Public consultation - independent review of the Safety, Rehabilitation & Compensation Act 1988

23 December 2024

Department of Employment and Workplace Relations
Submission via Consultation Hub

INDEPENDENT REVIEW OF THE SAFETY, REHABILITATIONS & COMPENSATION ACT 1988

Thank you for the opportunity to provide feedback in relation to the review of the Safety,
Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act).

The Australian Education Union ACT Branch represents approximately 4,000 educators working in public schools and technical and further education in the ACT. The entirety of our membership is covered by the SRC Act, noting employees of the ACT Government are employees for the purposes of the SRC Act.1 Since 1 March 2019, the ACT Government has been a self-insured licensee under the SRC Act. Claims management is undertaken by Employers Mutual Limited.

The work and work environment of our members is challenging and complex. Our members are exposed to a range of hazards that puts them at significant risk of physical and psychological injury, including occupational violence, workload and intensity of work. Educators are more likely than other professions to make claims for psychological injury and make claims related to occupational violence.2

We note the extensive list of questions provided as part of the Getting the best outcomes for injured workers – public consultation issues paper (21 October 2024) (the Consultation Paper). Our submission provides some general commentary on the SRC Act. The submission also addresses some of the questions posed in the Consultation Paper. We have adopted the same numbering as the Consultation Paper for ease of reference.

Issue: Ineffectiveness of step-down provisions

Recommendation: remove step-down provisions.

1
Safety, Rehabilitation and Compensation Act 1988 (Cth) s 4A & 5(11).
2
Al Afreed, Fatimah M et al, 'Work-related injuries in the Australian education sector: A retrospective cohort study'
(2022) 53 Injury 3962, 3965.

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Step-down provisions are regularly touted as necessary to encourage a return to work by gradually reducing compensation payments over time and creating a disincentive for long-term receipt of workers compensation payments. The AEU disagrees that this is truly the purpose, but instead a means of reducing the financial liability of the scheme at the expense of good outcomes for workers.

Studies have shown that step-down provisions do little to positively impact injured workers returning to work.3

Step-downs cause many injured workers to experience financial stress. A worker’s personal expenses, such as mortgages, rent and utilities remain constant despite their income decreasing.
Financial pressure creates anxiety and stress. This in turn psychologically impacts injured workers during recovery, potentially leading to a secondary injury or aggravation of their injury. This complicates the return-to-work process and jeopardises the rehabilitation of injured workers.

The timing of the step-down does not align with recovery timeframes for complex injuries, particularly psychological injuries. Workers with psychological injury often face an unpredictable and long recovery path. When a step-down occurs during a period of treatment or rehabilitation, this can jeopardise recovery due to the added pressure placed on an injured worker.

Rather than encouraging a return to work, step-downs can hinder recovery and impact the long- term successful return-to-work for injured workers. In our experience, workers often feel as though they need return to work prior to the 45 week period due to the financial pressure caused by the step down. This is can often be before they are medically ready, which risks re-injury, aggravation or extending the recovery period. Such a situation creates an insidious cycle of re-injury that ultimately extends the total recovery period or causes more permanent incapacity for work.

Issue: Delays in claim determination

Recommendation: introduce provisional liability payments, remove ‘stop-clock’ provision where delay due to employer, shorten decision-making timeframes.

3
Lane, Tyler J et al, ‘Step-downs reduce workers’ compensation payments to encourage return to work’ (2020) 77(7)
Occupational and Environmental Medicine 470.

2
From 1 April 2024, the Safety, Rehabilitation and Compensation Regulations 2019 (Cth) (the
Regulations) requires claims for compensation or a request for reconsideration of a determination be determined within a specific period. The Regulations prescribe the following periods for decision-making:

- In relation to a claim regarding an injury (other than a disease) or an aggravation of an injury
(other than an aggravation of a disease), a decision must be made within 20 days of a claim
being made.
- In relation to a claim made in relation to a disease, a decision must be made within 60 days
of a claim being made.
- In relation to a request by a claimant to reconsider a determination, a decision must be
made within 30 days of the request.

The AEU welcomes the introduction of timeframes on claim determination, noting that prior to 1
April 2024 there were no legislated timeframes for determination of claims under the SRC Act.
However, the AEU is concerned about the current operation of the ‘stop-clock’ provision and the absence of provisional liability payments.

The experience of our members of the current claim determination system has been poor. Claims routinely consume the entire period allowed under reg 11A of the SRC Regulations, and the broad application of the stop-clock provision frequently extends determination times well beyond these prescribed periods. This situation is particularly problematic when delays arise from employer inaction. It is unreasonable that well-resourced government departments fail to provide timely information to claims managers, and even more concerning that claimants are punished for these delays through the stop-clock mechanism for circumstances beyond their control.

The 60-day determination period for disease claims poses particular challenges, especially given that most such claims we see involve psychological injuries. This extended period of uncertainty creates additional stress for claimants who are already managing significant health challenges, potentially exacerbating their conditions.

The current system creates substantial barriers for injured workers seeking compensation.
Workers who are unfit for duty must access personal leave while awaiting claim determination.

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This presents a significant hardship for our members, who typically have limited accrued personal leave due to several factors: the underreporting of workplace injuries, the use of personal leave to manage previous workplace injuries that they have not sought compensation for, the high personal leave usage in the education sector owing to the inherent nature of the role, and the disproportionate care responsibilities borne by women, who comprise the majority of the education workforce. Furthermore, the requirement for workers to personally fund medical treatment until claim determination impedes their recovery and rehabilitation prospects.

The SRC Act's determination timeframes are excessive when compared to other systems.4 We advocate for both a reduction in the timeframes prescribed by reg 11A of the SRC Regulations and the elimination of the stop-clock provision where delays result from employer inaction.

The AEU strongly recommends incorporating provisional liability payments for incapacity and reasonable medical expenses into the SRC Act. This approach, already adopted by most Australian workers' compensation systems,5 ensures injured workers can access necessary medical treatment promptly and maintains their financial stability during the critical initial recovery period.
Moreover, provisional payments should continue when determination delays arise from the determining authority's requirements under s 57 of the SRC Act, whether for medical examinations or additional practitioner reports.

Issue: Lack of timely payment/reimbursement

Recommendation: introduce provisional liability payments.

Even when workers' compensation claims are accepted, our members consistently encounter challenges regarding the timely processing of payments and reimbursement of medical expenses, as well as the recrediting of utilised leave entitlements during periods of incapacity prior to the claim being accepted. These difficulties are particularly pronounced in situations involving protracted determination periods, which is now an in-built feature of the scheme because of the operation of reg 11A. Throughout these extended periods, injured workers find themselves in the position of needing to draw upon their personal leave or other leave entitlements, or leave without

4
Safe Work Australia, 'Comparison of Workers' Compensation Arrangements in Australia and New Zealand' (Report,
2023) 103
5
ibid 101

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pay, and bear the burden of medical expenses from their own finances.

The process of recovering these costs and having leave reinstated once a claim receives approval becomes extraordinarily complex, especially when the reimbursement period extends beyond two months which is what we are now consistently seeing. The situation becomes even more complex when the worker maintains partial work capacity during this timeframe, as this introduces additional variables regarding how much leave must be reimbursed. For instance, a worker might be able to perform modified duties for four hours per day whilst requiring leave for the remaining hours, creating a complex web of entitlements and payments that need to be reconciled over an extensive period.

Workers face a considerable administrative burden, being required to complete documentation for payment processing. These forms are rarely accompanied by adequate guidance or explanation.
The complexity of these administrative requirements imposes unnecessary stress during a period when injured workers should be concentrating solely on their rehabilitation and recovery. Many workers report feeling overwhelmed by the paperwork, particularly when dealing with concurrent medical treatments and appointments, and trying to return to work.

The implementation of provisional liability payments could significantly improve the timeliness of reimbursements and payments. This approach would ensure prompt payment of medical costs and incapacity payments from the outset of a claim. This would effectively prevent situations where substantial amounts of leave or medical expenses require retrospective reimbursement, as is the case now. Furthermore, provisional liability payments would eliminate the necessity for members to pursue the complicated process of leave recrediting.

This approach would also reduce the administrative burden on employers and insurers, as it would minimise the need for complex retrospective calculations and adjustments.

Implementing a provisional liability system would demonstrate a more supportive approach to injured workers, acknowledging the significant financial and emotional stress that workplace injuries can create. It would allow workers to focus on their recovery without the added pressure of managing financial uncertainties or navigating complex administrative processes during their recovery and rehabilitation.

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Issue: System-induced injury and aggravation

Recommendation: review claims process with the view to reduce injuries and aggravations of injuries caused by the scheme itself.

The scheme under the SRC Act is a no-fault system. Its primary intent should be to support injured workers in their recovery and return to work. In practice the system has become an increasingly adversarial process. This adversarial process causes and exacerbates injuries. Our experience is that this is most pronounced in cases involving psychological injuries.

Psychological injuries present unique challenges within the compensation framework.
Psychological injuries rarely have a clear causative event. Rather, they can develop from an interplay of different factors. These might include sustained bullying, excessive workload, poor management practices, or exposure to traumatic incidents. These claims inevitably position an injured worker in conflict with their employer, particularly when making such a claim can be an assertion of poor workplace practices and/or management decisions.

Making a claim for a psychological injury requires a statement that documents how the injury occurred. Creating this statement forces the injured person to repeatedly relive traumatic events.
This can significantly exacerbate their psychological condition, potentially setting back their recovery progress.

Further harm is caused if workers are subsequently required to attend independent medical examinations. During these assessments, they must once again recount their traumatic experiences to an unfamiliar person. Repeatedly recounting traumatic experiences without appropriate therapeutic support causes harm.

AEU members frequently report that the process of pursuing a claim is more harmful than the original incident that caused their injury. The process demands repeated retelling of traumatic incidents to various people who are evaluating the validity of the claim, which occurs in parallel to therapeutic treatment. The cumulative effect of this system can be profoundly damaging to the very workers who should be protected by the operation of the scheme.

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Issue: Need to secure suitable employment for injured workers

Recommendation: introduce penalties for employers who fail to meet their s 40 obligations, include a mechanism for workers to dispute when their employer fails to take reasonable steps to find suitable employment

Section 40 of the SRC Act imposes an obligation on employers to take all reasonable steps in providing or helping to secure suitable employment for injured workers. This duty forms a crucial component of the rehabilitation framework. While the AEU strongly supports this legislative requirement, we have observed a concerning pattern of employer’s failing to take reasonable steps to find workers suitable employment. This leaves injured workers out of the workforce for longer than is required.

If workers are denied suitable employment opportunities that align with their medical restrictions and capacity, their injuries persist and frequently worsen. The impact of prolonged periods without work can compound existing injuries and introduce secondary health issues. For instance, a teacher with a back injury who could perform modified duties in an administrative role might experience a deterioration in their psychological health due to extended time away from work. The longer the absence from work, the more unlikely that there will be a successful return to work.

The financial implications become particularly severe once workers cross the 45-week threshold without suitable work. At this point, the reduction in workers' compensation payments can create significant financial hardship for injured workers and their families. This financial stress often occurs precisely when workers are most vulnerable, potentially compromising their recovery and rehabilitation prospects.

The AEU endorses strengthening this provision through the introduction of penalty units, as recommended in the Hanks Review.6 This would create a meaningful deterrent for employers who fail to meet their obligations under s. 40. The implementation of penalty units provides consequences for non-compliance, potentially motivating employers to take more proactive steps in providing suitable employment opportunities.

6
Peter Hanks QC, 'Safety, Rehabilitation and Compensation Act Review: Report' (Report, Department of Education,
Employment and Workplace Relations, February 2013), recommendation 6.17.

7
We support the establishment of a formal dispute resolution mechanism specifically addressing the obligation to provide suitable employment. This process would provide workers with a structured pathway to seek intervention when employers fail to take reasonable steps in providing or facilitating suitable employment.

Response to selected questions in Consultation Paper

Please find below our response to a selection of questions in the Consultation Paper:

Best practice workers’ compensation – discussion questions
What are the primary objectives of a workers’ compensation scheme? Should those
objectives be expressly stated in the Act?
Yes, objectives of the scheme should be included within the SRC Act. Objectives are
provided for in other jurisdictions, including within the Workplace Injury Management
and Workers Compensation Act 1998 (NSW) (see s. 3) and the Workplace Injury
Rehabilitation and Compensation Act 2013 (Vic) (see s. 10).
1 The AEU believes the objectives of the SRC Act should include:

- Providing fair compensation for workplace injuries and disease
- Protecting workers from financial hardship due to workplace injuries and disease
- Supporting injured workers to recover and return to suitable employment
- Encouraging timely intervention and prevention of injuries and disease

Describe the areas of the scheme needing reform to help workers understand and
access their entitlements. What changes are needed to enable workers better to
navigate the legislative framework?
a. Reforms for accessibility, efficiency and intelligibility
The scheme requires reform to improve accessibility and navigation for workers. We
3 regularly hear from our members about the complexity and administrative burden of
making a claim, the return to work and rehabilitation processes. These reforms should
focus on simplifying complex processes and the burden on injured workers who make
claims.
The current legislative framework presents challenges for workers trying to understand
their rights and entitlements. A comprehensive reform should include the creation of
plain language policies and guidelines. This includes developing clear, accessible

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explanatory materials for use by workers. Likewise, communications to injured workers should be in plain and easy to understand language, free of jargon.
The AEU believes the current claims process is also in need of simplification. It would be beneficial to conduct a series of customer journey maps from the perspective of injured workers to gain a detailed understanding of the administrative demands placed on the injured person.
For example, one criticism we regularly hear from our members is the frequency in which their claims manager changes. Minimising the disruption in this regard is paramount.
The aim should be to minimise the burden on injured workers. Consideration should be given to whether forms can be simplified and streamlined, including removal of the need to provide duplicated information and undertake duplicated processes. Consideration should also be given to whether information can be provided by the employer as part of the claim. b. Assistance to external services that support injured workers
Workers currently have little access to information and support services throughout their workers compensation claim. Unless the injured worker engages a lawyer, unions shoulder a significant amount of work in this space. This includes assistance with making the claim, as well as providing advice and support through the rehabilitation and return to work processes. There are usually other issues that the injured worker is experiencing that they also need assistance with, including leave reimbursement.
If an injured worker chooses to engage a lawyer at the claim lodgement stage, this is likely to cost many thousands of dollars. If a claim is denied and affirmed by the determining authority in the reconsideration phase, an injured worker may potentially need to pay tens of thousands of dollars in legal expenses in pursuing the matter to the
Administrative Review Tribunal.
We note that the NSW workers compensation scheme provides funding for legal representation for a worker as follows:

- Stage 1 – funding to undertake such work as confer with and obtain instructions
from an injured eligible worker, provide the worker with comprehensive legal
advice, advise on an insurer’s decision, conduct early enquiries (including
obtaining information from the insurer, if relevant) and responding to a request
for further information, commence investigations of any potential claim

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(including completing a worker’s injury claim form on behalf of an injured worker
and providing legal advice about the resultant decision of the insurer), assess
the prospects of disputing an insurer’s decision and/or explore and achieve early
solutions7
- Stage 2 – available to further investigate and pursue a claim for benefits, a
dispute about a decision claim or any aspect of a claim, and/or the assertion of a
threshold, including all work up to the commencement of proceedings in the
Personal Injury Commission8
- Stage 3 – funding to pursue dispute resolution proceedings in the Personal Injury
Commission9
- Stage 4 – funding may also be provided to pursue an appeal10

Consideration should be given to implementing such a model, which allows injured
workers to seek legal assistance early, without the cost burden associated with doing
this.

Workforce challenges – discussion question
What changes are required to address workforce challenges (current and emerging:
see ‘Issues to be considered’ above) to maintain an effective and sustainable
Comcare scheme?
Workers’ compensation claims for psychological injuries are increasing, having
approximately doubled in the past decade.11 The rise in such claims requires significant
4 enhancement of mental health support services and tailoring of the claim making and
management process under the scheme.
The scheme should expand its capacity to handle complex psychological claims through
differentiation in the claims experience, including through the introduction of
specialised case management team and specially trained claims managers.
An aging workforce will present unique injury risks and recovery issues. The scheme

7
Independent Legal Assistance and Review Service, 'ILARS Funding Guidelines' (Guidelines, Independent Review
Office NSW) https://www.iro.nsw.gov.au/sites/default/files/ILARS%20Funding%20Guidelines.pdf, 18
8
ibid 19
9
ibid 20-21
10
ibid 22-23
11
Safework Australia, ‘Workers’ Compensation data dashboard’ https://data.safeworkaustralia.gov.au/interactive- data/topic/workers-compensation.

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should develop specialised return-to-work programs that consider the specific needs of
older workers, including flexible work arrangements and graduated return-to-work
plans. The scheme will also need to adapt to an aging workforce who, due to closure of
defined benefit schemes such as the CSS and PSS which offered adequate retirement
and invalidity benefits, will likely retire later. This issue will be pronounced due to the
increase in the age in which people may access the age pension (see s. 23 of the SRC
Act), which in turn will extend coverage of the scheme to older workers. It is the AEU’s
view that restrictions on workers compensation entitlements to those under specific
ages is problematic, particularly as other safety nets such as superannuation and
retirement benefits have become more restrictive.
What changes are required to the Comcare scheme to better manage complex
psychological claims?
Claims managers require specialised training in trauma-informed practices to better
support these workers from their first contact.
A dedicated psychological claims unit should be established with specially trained case
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managers. These specialists should have expertise in psychological injuries.
Employers also need additional support and guidance for assisting workers. This
includes developing return-to-work frameworks specifically for psychological injuries,
providing training for supervisors and managers, and establishing clear protocols for
workplace adjustments related to psychological injuries.

Employee experience – discussion questions
What changes to the Comcare scheme would better support workers with
psychological injuries and illnesses?
12
See our response to question 6.
Do you have any suggestions for improving and building the competencies of claims
managers?
Claims manager are workers too. They must have appropriate training and support to
fulfill their role. The nature of their role is difficult and exposes them to risk of injury,
through exposure to traumatic material and emotional fatigue.
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Appropriate resourcing is required to ensure there is adequate staffing so claims can be
determined in a timely manner, but ensures that claims manager have manageable
workloads. Adequate staffing ensures that claims manager can take a worker-centric
approach to the management process, ensuring that they can be a support to those
injured workers.

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WHS Act coverage – discussion questions
Should self-insured licensees be regulated by Comcare under Commonwealth WHS
laws, or state and territory WHS laws and regulators? Please give reasons.

The AEU ACT Branch believes that employees in the ACT Government should be
regulated under ACT WHS laws. The ACT situation is unique, and we do not wish to make
comment on the appropriateness of other self-insured licensees being regulated under
Commonwealth or state/territory WHS laws. We therefore limit our commentary to the
ACT specific situation.
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While there is negligible variation between the Commonwealth and ACT WHS laws, state
and territory regulators possess deep knowledge of local conditions, risks, and
workplace cultures specific to their jurisdiction. Their proximity to regulated workplaces
enables more rapid response to incidents and more frequent workplace inspections.
This local presence facilitates better engagement with employers, workers and their
representatives, enabling regulators to provide more targeted and timely guidance on
WHS matters.

Scheme entitlement – discussion questions
Are the current exclusions under the SRC Act appropriate?
The current exclusions under the SRC Act require revision as they no longer serve their
intended purpose effectively.
The exclusion of psychological injuries arising from reasonable administrative action
has created significant issues, noting the frequent usage to deny claims. The broad
interpretation of what constitutes "reasonable administrative action" can lead to
legitimate claims being excluded, particularly when there are multiple causes of an
injury/disease. This is compounded due to the significant cost burden on claimants who
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seek to challenge such decisions and rely on the correct decision being made by a
claims manager.
It is our view that the exclusion in s. 5A of the SRC Act is too frequently and
inappropriately applied to deny claims. The scheme is beneficial in nature and we
regularly see members who have claims denied under s. 5A. The provision also fails to
recognise the culmulative nature of psychological injuries. It is our view that a
stregthening of the language in s. 5A is required to ensure that legitimate claims are not
denied.
How can entitlements be structured to improve outcomes for employees and their
40
families? What changes can balance fair support while ensuring the financial
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viability of the Comcare scheme? For example, should changes be made to the
step-down provisions or the duration of payments?
As indicated above, the AEU is of the view that the structure of entitlements under the
SRC Act do not lead to fair outcomes for injured workers and there is a need to create an
appropriate disincentive on employers when it comes to injured workers. This
disincentive should create a situation whereby the employer must take steps to prevent
workplace injury and disease, as well as introduce early intervention activities to
ameliorate against more severe injury/disease, and give primacy to the rehabilitation
and return to work of injured workers.
As indicated above, the AEU believes the step-down provisions do not achieve the
stated aim of encouraging workers back to work, and rather may have perverse
outcomes.
Does the Comcare scheme sufficiently support injured employees with no potential
to return to work?
With the closure of beneficial superannuation schemes, such as CSS and PSS, further
supports should be provided to seriously injured employees with no potential to return
to work ever. This includes:

43 (a) Making incapacity payments superable and requiring payment of
superannuation by the scheme. This would mean that an injured worker would
be able to continue to receive superannuation that would assist with exiting
coverage of the scheme.
(b) Expanding on access to common law entitlements.

Should the scheme allow more options to finalise claims, including lump sum
payments? What safeguards should be in place?
There is some benefit to the introduction of commutation. Strong safeguards should be
44 included if these were to be introduced, including ensuring that the injured worker is well
enough to make such a decision, a minimum time period a redemption or commutation
can be offered, and funding the injured worker to receive both legal and financial advice
prior to an offer being accepted.
Should access to common law continue to be restricted?
No. We note that those covered by the SRC Act when it commenced in 1988 were almost
45 entirely Commonwealth public servants with access to beneficial superannuation
schemes. These schemes provided generous retirement and invalidity benefits. These
safety nets may have reduced the need for a injured workers to pursue common law
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claims against employers.
Since PSS and CSS have closed to new members, the efficacy of these superannuation-
based safety nets has eroded, and will in time disappear. This creates a new and growing
need for the restriction on common law claims against employers covered by the SRC
Act to be removed.
If access to common law continues to be restricted, should there be a greater right
to redeem compensation benefits?
Yes. There is some benefit to the expansion of redemption of benefits. Strong safeguards
46 should be included if these were to be introduced, including ensuring that the injured
worker is well enough to make such a decision, a minimum time period required to have
passed since the claim was accepted until a redemption can be offered, and funding the
injured worker to receive both legal and financial advice prior to an offer being accepted.

Rehabilitation and return to work – discussion questions
Should the Comcare scheme provide for provisional payments? If so, what should
be the length and amount of any such payments, and how/whether to recover
payments if ultimately the injury is not due to work?
The AEU strongly supports the introduction of provisional payments as indicated above.
We would support the introduction of provisional liability for incapacity payments for 13
weeks (or until such time as the claim is determined if there is a delay caused by the
50 actions of the determining authority, such as requiring the employee to attend an IME)
and reasonable medical costs. We do not believe there should be a limit necessarily on
medical treatment costs, noting earlier access to treatment is likely to result in a better
recovery and rehabilitation of the worker. Those medical costs should be reasonable
and meet the requirements under s. 16 of the SRC Act.
There should be no ability to recover such payments if liability is declined for the claim.

Dispute resolution – discussion questions
What is your experience of dispute resolution in the scheme? What improvements
would you suggest arising from that experience?
A significant barrier for injured workers is the cost prohibitive nature of dispute
resolution. As indicated in our response to question 3, there are models in other
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jurisdictions that assist with removing this barrier.
The process through the AAT, now the ART, can be long and complex. This is in
comparison to more informal and expedient processes available in other jursidictions,
who have established bespoke tribunals to specifically deal with workers compensation

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matters. Consideration should be given to how the SRC Act can expedite the processes
in the ART.
Should the legislative framework provide for pre-litigation dispute resolution
processes prior to external review by the Tribunal? If so, at what point in the
process and by whom?
Early intervention by an independent or tribunal appointed accredited
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mediator/conciliator would assist. This is consistent with other employment related
processes. For instance, if a worker lodges an unfair dismissal appication under the Fair
Work Act, a mandatory conciliation must occur. This generally occurs within a short
period of the claim being lodged witht the Fair Work Commission.
How can dispute resolution processes be structured to limit further harm to
claimants? For example, should there be dispute resolution at the reconsideration
57 stage? Who should pay legal costs associated with the reconsideration?

We refer you to our previous answer to question 3.

Should you require any further information, we would be happy to meet with your team to discuss this matter further.

Kind regards,

Matthew Peterson
Director – Workplace Advocacy & Member Support

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