BY CHRIS LATHAM
PERTH — During the 2001 Western Australian election campaign, the ALP campaigned on the basis that it would ensure the "maintenance of a fair and efficient workers compensation system". Central to this system would be a "better balance between statutory payments and common law" which would "open up greater access to common law for injured workers".
In March of this year, Premier Geoff Gallop's Labor government released an updated version of its intended amendments to the Workers Compensation and Rehabilitation Act. The proposed amendments are centred on four areas — changes to statutory benefits; coverage for medical treatment; dispute resolution; injury management and the access of workers to common law.
Labor plans to increase the cap on weekly payments to two times average weekly earnings from the current cap of one-and-half AWE, increasing the maximum benefit from $977 to $1303. This payment will be reduced by 15% after eight weeks; it is presently reduced after four weeks.
The extension of the period of payment is expected to benefit some 4800 injured workers annually. After eight weeks, the injured worker's overtime earnings will not be included in calculations for weekly benefits.
The length of time that benefits can be received is governed by the prescribed amount, which will remain at a maximum of $130,609. For workers with permanent total incapacity the maximum prescribed amount can be extended by 75% or $97,956.75, to $228,565.75 (previously the maximum extension was $50,000).
The prescribed amount is the total amount available for any injury; if an injured worker subsequently dies then his or her dependents receive the prescribed amount, minus any weekly payments already received.
Under the proposed amendments, workers in receipt of statutory benefits will be allowed to exceed the maximum medical entitlement of $39,182.70 by $2000. In exceptional circumstances, workers will be able to receive unlimited coverage for medical expenses; previously this could be increased by $50,000, although there are no specific criteria provided in the government's proposal for when this would occur.
The amendments propose restructuring the way in which disputes over workers compensation will be resolved. These changes include the reintroduction of lawyers into the whole system (rather than simply during final appeals) and the creation of a new Workers' Compensation Dispute Resolution Authority, which will oversee a process of conciliation conferences and arbitration.
Under the existing legislation, "injury management" — the process by which injured workers return to work — was voluntary and only vocational rehabilitation was required. Labor's amendments would require large employers to develop their own policy and procedures for injury management and encourage insurers to provide resources for smaller companies to develop these as necessary.
Labor also proposes that injured workers be legally required to participate in injury management and rehabilitation activities. Failure to do so could result in the stoppage of payments.
While workers should have the option of returning to work, and employers be legally required to make arrangements to facilitate this process, Labor's amendments are not aimed at giving workers greater options. Instead, they are aimed at saving employers and insurers money by compelling injured workers to participate in attempts to return to work, and allowing an earlier reduction in the level of weekly compensation payments. The government's estimates indicate that compulsory injury management will deliver a saving of 2.5% on the total cost of the workers compensation system.
Labor proposes to maintain the "two-gate" system for access to common law introduced by the state Coalition government in 1999. Under this system, injured workers assessed to have a "whole body impairment" (WBI) of greater than 25% (currently the threshold is 30%) are eligible to receive uncapped compensation payments.
For workers assessed to have a "serious impairment" of between 15% and 25% compensation is capped at a maximum of $274,278; this is a reduction of the threshold, from the current act, by 1%.
Not only does Labor's proposal fail to reverse the restriction in access to common law introduced by the Coalition government, it extends this restriction by stopping the inclusion of secondary and consequent impairment, particularly psychological impairment, from being included in any assessment of WBI (as is presently done), although these can be included in considerations of the amount of compensation.
This is justified in the proposal on the basis that it is difficult to obtain consistent assessment of the level of this impairment. While the government's proposal does bring consistency, workers will be consistently denied the right to seek common law damages.
The proposed amendments will extend the deadline for seeking common law damages to 12 months, extendable by an additional six months for workers who can demonstrate their condition has not stabilised.
Workers with a serious impairment will also no longer lose their entire statutory benefit. Instead, all coverage of medical and other expenses will cease and weekly payments will be reduced to 70%, then to 50% after three months and cease after six months.
As common law damages are reduced by the amount of weekly benefits that the worker has already received, the phasing down of compensation payments and ending of coverage of medical expenses can only be interpreted as intended to dissuade injured workers from making common law claims.
From Green Left Weekly, October 1, 2003.
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