Programme 2.3 - Workers’ compensation payments

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Special appropriations to Comcare are provided through the department. This includes special appropriations under the Safety, Rehabilitation and Compensation Act 1988 for the payment of pre-premium claims expenses (before 1 July 1989) and under the Asbestos-related Claims (Management of Commonwealth Liabilities) Act 2005 for asbestos-related claims settlements. Expenses for claims accepted since 1 July 1989 do not require appropriation as they are funded from Comcare's premium revenue.

Further information regarding the operations of Comcare can be found at www.comcare.gov.au.

During 2014–15, Comcare paid $32.7 million for incapacity, treatment and other costs for claims resulting from injuries that occurred before 1 July 1989 (pre-premium). The outstanding claims provision for pre-premium claims reduced from $409.2 million in 2013–14 to $368.4 million in 2014–15.

Table 10 Programme 2.3 performance indicators
Performance indicator 2014–15 estimate 2014–15 actual
Durable return to work rate (i.e. the percentage of injured workers from premium-paying organisations with 10 or more days lost time, who had submitted a claim seven to nine months prior to interview, and who were working in a paid job at the time of interview) 90% na
Funding ratio (i.e. the percentage of premium-related total assets to premium-related liabilities) 71% 76%
Commonwealth average premium rate 2.12% 2.12%
Employer satisfaction with recovery and support services 61% na
Injured worker satisfaction with recovery and support services 81% 62%

na = unavailable

In 2014–15, Comcare settled 70 per cent of asbestos claims within 180 days; the 65 per cent target has been reached or surpassed for the last four reporting periods. The target is determined in accordance with the rules and timetables of the courts of each jurisdiction and performance can also be affected by the involvement of third parties.

Comcare recovered 24 per cent of the value of asbestos claims settlements from third parties in 2014–15. This result was significantly above the 5 per cent target and is an improvement on the 2013–14 result of 8 per cent.

Workplace relations policy advice

Annual wage review

Together with the Treasury, the department managed the government’s participation in the Fair Work Commission’s 2015 review of minimum wages. This included drafting the government’s submissions, preparing responses to questions asked by the commission, and attending public hearings.

On 2 June 2015, the commission released its decision to increase the national minimum wage and award classification wages by 2.5 per cent. From 1 July 2015, the national minimum wage will increase to $656.90 a week ($17.29 an hour).

Productivity Commission review of Australia’s workplace relations system

The department continued to advise the government on the progress of the Productivity Commission’s review of the workplace relations system. The terms of reference for the review require the Productivity Commission to assess the performance of the workplace relations framework, including the Fair Work Act, focusing on key social and economic indicators important to the wellbeing, productivity and competitiveness of Australia and its people. The Productivity Commission released five issues papers on 22 January 2015 and invited public submissions. The department made a submission on 13 March 2015 and is continuing to monitor progress of the review. The final report is due to the government on 30 November 2015.

Centre for Workplace Leadership

The department continued to contribute funding to the Centre for Workplace Leadership, established at the University of Melbourne in 2013. Total funding for the centre includes $12 million over four years from the government, of which around $3.4 million was provided in 2014–15. The Secretary of the Department of Employment is a member of the centre’s advisory board, which helps guide the centre’s long-term strategic direction and foster industry partnerships. The board met five times in 2014–15 and provided guidance and advice on a number of the centre’s initiatives as well as its governance and future planning.

In April 2015 representatives from the department attended the centre’s second national conference—The Future of Work: People, Place, Technology. The centre is developing practical workplace training for managers and leaders and creating resources to help workplaces measure their own performance. One of the centre’s projects involves using the results of its national study of Australian leadership to establish a benchmark for effective leadership.

The centre also completed the Workplace Gender and Equality Strategy Project, which was commissioned by the department. Through this project, the centre worked with 10 organisations to develop a strategy to promote and achieve gender equality in the workplace, building on their existing workplace policies and practices. The results are presented as case studies for other organisations to consider.

Safety net and awards policy

The department continued to provide policy advice to the government on the Fair Work Commission’s four-yearly review of modern awards. In 2014–15 the government made a submission on part-time and casual employment and another on accident ‘make-up’ pay. The department also provided information in response to a request by the president of the commission during the hearing of the annual leave common issue. This information went to the construction of section 90(2) of the Fair Work Act and updated the commission on the status of the Fair Work Amendment Bill 2014.

Superannuation

The department provided policy advice to the government on the Fair Work Commission’s four-yearly review of default superannuation terms in modern awards. 

The department continued to work closely with the Treasury to develop policy to implement the government’s election commitments on competition, corporate governance and transparency in the superannuation industry.

Transparency and accountability of registered organisations

The department continued to provide advice and assistance to the government on the implementation of its election commitment on accountability of registered organisations.

The department assisted with developing the Fair Work (Registered Organisations) Amendment Bill 2014 [No. 2], which includes measures to strengthen the reporting and disclosure requirements for registered organisations and their officers; increase civil penalties and introduce criminal penalties; and establish a registered organisations commission as an independent monitor and regulator.

The Bill was introduced into parliament on 19 March 2015. It replicates the Fair Work (Registered Organisations) Amendment Bill 2014, which was introduced into parliament on 19 June 2014 and rejected by the Senate on 2 March 2015.

Post-implementation reviews

The department conducted a post-implementation review of the Fair Work Amendment (Textile, Clothing and Footwear Industry) Act 2012 which assessed whether the Act works effectively and efficiently to provide protections for outworkers. The review was prepared by the department and was assessed as adequate by the Office of Best Practice Regulation on 5 September 2014.

The department conducted a post-implementation review of the Fair Work Amendment (Transfer of Business) Act 2012. The review was assessed as adequate by the Office of Best Practice Regulation on 22 August 2014.

Coastal shipping reforms

The department provided workplace relations policy advice on the government’s coastal shipping reforms, announced by the Deputy Prime Minister, the Hon. Warren Truss MP, on 20 May 2015. The department worked closely with the Department of Infrastructure and Regional Development and the Office of Parliamentary Counsel in drafting the Shipping Legislation Amendment Bill 2015. The Bill was introduced into parliament on 25 June 2015.

International engagement

During 2014–15, the department provided policy advice to the government on international labour issues, with a particular focus on the Asia–Pacific region.

The department’s international engagement includes the annual International Labour Conference and meetings of the Governing Body of the International Labour Organization (ILO). The department represented the government at ILO Governing Body meetings in November 2014, March 2015 and June 2015, and at the 104th session of the International Labour Conference held in Geneva in June 2015. Australia is representing the Far-East Asia Pacific Sub-Group of countries on the Governing Body for a three-year term until 2017.

During 2014–15 the department’s Minister-Counsellor (Employment) was Australia’s representative to the ILO. This role included chairing sessions of the Governing Body meetings in November 2014 and March 2015 and chairing the Committee on Labour Protection at the 2015 International Labour Conference.

Chairing the ILO Governing Body meetings gave Australia an opportunity to provide strategic influence and take a leadership role internationally.

At the conference, a departmental representative chaired a sub-committee on the Cook Islands’ application for ILO membership. Departmental delegates participated in drafting a new recommendation on facilitating the transition from the informal (unregulated) to the formal economy and contributed to discussions on labour protection and employment creation in small and medium-sized enterprises.

In 2014–15, the department continued to support the ILO in implementing measures to improve the functioning of the conference and the Governing Body, in order to ensure the ILO is well placed to remain relevant in the contemporary world of work. In addition, the department provided advice to the government on a new protocol and recommendation on forced labour (adopted at the 2014 International Labour Conference), which has particular relevance for the Asia–Pacific region.

Australia’s international labour engagement included close work with Australia’s social partners—the Australian Chamber of Commerce and Industry and the Australian Council of Trade Unions. The social partners jointly administered the Pacific Growth and Employment Project, funded under the ILO – Australian Government Partnership Agreement 2010–2015, until its conclusion in November 2014. The project was designed to improve vocational skills and employment opportunities for young people and their families in Pacific Island countries. It was piloted in Papua New Guinea’s transport sector and Vanuatu’s tourism sector.

Increasing employment opportunities through the Pacific Growth and Employment Project

On 5 December 2014, Senator the Hon. Eric Abetz, Minister for Employment, acknowledged the Australian Council of Trade Unions’ and the Australian Chamber of Commerce and Industry’s achievement in increasing employment opportunities in the Pacific through the Pacific Growth and Employment Project.

Over the past two years, the project has increased employment opportunities in Papua New Guinea and Vanuatu by drawing on the experience of Australian businesses to develop strategies that prepare young people for employment and create opportunities for the indigenous workforce. The project also focused on skills development, and Australian standard training certificates are now being provided in the transport sector in Papua New Guinea.

The project also led to increased opportunities for private enterprise engagement in the region and provided a strong foundation for ongoing employment growth and skills development in the Pacific.

During 2014–15, the department provided legal advice to portfolio ministers, portfolio agencies and other stakeholders about the operation of the national workplace relations system; developments arising from relevant court and tribunal decisions in federal, state and territory jurisdictions; and work health and safety and workers’ compensation.

Primary legislation

The department supported the development and passage through parliament of legislation to implement the government’s workplace relations priorities.

The Construction Industry Amendment (Protecting Witnesses) Act 2015 amended the Fair Work (Building Industry) Act 2012 to extend the period during which the director of the Fair Work Building Industry Inspectorate can apply to a nominated presidential member of the Administrative Appeals Tribunal for an examination notice by a further two years (until 1 June 2017). The amendment took effect from 20 May 2015.

The Fair Entitlements Guarantee Amendment Bill 2014 was introduced into the House of Representatives in September 2014. It would amend the Fair Entitlements Guarantee Act 2012 to cap the maximum amount of redundancy pay entitlement available under the Fair Entitlements Guarantee scheme at 16 weeks, consistent with the National Employment Standards.

The Fair Work Amendment Bill 2014 was introduced into the Senate in August 2014. The Bill would amend the Fair Work Act to implement elements of the government’s 2013 election commitments.

The Fair Work Amendment (Bargaining Processes) Bill 2014 was introduced into the parliament on 27 November 2014. It passed the House of Representatives on 9 February 2015 and was introduced into the Senate on 10 February 2015. The Bill would amend the Fair Work Act to give effect to the government’s commitment to enterprise bargaining.

The Fair Work (Registered Organisations) Amendment Bill 2014 [No. 2] was introduced into the parliament in March 2015. It would amend the Fair Work (Registered Organisations) Act 2009 to establish a registered organisations commission, strengthen officers’ and organisations’ reporting and disclosure obligations, increase civil penalties and introduce certain criminal penalties. The Bill was reintroduced into parliament in the same form as the Fair Work (Registered Organisations) Amendment Bill 2014.

The Seafarers Rehabilitation and Compensation and Other Legislation Amendment Bill 2015 was introduced into parliament in February 2015 following the Federal Court’s decision in Samson Maritime Pty Ltd v Aucote [2014] FCAFC 182. The Federal Court’s decision interpreted the Seafarers Act—and potentially the Occupational Health and Safety (Maritime Industry) Act 1993 which has very similar coverage provisions—as having a much broader application than has previously been understood by regulators, maritime industry employers and maritime unions.

The Bill amended the coverage provisions of the Seafarers Act and the Maritime Industry Act from their enactment in 1992 and 1993, respectively, until 26 May 2015 when the Bill received royal assent. The amended coverage provisions align with how the Seacare scheme had previously been understood to apply. Seafarers not covered by the Seacare scheme are covered by the relevant workers’ compensation and work health and safety legislation of the state in which they work. The Bill passed the parliament on 14 May 2015.

The Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Bill 2015 was introduced into parliament on 25 February 2015 and passed the House of Representatives on 12 May 2015. It would amend the Safety Rehabilitation and Compensation Act 1988 to ensure that existing employers have ongoing rehabilitation responsibilities and enable Comcare to recover premiums and regulatory contributions if any employers leave the Comcare scheme.

The Safety, Rehabilitation and Compensation Legislation Amendment (Improving the Comcare Scheme) Bill 2015 was introduced into parliament on 25 March 2015. It is the first major update to the Comcare scheme since its establishment in 1988. The Bill would implement, in part or whole, recommendations of the 2012 review of the Safety, Rehabilitation and Compensation Act by Mr Peter Hanks QC and Dr Allan Hawke AC. The Bill would also make other changes to the Act following further consultations and analysis to support better return-to-work outcomes and a more efficient scheme.

Regulations

The department supported the development of regulations to give effect to the government’s workplace relations priorities. The following regulations were made during 2014–15:

  • The Fair Work (Building Industry—Accreditation Scheme) Amendment Regulation 2014 implemented the government’s response to the 2014 review of the Office of the Federal Safety Commissioner and the Australian Government Building and Construction WHS Accreditation Scheme. The Regulation also made a number of amendments that had been identified by the Federal Safety Commissioner to improve the clarity and effectiveness of the accreditation scheme. The majority of the amendments commenced on 1 January 2015.
  • The Work Health and Safety Amendment Regulation 2015 (No. 1) made technical amendments to the Work Health and Safety Regulations 2011 that were agreed by the workplace relations ministers in April 2014.
  • The Work Health and Safety Amendment (Public Authorities) Regulation 2014 amended the Work Health and Safety Regulations 2011 to prescribe Medibank Private Ltd and Star Track Express Pty Ltd as ‘public authorities’.

Workplace safety

Office of the Federal Safety Commissioner

The Office of the Federal Safety Commissioner administers the Australian Government Building and Construction WHS Accreditation Scheme and works closely with government agencies and industry to ensure effective implementation of the health and safety requirements of the Fair Work (Building Industry) Act 2012.

The scheme aims to establish best practice in the health and safety systems and practices of building companies that wish to undertake Commonwealth-funded building work. As at 30 June 2015, 366 companies were accredited under the scheme. The Office of the Federal Safety Commissioner had been notified of 1302 directly and indirectly funded contracts for building work covered by the scheme with a combined value of $67.86 billion.

Following the 2014 review of the scheme, on 1 January 2015, the Office of the Federal Safety Commissioner implemented a number of legislative changes designed to modernise and streamline the scheme. These included an extension of the joint venture arrangements for international companies to domestic companies, and the removal of a number of barriers to the application process, including the requirement to have certification to AS/NZS 4801 which sets out the requirements for an occupational health and safety management system.

A comprehensive review of the scheme’s audit criteria was also completed in 2014–15, which included producing plain-English guidance material on the criteria. The guidance is designed to assist companies to better understand the Federal Safety Commissioner’s expectations about safety systems and onsite implementation.

The Office of the Federal Safety Commissioner implemented a number of administrative enhancements to the scheme, including a new risk-based approach to compliance with scheme criteria and developed FSC Online, a web-based accreditation application system. FSC Online was released on 1 May 2015. Roadshow presentations about changes to scheme requirements started around the country.

The department conducted an open tender to refresh the standing panel for Federal Safety Officers in 2014–15. Federal Safety Officers assess compliance with scheme criteria at onsite audits on behalf of the Federal Safety Commissioner.