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Wednesday, 19 March 2014
Page: 2380


Mr PYNE (SturtLeader of the House and Minister for Education) (10:29): I move:

That this bill be now read a second time.

Employers operating in multiple states deal with different workers' compensation schemes and work health and safety regulations in each jurisdiction around Australia. This increases red tape for employers and is confusing for workers who are subject to different regulation and benefits depending on which state or territory they are employed in.

While in the past, certain private sector corporations have been able to self-insure for workers' compensation coverage through the Commonwealth's Comcare scheme, a moratorium on new corporations entering the Comcare scheme was imposed in 2007 by the former Labor government. This was despite evidence from the 2004 Productivity Commission inquiry into the National workers' compensation and occupational health and safety frameworks which found that the cost for multistate employers of complying with multiple state workers' compensation arrangements was considerable. Those costs could have been used more effectively to create new jobs and improve the safety standards within the enterprise. The Howard government responded to the Productivity Commission inquiry recommendations by allowing eligible private corporations that operated in multiple states to apply for a self-insurance license with the Comcare scheme.

There are currently 30 licenced corporations who are benefiting from the reduced red tape and cost by having one set of workers' compensation arrangements for their national workforce. Ten of these are current or former Commonwealth authorities such as Australia Post and Telstra. The remaining 20 are private corporations such as Optus, TNT, the National Australia Bank and John Holland Corporation. The work health and safety performance of these companies since joining the Comcare scheme has been strong and in most cases has been better than it was under multiple state schemes. These companies have the benefit of significantly reduced red tape, cost and bureaucracy that frees them up to work more effectively with their employees to improve work health and safety in their organisations.

Following a campaign from the union bosses, the previous Labor government banned multistate companies from joining the Comcare scheme. Labor refused to lift the ban despite a 2012 review of the Comcare scheme commissioned by Labor and led by Dr Allan Hawke AC, which recommended lifting the moratorium preventing multistate employers from joining the Comcare scheme, finding the requirement to insure in multiple states and territories to be inefficient and costly. The Leader of the Opposition sat on his hands and did not enact any recommendations of the report as workplace relations minister.

On 2 December 2013, the coalition government lifted the moratorium so that multistate employers, which meet rigorous financial and governance criteria and demonstrate suitable work health and safety performance, can apply for a license to self-insure in the Comcare scheme, rather than through multiple schemes. It is the government's intention to also allow the multistate employers, who choose to apply to self-insure for workers' compensation arrangements with Comcare, to also have one set of work, health and safety regulation rather than be subject to multiple state requirements and regulators.

This bill seeks to amend the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) and the Work Health and Safety Act 2011 to expand the eligibility of corporations to self-insure through the Commonwealth's Comcare scheme.

The amendments:

remove the need for the minister to declare eligibility to apply for a self-insurance licence while maintaining the ability for the minister to issue directions to the Safety, Rehabilitation and Compensation Commission. This will streamline the current two-stage approval process;

remove the out-dated requirement that a corporation must be in competition with a Commonwealth authority, or former Commonwealth authority, to enter the Comcare scheme; and

broaden the range of corporations that are eligible for a licence to self-insure under the Comcare scheme to 'national employers' defined as an employer that is required to meet workers' compensation obligations under the laws of two or more states or territories.

This approach will reduce red tape while ensuring a strong and robust approval process by the independent Safety, Rehabilitation and Compensation Commission.

These important productivity reforms are critical for multistate employers. They will give these employers the option of continuing to operate under multilayered worker's compensation and work health and safety regimes, or to apply to have one set of national arrangements.

It is anticipated that the reduction in red tape and significant savings that could be realised for business could be spent on creating jobs and reinvesting in the economy.

Group licences

Currently, corporations applying to be covered under the Comcare scheme must be assessed individually for eligibility. A feature that business has been seeking for some time is the introduction of group licences to the SRC Act.

The bill provides for the Safety, Rehabilitation and Compensation Commission to grant a licence to an eligible group of corporations that are owned by the same holding company, in line with the state schemes and the commercial reality of modern multicompany corporate structures.

Introduction of group licences will reduce red tape and costs for corporations as it recognises that groups of interrelated corporations often share return-to-work and work health and safety systems within the group. It will also recognise that each entity that forms part of a group does not individually need to meet the definition of a national employer.

This reform will be better for businesses, better for workers and better for the economy.

Serious and wilful misconduct

Currently under the SRC Act, workers' compensation can be claimed by a worker who is injured while involved in payable employment where an injury caused by the serious and wilful misconduct of the employee results in death or serious and permanent impairment.

The bill removes access to compensation where any injury sustained by an employee is caused by their own serious and wilful misconduct.

While claims in this category are rare, the Australian public rightly expects that employees should take personal responsibility for their actions. The government believes that the workers' compensation scheme should be geared towards people acting in a proper and safe manner and not include a safety net for people who break the rules and put at risk not just themselves but other employees as well.

Offsite recess breaks

Currently workers' compensation is payable for injuries that occur during recess breaks, even if the employee is not at the place of work when the injury occurs, contrary to the position in South Australia and Tasmania.

The SRC Act as originally drafted provided compensation coverage for employees who were injured while absent from their place of work during an ordinary recess. This provision was removed by the coalition government in 2007, and then reintroduced by the Labor government in 2011.

The effect of the previous government's change to the act is that workers' compensation could be payable, for example, where an employee sustains an injury while shopping, at a restaurant or playing sport away from the employee's place of employment during a lunch break. This is despite the employer having no control over the activities of the employee or the environment in which the employee engages in such activities. The proper avenue for people to seek recompense for injuries under such circumstances is through the owner of the premises where an injury occurred, not through their employer who has no control over the matter.

This bill addresses this unfair arrangement. Workers who are injured at work, even while having a recess or lunch break, will remain fully covered. Injuries that occur while the worker is away from the workplace undertaking activities associated with the employee's employment or at the request or direction of the employer will also still be covered.

Conclusion

This bill will reduce red tape and help to build a stronger and more prosperous economy. The real savings to business that will be realised under this bill can be reinvested in jobs and in the economy. I recommend the bill to the House.

Debate adjourned.