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Tuesday, 27 March 2007
Page: 12


Senator MARSHALL (1:16 PM) —I also rise to speak on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, and I completely the endorse the comments of my colleagues Senator Wong and Senator George Campbell. The government’s motivation in respect of this piece of legislation, and other pieces of legislation that preceded it, is to establish a national workers compensation jurisdiction. Clearly that new workers compensation jurisdiction would be based on lower standards, the disempowerment of working people and the reduction of entitlements. All the preceding legislation and this legislation prove that very point. This bill clearly reduces benefits and makes people who are covered by the Comcare system or the licensing arrangements attached to the Comcare system worse off in respect of their entitlements to compensation for injuries.

Comcare was a Commonwealth Public Service compensation system. It was expanded to include corporatised bodies that were previously Commonwealth Public Service organisations. This government has now introduced legislation to provide licences to private companies to self-insure under the Comcare scheme. The licences will go to companies that have nothing to do with or have no relation to the Commonwealth public sector—for example, the National Australia Bank; Linfox; KNS Transport; John Holland, a construction company; and Optus.

The government is creating a scheme to duplicate those workers compensation arrangements at a state level. It is a scheme that will compete at a lower standard of care, that has the potential to lower benefits in order to attract more and more employers to a cheap workers compensation scheme in every aspect—namely, the premiums, compensation and conditions of those workers who are covered by that scheme.

Having said that, the government has introduced a couple of minor benefits too. I want to acknowledge them because we are often accused of looking only at the negative aspects of the bill and never recognising the positive ones. There are a couple of positive aspects. One is that, through this legislation, the government has increased the limit on the funeral benefit payment. It also introduces an administrative change—and a long overdue correction—to superannuation calculations. I will talk about that later in my contribution. As has been indicated, I will move an amendment in the committee stage that goes to that issue.

As we so often see with this government, it gives a very measly amount with one hand and gouges out entitlements and benefits with the other. The Labor Party look at the issues on balance and see the massive discrepancy between the advantages and the disadvantages. Thus we will oppose this bill, as we should, because it will significantly reduce the entitlements to people covered by the Comcare scheme.

As Senator Wong said, the overall cost savings to the government have been estimated to be around $20 million. Let us understand where that $20 million comes from. There is nothing in this bill that streamlines or makes more efficient the Comcare system to generate savings. Every single dollar of savings will be from a reduction of benefits paid to working people, from a reduction in the coverage—and I will go to some of those issues in a moment—and from a reduction in the sorts of diseases and injuries that will be compensable under the new scheme. When the $20 million per annum savings are realised by this scheme, it will have come out of the pockets of those workers covered by this scheme who have been injured or who are ill as a result of workplace incidents.

The first significant change that this bill introduces is to the definition of ‘disease’. If you were an employee covered by the Comcare scheme and you have a disease right now that has a work related component to it, then you can validly make a claim under the Comcare scheme but, under this bill, if you are an employee with a disease, you will not be able to make a claim under the Comcare scheme unless the work related component is a substantial component to that disease. In legal terms, that is a very significant difference. It means that the number of people entitled to make a claim will be reduced. That, of course, is the point of the amendment.

Comcare indicated to the Senate Standing Committee on Employment, Workplace Relations and Education inquiring into this legislation that its estimate is that there will be 2.5 per cent fewer claims eligible under the new definition, a saving in that area alone of $5 million per annum. That saving will grow as the scheme is expanded to include more employers. There is some significant dispute about the potential savings due to that change, but I thought it was important to put the department’s figures to the Senate. We can expect that to be the minimum saving—and the minimum disadvantage. The real disadvantage is potentially much greater. Many of the people who made submissions to the Senate inquiry indicated that their view is that it will be much greater than that.

A significant problem with this is that it will introduce some uncertainty into the claim system. In their submission to the committee, the Law Council of Australia was of the view that these changes will also result in a significant increase in litigation. The savings on the one hand that may be generated will potentially be lost because of increased litigation. That cost would not only be to Comcare, because half of the litigation costs will be borne by workers who have been injured but whose claims are denied because of the change to the definition.

The second significant reduction in benefits is the removal of journey accident cover. Right now, if you have an accident on the way to or from work you are covered. The employers and Comcare argue that the employer has no ability to control the environment on the route to and from work. As Senator Campbell rightly pointed out, neither does the employee. Going to and from work is a requirement of your employment. You are required to attend work as part of your employment, so the journey is at the request of the employer in the first place. The employers try to make a rational argument by saying that as they do not have any control over things outside their workplace then this scheme should not cover those journeys.

What we have is a no-fault system. All of the state workers compensation systems and the Comcare system are no-fault systems. If we want to view it simply, it is an insurance cover to insure people against accident and injury suffered while doing things associated with their work. Travel to and from your work is clearly associated with your work. Given that it is a no-fault system, the government has given no rationale as to why they want to take this away. Going to and from work is part of your employment obligations. Insurance to cover you for accident, injury and illness on your way to and from work is the way that a no-fault system works.

If we do not have that, what will happen is that those costs will be transferred to others. If you are in a motor vehicle accident, for instance, the traffic accident commissions in many states will have some sort of overarching cover. But if you are not in a vehicle and you have an injury or illness and are unable to go to work, eventually you will find yourself in the welfare system. The cost savings to the Comcare scheme will potentially be put back onto the community and the taxpayer. That is what we say. A no-fault system should not allow that transfer of cost. This is why workers compensation systems have been set up as no-fault systems: to provide that overall insurance for people.

As Senator Campbell rightly pointed out, it is difficult now in the modern workplace to determine what a journey to and from work is. There are many people whose workplaces are in fact their vehicle. As a former electrician, I know the difficulty with determining that. If you get a call-out at night and you must go and fix a piece of machinery which is required urgently, when do you commence work? Do you commence work when you get in your vehicle to drive to the job, or do you commence work when you get to the job? Many people, especially those in the trades areas and other service industries—people in Telstra, for instance—get their job by computer at home. They start work on the job. They rarely go to a depot. When does work start? Is it when they get to the first job that has been allocated for the day, wherever that may be, or when they leave home? This will introduce more litigation to determine what the legal status of those things is. If there is preparation done for the job—preparing material, doing paperwork—before people get into the vehicle to attend the job, how is that coped with? We say that this introduces an enormous grey area which will mean more litigation and will simply disadvantage people who work in those situations.

The third concern is that this legislation removes the right to make a claim where there has been ‘a reasonable administrative action taken by the employer’. While this sounds reasonable on the surface, employers will never admit that their administrative actions are unreasonable. If people take those actions, they must say that they are at all times reasonable. But, in my experience in the workplace, I have often seen where these sorts of administrative actions are used to bully and harass people. We have talked about performance appraisals and about how they are being used to bully and harass people. I have seen this regularly. It is well documented around the place. I have seen how administrative action is used sometimes to stress people in order to encourage them to leave. I have seen people who, as a result of restructures, have been placed in windowless offices and given nothing to do for months on end, causing enormous stress to them. Yet the employers will always argue in those situations that these are reasonable administrative actions. We believe that the definition goes too far.

Quoting from the Hansard of the Law Council of Australia’s evidence to the committee inquiry, this is what they said about it:

Those provisions would apply to all diseases and may catch a range of other events. Our main concern regarding the focus on such a broad definition of administrative action is that the concept of ‘reasonable’ really introduces a fault based notion into a no-fault scheme. What you end up with is an investigation of whether what happened was a reasonable thing to happen or not in a scheme that is clearly designed as a safety net no-fault scheme.

They go on to say:

Our concern is—one of the provisions is that it is cost saving—that it will simply lead to greater litigation as the question of reasonableness or otherwise of this administrative action is litigated.

So, again, while the government says that there will be some cost savings about these things which they claim to be reasonable, potentially the cost savings are removed or costs are incurred due to the increased litigation around these very broad questions of law.

The fourth area is the removal of workers compensation during lunch or rest breaks. I find it quite unfathomable that the government seeks to withdraw this compensation. Let me go back again and say that this is a no-fault system. It is an insurance system that provides coverage for people during their work and work related activities. The same thing that I have said about journey accidents applies to rest breaks. If you remain in the lunch room at work, you are covered. If you go out to a shop to buy your lunch, which you would only do because you are at your workplace, you are not covered. If you want to take your lunch across the road to the park, you are not covered for any injuries or illnesses that occur during that process.

I come back to the example of people who have mobile workplaces. If you are a Telstra technician, for instance, and you are on the road from the beginning of your shift to the end of your shift doing repairs, construction or installation or fixing faults—whatever it is that you are doing—there is no provision to return to the depot to eat your lunch in the so-called safety of the employer’s environment. Of course you eat your lunch on the road. The employer insists upon that. The employer would not tolerate people returning to a depot. If you are in one of the major metropolitan cities, it could take at least an hour to return to your depot. If you pull up in a park or on the side of the road to eat your lunch, you are simply not covered in those situations anymore. I think that is grossly unfair.

The government does not apply this principle equally across the board. I have not had an opportunity to go through the government’s amendments in detail, but they make it clear that if you are attending a place of education, for instance, you will be covered. I think you ought to be, and I am not arguing that you should not be, but the government clearly is not applying the principle of removing that coverage equitably. I will listen with interest to see if the government can explain why the situation is different for those attending places of education and those at work. The issue remains that it is outside of the employer’s control.

The other point I want to touch on briefly—I will be talking about it in much more detail in the Committee of the Whole—is that of deeming rates. As I said at the outset, this is a long overdue amendment. Many people have been significantly disadvantaged by the 10 per cent deeming rate that has been applied over the last 10 years. This amendment is long overdue. There is an argument about what the deeming rate for superannuation lump sum payments ought to be in the mix of your overall payment, but clearly 10 per cent was a ridiculous amount. Finally the government has acknowledged that; I welcome that. But people have been disadvantaged over a long period of time. I want to table a document before the committee stage so that government members who may want to contribute to this debate have an opportunity to see it. I seek leave to table that document.

Leave granted.


Senator MARSHALL —The document is an example provided by the department through Comcare. It was as a result of a scenario that was provided by the Law Council to our committee. Comcare took it away and did their own calculations. While the calculations are in dispute, the principle of the disadvantage is not. The intention of the act was to provide people with 75 per cent of normal weekly earnings. I have tabled the case study of Daryl, and this is the department’s response to that. In the example, the normal weekly earnings of Daryl were $1,038 a week; therefore 75 per cent of his weekly earnings was $778.50. On permanent disability, Daryl received $242,000-odd as a superannuation lump sum payout. Interest was applied to the pre-tax payout at a rate of 10 per cent. He was also required to pay another five per cent superannuation contribution, deducting in total $518.22 from his 75 per cent of average weekly earnings, leaving Daryl with $260.28. The effect of these amendments—we will talk more about that—will improve Daryl’s situation by $206.97. (Time expired)