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House of Assembly - Fifty-First Parliament, Second Session (51-2)
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WORKERS REHABILITATION AND COMPENSATION (SCHEME REVIEW) AMENDMENT BILL

Committee Stage

In committee.

(Continued from 3 April 2008. Page 2594.)

Clause 1.

Mr HANNA: I move:

Page 5, lines 3 and 4—Delete 'Scheme Review' and substitute:

Reduction in Weekly Payments and Other Matters

I have a couple of questions on the clause but, for the moment, I speak to the amendment. It is my belief that legislation should be plainly and truthfully characterised in the title. While it is true to say that the legislation has come before us as a result of a review of the WorkCover scheme, it is more accurate to say that it is about the reduction in weekly payments and other matters. It is about the reduction in weekly payments to injured workers.

The cornerstone of this piece of legislation is the reassessment of the capacity for work after 30 months (2½ years), and we know that the way that that reassessment is designed will result in almost all workers at that point being tossed off the system. As I have pointed out before, it will mean that they are either cast onto the social security net to receive commonwealth benefits or, if they have the good fortune to have a partner in employment, they may go down to zero income. They may end up receiving nothing at all.

So, I say that this is the cornerstone of this legislation because of the problem the government was sincerely trying to grapple with—that is, the ever-increasing unfunded liability and the ever-increasing total number of workers on the WorkCover scheme. Generalising just a little bit, we can see that, over the last decade, we have had something like 200 or 300 extra workers come onto the scheme. My point has been that the redemption facility available under the legislation has been extremely poorly utilised by WorkCover and its agents.

When I say WorkCover, I always mean one or more claims agents from time to time. WorkCover has poorly used the redemption facility. If you compare that to the way the self-insured employers have managed their schemes for their businesses, you will see that the redemptions have been well used by the big employers, and they have fully funded schemes, unlike WorkCover. The problem presented was an increasing number of workers on the scheme in total each year and an increasing number of workers in the bracket of, say, more than two years or more than three years, depending on where you want to measure it; in any case, an increase in the long tail of injured workers who are on the scheme long-term. That was the issue that the government sincerely wanted to tackle.

It is fair enough that the government wanted to tackle it, but it has done that by taking an amputation approach. This is like saying to the patient in the hospital, 'You've got a sore leg. We could treat it conservatively, and, over time, it will heal, but, there's a very quick way to remove the sore on the leg—that's amputate the leg.' That is what this 2½ year provision is about: dumping workers off the system 2½ years after injury.

That is why I think it is much more accurate to call it the 'Reduction in Weekly Payments and Other Matters Bill'. It refers to the cornerstone of this legislation, the goal of which is to reduce unfunded liability by simply tossing workers off the system.

The Hon. M.J. WRIGHT: The government does not support this amendment. The member for Mitchell has made some points in regard to speaking to his amendment, but he has not talked about things such as permanent impairment, where the lump sum will be increased to $400,000; provisional liability; the WorkCover Ombudsman; the code of claimant rights; and, so, the list goes on. We are strongly of the view that this is a balanced package; it is not just about weekly payments. There is a range of measures in the bill, and for that reason we oppose the amendment.

Mr HANNA: The minister overlooks the fact that, in the title I have suggested for the bill, I have referred to other matters that would cover the elements he is talking about. I want to take another tack here, and that is to refer to the clause itself, and take the opportunity to ask the minister a question about the bill as a whole. Is it true that, if this legislation is passed, as the government would wish it with government amendments, the average person injured on the road will receive more in damages than would an injured worker under this legislation?

The Hon. M.J. WRIGHT: I cannot be sure of that. I am not aware of the details of the CTP fund, but in regard to the package with which we have come forward, and compared to other jurisdictions, we think we have a very balanced package. Of course, Mr Clayton tells us that we will still have the most generous schemes.

Dr McFETRIDGE: Minister, you said on FIVEaa that the savings from the cutbacks of entitlements will be about $22 million. I understand that, because of the changes to the three stage step-down from the two stage, those savings will be less. Certainly, the CEO of WorkCover has expressed some concern that this will have an impact on the overall objectives of the changes in legislation. Can you tell us what you expect?

The Hon. M.J. WRIGHT: The actuarial advice is that, as a result of the amendment that has come forward, it will take an extra year to achieve the full funding. It was estimated to be from five to six years and it has now been reviewed and changed to six to seven years, so that is the effect. However, the same overall objectives will be achieved.

Mr HANNA: Because there is an amendment and a question on the clause, do I have three contributions or three on each?

The ACTING CHAIR (Hon. P.L. White): Three on the clause.

Mr HANNA: Do I also have three on the amendment?

The Hon. G.M. Gunn interjecting:

Mr HANNA: That is right.

The ACTING CHAIR: Member for Mitchell, you have three questions on the clause, and this relates to standing order 364, if you want to view that.

Mr HANNA: It is good to clarify this at the outset. I have an amendment to the clause and that is put as a separate question, so I believe I have three contributions left.

The ACTING CHAIR: It is a separate question, but the three questions are on the clause, not each question relating to the clause. You have the opportunity to respond to every question asked about your amendment.

Mr HANNA: I see. For example, if the member for Morphett asks me a question about my amendment, I would have the right to answer it on top of my three contributions on the clause.

The ACTING CHAIR: So I am advised.

Mr HANNA: I want to ask the minister another question about the effect of the scheme as a whole. Given that the Clayton report gave much emphasis to the Victorian legislation (and there are clearly a lot of aspects of this bill which are based on the Victorian scheme), I looked at the Victorian scheme figures. I know that somewhere—and this information was provided to caucus this morning in some detail—in the Victorian scheme you have something like 28 per cent of the payout from the fund going via common law payments, because in Victoria you have a limited right to sue the employer for wrongdoing.

Given that our scheme is not going to have that, as the government would wish it, even though the government's proposal would make our scheme marginally more generous in terms of step-down payments and lump sums, I suggest it would be fair to say that our scheme will actually be much meaner to workers than the Victorian legislation upon which the amendments appear to be based. The crunch, really, is whether the minister agrees with the following quote:

We are actually making it fairer and more generous to workers.

Does the minister stand by that statement?

The Hon. M.J. WRIGHT: I thank the member Mitchell for his question. I think the figures that he quotes are about right in regard to common law. He also talks about what we are doing here. Sure, there are some elements of what we are doing that exist in Victoria but we are not simply copying the Victorian scheme. Clayton recommended very strongly to us that common law did not contribute to the objectives of the review. He talked about things like a lump sum mentality, that it was not conducive to return to work, that it was a lottery for workers, the costs of lawyers and so forth, so he had a range of reasons. Mr Clayton recommended to us that, even with the legislation that we put forward, ours would be the most generous of the state schemes.

Dr McFETRIDGE: I have a question for the member for Mitchell. This bill has been described with a number of different characteristics—everything from draconian to unworkable. Have any other titles been suggested to you?

Mr HANNA: Yes, a few names have been tossed around, and I have sounded this out with a few people concerned about the cuts that are in this bill. Probably the most notorious name that was put to me was to call it something like Rann's WorkChoices Bill, because this legislation has a lot of similarities with John Howard's WorkChoices legislation. In both cases, it leaves workers with less choice in the sense that, under this bill, after 2½ years workers are going to be cut off the system.

Another feature of it is that it is being enacted by a government without a mandate. John Howard went to the previous federal election without a mandate for the harsh WorkChoices legislation that he brought in, but he did it because he knew he could get away with it; he knew he could get it through the Senate. But clearly he did not carry the Australian people with him.

Similarly, it is the case with this legislation. Nobody would have voted for the Labor government at the last election (or any past election) believing that the entitlements of injured workers would be cut drastically. Absolutely no way can this government say it has a mandate for that. Premier Rann has to take responsibility for pushing this through simply because he believes he can.

He knows the Liberal Party will be compliant because it serves the interests of big business who are traditionally the supporters of the conservative party. The Labor Party seeks to etch out new political ground as the conservative party and the ruling party in this state. That is a fair enough aspiration, but it leaves behind most of those people who voted for Labor at the last election—that is my point about the mandate.

Thirdly, I believe that the carriage of the WorkChoices legislation through the federal parliament left Howard and his team with the perception that he was arrogantly trying to steam ahead further than what the Australian people would wish, and that tag of 'arrogance' stayed with him. I believe that will be the result of this legislation here and Labor backbenchers will suffer for it at the next election, even though they are duty-bound under caucus rules to vote for it.

So, I think that Rann's WorkChoices legislation would actually be a very apt title. However, I am not one for cheap gimmicks. I thought of something a bit more moderate between that and the proposal I have made of a 'reduction in weekly payments and other matters'. I thought that maybe 'cuts to injured workers and other matters' might be more appropriate, because clearly the overall effect of the bill is to cut payments to injured workers. It is certainly true of income maintenance—whether we talk about an 80 per cent or 90 per cent step down after three months or six months, it would not matter; the real guts of this bill is kicking workers off the system after 2½ years.

While I am at it, the minister made a point about the generosity of this legislation in saying that the prescribed sum is being considerably increased. I acknowledge that. That is a good thing in this bill. I am not saying it is all bad, although I must vote against it because it is bad on principle. The fact is that very few people, as we know, get up above 50 per cent in terms of whole body impairment, let alone 100 per cent; so, very few will get the rewards, if you like, of the increased prescribed lump sum.

We can debate that later in the bill, but it is not anywhere near as generous as what the minister makes out, with respect. I considered some other titles—probably more politically apt titles—but I have ended up with something very moderate and fair: Workers Rehabilitation and Compensation (Reduction in Weekly Payments and Other Matters) Amendment Bill.

Mr PISONI: I have a question for the mover of the amendment. Perhaps he could go into some detail as to where suggestions came from for other names for the bill and what they were.

Mr HANNA: I thank the member for his question. Unlike the government, I did consult quite widely when I was putting together my amendments, and I had a lot less time to do it than the government had in preparing this legislation. I did speak to members of trade unions; I spoke to injured workers, because I have several in my own electorate; and I canvassed it with staff and friends—the usual people that I would consult with. There was certainly a number of people who wanted something more extreme and incisive, but in the end I thought: let us have something moderate but accurate; it is about reduction in weekly payments.

Amendment negatived; clause passed.

Clauses 2 and 3 passed.

New clause 3A.

Mr HANNA: I move:

Page 5, after line 12—Insert:

3A—Amendment of section 2—Objects of Act.

Section 2—After subsection (1) insert:

(1a) Without limiting subsection (1), the primary objective must be to rehabilitate a disabled worker so that the worker can return to the workforce to the greatest possible extent as rapidly as possible (taking into account the nature and extent of the worker's disability and any other relevant factor).

(1b) In connection with the operation of subsection (1a), the Corporation or a self-insured employer (as relevant), and an employer from whose employment a compensable disability arises, must seek to achieve a disabled worker's return to work—

(a) in the worker's previous position, or in a position of at least equal status; and

(b) at a rate of pay that is at least equal to the worker's previous rate of pay.

Both the government and I believe that there could be improvement to the objects of the legislation. One of the critical things that we agree on is that there needs to be greater emphasis on return to work. In this regard, I believe that many employers have let the team down. When I talk to people in the community a lot of them will home in on the notorious cases of fraudulent workers, which are always highlighted in the daily newspaper if they ever arise. I must say I have not read of one for some time.

I am always ready to acknowledge that there is a very small proportion (maybe 1 per cent) of workers who are trying it on and who claim to be injured worse than they are, and so on. However, the same also applies to employers. There are some notoriously bad employers. One of the things that employers are particularly unhelpful with at times is getting injured workers back to work in that same workplace where they were injured. Part of this, I have to say, is because of the scheme itself, which seems to be set up as adversarial in nature, or at least that is the culture that has developed.

I do not believe that it was ever the intention underpinning the original legislation but, perhaps because of the types of claims managers that have inhabited WorkCover and the various claims management agencies over the years, there has been this adversarial approach and almost a presumption that the worker is bludging and needs to be forced back into some sort of employment, possibly with medical services almost forced upon them. Inevitably, that produces a reaction in even the best-intentioned worker, and it becomes an 'us and them' attitude.

Quite often, employers buy into this sort of conflict. A worker who goes off injured is seen as a liability and as someone who is unproductive, possibly also being seen as a bludger. This culture needs to be turned around. There is only a limited amount that we can do about that in parliament: it has to come ultimately from WorkCover and the claims managers. But we can, at least, set the basic direction to be followed by claims managers. That is why I believe there needs to be an amendment in these terms.

One of the critical things about this matter is not just setting rehabilitation as a primary objective of the legislation: it is essential to get workers back as rapidly as possible. Obviously, one needs to take into account the nature and extent of the disability suffered by the worker. One also needs to take into account the workplace. If it is a very small workplace involving a very limited range of duties that need to be performed, one can understand that it may be difficult if the worker's injuries prevent him or her from carrying out those particular duties, of course.

As I say, we are simply setting the strategic direction: something that will underpin the management of every claim, and I think that the primary objective has to be to rehabilitate workers so that preferably they get back to the same workplace, and as rapidly as possible. Members will see in the amendment I have moved that I also talk about achieving, where possible, a return to work in the worker's previous position, or in a position of at least equal status, and at a rate of pay that is at least equal to the worker's previous rate of pay.

One thing that happens in a lot of work sites is that the employer will be good enough to take back the worker—bearing in mind that they have a duty to do so—but say, 'If you can't do your pre-injury duties, we'll give you a job out in the shed packing boxes or opening envelopes, or something like that.' It might be something that normally would have a lower rate of pay or it might be that it is a function or a set of duties only available for two hours a day. Opening the mail might be something that is done for two hours a day, so the rest of the time the worker is not employed. What I am driving at here is that, wherever possible, we have to try to get the worker back, if not in the same position—because of the limitation of duties—in a position of the same status and of the same pay.

I reiterate that this is an objective: it will not always be possible, and we all understand that. However, if we do not set it out as an objective, it certainly will not happen. We at least need to have this to strive for so that, if injured workers are not going back to exactly the same position because they cannot precisely do those duties, or perhaps because they had an extended period off work and somebody else has actually had to be in that position to replace them, at least they should have a position of the same status and of the same pay.

That would accord with their dignity and, if it is possible for this to happen in the workplace, it means that the employer has a productive worker, hopefully back at work, and the worker will be happier and more productive because he or she has the same pay and the same status, even if it is different work. Again, I acknowledge that it will always be easier with a large employer involved.

It will be easier in the Public Service or a very large corporation where there are multiple positions. It will be much harder in small business, and I acknowledge that. That is why we are setting it as an objective; even if it is not always reached, it is worth putting there as an objective.

The Hon. M.J. WRIGHT: The existing government amendment achieves an objective similar to that proposed by the member for Mitchell, but does not go as far as that set out by him. Our amendment enhances the objects of the act by emphasising the importance of achieving a return to work, and reinforces that doing so is a shared responsibility between WorkCover and the employer from whose employment the disability arose.

In terms of the proposed amendment to enshrine the hierarchy of return to work within the objects of the act, the existing provisions of section 58B already prescribe an employer's duty to provide work, and the hierarchy of return to work is spelled out in the Workers Rehabilitation and Compensation Regulations 1996. We broadly agree with what the member for Mitchell is saying, but we do not think that this is the place to do what he is doing.

We think that other parts of the act achieve the member's intent, and they are better dealt with in the act rather than in the objectives. Broadly speaking, when the member for Mitchell talks about the importance of return to work and it being a part of the recovery, we are not in conflict. We very much support that and that is what this package is all about. However, for the reasons I have outlined, we do not support it being placed here in the objects.

Dr McFETRIDGE: Just on a point of clarification, this is on the member for Mitchell's amendment. I have three questions there, although I know that the minister spoke about his amendment then.

The ACTING CHAIR (Hon. P.L. White): I will put that subsequently, and he will formally move them.

Dr McFETRIDGE: The member for Mitchell's amendment states in new subsection (1b) that the employer 'must' (not 'should')—

seek to achieve a disabled worker's return to work—

(a) in the worker's previous position or in a position of at least equal status;

I know he acknowledges that in small business that would be quite difficult, and I will give a personal example here. When I owned my veterinary practice, I employed a vet who was injured and was unable to undertake the duties I would have required. There was just no way that my business could afford to employ a vet to replace her but then also get her back working in the practice at the same salary she was receiving as a fully practising veterinary surgeon. I have an issue with the word 'must' there. Certainly, I have the utmost sympathy for any workers who want to go back to work and cannot do so because of their employer's hesitancy in taking them back into a suitable position that is available without having to create an artificial position. Can I just have a bit of clarification of the phrase 'must seek'?

Mr HANNA: I think that the key word for the member for Morphett is 'seek'. The obligation there is to seek to get the worker back to the same position or a position of equal status and equal pay. There is no penalty for employers if they do not do that under this clause anyway. If they do something else that is misbehaviour, it may be an offence under some other part of the legislation, but what we are doing here is setting the objectives.

There is no penalty for not reaching the objectives: it is an aspiration. The point is that the amendment does not say that an employer must achieve a return to work: they must seek to achieve it, and that is the critical distinction. I think that it is important perhaps to set out where this fits in with the other objects.

We already have a number of worthwhile objectives stated in the legislation. There is no doubt that the objective of rehabilitation is already there. It is stated very simply in terms of seeking effective rehabilitation, but this has not worked; we know it has not worked. A culture of encouraging rapid return to work in conditions where the worker has some dignity has not worked. Therefore, we need to spell it out a bit more.

There are numerous objectives, already stated in the legislation, that talk about reducing the cost of work injuries, such as effective administration of the scheme, ensuring that the scheme is fully funded, and so on. But the reason I have set this up as a primary objective is that everything else falls into place if you get this right because, if you are getting workers back early, you are going to have cost-positive cost implications for the scheme, you are going to have efficiency in the administration, and you are going to have less cost overall to the community of employment-related disabilities. I just want to reassure the member for Morphett about that.

Perhaps if I give a couple of examples of why it is so is essential to get workers back rapidly and to have that stated as an objective. One case brought to my attention recently was an injured worker with a shattered wrist. It took nine months of asking EML (the claims agent) to get a response about whether they could have a modification to their car so they could drive the car—and that would ultimately save the claims manager and the scheme money because otherwise they were paying for taxis to medical appointments, and so on. That is just one example of how the culture of rapid return to work is just not there at present. A number of my amendments later on, such as extending the excess to be paid by employers from two weeks to four weeks income maintenance, are practical ways of achieving the same objective.

Another reason it is important and why employers should at least try to get workers back early is the psychological sequelae of being off work for a long time. There is some WorkCover advertising going on at the moment—I have heard it on the radio—where the bloke is sawing and a tender, caring woman's voice is saying, 'Now that feels better, doesn't it?', or something like that. The point of that advertising is that getting back to work early is a positive thing. We can all get on with it: the worker can get on with it; the employer can get on with it.

It is well documented that high rates of depression and other variations of mental illness follow when workers are off work for a long time. So, it is essential that, in clarifying the objects of the act, we achieve, first of all, that it becomes an overarching objective to get workers back to work; secondly, that this be done rapidly; and, thirdly, that, where possible, it be done in the same workplace and, preferably, with the same status and pay. In this way, the worker is going to be happy; the employer is therefore going to be happier with the worker; and we are going to have less money paid out of the scheme.

The committee divided on the new clause:

AYES (3)

Gunn, G.M. Hanna, K. (teller) Such, R.B.

NOES (41)

Atkinson, M.J. Bedford, F.E. Bignell, L.W.
Breuer, L.R. Caica, P. Chapman, V.A.
Ciccarello, V. Conlon, P.F. Evans, I.F.
Fox, C.C. Geraghty, R.K. Goldsworthy, M.R.
Griffiths, S.P. Hamilton-Smith, M.L.J. Hill, J.D.
Kenyon, T.R. Kerin, R.G. Key, S.W.
Koutsantonis, T. Lomax-Smith, J.D. Maywald, K.A.
McEwen, R.J. McFetridge, D. O'Brien, M.F.
Pederick, A.S. Penfold, E.M. Pengilly, M.
Piccolo, T. Pisoni, D.G. Portolesi, G.
Rankine, J.M. Rau, J.R. Redmond, I.M.
Simmons, L.A. Snelling, J.J. Stevens, L.
Venning, I.H. Weatherill, J.W. White, P.L.
Williams, M.R. Wright, M.J. (teller)

Majority of 38 for the noes.

New clause thus negatived.

New clause 3A.

The Hon. M.J. WRIGHT: I move:

Page 5, after line 12—Insert:

3A—Amendment of section 2—Objects of Act.

Section 2—After subsection (2) insert:

(3) The corporation, and the employer from whose employment a compensable disability arises, must seek to achieve a disabled worker's return to work (taking into account the objects and requirements of this act).

This clause places an obligation on WorkCover and the employer from whose employment the compensable injury arose to achieve a disabled worker's return to work. It enhances the objects of the act by emphasising the importance of achieving a return to work and that doing so is a shared responsibility between WorkCover and the employer from whose employment the disability arose. As I said earlier, the emphasis on return to work I think we agree upon and, as I also said earlier, the government amendment does not go as far as the member for Mitchell's amendment.

Dr McFETRIDGE: We all obviously agree that early return to work is beneficial and we are all aware of the consequences of having to wait around and not be treated as you think you should when you are trying to recover from an injury. So, getting back to work is vital, but that work has to be available and it should be suitable work. What obligations are there on employers, or penalties, to ensure that injured workers are returned to work if that work is not available or if there is no suitable work available?

The Hon. M.J. WRIGHT: The obligations and penalties the member refers to are covered in section 58B—the responsibilities to get the worker back to work—and also the government has an amendment coming up later in regard to an additional penalty that will be put in place. It is all about rehabilitation and return to work. With respect to the member's question about suitable work, that would be something the agent would have responsibility for—to try to ensure that there is suitable work.

Mr PISONI: I am particularly interested in the definition of the employer in this amendment. I can recall a situation many years ago when a small business employer took on a staff member who had recovered, if you like, from a disability that was caused by a previous employer. That was not declared, but it was considered to be ongoing; however, the new employer did not realise it was ongoing. Maybe the employer should have asked the question and not given the guy the job in the first place; however, he did not. The work that the employee was doing then caused a relapse of the ailment. Would the employer responsible for the rehabilitation in this instance be the first employer where the ailment was caused initially, or would it be the employer from where the ailment was reactivated?

The Hon. M.J. WRIGHT: I thank the member for his question. As the member would be aware, all employers have a responsibility to get employees back to work but, in regard to the precise question, it would depend upon the injury. If it was a secondary injury, it would probably be the second employer, but if it was the primary injury, it would probably be the original employer.

Dr McFETRIDGE: On the same issue of getting injured workers back to work quickly; in his report Mr Clayton says that the corporation itself should be taking a much more active role, and yet the government does not seem to have put an emphasis on that part of the Clayton report. So, we still have the situation where the case manager has to approve the rehabilitation and return to work programs. There has been a lot of criticism—whether it is fair or unfair—about the way the case managers in EML have been mishandling cases. I hope that is not true, but certainly if Mr Clayton has suggested that the corporation should be somehow more accountable, perhaps that is something that should be considered.

The Hon. M.J. WRIGHT: I thank the shadow minister for his question. It is an important question, because rehabilitation is critical if we are going to be successful. We are, of course, establishing the $15 million return to work fund, and that will be in part about retraining and rehabilitation. Via another bill that is before the parliament (the governance bill) we will also be putting in place performance agreements and the WorkCover charter. So, I think these things point to not only greater emphasis on rehabilitation, but also the responsibility that the corporation will have for rehabilitation.

In regard to EML, I would also hope that that criticism is not justified. EML as the claims manager has an important responsibility and must ensure that it gets claims management right. I think we can be confident that, since the regulations were changed and there are greater penalties and also benefits in the contract, there is, generally speaking, better claims management than we have had previously. If there are problems, then WorkCover needs to iron them out.

Mr HANNA: Just before my substantial contribution in relation to the government amendment, I am very interested in the matter to which the minister has just referred; that is, the clauses in the contract with EML in relation to what they get rewarded for and what they get penalised for, because clearly, in my view, the current system of the stick and the carrot has not been working. The emphasis has not been on rapid return to work and appropriate use of redemptions. I ask the minister to spell out what they get bonuses for and what they get penalised for?

The Hon. M.J. WRIGHT: I do not have all the detail in front of me, but, generally speaking, I think I can give the honourable member an answer which he will appreciate. Bonuses are provided for increasing the return to work and meeting targets, and service delivery between WorkCover and EML would also qualify for a bonus. Of course, the prime one is better return to work rates. Obviously, penalties would be incurred if they are not achieving the aims that have been established in the contract.

There has been some criticism of EML. How much of it is warranted, I am not sure. Certainly some examples have been brought to my attention and about which I have asked WorkCover to give me some information. Can EML do better? Yes, probably they can. They are doing better than the previous four claims managers that we had in place. The advice that I have received is that that is the case; that is, they are doing better. They are about two years into the contract and obviously are working through a whole range of issues.

The Hon. S.W. KEY: In relation to return to work in this clause, it is my understanding that, despite the fact that there has always been the philosophy of workers returning to work—and I think it is something that we in this chamber all support—there have not been any prosecutions of employers regarding return to work. I certainly know from personal experience that there have been plenty of breaches of workers not being able to return to work. Could the minister address that question and also say how that fits in with the new bill and also his proposed amendments?

The Hon. M.J. WRIGHT: I thank the honourable member for her question. I know that she has a very strong interest in this area not only in relation to this question but also workers compensation and occupational health, safety and welfare. She was a former shadow minister in this area, of course. I am aware of the criticisms regarding no prosecutions. Previously, WorkCover has imposed a supplementary levy on businesses that are breaching section 58B.

Of course, what we are proposing, which we will debate later, is a new fine of up to $25,000 for employers who are not complying with section 58B. The comment is correct, and will, I think, potentially go a long way to rectifying that situation. When I say 'potentially', it would be the hope that, of course, all businesses comply with section 58B. However, if they do not, we have an amendment coming forward later in the bill which is a new fine for not complying with that section.

Mr PISONI: If the main reason suggested by the government for the blow-out in unfunded liability is the number of partially incapacitated workers who continue to be in receipt of weekly payments of income maintenance years after sustaining a compensatable disability, why does this government believe that the answer is to take the drastic step 2½ years after the injury is sustained; and why is there not a greater focus upon claims management and rehabilitation in the early stage?

The Hon. M.J. WRIGHT: Many things are important here. The honourable member spoke not only about the work capacity review but also, of course, about claims management. I would say that, as best we can, the contract in place ensures important things such as the early diagnosis of the claim. Provisional liability is also in the bill, and all those factors will play an important part in making sure that there will be an early return to work. I have said consistently that, for a number of years under both governments, we have not done well enough at getting people back to work, and that must be the focus of the turnaround in the culture of the organisation.

Mr HANNA: I think that we need to set this debate in the context of the existing objects of the act. As one might expect, there are a number of pretty general statements. The act currently seeks to achieve a reasonable balance between the interests of employers and the interests of workers. Well, I think that will be seriously upset by this legislation. More relevantly, the act already states that there is an objective to provide for the effective rehabilitation of disabled workers and their early return to work. The purpose of my amendment was to point out that that has not really been working. However, my question to the minister becomes: how will the government amendment add anything? There appears to be a duty—at least an aspiration—for the corporation and the employer to seek to achieve return to work; but, of course, immediately the rider is added to that, 'taking into account the objects and requirements of this act'.

The requirements of the act, I presume, are the statutory obligations, such as section 58B; and, if this legislation passes, requirements such as provisional acceptance of claims. It is very difficult for me to see how this amendment—stressing that the corporation and the employer have a role in return to work—is any different from the current aspiration that there be effective rehabilitation and early return to work, because, after all, who else would be pushing that process apart from the worker, the employer and the corporation through their agents? I am really struggling to see how this government amendment will advance the cause at all. I will not disagree with the amendment, but I just cannot see the value of it.

The Hon. M.J. WRIGHT: What we are doing is re-emphasising the responsibilities of WorkCover and the employer in getting people back to work. However, it is not as prescriptive as the member for Mitchell's amendment. It is putting it into the objects and re-emphasising the responsibilities of both WorkCover and the employer.

Mr HANNA: In that case, I ask the minister what he has against the concept of an objective which would say that the employer must seek to return the worker to work either the same as pre-injury or of the same status and pay. I know that question, in a sense, has been dealt with after discussion of my amendment, but why has the government not sought to include that in its own amendment?

The Hon. M.J. WRIGHT: I think I said in an earlier answer that some of what the member for Mitchell has put forward already exists in the regulations. Also, I would say that our focus is on general obligations whereas perhaps it would be fair to say the member for Mitchell's amendments are more specific, and some of them are covered in the regulations.

New clause inserted.

Clause 4.

The Hon. M.J. WRIGHT: I move:

Page 5, after line 17—Insert:

(1a) Section 3(1)—definition of arbitration officer—delete the definition.

(1b) Section 3(1)—definitions of conciliation and arbitration officer and conciliation officer—delete the definitions and substitute:

conciliation officer—see section 81;

This amendment relates to broader changes to dispute resolution. The purpose of this technical amendment is to support government amendments to be moved later where the arbitration stage of dispute resolution is being abolished. This technical amendment supports later government amendments in the bill. Others would share the view that there was widespread discussion about whether arbitration should be in the dispute resolution process. It was recommended by Mr Clayton but, largely, as a result of consultation that the government held, the views were reasonably common in that it could increase the amount of disputation. Of course, that is something we are trying to avoid.

The CHAIR: This is a very long clause, so I indicate that I will allow three questions on each of the amendments and then three questions on the clause overall.

Mr HANNA: I indicate that, on this occasion, I am in furious agreement with the government. The interesting thing is that, in its consideration of cost cutting, and so on, the government came to the same conclusion as I did, working in the interests of the welfare of injured workers. The conclusion is that the arbitration system has not been working. We find that there are very few matters that are able to be negotiated successfully at the arbitration stage, so it introduces just another stage of the dispute resolution process, which has become unnecessary. The goal of a lot of litigants is to get to the judicial determination stage. Either arbitration is not being taken seriously, because it is not being seen as a definitive disposal of the issues, or there is just a lack of willingness to negotiate.

I do not think that we should be unfair on injured workers if they are not prepared to give things up at that arbitration stage, because often for them it is a matter of their livelihood, particularly if the success or failure of the claim is in issue and they will potentially be without income. On the other side of the coin, my experience is that employers very often have deeper pockets and can withstand a longer drawn out dispute resolution process.

I have known of a number of employers who have been willing to drag out the arbitration process and then take a lengthy series of points in judicial determination as well. In fact, there are one or two employers who are notorious for not even turning up to the first arbitration meeting, thus wasting the worker's time and resources—usually they are in a position where they have to pay a solicitor to come along, and some employers just do not turn up. In other words, they are dragging out the process, knowing that they can bear the cost of doing that better than can the worker. Even where there are unions representing workers, their funds often pale in comparison with the funds available to larger corporations and the self-insured employers. The conclusion we have reached is the same: we might as well do away with arbitration. It just has not worked as we had idealistically thought that it would.

I would like to note at this point the work of a former review officer, Frances Meredith, who spent a lot of time analysing the review process. I think that she (and most of us) would probably share the view that it would be great if arbitration worked and we could get rid of most of our disputes at an early stage by agreement, but it just does not seem to happen in this arena. We need a fairly quick passage through to a definitive resolution of the dispute—and I refer to judicial determination as a definitive resolution of the dispute, even though that may be subject to appeal. I think that there should be limits to conciliation—it should not be a drawn out process—and, certainly, I agree that we can do without the arbitration process.

Amendment carried.

Mr HANNA: I move:

Page 6, after line 10—Insert:

(4a) Section 3(1)—After the definition of dependant insert:

designated common law liability means a liability at common law within the ambit of section 54(1)(b);

This is a critical amendment, and it will be a test clause for the concept that we should have a right, limited as it may be, for workers to sue negligent employers. Rann and his government will be aware that I am putting forward a proposal to allow for workers to sue negligent employers, in very limited circumstances. It is critical to the government's argument that it is producing the fairest and most generous scheme in Australia. They were Premier Rann's words when he was interviewed on radio. He said, 'We are actually creating the fairest and most generous scheme in Australia.'

Any comparison with the other states rests on an understanding of the common law right that workers enjoy in those states. In 1992, I think, this parliament abolished the right of workers to sue negligent employers. Members would be aware that, in the history of the scheme, the right to sue negligent employers was retained in the 1986 legislation, but the damages were capped and the payment for any such damages was paid within the scheme. So, the levy that employers paid, which was essentially an insurance premium, was to cover their statutory payments to injured workers, but it was also to cover the payment of common law damages, which were capped.

In 1992, the Labor government did not have full control of the parliament, and the abolition of common law rights was pushed through. The original deal that was brokered between employers and injured workers in the mid-1980s was one that rested on workers having a limited right, at least, of common law entitlement. In other words, in the late 1980s any worker could sue their employer for damages, but those damages were somewhat limited by statute. It is those very rights that were taken away in 1992.

Of course, despite there being a whole bundle of rights forgone by workers, the statutory entitlements, which were there to balance the fact that you could not sue someone for negligence, have been progressively eroded. They were stripped back in 1994-95, when the Liberal government was in power, and now this legislation goes even further than the Liberal cuts of 1994-95. This Labor government legislation actually outdoes the Liberals in terms of taking rights away from injured workers, yet there is no right to sue the employer for negligent behaviour to make up for that.

When comparisons are made between South Australia and Victoria, or South Australia and other states, it is generally overlooked (I suppose deliberately) by Premier Rann and the others who speak for the government that there are common law entitlements in those other states. Citing the briefing note that was given to caucus members this morning, there was a very clear demonstration of statistics in the Victorian legislation: the amount that was paid out for negligent employers causing injuries to workers was about 28 per cent of the Victorian scheme.

The Rann government is bringing in a similar sort of scheme to that in Victoria. It is cutting workers' rights here to make it closer to Victoria but without the right to sue negligent employers, which they have in Victoria and which actually makes up about 28 per cent of payments to injured workers. So, it will be a system that is a lot more harsh and cruel to injured workers than that in Victoria. I use the Victorian example because it has been repeatedly set up as the benchmark in the Clayton report and repeatedly by the Premier and his mates on the Labor front bench.

I have introduced a scheme of common law entitlements. It is very limited and modest. I suggest that, even to qualify, injured workers must have a 25 per cent whole body impairment, and that will cut out most workers straightaway. On top of that, I suggest that there has to be a statutory breach or something called 'gross negligence' on the part of the employer, and there is some judicial explanation of those terms. The fact is that it is intended to be a slightly higher benchmark than common law negligence as previously applied in South Australia.

The scheme, as I am putting it forward, is one where employers would get insurance for common law claims, insurance to cover their own negligence, outside the WorkCover scheme. Where, at the moment, employers go out into the private marketplace and buy public liability insurance, I am suggesting that they would have to pay in addition for their own negligence, bearing in mind the extremely strict circumstances in which common law claims might be made.

It means that bad employers will be punished if they behave badly. If employers leave unsafe machinery or unsafe work practices unchecked in the workplace then very quickly there will be injuries and, as a result of that, higher premiums, because private insurers will not muck around; they will come back with a higher premium for those who misbehave—for those who do not care sufficiently for worker safety.

For the record, I refer members to my amendments 54, 55, 81 and 82, which cover the essence of the scheme that I am putting forward. If you look at those later amendments, you will see that I am suggesting that there is an obligation on employers to have such insurance so that insurers can pay out on common law claims when they do arise. Secondly, I am suggesting that the corporation be an insurer of last resort. I believe that was there in the 1971 legislation. I could be corrected on that; it was a bit before my time, but it is comparable to what we have in our motor vehicle accident legislation, whereby the Motor Accident Commission is the insurer of last resort if a driver is driving uninsured. We need that for injured workers' protection.

This is a critical clause. If the Rann government is going to strip away the rights of workers and to seek to chuck them on the scrapheap after 2½ years, then the least we can do is allow injured workers to sue negligent employers. Most employers will not have anything to fear, but those who show lack of care in the workplace should be open to common law claims, in other words, workers exercising their rights to seek damages for the wrongdoing done to them by bad employers. That is what this set of amendments is about. I take this as a test on the principle that there should be a least a common law right to sue in limited circumstances if these other benefits are to be taken away from workers.

The Hon. M.J. WRIGHT: The government opposes this amendment. We are not in favour of reintroducing common law into the South Australian workers compensation system. As the member for Mitchell said, it was in, I think, 1992 that common law was largely taken out of our system. We also argue that it is contrary to the goal of return to work which, of course, we have already spoken about and will continue to speak about as we work our way through this particular bill.

Common law tends over-compensate minor injuries and significantly under-compensates more serious injury compared with long-tailed statutory arrangements, such as they exist in South Australia. The prerequisite requirement of having to demonstrate fault for access to common law damages departs from the philosophical no-fault basis of statutory workers compensation schemes. The relatively high transaction costs associated with common law means that it is a less efficient mechanism for delivering benefits to injured and ill workers than statutory benefit arrangements.

Interestingly, the review does not support the introduction of common law. Mr Clayton would argue that it is the antithesis of getting people back to work, that it is a lottery and, as such, did not propose it. Like redemptions, access to common law would seriously compromise the success of the other proposals and would lead to cost escalation in the medium term.

It is correct that the member for Mitchell has put forward a proposal which has some gates around it. He talked about the 25 per cent of whole body impairment, the need for it to be gross negligence and also that it does not require WorkCover to cover the common law but it would be done by individual employers. Of course, they would need to go out and get insurance. It is my understanding that that would be a significant increase in costs for them to do so. That would vary, of course, from business to business, but it would certainly increase costs.

Because we have a no-fault system, that it is the antithesis of return-to-work, that it can be a bit of a lottery, and, of course, that it can become a bit of a jamboree for lawyers as well, we oppose the amendment moved by the member for Mitchell.

Dr McFETRIDGE: The introduction of common law, as far as I am aware, has not been proposed by any union officials who have spoken to me and certainly not by any employer groups, as I understand it. Only in the last few days, a group of lawyers actually started raising the issue of common law being reintroduced.

My understanding is that no separate public liability insurance policy is taken out by employers in Victoria. They contribute to the costs of a common law claim as part of their WorkCover levy. I would like an explanation as to how that works in Victoria and an indication as to why it would not be a disadvantage and incur extra costs for employers here. As we all know, it is a no-fault compensation scheme and there are, I think, some circumstances where employers could be at risk through the lottery, as Premier Rann described it in 1994 in his 'Limbs, Lungs and Lives' book.

He described workers compensation as a lottery then; the minister described it as a lottery last week when he was talking about the case management (or mismanagement, as people may see it) by EML of some of the cases; and we now find that Mr Clayton also has described workers compensation as a bit of a lottery. We do not want workers using common law to buy a ticket in yet another lottery. It is certainly something the opposition will not be supporting. I am interested to see how it works in Victoria without adding extra imposts to WorkCover premiums, as well as a separate public liability insurance.

Mr HANNA: The member for Morphett raises a good question. How can this work in Victoria and yet the Labor government says it would not work here, or it should not work here. In Victoria, payments to workers as a result of common law claims are being made out of the scheme. Employers are paying for that through their levies and yet the levies in Victoria are less than here. Certainly, from the point of view of funding the scheme, workers and employers are not going to be worse off by having a common law entitlement.

The interesting thing about this scheme, which the minister seems to have overlooked in his answer—if I may say, with respect—is that the fund will benefit from what I am putting forward. Yes, employers will have to go out and pay maybe a few thousand dollars a year to get insurance against claims of negligence. However, if the government's legislation otherwise goes through, levies are going to drop by a half to three-quarters of a per cent. That is the whole point of the government legislation: it is a quick fix to get a cut in employer levies before the next election.

If common law claims are implemented, in the way that I am suggesting, look at what will happen: there is a right of recovery in here so that where WorkCover has paid out money for a lump sum under section 43, and income maintenance under the other provisions of the legislation, and then a worker successfully sues for common law, the money that has been paid out can effectively be recovered by WorkCover. So, the actual funding of the scheme is going to improve.

We are shifting the cost from the scheme and the worker on to negligent employers. Out of the three groups, who would you rather have pay for the cost of work injuries: the whole body of employers, through their levies across the WorkCover Corporation scheme; injured workers who, under government legislation, are missing out on benefits; or, employers who are negligent? They are the ones who should be paying—those who are less careful in the workplace; those who have unguarded machines; those who ask workers to pick up 30 kilograms at a time; those who leave risks in the workplace where people can bump into something or where things can fall on them, and so on. They are the ones who should be paying—employers who are acting negligently.

Even then, I would put in a test that says 'gross negligence', so presumably that is something more than just being simply careless. If my scheme is adopted, it will be a benefit financially to our WorkCover fund and whatever extra employers are paying in terms of their private insurance to cover common law, they will be getting back in reduced levies because there will be a benefit to the fund. Who has something to fear? Not an employer who is careful in the workplace nor an employer who makes all the machinery guarded and who has careful processes in place to ensure that workers do not injure each other or themselves; those who have something to fear from what I am putting forward are those careless, wanton employers who disregard the safety of their workers.

In answer to the question from the member for Morphett, it is not only possible to have a common law scheme funded by a no-fault scheme, such as we have, or a comprehensive scheme whereby people pay their levies to the central fund and it pays out on common law claims, and have lower levies like they do in Victoria, but I am suggesting a scheme whereby our statutory scheme (the WorkCover unfunded liability) will actually benefit from the common law scheme because it is shifting the cost onto negligent employers.

The Hon. S.W. KEY: I wanted to ask the member for Mitchell a question in regard to common law. My understanding is that, in the mid-1980s when the Workers Rehabilitation and Compensation Act was introduced along with the industrial health, safety and welfare legislation, there was not only the philosophy of no fault but also there needed to be a proper health, safety and welfare program within the state to look at prevention and, where necessary, there would be an inspectorate and industry advice to try to stop injuries, accidents and diseases from occurring. That was certainly the philosophy in the mid-80s and, in some ways, it was an honour to be part of that debate.

One of the reasons for not supporting common law at the time, as I understand it—and this would not be the only argument—was that basically a number of workers, and those workers who were represented by their unions, would not have access to what could be extremely high legal costs. My question is twofold: one, why can't we look at the health, safety and welfare act as a more positive way of trying to prevent and follow up with the industry; and, secondly, would your clause (if passed) make common law more accessible to the basic worker and, if they did have a trade union representative, their trade union?

Mr HANNA: Yes, I think the point is well made about occupational health, safety and welfare and the need to police our ideals in that regard. I acknowledge that the Labor government has hired a lot more inspectors and, presumably, that is doing some good in improving standards throughout our work sites. But we know, time and time again, that there are employers who get away with murder, or pretty close to murder. To cite one of the examples that was put to me recently, a butcher's apprentice was left to work on an unguarded machine. He was a young lad and he lost his hand. I do not know what work he will get in the future. He does not have a great education, but you do not have much demand for one-handed butchers, and that was a case where the guard should have been on the machine.

No amount of policing or inspectorates will stop some scoundrels trying to get away with shortcuts like that. So, yes, you need all of that—the inspectorate, penalties for those who create unsafe situations—but now we are looking at the compensation side of it. In answer to the other part of the member for Ashford's question, the fact is that, under the scheme I am proposing, the statutory benefits are going to be there as a baseline, so you will have your section 43 payment (less for most workers under this legislation than previously); you will have income maintenance, even though it will pretty well cut out at 2½ years for most workers who survive on the scheme that long, but you will have that as a baseline. Common law would be something for the seriously injured to go for on top of that, because the damages they would receive would be in excess of what they would take as their statutory entitlements. So, it is almost to go for a top-up, in a sense, to have what they would have achieved prior to 1986 if they had sued for common law.

They are not double-dipping, they are not getting the statutory benefits and the common law, but where they take advice that there is a good claim for negligence and that the damages would mean that they would be in a better position than the statutory benefits, under what I am proposing they would be able to sue for common law, give back to the corporation what they have got from the corporation and keep the extra.

I know legal costs are involved in that and I acknowledge that one of the risks has always been that if you take a case and lose it then you can be worse off than if you had not taken the case at all. That is the case with rights right across the board for injuries: the same will happen if you are in a car crash or even if you sue for victims of crime compensation. If you hire a lawyer and you end up missing out you can end up paying legal costs, and they can be a heavy burden.

I am relying on the fact, which I know to be true, that most lawyers are actually fair dinkum. Most lawyers will give fair and honest advice. You will always get a couple of shonky ones, and the government loves to harp on that, but the reality is that most trade union officials who are well versed in the area and most lawyers who practise in the area are going to give good advice, and they are not going to send people chasing up after a pipe dream which is going to end up being a heavy legal bill.

Dr McFETRIDGE: Member for Mitchell, two of the big issues that are always raised when you go into the area of people suing under common law are: one, that the lump sum they get paid in the end is about the same as what they would have got had they stayed in a scheme where redemptions could have been paid out. Secondly, there is the issue of the legal costs involved: would they be capped or would some other limitations be put on the legal services available? What would happen there?

Mr HANNA: As to legal costs, the usual rule in our courts would apply, that the winner's costs are mostly paid by the other side. So, for successful claims the negligent party—usually, in effect, their insurer—would end up paying most, if not all, of the worker's costs. The problem area lies where the worker takes a claim and it is unsuccessful.

I can give an example of that. I had a case many years ago where someone slipped on the floor. Now, the court cases kind of go both ways: in some cases it can be negligent to leave a pool of slippery liquid on the floor in work premises and sometimes it is not because there is actually an adequate system of cleaning and it was just bad luck, in effect. There are cases where the worker might be advised to sue for negligence, in good faith, but the judge might say: no, really that was not negligent.

Sometimes it is not until you get well down the litigation process before you find out if something is more likely than not to be found negligent. So, there is that risk in there—I acknowledge that. But, for the most part, what the worker stands to gain, if well advised, is going to be more than what is there in the statutory scheme.

The reason that common law claims were left in the scheme in 1986, even though the amount that could be paid out was capped, was because it was anticipated that in a lot of cases the statutory entitlement would be less than the amount you would get as common law damages. So, I would be confident in putting this forward, that seriously injured workers who are faced with negligence in the workplace would benefit.

The committee divided on the amendment:

AYES (2)

Hanna, K. (teller) Such, R.B.

NOES (41)

Atkinson, M.J. Bedford, F.E. Bignell, L.W.
Breuer, L.R. Caica, P. Chapman, V.A.
Ciccarello, V. Conlon, P.F. Fox, C.C.
Geraghty, R.K. Goldsworthy, M.R. Griffiths, S.P.
Gunn, G.M. Hamilton-Smith, M.L.J. Hill, J.D.
Kenyon, T.R. Kerin, R.G. Key, S.W.
Koutsantonis, T. Lomax-Smith, J.D. Maywald, K.A.
McEwen, R.J. McFetridge, D. O'Brien, M.F.
Pederick, A.S. Penfold, E.M. Pengilly, M.
Piccolo, T. Pisoni, D.G. Portolesi, G.
Rankine, J.M. Rau, J.R. Redmond, I.M.
Simmons, L.A. Snelling, J.J. Stevens, L.
Venning, I.H. Weatherill, J.W. White, P.L.
Williams, M.R. Wright, M.J. (teller)

Majority of 39 for the noes.

Amendment thus negatived.

Mr HANNA: I move:

Page 7, lines 1 to 5—Delete subclause (15)

The situation in relation to allowances for workers is currently that there are certain allowances which are prescribed under the legislation. These are relevant to the calculation of average weekly earnings. Subclause (15) of clause 4 allows for certain payments received by workers to be disregarded in the calculation of average weekly earnings.

These allowances could be any one of a very wide variety of things. They might be allowances concerning the worker's tools; they might be concerning transport which the worker necessarily uses in order to complete their duties; it might be an allowance to do with some feature of the work which involves payment to other people, whether it be travel expenses or admission to a venue for which one has to pay—it could be any number of things.

That is why the scheme, so far, has taken the approach of prescribing certain allowances so that they are not taken into account in relation to average weekly earnings. If you have a compensation scheme which is meant to compensate people because they are injured and they cannot go to work, why would you not compensate them as fairly as you can for everything they get at work which they can no longer get?

It is a very simple principle which I seek to resolve with my amendment by providing that allowances received by the worker should be included in the calculation of average weekly earnings. Clearly, the government amendments seek to simplify the calculation of average weekly earnings. I am actually trying to simplify that even further.

Rather than have ministers rule certain payments in or out, let us just have them all in. That is done on the basis that, if an employee goes to work and receives wages, super, and allowances, we should try (as best as we can) to put that worker back into the situation that they were in at work before they were injured—if, indeed, they have been injured and can no longer go to work. It is as simple as that. It just seems to me that the government's approach is actually taking something away from workers, and I want to ensure that that cannot be done through this amendment.

The Hon. M.J. WRIGHT: The government opposes the amendment. It is important to distinguish between normal allowances paid in exchange for the worker's qualifications, skill and labour and allowances paid to reimburse the worker for an expense incurred in the course of employment. The former are included in average weekly earnings, but the latter are called 'prescribed allowances' and are often excluded from average weekly earnings.

Most things that are prescribed are done so by regulation. It makes little or no sense to have some allowances prescribed in section 3 of the act and others prescribed by regulation. It would be much better to put them in a single instrument, and regulation is the better alternative.

There are numerous types of allowances and benefits in modern workplaces, and these change all the time. It is important that the government has the flexibility to adapt the scope of prescribed allowances to keep pace with social and industrial changes. Regulation, rather than legislation, is the appropriate tool for this to occur. Either way, the government does not plan to broaden or narrow the scope of prescribed allowances.

There are numerous types of allowances and benefits and, as I have said before, these change all the time. It is important that the government has that flexibility to adapt the scope of prescribed allowances to keep pace, and regulation, rather than legislation, is the appropriate mechanism to do this.

Mr HANNA: Which allowances does the minister plan to prescribe so as to exclude them from average weekly earnings? I suspect that the effect of the government position is to discriminate more against blue-collar workers than those who are on salaries because of the various allowances for tools, clothes and so on that often go with blue-collar work.

The CHAIR: The question is that amendment No. 5 moved by the—

The Hon. M.J. WRIGHT: I have an answer for the member for Mitchell.

The CHAIR: The member for Mitchell does not get to ask the questions at the moment. He moved the amendment, so people can question the member for Mitchell but not question the minister on that amendment.

Mr HANNA: On a point of order, Madam Chair, I understood that, after putting the amendment, the clause would be put directly.

The CHAIR: After the amendments have been dealt with, the clause overall will be open for discussion.

Mr HANNA: This is in line with your earlier ruling; yes. Thank you, Madam Chair.

The Hon. S.W. KEY: I want to ask a question of the member for Mitchell with regard to prescribed allowances. My understanding is that one of the positive things in this bill is that the earnings of an injured worker in the previous year would be taken into consideration and seen as the average weekly earnings.

I guess my question to the member for Mitchell is whether his interpretation of this bill is that prescribed allowances would not be included in whatever is considered to be the average weekly earnings of an injured worker in the previous year to try to, as I understand it, make sure that people's overtime and other allowances and payments on top of their basic wage are taken into consideration. Having done a number of cases myself, trying to demonstrate an established pattern of overtime, I would be very interested to hear whether what the member is saying with regard to allowances is within the meaning of the bill that has been put forward by the minister.

The CHAIR: The question before the house is the member for Mitchell's amendment. Therefore, questions of the honourable member or a brief response by him are in order. The member for Mitchell has the call.

Mr HANNA: Thank you. To answer the question, I think we need to go back to what the bill is doing—and, indeed, back to what the act currently does. There is a definition of 'prescribed allowance' in the act, as the honourable member well knows, and that current definition specifies a number of things which must be included, in a sense: special expenses incurred by the worker in the course of employment, special rates paid on an irregular basis (I am not sure whether or not that would be a living away from home allowance, perhaps) or by way of site allowances. Then there is the catch-all provision 'other allowances or benefits prescribed'.

In the bill the government seeks to scrap that and have what seems to be just the last part of that clause included, 'prescribed allowance' meaning 'any amount received by the worker from an employer by way of an allowance or benefit prescribed for the purposes of this definition'. That implies—to me at least—that the things specified under current legislation are not intended to be maintained in the same way by the minister after this bill is passed. That is why I asked the minister what he intends to prescribe in terms of allowances, because obviously that will be important.

The member for Ashford is correct in thinking that these allowances would not normally be taken into account in average weekly earnings if the government has its way. So, to me that is a way of reducing average weekly earnings.

Amendment negatived.

Progress reported; committee to sit again.


[Sitting suspended from 12:58 to 14:00]


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