Unions NSW Workers Compensation Survey Report 2014
Introduction 1. On June 19 2012, the NSW Liberal Government introduced changes to workers compensation that significantly cut the rights and entitlements of injured workers. The main elements of the changes are: Workers compensation for trips to and from work are no longer covered; Weekly payments stop at two and a half years for most injured workers; Weekly payments are reduced for most injured workers; Medical expenses stop one year after weekly payments cease; Lump sum payments for pain and suffering are removed; and Heart attacks and strokes are no longer covered; 2. It s been two years since these changes were introduced and injured workers and their families continue to feel the effects. 3. Last year Unions NSW conducted a survey of injured workers and compiled a report documenting the real impacts these changes were having on workers and their families. 4. This report revisits the experiences of injured workers, who continue to experience economic hardship and personal pressures as a result of the cuts to workers compensation. Unions NSW Survey 5. In May and June 2014 Unions NSW conducted an online survey to gauge the effect of the workers compensation changes on injured workers. This survey expanded on the 2013 survey results. 6. The survey was completed by 2076 people, 81% (1692) of whom had suffered an injury or illness at work, or while travelling to or from work. From the 1692 injured workers who completed the survey, a further 81% (1369) had made a workers compensation claim. 2
7. Physical injury remained the most prevalent type of workplace injury (64%), followed by mental illness and journey incidents (see figure 1). Figure One 8. The survey follows the experiences of workers who were injured both before and after the changes. The majority of workers were injured between June 2000 and 19 June 2014 (see figure 2). The retrospective nature of the workers compensation changes means that all injured workers, regardless of their injury date, are impacted. 3
Figure Two 9. The survey also sought people s views on the workers compensation changes. About 85% of respondents disagree with the changes, and 83% indicated that it would affect the way they vote in the 2015 State Election. 10. When survey respondents were asked what they thought of the Government s changes to workers compensation, unfair and wrong were the most common descriptions. Cruelly saving money from workers insured benefits, prolonging suffering, reneging on the Government s ethical and moral obligations, giving an insurer the right to make profits from suffering. It is an attack on injured workers and their families, we did not choose to be injured and we are suffering daily, the changes were made to protect the interests of employers at the expense of powerless injured workers. 4
Unfair. A person who was injured while doing their actual duties at work, should always be supported for the treatment of that injury. The right approach to workers compensation 11. Over the past two years, Unions NSW has considered what is needed in a workers compensation scheme to ensure the best outcomes for injured workers, their family and employer. 12. In consultation with affiliated unions, Unions NSW has developed 12 Guiding Principles for Reform that outlines what an effective workers compensation scheme should include. 13. Unions NSW believes that the scheme can afford to introduce changes to workers compensation that reflect these guiding principles. The principles are set out below. 5
12 Guiding Principles for Reform 1. Workers compensation should be available on a no- fault basis where an injury arises out of or in the course of employment, even where it is the aggravation of an existing injury or disease. 2. Premiums must recover the costs of the system as well as encourage safe work practices. 3. WorkCover must be properly resourced to carry out its functions properly including an increased emphasis on prevention and compliance. 4. Meaningful tripartite consultation must be a central part of the system. 5. The system of scheme agents and self- insurers should be abolished and all workers compensation functions should be internalised within WorkCover. 6. Trade unions must have the power to enforce non- compliance with workers compensation law together with rights of entry, inspection and other investigative powers. 7. The Workers Compensation Commission should provide a quick, easy, effective and legally binding mechanism to resolve disputes about all aspects of the workers compensation system. 8. Return to work should be elevated as a central tenant of workers compensation by: 8.1. placing an absolute obligation on employers to provide suitable duties; 8.2. preventing termination unless the injury management plan states that the return to work goal is a different job and a different employer; and 8.3. incentivising the employment of injured workers. 9. Journey claims and recess claims should be covered by the system. 10. Weekly payments should be set at a level equivalent to an injured worker s pre- injury average weekly earnings irrespective of their fitness for work and should not be subject to any caps or step- downs. 11. Costs associated with medical and all related treatment should be covered for workers compensation purposes with no arbitrary caps or limits. 12. Work Capacity Reviews and Decisions should be removed from the workers compensation legislation. Consideration of a worker s functionality is properly addressed as part of their rehabilitation plan. 6
Injury prevention 14. Workplace injuries are caused by unsafe workplaces and unsafe work practices. The Government s workers compensation amendments failed to address the issues of workplace health and safety. 15. Unions NSW believes that WorkCover has dropped the ball on the prevention of injuries and illnesses. Current rates of fatalities have plateaued and at the same time, fewer interventions from prosecutions are taking place and WorkCover is making fewer workplace visits. 16. Cuts to workers compensation have seen a reduction in the overall costs of supporting an injured worker, thus decreasing employer liability. Research from Macquarie University suggests that this may encourage a moral hazard where there is a reduced incentive for employers to provide safe workplaces. 17. In 2013, WorkCover reported that they had 315 workplace safety inspector positions. They would not confirm how many of these positions were actually filled. This equates to about one inspector per 6,541 employees across the State. 18. Safe Work Australia has reported that the true cost of supporting injured workers in Australia is over $60 billion; with employers only contributing to about 5% of this cost. The best way for the government to reduce the cost of workers compensation is to reduce the number of workplace injuries. Given the parties with the most influence over workplace safety are the employer and Work Cover (the regulator), any focus on reducing scheme costs should target them, not injured workers. 19. This would involve increasing government investment in the regulation of workplace safety and removing any moral hazards that may exist in the provision of safe workplaces. 7
Journey Claims 20. The workers compensation changes removed coverage for all journeys to and from work that occurred after 19 June 2012. 21. The Unions NSW survey heard from 189 workers who had been injured while travelling to or from work. From this group, 21 people were injured after June 2012 and were not eligible to make a claim. 22. People who had been able to make a journey claim have, on the most part, returned to work and are no longer receiving weekly payments. Only 21% were still receiving weekly payments. These workers spoke of how important receiving workers compensation was in ensuring they were able to return to work and do so with dignity. 23. One respondent, Sam, fell down a set of stairs on his way to work and tore his Achilles tendon. This injury occurred prior to 19 June 2012 and he was able to make a workers compensation claim. This covered the cost of his treatment and time off work as well as ensuring he had a return to work plan. Sam only needed a few weeks off work and described the process of returning as problem free. Sam believes that the removal of journey cover is counterproductive and that it will increase the likelihood that employees will experience secondary injuries as a result of pressure to resume duties before they are fit. 24. Another injured worker who had made a successful claim for journey cover commented Travel cover is necessary to ensure workers can keep performing their jobs. The employers lose out if we are injured on the way to work and take more sick leave and wait for public treatment as opposed to being able to access well- managed WC leave & treatment. 25. Workers who were injured on the way to or from work after 19 June 2012 demonstrate the range of problems non- coverage of journeys cause. 26. Jordan was knocked off this bike by a car on his way to work in July 2012 and sustained 8 injuries that left him with a permanent impairment of 20%. He received no workers
compensation and is currently chasing a third party insurance claim. Jordan used sick and annual leave to cover his time off work and received no assistance in the return to work process. As a result, he has had to significantly reduce his work hours, has increased his personal debt and had to rely financially on other family members. He has also experienced secondary injures that are both physical and psychological, including major surgery. Jordan s injuries are huge and will take many weeks and months to heal, a process that has been hindered by the lack of support he has been able to receive through workers compensation. 27. In 2011 journey claims made up only 2.6% of workers compensation claims in NSW 1. The cost of restoring journey claims to the system is about $35 million net per annum with recoveries 2. The costs to the scheme are small, but the benefit to individuals and the families and communities that support them are huge. The restoration of journey claims will provide more injured workers with the support they need to return to work after their injury. Medical Costs 28. As a result of the workers compensation changes, almost half of the injured workers that responded to the survey (43%) have had their medical payments cut off or have been told that they will be cut off shortly. 29. The cessation of medical costs has caused feelings of anxiety and fear for injured workers. Many are questioning how they will be able to afford their future medical needs and how this will affect their ability to work. 30. The survey asked all injured workers to indicate how their financial situation has changed since they were injured. About 46% of injured workers said their situation had worsened. For workers who had been told their medical payments would be cut off, 63% said that their financial situation had worsened. 1 Joint Select Committee on the NSW Workers Compensation Scheme, 2012 2 Australian Lawyers Alliance, Submission to the Joint Parliamentary Submission on the NSW Workers Compensation Scheme, 2012, p. 12 9
31. One injured worker summed up the importance of medical costs: I think it is unfair for a worker with a long term injury to be expected to pay for long term ongoing medical costs. The injury should be covered for medical expenses for life. The change in this may result in poor outcomes and more time off work or even inability to continue to work due to people being unable to afford to pay for care. This will cost the government more in the long run. A workplace continues to have a duty to care for an injured worker. There should be no magical cut- off date when expenses stop. 32. For many injured workers, their medical costs will not be covered by Medicare and it s the worker who will be out of pocket. Trips to specialists, physiotherapists, operations, replacement hearing aids or prosthetic limbs are costly expenses for injured workers, most of whom are already experiencing financial stress. 33. About 90,000 injured workers take less than 10 days off work after a workplace injury 3. For many workers it is timely access to medical treatment and ongoing treatment that allows them to remain at work. 34. Some workers have never taken time off work for an injury, but access workers compensation in order to cover their medical costs. One worker who suffered from RSI said I do not take time off work - I just want treatment for my arm so I can maintain my work and home life. This has been denied to me and my condition is worsening. 35. Other workers feel like the rules of the game have been changed half way through. This is particularly the case for workers where the changes to workers compensation have overridden the terms of a formal settlement of claim. The survey indicated that this was the case for 64% of injured workers. 36. One retired worker, Tom, signed an agreement to receive a lump sum payment on the written condition that he would continue to receive medical costs for his hearing aid 3 WorkCover Authority of NSW, Annual Report 2012-2013 10
maintenance and future replacements. Under the cuts to workers compensation the maintenance and replacement costs are denied. As a retiree on a fixed income, changes to payment agreements such as these have a significant impact on finances and for many may mean that hearing aids don t get replaced. A number of retired workers who are in this circumstance are also grandparents, and they spoke of the pain they experience when they struggle to participate in conversations with their family and grandchildren because of their hearing loss. 37. Another retired worker, Elizabeth, sustained a knee injury at work. She had never taken a day off from work as a result of the injury, but accessed medical treatment. Elizabeth is over 65 but is still working. Because she is over the retirement age, her access to medical treatment will cease in 12 months. For workers like Elizabeth, it is probably unlikely that they will remain in the workforce once their access to medical treatment has been removed. 38. The removal of caps on medical costs, pre- approval requirements and causality changes will only cost the scheme about $310-350 million to reverse. Weekly payments 39. Of the injured workers who responded to the survey who had made a workers compensation claim, 561 were receiving a weekly payment at the time of the changes to payments (1 October 2012). About 42% of these injured workers have experienced a reduction or complete cessation of their weekly payments as a result of the changes to workers compensation. 25% had their payments completely stopped. 40. For the workers whose weekly payments were reduced or stopped, only 3.5% indicated that they were able to return to work in a fit state. Injured workers were most likely to return to work prematurely with their injury (41%) or to apply for Centrelink payments because they were unable to find work (23%) (See figure three). 11
Figure Three 41. As expected, the number of workers who indicated that their payments were reduced or stopped increased significantly when compared to last year s Unions NSW survey 88 or 6% of all injured workers (2013) compared to 240 or 11.3% (2014). 42. Workers who experienced a reduction or cessation in their weekly payments have cut down social outings (85%), reduced family holidays (75%) and increased their debt (48%). They ve also returned to work without being able to undertake all activities (58%) and experienced greater family conflict (57%). 12
Return to work 43. The workers compensation cuts do not promote an efficient and effective return to work process for injured workers. 44. Providing a sustainable return to work is one of the best mechanisms to assist the recovery and rehabilitation of injured workers. 45. The 2012 Act placed no real obligations on employers to genuinely participate in a fair and dignified return to work process for their injured workers. Instead, employers were faced with a moral hazard where it became cheaper to terminate an injured worker than return them to work. 46. About 23% of injured workers in the Unions NSW survey returned to work within a week of being injured. The majority (65%) returned to work within three months. 47. The provision of suitable duties is an essential element in ensuring a successful return to work that does not inflame the workplace injury or illness or result in secondary injuries. The Unions NSW survey found that about 36% of workers encountered difficulties in the provision of suitable duties. The most common issues that were raised were: light duties claiming to be unavailable (when arguably they were), lack of communication with the employer and/or insurer about the return to work process and no return to work plan offered. 48. One injured worker, Diane, was told that there were only suitable duties provided for 12 hours a week, when she d previously worked full time. Another employee was hired to balance out her full time hours. After six months of this arrangement Diane was fired. She believes this is because her employer wanted her to return to full time hours even though she was not yet capable of this. 49. Another injured worker, Mike, wrote of his frustrations with the black and white nature of 13 return to work processes that are imposed by both the employer and the insurer.
Return to work processes do not account for the fluctuating levels of pain and cycles of disability that affect us on a daily basis in varying degrees. We are treated as either fit to work, or unfit. There is no understanding from the system that some people want to work and they can work if they are allowed to change times, work from home, and arrange flexible times. 50. Strengthening the obligations on employers in relation to return to work would deliver clear and positive cost reductions to the scheme by ensuring injured workers are able to return and stay in the workplace. Incentives for employers to hire injured workers 51. There are currently no real incentives for employers to hire injured workers. In fact, employers have the right to ask prospective employees if they have ever had a workers compensation claim. For many injured workers this has acted as a barrier to employment, with employers unwilling to employ workers who have current or previous workplace injury or illness. 52. From the injured workers surveyed, 57% had been asked in a job interview if they had ever made a workers compensation claim. 53. Jill was injured at work and found herself looking for another job. It took her multiple applications and interviews over a period of two years to find another job. She was told in interviews that her injury would be a liability. 54. Another worker, Carla, lives in a regional area and found it very difficult to find work after her workplace injury. When you are 60 years of age with a permanent back injury, limited education and psychological problems it is impossible to find employment in a small country town with limited employment opportunities. 14
The burden of workplace injuries 55. The link between being physically injured at work and the psychological toll this can take was apparent in the Unions NSW survey. This is demonstrated in the following comments from survey respondents: I think it has made it harder to understand the changes to Workers Comp. laws, and it has made me reluctant to access any assistance because it is so difficult to fight the quagmire I have had to wade through. Everything about the whole system is stressful and difficult when you are in pain, I could go on and on and on about how difficult and intimidating it is to try to comply with all the demands the 'return to work' process inflicts on you but, I am currently in too much pain. 56. The survey demonstrated how the impacts of a workplace injury have a ripple effect on the injured workers life. Injured workers were asked what adjustments they had made to their lives as a result of their injury (see figure four). Over 50% of injured workers had reduced their social outings as a result of their injury and 30% had increased their levels of debt. The impacts were shared within families with 19% relying on others to work and 15% being subsidised by others. 15
Figure Four 57. Workplace injuries also took their toll on the emotional and mental well- being of injured workers and their families which is outlined in figure five. Figure five shows the percentage of workers who experienced the outlined impacts for: - - all injured workers; and injured workers whose weekly payments have been cut off or reduced. The survey showed that workers who had their weekly payment reduced experienced negative impacts at a greater rate than all injured workers. 16
58. About 38% of all injured workers experienced greater family conflict and 9% separated from their partner. Of the workers whose weekly payments had been reduced or cut off, 58% had experienced secondary mental health issues and 38% had had suicidal thoughts. Figure Five 17