Compensation Legislation Amendment Bill 2016


Debate resumed from 10 November; motion of Ms PULFORD (Minister for Agriculture).

Mr RICH-PHILLIPS (South Eastern Metropolitan) — I am pleased to speak this afternoon on the Compensation Legislation Amendment Bill 2016. The bill the house is considering this afternoon makes a number of changes to the transport accident and workplace accident compensation schemes. It follows legislation this house considered in February of this year particularly with respect to the Transport Accident Commission (TAC) scheme, which is one of the two statutory insurance schemes that exist in Victoria. The WorkCover scheme, of course, provides rehabilitation and compensation for people who are injured in workplace injuries, and in parallel we have the Transport Accident Commission scheme, which provides a rehabilitation and compensation regime for people who are injured in transport accidents. Indeed we heard before from the minister at the table, the Minister for Agriculture, about the role of the TAC scheme for people who are injured in respect of monkey bike incidents.

Both the TAC scheme and the WorkCover scheme have been in existence in Victoria for in the order of 30 years in largely their current form. They are recognised around Australia as exemplars in the provision of statutory insurance for workplace injury and transport accident in terms of, firstly, their financial viability and health — the fact that they both have balance sheets that reflect the liabilities of the scheme and have done so for a long period of time. They are essentially fully funded schemes, with some variations at the margin. They provide a range of statutory benefits to parties who are injured in workplace injuries or transport accidents. They also provide access to common-law benefits for parties who are subject to significant injury under each scheme and pass the threshold that is required to access common-law benefits. Separate to compensation they also provide rehabilitation and medical and like services for injured parties. So the schemes have existed for a long period of time, are very well regarded around Australia and indeed are well regarded internationally for the compensation structures they provide and the way in which they operate.

The bill before the house this afternoon seeks to make a number of relatively small but related amendments covering the Accident Compensation Act 1985, the Limitation of Actions Act 1958, the Transport Accident Act 1986 and the new Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC act).

The WIRC act was an initiative of the previous coalition government, which undertook to do a clean rewrite of the WorkCover legislation, reflecting modern legislative practices, reflecting what had developed as practice around the use of the previous Accident Compensation Act-based scheme and reflecting the recommendations of the previous review of the accident compensation scheme, which had been undertaken in 2009–10. What the bill seeks to do today is make a number of small amendments to that suite of legislation.

With respect to the Accident Compensation Act, the bill seeks to extend, by way of ministerial order, the range of offences — this is in relation to workplace accidents — where a person who is involved in a motor vehicle offence or incident, where there is culpability and they are charged with certain offences, is not entitled to compensation by virtue of their culpability. What the bill will seek to do today is allow for similar offences in other jurisdictions to be included as offences where a person would not be entitled to compensation, and it creates a structure where, through ministerial order, analogous offences in other jurisdictions can be brought into consideration in the same way as the offences in the Victorian statute are currently considered as grounds for exclusion from eligibility for compensation under the act. I highlight that is specifically in relation to compensation; it is not in relation to medical and other like benefits which are available under the scheme.

The bill also seeks to change the eligibility period for support under the two schemes from the current provision, which sees support end at the age of 65, consistent with what has been long held as the standard retirement age in Australia, to recognition that those benefits should end at the retirement age, recognising that the commonwealth has legislated to change the standard retirement age in Australia from the age of 65 to the age of 67 over the period from 2017 to 2023.

A consequence of that change at the commonwealth level was that if the entitlements under the TAC and WorkCover schemes were to remain static, expiring at the age of 65, as the change in the official retirement age and therefore the availability of, in particular, age benefits increased, a gap was going to be the consequence for those people who were seeking to transfer from the statutory benefits under our schemes onto the commonwealth benefit. So this amendment to the relevant acts today will ensure that there is no gap between the expiration of statutory benefits under our scheme and the transfer onto the age pension or a similar benefit under the commonwealth legislation as that retirement age increases. That is something that we believe is appropriate.

The bill also seeks to make a minor change with respect to the TAC scheme in relation to the availability of support for family members of people who are killed in transport accidents to provide them with some assistance and support to travel to the funeral of their deceased relative. The bill will allow for reimbursement of up to $5000 for those relatives who need to attend the funeral of a person killed in a transport accident which is more than 100 kilometres from where they reside. This is following on the back of a change that was made to the transport accident scheme under the previous government, which increased the level of support that was available for funeral and like services available to families of people who are killed in a transport accident, and that is a provision that the coalition is also happy to support.

The two other major changes in this legislation — particularly the next one — relate to a matter that this house has now considered on two previous occasions. It goes to the issue of the American Medical Association (AMA) guidelines, which — in the case of the Transport Accident Commission scheme — medical practitioners are required to use to assess the impairment of claimants who are seeking to access common-law benefits. Under the two schemes — and talking particularly about the TAC scheme at this point — in order for a claimant to be able to access the common-law framework which exists under the scheme, they need to demonstrate that they have incurred a particular level of permanent impairment and that they reach the threshold to be eligible to access common law. Assessments for the level of impairment that a party has incurred are to be undertaken in accordance with the AMA guidelines, which set down a framework by which medical practitioners are to assess the level of impairment that claimants have suffered by reference to the detail in the guidelines.

One of the issues that has arisen with respect to the use of the AMA guidelines relates to the assessment of spinal impairments. This is a consequence of a Supreme Court decision which has become known as the Serwylo case, in which the court determined that the assessment of spinal impairment needed to be basically in accordance with a literal reading of the AMA guidelines.

As a consequence of that Serwylo decision by the court, a perverse outcome has been introduced to the assessment of spinal impairment under the AMA guidelines whereby, in effect, the AMA guidelines require the assessment of impairment to be based on the extent of fractures to the person's spine rather than based on the extent of impact on mobility that a person has suffered as a consequence of suffering fractures to their spine. This has led to the potential for perverse outcomes, where somebody who may have significant fractures to their spine but experiences little impact on mobility is receiving a higher level of assessment of impairment than a person who has greater reduction in mobility but fewer actual fractures to the spine. This has led to cases where the level of impairment assessed in a spinal injury is inconsistent relative to the impact on the person's mobility and is assessed as being greater than the reduction in mobility that other people have suffered through other injuries which have been assessed based on the AMA guidelines.

Having regard to the way in which the Serwylo decision was leading to perverse outcomes in the assessment of spinal injuries, the previous government — on the advice of the Transport Accident Commission — legislated in 2013 to modify the Transport Accident Act 1986 to allow for the introduction of a guides modification document. The guides modification document was an administrative instrument made by order in the Government Gazette, which changed the way in which the AMA guidelines — relative to, in this instance, spinal injury — were to be interpreted by practitioners in assessing permanent impairment for the purposes of the TAC act.

The guideline that was created in 2014 was done following a regulatory impact statement, it was done following substantial consultation with medical practitioners in the field and it was designed to ensure that the outcomes of spinal assessments under the AMA guidelines were consistent with the actual impact on mobility that had been experienced by parties suffering spinal injuries and were consistent with the actual level of impairment that they suffered. It was designed to basically correct the perverse outcome of the Serwylo case. The mechanism that was put in place in the legislation was also designed to allow for similar modifications to the AMA guidelines should they be needed in the future to address other anomalies that arise from time to time through the interpretation of those guidelines.

It is the reality of both the TAC and WorkCover schemes that, as they are both schemes which are heavily litigated, periodically decisions are taken in the courts which lead to unintended consequences, which lead to the schemes being interpreted in a way which was not intended by the Parliament when the original scheme was put in place and which have unintended outcomes — unintended outcomes for clients and indeed unintended impacts on the financial liabilities of the two schemes. The mechanism that we put in place in 2013 to address the Serwylo case also allowed flexibility for future decisions in relation to the interpretation of the AMA guidelines, which may have had perverse or unintended outcomes in their application.

In February this year the house dealt with an amendment to the Transport Accident Act which removed the mechanism that allowed the creation of guides modification documents. The new government indicated, under the influence of the plaintiff law firms — and I see Mr Dalidakis over there with surprise on his face — —

Mr Dalidakis — Why do you always attack those that stand up for people that have the least?The ACTING PRESIDENT (Mr Morris) — Order! Thank you, Minister. I will ask Mr Rich-Phillips to continue.

Mr RICH-PHILLIPS — The minister says, 'Why do you always attack those that stand up for those that have the least?'. I wonder whether that is Minister Dalidakis's view with respect to what has been happening with the class action around the Black Saturday fires.

As Mr Dalidakis's colleague Mr Somyurek has raised in this place, the proceeds from the settlement of that class action remain in the hands of the plaintiff lawyers that Mr Dalidakis is standing up for. They have not been paid to any of the claimants in that class action. The bonuses have been paid to the partners of the relevant law firms. They have got their Porsches and their Portsea holiday homes from that class action, but the people who are actually meant to be the beneficiaries of the settlement of that class action still have not been paid. Yet Mr Dalidakis and his colleagues over there are happy to stand up for the plaintiff lawyers even when it is not in the interests of their clients.

That is what we saw with the legislation that Minister Scott brought into this place back in February where, under pressure from the plaintiff lawyers, the mechanism which allowed for the creation of guides modification documents was repealed and there was no mechanism in the Transport Accident Act which allowed for the perverse outcome of the Serwylo case to be addressed. So we had a period where Serwylo, as adjudicated by the court, stood, and any cases, any claims which arose following the repeal of that legislation, had to be assessed in accordance with the AMA guidelines as adjudicated by the court and would result in perverse outcomes.

So what we have today is the government backflipping, because this legislation — surprise, surprise — introduces guides modification documents. It goes and reverses what had been repealed back in February and seeks to reinsert it. It seeks to reinsert a ministerial instrument gazetted on 6 October this year which allows for the modification of the AMA guidelines in relation to the interpretation of spinal injury. As predicted back in February when the legislation passed, the government has had to go back and address this issue again, and the way in which it is addressing this issue again — despite the criticism back in 2013 and despite the criticism from this government in February this year when it repealed this section — is actually to reinstate a mechanism for a guides modification document to be created by the minister to modify the interpretation of spinal injury under the AMA guidelines.So, we have seen a complete backflip. We have seen a complete example of hypocrisy from the rhetoric of those opposite when they knew at the time that legislation was passed in 2013 that it was necessary. The government knew in February this year when it repealed that provision that it was necessary. We are now seeing, some nine months later, it being reinserted in a slightly modified form in the legislation — and, I might add, apparently without the previous rigour which surrounded the last guides modification document which involved wide consultation and a regulatory impact statement before it was gazetted at the end of 2014. That is something that I intend to consider in some detail with the minister in committee.

The other aspect of this bill which is notable is its amendment to the Workplace Injury Rehabilitation and Compensation Act 2013 with respect to the Accident Compensation and Conciliation Service (ACCS). The ACCS is currently a body corporate that exists under the Accident Compensation Act 1985 whose role is to, as its name suggests, provide conciliation services largely for claimants under the WorkCover scheme. It is a body which has existed since the mid-1990s. It exists under a head of power vested in a senior conciliation officer, appointed by the Governor in Council (GIC), who then oversees a body of conciliation officers who are also appointed by the Governor in Council on the recommendation of the senior conciliation officer and who then act independently in conciliation on individual matters.

It is a mechanism that has worked well for the period in which it has been in place. It is an organisation which has undergone some change over that period, and in the late-2010 period or in 2008–09 we saw the previous government under then minister Tim Holding change the mechanism and change the way in which conciliation officers were appointed, which required the full pool of conciliation officers to be reappointed at that time, which led to considerable disquiet among the conciliation officers.

One of the things that was undertaken when the coalition was in power was the staggering of the terms of those conciliation officers so that the full pool of officers did not need to go through a recruitment process — I think every three years — at the one time for those roles, to provide a bit of continuity in the ACCS to ensure that even when there was turnover at the expiration of those GIC appointments it did not occur to 100 per cent of the conciliation officer pool on the one day.

What the bill seeks to do today though is a radical departure from the current structure of the ACCS. Under the guise of moving to a more contemporary governance structure the government through this bill is seeking to create a statutory body governed by a board, with the board members appointed not by the Governor in Council but by the minister directly, then with the senior conciliation officer appointed by that board and the conciliation officers appointed by the board. This removes to a large degree the independence which exists in the current structure. Members of this place who are executive councillors will know that the process of appointments by the Governor in Council and the process of other administrative instruments being undertaken by the Governor in Council are not, as many may assume, mere rubber stamps.

Quite often matters when they are presented to the Governor in Council are not simply rubberstamped through an executive council meeting. The Governor in exercising their constitutional function will often seek information on why a decision is being recommended, will often raise questions about particular matters being presented to the executive council and may express concern about matters which are being presented to the executive council. It is often the role of a minister to provide an explanation to the Governor as to why a particular course of action is being proposed, as to why a particular appointment is being recommended or as to why a particular administrative action is being taken. So while there is often an assumption in the broader public service and outside the public sector that the Governor in Council process is merely a rubber stamp of a minister's decision, in reality it is quite often not simply a rubber stamp but undergoes extensive scrutiny before the Governor in Council actually acts on the recommendation put to them by the relevant minister.

But what we see with this bill and with the proposal to create the ACCS as a statutory corporation is the removal of the Governor in Council as an oversight mechanism in any respect. Board members will no longer be subject to appointment by the Governor in Council, which is a very unusual approach for a statutory body — and I will be interested to hear from the minister what other statutory bodies do not require Governor in Council appointment of their directors — and likewise the senior conciliation officer, who currently is a GIC appointment, and the conciliation officers, who are currently GIC appointments, will simply be employees of the ACCS and subject to dismissal by the senior conciliation officer or the board of the ACCS, as is any other employee. That is something of concern.

These conciliation officers do have an important independent role to play, and it is important that their independence is genuinely reflected in their employment relationships. We have some concerns that in this shift to a statutory corporation basis — in what the minister in his second-reading speech described as moving to a more contemporary governance arrangement — it in fact removes the genuine independence which currently exists for the senior conciliation officer and the individual conciliation officers.

This is an interesting piece of legislation which does see the government backflip on its previous decision with respect to guidance modification documents and the Serwylo case and go down a path, the reason for which is not entirely clear, with the ACCS. The coalition is not going to oppose this legislation, and it welcomes the changes with respect to recognising the shift in retirement age for statutory benefits and likewise the minor change with respect to providing additional support around funerals for families of people killed in transport accidents. But on the two substantive issues, the Serwylo matter and the ACCS, the government needs to provide greater clarity as to why it is taking the action it is, and I look forward to exploring that with the minister in committee in due course. Search Results Previous result | Next result  

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