Workers' compensation scheme reforms

4 May 2010

Partner Cameron Seymour was pleased to have participated in the Queensland Law Society's submission to Government on the proposed reforms to the Queensland workers' compensation scheme. He notes that those submissions have been recognised in the reform package and reports on developments.     

Premier Anna Bligh and the Industrial Relations Minister Cameron Dick recently announced the reform Queensland's workers' compensation scheme.

In November 2009, the WorkCover Queensland Board reported growing financial pressures pointing to the global financial crisis and an increase in common law claims as factors. The Board recommended a number of changes including restricting injured workers access to compensation through the courts. 

The Government expects that legislation required to implement the reform package will be introduced into Parliament by mid 2010.

The following summary of key measures is taken from the Government's Media Release of 27 April 2010. 

No restrictions 

The Queensland Government has ruled out placing any restrictions on injured workers' access to common law claims for compensation. 

Harmonisation with Civil Liability Act

The Government will harmonise arrangements with the Civil Liability Act 2003, to ensure consistency across all personal injury regimes. As a result, common law claims brought under the Workers' Compensation and Rehabilitation Act 2003 will be harmonised with arrangements under the Civil Liability Act 2003 in terms of liability (standard of care), contributory negligence and caps on general damages and damages for economic loss.

General damages (pain and suffering) will be capped at $300,000. General damages make up the smaller proportion of damages awards, and are relatively stable across different personal injury schemes. Damages for economic loss (loss of future earnings) will be capped at three times Queensland Ordinary Time Earnings (QOTE) for the purposes of calculating annual earnings. QOTE is currently $1132.10 per week ($58,869 per annum). Three times QOTE is $176,607. This amount will be the maximum annual earnings a court will be able to take into account when calculating loss of future earnings.

The statutory scheme will remain unchanged. 

Increasing onus of proof to prove employer fault 

The Queensland Court of Appeal decision, Bourk v Power Serve Pty Ltd, has led to increasing numbers of common law claims based on the perception that strict liability attaches to an employer if a work injury has occurred, regardless of fault. At the request of WorkCover and self-insurers, the Act will be amended to require workers to show that an employer breached a duty to take precautions against a risk of harm that was foreseeable, not insignificant, and in circumstances in which a reasonable person would have taken the precautions. 

Costs against plaintiffs whose cases are dismissed 

The Act currently allows costs orders only where the court awards more or less than a party's final written offer of damages. This has been interpreted by the courts to mean that if the claim is dismissed, no costs are payable. The Act will be amended to allow courts to award costs against an applicant where a claim is not successful.

Employer excess 

The employer excess will change from 65 percent of QOTE ($740 for most employers), to 100 percent of QOTE ($1132) or one week of compensation, whichever is the lesser amount. This will provide an incentive to employers to improve injury rates and is comparable with what employers pay in most other states and territories. 

Structural review of Institutional and working arrangements 

The Government will also conduct a structural review of institutional and working arrangements in Queensland's workers' compensation scheme. The review will consider the claims management, common law settlements, rehabilitation and return to work as well as the range of issues that are raised during the review including legal costs and other associated legal matters. 

Premium 

The WorkCover Queensland Board has decided that an average premium rate of $1.30 should apply for the 2010 -11 premium year.

Other Developments 

National Forum on Workers' Compensation

Part of Safe Work Australia's functions is to develop proposals relating to harmonising workers' compensation arrangements across Australia. 

A National Forum on Workers' Compensation organised by Safe Work Australia was held in Melbourne on 30-31 March 2010. The forum was held to identify the challenges and opportunities relevant to the development of an action plan to harmonise workers' compensation arrangements. It is expected that Safe Work Australia Members and the Workplace Relations Ministers' Council (WRMC) will now formally consider the action plan. 

For further information, please contact: 

Cameron Seymour | Partner
Mullins Lawyers
t +61 7 3224 0360
f +61 7 3224 0333
cseymour@mullinslaw.com.au