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Issue #1551      13 June 2012

Don’t cut workers’ comp!

Thousands of workers are expected to rally outside NSW state Parliament on Wednesday June 13 against cuts to workers’ compensation. The protest action, organised by Unions NSW, is being held the day after the state budget is handed down. Judging by the information revealed prior to budget day, it looks set to be a horror for workers. The NSW premier Barry O’Farrell looks set to outdo his Liberal Party peers in other states with a massive attack on workers’ compensation, as well as jobs, wages and public services.


(Photo: Anna Pha)

Workers’ compensation is top of the list. The planned changes include:

  • Slashing of payments – the current amount is 100 percent of ordinary pay for the first 26 weeks, then the statutory rate of $432 a week. Under the changes, the most a worker could receive is 90 percent for 13 weeks before being reduced to the statutory rate ($432 is approximately 70 percent of minimum wage)
  • Cutting off all weekly income and treatment expenses after 2½ years (or 130 weeks) for those considered to be “partially injured”.
  • Removal of cover during travel to and from work.
  • No entitlements after nine years except for people who are ”totally incapacitated”.
  • Abolition of lump-sum payments for injured workers with ”less than 10 percent whole-body impairment” (and therefore excluding payment for injuries such as a fused ankle or back and neck injuries not requiring surgery).
  • Raising injury thresholds to a very high, difficult to meet 30 percent whole person impairment for work injury damages claims.

Barrister Bruce McManamey, a spokesman for the Australian Lawyers Alliance, said, “It’s the kind of stuff that will result in injured workers losing their homes.”

The majority of lump-sum payments are between $6,000 and $13,000. ”If they abolish lump sums for injuries less than 10 percent, I think it falls into the category of mean and petty,” McManamey said.

NSW Greens MP and industrial relations spokesperson, David Shoebridge, described the cuts as “the harshest cuts ever proposed to workers’ compensation benefits in NSW”. If they became law, they would “force many injured employees straight into poverty”, Shoebridge said.

Some lawyers estimate that half of the 28,000 workers who currently receive benefits and medical expenses will no longer receive a cent under the Liberal’s cuts.

The Australian Lawyers Alliance is concerned about mismanagement of WorkCover. NSW Director, Andrew Stone, said, “Payments made to scheme agents and insurers to manage claims has increased every year since 2001, despite the number of major injuries (those claims which require management) reducing by almost half over that same period!

“The cost of managing the scheme appears to be completely disproportionate to the benefits provided for injured workers,” Stone said. This is one possible area of reform that would not hurt injured workers and reduce costs of the scheme.

However, the most humane and at the same time cost-effective approach is through prevention – reducing the number of injuries.

Employers want it both ways: low insurance premiums and no responsibility for sickness and injury (including deaths) caused by their negligence.

Employers have lobbied hard to reduce the rights of trade unions to take action in relation to occupational health and safety in the workplace. Unions and their members face heavy penalties for industrial action that protects the health and safety of members. At the same time government authorities do little to enforce the limited occupational health and safety (OH&S) regulations that do exist.

Trade unions should have their full rights restored so that they can halt work or take other industrial action to ensure the workplace is safe. They should have their own OH&S officers trained on company time and with the power to shut work down when deemed necessary. They should not face the threat of fines of hundreds of thousands of dollars and damages action of millions of dollars for protecting lives.

Workplaces should be regularly inspected and jail penalties applied for company directors and management responsible for the injury and deaths of workers or for breaching OH&S regulations. Fines are peanuts to the big transnational corporations compared with the huge savings (profits) made by risking the health and safety of workers.

Injured and sick workers should not be driven into poverty as a result of the boss’s negligence. Benefits need to be improved and employers foot the bill.

Prevention means fewer injuries and deaths, as well as lower premiums in the long run. The only losers are the parasitic third party insurance companies whose profits might be hit.

As the Transport Workers’ Union says: “Prevention, not reduction in compensation, is the best way to reduce injuries.”  

Next article – Editorial – A crisis of overproduction

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