Red flag for Employers about proposed WorkCover changes

Updated 25/10/2023

The Government’s proposed changes to the WorkCover system in Victoria has a potential costly legal sting for employers already facing increasing premiums.

The changes proposed by Labor could jeopardise the integrity of a no-fault system that has been in place for over a century.

This system, initially designed to provide efficient support to injured workers without the need to prove employer negligence or breach of statutory duty, dates back to the introduction of Victoria’s first Workers' Compensation scheme in 1914 and has been the bedrock on which all subsequent alterations have been based.

CPSU has raised this potential red flag for Employers ahead of opposition and cross bench parties considerations on expected legislation to change claim entitlements.

The historical context of this scheme is essential to understand the significance of these changes.

In 1914, Victoria passed the ground-breaking Workers' Compensation legislation, stating that;

"If in any employment personal injury by accident arising out of and in the course of the employment is caused to a worker, his employer shall, subject as hereinafter mentioned, be liable to pay compensation."

This approach was welcomed by employers as it prevented workers from pursuing separate legal proceedings.

The proposed changes as we understand them now threaten to disrupt this long-standing no-fault system.

Employers could potentially face direct legal action for damages, significantly increasing legal liabilities and costs and should be met with strong opposition.

These changes may lead to employers navigating a complex and adversarial legal environment, contrary to the original intent of our 1914 Workers' Compensation system.

The Coalition and crossbench parties should not be cajoled into supporting the proposed changes that will not only see injured workers’ with legitimate mental injury denied compensation but will also be potentially damaging to employers.

Whilst the balance sheet insolvency is not the fault of injured workers, the draconian changes to the scheme severely impact injured workers and there is no doubt the Victorian government are making injured workers pay for their incompetence in managing the scheme.

Rather than introducing incremental increases over the last ten years to employer premium rates the scheme has been allowed to slip into balance sheet insolvency.

WorkCover needs to end the outsourcing of its claims management to reduce costs, and re-invigorate return to work arrangements that currently see injured workers terminated from their employment and payments after 104 weeks.

The Victorian Government exacerbates mental health injury claims within its sector by slashing jobs, and is the only winner under their proposed changes by effectively halving their insurance premiums while all others under the scheme suffer.

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