CCI doubts over compo changes

Working directors of public companies will no longer be able to obtain workers’ compensation insurance under reforms implemented this week by the Gallop government.

Employment Protection Minister John Kobelke said the latest round of changes, which followed an initial tranche of reforms in January, would improve fairness, certainty and efficiency in the workers’ compensation system.

However, the reform package has drawn fire from the Chamber of Commerce and Industry of Western Australia, which believes it will fail to meet most of its stated goals.

“It will impose an enormous burden on insurers and particularly on employers,” said Anne Bellamy, the CCI’s director health, safety and workers’ compensation.

She said workers’ compensation premiums would have dropped by about 10 per cent this year if the new system had not been introduced, but instead they rose slightly. Ms Bellamy believes the government has not made a good case for the changes.

“We had a very sound and stable system, one of the best in Australia,” she told WA Business News.

Mr Kobelke said the reforms introduced in January improved the weekly benefits for the majority of injured workers. About $130 million in additional benefits will be paid this year.

He said the latest reforms would deliver “significant improvements” in dispute resolution, impairment assessment, common law and injury management.

One change that has been widely endorsed is the new method of impairment assessment, which is considered more objective than the old disability test. Other changes include the establishment of a dispute resolution directorate to help deal with the 40,000 claims each year.

New programs will be introduced to the statutory system that help in retraining injured workers and provide additional medical entitlements for seriously injured workers.

The latest round of changes was originally scheduled to take effect from July 1 but was deferred because necessary preparations had not been finalised.

In particular, the rules and regulations to be used by the dispute resolution directorate had not been finalised.

Ms Bellamy said the government’s original reforms would have excluded all working directors from obtaining workers’ compensation coverage.

Amendments introduced to State Parliament in August restored the ability of working directors of private companies to obtain coverage, but not so for public companies.

“The act specifically prohibits public companies from insuring their working directors,” Ms Bellamy said.

She said the type of corporate structure should not be relevant.