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Wednesday, 4 November 1992
Page: 2634


Mr SHARP (10.16 p.m.) —I rise this evening on behalf of the Opposition to debate the Seafarers Rehabilitation and Compensation Bill 1992 and three other cognate Bills that are before the House. The Opposition supports the principle behind the Bills which is that seafarers should have a rehabilitation and compensation system in keeping with contemporary community standards. Not only does the Opposition agree with that principle, but the industry itself concurs with that view.

  Having said that, it is important to note that the Opposition does not agree with every single aspect of the legislation. We will be drawing attention to some of those areas of difference and concern that we have during this debate here tonight and also later on in the other place where the possibility of having a lengthier debate on the subject is available to members of the Senate. That, unfortunately, is not available to members of the House of Representatives because this evening we are subject to the guillotine which limits debate.

  The Act that the legislation is intended to replace—the Seamen's Compensation Act 1911—is clearly out of date. I think everybody agrees with that. This was certainly acknowledged by the review of seamen's compensation which was conducted by Professor Harold Luntz who, incidentally, was the architect of the WorkCare scheme in Victoria. Honourable members from Victoria would be well aware of that scheme and indeed would have had some considerable concerns about it in the past. However, Professor Luntz recommended in his review that compensation arrangements should be on the basis of community standards and Cabinet determined that this would be the Commonwealth Employees' Rehabilitation and Compensation Act 1988, commonly referred to as the CERC Act. The selection of the CERC Act was not necessarily that of the review report, as suggested in the Government's explanatory memorandum, but indeed it was the Government's own selection.

  It must be observed, however, that the CERC Act relates to Commonwealth public servants and some employees of government statutory authorities and government-owned business enterprises, but does not relate to private enterprise. The proposed legislation relates only to private enterprise and does not cover public servants. Under these circumstances, it is not clear on what basis the communality has been determined, other than the fact that they are both Federal Acts and the only Federal Acts so far dealing with rehabilitation and compensation.

  However, there are major differences, not the least being that the Navigation Act already provides for a three-month sick leave period, regardless of length of service, due to specific maritime requirements such as the need for complete recovery and fitness clearance to work on ships, especially for seafarers such as engineers, et cetera, where the physical demands are specific. It is interesting to note that in the second reading speech of the Parliamentary Secretary to the Minister for Employment, Education and Training (Mr Snowdon), when introducing these Bills into the House of Representatives a couple of weeks ago, he said:

  The rate of benefits payable to partially incapacitated employees who are able to work will be on a graduated scale. For these persons the combined total of compensation plus earnings will be between 75 per cent and 100 per cent of normal weekly earnings, depending on the number of hours that the employee actually works.

That is an interesting statement by the Parliamentary Secretary because, as everybody in the maritime industry would understand, one cannot be at sea unless one is 100 per cent fit. Seafarers, because of the nature of the work, cannot afford to be 75 per cent, 90 per cent or 95 per cent fit; they must be 100 per cent fit. They all have to be capable of going up and down ladders, squeezing in and out of confined spaces and being able to lift and carry things in the performance of their duties and at the same time manage to maintain their feet in what can only be described from time to time as very difficult circumstances. It is important for us to remember in the course of discussing these types of Bills—as I think the Parliamentary Secretary has probably mistakenly said in his speech—that we cannot have somebody at sea or pretend to be able to get people back at sea and pay them partial benefits unless they are 100 per cent fit.

  In any event, the CERC Act is subject to a review currently under way. This will most likely lead to revisions in the level of and approach to benefits. It is not clear how the results of such a review will affect the provisions of this particular Bill. It is interesting to note that this Bill basically ties the compensation and rehabilitation for seafarers to the CERC Act itself. Whilst this is being done, the CERC Act is currently under review.

  One would have thought that it would have been more logical to delay the implementation of this Bill until the CERC Act completed its review and the recommendations that would no doubt flow from that review could have been undertaken in coalition with the introduction of this legislation tonight. We do not want to find in a few months time that the Parliament is back debating the amendments necessary to this Bill because of the review of the CERC Act. It would seem to be an undue waste of the Parliament's time and cost to the taxpayer to have amendments brought back into the House because we decided to bring a Bill into the House that tied itself to a system that was currently under review and we had to review the legislation that we have before us tonight.

  The Government has argued that existing Federal standards are the only ones appropriate for an industry that is not fixed in any one State. We all realise that the maritime industry—the shipping industry in Australia—requires its employees to be all over the place, be it from State to State, from international boundary to international boundary, in the course of carrying out their employment. Because of that, the Commonwealth argues that there is a need for the CERC Act to apply and that the Commonwealth should fix the terms and conditions of compensation and rehabilitation.

  As a result, the Commonwealth argues that we need to have one set of standards established by the Commonwealth that overrides all the State boundaries and State differences. This is not borne out by arrangements, for example, in the aviation industry, where aircrews are also habitually mobile outside their home jurisdictions for extended periods. For instance, Ansett aircrews are covered by home port jurisdiction, despite the fact that they may be out of jurisdiction for extended periods and may be out of State jurisdictions of any sort, for example, to Cocos and Christmas Islands.

  There is little apparent rationale for the choice of the CERC Act as the community standard other than possibly that it represents the penthouse level rather than the basement level in compensation. Similarly, it is not clear why it has not been possible to close off altogether liability of employers under common law. One of the attractions of the arrangements in the first place is that they introduce certainty into compensation and make the trauma and costliness of common law action unnecessary. It would seem to be desirable to close off altogether that trauma and costliness. In common law actions settlements are delayed, often to the detriment of the claimant, and costs escalate to the detriment of both claimant and employer.

  While the Bill limits common law action to death and permanent injury for non-economic loss, for permanent injury it is capped, but it remains open in the case of death. The industry would prefer that there be no recourse to common law and that the Bill be comprehensive in application. The Opposition has sympathy with this view and would like to pursue the issue further.

  There are several other aspects that seem to be anomalous. Although the Bill exempts self-inflicted injury from the employer's liability, the more serious case of suicide is not exempted. There is no clear reason why the employer should not be held liable for the lesser instance but be held responsible for the greater. Suicide is an event against which the employer cannot insure and over which he cannot exert any control or take preventive measures; therefore, employer liability seems out of place. Section 26(1) of the legislation states:

If an employee suffers an injury that results in his or her death, incapacity for work, or impairment, compensation is payable for the injury.

Section 26(2) and section 26(3) of the Act qualify that provision. Section 26(2) states:

. . . which provides that compensation is not payable for an intentionally self-inflicted injury.

Section 26(3) states:

. . . which provides that compensation is not payable for an injury that is not intentionally self-inflicted but is caused by the serious and wilful misconduct of the employee, unless the injury results in death, or serious and permanent impairment.

The industry has expressed its objections to the Opposition to the exclusion of death or permanent impairment from subsection (3), given the principle of non-liability on the part of the employer for the lesser event of injury. It seems contradictory for the Bill to accept that the employer cannot be held responsible for an employee's injuries resulting from his or her own wilful misconduct but then to hold the employer responsible for an employee's permanent impairment or death under the same circumstances. It seems that logic fails us in this instance.

  The possibility of employer abuse of such an exclusion in order to evade major claims by charging wilful misconduct is guarded against by the dispute settlement and appeal provisions. If the reasoning is that it is the employee's widow and children who are punished by the misconduct rather than the employee, that may present a case for some other measure such as employee insurance. But it is not satisfactory to make the employer liable for something that is obviously not his fault and which he would not have condoned—and, indeed, nobody would have condoned.

  Several of the above have been justified in representations to the Opposition on the grounds that they are compatible with the CERC Act. Apart from doubts about the appropriateness of using the CERC Act as the community standard in the first place, the Opposition questions the need to perpetuate whatever shortcomings the Act may have simply in the name of consistency—the more so as the CERC Act itself is under review and subject to change in the near future.

  A further shortcoming that the industry has drawn to the attention of the Opposition is in clause 97, which stipulates that the employers' fund—that is, the safety net run by employers to cover employees on industry training courses and those on a roster or in transit from a ship or a place of training—should insure for a liability in excess of $1m for a catastrophe or an event which results in several expensive claims arising from a single accident.

  The clause was inserted by the Government at the last moment—and, the industry claims, without proper consultation with the employers' compensation agency. It cuts across the exercise of commercial judgment by the fund's administrators and is at odds with the principle of industry and employer responsibility reflected elsewhere in the Bill. In the Opposition's view, the reserve powers to assume responsibility for safety net provisions are sufficient to safeguard the responsible commercial operation of the fund, and full commercial responsibility should lie with the employers and the industry until the Minister's reserve powers under the Bill become necessary.

  The Bill presents a laudable principle and noble motives that show some signs of arbitrary dealings. The Cabinet decision has been defended to the Opposition only in terms of `Well, that's what the Cabinet decided'. Explanations for the decision to adopt the CERC Act as the so-called community standard envisaged in the Luntz Review are needed. There are loose ends, including some that have been hastily added at the last moment. Quite why the Bill is being pushed through with so little opportunity for examination or debate—it was introduced in the House only on 14 October—is not clear. Seafarers have, after all, managed since 1911, and it would be advisable to get this much needed modernisation of their compensation arrangements right. The Opposition supports the principle and intention of this Bill but wants to clarify some of these outstanding matters during its passage through the Parliament.

  In conclusion, I make the point that this is the first instance that we are able to find where the Government has imposed compensation and rehabilitation requirements that it uses for itself upon the private sector. It is interesting to note that, in its reforms of the shipping and waterfront industries, one of the things that the Government has tried to achieve is to focus the attention of employees and employers of people in the maritime industry onto the individual enterprise rather than to treat themselves as being part of a broad industry which has common pay rates, common terms and conditions of employment, and so forth.

  What this legislation does is impose terms and conditions of employment—in this instance, relating to compensation and rehabilitation—upon the private sector that currently are applied only to Commonwealth Government public servants. We would like to know why that is the case. We would like to ensure that, in the process of providing these generous rehabilitation and compensation terms for seafarers, other industries and other unions do not seek to try to follow up the sorts of gains that the seafaring industry has had and that we do not see this type of benefit flow through to other sectors of industry right throughout the economy. We have seen instances of this occur in the past.

  Indeed, the debate in the last week or two in Victoria has focused on the 17 1/2 per cent leave loading. It is worth remembering that the 17 1/2 per cent leave loading was brought in by the Whitlam Government; I think Clyde Cameron was the Minister for Labour at the time. That was brought in to benefit a particular sector of the Australian work force to overcome a particular problem that that sector had with employees going on leave and, as a result, suffering a loss of income. No sooner was that particular benefit provided to that particular section of the Australian work force than every other sector turned around and said, `Well, goodness, they've got it; why can't we?', and they all followed on and adopted the 17 1/2 per cent leave loading through various means.

  That leave loading, of course, was not originally intended for those particular sectors of the Australian work force that picked it up later on. We have seen the costs of that grow to quite high levels—indeed, levels that the Minister responsible for its introduction admitted in later years he was alarmed by. So let us not see this legislation lead to other industries and other work forces trying to adopt the more generous provisions that are in this Act as a result of the Commonwealth applying terms and conditions of employment that are applicable at present only to the employee seafarers.

  Apart from that, I repeat that the Opposition supports the principal intent of this legislation. We agree that there is a need to improve this particular aspect of the terms and conditions of employment for seafarers. We recognise that the current Act is inadequate and long overdue for review. However, we argue that there is a need for particular aspects of the legislation to be corrected. We look forward to seeing that occur, either through the Government's own initiation or, indeed, at some stage later when it is debated in the other place.