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Industrial Relations Legislation Amendment Bill 1990



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House: House of Representatives

Portfolio: Industrial Relations

Purpose

This is an omnibus Bill that contains a number of largely non-contentious amendments. The most important changes relate to premiums payable to Comcare; the requirement for certain authorities to discharge Comcare liability; and the granting of leave of absence to various high ranking officials.

Background

Comcare was established by the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (the Principal Act) as the major body responsible for the rehabilitation and compensation, and the prevention of injury, for Commonwealth employees. A main feature of Comcare is the requirement for employing agencies to pay a premium which is based on the occupational health and safety record of its employees. This provides an incentive for each agency to minimise its requirement for compensation and rehabilitation programs and encourages the prevention of accidents and disease. The liability of each agency is estimated by Comcare and to this is added a proportional share of Comcare's administrative costs to calculate the total contribution.

The performance of Comcare is assessed in its Annual Report for 1989-90, the first full year of the schemes operation. When the scheme was introduced, premiums averaged 2.6 cents in each salary dollar. A reduction in initial claims by 12% and a 60% reduction in claims extending beyond one month has taken place since the scheme was introduced. This, combined with the rehabilitation program designed to encourage return to work, has seen premiums reduced to an average of 1.9 cents in the salary dollar for 1990-91. 1 An essential feature of Comcare is the program to assist employees who are likely to be off work for 28 days or more to engage in a rehabilitation program that will assist in the gradual full return to the workforce. This is done through case management programs which are managed by the individual agencies. Of the plans closed in 1989-90, 88% returned to work. The average plan cost $1131 and lasted for 116 days. During the year, 0.4% of employees referred to Comcare had their compensation suspended for failing to undertake their plan without reasonable excuse. 2 On the other side, the stringent attitude towards compensation, rather than rehabilitation is seen in the statistics regarding appeals to the Administrative Appeals Tribunal, where approximately 43% of Comcare decisions were not upheld.

In consultation with Comcare, Telecom and Australia Post have responsibility for administering the Principal Act in respect of all their employees. The Department of Defence administers the Principal Act, in consultation with Comcare, for members of the Australian Defence Forces and the Reserve. These arrangements reflect the size, and independence, of the bodies and the special considerations for the Defence Forces.

A number of deficiencies in the performance of Comcare are noted in the financial statements included in the Annual Report. Two of these concern breaches of section 98 of the principal Act which deals with premiums. The main breach concerned Comcare charging interest for late payments by Government Business Enterprises. 3 Amendments contained in this Bill will rectify this situation.

The Remuneration Tribunal determines various entitlements for senior officers of various bodies. While arguments may be made about the appropriateness of the Tribunal, eg. should the body be able to determine the entitlements, the existence of the Tribunal was supported by the Hancock Report. At present, there are only two members of the Tribunal as, since the third departed, the Government has stated that it is unable to find a replacement. This could lead to difficulties as two are required for a quorum and the unavailability of one of the current members will mean the Tribunal cannot sit.

Main Provisions

Clause 4 will amend section 4 of the Principal Act to substitute a new definition of injury. The new definition will make it clear that the definition covers the aggravation, due to employment, of an existing injury. This will apply from 1 December 1988.

A further amendment to section 4 of the Principal Act will amend the definition of Commonwealth Authority to include Government Business Enterprises declared by the Minister. This will rectify the situation outlined above.

The value of contracts Comcare may enter into without Ministerial approval will be increased from $100 000 to $500 000 by clause 9.

Clause 10 will repeal sections 96, 97 and 98 of the Principal Act, which deal with contributions, and also provide that the sections will continue to apply for the 1990-91 financial year.

A new Division 4A, dealing with premiums for years beginning on 1 July 1991 or later, will be inserted into the principal Act by clause 11. Proposed section 96A provides for a premium to be set for each body based on:

* the prescribed amount, which is based on the estimated liability and estimated administrative expenses. This reflects the current situation except the Minister may direct the method to be used and the matters that Comcare is to have regard to;

* the bonus amount, which provides for deductions relating to the occupational health and safety record and practices of the body;

* the penalty amount which will be added and is based on the same features as the bonus amount.

Where an authority is liable to discharge Comcares liability under proposed section 128A, see below, regard is to had to any amounts already paid for the injury etc. by the authority (proposed section 96B).

Review of an estimate will initially be made by Comcare (proposed section 96D), and where the body is still dissatisfied, by the Minister (proposed section 96F).

Proposed section 96H provides for variations of estimates where there has been an error, or where there is a significant change in the number of employees or the annual salary and wages payable.

Comcare may allow a discount on the premium where it is paid before the due date. Similarly, where payment is late, i.e. paid after 30 September in the financial year due, or paid in instalments, a surcharge may be charged (proposed section 96J). As well, interest will be payable where an amount is not paid in accordance with a Ministerial direction. The rate of interest will be specified by the Minister. Interest will not be payable if the amount of interest due is less than $100 (proposed section 97). (While proposed section 96G allows the Minister to direct that agencies premiums be paid in instalments, proposed section 98 provides that such a direction is not to be given if this will result in a surcharge.)

Clause 17 will insert proposed section 128A into the Principal Act. For prescribed Commonwealth Authorities, which are listed, the authority will be liable to discharge Comcares liability in respect of injuries sustained before 1 July 1989.

Remuneration Tribunal Act 1973

Section 4 of this Act provides that certain people, including Members of Parliament, Public Servants and judges of Federal or Supreme Courts, cannot be appointed to the Tribunal within seven years of finishing such employment. Clause 24 will reduce this period to one year.

Proposed section 4B provides for the disclosure of interests by the Chair and members of the Tribunal when considering a matter that may conflict with those interests. Where the Chair proceeds to hear a matter and the Minister is aware of a conflict of interests, the Minister may, if it is considered appropriate, direct that the Chair takes no further part. The same will apply in relation to members, with the Chair giving the direction.

Section 7 will be amended to allow the Tribunal to determine the recreational leave entitlements of officers covered by the Tribunal (clause 27).

Clause 30 will amend the Acts contained in the Schedule. The effect of the amendments will be to amend the Acts to reflect the new power of the Tribunal to determine recreational leave entitlements and to specify who may grant leave of absence other than recreational leave. For the most senior officer in the various organisations this will generally be the appropriate Minister.

References

1. Comcare, Annual Report 1989-90, p.7.

2. Ibid., p. 31.

3. Ibid., p. 114.

Bills Digest Service

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This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1991

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Published by the Department of the Parliamentary Library, 1991.