March 2006

Workers compensation - new year, new changes in proceedings, commission powers and compensation schemes

The Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act, 2005 introduced a raft of changes, some of which are now operative. The majority of provisions are yet to commence, but are likely to do so in the near future. The following are some of the more significant changes.

Claims and dispute resolution

One set of provisions, which have not yet commenced, will make substantial changes to the procedures for placing claims in dispute and the resolution of those disputes before the Commission. It will become a requirement that insurers and self-insurers provide full reasons for their decisions and include with the dispute notice all documents relevant to the decision to dispute the claim. Before giving notice of the decision the insurer must carry out an internal review. After having given notice of the decision, and before the decision can be referred to the Commission, a worker may also request a review. The significance of the notice provisions becomes more relevant in the context of proceedings before the Commission.

Proceedings before the Commission will be limited to the matters notified in the dispute notice. It will be imperative that insurers and self-insurers ensure that notices disputing claims are accurate and reflect the available evidence which supports the decision. It will not be possible to introduce new evidence before the Commission.

Commission Proceedings

To further emphasise the significance of the dispute notice, it will be a requirement in the context of Commission proceedings that the reasonable prospects of an application, or a defence, succeeding can be certified by the lawyers acting. A failure to do so would be a breach of the Legal Profession Act. It is anticipated that this provision will come into operation at the same time as those provisions governing claims and dispute resolution.

There is speculation that the cost regulations will also be amended at the same time.

Registrar's Powers

In further provisions yet to commence, the Registrar of the Commission will have a broader range of powers, including referral of claims involving only permanent impairment, or a threshold dispute, directly to an AMS. The Registrar, an AMS or an Appeal Panel, will have the power to reconsider any decision if satisfied that there is an obvious error.

In the context of expedited assessments the Registrar will have power to make an Interim Payment Direction for medical expenses up to a limit of $7,500 (up from $5,000). The Registrar will also be given the power to determine a dispute in relation to past weekly payments for claims up to 12 weeks. In exercising this power the registrar will have all the functions and powers of an arbitrator. This set of provisions has not yet commenced.

Lump Sum Compensation 

Registered Agreements under section 66A will be replaced with what will be known as Complying Agreements. The employer/insurer will have to certify that the worker has received independent legal advice, and there will be power with the Registrar to award additional compensation in certain circumstances, including where the Registrar regards the amounts as too low.

In the context of whole person impairment for back injury after 1 January 2006 there is provision for an additional 5% to be recoverable. This provision is now in operation but only affects injuries sustained since the beginning of this year. This has the potential to be complex where whole person impairment comprises impairment of the back and some other part or parts of the body.

Definition of Worker

Another set of provisions which have commenced deal with the definition of worker in the context of labour hire situations. The legislation seeks to tighten the provision to ensure that the labour hirer remains the employer for the purposes of determining the employer liable to pay compensation and premium. The example used in the amending Act refers to the labour hirer continuing to be the employer where the worker is lent or let on hire to a labour buyer. In a useful initiative, WorkCover has foreshadowed a declaratory function to enable prospective employees to determine whether their intended labour arrangements create the employer/employee relationship necessary to attract liability and premium.

As the majority of the new provisions have not yet commenced, and there are related changes also flagged, Bartier Perry will send you further bulletins to keep you up to date.