Workers Compensation Legislation Amendment Bill
Debate resumed from 14 November.
The Hon. R. S. L. JONES [12.09 p.m.]: I support parts of the Workers Compensation Legislation Amendment Bill but point out that there are problems with it . They have been put to us by various individuals and organisations. Yesterday I talked to Garry Brack, the Director of the National Employers Federation and the Executive Director of the Employers Federation of New South Wales. Mr Brack said he was also concerned about the proposal to remove the Workers Compensation Advisory Council. He felt that retention of the council was an important amendment that should be supported. The Law Society of New South Wales, lawyers and others expressed concern that much of the detail will be put into regulations and not in legislation. It seems that lawyers, insurers, employers and employees are experiencing a certain amount of disquiet and they should be given a chance to investigate the ramifications of the legislation.
The bill provides for injury management pilot schemes and the introduction of market incentives for employers to improve occupational health and safety and injury management performance. It also allows for subsequent claims for compensation—after the initial claim is made to the employers—to be made directly to the workers compensation insurer. It provides that commencement of proceedings in the Compensation Court to recover permanent loss compensation constitutes an election to claim that compensation and prevents a claim for common law damages against the employer in respect of the injury concerned. It provides that damages awards for an action founded in breach of contract can be reduced for contributory negligence on the part of the injured worker, as is the case with actions founded in tort.
The Alliance for Victims of Accidents has complained that there has been inadequate time allowed for the consideration of the Workers Compensation Legislation Amendment Bill, both the draft and, in particular, the final version. The alliance wrote to members of the crossbench—and I assume also to the Government—asking that debate be deferred until sufficient, considered analysis of the bill could be achieved. Evolving in late 1999 from the organisation Injuries Australia, the Alliance for Victims of Accidents is a coalition of professional organisations that represents injured people, the service providers who work with them and others with an interest in injured people's rights. The alliance's request for more time to debate the bill has been supported by the Australian Association of Surgeons, the Australian Medical Association, the Australian Plaintiff Lawyers Association [APLA], the Brain Injury Association of New South Wales Inc., Injuries Australia, the Law Society of New South Wales, ParaQuad and the Royal Australian and New Zealand College of Psychiatrists. That request has been denied to date.
In a letter dated 6 September the APLA argued strongly for a reference to the select committee so that the Workers Compensation Scheme could be examined and a report presented to Parliament before any legislation was brought down. APLA argued that amendments to the bill could only amount to tinkerings with fee scales and processes within the current scheme that would not overcome some of the major problem that exist with the present system. APLA cited concerns about employer compliance, problems with assessing rehabilitation outcomes, the role of medical and legal specialists and questions of worker, employer and insurer fraud as being of prime importance and in need of in-depth discussion.
I understand that if this bill were to go ahead, some amendments would be put forward by a member of the crossbench that would convey APLA's concerns. However, even the association has conceded that amendments to the bill are insufficient to rectify problems with the basic system and that is why it has called for an inquiry. Also in September the UnitingCare Employee Relations Service of New South Wales wrote to honourable members urging that an inquiry be supported. The Uniting Church in Australia is a significant employer within New South Wales, employing 30,000 people in various industries, including aged care and child care, schools, hospitals and various community-based activities. It pays approximately $10 million in premiums to WorkCover.
The Law Society has also recommended that the inquiry go ahead rather than the Workers Compensation Legislation Amendment Bill, arguing that the bill is, in effect, only a piecemeal attempt at reform. Most important, the Law Society has argued that debate in the public arena is needed. The bill is very problematic in this regard. Much of the detail and all of the devil is contained in the ability to change regulations, thereby fundamentally changing aspects of the scheme without legislative scrutiny. It seems to be a growing government tendency to put considerable power in the regulations where, as all honourable members know, at times it is quite difficult to address any problems that might arise. There is also no opportunity to debate the regulations in public. The public is less sure of what rules apply and, arguably, has less confidence than if the issues had been determined in the public forum. The Law Society also prepared a document that lists the significant regulation-making powers in the bill. There are 35 clauses in which power is vested in the regulations.
For instance, one section seeks to leave to the regulations the power to specify the number of medical reports that may be admitted in evidence in connection with a claim or any aspect of a claim. It is possible that the regulations could be written to allow for only one medical report to be relied upon, perhaps without good reason. I have received a letter from Moroney Rutter and Mantach, plaintiff lawyers, who comment on the bill. They state that the amendments contained in schedule 4 would have the effect of locking injured workers into an election as soon as they start compensation for section 66 and section 67 benefits. The amendment limits the range of options available to the worker. They criticise schedule 7, which deals with amendments relating to medical reports. They state that the proposed amendment to section 130 of the Workplace Injury Management and Workers Compensation Act is designed to limit the number of medical reports that a worker can obtain and limits the amount of costs recoverable by the worker in connection with medical report fees.
Moroney Rutter and Mantach have said that solicitors acting for workers have a professional responsibility to fully investigate a worker's rights and there should be no limit to the number of reports that can be obtained. In some cases, the worker may have multiple injuries involving various parts of the body and there would be no option but to obtain expert medical opinions dealing with all of the worker's injuries. They state it is a denial of justice to limit the evidence that a plaintiff may put before the court when insurance companies can get as many reports as they wish. The solicitors criticise schedule 8, suggesting that the proposal to include section 79A—exchange of information before conciliation—imposes a requirement for the worker to provide "a list identifying all other evidence that the applicant has that is relevant to the dispute".
The solicitors submit that it is unfair to require a worker to provide "all other evidence". Some of the evidence obtained in a workers compensation case may not be of assistance to the worker's claim. As the law presently stands, they do not have to disclose such material. This section will disadvantage injured workers. They say that section 79A also imposes another penalty upon the worker, namely, if the evidence is not disclosed in the list of the evidence, it cannot be used in proceedings before the conciliator or in the Compensation Court. New section 79A (6) will create disputes, including as to when medical reports were received. The date of the report is not necessarily the date on which it was received. The provision may cause relevant evidence to be inadmissible in court.
The letter states that section 81A requires parties to conciliation to provide copies of evidence before the hearing. It also states that it may not be possible to comply with the section—if, for example, a report was received less than seven days before the conciliation conference—and that it is unreasonable to restrict the evidence available to a court in such circumstances. The letter criticises schedule 23 and states that the proposed amendment to section 88 of the Workplace Injury Management and Workers Compensation Act imposes a limitation in respect of costs in relation to conciliation and that a maximum amount of $500 is imposed. The amendments in schedule 8 makes is necessary for solicitors acting for workers to carry out more work, and there is more responsibility in dealing with the penalty provisions. It is a situation in which the solicitors will be required to do more work for less pay.
The letter further states that new section 88 (4) (b) is also of great concern. The section enables a maximum amount to be set in respect of disbursements that are payable by employers in respect of conciliation matters. This section will be used to target the cost of medical report fees; workers cannot negotiate with doctors about the amount of the report fee and they are forced to pay whatever the doctor wishes to charge. If a worker wishes to claim compensation, he or she has to obtain reports from treating specialists and other medical experts. If the amount allowed in respect of medical report fees is fixed at an amount less than the fee charged by the doctor, it will be the worker who bears the cost of the difference between the two amounts. The section does not affect the insurance company or the employer. Those are matters put to us by solicitors acting on behalf of workers, essentially. I move:
That the question be amended by the addition of the following paragraphs:
(2) That the provisions of the Workers Compensation Legislation Amendment Bill, as passed by the House, be referred to the Standing Committee on Law and Justice for inquiry and report, together with the system of workers compensation in New South Wales, as established under the Workplace Injury Management and Workers Compensation Act 1998, including:
(a) the deficit in the workers compensation scheme,
(b) the Government's decision making in relation to proposals for private underwriting of the compensation scheme,
(c) the cost of workers compensation insurance premiums in New South Wales, including comparisons with workers compensation premiums in other jurisdictions,
(d) options for future reform of the workers compensation system in New South Wales, including:
(i) the manner of determining workers compensation premiums,
(ii) measures to assist the return to work of injured workers,
(iii) the functions, structure and operations of WorkCover New South Wales,
(iv) measures to reduce the level of fraudulent claims,
(v) the impact of workers compensation costs on employment in New South Wales,
(e) the manner in which WorkCover subcontracts its claims management to private insurers,
(f) the nature of claims management,
(g) any other matter arising out of or incidental to these terms of reference.
I believe that the amendment would be or could be acceptable to the Government, set in light of the fact that the Government controls that committee and no reporting date has been set, thus allowing the committee to determine its own priorities. I believe it is important that the committee now have a look at WorkCover and that it would be very beneficial for all members, particularly the Government, to have this inquiry. It would mean that the next time we have similar legislation before the House it would be based on more information so that everyone can participate, be they workers, employers, or insurers, and the whole matter could be cleared up before legislation comes before the House.
Reverend the Hon. F. J. NILE [12.23 p.m.]: The Christian Democratic Party supports the bill, the object of which is to amend the Workers Compensation Act 1987, the Workplace Injury Management and Workers Compensation Act 1988, and the Workers Compensation (Dust Diseases) Act 1942. It will do that in a number of ways. In speaking in support of the bill I shall make some observations about the point we have reached in the review of the workers compensation legislation and of WorkCover in this State.
The principles on which the Christian Democratic Party works are very simple. One aspect that concerns me at the moment is the principle of allowing the Government to govern. It seems that in recent days there has been more and more sidetracking of legislation and blocking of legislation indirectly by referring it to committees, adjourning it or delaying it. We have reached a situation whereby the Government is not able to implement its program and may come under criticism for not acting in certain areas, such as workers compensation and fisheries.
I am sure honourable members would agree that WorkCover is in a serious state and, as with a patient who has cancer or some other life-threatening disease, WorkCover requires radical surgery. This bill, as we have been told before by the Minister, is part of a series of bills that will bring about that radical surgery and, hopefully, the patient will become healthy; WorkCover will be a healthy activity and will operate efficiently and without any deficit.
There is no doubt that there is also a need to streamline the administration of WorkCover. That is why I have opposed inquiries like the one proposed by Hon. R. S. L. Jones, which affect staff, board members and others involved with WorkCover. They become distracted because they have to deal with a parliamentary inquiry. From my experience as the chair of a number of inquiries I can attest to the fact that a significant amount of time and attention is given by all the key players who have to appear before such inquiries. Focus is taken off trying to solve problems and put onto how they might anticipate questions from the inquiry to make sure they have all the options covered and have all the material that might be requested at the inquiry.
The focus is moved away from solving the problem to virtually handling an inquiry successfully. The inquiry might be handled successfully, but in the meantime WorkCover has not progressed one step forward. In Committee I will move an amendment to the Opposition's amendment which will bring WorkCover within the operation of the Standing Committee on Law and Justice, but it will not involve a full-scale inquiry as that proposed by the Hon. R. S. L. Jones in his amendment. The amendment will be in the following terms:
From LP amendment No. 4 omit:
(2) At the end of the 2 year period, the effectiveness of this schedule is to be investigated by the Law and Justice Committee of the Legislative Council.
That amendment will give the overall role of investigation to the Standing Committee on Law and Justice. It will give the committee something it does not have: expertise. An independent evaluation by a person or organisation has been provided on other occasions. During past inquiries Legislative Council members of committees have had to engage consultants and others for the purposes of a report because the members realised they did not have the necessary expertise. Obviously, on this occasion the costs associated with this inquiry would be levied against the Standing Committee on Law and Justice and/or the Legislative Council.
(2) The effectiveness of this schedule is to be evaluated by an independent person or body, chosen by the authority by private tender, and results of the evaluation are to be referred to the Law and Justice Committee of the Legislative Council, which is to review the results and report to Parliament.
My proposal is that the cost be met by the Government, through WorkCover, and not involve the budget of the upper House or of the Standing Committee on Law and Justice. I foreshadow that amendment, which can be compared to one moved by the Hon. R. S. L. Jones. I want everyone involved with WorkCover, including the Minister, to focus all their attention on solving the problems and on bringing WorkCover under control, with reasonable premiums, and so on. That has been achieved, as far as humanly possible, with the Motor Accidents Authority and motor accident compensation. This House should not block this important restructuring.
On Tuesday the Law Society, when briefing certain members of this House, raised a strange point of view, almost a suspicion, about whether WorkCover is in as bad a position as claimed. I was surprised that the Law Society implied that WorkCover was reasonably healthy and not subject to such a deficit. We have heard about a $2 billion deficit, but that may be down to $1.6 billion. However, no-one doubts that WorkCover is in a financially dangerous position. Obviously, if the Law Society or members of the legal profession can convince us that WorkCover is not in a perilous state, the Government need not take expensive action to review it.
One reason for reduction of legal costs is the possibility, it is claimed, of a blow-out; if there is no blow-out there is no necessity for that action. I would be concerned if the Law Society were trying to promote a point of view which protects the financial interests of its members who might become involved in compensation cases. Lawyers can seek financial benefit through such cases. I ask the Government to put clearly on the record, while the bill is being debated in this House, the current financial position of WorkCover. Obviously, if there is a deficit of $1.6 billion, that is a serious issue.
Reduction of the deficit, and hopefully elimination of it, would involve a number of steps. This bill, as part of that reform process, will achieve that purpose. I support the involvement of the Occupational Health and Safety Council and the proposal to combine it with the Advisory Council. Obviously, a major way of reducing the scheme's cost is by reducing the incidence of accidents, so that workers can go to their workplace, engage in employment, and return home safely. I am sure we were all impressed with the WorkCover television advertisements which focused on that point. The advertisements showed a wife farewelling her husband as he went to work and expecting him to return home safely.
As a member of the law and justice committee I visited a BHP site and a company in Melbourne that was involved in producing airconditioning units for Toyota. That company had established a model factory in which an accident was almost impossible because of the safety measures it had introduced. The company spent a lot of time and money doing that, but that expenditure would have been offset by fewer accidents and, hopefully in the long run, a reduction in premiums. I see no problem in the proposal to combine the Advisory Council and the Occupational Health and Safety Council. I am not as worried as other members of the crossbench and the Opposition about the powers of the Advisory Council. It has been in existence for some years and does not appear to have produced any major solutions.
Although the Advisory Council allows consultation, as each stakeholder is concerned about its area of interest a deadlock is reached. In other words, unions may not want to proceed where its members might be affected, and lawyers may not want to proceed if their income will be reduced. Consultation and agreement are more than acceptable if a solution is achieved. However, if a solution is not achieved, the Advisory Council may cause delays in the reforms that the Government is trying to introduce. I do not see that as a problem. The Christian Democratic Party supports the bill with that proviso.
We support the bill's attempts to reduce, and hopefully eliminate, false claims and other forms of fraud. We agree with the provision that medical assessors should be approved or certified, so that lawyers do not retain only those medical practitioners who will give a favourable decision. We need professional people who have no axe to grind and can report accurately on the injury experienced by the worker. The legal profession must be prohibited from advertising or touting for business. We have all heard radio advertisements in which WorkCover has required the inclusion of a statement that large penalties will be incurred for claims that are not genuine. The emphasis in those ads is on touting for business. Lawyers may offer deals at no charge if they can get a large percentage of the compensation payout. That offer could encourage people to become involved in cases in which normally they would not be involved.
The legislation is moving in the direction of mediation rather than confrontation, and that is the way to go. Confrontation involves more legal costs. We should develop methods of achieving reconciliation and mediation and a solution to the compensation problem. The principles involved in investigation of motor accident compensation should be applied to investigation of workers compensation in an attempt to phase out bulk payments and replace them with total care and periodic payments to workers. That would require the co-operation of the unions, which I am sure could be negotiated by the Government.
The bill focuses on the importance of rehabilitation, which the Minister has mentioned on a number of occasions in this House. Rehabilitation must be more effective and efficient so that workers are not out of the workplace for up to three years. Workers need to return to full employment in some form or other. Workers who are in long-term rehabilitation programs, or who are not able to work for some other reason, should be assessed regularly to ensure they have not been forgotten and left on workers compensation year after year. That is certainly not in the interests of the workers or taxpayers of this State.
Employer groups have briefed members of this House. They appeared to be agreeable in principle to the legislation and there has been no dramatic lobbying for delay or amendment of the bill. However, premiums are a problem for industry. I hope that the Government will follow through the initiative of basing premiums on a company's safety record. Companies that have a good safety record and have dramatically reduced workplace injuries should benefit from discounted or lower premiums.
Companies with a high level of accidents should pay higher premiums. So employers who do the right thing will benefit from their actions, and there is incentive for employers to make their workplace safe. Further, premiums should be fair and reasonable. The Christian Democratic Party supports the bill. Often, those in Opposition do not want the Government to succeed because it will get the credit. That is part of politics. In this case, we should develop a bipartisan approach, as we have in the Aboriginal issue, and be more co-operative so that we deliver the best possible workers compensation package for the workers of this State.
The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [12.40 p.m.], in reply: I thank honourable members for their contributions to the debate. As previously outlined, the Workers Compensation Legislation Amendment Bill is the first in a series of legislative packages to be presented over the next 12 months by the Government to reform the WorkCover scheme. Substantive matters will be dealt with in the second and third legislative packages as the Government reviews progress.
The main provisions of the bill have already been outlined in detail. Some specific points that were raised during consultation on the bill should also be noted. Item  of schedule 21 provides that the employer is entitled to recover interest where a premium has been incorrectly calculated and the employer has paid too much premium. The provisions will allow interest to be recovered from the date that the incorrect premium was originally paid. Insurers will be advised through normal administrative process by WorkCover to make the payment of interest from that date.
The Advisory Council was established following the Grellman inquiry into the New South Wales workers compensation scheme. Mr Grellman found at that time that stakeholders felt that fundamental changes to the system were often made without their consultation, despite the impact of change. The Advisory Council in its early months endorsed the Grellman inquiry recommendations, which resulted in the 1998 Act. Since April 1998, the council has sought to play a role in identifying initiatives to improve the scheme. The 1998 reforms which followed from the Grellman report, and which were endorsed by the Advisory Council, have resulted in savings and a slowing in growth in the deficit.
However, these reform initiatives have, in effect, stalled and further reform is necessary. Accordingly, the Advisory Council recommended in 1999 that the commencement of private underwriting be deferred while further scheme reforms were developed. The Advisory Council identified a number of possible areas for reform at that time, although further detailed work was required to identify actual changes. The Advisory Council provided further advice in August 2000 about reform options. This was broadly similar to those proposals provided in 1999.
Despite all this, there has been a failure to reach agreement on fundamental scheme reform in areas such as dispute resolution. The only recommendation from the Grellman inquiry that was fully implemented was the proposal to establish the stakeholder body, that is the Advisory Council. The Grellman report recommended a need for further reform in key areas such as dispute resolution, improved medical management, simplified legislation and the introduction of private underwriting. Almost three years after the Grellman report and two years after the establishment of the Advisory Council, the council has been unable to agree as to how to best progress reforms in these areas. The only area where significant progress has been made is in relation to improved injury management.
It is now apparent that consensus will never be reached on further reform. There is a need for firm decisions on further scheme reform. I have already announced a detailed statement of strategic directions, which has identified priority areas for reform. It is my intention to deliver reforms that meet all these objectives. The Government has identified the need for a broader range of initiatives. These include the need for improved dispute resolution arrangements, improved injury management performance, strategies to improve compliance and strategies for managing the deficit. Since the statement was made in June 2000 substantial progress has been made on implementing the strategic directions for the scheme.
The WorkCover Authority is at an advanced stage in the tendering process for both the injury management pilot and the general practitioner training pilot. The changes to the corporate governance arrangements for the scheme will ensure that the reform program is able to continue in an effective and timely fashion. This bill reconfirms the Government's commitment to consult with all key interest groups, including employers, employees and service providers in the further development of scheme reform. However, the bill puts in place arrangements consistent with the principle of ministerial responsibility to ensure that the Government is able to show the leadership sought by stakeholders on bringing about sustained reform to the scheme.
Prevention of workplace injuries should be the priority area in reducing the financial and social cost of workplace injury. Rather than focusing on the entitlements of an injured worker, it is preferable to respond to the causes in the workplace that result in injuries in the first place. The priority that the Government is giving to prevention is highlighted by the recently released Occupational Health and Safety (Consolidated) Regulation. Concerns have been raised that the consideration of occupational health and safety issues will be undermined through the merger of the Advisory Council and the Occupational Health and Safety Council. The important role that both bodies have played, particularly the Occupational Health and Safety Council in relation to workplace safety, cannot be underestimated. The intention of the proposed merger of the two bodies is to give greater priority to occupational health and safety issues.
By establishing a single body responsible for providing advice on all aspects of the WorkCover schemes, the Government will obtain co-ordinated advice, which looks at all aspects of a proposal or problem. This is an increase in status for occupational health and safety matters. Further, a specific position has been reserved for an occupational health and safety expert. Nominating organisations, particularly employer and employee groups who nominate representatives to the council, have a responsibility to ensure that there is also additional occupational health and safety expertise available to the council. WorkCover will be able to establish consultative bodies for specialist expertise on specific issues, including occupational health and safety issues. There will be no decrease in status for occupational health and safety issues. This is consistent with the Government's broader objective of injury prevention.
The Leader of the Opposition seems to believe that not continuing the Rating Bureau in its current form is a sinister plot. It is nothing so interesting. The Rating Bureau was established under the 1998 Act for the purpose of determining premiums under the privately underwritten scheme. With the deferral of private underwriting it is unnecessary for the bureau to continue to carry out the functions of monitoring scheme performance and preparing costings on legislative proposals. This will reduce unnecessary expenditure. These functions are already carried out by the WorkCover Authority through its actuaries. The Auditor-General provides an independent review of scheme valuations. The appropriate role of the Rating Bureau can be reviewed after a decision is made in relation to private underwriting.
The Leader of the Opposition has also suggested that the bill does not deal with the previously announced premium discount scheme. Schedule 2 of the bill contains the enabling provisions for the scheme. The regulations will set out the detail of the proposed scheme, including the conditions on which discounts will be awarded. Regulations are subject to disallowance by Parliament. Consultation is set to commence shortly on the details of the premium discount scheme. The proposed scheme allows an employer to receive a premium discount up-front in the premium year. This is deliberate, as the Government wants this scheme to reward employers for their current and future behaviour in occupational health and safety and injury management, not punish them for their past claims.
However, employers do not get the discount for nothing. It is only when they have met certain occupational health and safety and injury management benchmarks that they get to keep the discount. Employers participating in the scheme will receive a discount on their premium on commencement. This will free up funds to make it easier for them to put occupational health and safety and injury management systems in place. However, if during the year they fail to meet the performance benchmarks, the discount can be recovered through a premium adjustment at the end of the year.
The reforms in the 1998 Act relating to injury management have generated improvements in the underlying cost of the scheme. However, these reforms have stalled and there is a need for further initiatives to generate improved injury management outcomes. The pilots will assist in identifying best practice. It is central to the Government's strategy that it focus on better return to work outcomes to generate savings, rather than cut benefits. The Leader of the Opposition has also raised the issue of previous injury management pilots. WorkCover conducted an industry rehabilitation co-ordinator pilot with two industry organisations—the Australian Industry Group and Australian Business Limited. These projects only dealt with a sample of 17 workers. That sample is not large enough from which to draw any significant conclusions or findings.
The injury management pilots are to be the subject of comprehensive and rigorous evaluation. Each pilot will be overseen by a steering committee, which will involve relevant stakeholders. The evaluation will be conducted in a variety of ways by WorkCover's actuaries, by WorkCover's statistical branch and by external expert parties, for example, Campbell's National Return to Work Monitor. The evaluation process will be collated, analysed and validated by an independent body selected through a competitive selection process. The evaluation will cover cost-benefit analyses of the pilots and their application to the scheme as a whole; differences in service utilisation and costs and differences in the return to work outcomes for injured workers; user satisfaction with the pilots provided; and comparison of return to work rates and durability of employment for the pilot population against New South Wales and national results.
The legislation currently asks injured workers to choose between statutory lump sum compensation and common law damages. The proposed amendment does not change this requirement. It merely requires that the worker make a choice before starting proceedings in the Compensation Court. Obviously, two sets of proceedings for a single injury are more expensive than one. Even if the amendment means that counsel's opinion is sought at an earlier stage, it will be less expensive than running two cases. This reform will not disadvantage seriously injured workers who wish to pursue common law damages. Lawyers will continue to provide advice to their clients to enable them to make informed decisions about whether to pursue common law damages.
The intent of the proposal relating to medical reports is to reduce the number of unnecessary reports obtained in disputed claims. While there are already some provisions in the current legislation that deal with a recovery of costs for medical reports, these are limited in their operation. Similar restrictions are in place in the District and Supreme courts. Although the final regulation is still subject to consultation it is proposed that the motor accidents approach be used when the parties are generally entitled to one report per specialty to support their claim. In some cases a further report may be obtained. It is proposed to give effect to this amendment by regulation to allow close consultation with scheme participants.
The proposal is not intended to limit the treatment provided to an injured worker, and this will be given close attention when the regulation is being drafted. The legal profession has raised significant objections to the proposals to require information to be exchanged prior to conciliation. These reforms are about getting injured workers their compensation in an appropriate time frame. The intent of the provisions is to ensure that all available information is made known and is available, subject to normal rules relating to privilege. This will ensure that parties can make informed decisions to settle matters. By identifying all the evidence the conciliator will be able to order that the evidence be produced, subject to any exemptions.
Although the objections relating to identification of all evidence in the possession of the parties have been noted, it must be recognised that when the matter proceeds to court the material can be identified through the discovery process. Disclosure is not sought at an early stage but when resolution can be achieved through conciliation. To consider this to be an early stage is to promote the proposition that matters must be resolved at the Compensation Court after a very lengthy delay rather than through more immediate conciliation. The only people who benefit from matters proceeding to a full hearing before a court are those who participate in the dispute resolution process. The proposed amendments will increase WorkCover's capacity to recover premium debt from employers by allowing unpaid premiums to be recovered from corporations.
The amendment is aimed at directors of corporations who seek to gain financial advantage by knowingly avoiding their workers compensation obligations. This liability extends only to culpable directors within the meaning of the bill. It is not appropriate to extend liability to all directors as this will conflict with the principal purpose of the Corporations Law. Directors who generally attempt to do the right thing should not lose the protection of limited liability. The proposed amendments vary section 145A of the Workers Compensation Act 1987, which was introduced to enable WorkCover to recover debt arising from claims lodged under the uninsured liability and indemnity scheme from the directors of uninsured corporations.
Certificates of currency provide a mechanism for employers and unions to check the insurance coverage of other employers. It is particularly useful in industries where there is a high degree of labour mobility and extensive use is made of subcontracting arrangements. The provisions of the bill require insurers to issue a certificate on request. The certificates are valid for four months only, at which time the new certificate may be issued. Employer groups have noted that the certificates of currency provided for under schedule 13 to the bill are required to include wage and employee details. This information is, of course, used by the authorised officer to determine whether the correct premiums have been paid.
It has been noted that this information may be commercially sensitive. I am advised that section 243 provides that a person who acquires information while administering or executing the Act must not disclose that information, except in limited circumstances. This would apply to a union official or contractor who exercises a right to view a certificate, although that person would be able to advise the WorkCover Authority of any discrepancy. The authority will give detailed consideration to requiring insurers to include a statement on the certificate outlining the obligations under section 243.
The Hon. M. J. Gallacher: Thank goodness we brought that to your attention.
The Hon. J. J. DELLA BOSCA: That is very kind of the honourable member. The legislation imposes a range of obligations on parties, and provides a sanction if those obligations are not fulfilled. Similarly, most licensing systems create offences and have a broad range of sanctions for breaches of licence conditions. These provisions are based on similar provisions in the Motor Accidents Compensation Act 1999, although there are some procedural modifications. Insurers have obligations in the workers compensation scheme. This provision merely allows for a streamlined process to provide a sanction when an insurer does not fulfil his or her obligations.
Before imposing a sanction the board is required to provide the insurer with an opportunity to make submissions. Prerogative relief is available in those cases where principles of natural justice are not observed. The proposal to reopen the specialised class of licence has been the subject of much consultation. The proposed amendments provide stringent criteria for obtaining such a licence. For example, the proposed specialised insurer will have to demonstrate that it will not have an adverse effect on the efficiency of the scheme. It will be limited to a particular industry, class of business or employer, and must be supported by the relevant industry bodies. The applicant must also meet Federal licensing requirements.
The bill contains provisions that enable exiting specialised and self-insurers to contribute to the deficit under the 1987 Act. There are already similar provisions in the 1998 Act. It is not part of the Government's proposal to levy all employers, as has been suggested. The Government is reinforcing the principle that employers who seek to exit the scheme should now contribute to their unfunded liabilities. The amendments, including the provision to make agreements with WorkCover that will allow exiting employers to take their so-called tail, will allow this to happen. The Opposition has noted that nothing in the bill deals with advertising or fees. Maximum fees can be set under the existing provisions of the legislation without the need for further amendments.
The Hon. R. S. L. Jones moved an amendment to the second reading of the bill. The Government is strongly opposed to that amendment. Workers compensation arrangements have been reviewed at least 16 times in the past six years. The time for another review has passed. The Government has outlined its strategic directions for the scheme and has in place a comprehensive reform strategy. The bill is the first in a series of legislative packages to be presented by the Government. The second and third package to be presented next year will deal with more substantive reform issues. The bill was tabled before the House in draft form more than four weeks ago, on 10 October. The second reading speech on the bill took place two weeks ago, on 1 November. Honourable members have had extensive periods in which to consider the provisions of the bill, consult with stakeholders and suggest changes.
The Hon. M. J. Gallacher: When are you going to do your homework?
The Hon. J. J. DELLA BOSCA: I assume the honourable member did his homework. Given the time that has been made available for consideration of the bill, it is difficult to see whether another review would add significant value. Referral of this matter to the law and justice committee will delay the Government's reform program. The injury management pilot may not be able to commence on 1 January 2001. It will also delay progress on the premium discount scheme, on which detailed consultation is soon to progress. The Parliament has demanded that the Government take action to repair the scheme, yet the motion before this House will frustrate that reform. Such a review will also delay the subsequent reform packages to be presented next year. Employers will benefit from higher premiums for a longer time. In these circumstances it is unreasonable for the honourable member to place the matter before the House.
Question—That the amendment be agreed to—put.
The House divided.
Mr R. S. L. Jones
Mr Della Bosca
|Mr M. I. Jones|
|Mr Lynn||Mr Obeid|
|Mr Samios||Ms Tebbutt|
Question resolved in the negative.
Motion agreed to.
Bill read a second time.
[The President left the chair at 1.10 p.m. The House resumed at 2.30 p.m.]
Clauses 1 to 4 agreed to.
The Hon. M. J. GALLACHER (Leader of the Opposition) [2.33 p.m.]: I move Opposition amendment No. 1:
No. 1 Page 7, schedule 1.1 , lines 21-25. Omit all words on those lines. Insert instead:
(3) 2 persons appointed by the Minister as employee representatives from a panel of at least 4 persons nominated by the Labor Council of New South Wales,
(4) 2 persons appointed by the Minister as employee representatives, being persons who are not members of an industrial organisation (within the meaning of the Industrial Relations Act 1996) and have not been members of such an organisation for at least 12 months prior to appointment,
(5) 1 person appointed by the Minister to represent injured workers,
I take umbrage at the suggestion by the Minister for Industrial Relations that the Opposition is being anti-union with this amendment. It is designed to provide balance in the make-up of the amalgamated council. The Minister's proposal is that the council have five persons appointed by the Minister as employee representatives from a panel of at least six persons nominated by the Labor Council of New South Wales, one being appointed to represent injured workers. I made the point last night that only 25 per cent of New South Wales employees are covered by unions and the Labor Council of New South Wales. We believe that the other 75 cent should be represented in this equation, but there is no provision in schedule 1 for their representation.
The amendment is not designed to take away responsibility or power from the Minister. Under the amendment the Labor Council would still have a significant role—much larger than the 25 per cent of employees that it represents would justify. The Minister will be able to decide on the suitability of people appointed to the new council, and the Opposition does not believe that at this stage that power should be removed. We simply want to mirror what is occurring in the workplaces of this State and give people who have made a choice not to be members of a union—75 per cent of the workers of this State—the assurance that their voices will be heard on the council. The final point I make is that the provision that one person on the council be appointed by the Minister to represent injured workers is consistent with the original proposition for membership of the council. Again, the Minister would have sole responsibility to select the person to be appointed. The person would not be chosen by the Labor Council.
The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [2.37 p.m.]: The proposed amendment seeks to reduce the reasonable role given by the bill to the Labor Council in providing a panel of nominees for appointment to the proposed new council. The amendment is inappropriate as the Labor Council is the peak worker representative and peak union body in New South Wales. The Leader of the Opposition may take umbrage at the suggestion but his party's concern about this matter is driven more by ideology than by a determination to reform the scheme.
Question—That the amendment be agreed to—put.
The Committee divided.
Mr M. I. Jones
Mr Della Bosca
Mr R. S. L. Jones
Question resolved in the negative.
Question—That the schedule be agreed to—put.
The Committee divided.
Mr Della Bosca
Mr M. I. Jones
Mr R. S. L. Jones
Question resolved in the affirmative.
Schedule 1 agreed to.
The Hon. M. J. GALLACHER (Leader of the Opposition) [2.51 p.m.]: I move Opposition amendment No. 2:
No. 2 Page 19, schedule 2 , lines 21-25. Omit all words on those lines.
This is consistent with Opposition amendment No. 3, which the Committee will shortly debate. It is extremely important that this amendment is dealt with before the next amendment.
The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [2.52 p.m.]: The amendment seeks to replace the regulation-making power in the bill regarding the review of premium discount systems with a specific provision of the Act, which is inappropriate. The proposal is very broad and workable and will allow insurers and employers to dispute any proposed premium discount scheme, not only in a situation where the particular employer or insurer is directly affected. It would, for example, allow insurers to dispute discounts agreed with employers, or employers to dispute administrative procedures established for the smooth operation of the discount scheme.
The Administrative Decisions Tribunal [ADT] examining a one-off case would not be in a position to consider the broader implications for the whole of the WorkCover scheme. As the Leader of the Opposition has indicated, the two amendments—the one he has moved and the one I assume he intends to move shortly—are very closely linked. My remarks apply to both.
The Hon. M. J. GALLACHER (Leader of the Opposition) [2.53 p.m.]: I move Opposition amendment No. 3:
No. 3 Page 20, schedule 2 . Insert after line 4:
(8) An insurer or employer who is aggrieved by any decision of the Authority under this section may apply to the Administrative Decisions Tribunal for a review of the decision.
This amendment relates to what I consider to be yet another oversight by the Government with respect to an aggrieved insurer or employer who has difficulty following the decision made by the authority. The amendment puts in place an appeals process that enables the aggrieved insurer or employer to take a matter to the Administrative Decisions Tribunal for a review of the decision. As it currently stands no such process is available and the application of this amendment to the bill will add to the integrity of the legislation.
The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [2.54 p.m.]: The remarks I made during consideration of the previous amendment are applicable to consideration of this amendment. As the Committee has already expressed a view on the earlier amendment I seek its support to reject this amendment.
The Hon. M. J. GALLACHER (Leader of the Opposition) [2.54 p.m.]: I move Opposition amendment No. 4:
No. 4 Page 20, schedule 2 , lines 16 and 17. Omit all words on those lines. Insert instead:
1 2 year pilot scheme
(1) This schedule (except subclause (2)) operates for a 2 year period following the commencement of this schedule.
(2) At the end of that 2 year period, the effectiveness of this schedule is to be investigated by the Law and Justice Committee of the Legislative Council.
The injury management pilot project proposed by the Government in this legislation will put in place a two-year pilot scheme. In his reply to the second reading debate the Minister spoke about the need for scrutiny and some examination of the process, and in fact made reference to an investigation to be conducted by independent persons or organisations at the conclusion of the two-year period. This is really breaking new ground and the Opposition is seeking a full and open examination of this proposal before the Parliament at some stage. The Opposition recognises that some time will elapse before the commencement of the two-year period, thereby ensuring that the conclusion of the two year period—the end of the sunset clause—will in fact occur after the next State election. That will eliminate any opportunity for this issue to be politicised, or at least the allegation that the issue has been politicised, by either side in the debate.
With regard to the two-year pilot scheme sunset clause, the Opposition is seeking to add to the provisions of the bill to ensure that, at the end of the two-year period—in conjunction with what the Minister has said in regard to the scrutiny of the scheme that will be undertaken by the independent persons or organisations—the effectiveness of the scheme will be reviewed by the Legislative Council Standing Committee on Law and Justice, which will report back to Parliament on the success or otherwise of the scheme.
Reverend the Hon. F. J. NILE [2.56 p.m.]: The Christian Democratic Party agrees with what the Opposition is seeking to achieve, but I believe the amendment that I propose to move now will be better than what the Opposition has proposed in its amendment No. 4. I move:
From LP amendment No 4 omit:
(2) At the end of that 2 year period, the effectiveness of this Schedule is to be investigated by the Law and Justice Committee of the Legislative Council.
(2) The effectiveness of this Schedule is to be evaluated by an independent person or body, chosen by the Authority by private tender, and the results of the evaluation are to be referred to the Law and Justice Committee of the Legislative Council which is to review the results and report to Parliament.
The Government has agreed that there will be evaluation. That was stated by the Minister in his reply to the second reading debate on the bill, and the evaluation that the Government has referred to would be conducted in a variety of ways by WorkCover actuaries, by the WorkCover statistical branch, by external expert parties, such as Campbell's National Return to Work Monitor. This evaluation process would be collated, analysed and validated by an independent expert body selected through a competitive tender process.
That is the point I am emphasising in my amendment. It must be an independent evaluation so that there can be no accusation that the Government has manipulated the evaluation. It will be independent of the Government, but the evaluation will cover the cost benefit analysis of the pilots and their application to the scheme as a whole; the differences in the service utilisation and costs; differences in return to work outcomes for injured workers; user satisfaction for the pilot providers; and comparison of return to work rates and durability of employment for the pilot population against New South Wales and national results.
The amendment moved by the Opposition simply states that the effectiveness of this schedule be investigated by the Legislative Council Standing Committee on Law and Justice. I want to ensure that that committee has the benefit of expert advice. The committee comprises members of this House and is chaired by the Hon. R. D. Dyer. The committee members are very effective and efficient, but are not experts on all the details of the WorkCover scheme.
The Standing Committee on Law and Justice needs an expert report that it can consider to enable it to report to the House. Through the committee the House will have a monitoring process. It will review the results of the evaluation and report to Parliament. My amendment will achieve, in a better and more effective way, what the Opposition is attempting to achieve. It will equip the Standing Committee on Law and Justice with expert knowledge, which is the information it needs. If my amendment is not agreed to, the committee will have to hire consultants or other persons, who will be a charge against the committee and/or this House. Under my amendment the Government will bear all the costs of the evaluation process by an independent evaluator. The Hon. R. D. Dyer is nodding his head in agreement.
The Hon. R. D. Dyer: I don't want to pay for it.
Reverend the Hon. F. J. NILE: That is what I am saying. From a financial point of view this is a more efficient and effective way for the House to operate.
The Hon. M. J. GALLACHER (Leader of the Opposition) [3.01 p.m.]: I seek a point of clarification from Reverend the Hon. F. J. Nile. What is meant by the words "chosen by the authority by private tender"? How is it intended to place advertising to get the private tender under way? Who will fully examine the value of the system?
Reverend the Hon. F. J. NILE [3.02 p.m.]: WorkCover would have to seek tenders.
The Hon. D. J. Gay: Why is it a private tender? Surely it is a government tender.
Reverend the Hon. F. J. NILE: The emphasis is on private tender. The people who apply will be from private industry. Private tender means private industry. It will be advertised publicly; it will not be a division of WorkCover that will conduct the evaluation. It will be independent. That is where the emphasis will be—independent. Private in this sense does not mean secret; it means that private industry will have the opportunity to tender to carry out the evaluation.
The Hon. D. J. Gay: So it will not be a private tender; it will be an open tender.
Reverend the Hon. F. J. NILE: Yes, an open tender, not a private tender.
The Hon. J. J. DELLA BOSCA (Special Minister of State, Minister for Industrial Relations, Assistant Treasurer, Minister Assisting the Premier on Public Sector Management, and Minister Assisting the Premier for the Central Coast) [3.03 p.m.]: The Government supports the amendment proposed by the Christian Democratic Party. The injury management pilot will provide new information that will assist in identifying possible improvements to the injury management provisions of the current legislation. The Government welcomes the opportunity for the law and justice committee to review the evaluation of the pilot project and make suggestions for improvements to the scheme. The amendment is supported. The Government does not support the earlier amendment in its original form moved by the Leader of the Opposition.
Amendment of amendment agreed to.
Amendment as amended agreed to.
Progress reported from Committee and leave granted to sit again.