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(This is an uncorrected proof of the daily report. It is made available on the condition it is
recognised as such.)
Bill presented and read a first time.
Mr BURKE: Madam Speaker, I move that the bill be now read a second time.
Honourable members will recall that, during the November and February sittings, I advised that
an independent review had been undertaken by experts in the field of workers' compensation
dispute resolution systems. The government is committed to remain at the forefront of legal
reform to achieve nationally consistent, practical, high-quality standards for occupational
health and safety, and to have a workers' compensation scheme which reflects the community's
needs and values. The bill reflects, and is evidence of, the determination that Northern Territory
workers are properly protected following a workplace injury.
I turn now to some of the more significant issues addressed in the legislation. The bill improves
dispute resolution processes under the Work Health Act and will assist in reducing scheme
costs. Since the completion of the review, an extensive consultation process has occurred,
involving employers, workers representatives, the judiciary and magistracy, the legal
profession, the Office of Courts Administration, insurers, the Insurance Council of Australia, the
Work Health Advisory Council and affected government departments. I wish to acknowledge the
constructive manner in which the many stakeholders in the scheme have approached and contributed to
this most important matter.
There are 2 significant areas that require addressing to improve workers' compensation dispute
resolution processes. One is to reduce the time taken to deal with disputed claims and the other is
the containment of related costs. This can be achieved by improvements to the mediation service and
also by increasing the effectiveness of the Work Health Court process.
Mediation, as honourable members will be aware, is a low-cost, non-adversarial dispute
resolution process which is administered by properly-trained mediators. It provides an early focus
of information relating to the case and allows the parties to clarify and consider issues in dispute.
Further, mediation provides an opportunity to settle the dispute with a reduced level of legal activity.
Participation in mediation conference process by insurers and/or employers is at the request of a
mediation officer.
Mediation is currently not compulsory and this compromises its effectiveness in resolving disputes.
We now intend to make attendance of mediation conferences compulsory by these parties should
the mediators so request. Parties to a dispute will be required to participate in the mediation
process before redress can be sought through the Work Health Court. In conjunction with this, the
cost of the mediation service, currently some $32 000 annually, will be charged to worker's
compensation insurers. It is proposed to charge insurers on a proportional basis according to the
number of meditations conducted in each financial year.
As I mentioned earlier, there is a need to reduce the cost of disputed claims. The cost of
worker's compensation disputation in the Northern Territory is relatively high for the number of
disputes managed in comparison with the other more highly legalised and populous Australian
jurisdictions, and the government finds this unacceptable. Fixed court costs associated with work
health disputes have been calculated t $412 000 per year. These costs have been met by
the government and ultimately the Northern Territory community as a whole. We now plan to recover
these costs from the work health insurers as occurs in most other Australian workers'
compensation jurisdictions.
Passing the court costs associated with disputed work health
claims on to the insurers will act as an incentive for the insurer to properly manage and resolve the
dispute rather than to use the courts.
A managing magistrate will be appointed to mange the Work Health Court case load, the court
list and conduct all pre-hearing conferences. Enhanced case flow management processes
will also be introduced by the court. These initiatives will have a very minor effect on the
premium levels being offered by insurers to employers, if they are indeed passed on, with an
estimated increase in the average premium level from 1.50% to 1.52% of wages paid. The proposed
outlay being imposed on insurers resulting from these initiatives, because of the efficiencies
and benefits gained, ultimately will lead to a reduction in their overall costs. It is intended that
the changes will provide a quicker, cheaper and more efficient dispute resolution system that will
benefit the community as a whole.
I turn now to some of the other issues addressed in the bill. The first matter I raise will please
the member for Nhulunbuy, as he has made strong representations to me on this subject.
The
act will be amended to deem principal contractors on work sites to be the employer for the
purposes of health and safety committees. This will enable the formation of safety
committees on sites with multiple contractors where the total number of employees exceeds
20. Currently, each subcontractor on a work site is treated as an employer. Strictly speaking, each
subcontractor employing more than 20 workers could be obliged to establish a safety committee if
requested by a majority of their employees. This amendment will treat the principal contractor as the
employer for the purposes of safety committees and so allow for one safety committee to be
established for the whole site. This provision will reflect current industry practice.
We have taken the opportunity also to revise some of the penalties in the principal act, and I have
sought the advice of the Attorney-General's Department in this regard. Penalties applying
to the compensation, rehabilitation and insurance provisions have not been reviewed since the
act commenced in January 1987. In the main, the increases contained in this bill are in line
with inflation. However, there is one particular exception that I draw to honourable members'
attention - the penalty that deals with the contracting-out provision in section 186A.
The term `contracting out' is the actual term used in the act to describe efforts to illegally avoid the
provisions of the legislation. It has no relationship to insurance contract arrangements. An example of
contracting out would be if an insurer attempted to persuade a person on incapacity benefits to
take a lump sum as final settlement of all future entitlements under the act. The scheme,
being pension-based, only allows a limited level of lump sum payments under very restricted
circumstances, and such payments cannot include a future entitlement to medical, surgical
or rehabilitation expenses. The penalty in respect of this section is to be increased from $5000 to
$100 000. This increase will serve to discourage any attempts to contract out of the
legislation, as this would be seen to undermine it fundamentally and be considered a most
serious offence.
Further, the magistracy and judiciary have also found some difficulty with the contracting-out
provision of the act, particularly as it relates to computation of weekly benefits under section 74
and consent agreements under section 108. Computation, by way of explanation, is the
conversion of future weekly benefits to a once-only lump sum payment. The legislation provides
for such conversions under limited circumstances. Consent agreements are compromise
agreements that are reached between parties to resolve a mater in dispute. These agreements
and computations must be ratified by the Work Health Court.
In addition, the Work Health Authority will be empowered to assess the legitimacy of requests
for reassessment of permanent impairment following any initial assessment. Reassessment,
which is arranged by the authority and carried out by a panel of 3 medical practitioners, is the
dispute resolution mechanism to resolve disputes regarding a claimant's level of
impairment as initially assessed by a single medical practitioner.
The legislation currently dictates that any application to the Work Health Authority for reassessment
must be referred to a panel of medical practitioners even if the original assessment was
flawed and was not conducted in accordance with the legislation. The authority has no discretion in
this matter and this, of course, can contribute unnecessarily to scheme costs, which is
unacceptable. The bill will remedy this situation.
The matters contained in this bill can only lead to a better situation for those workers
unfortunate enough to suffer a work place injury. I commend the bill to honourable members.
Debate adjourned.