Australia: A National Occupational Health And Safety Regime: How Close Are We?

Traditionally, there has been a notable lack of uniformity between the States and Territories in relation to occupational health and safety laws and workers' compensation in Australia, particularly in respect of sanctions and enforcement. Recent case law and legislative developments indicate the tide is turning on the capacity of the Commonwealth to control these areas, historically regulated by the states and territories.

WorkChoices decision

On 14 November 2006, the High Court handed down its decision in NSW v Commonwealth [2006] HCA 52 which upheld the constitutionality of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). The amending Act created a federal industrial relations scheme covering the majority of employers in Australia under the Workplace Relations Act 1996 (Cth). The amendments were underpinned primarily by the corporations power in section 51(xx) of the Constitution.

The High Court's decision has broader implications for the Commonwealth in terms of the activities of corporations which may now be regulated by the Commonwealth through the use of the corporations power. The impact of the decision is that the Commonwealth may legitimately extend the power of the Commonwealth to legislate in areas that were traditionally controlled by the States and Territories.

Comcare decision

On 14 March 2007, legislative changes came into effect which means that the Commonwealth Occupational Health and Safety Act 1991 (Cth) ("OHS Act") no longer applies strictly to Commonwealth employment. Private employers licensed to operate under Comcare are now covered by the OHS Act.

Further, in the recent decision of Attorney-General (Vic) v Andrews [2007] HCA 9, the High Court upheld the validity of licensing for "eligible corporations" under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("SRC Act"). Private sector corporations can opt out of state workers' compensation schemes where they meet the eligibility requirements under the SRC Act.

This means that certain employer corporations can now elect to be insured under the federal Comcare scheme. As more employers elect to insure in the Federal system, the State insurance regimes are likely to be less and less viable. This decision has had the impact of refocusing workers' compensation in a Federal, rather than state, context.

What are the arguments for uniformity?

In 2004 the Productivity Commission released a report into occupational health and safety called "National Workers Compensation and Occupational Health and Safety Frameworks". ¹The Report recommended that "national uniformity in occupational health and safety regulation should be established as a matter of priority." The Commission noted there are 10 principal pieces of occupational health and safety legislation in Australia and multiple workers' compensation schemes. This leads to the following difficulties:

• there are significant compliance costs imposed on multi-state employers because of the multiple schemes

• differences attach to the definition of "employee" between schemes which may mean that a worker may be covered in one scheme, but not by another

• there is a risk that working temporarily interstate may leave employees uncovered

• benefit schedules differ among jurisdictions

• employees have different degrees of access to common law and journey to work claims

• employees are subject to different work-related tests

• different penalties attach to breaches of OHS laws in different jurisdictions; and

• employees have different rehabilitation and return-to-work requirements from scheme to scheme.

Implications for employers

The current arrangements in relation to OH&S and workers' compensation place a strong burden on employers in terms of compliance costs and the administrative burden of being regulated under multiple regimes. These pressures are compounded by the fact that employers have to stay on top of regular amendments to the various occupational health and safety legislation, codes and regulations. Further, maximum penalties for breaches of OH&S are far lower in the Commonwealth sphere, while insurance premiums are far cheaper under the Comcare scheme.

The way forward

The High Court's upholding the constitutional validity of the 2005 amendments to the Workplace Relations Act removes any constitutional impediment to the creation of a national OH&S Scheme. Further, the High Court's decision to allow eligible corporations to opt-out of state schemes raises questions about the future viability of state workers' compensation schemes. This suggests that it is only a matter of time before a national system of occupational health and safety and workers' compensation is created.

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.