In early 2017, the South Australian Government introduced a Bill into Parliament regarding the management of workers compensation claims for South Australian Public Sector workers. The SA Public Service employs about 100,000 staff, making it a major employer. In fact, this number accounts for about 12% of all workers in this state.
What is the Public Service?
The Public Service (often known as the Crown) is a massive bureaucracy, and there are many different departments all considered a part of the Crown. For example, there is the Department of Health, the Department of Transport, Planning & Infrastructure, the Department of Premier & Cabinet, the Department of Education & Child Development, the Attorney General’s Department just to name a few.
Within each department, there may be many different Governmental Agencies. For example, SafeWork SA is a large Government Agency (or ‘business unit’) within the Attorney General’s Department, but it used to be covered by the Department of Premier & Cabinet, and before then, the Department of Labour (which does not even exist anymore). So to cut a long story short, understanding the complexities of the Public Sector bureaucracy is very difficult indeed.
Given how complicated and intricate the Crown appears to be, it is understandable that the management of industrial relations and workers compensation for Crown employees is a minefield of complexity.
What is a self-insured employer?
The SA Public Service has long been classified as a ‘self-insured employer’ in a workers compensation context. This fundamentally means that they manage claims internally without relying on Return to Work SA (formerly WorkCover).
Self-insured employers don’t pay insurance premiums like most other SA businesses, but they bare the liability for expenses associated with a workers compensation claim, including income support payments (weekly payments), medical expenses and lump-sum compensation for permanent impairment.
The individual Government departments have been able to manage claims with a certain amount of flexibility, and the internal case managers have had expertise in the processes, policies, codes of practice, etc that apply to the specific department and agencies that they cover.
What is the State Government proposing to change in relation to workers compensation for the public sector?
The Bill before Parliament (the Return to Work Corporation of SA (Crown Claims Management) Amendment Bill) seeks to transfer the claims management of workers compensation currently performed by Government Agencies to the Return to Work SA Corporation.
"It is clear that we are not entirely convinced that the proposed legislative change is a good idea for South Australia."
This will effectively treat the Public Sector just like all other Private Sector businesses, and the Public Sector will lose its self-insured status. They will also start paying workers compensation insurance premiums to Return to Work SA, which will be based on how many claims are submitted by employees within each department. If a department or agency has few workers compensation claims, their premiums will likely reduce, whereas a department with many claims will see a rise in premiums.
At Andersons, we work with many public servants who have suffered work-related injuries; both physical and psychological. Although we often have debates (sometimes heated arguments) with the Government case managers about decisions made relating to our clients’ entitlements, these case managers have an intimate understanding of the workers compensation law, the Government policies and procedures and how their departments/agencies operate.
Our concerns about the South Australian Government proposed changes to workers compensation for public servants
At Andersons, we have some serious reservations about the transfer of claims management away from the departments/agencies and rather claims relating to public servants will be lumped in with thousands of other claims. All claims will be managed by the agents of the Return to Work Corporation, namely Employers Mutual Limited (“EML”) and Gallagher Bassett Services.
Some of our concerns are:
- The Crown is governed by the principles of being a ‘model litigant’. This means that they have to act ethically and fairly at all times, even if this means the decisions lead to more compensation to the injured worker. Moving claims management for Crown employees to Gallagher Bassett and EML may result in a loss of the model litigant protections, and workers compensation claims will simply be treated like other general insurance claims.
- As mentioned above, the internal bureaucrats within the Crown are specialised and have a firm grasp of the law and procedures. This may be contrary to the case managers at EML and Gallagher Bassett who are often young, inexperienced with little or no tertiary qualifications. We have even seen online job advertisements for case managers with these insurance companies that emphasise that tertiary qualifications and/or experience in the workers compensation system is unnecessary.
- The Government departments/agencies are covered by large enterprise agreements, internal policies and codes of practice. This proposed legislative change is effectively placing the burden of understanding these intricacies on case managers at Gallagher Bassett and EML.
- With current active claims managed by the insurers, clients regularly complain that the case managers often change and this change occurs without warning. This provides a lack of consistency and clients struggle to understand exactly who has conduct of their matter. They get palmed off to different areas; one area deals with medical expenses and general management, another area deals with permanent impairment, another area deals with disputes. In the Public Sector, it is all relatively centralised within the individual departments, and case managers often last for the life-time of the claim.
- One of the benefits of being on workers compensation as a Government employee is the ability to ‘redeem’ one’s entitlements; that is, negotiate a lump sum financial settlement to finalise your claim. Employees often appreciate the ability to wrap up their entitlements in a neat package. The proposed legislation confirms that the Public Service will lose their self-insured status, which implies ‘redemptions’ for income and medical expenses will likely be taken off the table. If this is indeed the outcome, this will be a very negative consequence of this proposed change.
- The Attorney General has attempted to dampen the fears that this legislative change is all part of a long term plan to privatise Return to Work SA. However, it seems that privatisation is clearly on the agenda and it is possible that moving the management of Public Service workers compensation management is simply an attempt to make Return to Work SA seem more financially attractive when it is put to tender.
- If the individual departments become more focused on their premiums (that is, more claims equals higher premiums), they may try and prevent or disincentivise workers from submitting claims.
It is clear that we are not entirely convinced that the proposed legislative change is a good idea for South Australia, and more importantly, employees of the South Australian Public Service.
If you are an injured worker, whether in the Government or Private Sector, and you’re looking for advice or assistance in relation to a workers compensation claim, feel free to get in touch with today’s blog writer, Michael Irvine.