Regulatory framework for compensation

Statutory workers’ compensation

33.3 Workers’ compensation is a system of accident compensation for workers who suffer or contract work-related injuries or disease, and for the dependants of those whose death is attributable to employment.^[1]

33.4 Each Australian jurisdiction has workers’ compensation legislation which requires employers to insure against their statutory and common law liability to compensate workers for work-related injury and disease that results in incapacity or death.^[2] Each jurisdiction provides compensation on a ‘no-fault’ basis.^[3] A claimant does not have to show that the employer acted negligently in order to be eligible for compensation. Depending on the legislation, a person might also be able to bring a common law action in negligence against an employer.

33.5 The two federal workers’ compensation schemes are the Comcare scheme, for Commonwealth employees and employees in the Australian Capital Territory public sector; and the Seacare scheme, for certain seafarers.^[4] Comcare is a Commonwealth statutory authority responsible for workplace safety, rehabilitation and compensation in the federal sphere.

Common law claims

33.6 Injured workers may be able to claim common law damages from an employer for negligence, or for breach of a statutory duty. There is also an implied term in the common law contract of employment that an employer must take reasonable care not to expose employees to unnecessary risks to their health and safety.^[5] Breach of this term may give rise to a common law claim for breach of contract.

33.7 Originally, all Australian workers’ compensation schemes allowed access to the common law actions for damages for workplace injuries and disease, subject to the claimant making an election between the common law action and statutory benefits. Some jurisdictions have since removed access to the common law entirely, while others have subjected it to heavy restrictions regarding the available heads of damage, and the amount of damages recoverable.^[6]

Other inquiries into workers’ compensation

33.8 The Inquiry is aware of several inquiries into workers’ compensation reform in Australia. The House of Representatives’ Standing Committee on Employment and Workplace Relations has been asked to inquire into, and report on, matters relevant and incidental to Australian workers’ compensation schemes. The Committee is examining:

• the incidence and costs of fraudulent claims and fraudulent conduct by employees and employers, and any structural factors that may encourage such behaviour;

• the methods used and costs incurred by workers’ compensation schemes to detect and eliminate fraudulent claims, and the failure of employers to pay the required workers’ compensation premiums or otherwise fail to comply with their obligations; and

• factors that lead to different safety records and claims profiles from industry to industry, and the adequacy, appropriateness and practicability of rehabilitation programs and their benefits.^[7]

33.9 In July 2002, the Federal Government announced that, following finalisation of terms of reference, it would ask the Productivity Commission to inquire into establishing nationally consistent arrangements for workers’ compensation and occupational health and safety issues.^[8]

33.10 During 2002, a committee chaired by Justice David Ipp conducted a review of the law of negligence. The committee examined methods to reform the common law in order to limit liability and the quantum of damages arising from personal injury and death. The committee’s final report, titled Review of the Law of Negligence,was submitted to the Commonwealth in September 2002.^[9]