Workers’ Compensation Insurance & Covid-19: Western Australia Update
You may have heard murmurs of changes to Workers’ Compensation associated with Covid-19, or seen one of the many legal bulletins circulating the internet. Whilst it is early days and the regulations have not been finalised, we have summarised below key points on what you need to know.
On 24 June 2020 a Bill was introduced to Parliament to make amendments to the Workers Compensation and Injury Management ACT as part of a response to COVID-19.
Key proposed changes include:
- Prescribed Amount -the maximum entitlement for workers’ wages under the act is indexed annually. The proposed amendment is aimed at preventing any reduction in entitlements (weekly compensation payments under the Act) as a result of the economic impact of Covid-19.
- Prescribed diseases – Covid 19 to be considered an industrial disease. The amendments seek to protect health care workers who are at particular risk of exposure to Covid-19. At this stage it is anticipated that the change in regulations will likely only impact health care workers and limited “essential workers“. The intention is for these workers to have timely access to workers compensation entitlements and to remove the requirement for these workers to prove that the Covid 19 disease was acquired in the course of their employment, and that their employment was a significant contributing factor in contracting the disease. The changes are intended to be retrospective from 16 March 2020.
- Common law termination date - current legislation requires a worker to make an election in order to pursue common law damages prior to what is called the ‘termination date” (a specific date when a worker is advised by the insurer that they cease to be eligible to pursue common law damages). The proposed changes will remove this requirement and enable a worker to access common law any time up to the 3 year statute of limitations.
WHAT IT MEANS FOR EMPLOYERS?
- Changes to common law election is the most significant change proposed. The intention of removing the “termination date” appears to apply to workers whose termination date has already passed, as well as those who haven’t yet reached it. This has the potential to increase the number of people who have access to common law, although it is important to note that workers will still need to meet the current threshold tests. In this regard there is no change proposed to the procedural requirements which require at least 15% whole person impairment, as assessed by an Approved Medical Specialist.
- Employers in the health care sector may experience additional claims. The current state of Covid 19 in WA is positive, however this has the potential to change as is evident from statistics recorded in other states. The changes brings WA into line with the other states. Insurance advisers and insurers, will need to be mindful of the potential unintended consequences of any amendment to prescribed diseases, and the potential for this to expand to include non-healthcare related industries and other diseases. It is important that the regulations be properly framed and contained so other industries are not inadvertently impacted.
WHAT ACTIONS DO EMPLOYERS NEED TO TAKE?
The final draft of the regulations will be critical to how the changes are interpreted. In the meantime Lockton recommend that employers consider taking the following action:
- Review claims which include common law potential and where the termination date has passed to assess any exposure;
- Ensure that any likely Covid-19 related claims are fully investigated and strong injury management protocols put in place to manage these claims, including early diagnosis and treatment.
WHERE TO GET HELP FURTHER ADVICE?
Lockton are in a position to offer advice and support to employers and organisations who require it. We are closely connected to the insurers and legal lobby group, ensuring that we are at the forefront of the development of the regulations. An update is expected early August 2020.
Lockton’s Workers Compensation team can assist in reviewing claims that may fall within the common law category, and to help mitigate any potential risk. In addition, we can support you with proactive injury management and advice with any suspected Covid 19 claims.
Employers should be aware that the if they have received a job keeper allowance for employees, the WorkCover Authority has issued guidelines on how these should be treated for the purposes of Wage Declarations to insurers.
Additional information is available from our Lockton team.
WA Manager – Workers Compensation
Mobile +61 418 192 003 | Office +61 8 9217 0845