Last month the Queensland Government rushed the Workers’ Compensation and Rehabilitation and other Legislation Amendment Bill 2013 through the Parliament. The Bill was introduced without any public consultation being undertaken and was passed within two days without any significant debate. A cynic might suggest, that the timing of the Amendments, in conjunction with the new Anti-Bikie Laws and Sex Offender Laws, was deliberate to avoid any public scrutiny. Certainly that was the practical effect of the timing of the passage of the Act through parliament.
The Act has served to confirm widespread speculation that the Government intended to make significant and sweeping changes well beyond those recommended by the Finance and Administration Committee [FAC] in May 2013.
In summary the Act introduces the following changes:
Restriction of Common Law Damages Claims
The Act has the effect of abolishing the rights of persons injured at work to access damages claims unless they are assessed as having a degree of permanent impairment of more than 5%.
The changes do not impact on statutory Workers’ Compensation claims and only introduce a threshold restricting Common Law damages claims.
Based on statistics maintained by WorkCover it is anticipated that as many as 50% of damages claims will be abolished by the Act.
The FAC made recommendations against the introduction of a cap or threshold. Notwithstanding the recommendations, the Government introduced the cap in circumstances where:
- WorkCover operated at a profit of more than $500M in the financial year to 30.06.13
- Total numbers of damages claims fell in the year ended 30.06.11, and fell again in the year ended 30.06.12;
- Total costs of damages claims fell in the year ended 30.06.11, and fell again in the year ended 30.06.12;
- General damages awards have fallen significantly in the year ended 30.06.12, and those recorded falls likely show only the start of the impact of the 2010 caps on General Damages.
Disclosure of Past Medical History on Application for Employment
The Act has introduced a range of new rights for Employers to require disclosure of information and documents by prospective employees. These are directed at allowing Employers to require disclosure of pre-existing injuries or medical conditions. A request for disclosure can be made provided that:
- The request is in writing;
- The request contains information about the nature of the duties of the employment;
- The Applicant is given a reasonable opportunity to comply with the request before being engaged by the Employer.
The Act also provides that if a job applicant makes a false or misleading disclosure then they will be precluded from seeking Workers’ Compensation or damages for any event that aggravates the pre-existing medical condition.
Employers wanting to take advantage of the provision should make sure that they obtain advice as if they do not comply with the Legislation the request will be ineffective. Likewise employees faced with the request should ensure that they make a full disclosure otherwise the consequences could be draconian.
It remains to be seen how the new provisions will be interpreted in conjunction with the Anti-Discrimination Act. Historically it had been thought likely to constitute a breach of the Anti-Discrimination Act for such information to be requested. Whilst the new Act will make it clear that requesting the information is not of itself discrimination, it remains to be seen how the two Acts will be interpreted, and it could well still be found to be unlawful discrimination if an Applicant is unsuccessful because of the disclosure of preexisting medical conditions.
The Act also allows prospective employers to obtain a copy of the Applicant’s Workers’ Compensation Claims History.
Rehabilitation Introduced as Part of the Common Law Damages Claim Stage
There are new requirements for WorkCover or self-insurers to refer all workers who lodge claims for damages to accredited Return to Work Programs. These provisions are designed to increase the focus on re-skilling and re-training with a view to improving the employment prospects of injured workers.
Restrictions on Damages
The Act also re-worded the restrictions on recovery of certain type of damages. In essence, the restrictions are intended to limit awards of damages for costs of services provided to an injured worker by friends and family. In reality these provisions are not new but rather are a re-write of provisions that have been in the Act for some time but have, because of poor drafting, not achieved the intended effect. Whether the current provisions actually make any real difference remains to be seen and will no doubt be tested in the Courts.
Employer
The Act also requires employers to keep documents about employees and any contracts for at least three years so that the documentation can be produced to WorkCover on request. The detail of the documentation that will be required to be kept is not spelt out in the Act but in due course will be the subject of regulations.
The changes introduced by the Act will have a drastic impact on the scheme. The introduction of the cap on Common Law damages claims is mooted as bringing about a reduction in premiums. No doubt there will be a short term reduction. However, employers should not expect any long term benefit as experience in other States shows that restrictions on damages claims invariably do not have any significant impact in reducing premiums. Some of the reasons why any reduction in premiums is likely to be short lived include:
- The cap or threshold issue will lead to an increase in litigation thereby creating new costs within the scheme in place of some of the savings in damages payouts;
- The remaining claims will be major claims and the reduction in overall numbers will almost certainly cause an increase in the number of claims litigated to trial which in turn will increase the average claims cost;
- Statutory claims duration will increase as will the average cost of statutory claims. Many decisions that are currently made by WorkCover and Insurers to terminate a statutory claim are capable of challenge but have not been challenged because the employee is pursuing a damages claim anyway. With the cap this will change with an inevitable increase in the length of average statutory claims duration and costs.
