The NSW Lower house last night voted 65 to 24 to pass Coalition amendments to WorkCover that will retrospectively cut workers’ compensation, including travel cover. The reforms, which are to make up for a $4 billion deficit on WorkCover’s balance sheet, are the latest changes to the state’s industrial relations regime designed to weaken the state’s public service unions.
Although the scheme is yet to pass the upper house, if the Workers Compensation Legislation Amendment Bill 2012 (pdf) is made law large swathes of the current WorkCover regime will be abolished.
Notable cuts include reductions of weekly benefits after 13 weeks, instead of the current payout of 100 per cent payout for 26 weeks; a five-year cut-off for compensation payments with an exception of 20 per cent payments for full-body impairment; and a one year cap for hospital and rehab expenses — either from the period of compensation, or from when weekly payments cease.
Sweeping changes to lump sum payments are also to become law, including the abolition of compensation for heart attacks and strokes unless a worker’s employment was the main contributing factor.
Relatives of a worker killed on the job will also no longer be able to claim common law damages against an employer for nervous shock, unless the nervous shock is itself a work injury — essentially abolishing the right to recover damages for spouses who aren’t also co-workers.
Journey claims, previously left untouched by both Labor and Coalition governments, will now be abolished, except where the journey is work or training-related. Shift workers, typically the beneficiaries of such provisions due to fatigue-related accidents occurring to and from their place of work, will be chiefly affected.
The prerogative to cut costs has also altered the dispute resolution process for assessing work capacity. Insurers will now conduct internal reviews themselves in the first instance, with WorkCover now only conducting merit and procedural reviews. Further, insurers will now conduct work capacity assessments of injured workers "at various stages throughout the life of the claim" to mop up fringe cases.
The WorkCover changes are to apply retrospectively according to Schedule 12, clause 3 of the Bill (pdf), meaning the new regime will apply to current, past and pending claims for compensation and injuries received before the bill becomes law. O’Farrell has denied the changes will be retrospective despite reporting and expert opinion on the matter.
"The changes simply mean if the parliament passes the laws, the laws come into effect from the day the government signs off on them and from that moment on they take effect," he told NSW Parliament today.
O’Farrell’s Bill was compiled quickly in the wake of a recent Parliamentary Inquiry into WorkCover. Its report (pdf) notes, "the premiums paid by New South Wales employers are estimated to be between 20 and 60 per cent higher than equivalent employers in our competitor states", but figures compiled by the NSW Greens from WorkCover’s available Annual Reports claim that benefits paid between 1997 and 2010 increased by only 43 per cent — less than inflation over the same period.
The figures, checked against WorkCover’s annual reports by New Matilda, also show major workplace injuries fell by 53 per cent over the same period. Management fees to private insurance companies increased by 236 per cent and for each major injury increased by 620 per cent, more than 5 and 14 times inflation respectively.
The WorkCover changes are part of O’Farrell’s attempt to break the backs of New South Wales’ powerful public sector unions with a wide range of legislative and regulatory changes.
Another bill before parliament, the Industrial Relations Amendment (Industrial Representation) Bill 2012, otherwise known as the "competitive unions" bill, is currently before the upper house, where it has stalled in the face of Green and Labor opposition.
The competitive unions bill seeks to deregulate industry unions to allow "joint coverage" — two unions effective representing the same workers — but is widely considered to be an attempt to use conservative, employee controlled industry peak bodies, sometimes called "yellow dog unions" as a wedge to split groups like the Teachers’ Federation, Nurses’ Federation and the scandal-ridden Health Services Union. Groups admitted under the scheme will have to agree to avoid strikes and industrial action in return for admission.
The Australian Medical Association and Emergency Service Protection Association, two such bodies, yesterday rallied outside NSW Parliament, urging support for the bill so they might split from the HSU. The NSW branch of the Labor Party has agreed to pass the bill if amended to free employee associations from "undue" influence by employees or other groups.
Wage caps announced in last week’s budget under changes to the operation of the Industrial Relations Commission have given the NSW government an in-effect absolute veto over the setting of wages, removing unions’ prior recourse to arbitration. Much of the damage will be felt by so-called "back office" employees, pushing paperwork onto frontline staff.
It’s one half of a "pincer movement", says Greens MLC David Shoebridge, that also involves an 11-fold increase in IRC fines for unprotected industrial action now sitting on the Parliamentary notice paper.
"If that legislation finds its way onto the statute books, unions and their members won’t have any way to challenge wage regulations by the financial minister. If they decide to go on strike and a dispute order is made they’ll be subject to crippling fines, which would come close to bankrupting a lot of smaller unions," Shoebridge told New Matilda.
He also believes O’Farrell’s scheme to be "deeply ideological", and in its fundamentals, worse than former PM John Howard’s Work Choices scheme.
"At least with Work Choices there was always the capacity to have an independent arbiter of disputes. There was the capacity for protected action under Work Choices. But in NSW there is no right to strike, and if unions do strike they will be hit by crippling dispute orders. The package taken together is more radical," he said.
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