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Legislative Assembly for the ACT: 2001 Week 10 Hansard (28 August) . . Page.. 3427 ..

MR BERRY (continuing):

performance of host employers. The host employers did not have to worry about it. The committee heard that, effectively, some companies are using labour hire organisations as part of their risk management policy, devolving workers compensation costs and at the same time abrogating their workplace safety responsibilities. That is why we need to do something about who has responsibility for workers compensation payments when they are using labour hire employees.

The association argued that there is no incentive for a host employer to improve the safety of their operation when the increase in workers compensation premiums falls not on them but on the labour hire company. To remedy the situation, the association told the committee what they would like to see. I quote:

We would like to see their [host employers] workers compensation policy to be affected also by accidents that happen on their work sites. We accept that they are also our workers and therefore we cannot totally absolve ourselves from responsibility. However, currently the host employers are absolving themselves from that workers compensation responsibility and we would like to have some mechanism implemented whereby there is an incentive for that host employer also to get involved.

Well, I found the incentive: give them the responsibility for the premiums. The committee notes evidence provided by the government that the act, as it currently stands, creates uncertainty about where the responsibility for workers compensation costs lie. The government noted:

... it can be argued that the companies or individuals employing staff from labour hire companies are also required to provide workers compensation cover for these individuals under subsection 6 (3):

"where a contract to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor's own name, or to perform any work as an outworker, is made with the contractor, who neither sublets the contract, nor employs workers, the contractor shall, for the purposes of the Act, be deemed a worker employed by the person who made such a contract.

So then, under the old act, the government was saying that it might have been the case that they should be covered, but what this legislation does is completely clear the decks and makes sure that labour hire employees are not covered by the host employer. They make it very clear in this legislation. If you have a look at the flow chart in the legislation, it makes it very clear that labour hire employees are not covered by the host employer; and that is what this committee recommended-that to solve the situation, the host employer ought to wear the responsibility.

The select committee went on to recommend that the Workers Compensation Act be amended so that costs expended by a business on the provision of workers by labour hire companies can be considered as a wage and salary cost and used in the calculation of insurance premiums; and that the Workers Compensation Act be amended so that workers employed through labour hire companies be deemed employees of the host employer.

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