The law states Employers must buy Workers Compensation insurance and there is significant government control in each state/territory regarding employee welfare. The workplace can have significant risks to your employees health and safety. Employers therefore have a duty of care to employees and are required to organise their workplace and their work systems to minimise the likelihood of injury.
In Australia, each State or Territory has developed legislation imposing a liability on employers to pay compensation to any of their employees who become incapacitated or are otherwise unable to work, or to dependents in the event of death. There is also a separate scheme for Commonwealth employees (“Comcare”) and seamen (“Seacare”). Under Australian Worker’s Compensation arrangements:
- The insurance of these workers’ compensation is compulsory. The legislation in each State or Territory normally establishes a scheme under which insurers will become licensed to undertake this type of insurance. Some of the Australian licensed Workers Compensation insurance agents are (but may not be licensed in each state or territory): Allianz, GIO, CGU and QBE. There is also a provision for risks which the insurance market consider uninsurable.
- The employer is liable for any injury that the employee receives in the work place.
- Where there is negligence on the part of the employer, then the employee can sue in negligence under common law instead of pursuing workers’ compensation benefits. In addition to workers compensation insurance Management Liability (including statutory liability, directors liability and employment practices liability) and Travel Insurance should always be considered by any entity/company.
Each State or Territory in Australia has different degrees of statutory control of this product, which also means insurance brokers/advisors cannot assist in some states and/or territories at all. The legislation specifies the terms of the policy, including any maximum limitations which may be placed on the amount of cover, in money terms. In New South Wales the system is government-controlled and while insurers are handling premiums and claims, they have only been allowed to underwrite certain risks since 2001, provided they have been granted a restrictive licence. In Victoria, the scheme is administered by WorkCover, with some private insurers acting as claims agents. In Victoria and Queensland, insurance can only be placed with a government-administrated fund. Although schemes differ between jurisdictions, the general features of these schemes include:
- Compensation for past and future economic loss
- Medical and other out of pocket expenses
- Weekly payments in lieu of wages
- Rehabilitation and return to work expense
- Provision of legal assistance to pursue a claim and intensive rehabilitation assistance.
- General damages for pain and suffering and benefits payable to dependents
The availability of common law actions has been considerably restricted and in some cases abolished and in general there is a strong emphasis placed on the rehabilitation aspects of the schemes.
Summary of Territory & State Positions can be found in each of the headings below.