The idea of the national harmonisation of workers’ compensation has been discussed in Canberra’s policy circles since it was first floated by the Whitlam Government in the early seventies. Forty years later, Australia’s state, territory and Commonwealth governments look set to take the first tentative steps towards the policy, right as the momentum for Occupational Health and Safety harmonisation hits full swing.

At the end of 2010, Safe Work Australia launched its National Workers’ Compensation Action Plan for the period 2010-13. Continuing with the Gillard Government’s workplace reform agenda, the action plan notes that many stakeholders believe Australia’s various workers’ compensation processes to have “less equitable, effective, efficient, comprehensible and sustainable outcomes for workers and employers.”

On the back of a long-term decline in Australia’s durable return to work rate, Safe Work Australia is hopeful that this slow move towards a nationally consistent approach will support the effective and early return to work for injured workers, while reducing the overall costs of the system to employers and taxpayers.

Plans for the future

Through the 2010-13 action plan, Safe Work Australia is aiming to develop nationally consistent standards in a number of areas currently governed by state and territory law:

• Support tools and guidance materials for Return to Work Coordinators;
• Definitions of matters relating to workers’ compensation;
• Work related death benefits; and
• Employer self-insurance.

Part of Safe Work Australia’s plan involves a greater oversight of how the various jurisdictions are performing. The working group has been tasked with compiling reports on the relative economic costs of workers’ compensation, comparisons of workers’ compensation arrangements across Australia and New Zealand, and best practice approaches to injury management and return to work within these jurisdictions.

A particularly significant item on Safe Work Australia’s agenda is the consideration given to the development of nationally consistent permanent impairment guidelines. At the moment, Australia’s various jurisdictions operate under either the fourth, fifth or sixth editions of the American Medical Association’s guidelines for assessing impairment. There is currently a great deal of medical debate on which edition constitutes the best means of assessing impairment: a recent study from the University of Illinois suggesting that migrating to the sixth edition may make the assessment of some forms of impairment more difficult.

Safe Work Australia has also planned to develop more policy responses for specific occupational hazards which require a national response, including:

• Policy responses to the Federal Government’s recent Inquiry into Workplace Exposure to Toxic Dust;
• Nationally consistent approaches to the compensation of asbestos-related illnesses; and
• Ensuring Australia’s workplace landscape operates in accordance with International Labor Organisation conventions recently ratified by the Federal Government.

Is harmonisation worth the effort?

Harmonisation has the potential to be a double-edged sword. On the one hand, processes are streamlined for businesses operating in more than one state or territory jurisdiction. Workers’ compensation employees can move interstate without having to endure what is often a protracted period of retraining. Governments are likely to reap a cost benefit if workers’ compensation practices are standardised.

On the other hand, harmonisation could lead to problems further down the line without any corresponding benefits. When state-based systems cede their responsibilities in favour of a national approach, the result can be a system which is remote from its stakeholders. Innovative ideas originating from those working in the field become harder to implement, because any change will require the assent of territory, state and federal ministers.

If harmonisation proceeds beyond what is contained in Safe Work Australia’s action plan, the process is likely to be drawn out for years. In their consultation for the plan, the Australian Institute of Actuaries warned that “the common ground between states on each of the variations... may involve, in some instances, protracted consultations with stakeholders, lawyers, and actuaries.”

In effect, agreeing to substantive harmonisation has its pitfalls. It is difficult to imagine prompt agreement on a common path between certain jurisdictions. For example, Queensland has always operated under a state monopoly model of workers’ compensation, and in recent years has relied on its low employer premiums to poach interstate businesses. It is unlikely that the Queensland Government would readily abandon a system that has both been in its current form for nearly 100 years and given them such a competitive edge over other states.

The harmonisation measures proposed by Safe Work Australia are small initial steps in moving towards a national approach, which do not fundamentally reform the country’s existing workers’ compensation landscape. Whether Safe Work Australia intends to pursue a more radical path after 2013 remains to be seen – this outcome will largely depend on both the success of the current action plan’s working group, and the success of the Government’s OH&S harmonisation, which will by then have been in operation for two years.

What we would like to see

In many ways, Safe Work Australia’s action plan will be a litmus test for whether, after 40 years, the harmonisation of Australia’s worker’s compensation systems will proceed in full. Parts of the plan will be an interesting insight into whether the various workers’ compensation authorities have the will to co-operate.

We at Return to Work Matters believe that more needs to be done to assist injured workers into durable return to work. It is prudent that Safe Work Australia are considering the needs of Return to Work Coordinators in a period where Australia’s durable return to work rate has been in long-term decline. Improving resources for RTWCs is of fundamental importance to arresting this decline.

To that end, we would like Safe Work Australia to consider the development of the following support materials for national use:

• Supervisor training;
• Basic ergonomic training for coordinators;
• Information on telephone communication techniques;
• Practical tools to address motivation;
• Ways of influencing senior management to improve workplace culture;
• A tool to clarify the costs of return to work programs on a business;
• A guide to communicating with a business’s finance manager;
• A bank of videos containing testimonies from employees who have done well with return to work;
• Information for injured workers about how to get the best out of their situation; and
• A national curriculum for doctors and allied health professionals about return to work.

All of these measures have a proven track record, and if implemented have the power to significantly improve Australia's durable return to work rate.

Safe Work Australia’s National Workers’ Compensation Action Plan can be found in full here.