Page 3207 - Week 10 - Thursday, 25 September 2014
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MR GENTLEMAN (Brindabella—Minister for Planning, Minister for Community Services, Minister for Workplace Safety and Industrial Relations, Minister for Children and Young People and Minister for Ageing) (11.32): I move:
That this bill be agreed to in principle.
The Workers Compensation (Cross-border Workers) Amendment Bill 2014 is an important piece of legislation that will assist employers, workers, insurers, insurance brokers and the courts to more reliably determine a cross-border worker’s state of connection. Australian states and territories require employers to hold workers compensation insurance that covers all of their workers in the event of a workplace injury. In some instances, workers may perform their duties in more than one state or territory. These workers are known as cross-border workers and they are common in the ACT.
In the past this led to employers taking out a policy of insurance for some workers in more than one jurisdiction. This was an expensive and inefficient arrangement that was prone to disputation. To minimise the cost of workers compensation insurance, in 2003 states and territories agreed that employers should only need to insure each of their workers in just one jurisdiction regardless of how many states or territories they may work in from time to time.
In order to achieve this objective each jurisdiction should apply the same rules for determining where a worker must be insured for the purposes of workers compensation, and this is known as the worker’s state of connection. If states and territories apply different rules, they may form conflicting views on which state or territory’s workers compensation scheme should cover a cross-border worker’s injury.
This is a concerning scenario for workers and employers because the inconsistent application of state of connection rules between states may result in, firstly, workers not being covered by workers compensation policy for all injuries, claims being made on government-operated safety net schemes for uninsured workers such as the ACT default insurance fund, an increase in disputation and legal costs, and legal and financial penalties for employers if they are found to have been inadvertently uninsured in a jurisdiction where their workers have rights to compensation.
Given the number of businesses operating across the ACT-New South Wales border, consistency with how New South Wales determines a worker’s state of connection is a particularly important consideration. By 2010 ACT workers compensation insurers and the default insurance fund administrator had become concerned that the common law had reached a point where the nationally agreed state of connection rules were being interpreted differently by insurers, regulators and courts in New South Wales and the ACT. Rather than risk being uninsured, some employers responded by purchasing multiple insurance policies to cover their cross-border workers. This has increased insurance costs and is out of step with the territory’s policy position. In response, the heads of workers compensation authorities undertook a review of the national guidance material and in March 2012 released updated state of connection rules.
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