Workers compensation is a compulsory statutory form of insurance that covers all workers—whether full-time, part-time, or casual. This is required from all employers in all Australian states and territories. If your employee suffers a work-related injury or illness, the workers compensation coverage may provide the employee with:
- Weekly benefits
- Medical and hospital expenses
- Rehabilitation services
- Lump sum for permanent impairment
All of the above benefits are set by each particular workers compensation scheme and each government regulates the scheme in each state or territory. Understand that the schemes are administered and realised in various and different ways with insurers fulfilling different specific roles as specifically required by each scheme and system.
For example, insurers in Western Australia, the Northern Territory, the Australian Capital Territory (ACT), and Tasmania underwrite the scheme. In Victoria, South Australia, and New South Wales (NSW), insurers operate on behalf of the government authority as scheme agents. In Queensland, the scheme is entirely operated by the state.
For specific details on particular schemes in each state or territory, visit the official websites of the government agencies overseeing the injury management and workers compensation systems:
- Australian Capital Territory (ACT) — worksafe.act.gov.au
- New South Wales (NSW) — workcover.nsw.gov.au
- Northern Territory (NT) — worksafe.nt.gov.au
- Queensland (QLD) — workcoverqld.com.au
- South Australia (SA) —workcover.com
- Tasmania (TAS) — workcover.tas.gov.au
- Victoria (VIC) — worksafe.vic.gov.au
- Western Australia (WA) — workcover.wa.gov.au
There are two broad categories of compensation payments:
- Weekly payments — payment(s) to employee as compensation for loss of income resulting from the work-related injury/illness
- Medical expenses —any medical/hospital cost that arises directly from the work-related injury/illness
For injuries or illnesses resulting from and/or arising out of the ordinary course of employment, all workers are generally entitled to compensation. The compensation also covers other specified circumstances, for example, injuries that occur during lunch break might be specifically and expressly included.
Course of employment
Bear in mind that “in the course of employment” has a broad definition, and will include usual work activities and other activities required or organised by your business/company. Examples include work-related travel and/or leisure activities required for work.
In most cases, the compensation under these activities is “no-fault,” entitling the employee to receive compensation, regardless whether they have acted in accordance with standard policies and procedures set by your business, except of course, in very serious cases of misconduct.
Securing the insurance
All employers are required to secure workers insurance for all employees, as part of the compensation scheme regulated by each state or territory. Generally, as an employer, you will secure said insurance through payment of a premium to an insurance fund that is state- or territory-based.
The premium is calculated with regard to the payroll, the risk profile of the industry the business operates, and past performance. Legislation also provides for employers to “self-insure,” after meeting certain criteria and requirements.
Your obligations as employer
Each state or territory has set out employers’ legal obligations on workers and accident compensation, as mandated by legislation.
Generally, an employer is expected to:
- Provide safe and healthy workplace to avoid any risks of employee accident, injury, or work-related illness
- Provide necessary support and assistance should an employee suffer from any work-related injury or disease
- Take out insurance with an approved insurer covering the employee’s full liability for damages and workers compensation
- Depending on the severity of the injury, facilitate the employee’s return to work
As an employer, you are required to adequately assess your employee’s capacity to return to work. Doing so requires you to examine:
- The nature, severity, and extent of your employee’s injury and/or illness
- The expected time frame of the injury/illness’ resolution
- The impact of the injury/illness on your employee’s ability to safely perform the inherent requirements of their pre-injury role(s)/position(s)
- If any, the measures required to assist and enable your employee to safely perform the inherent requirements of their pre-injury role(s)/position(s)
- The limitations that apply to the employee safely performing other duties
- The legal auspices and considerations that must be taken into account and satisfied for a capacity assessment
Managing the return-to-work process
When you assess your employee’s fitness to continue work or managing the return-to-work process, you need to consider certain legalities, including:
- The specific provisions of the workers compensation laws themselves, especially the ones regarding both return-to-work obligations and those that may place an express prohibition on the termination of the employee for specified time/period post-injury/illness
- Specific anti-discrimination laws/provisions, especially the ones relating to the prohibition of discrimination against an employee on the basis of impairment or disability—including the impairment or disability caused by the work-related injury or illness
- Specific provisions of the workplace relations law
- The terms of the employee’s contract of employment—this is very important, especially for casual workers
- General health and safety laws, particularly the ones promulgating your obligations, as an employer, to ensure that your employee is able to perform his or her duties and roles upon returning to work safely and without risks posed to his or her health, safety, security, and wellbeing
- Privacy laws and health records concerning the dissemination of information on the employee’s health, and his or her work-related injury and/or illness
- Consultation obligations as promulgated by workplace health and safety laws
Employee leave and entitlements accrual
The Fair Work Act (Section 130) prescribes that an employee who is absent from work and is receiving workers compensation is not entitled to take or accrue any paid or unpaid leave, unless a commonwealth, state, or territory workers compensation law approves the particular taking or accruing of leave.
Superannuation and accident pay
Besides the above considerations, you, as an employer, should also need to make sure whether you have to fulfill certain superannuation and make-up pay obligations for your casual employees. Though they are not a standard, these obligations are dependent on whether they are provided in a modern award.
Certain modern awards contain provisions that require superannuation contributions during the period the employee is absent from work due to a work-related injury or illness.
Accident pay is also not a standard, but is prescribed in certain modern awards—so make sure you understand these requirements and fulfill your obligation(s) to your employee.
When you thoroughly understand the above legal provisions and considerations, it will be easier for you to proceed in fulfilling your obligations in case an employee suffers work-related injury or illness. If still unsure or unclear about the specifics of your obligations, do not hesitate and consult with a trusted lawyer with proven expertise on the subject matter.