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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-05-31 Daily Xml
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Parliamentary Committees

Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation: Return to Work Act and Scheme

The Hon. S.W. KEY (Ashford) (11:03): I move:

That the 28th report of the committee, entitled 'Interim report into the referral for an inquiry into the Return to Work Act and scheme', be noted.

This is an interim report summarising the submissions made up to and including 2 March 2017. The Hon. Tammy Franks from the other place moved for this inquiry into the Return to Work Act and scheme. For many years, South Australia's previous workers compensation scheme, WorkCover, was often cited as one of the poorest performing in the country. It consistently produced return-to-work rates well below the national average, required one of the country's highest employer premiums to operate and was reported to be extremely underfunded. Significant reform was needed.

On 1 July 2015, the Return to Work Act and scheme commenced. Moving away from the focus on medicolegal matters, the return-to-work scheme now better recognises the health benefits of work and has a stronger focus on early intervention and customer service. It uses mobile case managers to provide a greater level of face-to-face service and utilises systems such as telephone reporting to help reduce administrative processes, connecting employers and workers with the support they need sooner.

Since the introduction of the Return to Work Act, average employer premiums have significantly dropped and the scheme is now reported as fully funded. However, the percentage of injured workers who are at work at one, three, six and 12 months post injury has only marginally improved since the commencement of the reformed scheme. The committee will see whether these figures continue to improve, as in more people returning to work. Many submissions received from workers and unions stated that benefit to employers by way of reduced premiums has come at the expense of the support provided to injured workers.

Workers who were in the WorkCover scheme on 1 July 2015 moved to the Return to Work scheme in accordance with the transitional provisions in the act. As a result of wording in these provisions, some workers have been left without income or medical support. The full bench of the South Australian Employment Tribunal found these provisions caused a seemingly unfair outcome to one worker. The committee received submissions with examples of other workers who had no access to income support on the Return to Work scheme as a result of these provisions. These included workers who were on maternity leave or non work-related sick leave at the time the act commenced.

The committee received submissions providing examples of some injured workers who were soldiering on at work and who had been denied weekly payments due to the wording of these provisions. I have met with a number of constituents who have this exact problem and who are in very difficult circumstances. In comparison with workers with physical injuries, workers with psychiatric injuries have always had a great hurdle to overcome when seeking access to the scheme. Workers with a psychiatric injury now need to prove that employment is the significant contributing cause of their injury.

All of us will go through some sort of psychological trauma or stress at one time or another. I think most of us can agree with that. I am getting a lot of nods in the chamber. It is part of life; however, the committee heard evidence of concerns that the new wording—the inclusion of the word 'the'—gives case managers too broad a power to reject psychiatric injury claims when a worker has or has had a personal non work-related stressor in their life.

The committee received an example of one worker who had been sexually harassed at work but had her claim denied. The case manager relied on the fact that the worker had had a miscarriage a year earlier and had sought some counselling for that. They argued that this meant that the employment was not 'the' significant contributing cause in her claim. The committee received submissions detailing a number of examples similar to this.

While there is a slight change in the wording for workers with a physical injury, case law to date indicates that this, we hope, will have minimal impact for them when accessing the scheme. The Return to Work Act introduced the classification of seriously injured worker, workers who have been assessed as having a whole person impairment of 30 per cent or more. The committee does not ignore the significant impact that a work injury may have on a worker's life, even if the worker does not meet the arbitrary, we believe, 30 per cent threshold.

However, the act draws a very distinct and inflexible line in the sand on this matter. The committee received a great number of submissions that strongly expressed concern that this approach does not account for the individuality of each worker and the nuances of their circumstances. Workers who meet the act's definition of 'seriously injured' have access to weekly income support until retirement age, continue to have medical expenses paid and have no obligation ever to return to work. Not since 1992, under this state's workers compensation system, have seriously injured workers been able to access common law rights to sue their employer in cases of employer negligence.

The committee received some submissions supporting this move, citing that it may encourage employers to provide safer workplaces, as well as give workers their day in court. However, many submissions did not support the reintroduction, as the process was thought to be too adversarial, gave rise to fractured worker and employer relationships and went against the objective of supporting workers to return to work. The issue of common law has always been an issue in my time in the industrial relations arena with regard to workers compensation, and it continues to be an issue of debate.

Almost all submissions that provide an opinion on common law stated that the current state of its only being accessible to those people deemed to have a whole person impairment of 30 per cent or more is a token gesture that is most likely not to be used. Workers who do not meet this arbitrary 30 per cent threshold, the key that opens the door to access ongoing support, will find that the support afforded to them is very limited. Weekly income support payments are now limited to 104 weeks, with a further 12 months' medical expenses covered, or, if no income support is claimed, then 12 months of medical expenses is covered.

It is worth noting that the majority of workers—around 70 per cent—will not require income support payments. Of those who do, 80 per cent of them historically have not been in receipt of income support by the 104th week. Many submissions raised concern that the biggest impact will be felt by those workers who have a whole person impairment of less than 30 per cent and who are unable, or have reduced capacity, to work when they come to the end of the 104 weeks. In fact, the committee received submissions stating that for some complex injuries, including psychiatric injuries, 104 weeks is not enough time to allow for adequate recovery.

I have mentioned 104 weeks a few times. It is important to note because towards the end of this month marks 104 weeks since the commencement of the new Return to Work Act. I do not know about other people, but certainly in our electorate office a number of people are now starting to present with concerns about their future medical expenses and also about what income they may be able to access.

It is also when the first group of workers will have income support ceased as a result of this new strict time limit. The committee received a number of submissions from injured workers who are still not able to work as a result of their injuries but whose payments will cease in 27 days. While some workers may be able to seek support from community organisations, government agencies, friends and families, many submissions were clear that these supports were not available for every worker. Some workers fear that they will no longer be able to afford mortgage repayments and will lose their home.

The committee understands that the scheme is still evolving, with the full effects of reform yet to be realised. This inquiry has been of great interest, receiving almost 50 submissions, with more than half from workers and their representatives. I would like to thank everybody who has made a submission thus far. A number of witnesses have come before the committee, but because of the volume of work—anybody looking at the interim report will see that we have received a lot of information—we thought that it was important to publish what we have received thus far.

I would like to thank the members of the committee: the member for Fisher and the member for Schubert and, from the other place, the Hon. John Dawkins, the Hon. Justin Hansen and the Hon. John Darley. I would also like to express my appreciation to the committee staff: the executive officer, Ms Sue Sedivy, and the research officer, Mr Peter Knapp.

Mr KNOLL (Schubert) (11:14): I rise to make a brief contribution on the interim report. I was quite cynical when this was first brought to us. I understand that it was being pushed as a potential committee in the upper house by the Hon. Tammy Franks; instead, an inquiry into the scheme was sent to us on the committee the name of which is too long to mention.

The Hon. S.W. Key interjecting:

Mr KNOLL: Yes. I suppose I maintain a level of cynicism around this inquiry because I think what we are doing is happening too early. As the member for Ashford noted in her speech, some of the stricter measures in the new act only really start to manifest themselves as of 1 July this year, and it is very difficult to understand how that is practically going to impact in the broad.

The other reason I think it is too early is that at the moment I understand there are something like 60 appeals on various cases in front of the South Australian Employment Tribunal, and these appeals will set a precedent for how the act is to be interpreted. So, a lot of the criticisms that are being made of the act are made without full understanding of what the tribunal is going to do in terms of its decision, whether any of these get referred to the Supreme Court and what decisions will be made in this regard.

Another thing that has kept me cynical is that almost every single submission made by both employers and employees has acknowledged the fact that this inquiry is too early. What has also happened is that, because it is too early, there are a number of things that we can make judgements on now regarding changes to the scheme, but there is plenty that we still need to wait and see play out. What has happened with each of the groups of employers, employees and unions is that everybody has gone back into the corners that they were in when the bill was first introduced. What I have found frustrating is that we are essentially relitigating the same arguments we had when we put the bill through this place over two years ago.

I suppose there is some frustration on my behalf in regard to the fact that we are looking at this now as opposed to giving it another six or 12 months to play out. In relation to one provision, it seems that, on some of the submissions and evidence we have received, one of the changes with regard to psychological injury may not end up being as some of the submissions suggest. This is regarding the change in the act from work needing to be 'the' significant factor in the course of the psychological injury as opposed to 'a' significant factor. That increases the threshold that suggests that work needs to have had the major impact; it needs to be the main impact.

How that is interpreted is up for debate, and we have taken evidence that some people have tried to quantify the factors that have led to a psychological injury and quantify how that has operated, but it seems from the early judgements of the tribunal that they have focused not on the word 'a' versus 'the' but they have actually focused on the word 'significant' and as such, in essence, it has put a more open and wide interpretation on the acceptance of psychological injury claims.

Having said that, there are some useful things that we have discussed as a committee, and some of the submissions have been insightful. Also, through our discussions and committee hearings, there are a number of useful suggestions that I think have come out in relation to making changes to the scheme where we could potentially make some changes that will potentially have very little impact on the cost of the scheme but may have huge impact in helping injured workers. Those things have been useful, and hopefully we can incorporate some of them into the final report. Certainly, as we go further and take hearings after this two-year cut-off period starts to come into effect and we start to see the practicality of that, I think we will start to get a better understanding of where we are at.

In relation to whole person impairment, that has certainly been one of the most contentious issues around this needing to meet the 30 per cent threshold. That is an issue we are going to have to explore further, and certainly we have taken evidence that some people who are above the 30 per cent whole person impairment threshold are back at work and able to do so. Conversely, there are some people who are under the 30 per cent threshold who are not able to get back to work. How do we deal with that? We are using a definition of injury as opposed to a definition of ability to return to work, if that makes sense.

The other interesting thing we are looking at is that there is a provision in the act that you have to be above 30 per cent to be considered a seriously injured worker, and a seriously injured worker then has the ability to remain on the scheme with income maintenance payments and medical expenses paid for indefinitely. However, we do know that there are now a number of cases where workers have been deemed seriously injured without the 30 per cent whole person impairment test being used, and that is a discretion that is given to ReturnToWorkSA to do.

That is something we need to explore because, if that is used properly, it is potentially an avenue by which we can, I suppose, mitigate some of the harshness that some of the submissions have suggested. As I understand it, there are about 70 people who have already been deemed seriously injured as a result of that provision, and I think we need to explore how that is operating a little more closely.

Whilst I always enjoy my time on a Thursday morning, I find it the most exciting committee to be on—no offence to the member for Little Para—and we do a lot of really good work. I would happily talk about these topics all day, every day, but I would like to put on the record my frustration, and certainly the frustration of a number of the submissions, about the timing of this. This report may actually need to be extended so that we can get to the right time frame, notwithstanding the fact that a statutory review of the act is due to happen in the near future anyway. With those words, I conclude my remarks.

The Hon. S.W. KEY (Ashford) (11:21): I would like to say that, unusually, I agree with most of the comments made by the member for Schubert. Interestingly, we are on the same page in this area, and I would like to thank him and the member for Fisher, in particular, in this house for their contributions. It has been really helpful and means that we can have a lot of discussions out of the chamber perhaps about some of the suggestions that could come forward. I am very blessed to have the Hon. John Dawkins and the Hon. John Darley on the committee, as well as our newer member, the Hon. Justin Hanson. Their contribution is exceptional.

This is an interim report. As I said in my opening comments, we thought it was important to publish many of the contributions we have received thus far because it is a big issue in the community. We look forward to further witnesses and further submissions.

Motion carried.

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