The New South Wales Liberal Government has recently advised that the New South Wales Workers Compensation Scheme is in deficit to the tune of $4 billion. It has been conceded that much of this loss has been to the effect of investments from the Workcover fund and the Global Financial Crisis. However it seems that it is the injured worker who is going to bear the brunt of this by a reduction in benefits.
A Parliamentary Committee has been established to enquire into the current operation of the NSW Workers Compensation Scheme and hearings are to be conducted on 21 May, 25 May and 28 May 2012. An Issues Paper has been published by the Government which identifies several changes to the Workers Compensation Scheme in this state which, if adopted by the Government, is likely to result in substantial reductions to the rights and entitlements of injured workers. Some of the more significant proposed changes are as follows:-
- The abolition of Journey Claims
New South Wales is now the only state in Australia which continues to provide workers compensation benefits for workers on their way to and from work. However, the fact that journey claims have been abolished elsewhere in this nation does not necessarily make it acceptable in New South Wales. The argument advanced by advocates supporting the rights of injured workers is that if a person provides his or her labour so that another person or business has the potential to make a profit, then that worker should be adequately covered for workers compensation not only during the time he is in the workplace but also in getting to and from the workplace.
- A Cap on Weekly Payments of Compensation
There is currently no cap or time limit on the payment of weekly benefits of compensation. An injured worker can potentially receive a weekly payment of compensation due to incapacity for work until he or she reaches 66 years of age. If weekly payments of compensation were reduced to a fixed period of say 5 or 10 years, then an injured worker would be thrown onto the social security system. It would also act as a disincentive for an injured worker to return to work because as the law currently stands, an injured worker is entitled to “make up pay” if he or she returns to work but is losing income compared to what was being earned prior to the injury. This would cease if there was a cap or termination date for weekly payments of compensation.
- The Removal of a Payment for Pain and Suffering.
An injured worker is entitled to a lump sum payment for permanent whole person impairment and if that impairment is 10% or more then there is an additional entitlement to pain and suffering. The maximum amount for pain and suffering is $50,000.00 but that is reserved for a most extreme case and an entitlement for pain and suffering must be proportionate to a most extreme case or worst case scenario. An entitlement to pain and suffering does provide a subjective consideration of the pain and suffering that an injured worker has experienced and is likely to continue to experience in the future. One of the options suggested is for the abolition of this payment.
- Changing the Law that Applies to Negligence in the Work Place
A suggestion made in the Issues Paper is that the law of negligence in the work place is to brought in line with the same standards of liability and negligence under the Civil Liability Act. The common law of this land has recognised for decades that there is a higher duty of care owed by an employer to an employee than there are in other legal relationships, such as an occupier of premises or a head contractor on a site. An employer has a duty to take all reasonable steps to ensure that an employee is working in a safe environment and free from risk of injury. If this amendment to the law were to be introduced, the duty of care that an employer has towards an employee would be significantly reduced. That in turn could give rise to an increase of injuries in the work place.
The New South Wales Liberal Government has also issued a press release stating that it is likely to introduce a Bill into parliament in the next few weeks and before the winter recess that will involve changes to workers compensation benefits. That Bill has yet to be published but further information in regard to that legislation will be published on our website.