Business impact of Queensland Government’s WorkCover changes – 18 October 2013
This week the Queensland Attorney General, Jarrod Bleijie hastily introduced new changes to Queensland Workers’ Compensation Law. The article below considers the potential impact of these changes and what they mean for your business.
The changes will be effective for all work related injury claims, which occur from 15 October 2013 and include:
- · The introduction of a 5% Whole Person Impairment (WPI) threshold, which prevents injured workers with a diagnosed WPI of less than 5% from making a common law claim against their employer.
- · Permitting employers to seek pre-employment disclosure from workers regarding past claims and obtain their claims history.
- · An increase in worker fraud penalties and all fraud cases to now be prosecuted by The Office of Fair and Safe Work Qld (OFSWQ).
- · Ensuring that common law claimant’s have access to return to work programs.
The 5% threshold
The 5% threshold change will likely result in a reduction of common law claims by injured employees against their employers by ensuring that only seriously injured workers can commence a common law claim. This may be seen as good news for employers given the extensive amount of employer’s time often lost in the investigation and administrative processes associated with common law claims, which can take on average between 12months to 3 years to finalise.
Obviously, each injury needs to be individually and independently assessed by a qualified medical expert to determine whether it results in a WPI of 5% or more. However, by way of general example, viewers of the ABC’s 7:30 report last night heard that a Queensland gentlemen who required a knee reconstruction as a result of a work related injury under the new laws would not be able to pursue a common law claim against his employer due to the fact that his injury was assessed as resulting in a WPI of 2.5%.
Essentially, a successful common law claim by an employee against their employer occurs in a situation where an employee, who is injured at work, successfully establishes that their employer’s negligence caused the employee’s injuries and those injuries resulted in some type of harm to the employee. In turn the employer’s WorkCover insurer will be required to pay damages in common law, which may include the following:
- · Pain and suffering.
- · Past economic loss (lost wages).
- · Future economic loss (loss of ability to earn future wages and super).
- · Future medical expenses.
- · Future care and assistant expenses.
In contrast, in a standard workers’ compensation statutory claim by an injured employee, negligence of the employer does not need to be established. It is only necessary to establish that the employee’s injury arose out of, or in the course of employment, and the employment was a significant contributing factor to the injury.
Statutory claims cover an injured worker for past medical expenses, past economic loss and it some instances also result in a lump sum compensation payment. However, a statutory claim will not provide the worker with any entitlement to damages of future economic loss, future medical expenses or future care, which at times can mean a significant amount of money.
Previously, there was no minimum threshold in relation to the harm or WPI an injured employee experienced before they could commence a common law claim against their employer.
However, now an employee with a WPI of less than 5% will not be able to make a common law claim against their employer. This is likely to result in large savings to WorkCover by reducing potential compensation payments for future economic loss, future medical expenses and future care expenses that it may have otherwise paid had an employee with less than 5% WPI who commenced a common law claim against their employer. As a result future employer WorkCover premiums may in fact come down as a result of abovementioned savings.
Whilst the above changes appear like a real win for employers resulting in both time and cost savings, they have the potential to cause employers to become less vigilant with regard to ensuring that employees are prescribed a safe system of work and also deny injured employees the fundamental legal right to seek full compensation from negligent employers.
Pre-employment disclosure of workers claims history
The prospect of allowing employers to obtain disclosure of potential employees’ workers’ compensation claims history may seem appealing to many businesses and may be an effective tool for ensuring that employers don’t employ a serial claimers, however, it also carries with it a number of negatives.
If too much weight is given to a prospective employee’s claim history, the negative implications may include:
- · A likely increase in the instances of covert discrimination occurring on the grounds of disability.
- · Employers missing out on quality, high value candidates who have had legitimate claims in the past due to a biased against employees who have a previous claim history.
Increase in fraud penalties
There is no doubt that an increase in fraud penalties under the scheme should assist in the deterrence of false compensation claims being made by employers. Accordingly, it could be argued that these changes alone should be sufficient and the 5% threshold change to common law claims is going too far.
Ensuring common law claimants have access to return to work programs
There is little doubt that “return to work programs” are a win-win for both injured employees and their employers. By returning to work, compensation for future economic loss is likely to be reduced if not totally negated. It is also the case that in most instances, by returning to work the employee’s overall wellbeing is likely to improve dramatically.
Having said that, from a practical point of view, it may be difficult for employers to implement and welcome back an injured worker who is in the process of suing them for negligence.
If you have any questions in relation to the new WorkCover arrangements, health and safety, or risk management strategies for your business, do not hesitate to get in contact with the Sync or Swim Team!
Article by: Paul Bright, Business Development and Compliance Specialist.