Accident Compensation Act

Accident Compensation Act Changes to the Accident Compensation Act 1985 explained Edition No. 1 March 2010

Contents Introduction 1 Overview of changes 2 Key changes Workers entitlement to compensation 5 Access to entitlements and support 6 Entitlements 8 Supporting injured workers back to work 11 Treatment expenses and accountability of service providers 15 Access to justice for seriously injured workers: common law 16 Decision making and dispute resolution 17 Employer premiums 18 Recovery from third parties 19 Self-insurance 20 WorkSafe Victoria is a trading name of the Victorian WorkCover Authority. While every effort has been made to ensure the accuracy of the information in this document, it does not consider your individual circumstances and is provided for general information only. It should not be viewed as a definitive guide to the law. WorkSafe cannot be held responsible and extends no warranties as to the suitability of the information for any particular purpose or actions taken by third parties as a result of this information. This publication is protected by copyright.

Introduction This guide has been developed to provide an overview of changes to Victoria s workers compensation scheme that were passed by the Victorian Parliament in the Accident Compensation Amendment Bill 2009. The guide can be used as a reference for employers, injured workers, Agents and others who are involved in the workers compensation scheme and would like to better understand what changes will occur and when. For more details on how the changes may impact your individual circumstances, visit worksafe.vic.gov.au, contact WorkSafe s Advisory Service on (03) 96411444, freecall 1800 136 089 or call your WorkSafe Agent. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 1

Overview of changes Who do the changes affect? Summary Date of effect Workers Workers Family members Entitlements Increase in the no-fault maximum lump sum entitlement for a permanent impairment from $409,200 to $503,000. A 10% increase in no-fault lump sum entitlements for some workers who are compensated for spinal impairments only. Increase in the no-fault lump sum entitlements to workers with a permanent psychiatric impairment assessed at the existing 30% whole person impairment threshold, from $13,650 to $68,240. Entitlements Increases in weekly payments from 75% to 80% of pre-injury income after workers have received payments for longer than 13 weeks. Superannuation contributions at the superannuation guarantee rate (currently 9%) for workers still receiving weekly payments after 52 weeks, calculated as a percentage of the worker s weekly payments. Increased compensation for workers entitled to overtime and shift allowances by extending the time for which these allowances are taken into account in the calculation of weekly payments, from 26 weeks to 52 weeks. Increase in the statutory maximum for weekly payments to twice Victoria s average weekly earnings, currently $1,760. Entitlement to weekly payments for up to 13 weeks for injured workers who have returned to work, but who require surgery for their work related injury where they have already received weekly payments for 130 weeks. Payments Increase in the maximum lump sum payment for dependants following a workplace death from $273,970 to $503,000. The surviving partner who was living with a worker at the time of death will be deemed to be dependent on the earnings of the deceased worker. Except in certain circumstances, claims can be determined without the need to go to court. Extend eligibility to pensions and lump sums for dependent children of deceased workers up to the age of 25 who are full-time students or undertaking a full-time apprenticeship. 10 December 2009 5 April 2010 10 December 2009 2 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Overview of changes Who do the changes affect? Summary Date of effect Workers Employers Workers Workers Employers Protection against discrimination Enhanced protection against discrimination for workers making or pursuing compensation claims. Expanded penalties for discrimination. The ability to seek a review of WorkSafe s decision not to prosecute discrimination. A new right for a worker to bring their own action to address discrimination in the Magistrates Court. Request for information An employer will be able to request from their Agent a written statement of reasons explaining why certain claims for compensation were accepted or rejected. Claims lodgement Workers will be able to fill out an electronic claim form on the WorkSafe website and submit it via fax and, with the employer s consent, by email. Return to work Introduction of a staged approach to the consequences for workers who do not comply with their return to work obligations. WorkSafe will develop supporting materials which will clearly set out how to comply with obligations for workers. Return to work Introduction of simple and clear return to work obligations for employers, reducing the emphasis on paper compliance and focusing on achieving return to work outcomes. Return to work inspectors will continue to provide assistance and guidance to employers; however, they will, where necessary, also have the ability to issue notices requiring compliance. Tougher penalties for employers who fail to comply with their return to work obligations. Introduction of the ability to seek a review of WorkSafe s decision not to prosecute alleged return to work breaches by employers. Host employers will be required to co-operate with labour hire employers on the return to work of a worker who is injured while on hire to the host. WorkSafe will develop supporting materials which will clearly set out how to comply with obligations for employers. A nine month transitional period will be implemented between 1 July 2010 and 31 March 2011 to enable employers with existing claims to adjust to the changes in return to work obligations. 1 July 2010 5 April 2010 5 April 2010 1 July 2010 1 July 2010 WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 3

Overview of changes Who do the changes affect? Summary Date of effect Employers Workers Self-insurers Service providers Premium The right for employers to request a review of statistical case estimates where there are data errors. Access to a formal internal and external review process if employers dispute their premium. Regular review of premium setting by an independent body. Introduction of new premium avoidance measures and revised penalties to encourage premium compliance. Changes to the definitions of remuneration, which will more closely align with the Victorian payroll tax system and WorkCover New South Wales. Ability for trustees to hold multiple policies for independent businesses run under trusts. Dispute resolution Conciliation Officers will be able to direct WorkSafe or a self-insurer to pay the reasonable costs of medical and like expenses up to $5,000 at conciliation. Reimbursement of workers transport costs to attend a conciliation conference capped at $50 per conference. Reimbursement of lost income sustained by a worker when attending a conciliation conference capped at $350 per day. Self-Insurance arrangements WorkSafe has the discretion to allow subsequent approvals of self-insurers (following the initial three year approval period) for six years for those self-insurers who have driven improvements in safety, injury management and return to work. Self-insurers are no longer required to provide a yearly report to WorkSafe of common law proceedings; however, they are required to notify WorkSafe of any strategically significant matters. Self-insurers claims management policies must now be documented and provided to their workers and WorkSafe. WorkSafe is able to extend the term of approval for a self-insurer that is undergoing a corporate restructure, such as when it acquires or sells a subsidiary company or where a self-insurer is taken over by a holding company. A self-insurer is able to manage the claims of a company that it acquires. A self-insurer has more flexibility in choosing the limits in its contingent liabilities insurance policy. Controls on professional conduct New powers for WorkSafe to suspend payments to a service provider whilst they are under investigation for a breach of the Act and to disqualify service providers from the scheme. 1 July 2010 5 April 2010 1 July 2010 5 April 2010 *All figures are current as at 10 March 2010 4 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Workers entitlement to compensation Coverage for certain workers A worker is entitled to compensation if they sustain an injury arising out of, or in the course of, employment. In determining whether this entitlement to compensation exists, the law sets out a definition of who is considered a worker. In order to clarify worker entitlements and employer obligations, particular groups of workers have been deemed to be workers in the Act. The Act has been amended to clarify that outworkers and municipal councillors are deemed workers for the purposes of the Act. Claims for mental injury caused by stress The Act excludes from compensation claims for mental injuries (more commonly referred to as stress claims) that arise from an employer s reasonable management actions. Such actions might include performance appraisals or disciplinary action. The fundamentals of the existing provision for mental injury claims have not changed; however, the existing exclusionary provision has been amended to simplify the language and clarify the meaning of management actions. Five additional contemporary management actions have been included in the new definition in the Act: Appraisal Counselling Suspension or stand down Training Investigation. Key changes Outworkers are deemed to be workers. Municipal councillors are deemed to be workers. The stress exclusion has been amended by clarifying the meaning of management action. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 5

Access to entitlements and support Access to entitlements When a worker is entitled to compensation, it is important that they can access their entitlements simply and quickly. Changes have been made to the claims process to help make lodging a claim form simpler for workers and employers and to encourage earlier decision making. Claims for compensation will be able to be given to or served on an employer more easily. An electronic claim form will be available on the WorkSafe website, which will allow a worker to fill out the form electronically and can then be submitted with a signature by fax or, with the consent of the employer, by email. The time within which WorkSafe and self-insurers must make a decision about certain claims will be specified. WorkSafe and self-insurers will need to make a decision about claims for medical and like services within 28 days, which is the same as the 28 day timeframe required for determining claims for weekly payments. Protection against discrimination The reforms are designed to improve the existing protections for workers who suffer discrimination because they have taken steps to pursue a claim for compensation or who have notified their employer, any other employer or WorkSafe of an injury. The reforms will broaden the range of prohibited discriminatory conduct, including dismissal, altering the position of a worker to their detriment and threatening to do these things. The reforms will also extend protections against discrimination to prospective employees; for example, job applicants. The amendments: prohibit a wider range of discrimination and impose tougher penalties for proven discrimination empower workers to request that WorkSafe consider a prosecution against an employer or prospective employer allow workers to bring a civil action for discrimination against an employer or prospective employer themselves. Workers will also be able to: seek damages for the discriminatory conduct seek to be employed in a similar position seek payment of lost income up to 12 months. 6 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

In addition, it is an offence for employers to refuse employment to a job applicant, where the dominant reason is that the applicant has: given notice of an injury taken steps to pursue a claim for compensation, or complied with a request by WorkSafe regarding an investigation into potential breaches of the Act. Key changes The process for lodging a claim form has changed. Workers will be able to fill out an electronic claim form, which can be submitted with a signature by fax and, with the consent of the employer, by email. WorkSafe and self-insurers must determine liability for claims for medical and like expenses and weekly payments within 28 days. The protections for workers who suffer discrimination because they have taken steps to pursue a claim for compensation or notified of an injury have been strengthened. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 7

Entitlements Changes to the Act have resulted in an increase in a number of entitlements that workers may be eligible to receive as a result of a work-related injury or illness. Currently, workers who have sustained permanent significant impairments may be eligible to receive no-fault lump sum compensation, known as impairment benefits. Further, the families of workers who have died as a result of a work-related death may also be eligible to receive compensation. The key changes to these forms of compensation are outlined in the table below. Weekly Payments Previous legislation New legislation Weekly payment rate if a worker has received weekly payments for longer than 13 weeks 75% of pre-injury income 80% of pre-injury income Statutory maximum for weekly payments Period for which overtime and shift allowances are taken into account in the calculation of weekly payments for workers entitled to these allowances Payments for family members following work-related deaths Maximum lump sum entitlement for dependants following a work-related death $1,300 Twice Victoria s average weekly earnings, (currently $1,760) 26 weeks 52 weeks Previous legislation New legislation $273,970 $503,000 Impairment Benefits Previous legislation New legislation Maximum no-fault lump sum impairment benefit for a permanent injury No-fault lump sum impairment benefit for a worker who has a permanent psychiatric impairment and satisfies the existing 30% whole person impairment threshold $409,200 $503,000 $13,650 $68,240 A number of other changes have been made to the Act that are designed to improve entitlements for injured workers and their families. 8 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Payments for family members following work-related deaths In certain circumstances, provisional payments may be made to the dependants of a deceased worker before an Agent has formally accepted a claim. These payments can be made for: reasonable costs of burial or cremation, up to a capped amount (currently $9,300) medical and like costs related to the worker s injury up to $7,500 family counselling, up to $5,320 a weekly pension for a partner, up to 12 weeks. Where it is appropriate that WorkSafe exercise its discretion, this will ensure families can receive some payments and do not have to wait for a claim to be processed. The changes also extend eligibility to pensions and lump sums for dependent children of deceased workers up to the age of 25 who are full-time students or undertaking a full-time apprenticeship. Children of a deceased worker who are born after the worker s death will now be treated as a dependant of the deceased worker. Where a deceased worker has no dependants, non-dependent family members may be eligible, in certain circumstances, to be reimbursed for expenses that they reasonably incurred as a result of the worker s death, if these expenses caused them financial hardship. The maximum amount that can be reimbursed will be $30,000 per family. The surviving partner who was living with a worker at the time of death will be deemed to be dependent on the earnings of the deceased worker. Lump sum entitlements will also be able to be determined without the need to go to court, where the dependant is legally represented, is not a minor and is not under a disability. Lump sum impairment benefits Lump sum impairment benefits for some injured workers who are compensated for permanent spinal impairments only have increased by 10%. Weekly payments Superannuation contributions have been introduced at the superannuation guarantee rate (currently 9%) for injured workers still receiving weekly payments after 52 weeks. This is calculated as a percentage of the worker s weekly payments. Injured workers who receive weekly payments for 130 weeks and have since returned to work, but who require surgery for their work-related injury, may be entitled to weekly payments for up to 13 weeks. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 9

Key changes for: Families of deceased workers Provisional payments in certain circumstances. Increase in maximum lump sum payment from $273,970 to $503,000. Extend eligibility to pensions and lump sums for dependent children of deceased workers who are full-time students or undertaking a full-time apprenticeship, up to the age of 25. Children of a deceased worker who are born after the worker s death will now be treated as a dependant of the deceased worker. The surviving partner who was living with a worker at the time of death will be deemed to be dependent on the earnings of the deceased worker. Injured workers with a permanent impairment An increase in no-fault maximum lump sum entitlement for a permanent impairment from $409,200 to $503,000. A 10% increase in no-fault lump sum entitlements for some workers with spinal impairments only. An increase in no-fault lump sum entitlements to workers who have a permanent psychiatric impairment assessed at the existing 30% whole person impairment threshold, from $13,650 to $68,240. Long-term injured workers An increase in weekly payments from 75% to 80% of pre-injury income after workers have received payments for longer than 13 weeks. Superannuation contributions at the superannuation guarantee rate (currently 9%) for workers still receiving payments after 52 weeks, calculated as a percentage of the worker s weekly payments. Extend the period during which overtime and shift allowances are taken into account in the calculation of weekly payments, from 26 weeks to 52 weeks. Increasing the statutory maximum for weekly payments and pensions to twice Victoria s average weekly earnings. Entitlement to weekly payments for up to 13 weeks for injured workers who have returned to work, but who require surgery for their work-related injury. 10 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Supporting injured workers back to work Early, safe and sustainable return to work is beneficial for both injured workers and employers. An open, constructive, consultative relationship between the injured worker and their employer will help both parties work together to get the worker back to work as soon as they are safely able to do so. The return to work provisions of the Act have been revised to reduce the focus on complex processes and paper compliance, and increase the emphasis on outcomes. This approach recognises that the needs of employers may vary depending on their size or industry. The Act now includes a statement of purpose for return to work to help employers, workers and others involved in the return to work process understand the intention of the legislation. These changes will not result in any lessening of current standards. The purpose of the return to work part of the Act is to provide: that employers, workers and other persons involved in the return to work process co-operate to ensure that workers successfully return to work that employers are responsible for providing pre-injury employment or suitable employment to enable workers to return to work that workers are responsible for participating in the return to work process consistent with their capacity for work for workers to be represented, assisted and supported in the return to work process for effective occupational rehabilitation for workers to facilitate their early and sustainable return to work. WorkSafe will issue guidance and Compliance Codes (similar to Occupational Health and Safety Compliance Codes) to provide employers with practical guidance on how to comply with the law. There are five key return to work obligations for employers: Provide employment Plan return to work Consult about the return to work of a worker Nominate a return to work co-ordinator who is competent to help the employer meet their obligations Make return to work information available. There is also a new obligation for host employers of workers that are injured while let on hire to co-operate with the labour hire employer on the worker s return to work. Provide employment The obligation for an employer to provide suitable or pre-injury employment to an injured worker for 12 months remains; however, the obligation now commences at an earlier point to support earlier intervention. This point is determined when an employer receives either a medical certificate or a claim for weekly payments from a worker or another person on behalf of the worker, whichever is earlier. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 11

Plan return to work Employers are required to plan the worker s return to work. The planning obligation includes: obtaining relevant information about the worker s capacity for work considering reasonable workplace support, aids or modifications to assist in the worker s return to work assessing and proposing suitable employment options consulting with the worker and their health care providers providing the worker with clear, accurate details about arrangements for their return to work monitoring the worker s progress. Consult about the return to work of a worker Improving communication between employers, workers and health practitioners through consultation will foster better relationships and co-operation, which are crucial to achieving good return to work outcomes. Employers must consult with the worker, the worker s treating health practitioner and, if involved, the provider of occupational rehabilitation services to the worker. Nominate a return to work co-ordinator Employers must nominate a return to work co-ordinator who has an appropriate level of seniority and is competent to assist the employer in meeting their return to work obligations. Employers with rateable remuneration of less than $2 million must nominate a return to work co-ordinator for the period that a worker has an incapacity for work. This is required throughout the duration of the employer s return to work obligations. Those employers with remuneration over $2 million must have a return to work co-ordinator appointed at all times. Make return to work information available Employers must make return to work information available to their workers about: employer obligations and how these are met rights and obligations of workers in the context of return to work and how workers can obtain further information about these matters name and contact details of the employer s Agent name and contact details of the return to work co-ordinator procedure for resolving return to work issues. Co-operate with labour hire employers If a worker employed by a labour hire employer is injured in the course of working for another person (known as the host), the host will be required to co-operate with the labour hire employer, to the extent that it is reasonable to do so, to get the worker back to work as soon as safe and practicable. This change recognises that both the host and labour hire employer share accountability for return to work. It is prudent for employers to keep records of return to work arrangements even though there is no longer a specific requirement to do so. 12 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Worker obligations Worker obligations are now expressed more simply. Workers are required to make reasonable efforts to return to work in suitable employment and to actively participate in return to work planning, occupational rehabilitation and assessments of rehabilitation and future work prospects. A staged approach has been introduced to give injured workers fairer warning of penalties that might be imposed for failing to comply with their return to work obligations. Criminal sanctions have also been removed in relation to worker non-compliance with return to work obligations. Encouraging and securing compliance Providing a sound regulatory environment for return to work is important; however, this needs to be supported by an effective compliance framework. The powers of return to work inspectors have been increased to better fulfil their role of investigating non-compliance, raising awareness and providing information and advice about meeting return to work obligations and requesting employers who breach their obligations to take measures to comply. Inspectors will now have the ability to issue improvement notices to employers, similar to those issued by health and safety inspectors. To ensure transparency and accountability, inspector decisions will be subject to internal and administrative review. A nine month transitional period will be implemented, commencing on 1 July 2010 and ending on 31 March 2011, to enable employers to adjust to the changes in return to work obligations. In practice, this means that if an employer with an existing claim is compliant with their return to work obligations under the previous legislation and continues to remain compliant, they will be deemed to be complying with their new obligations. If a person believes an offence against the return to work part of the Act has been committed, they will be able to request WorkSafe bring a prosecution. WorkSafe will then investigate the matter and either prosecute or give reasons for not doing so. There will also be an ability to request the Director of Public Prosecutions to review a WorkSafe decision not to prosecute under the return to work provisions of the Act. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 13

Key changes The return to work part of the Act now includes a statement of purpose, which will help employers, workers and others involved in the return to work process to understand the intention of the legislation. Five key return to work obligations for employers: Provide employment Plan return to work Consult about the return to work of a worker Nominate a return to work co-ordinator who is competent to help the employer meet their obligations Make return to work information available. New obligation for host employers to co-operate with labour hire employer. WorkSafe may issue guidance and Compliance Codes (similar to Occupational Health and Safety Compliance Codes) to provide employers with practical guidance on how to comply with the law. Flexibility on how to comply with return to work obligations, including no formal requirement to keep particular documents. A staged approach to the consequences for workers who do not comply with their return to work obligations. Return to work inspectors will continue to provide assistance and guidance to employers; however, they will, where necessary, also have the ability to issue notices requiring compliance. The ability to seek a review of WorkSafe s decision not to prosecute alleged return to work breaches. Tougher penalties for breaches of return to work obligations by employers. A nine month transitional period will be implemented, between 1 July 2010 and 31 March 2011, to enable employers with existing claims to adjust to the changes in return to work obligations. 14 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Treatment expenses and accountability of service providers In addition to lump sum and weekly payment entitlements, WorkSafe can also pay the reasonable costs of medical and like services for the management of a work related injury or illness. Medical and like services may include treatment by a medical practitioner, physiotherapy, chiropractic, osteopath and other personal services, such as occupational rehabilitation, which may assist a worker s rehabilitation. As a result of the changes to the Act, in certain circumstances WorkSafe is required to provide 28 days written notice to an injured worker prior to terminating the entitlement to medical and like services. This change is intended to provide greater consistency with the notice period requirements for terminating weekly payments. The Act will now provide WorkSafe with a discretionary power to require approval to be sought for certain medical and like services before these services are provided. A list of those services that require prior approval will be available on the WorkSafe website. However, car and home modifications are examples of services that will require prior approval. WorkSafe may produce guidelines to explain the determination of reasonable costs for medical and like services. Healthcare providers play an important role in assisting with the rehabilitation and recovery of injured workers. WorkSafe monitors the conduct of those healthcare providers who deliver a service under the scheme. Changes to the regulation of healthcare providers will now allow WorkSafe to suspend payments and, in serious cases, disqualify providers from providing services under the scheme for a period of time or revoke the provider s approval under the scheme. The courts will have similar powers where a provider is found guilty of an offence under the Act. Key changes WorkSafe must provide 28 days notice prior to ceasing payments for medical and like services in certain circumstances. WorkSafe will require prior approval for some medical and like services. WorkSafe may produce guidelines on the determination of reasonable costs for medical and like services. The sanctions available to WorkSafe for the management of service providers have been strengthened. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 15

Access to justice for seriously injured workers: common law The Act allows a seriously injured worker to sue for common law damages where the other party s negligence caused or contributed to the work-related injury. Common law damages provide a one-off lump sum payment to an injured worker. Common law damages (under the scheme which commenced on 20 October 1999) are restricted to workers who have sustained a serious injury. Some changes have been made to the common law provisions in the Act. Previously, the dependants of a worker could be denied any entitlements if the worker died from a cause unrelated to their workplace injury, before their serious injury application for a workplace injury was determined. The reforms will allow a serious injury application to continue where a worker dies before their serious injury application is determined and leaves behind dependants. In this way, the deceased s estate can still receive the damages to which the worker would have been entitled. In order to prevent unnecessary delays and disputes, it is important that WorkSafe and self-insurers have access to sufficient information to enable an accurate decision to be made about a worker s application. An authority to obtain medical information is mandatory if a worker makes a serious injury application. This authority will be revoked if the worker withdraws their serious injury application or the application is resolved. This authority will replace the current voluntary Form D medical authority. An anomaly has arisen in the common law provisions that can result in unfair legal cost consequences for workers who continue to receive weekly compensation payments while pursuing a common law damages claim. Delays in matters being heard at court are often beyond a worker s control, and workers should not suffer unfair legal cost consequences as the result of this delay. The amended Act now provides that weekly payments received by a worker after the making of a statutory counter offer are to be disregarded for the purpose of determining legal costs consequences when the matter has resolved. This change to the costs provisions applies to serious injury applications first lodged with WorkSafe on or after 17 June 2009. Key changes A worker s serious injury application may continue where a worker dies before their application is determined. An authority for WorkSafe or a self-insurer to obtain medical information will be mandatory if a worker makes a serious injury application. Delays in matters being heard at court are often beyond a worker s control, and workers should not suffer unfair legal cost consequences as a result of this delay. The amended Act now provides that weekly payments received by a worker after the making of a statutory counter offer are to be disregarded for the purpose of determining legal costs consequences when the matter has resolved. 16 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Decision making and dispute resolution Disputes can increase the costs and delay the delivery of entitlements to injured workers. They can also impact on return to work outcomes for the parties involved. The amendments to the Act are designed to promote the efficiency of the conciliation process for workers and employers and quicker resolution of claims in a number of ways. The Accident Compensation Conciliation Service is the primary vehicle for resolving statutory benefits disputes. To ensure the ACCS operates in a transparent and accountable manner, the functions and powers of the Senior Conciliation Officer have been expanded. In particular, Conciliation Officers will now be able to direct WorkSafe or a self-insurer to pay the reasonable costs of medical and like expenses up to $5,000. Furthermore, workers will be able to be reimbursed for transport costs to attend a conciliation conference, capped at $50 per conference, and for lost income, capped at $350 per day, as a result of attending conciliation. Medical Panels are another mechanism available to workers and employers to help resolve disputes. The Medical Panel process has been amended with the aim of improving the quality of referrals of medical questions to the Panel by Conciliation Officers and the Courts. The limitations on the jurisdiction of the Magistrates Court to deal with workers compensation claims has been removed, allowing the court to hear a wider range of matters relating to these types of disputes. In particular, the Magistrates Court will be able to hear matters where the value exceeds $40,000. This amendment has been designed to reduce delays in the resolution of claims as well as avoid the late transfer of cases to the County Court and the higher costs associated with that jurisdiction. There is now a legislated review process for employers to seek internal review by WorkSafe of an agent s decision, which is designed to improve the transparency of decisions made by WorkSafe and its Agents. The outcome will be limited to premium impacts. Employers will be able to request written reasons from Agents where initial liability is accepted for most claims and request a review by WorkSafe of decisions relating to liability for a claim in certain circumstances. If employers remain dissatisfied following the outcome of the WorkSafe internal review, they will be able to appeal to the Supreme Court. Key changes Conciliation Officers will now be able to direct WorkSafe or a self-insurer to pay the reasonable costs of medical and like expenses up to $5,000. Reimbursement of workers transport costs and lost income when attending conciliation conference. The limitations on the jurisdiction of the Magistrates Court to deal with workers compensation claims has been removed. Employers will be able to request written reasons from Agents where initial liability is accepted for most claims and request a review by WorkSafe of decisions relating to liability for a claim in certain circumstances. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 17

Employer premiums Victorian employers with an annual payroll of more than $7,500 pay a premium to WorkSafe for compulsory WorkSafe insurance. The premium is the cost to the employer for the insurance policy. The employer s premium is determined by a number of factors, including the size of their payroll, how risky their industry is and the cost of any recent claims. The changes to the Act are designed to provide greater transparency and understanding about how WorkSafe determines an employer s premium. Part of the process to calculate an employer s premium involves the use of statistical case estimating to establish the average cost of an employer s claims. Employers will now have the right to request a review of an estimated claim cost where they consider it has been calculated based on incorrect data relating to that claim. A more transparent internal process has also been introduced for employers to seek a review of their premium where there is a dispute over the calculation. Employers will also be able to appeal the internal review decision to the Supreme Court, if necessary. An independent expert body must conduct a review of premium setting every five years, providing greater transparency in setting premiums. The definitions of remuneration used in calculating an employer s premium have been more closely aligned with the Victorian payroll tax system and the WorkCover Authority of New South Wales. Trustees may be permitted to hold separate policies for independent businesses run under trusts. To encourage voluntary disclosure and employer compliance, penalties associated with WorkSafe insurance premiums have been rationalised. Penalties have also been introduced for those engaging in, or providing advice on, premium avoidance schemes. Key changes Employers may request a review of an estimated claims cost on the grounds that it is erroneous due to coding or other data entry error. A more transparent formal internal review process has been introduced for employers who dispute the amount of premium they are charged. There will be regular review of the setting of premiums by an independent body. Definitions of remuneration have been more closely aligned with payroll tax and WorkCover New South Wales. Trustees may be permitted to hold separate policies for independent businesses run under trusts. Penalties associated with WorkSafe insurance premiums have been reviewed and rationalised. 18 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

Recovery from third parties The Act provides an avenue for recovery of a workers compensation costs from a third party that has caused or contributed to a worker s injury or death. Host employers (those who employ labour hire workers) have in the past sought to protect themselves from liability by including hold harmless clauses in their labour hire agreements. By enabling, or appearing to enable, a host employer to avoid legal liability, a hold harmless clause reduces the incentive for the host employer to adopt safer work practices for labour hire workers. These clauses will now be void for recovery purposes under the Act. The amendments mean that any contractual provisions that require a worker s employer to indemnify a third party (such as a host employer) for any liability that might be imposed upon the third party by the Act are void. The purpose of this amendment is to ensure that each party remains accountable for its role in workplace safety. Key change Hold harmless clauses are now void for recovery purposes under the Accident Compensation Act 1985. WorkSafe Victoria Accident Compensation Act Changes to the Accident Compensation Act 1985 explained 19

Self-insurance The changes outlined in other sections of this booklet impact on self-insurers in the same way as they do on any other employer who holds a WorkSafe insurance policy. This section of the booklet refers specifically to reforms that impact on the administration and management of self-insurance. Self-insurance allows eligible employers to directly manage and pay for the workers compensation claims of their employees. Self-insurers represent around 10% of all wages in Victoria. The changes to the Act which relate to self-insurers are designed to increase flexibility and clarify regulatory requirements for these employers, while retaining an appropriate focus on ensuring that their workers receive the same compensation outcomes as other workers. Previously, self-insurers were approved for an initial period of three years, with subsequent approvals for four years. WorkSafe now has the discretion to allow these subsequent approvals for six years for self-insurers who have driven improvements in safety, injury management and return to work. This discretion is to be exercised carefully and in response to good performance. In addition, self-insurers are no longer required to provide a yearly report to WorkSafe of common law proceedings; however, they are required to notify WorkSafe of any strategically significant matters. A self-insurer s claims management policies must now be documented and provided to their workers and WorkSafe. WorkSafe is also able to extend the term of approval for a self-insurer that is undergoing a corporate restructure or where a self-insurer is taken over by a holding company. For employers who move from the scheme insurance to self-insurance, it is now more transparent how they elect to assume responsibility for their existing claims. A self-insurer is now able to manage the claims of a company that it acquires. Key changes WorkSafe has the discretion to allow subsequent approvals (following the initial three year approval period) to extend from four to six years for self-insurers who have driven improvements in safety, injury management and return to work. Self-insurers are no longer required to provide a yearly report to WorkSafe of common law proceedings; however, claims management policies must now be documented and provided to WorkSafe and to workers. WorkSafe is able to extend the term of approval for a self-insurer that is undergoing a corporate restructure, such as when it acquires or sells a subsidiary company or is taken over by a holding company. A self-insurer is able to manage the claims of a company that it acquires. 20 Accident Compensation Act Changes to the Accident Compensation Act 1985 explained WorkSafe Victoria

WorkSafe Victoria WorkSafe Agents Agent contact details are all available at worksafe.vic.gov.au/agents Advisory Service Phone (03) 9641 1444 Toll-free 1800 136 089 Email info@worksafe.vic.gov.au Head Office 222 Exhibition Street, Melbourne 3000 Phone (03) 9641 1555 Toll-free 1800 136 089 Website worksafe.vic.gov.au For information about WorkSafe in your own language, call our Talking your Language service 1300 559 141 1300 650 535 1300 661 494 1300 660 210 1300 662 373 1300 722 595 1300 724 101 1300 725 445 1300 781 868 1300 554 987 1300 782 442 1300 782 343 VWA1320/01/02.10