On 13 August 2013, the Queensland Government passed the Criminal Law and Other Legislation Amendment Act 2013, which amends the self-insurance provisions of the Workers' Compensation and Rehabilitation Act 2003 (WCRA).
Previously the Authority, Q-COMP, could only issue or renew a self-insurance licence under s 71 of the WCRA if it was satisfied that:
- the employer had at least 2,000 full-time equivalent workers employed in Queensland
- the employer's occupational health and safety performance was satisfactory
- the licence would cover all workers of the employer employed in Queensland
- the employer had given the required unconditional bank guarantee or cash deposit
- the employer had the required reinsurance cover
- all workplaces of the employer were accredited workplaces, or, if not accredited, were adequately serviced by a rehabilitation and return to work coordinator and the employer had workplace rehabilitation policies and procedures in place, and
- the employer was fit and proper to be a self-insurer.
This meant that if a self-insurer's workforce fell below 2,000 full-time equivalent workers in Queensland, the Authority was unable to renew the self-insurance licence.
Finance and Administration Committee's inquiry into Queensland's Workers' Compensation Scheme
The report of the Finance and Administration Committee's inquiry into Queensland's Workers' Compensation Scheme that was handed down on 23 May 2013 considered whether the current self-insurance arrangements were still appropriate.
There were many submissions both for and against the relaxation of the eligibility criteria, and the eligibility criteria of other states were compared. Queensland's requirement of 2,000 full-time equivalent workers was far in excess of the requirements of other jurisdictions, with New South Wales being the closest with a requirement of 500 workers and South Australia with 200. The remaining states and territories have no such requirement.
The Committee's recommendations
The Committee considered that for the existing self-insurers, renewal of licence should not be dependent solely on the number of full-time equivalent employees criteria. They believed that other existing factors, such as long-term financial viability and lodgement of bank guarantees and past performance of the self-insurer should be considered for renewals.
The Committee was conscious that the stability of the scheme was reliant on the majority of employers being in the WorkCover Scheme and considered that little could be gained from major change, however that there should be some flexibility for existing self-insurers who may fall below the required number of employees, provided they have a proven track record as a self-insurer and demonstrate continued financial viability1.
The Government's response
On 13 August 2013, the Queensland Government passed the Criminal Law and Other Legislation Amendment Act 2013, which purported to adopt the recommendations of the Committee. However, the amendment goes further than the changes recommended by the Committee. The Committee only recommended flexibility in relation to the renewal of the self-insurance licence. The amendment now allows for the Authority's discretion where special circumstances justify for both the issuing and renewal of the self-insurance licence.
The only guidance on what would be considered "special circumstances" is contained in sections 78B and 78C of the amending Act2, providing that, without limiting what could be considered a special circumstance that may justify the issue or renewal of a licence, it will include a circumstance where an employer who fails to meet the 2,000 full-time equivalent employee threshold, holds a current licence to be a self-insurer in two or more other jurisdictions and has demonstrated:
- a history of compliance with those laws and the conditions of those licences, and
- a history of acting reasonably in the performance of functions and exercise of powers under those laws or licences.
The effect of the amendment
Although in the second reading speech it was purported that this amendment was simply giving effect to the recommendations of the Committee, it clearly goes much further.
The Authority now has the power to issue or renew a licence, not only to employers who fail to meet the full-time equivalent worker threshold, but also to employers who may fail to meet any other of the eligibility criteria contained in s 71 of the WCRA.
With the relaxation of the eligibility criteria we now expect a number of the larger companies who self-insure in other jurisdictions to move to self-insure in Queensland.
1Report of Finance and Administration Committee inquiry into Queensland's Workers' Compensation Scheme dated 23 May 2013 p.186 – 187.
2Criminal Law and Other Legislation Amendment Act 2013, amending sections 71 and 72 of the Workers' Compensation and Rehabilitation Act 2003
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