01 May 2007
Recent amendments to the Safety, Rehabilitation and Compensation Act 1988, which came into effect on 13 April 2007, have considerably reduced the circumstances in which workers can claim compensation under the Comcare scheme.
Who is affected?
Under the Act, Comcare is responsible for administering Commonwealth workers' compensation. The Comcare scheme compensates workers who are injured either out of or in the course of their employment.
Commonwealth workers (not including members of the Australian Defence Force who are covered by a separate scheme), ACT Government employees and non-Commonwealth workers in some circumstances are all covered by the Comcare scheme.
Reforms to the scheme include: the limitation of coverage of injuries suffered outside the workplace, amendments to the definition of 'disease' and 'injury' and changes to the calculation of benefits to injured employees.
Coverage for injuries suffered outside the workplace
The Comcare scheme no longer provides coverage for injuries sustained when an employee is out of the office on a lunch break, or on the journey to and from work.
The rationale for the change is that the Government believes in these situations the employer has no control over the circumstances of the journey or the employee's behaviour on these journeys. Workers' compensation coverage for journey claims is estimated to have cost Comcare over $25.9 million dollars between 2004-2005.
Under the Scheme, employees are still covered for injuries incurred while at the place of work during an ordinary break from work. Additionally, employees remain covered where injury occurs when an employee is temporarily absent from work while undertaking an activity associated with work. An injury suffered during travel undertaken for the purpose of employment at the direction or request of the employer will also remain compensable.
Amendments to the definition of 'disease' and 'injury'
It is expected that the amendments to the definitions of 'injury' and 'disease' in the SRC Act are likely to save Comcare more than $5 million dollars a year.
The Act previously defined 'disease' to mean an ailment or aggravation that was 'contributed to in a material degree by the employee's employment.' The phrase 'material degree' has now been replaced with the phrase 'significant degree', defined to mean 'a degree that is substantially more than material.'
This limits access to the compensation scheme when work has only made a very minor contribution to a disease.
The definition of 'injury' now excludes injuries arising from 'reasonable administrative action'. Essentially, this means that an employee cannot claim from Comcare if the injury is a result of reasonable disciplinary action taken against him or her, or as a result of the employee's failure to obtain a promotion, transfer or benefit in connection with his or her employment.
Calculation of benefits under the Scheme
The definition of 'suitable employment' has been amended in order that Comcare can take into account the capacity of a terminated employee to work outside Commonwealth employment when calculating their weekly incapacity payments.
Previously, where a permanent employee was separated from the employer by way of retrenchment or invalidity retirement, only Commonwealth employment could be taken into account in calculating this figure. Amending this section is said to act as an incentive for those employees to seek employment outside the Commonwealth rather than relying on the maximum compensation benefit in these circumstances.
Changes have also been made to ensure retirees' incapacity benefits take into account superannuation payments from non-defined superannuation schemes as well as superannuation fund contributions and interest rates.
What effect will these changes have?
Employees, employers and advisers should be aware of the impact the changes to the Comcare scheme will have on future compensation claims. While the application of the scheme has been reduced in several areas, the obligation of employers to safeguard the health and safety of employees in the workplace under the Occupational Health and Safety Act 1991(Cth) remains unchanged.
In the long-term these changes could make the Comcare scheme more attractive to more employers. This is because the Government estimates that the amendments to the scheme will save $20 million dollars per annum, which is likely to reduce workers' compensation premiums. This fact, coupled with the recent High Court case Attorney-General (Vic) v Andrews [2007] HCA 9 which upholds the right of 'eligible corporation' employers in state systems to opt out of state schemes, is likely to result in a steady stream of eligible corporations opting to insure under the Comcare scheme.
The Clayton Utz Workplace Relations, Employment & Safety team can assist with training and advice in regards to the amendments to the Comcare scheme and employer obligations under the Occupational Health and Safety Act 1991 (Cth).
