Report of operations 5
REGULATORY SERVICES
Output 1.1 – SRC Act regulation
Safety, Rehabilitation and Compensation Act 1988
The Safety, Rehabilitation and Compensation Act 1988 (SRC Act) establishes a fully funded premium based system of compensation and rehabilitation for employees who are injured in the course of their employment. There is also provision for Commonwealth authorities and eligible corporations to self insure under a licensing system. The SRC Act covers all Commonwealth employees, including members of the Australian Defence Force (ADF)6 and employees of certain private sector organisations. ACT Government employees are also covered as a result of a declaration made under the SRC Act in 1994.
The SRC Act emphasises active claims management, rehabilitation and a safe return to work.
It has a comprehensive benefits structure with limited common law rights.
This Act operates in conjunction with the Occupational Health and Safety (Commonwealth Employment) Act 1991 (OHS(CE) Act) to provide a framework for both injury prevention and management.
Key points
The focus of this output in 2003 – 04 was on
- assisting Australian Government and ACT Government agencies to improve
their rehabilitation performance - the continued provision of jurisdictional policy advice on workers’ compensation and rehabilitation
- setting of premiums and regulatory contributions
- regulation of self insurers
- monitoring and reporting on the performance of the SRC Act scheme.
Activities
A range of activities were undertaken during 2003 – 04 against this output.
Compensation and injury management policy
Comcare has continued to provide advice on ways of improving compensation and injury management systems while maintaining accountability and retaining the integrity of the workers’ compensation scheme.
Legislative reform
Comcare has assisted the Department of Employment and Workplace Relations to progress consideration of a number of possible amendments to the SRC Act. A number of technical amendments have been identified for inclusion in the forthcoming Financial Framework Legislation Amendment Bill.
The Prime Minister gave his approval that amendments proposed to the SRC Act regarding incapacity benefits paid to employers on behalf of injured employees be included in the Financial Framework Legislation Amendment Bill (2) (FFLA Bill(2)). The amendments seek to regularise the longstanding administrative practice under which employers continue to pay injured employees with accepted workers’ compensation claims and are then reimbursed by Comcare. It is proposed to introduce the FFLA Bill (2) into Parliament during the Spring session 2004.
The Military Rehabilitation and Compensation Act 2004 and the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 were passed by the Parliament
on 1 April 2004. The Acts established a new Military Rehabilitation and Compensation Scheme
(MRC Scheme), which commenced on 1 July 2004.
The MRC Scheme applies to injuries or diseases that are related to Australian Defence Force (ADF) service on or after 1 July 2004. The SRC Act will continue to apply to civilian Defence employees.
Under the MRC Scheme responsibility for the management of the SRC Act as it applies to ADF members is transferred from Comcare to the new Military Rehabilitation and Compensation Commission. The administration of the Act in respect of ADF members will rest with the Department
of Veterans’ Affairs.
The ADF’s occupational health and safety responsibilities are not affected and will continue
to be governed by the Occupational Health and Safety (Commonwealth Employment) Act 1991.
Further information about the ADF is located in a separate section of this report at pages 93 – 97.
Dispute prevention
The Australian Law Reform Commission’s Report Number 89: Managing Justice – a review of the federal civil justice system made several recommendations which are relevant to the Commonwealth’s workers’ compensation jurisdiction. In particular, recommendation 130 recommended that the Administrative Appeals Tribunal (AAT) have regard to Calderbank offers when deciding costs.
Comcare has issued a Jurisdictional Policy Advice which discusses the use of Calderbank offers and sets out the policy approach to be adopted with regard to their application. Details of a trial which commenced on 1 July 2004 are contained at page 27 of this report.
Subject to the outcomes of the trial it is envisaged that the Jurisdictional Policy Advice will be implemented nationally during October 2004.
Rehabilitation
The SRC Act emphasises the mutual responsibilities of employers and employees in achieving expeditious, safe and durable return to work outcomes. Under the SRC Act, rehabilitation authorities (ie all premium paying agencies and licensed self insurers) are responsible for determining access to rehabilitation assessments and rehabilitation programs. Employees are required to actively participate in the development and implementation of their rehabilitation programs and return to work plans.
Effective occupational rehabilitation is a managed process combining early intervention with appropriate and timely services based on the assessed needs of the individual. The aim of occupational rehabilitation is to ensure that individuals resume their pre-injury employment status as soon as possible following injury. This is the best possible outcome for both employees and employers.
Improving return to work performance
Comcare is concerned about the amount of time it is taking to return injured employees to work. Comcare is working with employers to improve rehabilitation performance and reduce the duration of claims. Initiatives to improve rehabilitation and the rate of safe and durable return to work are discussed in the Strategic Initiatives section of this report. In addition, Comcare has pursued
a number of other activities aimed at improving rehabilitation outcomes.
Performance measurement: Along with most workers’ compensation schemes, the Commonwealth scheme participates in the National Return to Work Monitor. The Monitor benchmarks key return to work outcomes and enables inter-jurisdictional comparison. The representative sample for the Commonwealth includes premium paying agencies and licensed self insurers.
Improving performance of approved rehabilitation providers: Employers covered by the scheme
are required to obtain rehabilitation services from providers approved by Comcare.
Approved rehabilitation provider renewal process
During the year, approved rehabilitation providers were invited to seek renewal of their approved status for the period 1 July 2004 – 30 June 2007. Providers are assessed against gazetted criteria and a mix of outcome and service delivery standards. The outcome standards relate to return to work rates, duration and cost of return to work plans. Over 120 provider organisations have been approved to provide occupational rehabilitation services across Australia. A directory of providers can be accessed from Comcare’s web page www.comcare.gov.au. Copies of the criteria and standards for the next period of review can also be downloaded.
Improving agency injury management systems
Rehabilitation seminar
Comcare presented a rehabilitation seminar for employers in conjunction with the Commission’s Safety Awards presentation function in July 2003. Designed to provide human resource managers and case managers with practical examples of how an organisation can achieve sustained improvements in injury management, the seminar focused on an organisational approach to managing return to work. Through a series of case studies presented by experts, participants learnt how organisations had been able to achieve a ‘turn around’ in their return to work management.
Review of the rehabilitation policy guidelines
Comcare may issue rehabilitation policy guidelines under section 41 of the SRC Act. The current guidelines have been in place since 1999 and are being reviewed. The review commenced in May 2004 with the conduct of focus groups for premium paying agencies, licensees and rehabilitation providers. A draft document is being developed and will form the basis of further consultation. Revised guidelines are expected to be available before the end of the calendar year.
Revision of the permanent impairment guide
The SRC Act provides that Comcare may prepare a guide for the purpose of assessing the degree of permanent impairment of injured employees. The existing guide has been under review. The aim of the review is to produce a new guide providing a clear and objective system for measuring all impairments likely to result from work related conditions.
The new guide is expected to be finalised and provided to the Minister for approval in the coming financial year. Comcare is developing an implementation strategy which will include a comprehensive information and training program.
Asbestos
Over recent years, the use of asbestos in the Commonwealth has significantly reduced. To ensure continued reduction of the use of asbestos the Government took steps this year to ban the use of all forms of asbestos (with the exception of chrysotile in prescribed circumstances). Refer to page 61 of this report for further information.
Comcare has participated in an interdepartmental committee established to examine options for future management and coordination of claims made against the Commonwealth for asbestos related disease. The committee is chaired by the Department of Finance and Administration. The committee has finalised its deliberations and has made recommendations to government on a whole-of-government approach to managing such claims.
Self insurers
The SRC Act enables Commonwealth authorities and certain eligible corporations to apply to the Safety, Rehabilitation and Compensation Commission (the Commission) for a licence to self-insure their workers’ compensation liabilities and/or manage claims.
The Commission evaluates licensees’ compliance with their conditions of licence, associated performance standards and performance outcomes against a set of Commission performance indicators which include prevention, rehabilitation, claims management and scheme administration. The measures for prevention incorporate the National OHS Strategy targets.
At 30 June 2004 licensees were
- ADI Limited
- Australian air Express Pty Ltd
- Australian Postal Corporation
- CSL Limited
- JRH Biosciences Pty Ltd
- Pacific National (ACT) Limited
- Network Design and Construction Limited
- Reserve Bank of Australia
- Telstra Corporation Limited
- Visionstream Pty Ltd.
Licence and legislative compliance and performance outcomes form the basis for Commission decisions on relevant licence extensions, renewals, calculation of the performance component
of licence fees and on next year’s licence compliance evaluation program.
During the year the Commission built on the previous year’s review of the prudential conditions of licence and added further requirements to operate from 1 July 2004. It also reviewed the financial conditions of licence introducing an annual assessment of the financial strength of each licensee together with a system of ongoing financial monitoring. These changes took into account advice provided by the Commonwealth Actuary to the Productivity Commission’s inquiry into National Workers’ Compensation and Occupational Health and Safety Frameworks.
For further information refer to the SRCC Annual Report 2003-04 [pdf].
Performance
Output description
This output encompasses activities carried out by Comcare in relation to the administration of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act). It covers
- scheme funding – setting premiums and regulatory contributions
- injury management – compensation and rehabilitation
- licensing and associated compliance monitoring
- evaluation of scheme performance.
Output performance measure
Quantity/Quality/Timeliness
Performance meets Safety, Rehabilitation and Compensation Commission requirements.
Throughout the year, the Commission considered performance against a range of specific measures that underpin this indicator. While the Commission expects to see further improvement in scheme performance, it considers that the Commonwealth scheme is performing well overall. The scheme is fully funded and the Commission has in place a well developed system for monitoring scheme performance. In addition, the Commission is satisfied that strategies are in place to address issues
that are adversely affecting scheme performance. The scheme compares favourably with other OHS and workers’ compensation schemes in Australia.
Price
Budget estimate $3.4 million
The actual price for delivering Output 1.1 was $3.4 million.
Table 9: SRC Act Scheme Profile (incl Comcare, licensees and ACT Government)
|
2000–01 |
2001–02 |
2002–03 |
2003–04 |
|
|
Employees covered under |
307,695 |
304,035 |
305,918 |
306,353 |
|
Claims received |
19,274 |
19,195 |
18,121 |
18,902 |
|
Claims accepted |
15,738 |
15,611 |
15,032 |
15,600 |
|
Claims accepted per 100 employees (FTE) |
5.1 |
6.0 |
4.9 |
5.1 |
|
Reconsiderations decided |
4,591 |
5,032 |
4,918 |
4,723 |
|
AAT appeals received |
1,810 |
1,988 |
1,951 |
1,667 |
|
Total expenditure in $m |
442.04 |
459.02 |
476.90 |
486.23 |