throughout the rest of the act.

The bill also deals with several issues of a technical nature. The tribunal has held that the act currently requires that a worker must have a current incapacity for work at the time a section 18 order is made in order for the tribunal to exercise its jurisdiction. This creates difficulty where the worker's injury lends itself to a binary incapacity; that is, where a worker is either totally incapacitated for work or totally fit for work. This may commonly occur with psychiatric injuries or where the worker undergoes surgery to restore their capacity following physical injuries.

These workers may be either totally incapacitated, in which case any request for suitable employment is redundant, or they may be totally fit for work, in which case there is no jurisdiction to make an order. This overlooks the common grey area where a worker may, as an ultimate question of fact, be fit to return to work but there is nonetheless a medical dispute between the worker and employer about the extent of their capacity.

These disputes often involve competing expert medical evidence, which needs to be resolved by the tribunal. It also overlooks situations where a worker may make a section 18 application while suffering an incapacity but then recover from their injury midway through the proceedings. In these circumstances, the tribunal would lose its jurisdiction to make an order even if the employer continued to refuse to return the worker to work.

The solution provided in the bill is subsection 18(4e), which creates a time-limited period in which a dispute is preserved after a worker has ceased to be incapacitated. If the worker has requested suitable employment before they ceased to be incapacitated or within six months of ceasing to be incapacitated, the tribunal will continue to have jurisdiction to resolve the dispute.

An amendment to subsection 18(1) is made to operate in conjunction with the six-month time limit proposed under subsection 18(4e). If a dispute arises between the worker and their employer after that six-month period, the worker cannot make a section 18 application but may rely on other remedies available under general employment law to resolve the dispute, such as an unfair dismissal application.

The issue of when a worker ceases to be incapacitated is ultimately a question of fact but, typically, this would be informed by medical evidence from the worker's treating doctor, based on their examination of the worker. Our clear expectation is that a worker would be advised if their doctor considers they have ceased to be incapacitated, so that the worker can consider the application of the six-month time limit.

The bill also inserts subsection 18(5a) to clarify that in making a section 18 order the tribunal may specify certain aspects of the suitable employment to be provided, including the nature and range of duties, any adjustments to be made to enable the worker to perform those duties, and the number of hours to be worked. There may be situations where it is unnecessary for the tribunal to go into that level of detail, in which case subsection 18(5a) also allows the tribunal to make those matters subject to a recovery/return to work plan to provide additional flexibility to the parties in structuring suitable employment in accordance with a section 18 order.

Every stakeholder agrees that if an injured worker is going to return to work following a section 18 dispute, then that should happen as quickly as possible. The longer the worker is away, the harder it is to reintegrate them into the workplace.

The bill inserts subsection 18(7c) to confirm the tribunal can hear and determine a section 18 dispute concurrently with other proceedings under the act, and can also determine the compensability of an injury in the context of a section 18 dispute alone. These amendments will support section 18 disputes being resolved expeditiously, rather than having to await the outcome of other legal proceedings and delay any certainty for the parties in their return to work obligations.

The bill also inserts subsection 18(7d) to make clear that the tribunal is not artificially limited to considering the situation that existed when the worker first requested reasonable employment, and may have regard to medical and factual developments that arise during litigation. It is well known that workers compensation disputes ebb and flow over time and it is important that the tribunal can take a practical approach to the current evidence before it, including in relation to the worker's medical capacity and the available suitable employment options.

The bill also inserts section 19A, which gives the tribunal jurisdiction to determine monetary claims for wages or salary payable under section 19 when a worker is undertaking alternative or modified duties. This amendment is made for the avoidance of doubt and to remove any uncertainty about whether the determination of such disputes is fully captured by the existing monetary claim jurisdiction of the tribunal.

I now turn to amendments relating to dust diseases and terminal illnesses. A key principle in the act is that a work injury must have stabilised before a permanent impairment assessment can be undertaken by an accredited impairment assessor. A permanent impairment assessment determines the injured worker's degree of whole person impairment. This is then factored into the calculations which determine the worker's entitlement to lump sum compensation and access to other benefits, such as serious injury status and common law.

The bill includes a clear and concise definition of 'stabilised', which provides statutory clarity regarding when a worker may seek a permanent impairment assessment. The definition is consistent with personal injury law principles that a worker cannot be forced to undergo medical treatment. It is also consistent with the Impairment Assessment Guidelines, which make clear that a choice by a worker not to pursue additional or alternative medical treatment that has been offered does not preclude the worker's condition from being taken as stable for the purposes of a permanent impairment assessment.

The vast majority of work injuries will stabilise within the meaning of the statutory definition in this bill. However, in addition to defining stabilised, the bill also includes exceptions to this requirement for injured workers with terminal illnesses and prescribed conditions. These exceptions ensure that workers can undergo an assessment even though their condition may continue to deteriorate.

This bill defines that a terminal condition is a work injury that is incurable and will, in the opinion of a medical practitioner, cause death. The determination of this criteria is a matter for the medical practitioner and, ideally, the worker's treating specialist.

To be clear, the terminal condition exception means that a worker who has a work injury that is a terminal condition will not need to establish that the injury has stabilised for it to be assessed. This change provides certainty for workers with a terminal illness that they will have access to a permanent impairment assessment and the entitlements that can flow from that assessment.

The prescribed condition exception to the stabilised requirement is intended for work injuries that are of a progressive nature. Conditions that might fall into this category are ones that are not necessarily terminal but may not stabilise within the statutory definition; for example, some dust diseases. The regulations will govern what is considered a prescribed condition.

The minister is required to meet certain requirements before they can prescribe a condition for the purposes of this provision. At a minimum, the minister must consult with certain stakeholders including the AMA (SA), the minister's advisory committee and the corporation. In addition, the minister must be satisfied that the condition is serious and potentially life-threatening and extremely likely to cause an ongoing deterioration such that the degree of impairment resulting from the condition is unlikely to stabilise for a significant period. Determination of these factors by the minister is supported and guided by the required consultation that the minister must undertake.

The draft bill achieves fairer outcomes for workers through amendments to section 5 of the act, which provides the framework for setting a worker's average weekly earnings which forms part of the basis for the worker's entitlement to weekly payments of income support. A worker's average weekly earnings rate is set by reference to the worker's relevant employment, which is the employment from which the injury arose. For the purposes of dust diseases, the relevant employment is the employment at the time in which the worker was exposed to the hazardous dust that caused the prescribed dust disease.

In some circumstances, a worker may be exposed to hazardous dust decades before they are incapacitated for work by their injury, and the worker's earnings may be significantly less than their earnings at the time the injury manifests. The case of Rantanen v ReturnToWorkSA is one example that has exposed the unfairness which can result from the application of these provisions. Conversely, in other cases, the average weekly earnings attached to the worker's employment at the time in which they were exposed to hazardous dust may be more than their average weekly earnings at the date they are diagnosed with a dust disease.

These amendments allow a worker with a prescribed dust disease to elect which employment is used for the purposes of calculating their average weekly earnings. Workers will have a choice between setting their average weekly earnings by reference to either their employment at the time they were exposed to the hazardous dust that caused their dust disease or the time they are diagnosed with a prescribed dust disease. In other words, to achieve fairer outcomes with respect to income support entitlements, workers with a prescribed dust disease can choose whichever option provides the higher amount.

Relevant dust diseases are prescribed by way of regulation, and the process is informed and guided by legislated consultation requirements. For example, the minister must consult with stakeholders including the AMA (SA), the minister's advisory committee and the corporation before making a recommendation to prescribe a disease linked to this provision.

I thank all stakeholders who have provided feedback during the extensive consultation phase of this bill. I commend the bill to the chamber and seek leave to have the explanation of clauses inserted in Hansard without my reading it.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Return to Work Act 2014

3—Amendment of section 4—Interpretation

This clause inserts interpretative provisions to support the measure.

4—Amendment of section 5—Average weekly earnings

This clause amends section 5 of the principal Act to further expand categories of relevant employment.

5—Amendment of section 18—Employer's duty to provide work

This clause amends section 18 of the principal Act to make additional provision for an employer's duty to provide work.

The clause provides that a worker who has been incapacitated for work in consequence of a work injury who seeks employment with the pre-injury employer may give written notice to the employer seeking a return to work. The clause further provides that the pre-injury employer may offer suitable employment (either of a kind requested in the worker's section 3 notice or some other suitable employment) and sets out the procedures that may be followed if no offer of suitable employment is made. The clause provides that a worker may apply for an order by the Tribunal under subsection (5) if the pre-injury employer refuses or otherwise fails to provide suitable employment, or the worker considers that any employment offered by the pre-injury employer is not suitable.

The clause inserts proposed subsection (5a) to expand the Tribunal's capacity to make orders relating to the provision of suitable work by an employer to an injured worker.

The clause provides for the payment of costs.

The clause also amends section 18 of the principal Act to set out the obligations of both host employers and labour hire employers to provide work to injured workers.

6—Amendment of section 19—Payment of wages for alternative or modified duties

This clause amends section 19 of the principal Act to remove the capacity for the Corporation to determine that the requirement to pay wages under section 19 does not apply.

7—Insertion of section 19A

This clause inserts section 19A into the principal Act.

19A—Jurisdiction to determine monetary claims

This clause provides that the Tribunal (constituted as the South Australian Employment Court) has jurisdiction to hear and determine monetary claims for wages or salary payable under section 19.

8—Amendment of section 22—Assessment of permanent impairment

This clause amends section 22 of the principal Act to make further provision for when an injury has stabilised to include an injury that is a prescribed condition and an injury that is a terminal condition.

9—Amendment of section 25—Recovery/return to work plans

This clause amends section 25 of the principal Act to provide for references to 'the host employer' in addition to existing references to the Corporation and the employer.

10—Amendment of section 42—Federal minimum wage safety net

This clause amends section 42 of the principal Act so that the reference to the relevant date applying in relation to the worker is a reference to the relevant date in proposed section 5(16)(a).

11—Amendment of section 48—Reduction or discontinuance of weekly payments

This clause amends section 48 of the principal Act so that the existing reference to a worker's dismissal from employment is substituted with a reference to the worker's employment being properly terminated as a basis for discontinuing weekly payments for an injured worker.

12—Amendment of section 122—Powers and procedures on a referral

This clause amends section 122 of the principal Act to ensure that consideration of what constitutes injury stabilisation mirror the proposed changes to section 22.

13—Amendment of section 129—Self-insured employers

This clause amends section 129 of the principal Act to provide that the Corporation must publish, on a website determined by the Minister, the name of the employer nominated in any application for registration referred to in section 129(12) and that employer's phone number and address.

Schedule 1—Transitional provisions

1—Interpretation

2—Average weekly earnings

3—Employer's duty to provide work

4—Monetary claims

5—Amendment of Impairment Assessment Guidelines

This Schedule provides for transitional arrangements to support the measure.

Debate adjourned on motion of L.A. Henderson.