Australia: Victorian compensation laws re-write to improve clarity and employer rights


The Workplace Injury Rehabilitation and Compensation Bill 2013 introduced into the Victorian Parliament on 18 September will help to clean up the maze that workers' compensation laws have become through countless amendments over almost 30 years.

If passed, the Bill will do more than just clarify existing provisions, it will go some way to addressing poor claims decisions and better recognising mutual obligations of employers and workers.

The Bill combines and revises the current Accident Compensation Act 1985 (ACA) and Accident Compensation (WorkCover Insurance) Act 1993 (ACWIA) in a single Act that is to commence on 1 July 2014. It will not alter the level of entitlements for injured workers, claims processes or premium calculation.

Improved structure for ease of navigation

Similar to the approach taken in the model Work Health and Safety Act, the Bill puts up front the entitlement and process provisions that employers and workers will most want to find, with administrative arrangements and some definitions and technical matters at the end and in Schedules.

Ease of navigation and understanding of processes is also assisted by the innovative inclusion of flow-charts on the key topics of:

  • Notice of injury and making a claim
  • Employer objections to a decision to accept or reject a claim (new)
  • Return to work obligations of employers and workers
  • Impairment benefits process
  • Dispute resolution process if a worker disagrees with a decision
  • Common law process
  • Employer registration, premium and premium review

Limited employer objection to claims decisions

A process will be provided for objection by an employer where a claim has been accepted by the Authority, but the employer believes that the claimant is not a worker as defined, or the objector was not the correct employer.

If the Authority affirms the decision to accept a claim, the objector may bring an appeal to the Supreme Court. A decision to set aside the acceptance of the claim will result in payments to the worker ceasing.

While this provides some relief for an employer, it does not revert to the broader entitlement of an employer (removed from the legislation in 1994) to obtain relief from any poor claims decisions. The new objection provisions are only a step in the right direction, dealing with only an aspect of the concerns of employers, with limited relief to employers and minimal cost to the scheme.

Employers will still need to review diligently the performance of the insurers and press actively for appropriate ongoing review of the entitlements of specific workers.

Clarifying mutual return to work obligations

The obligations of an employer and worker for the pursuit of a timely return to work are usefully set out in flow-charts in the Bill.

The Bill continues without change the obligations of an employer to plan and assist the return to work of an injured worker as described in sections 194 to 196 of the ACA.

The obligations of a worker to assist this process are more clearly stated, with the Bill arguably requiring a higher level of engagement and effort from a worker. A worker will be required to use occupational rehabilitation services, participate in assessments and participate in interviews "to the extent it is reasonable to do so" rather than the current standard of merely to "actively participate" and "co-operate".

This change may prove to be more than mere semantics. It may improve return to work outcomes or provide more opportunity for cessation of payments where workers are not genuinely pursuing return to work.

Premium assessment reviews options enhanced

The Bill includes a two stage process for review of premium assessments that is similar to the current process under the ACWIA. The first stage is an internal review by the Authority. The second stage is an external review of the internal review decision, by either an appeal to the Supreme Court (as at present) or a new process for review by the Victorian Civil and Administrative Tribunal (VCAT).

The Bill sets out, with a useful flow-chart summary, the steps for each of those stages.

This is a positive change that provides for a clear and possibly more timely process, through the use of VCAT.

While the Bill allows an employer up to 60 days to make an application for internal review and 60 days after the internal review decision to seek external review, these time periods will in practice be challenging, given the complexities of issues such as classification and claims estimates.

It is important to note that bringing an application for review will not suspend the liability of an employer for the assessed premium. Applications for review should accordingly be made and pursued in a timely manner to limit cash-flow and associated issues pending any reimbursement or off-set following a successful review.

Implications for employers

Employers should consider not only the way in which the Bill may provide benefits to them, but also if the wording of provisions is clear and workable. The legislative processes allow an opportunity for amendments to be made, and this should be pursued where possibly unintended consequences of changes in policy or drafting are identified.

The introduction of the Bill and particularly the clarity it introduces, provide an excellent opportunity for employers to review their relevant policies and procedures, to ensure that they are compliant, and to grasp new opportunities for effective claims and liability management. Areas of particular focus should include:

  • Initial claims notification
  • Interaction with the Authority and insurers throughout the claims management process
  • Active involvement in claims review and dispute processes
  • Effective claims management, including management processes, skills and training
  • Early intervention and diligent ongoing review for return to work
  • Interaction between workers' compensation, discrimination, OHS and employment compliance issues and policies
  • Premium assessment (classifications, claims estimates etc)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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