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Thursday, 5 April 2001
Page: 26553

Ms GILLARD (12:17 PM) —I welcome this opportunity to participate in the debate on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2000. I would have to say, though, that I cannot agree with the contribution of the member who spoke before me, because I do not think that the bill, as presented to this House, is about making the compensation scheme governed by the bill `better', which was the word that he used.

When we deal in this place with issues in relation to workplace rights and the rights of employees, I think we often find a fairly substantial gap between the rhetoric of this government and the way in which it actually acts. There is always a division between what is said and what is done. I was interested to see the comments—I actually read the transcript; I did not hear the comments on air—of the Minister for Employment, Workplace Relations and Small Business, Mr Tony Abbott, when he expounded on the philosophy of this government in relation to the treatment of employees. He did that fairly recently—on Sunday, 11 February—on the show Background Briefing, which is produced by Stan Corey and is heard on Radio National. As a premise, if you like, a foundation stone, to my contribution on this speech, I would like to go to the enunciated view of the minister about the way in which employers and employees should treat each other. On that radio show the minister said:

The basic view of human nature on which the industrial system was built is one that I don't think modern circumstances justify. See, we have moved on a long way over the last 100 years; people are better educated, there is much better regulation of health and safety and hours; the culture has changed so much in that time. We are not in the era of robber baron capitalism, we are not in the era of Karl Marx and the international workers of the world, and this view of human nature which says that basically workers are stupid, and basically employers are vicious, that is the view of human nature which underlies the industrial system, that is the view of human nature which says that workers and managers can't run their own operations together, can't work out their own arrangements, that's the view of human nature that says you've got to have courts and commissions to hold people's hands. Now I think we have gone well beyond that, I think that the average Australian worker is intelligent, creative, flexible, adaptable, dependable, and I think that the average Australian boss is sensible, reasonable and understands that everyone's got to get a fair go.

The minister goes on:

The relationship between employers and employees should really be the kind of relationship which exists between partners in an enterprise, partners in an operation. It should really be something akin to the relationship which exists between the members of an extended family, the interest that they have in common has got to be the over-riding goal, the success of the entire enterprise has got to be the thing that is generally uppermost in people's minds.

So there we have the minister, on behalf of the government, announcing a philosophy in relation to the treatment of working people that working people and employers are all to be viewed as members of a great big happy family and that they are going to resolve any differences between them in the way in which families do over the dinner table. But when we test that rhetoric of family enjoyment, the Brady Bunch sort of approach to industrial relations, we find that a very different philosophy applies when this government actually comes to put those things into operation. I would have thought it was axiomatic that one of the things you would do for members of your family was look after them and extend to them the maximum possible care and concern when they were sick, injured or suffering from a disease. But, despite the rhetoric of happy families, this government has not been very good at that. When we come to look at the details of this bill, in many of its parts it indicates an intention to not treat people as family members but to treat them fairly badly.

I go to one example in the compensation area which I think shows that this government's family rhetoric, its happy family industrial relations rhetoric, and the reality are not the same. It is a related compensation question and it deals with the way in which the preclusions period is calculated for social security purposes. Madam Deputy Speaker, I am sure that, like me, you are frequently approached by working people who have been injured at work and, under state based compensation schemes, have got a lump sum and find themselves precluded from payment of social security for a period. That period has to be calculated according to a mathematical formula. The way in which that is calculated is that the lump sum is divided by a figure that is calculated to be $1 more than the maximum income allowable before the pension is cut off. So you divide the lump sum by that divisor and you come out with a number of weeks of preclusion.

The problem with the way in which this division works is that there was a change in the value of that divisor between the pre-GST period and the post-GST period. The system was changed so that, in recognition of the factoring in of the GST, the figure of $1 more than the maximum income allowable before the pension is cut off moved from a figure of $428 to a figure of $543.63. You do not have to have studied mathematics for too long to know that the larger the divisor sum the fewer the number of weeks that result. So it is of greater advantage for someone to have their lump sum divided by the post-GST divisor than by the pre-GST divisor.

I have been approached by members of the public caught up in the system who are being dealt with very unfairly because of this change. In this example, the constituent in question received a compensation lump sum in May—the GST came into effect on 1 July and in May he received a compensation lump sum. He is going to be expected to live off that compensation lump sum, predominantly in a GST affected environment—that is, by definition, as soon as he got to 1 July, he started paying for the GST. So the time in which he is expected to provide for his own sustenance and support out of this lump sum is almost wholly in a GST affected environment, but the divisor that was used was the pre-GST divisor.

So in those circumstances he has got an extra long preclusions period—a longer preclusions period than he would have got if his lump sum had been paid in July, August or September—even though as he goes and spends his lump sum on all of the ordinary goods and services that one needs he is encountering, day in, day out, GST on those products. I draw that anomaly to the House's attention, because it is an indication of the gap between the rhetoric—the rhetoric of happy families—and the reality. The reality is that if you can chisel a little bit out of someone's welfare then this government seems entirely predisposed to do that, and that is a local example of where that has happened.

I turn to consideration of the compensation scheme that is dealt with in this bill. When we look at it we find that there is a reduction in entitlements being contemplated in this bill, and it is a reduction that will come about by dealing differently with the definitions of `injury' and `disease'. We need to note that in the compensation environment small changes of wording are not just technical matters; they actually affect substantive rights. We know that this bill will affect substantive rights, because when we look at the explanatory memorandum to the bill it tells us that the definitional changes relating to the words `injury' and `disease' are expected to save for the compensation scheme $17 million. So these are not technical changes of no real effect except some form of clarity for lawyers or what have you; these are substantive changes which mean that $17 million which would have flowed to employees who have got compensation now no longer will flow. So it is a change of substantive rights.

That change of substantive rights in the definition of disease and injury area is achieved through three different changes. Firstly, there is a change in the definition of `disease'. When this legislation was last amended, in 1988, the test regarding disease inserted into the act was that there needed to be a close connection between the employment and the disease. The meaning of these words has been considered in court cases, as one would expect with a compensation scheme, and the way the test is now working has led, as we know, in the scheme to financially acceptable results and acceptable claims rates. Notwithstanding that the current test appears to be working well and that there are no substantial problems with this compensation scheme, this bill heralds the government's intention to change the test to limit compensable circumstances to those where there is a material contribution by the employment to the employee's disease. Then `material contribution' is further defined as a `close connection'. So we go in this circle.

This is about defeating the intention of various court cases which have put a particular construction on the words in the current legislation, and that construction really has been to allow people to make application for and successfully receive compensation if there is a connection between the employment and the disease. Now this is a tightening of the test. So, as we know, $17 million to be saved. This is heralding the circumstance where, if this bill is passed, some workers who would have been compensated under the current legislation will no longer be compensated.

Secondly, there is a negative change for employees relating to the intersection of injury and disease. Currently, an injury is compensable if it occurred at work. That definition remains, and it would be pretty odd if that definition was not there in a workers compensation scheme. But—and it is an important `but'—if that injury occurs as a natural progression of a disease, the injury will be deemed not to be an injury. What does that all mean in plain English? That means that an employee who has had a heart attack or a stroke at work will no longer be able to receive compensation unless they can establish that the employment contributed in a material degree to that condition, the heart attack or the stroke.

When we look at that change we have got to ask ourselves how will courts, first of all, make the decision about whether or not there is a connection between the condition that manifested—maybe the heart attack, maybe the stroke—and work. The bill actually provides some guidance on that and says the factors that should be taken into account include the duration of employment and the medical predisposition of the employee. The wording there—`medical predisposition'—is very important. In considering how this will operate in practice, it is very important to note that it actually smashes two pretty important and, indeed, historic principles of workers compensation. The first principle that it smashes is the obvious principle that what happens at work is compensable. So it disregards that which has really been the foundation stone for our compensation arrangements.

The second principle that it throws out is the principle that you basically take the employee as you find him or her, and you do not exclude people because of their medical predispositions. This principle has been important. Clearly we are aware that there are some categories of employees who, for good reason, face medical testing before they are given a job. But, as an ordinary rule for most ordinary occupations, people present at work and, if they are capable of doing the job, they are given the job and there is no forensic inquiry made of their family history, of lifestyle factors, of diet, of sexual practices, of substance abuse practices or of anything else which would result in a medical predisposition towards some particular conditions. I think the reasons for that are particularly clear: one, people would find such inquiries incredibly invasive in a privacy sense, and, two, they open up a huge potential for discrimination. It is of concern to me that, at a time when genetic technology is giving us a greater and greater capacity to forensically examine medical predisposition issues, the government in this bill is proposing to throw out the window that principle so that people can be excluded from work on the basis of a predisposition or their medical predisposition be taken into account in calculating their compensation rights.

I ask members in this House: what is a rational manager in the Commonwealth Public Service supposed to do if this bill is passed into law? Prudent managers will want good information on what are the medical predispositions of the employees that they manage. If an employee that they manage has a heart attack at work, a stroke at work or what have you, the manager would want to be in a position to say, `Work did not cause that heart attack; work did not cause that stroke. That employee had a heart attack or stroke because they had a medical predisposition towards such a condition. I have the evidence of that; here is the medical predisposition evidence, so that means that that condition is not compensable.' So they would collect that medical predisposition evidence to have it in their kitbag against future compensation claims. I think we have to say, `Well, how will people ascertain whether or not people have a medical predisposition?' Are we contemplating huge surveys about what your father died of, what your father's father died of and what your father's father's father died of to determine these things that are used to calculate risk factors for various cancers and conditions? I think we are all aware of the genetic predispositions that one can have if one has a family history of certain conditions. Or do you go a step further as the genetic technology becomes more available in our community and say to the employee, `Go and get tested and I will look at that genetic material and see if you are genetically predisposed towards stroke conditions, heart attack conditions, breast cancer conditions or what have you'? I think there is a whole minefield here that arises because this bill does not accept the sort of foundation stone principle that, for ordinary occupations, you basically accept the worker as you find him or her and that, if they develop a condition, if they have an injury or a disease which manifests at work, it is compensable.

Third, this bill seeks to extend the exemption from compensation for injury or disease if that arises from managerial action, so it is an extension to an exemption taking out a pool of workers from circumstances which would otherwise be compensable. Currently the act seeks to prevent compensation claims being used to obstruct legitimate management action and contains an exclusionary provision. It provides that compensation is not payable in respect of an injury which arises from reasonable disciplinary action or a failure to obtain a promotion, transfer or benefit in connection with the employment. This bill seeks to extend that and to amend it so that what are exempted are actions which are to be regarded as normal management responsibilities—for example, an injury resulting from a reasonable appraisal of the employee's performance; a reasonable counselling action, whether formal or informal; a reasonable suspension action and the like. It is pretty easy when dealing with this issue to call to mind some very negative stereotypes of the public service and to sort of offhandedly say, `Well, why should someone be entitled to compensation if they become stressed arising from being chastised by their manager?' That was the sort of picture that was being drawn for us by the member who spoke before me.

I think we need to free up our thinking a bit and say that, when you look at who this compensation scheme actually operates for, there are lots of circumstances which are far more serious and where the issues about managerial action and its reasonableness are far more vexed. I note in particular that this compensation scheme applies to the Australian defence forces. I think we are all aware in this House that there have been some problems faced by the defence forces in terms of the culture that applies within the defence forces, including the treatment by superiors of subordinates. I do not put that as being every section of the defence forces, but there certainly are sections that have been very publicly examined where there have been very substantial problems. I think we are all aware that very recently a $2,000 fine was applied to a major of the 3rd Battalion Royal Australian Regiment as a result of an incident involving a subordinate which occurred during exercises in Malaysia.

We have got a problem with those sorts of culture questions and, given that the defence forces have recently been required to attend a two-hour discussion on bastardisation issues, I think it is on the public record that there are those problems. And, given that it is on the public record that there are these problems, it is not that hard to imagine that, in some sections of the defence forces where there remain issues with these kinds of cultural problems, in an informal disciplinary setting a superior could treat a subordinate in a way which not only causes stress, alarm and fear for that subordinate but might actually result in a manifest visible injury. I think that is not too far from where we have been in terms of the public debate. I think we can all imagine that happening, given some of the problems of culture that we have been well advised of in the defence forces. If these amendments are accepted, that subordinate, no matter how injured, would not be able to make a claim for compensation unless he or she could show that the action taken by the superior was unreasonable. We can obviously all envisage circumstances which every human being would say were unreasonable, but I think we have to recognise that in this area there is a big area of grey and some of that grey is of a very dark shade when we are dealing with workplaces which have got the sorts of cultural problems which appear to persist in sections of our defence forces. So I think we have got to be fairly careful about this amendment, and I would say that it is simply not justified.

Finally, I come to a comment that was made by the member who spoke before me, which was that there was a blow-out, I think was his word, in compensation costs. That is simply not true when we are looking at this compensation scheme. The number of claims lodged is going down, the number of claims accepted is going down, and this is a fully funded scheme. Consequently, there is no need for the government to act. The scheme is in satisfactory form at the moment in respect of these issues about which I have spoken.