What are the major changes to WA’s workers’ compensation scheme that local governments need to be aware of?

Risk Matters - Summer 2024

Mark Civitella

Mark Civitella

Partner, Mills Oakley
Mark practises exclusively in insurance litigation and has special expertise in workers’ compensation, attending conferences and hearings at WorkCover WA representing employers and insurers on a regular basis for over twenty years. As a long term service provider to LGIS, Mark has extensive experience in advising local governments in Western Australia on the handling of claims.

The Workers’ Compensation & Injury Management Bill 2023, currently before Parliament in Western Australia, will enact major changes to WA’s workers’ compensation scheme when it comes into effect sometime next year.

Put simply, it is a complete re-write of the current act with all sections re-ordered and re-worded, and better organised within the act.

Whilst the changes to the scheme are numerous, here are the ‘top 5’ changes that local governments and employers in general should be mindful of.

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The target commencement date for the new Workers’ Compensation & Injury Management Act 2023 is 1 July 2024.

1. Provisional payments and deemed acceptance

Procedurally, there will be major changes to the liability decision making process once a claim is made such that greater emphasis will need to be placed on gathering evidence quickly.

An insurer or self-insurer will have to give a worker a liability decision notice or a deferred decision notice within 14 days, failing which they are deemed to have accepted the claim. In the case of an incapacity claim, the insurer or self-insurer will be taken to have accepted that the employer is liable to pay income compensation (the new term for ‘weekly payments’).

If a deferred decision notice is given indicating more time is needed to make a decision, a decision must be notified to the worker by the ‘deemed liability acceptance day’ (time frame to be prescribed in regulations), otherwise liability is deemed to be accepted.

If an insurer or self-insurer gives a worker a deferred decision notice, the insurer or self-insurer must begin making ‘provisional payments’ to the worker if a decision on liability is not made by the day prescribed by regulations to be the ‘provisional payments day’ (which is expected to be 28 days from receipt of the claim).

2. Stress claim exclusions

The industrial exclusions for workplace psychiatric injuries will be expanded so as to include situations where the condition results wholly or predominantly from ‘administrative action’ which will include performance appraisal, suspension action, disciplinary action and anything done in connection with such.

Employers should be aware of the critical importance of documenting and keeping records of performance appraisals of a worker, including informal performance counselling, given the potential need to rely upon such evidence in defence of stress claims.

3. Rising medical cost of claims

The ‘medical and health expenses’ compensation cap will be increased to 60% of the general maximum amount pursuant to a 2021 election commitment of the government.

This means the current ‘medical and hospital’ prescribed amount is doubled to approximately $150,000 per claim and such limit becomes exclusive of travel expenses.

In cases where the prescribed amount is exhausted, an application can be made for an extension of such benefits. The current maximum extension amount of $50,000 is increased to an additional 40% of the prescribed limit (approximately $101,000).

Beware that these increased entitlements will apply to existing claims under the current scheme unless the prescribed amount for medical and hospital expenses is exhausted prior to the commencement day of the new act, or such liability was otherwise extinguished (e.g. by settlement).

4. Pre-employment screening limitations

The new act will prohibit the disclosure of information about a worker’s claim for compensation (or claim history) to another person for the purpose of pre-employment screening and imposes a fine for this of $10,000. The act will also provide that
a worker cannot be required to disclose information about a compensation claim for the purpose of selection for employment. The purpose of this is to minimise discriminatory practices where a person’s claims history is taken into account when considering their suitability for employment.

5. Vocational rehabilitation duties and case conferences

New duties are introduced by the amended act that place an obligation on an injured worker to:

  • make reasonable efforts to return to work;
  • cooperate in the establishment of a return to work program;
  • comply with reasonable obligations under a return to work program;
  • attend, participate in and cooperate in return to work case conferences;
  • give each certificate of capacity to the employer or insurer within seven days of receipt.

In the event of a worker’s failure to comply with a duty, an insurer or employer can apply to an arbitrator for an order. Failure to comply with a duty without a reasonable excuse may result in the suspension of income compensation and continued refusal can result in cessation of the entitlement to income compensation.

Unlike the current legislation, the new Act will expressly recognise return to work case conferences – meetings that
are aimed at supporting a worker’s recovery and exploring opportunities for a return to work. The case conference can
be arranged by an employer, insurer, approved workplace rehabilitation provider or a treating medical practitioner. Hopefully this amendment will improve the effectiveness of vocational rehabilitation under the scheme with better levels of cooperation and enforceability, and better outcomes in general.

There are many other notable changes in the bill, the effect
of some of which will become clearer once draft Workers’ Compensation and Injury Management regulations are released. The regulations will contain critical details that all stakeholders are urged to take an interest in and make submissions to WorkCover about should any concerns arise.

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