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Legislative Assembly for the ACT: 2009 Week 14 Hansard (Thursday, 19 November 2009) . . Page.. 5277 ..

compensation jurisdiction, all other workers compensation authorities will recognise the provider’s status. The framework takes into consideration the variety of businesses operating as rehabilitation providers and providers an approval regime that applies regardless of entity size.

The framework develops an agreed and transparent national model of workplace rehabilitation, including uniform service definitions and expectations of providers that are designed to deliver high quality workplace rehabilitation services to workers, employers and insurers. It provides a robust national approval system across the workers compensation authorities and reduces administrative costs and complexities for providers, employers and insurers who operate across multiple jurisdictions.

Finally, the bill amends the compliance framework underpinning the Workers Compensation Act to ensure that it operates in a robust and discriminating manner to improve the effectiveness and efficiency of the ACT scheme. The bill provides for the equitable application of compliance costs consistent with the principles of fair competition and economic growth. In particular, the bill enhances existing offences through the introduction of new civil penalties for non-insurance and underinsurance. These penalties equate to double the amount of the avoided premium and may be applied retrospectively for up to five years for those employers who consistently avoid their statutory responsibility.

This “avoided premium” provision is consistent with those operating in other jurisdictions such as New South Wales and Victoria and will have the effect of scaling the penalty to be commensurate with the size of the employer and disproving the perception that noncompliance is a cheaper alternative to the cost of complying with workers compensation laws. The inclusion of escalating penalties targets those employers who demonstrate persistent noncompliance with the law, while ensuring that appropriate penalties are available for initial, one-off acts of noncompliance. The bill provides for a hierarchy of penalties that culminate in possible criminal prosecution and/or a cease business provision that would operate until such time as the noncompliant employer has a workers compensation policy. Clearly, the protection of workers in the workplace is not optional.

The bill also introduces personal liability for executive officers when there is a debt associated with the new civil penalties for non-insurance or underinsurance. Consistent with most other workers compensation jurisdictions, the bill also prohibits injured working directors of uninsured entities from claiming compensation from the default insurance fund; the person responsible for avoiding their responsibilities should not be eligible to compensation from the default insurance fund. Every claim made against the fund by a working director of an uninsured entity represents an increased cost to those compliant employers and undermines the compliance objectives inherent in the Workers compensation Act.

Critically, these amendments also close the loop on employers who fail to discharge their statutory obligations. There are an increasing number of individual labourers and tradespersons who operate as contractors with an ABN, an Australian business number. The sole trader with an ABN has become a vehicle for contractors further up the contracting chain to avoid paying workers compensation insurance, portable long service leave and payroll tax. The prevalence of this contracting structure severely

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