Thursday, 16 November 2023

Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023

Introduction and first reading

The PRESIDENT (17:32): I have a message from the Assembly:

The Legislative Assembly presents for the agreement of the Legislative Council ‘A Bill for an Act to amend the Workplace Injury Rehabilitation and Compensation Act 2013, the Accident Compensation Act 1985 and the Occupational Health and Safety Act 2004 and for other purposes’.

Lizzie BLANDTHORN (Western Metropolitan – Minister for Children, Minister for Disability) (17:32): I move:

That the bill be now read a first time.

Motion agreed to.

Read first time.

Lizzie BLANDTHORN: I move, by leave:

That the second reading be taken forthwith.

Motion agreed to.

Statement of compatibility

Lizzie BLANDTHORN (Western Metropolitan – Minister for Children, Minister for Disability) (17:33): I lay on the table a statement of compatibility with the Charter of Human Rights and Responsibilities Act 2006:

In accordance with the Charter of Human Rights and Responsibilities Act 2006 (the Charter), I table a statement of compatibility in relation to the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023 (the Bill).

In accordance with section 28 of the Charter, I make this statement of compatibility with respect to the Bill.

In my opinion, the Bill, as introduced to the Legislative Council, is compatible with human rights as set out in the Charter. I base my opinion on the reasons outlined in this statement.

Overview of the Bill

The Bill makes various amendments to the Workplace Injury Rehabilitation and Compensation Act 2013 (the Principal Act), the Accident Compensation Act (the AC Act) and the Occupational Health and Safety Act 2004 (the OHS Act).

The amendments in the Bill relevantly seek to:

• introduce new eligibility requirements for work-related mental injuries so that only mental injuries diagnosed by a medical practitioner in accordance with the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM) that are predominantly arising out of or in the course of employment are compensable;

• clarify that there will be no entitlement to compensation for mental injuries that are predominantly caused by work-related stress or burnout arising from events that may be considered usual or typical and are reasonably expected to occur in the course of the worker’s duties;

• confirm that mental injuries predominantly caused by work-related stress or burnout resulting from traumatic events experienced by a worker that may be considered usual or typical and reasonably expected to occur remain compensable;

• introduce a Whole Person Impairment (WPI) threshold of greater than 20 per cent, alongside the existing capacity test, for injured workers to remain entitled to weekly payments beyond the 130 week second entitlement period;

• clarify that disputes relating to whether a worker has suffered an injury in circumstances that are compensable under the WIRC Act are not disputes that can be referred to the Workplace Injury Commission (WIC) for arbitration;

• amend the Principal Act and the OHS Act to allow the Authority to use information collected for the purpose of those Acts to fulfil its functions or exercise its powers under any Act, in certain conditions; and

• requires the Minister to cause an independent review of the amendments to the WorkCover Scheme arising out of this Bill, in the 2027 calendar year.

Human rights issues

The Bill may engage and limit a number of rights that are protected by the Charter, including the right to equality (section 8), the right to privacy (section 13(a)) and the right to a fair hearing (section 24).

For the reasons detailed below, I am satisfied that the Bill is compatible with the Charter and, if any of the abovementioned rights are limited, those limitations are reasonable and demonstrably justified having regard to the factors within section 7(2) of the Charter.

Section 8(3) – Right to Equality

Section 8(3) of the Charter provides that every person is equal before the law and is entitled to equal protection of the law without discrimination and has the right to equal and effective protection against discrimination. The purpose of the right in section 8(3) is to ensure that all laws and policies are applied equally. ‘Discrimination’ for the purposes of the Charter is defined by reference to the definition in the Equal Opportunity Act 2010 (the EO Act) on the basis of an attribute in section 6 of that Act. Relevant attributes include (but are not limited to) age, race, sex and disability. ‘Disability’ is defined in section 4(1) of the EO Act to include a mental or psychological disease or disorder.

Eligibility requirements for mental injury

The Principal Act already imposes special eligibility requirements for mental injuries. Section 40(1) of the Principal Act provides that there is no entitlement to compensation if a mental injury is caused wholly or predominantly by, among other things, reasonable management action. There is no entitlement to compensation for mental injury in the circumstances specified in section 40(1) of the Principal Act because it was considered that employers should not be liable for mental injuries that arise from the legal exercise of the rights of the employer to manage their workforce.

Clauses 4, 5 and 6 of the Bill will introduce additional eligibility requirements for mental injuries.

• Clause 4 of the Bill will introduce a definition of ‘mental injury’, which is currently undefined. Under clause 4, ‘mental injuries’ will be defined as injuries that cause significant behavioural, cognitive or psychological dysfunction and are diagnosed by a medical practitioner in accordance with latest DSM. That definition will have the effect of narrowing the concept of ‘mental injury’, which is not presently defined and therefore is not limited to dysfunctions that are ‘significant’ or diagnosed in accordance with the DSM.

• Clause 5(2) of the Bill will have the effect that a person will only be entitled to compensation for mental injuries predominantly arising out of or in the course of employment.

• Clause 6 of the Bill will have the effect that a worker is not entitled to compensation for a mental injury predominantly caused by stress or burnout that has arisen from events that may be considered usual or typical and reasonably expected to occur in the course of the worker’s duties. However, clause 5(3) will have the effect that despite the exclusion in clause 6, a worker is entitled to compensation for a mental injury if it is caused by traumatic events experienced by the worker that may be considered usual or typical and expected to occur in the course of the worker’s usual duties.

These changes will result in some workers who have a mental or psychological disease or disorder (and therefore have a ‘disability’ as defined under the EO Act) no longer being eligible to receive compensation under the Principal Act. That may in turn engage section 8(3) of the Charter, on the basis that the provisions may discriminate on the basis of disability by introducing new eligibility requirements into the Principal Act for workers seeking compensation for a work-related mental injury.

Any discrimination that is effected by clauses 4 to 6 is demonstrably justified. Clauses 4 to 6 serve two important purposes.

First, they are intended to ensure that the process for the assessment of mental injuries is rigorous. Currently, the assessment of mental or psychiatric injuries is not undertaken in the same way as physical injuries. Diagnosis of mental injuries presently relies largely on self-reporting and examination by medical practitioners. As a result, diagnosis generally turns on clinical judgement and consideration of the subjective viewpoint of claimants. Because of this, mental injuries may be more susceptible to misrepresentation by the claimant as compared to physical injuries. Further, there are particular difficulties involved in establishing a sufficient causal link between the general activities of a worker's role and their mental injury. Among other things, that is because mental injuries can often be the result of a myriad of factors, including a worker’s personal life and their interpersonal relationships.

The Bill seeks to address these issues by requiring a diagnosis be made in accordance with the latest DSM and by requiring that the mental injury predominantly arise out of or in the course of any employment.

Second, the amendments reflect the fact that while compensation should be available for mental injury in appropriate cases, the WorkCover Scheme must also remain financially sustainable for the long term. The requirements that mental injuries must cause ‘significant’ dysfunction in clause 4, and clauses 5(2) and 6, are directed to that purpose. Clauses 5(2) and 6 effect specific and targeted exclusion of mental injuries caused by the general stressors of the modern workplace and modern life. Providing financial compensation in respect of claims that are not clearly attributable to employment or serious psychological stressors risks the imposition of significant costs on the compensation scheme that would undermine its ongoing viability. The importance of ensuring the financial viability of the scheme is recognised by the Principal Act in sections 493(1)(g) and 493(2).

At the same time, the Bill recognises that some jobs necessarily involve exposure to traumatic events and that this should not mean that a person is not entitled to compensation if they develop a mental injury caused by work related stress or burnout, as a result of exposure to those events.

Thus, an important qualification to the limitation effected by clause 6 is contained in clause 5(3), which recognises the fact that certain workers (such as frontline workers) may regularly be exposed to trauma, and ensures that these workers are entitled to receive compensation even if the trauma is a usual or typical part of their roles. Clause 5(3) provides that a worker is entitled to compensation if they suffer a mental injury predominantly caused by traumatic events experienced by the worker that may be considered usual or typical and expected to occur in the course of the worker's duties.

Clauses 4 to 6 seek to ensure that support is available for those workers who experience a diagnosed mental injury resulting from serious workplace events, while ensuring that the diagnosis is undertaken in a rigorous manner and that there is a sufficient nexus between the mental injury and the worker’s employment, having regard to the need to ensure that the scheme is financially sustainable.

Moreover, the existing access to provisional payments for mental injury provide tailored support to those workers who have suffered an injury, but are not eligible for compensation under the WIRC Act. These supports aim to deliver earlier medical treatment and targeted return to work support to assist workers in achieving improved return to work outcomes. These supports also seek to connect workers with other more suitable support services to encourage improved health and return to work outcomes.

Importantly, workers will continue to have an ability to dispute decisions relating to their eligibility for compensation through conciliation, internal Agent review, WorkSafe’s Worker’s Compensation Independent Review Service and the courts.

To the extent, if any, that these clauses impose a limitation on the right to equality, for the reasons detailed above I consider that this limitation is reasonable and justifiable in accordance with section 7(2) of the Charter and as such, these clauses are compatible with the right to equality.

Weekly payments after the second entitlement period

Clauses 13, 14 and 15 of the Bill will introduce additional eligibility requirements for injured workers to continue to receive weekly payments beyond the second entitlement period of 130 weeks into sections 163, 164 and 165 of the Principal Act. These clauses introduce a WPI threshold alongside the existing work capacity test. Once these changes are enacted, only those workers with no ongoing capacity to work and with a WPI of more than 20 per cent will be eligible to continue receiving weekly payments. Consequently, those workers with a lower WPI score will be disadvantaged under these reforms.

Further, clause 17 of the Bill amends section 175 of the Principal Act to apply these changes to those workers residing out of Australia, who, in addition to establishing they have no ongoing capacity for work indefinitely, will be required to demonstrate a WPI of more than 20 per cent after the expiration of the second entitlement period to continue to receive weekly payments. Clauses 26 to 29 make equivalent changes to the AC Act to apply to injuries occurring before 1 July 2014 which have not yet passed the second entitlement period.

The operation of clauses 13 to 17, and changes to the determination of entitlement to ongoing weekly payments after the expiration of the second entitlement period may affect the right to equality by treating people unfavorably on the basis they have a particular disability.

These reforms are necessary to ensure that weekly payments after the second entitlement period take into account that some workers will continue to have no ability to return to work after their injury. They are intended to ensure that financial compensation is available to those injured workers who are most in need of ongoing support, that is, workers with a permanent impairment resulting from their work-related injury who have no ongoing work capacity indefinitely. This revised test for ongoing entitlement seeks to achieve that purpose by introducing an objective assessment of permanent incapacity. That objective assessment is undertaken in accordance with the procedure to be established by clause 16. Broadly, assessment of impairment will be conducted consistently with existing processes for assessing impairment benefits compensation under Division 4 of Part 2 of the Principal Act. Decisions will be based on the available medical evidence to support a decision to continue or cease weekly payments. Where workers dispute these decisions, they will continue to be able to refer medical questions in relation to the degree of impairment to Medical Panels for a binding expert opinion. Where decisions made by the Authority, Agents or self-insurers relate to something that is not a medical question as to degree of impairment, such as a determination not to refer a worker for assessment, these disputes can be referred through existing dispute resolution pathways, including to conciliation by the WIC. In this way, the right to challenge decisions is maintained and decisions relating to impairment will be based on medical expertise.

The threshold of 20 per cent WPI has been identified as necessary to ensure that the scheme remains viable and able to continue to deliver services into the future. Importantly, workers who do not meet this revised test and new impairment threshold will be actively supported to transition to other income replacement services and suitable supports if they are unable to return to work.

To the extent that these clauses relating to WPI assessments after the expiry of the second entitlement impose a limitation on the right to equality, I consider that the limit is reasonable and justifiable in accordance with section 7(2) of the Charter.

Section 13(a) – Right to privacy

Section 13(a) of the Charter provides that a person has the right not to have their privacy unlawfully or arbitrarily interfered with. Section 13(a) contains internal limitations: interferences with privacy will only limit the right if they are unlawful or arbitrary. An interference will be lawful if it is permitted by a law which is precise and appropriately circumscribed, and will be arbitrary only if it is capricious, unpredictable, unjust or unreasonable, in the sense of being disproportionate to the legitimate aim sought.

The right to privacy is broad in nature. The fundamental values which the right to privacy expresses are the physical and psychological integrity, individual and social identity, and autonomy and inherent dignity, of the person. It protects the individual’s interest in the freedom of their personal and social sphere.

Use of information that may be personal information

Clauses 22 and 31 of the Bill will introduce information-sharing provisions that will enable WorkSafe to share and use information more effectively across its insurance and health and safety business units. These clauses will enable information collected under either the Principal Act or OHS Act and associated regulations to be used by WorkSafe to perform its functions and exercise its powers under any Act, if the use of that information is reasonably necessary or directly related to the performance of a function or power conferred on WorkSafe under that Act. Clauses 22 and 31 may engage the right to privacy because it will permit WorkSafe to use information, which may be private and which has been collected by WorkSafe for a particular purpose, for a different purpose.

While WorkSafe is a single organisation, it has a dual function as Victoria’s occupational health and safety regulator and administrator of Victoria’s workers’ compensation scheme, with each function subject to differing regulatory regimes under the OHS Act and Principal Act. Despite WorkSafe being a single organisation, both the Principal Act and the OHS Act place restrictions on how WorkSafe may use or share information, which applies to both internal and external sharing of information.

These restrictions inhibit WorkSafe’s ability to use information that it collects for a workers compensation purpose to inform health and safety outcomes, or to use information that it collects for an occupational health and safety purpose, to improve support for injured workers.

Clauses 22 and 31 are intended to remove the stated restrictions, and thereby enable WorkSafe to use information that it has collected for one purpose for a further purpose of performing functions and exercising powers under other Acts administered by WorkSafe. In that way, they are intended to strengthen WorkSafe’s ability to respond to workplace safety concerns and support injured workers. The provisions are tailored to their purpose: information will only be permitted to be used by WorkSafe to perform its functions or exercise its power under another Act, where it is reasonably necessary, or directly related to, one or more functions or powers conferred on WorkSafe by that Act. Further, and importantly, existing restrictions and protections relating to the release of personal and medical information will continue to apply. The operation of other relevant privacy legislation including the Health Records Act 2001, the Privacy and Data Protection Act 2014 or the Victorian Data Sharing Act 2017 and the operation of legal professional privilege will not be impacted.

For the reasons detailed above, I consider that the clauses do not result in an unlawful or arbitrary interference with the right to privacy, and that the impact that the clauses have on the right to privacy is proportionate in all the circumstances, having regard to the significant public benefits that will accrue from WorkSafe being able to share information across its business functions and the fact that the provisions are tailored to the purpose that they serve. On that basis, I consider that the Bill is compatible with the right to privacy in section 13(a) of the Charter.

Section 24(1) – Right to fair hearing

Section 24(1) of the Charter provides that a person charged with a criminal offence or a party to a civil proceeding has the right to have the charge or proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.

What constitutes a fair hearing will depend on all the circumstances, including the legislative framework, the nature of the decision to be made, the nature and complexity of the issues and the impact of the decision to the rights and interests of the parties.

The right to a public hearing incorporates the principle that justice should not only be done, but be seen to be done, by subjecting legal proceedings to public scrutiny. It has been described as an indispensable element of the rule of law in a democratic society.

The right to a fair hearing should be read together with sections 25, 26 and 27 of the Charter, which confers various criminal process rights.

Arbitration amendments

Arbitration was introduced into the Principal Act by the Workplace Injury Rehabilitation and Compensation Amendment (Arbitration) Act 2021. Currently, disputes relating to whether a worker has an injury that was sustained in circumstances giving rise to an entitlement to compensation under the Principal Act, may proceed to arbitration following unsuccessful conciliation, as an alternative method of dispute resolution compared to commencing court proceedings. The WIC is limited to awarding up to 52 weeks of weekly payments or up to $20,000 in medical and like expenses by way of an arbitration determination. Appeals from decisions of the WIC may only be brought in relation to questions of law.

Clauses 23 and 24 of the Bill will provide that disputes relating to whether a worker has an injury that was incurred in circumstances giving rise to an entitlement to compensation under the Principal Act can proceed to conciliation, but can no longer be referred to arbitration. Consequently, where the matter has not resolved at conciliation, disputes relating to these matters will be required to be resolved at Court. Insofar as this amendment limits the right in s 24(1), the limitation is justified.

While clauses 23 and 24 remove the ability to submit a matter concerning whether a worker has an injury that was sustained in circumstances giving rise to an entitlement to compensation under the Principal Act to arbitration, it does not mean that a decision of the Authority or self-insurer concerning entitlement to compensation may not be challenged. The effect of clause 24 is, rather, to direct all disputes concerning specified matters under the Principal Act to courts after unsuccessful conciliation rather than arbitration. This has the effect that decisions concerning initial entitlement to compensation are subject to the dispute process that existed prior to the introduction of arbitration in 2022. In those circumstances, the extent of the limitation on the right to a fair hearing is relatively minor.

Clause 24 pursues an important public purpose. As explained above, under the Principal Act, appeals may only be brought from arbitration determinations on questions of law. This has the effect of limiting the capacity of parties to challenge arbitration determinations. This effectively provides two pathways to dispute decisions after conciliation, which may lead to different potential outcomes based on similar questions of fact. This may lead to unfair outcomes for workers. Amending the Principal Act to provide that all eligibility disputes, not just those relating to mental injury, are subject to the same process is intended to reduce the potential for inconsistency by requiring all such disputes to be decided by the courts. This will result in the development of judicial precedent concerning the provisions related to entitlement to compensation (including the new mental injury provisions), which will in turn, result in guidance as to the operation of those provisions. There is no less restrictive means of achieving those purposes.

For those reasons, any limitation on the fair hearing right effected by clauses 23 and 24 is demonstrably justified.

Hon Jaclyn Symes MP

Attorney-General

Minister for Emergency Services

Second reading

Lizzie BLANDTHORN (Western Metropolitan – Minister for Children, Minister for Disability) (17:33): I move:

That the bill be now read a second time.

Ordered that second-reading speech, except for the statement under section 85(5) of the Constitution Act 1975, be incorporated into Hansard:

The Bill makes several amendments to the Workplace Injury Rehabilitation and Compensation Act 2013 to deliver on the Victorian Government’s commitment to build a modern workers’ compensation scheme that gives security to Victorian workers and businesses and helps workers get healthy and back to work, following a workplace injury. These changes address the increasing financial pressure on the WorkCover Scheme (Scheme), amending structural issues in the design of the Scheme to respond to these challenges. This Bill will deliver a more contemporary, sustainable Scheme that will continue to support injured Victorian workers into the future. These legislative changes, combined with premiums that better reflect the cost of claims and the creation of Return to Work Victoria, will ensure that the Scheme and the Victorian Government continue to support positive outcomes for Victorian workers into the future.

The Bill makes a range of amendments to the Workplace Injury Rehabilitation and Compensation Act 2013 and Accident Compensation Act 1985 to:

a. introduce additional eligibility requirements for mental injury so that only significant mental injuries diagnosed by a medical practitioner in accordance with the most recent Diagnostic and Statistical Manual of Mental Disorders (DSM) that predominantly arise out of or in the course of employment are compensable;

b. clarify that there will be no entitlement to compensation for mental injuries that are predominantly caused by work-related stress or burnout arising from events that may be considered usual or typical and are reasonably expected to occur in the course of the worker’s duties;

c. confirm that, where a worker’s duties are usually or typically traumatic, mental injuries predominantly caused by work-related stress or burnout as a result of traumatic events experienced by a worker remain compensable;

d. clarify that disputes relating to initial eligibility decisions under the Workplace Injury Rehabilitation and Compensation Act 2013 cannot be referred to arbitration;

e. introduce a permanent Whole Person Impairment (WPI) threshold of more than 20 per cent, alongside the existing work capacity test, for injured workers to remain entitled to weekly benefits beyond the 130-week second entitlement period; and

f. require the Minister to cause an independent review of the amendments to the Scheme arising out of this Bill, by an expert panel, during the 2027 calendar year.

Finally, the Bill further amends the Workplace Injury Rehabilitation and Compensation Act 2013 and the Occupational Health and Safety Act 2004 to allow information collected in accordance with either Act, to be used where reasonably necessary or directly related to a function or purpose of WorkSafe Victoria under any Act that it administers.

I will now address each of these amendments in more detail, turning first to the amendments relating to compensation for mental injuries.

Workers Compensation for mental injury

The Scheme was designed more than 30 years ago, primarily to respond to physical injuries. Since that time, the number of mental injuries has increased, now representing approximately 16 per cent of all new claims and around 50 per cent of costs to the Scheme. We know that workers with mental injuries have poorer return to work outcomes, remaining off work for longer than those with physical injuries, increasing the duration and cost of claims supported by the Scheme.

The mental injury eligibility reforms are designed to strengthen the nexus between employment and its potential to cause injury. It also improves the rigour applied to diagnosing mental health conditions, to ensure the Scheme supports those it was intended to.

The Bill introduces a definition of mental injury as an injury that causes significant behavioural, cognitive or psychological dysfunction and is diagnosed by a medical practitioner in accordance with the most recent version of the DSM. Therefore, injuries that do not significantly impair or impact a worker’s function, or are not diagnosed in accordance with the DSM, will not be eligible for compensation under the Scheme. The Bill also requires a mental injury to be predominantly caused by work to be compensable.

The Bill will introduce an additional exclusion for compensation for mental injuries predominantly caused by work related stress or burnout that has arisen from events that may be considered usual or typical and reasonably expected to occur in the course of a worker’s duties.

In this context, ‘predominantly caused’ takes its ordinary meaning and refers to the strongest or largest contributing factor relative to all others. This may be proved by establishing that the contribution of employment is greater than the sum of all other contributing factors.

Events that are reasonably expected to occur, or that are typical or usual, include modern work-related stressors that most workers experience during employment, such as reasonable additional hours and reasonable work-related interpersonal interactions. The determination of eligibility for a mental injury claim will consider what is reasonably expected to occur during the course of that worker’s employment. For example, certain interpersonal conflict, workload pressure and long hours are not considered to be unusual or go beyond what is reasonably expected in the course of employment.

However, events that would not be reasonably expected or typical in employment include where the worker experiences bullying, harassment of any kind or discrimination. Mental injuries predominantly caused by experiences of this kind will not be captured by the new exclusion and will remain compensable.

The exclusion relating to usual or typical duties a worker would be expected to undertake will not apply to a worker who routinely experiences traumatic events in the usual course of their duties and whose injury was predominantly caused by experiencing those traumatic events. Where a worker’s mental injury is predominantly caused by traumatic events experienced by the worker that may be considered usual or typical, and reasonably expected to occur in the course of their duties, the worker will continue to be eligible for compensation. This includes the experience of vicarious trauma.

This exception to the new exclusion is intended to apply to workers in frontline roles, emergency service roles and other occupations with regular exposure to traumatic events as part of their usual duties, many of these being public sector workers. As a result of the traumatic nature of this work, these workers will continue to be eligible for compensation despite the mental injury being predominantly caused by their usual or typical employment. Where a worker is exposed to trauma, they do not need to demonstrate a diagnosis of post-traumatic stress disorder to satisfy the exception, as any mental injury captured by the new definition would be eligible for compensation.

These changes ensure that workers experiencing a significant work-related mental injury that is predominantly the result of work-related events continue to be supported in recovery and return to work. To ensure these changes are understood and implemented effectively, guidance and training on the new definition of mental injury and the application of the work-related stress and burnout exception will be provided to WorkSafe Victoria’s agents and self-insurers.

Importantly, workers will continue to have access to provisional payments from the time they lodge a mental injury claim. Provisional payments provide access to early treatment and support through the payment of reasonable medical and like expenses from the time a claim is lodged until the claim is accepted, or where the claim is not accepted, for a total of 13 weeks. In addition to the 13 weeks of provisional payments, workers who have a mental injury claim not accepted will be provided with transitional support, including appropriate support services, return to work support if they have a capacity to do so, or if not, identifying any income replacement services. Workers will also be provided with information on how to dispute a decision they disagree with.

These changes will apply to mental injuries sustained on or after the commencement of the bill. There will be no retrospective application of these changes.

Changes relating to arbitration

The Bill will also amend the Workplace Injury Rehabilitation and Compensation Act 2013 to provide that initial eligibility disputes, relating to whether a worker is entitled to compensation under that Act, cannot be referred to arbitration. Instead, where conciliation has been unsuccessful, disputes relating to initial eligibility decisions can only be referred and resolved by the Courts. This amendment ensures that disputes relating to initial entitlement, including whether a claim satisfies the new mental injury eligibility criteria, will be determined and heard effectively, and the tests can be applied appropriately. This ensures that decisions relating to eligibility are applied consistently and in accordance with judicial interpretation.

Workers who can currently make an application for review to the Workers Compensation Independent Review Service through WorkSafe Victoria, will continue to be able to make applications regarding initial eligibility decisions following conciliation.

The changes relating to arbitration will apply to a genuine dispute in respect to injuries sustained on or after the commencement of the bill. There will be no retrospective application of these changes.

Weekly payments after the second entitlement period

Since 2015, the number of injured workers remaining on weekly benefits following the expiry of the second entitlement period has increased. In 2015, eight per cent of injured workers received weekly payments after 130 weeks. Recent modelling projects that, in 2023, 18 per cent of claims will continue beyond 130 weeks. The Bill amends the current requirements that need to be satisfied to continue to receive weekly payments after 130 weeks by introducing an additional requirement that the worker must have a permanent whole person impairment of more than 20 per cent for injuries arising from the same event or circumstance. This threshold is in addition to the existing requirement that the worker must be assessed as having no work capacity, and likely to continue indefinitely to have no work capacity.

This amendment will bring Victoria in line with other states and territories that have introduced impairment assessments, as a more objective determination of the impact of a work-related injury. Where a worker has capacity for work or a whole person impairment of 20 per cent or less, their entitlement to weekly compensation payments will end after 130 weeks. The process for assessing permanent impairment for this purpose is consistent with the existing provisions relating to determining a worker’s level of permanent impairment for lump sum compensation under the Workplace Injury Rehabilitation and Compensation Act 2013.

These reforms are focussed on addressing the long-term financial risk to the Scheme, while ensuring that workers with a significant permanent impairment and an indefinite incapacity for work resulting from their workplace injuries continue to receive support. Those who are no longer eligible to continue to receive weekly payments will be supported to return to work or access other appropriate support or income replacement services, where required.

Workers who are approaching the end of the second entitlement period will be assessed on their degree of permanent whole person impairment for injuries arising out of the same event or circumstance. The determination of permanent impairment for this purpose will be conducted by a qualified independent impairment assessor in accordance with the existing process for assessing impairment under the Workplace Injury Rehabilitation and Compensation Act 2013. Where a worker is assessed as having no current work capacity that is likely to continue indefinitely and a whole person impairment of more than 20 per cent, they will continue to receive weekly payments. The existing test of whether a worker has no current work capacity will continue to apply after the second entitlement period.

Acknowledging that some injuries, such as progressive diseases like silicosis and asbestosis, may not stabilise for the purpose of an impairment assessment being undertaken after 130 weeks, the Bill allows for interim entitlement decisions to be made. Where a worker’s whole person impairment cannot be assessed because their injury has not stabilised, they are under 18 years old, or there is not enough information to conduct an assessment, subject to certain requirements, WorkSafe Victoria, the agent or the self-insurer can make an interim decision to continue or to cease weekly payments after the end of the second entitlement period.

An interim decision to cease weekly payments can only be made if, following a review of existing medical evidence, WorkSafe Victoria, the agent or self-insurer is satisfied that the injury is not likely to be permanent, save for progressive diseases, and that the whole person impairment is likely to be 20 per cent or less and the worker has a current work capacity. An interim decision to continue weekly payments will be made where WorkSafe Victoria or its agents are satisfied that the worker’s impairment is permanent, the impairment is likely to be more than 20 per cent and the worker has no capacity for work indefinitely. Interim decisions will remain in force until a further interim determination is made or WorkSafe Victoria or its agents make an ongoing eligibility determination.

In recognition that these changes could lead to resourcing pressures for independent impairment assessors, provided certain conditions are met, the Bill makes amendments to allow WorkSafe Victoria, its agents or self-insurers to make a determination that it is not necessary or practicable to obtain an assessment of injury for the purposes of a determination of entitlement to continued weekly payments. These administrative decisions are not a determination of a worker’s degree of impairment, rather it is a decision that the worker does not need to be assessed by a qualified impairment assessor to determine their entitlement to continue to receive weekly payments after the expiry of the second entitlement period.

An administrative decision can only be made where there are no reasonable prospects of a worker’s injury being assessed as below the whole person impairment threshold, such as in the case of catastrophic injuries, or where there is no reasonable prospect of the injury reaching the threshold, such as minor sprains or fractures or standalone back injuries which do not require surgery. The ability for WorkSafe Victoria, its agents or self-insurers to make these decisions will ensure that workers with significant injuries are not required to attend additional assessments and resources are not expended on claims where there is no prospect of the worker remaining eligible for ongoing weekly payments. The Bill provides that these decisions can only be made where there is no disadvantage to the worker.

The Bill also provides that the assessment relating to the degree of impairment obtained from the second entitlement period assessment will be the assessment of impairment used for other purposes under the Workplace Injury Rehabilitation and Compensation Act 2013. For example, where a worker has received an impairment assessment for the purpose of determining entitlement after the second entitlement period, that impairment assessment must also be used where the worker applies for lump sum impairment benefit compensation under the Act or pursues common law damages. These amendments ensure that impairment assessments are applied consistently, and that impairment assessment availability is not depleted by these reforms. An injured worker may choose to initiate a claim for lump sum impairment benefits at the same time as the second entitlement review, or can choose to initiate an impairment benefits claim later, using the same whole person impairment assessment. However, it will not be possible for a worker to pursue an impairment benefits claim at the same time as a review is being undertaken to determine eligibility for weekly payments, post the second entitlement period. It is not the intention that the impairment decision for the purposes of determining entitlement post 130 weeks forces the commencement of an impairment benefits claim. That decision remains the choice of the worker.

The Workplace Injury Rehabilitation and Compensation Act 2013 currently allows a worker to apply for compensation in the form of weekly payments after the expiry of the second entitlement period in certain circumstances. This application can only be approved if the worker has returned to work for at least 15 hours per week, earns at least $177 per week and is incapable of undertaking further additional employment due to their injury. Currently, payments continue until the worker ceases to be eligible or the worker's circumstances change. The Bill will amend the Workplace Injury Rehabilitation and Compensation Act 2013 to include an additional requirement that a worker must also meet the new whole person impairment threshold. The provision will operate in the same way it currently does, but with the whole person impairment threshold as an additional requirement the worker must satisfy. This provision encourages return to work after the second entitlement period while acknowledging that certain injuries will have an ongoing impact on a worker’s continued capacity for work and subsequent earning capacity.

The whole person impairment threshold will also apply to workers who cease to reside in Australia. Currently injured workers leaving Australia need to demonstrate that they have no capacity for work indefinitely to continue to receive weekly payments regardless of whether they have exceeded the second entitlement period. The Bill will amend the Act to require these workers to also be assessed as having a whole person impairment of more than 20 per cent after the expiry of the second entitlement period to continue to receive weekly payments.

These changes will apply to injured workers due to reach the end of the second entitlement period on or after the date of commencement. Claims which have already passed the second entitlement period will not be subject to the new test or required to be assessed for impairment.

Section 85(5) of the Constitution Act 1975

Lizzie BLANDTHORN: I make the following statement under section 85 of the Constitution Act ‍1975 of the reasons why it is the intention of clause 16 to alter or vary section 85 of the Constitution Act 1975. This clause is consistent with existing limitations in the Workplace Injury Rehabilitation and Compensation Act 2013.

Clause 16 introduces section 167J of the Workplace Injury Rehabilitation and Compensation Act 2013 that provides that section 208 of the act applies to determinations relating to a worker’s impairment made for the purpose of determining eligibility for weekly payments after the second entitlement period. Section 208 prohibits an appeal to a court or tribunal for a determination as to the degree of permanent impairment. The extension of this limitation ensures that there is consistency in the disputation of decisions relating to permanent impairment and ensures that there is finality in the opinion of the medical panels. This recognises that medical experts are best equipped to ultimately determine medical questions.

Incorporated speech continues:

Information sharing

The Bill also amends the Workplace Injury Rehabilitation and Compensation Act 2013, and Occupational Health and Safety Act 2004 to allow information collected by WorkSafe Victoria under either Act, to be used where reasonably necessary or directly related to a function or purpose of WorkSafe Victoria under any Act that it administers. This change is intended to provide for improved internal information sharing between WorkSafe Victoria’s business functions.

These changes will allow for information obtained under WorkSafe Victoria’s health and safety function to be used, where appropriate, for a compensation function and vice versa. These changes will require that the use of information only occurs where reasonably necessary for the purpose of performing a function or exercising a power conferred under an Act that WorkSafe Victoria administers or is directly related to a function or activity conferred on the Authority under the other Act. These changes allow relevant information identified in health and safety activities to inform WorkSafe Victoria’s role in administering Victoria’s workers’ compensation scheme. Similarly, it allows for information obtained in insurance functions to inform WorkSafe Victoria’s prevention activities under the Occupational Health and Safety Act 2004.

Statutory Review

Finally, the Bill requires the Minister to cause an independent review of the operation of the amendments made by this Bill during the 2027 calendar year. The review must be conducted by a panel of experts with experience in the law, medicine, finance and occupational health and safety in accordance with terms of reference set by the Minister. This independent review will examine all changes made by the Bill, to measure their effectiveness, identify areas for potential improvement and assess the ongoing impact of these changes on the continued operation of the Scheme.

These significant changes to the Scheme included in the Bill seek to ensure the Scheme is appropriate for the modern workplace, capable of facilitating successful return to work outcomes and is financially sustainable, so it can continue to support Victorian workers into the future.

I commend the Bill to the house.

David DAVIS (Southern Metropolitan) (17:35): I move:

That debate be adjourned until Tuesday 5 March 2024.

Council divided on motion:

Ayes (20): Matthew Bach, Melina Bath, Jeff Bourman, Gaelle Broad, Katherine Copsey, Georgie Crozier, David Davis, Renee Heath, Ann-Marie Hermans, Wendy Lovell, Trung Luu, Sarah Mansfield, Bev McArthur, Joe McCracken, Nick McGowan, Evan Mulholland, Aiv Puglielli, Samantha Ratnam, Adem Somyurek, Rikkie-Lee Tyrrell

Noes (19): Ryan Batchelor, John Berger, Lizzie Blandthorn, Enver Erdogan, Jacinta Ermacora, David Ettershank, Michael Galea, Shaun Leane, David Limbrick, Tom McIntosh, Rachel Payne, Georgie Purcell, Harriet Shing, Ingrid Stitt, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Sheena Watt

Motion agreed to.

Debate adjourned until Tuesday 5 March 2024.

David DAVIS (Southern Metropolitan) (17:42): I desire to move, by leave:

That this house requires the Economy and Infrastructure Committee to inquire into, consider and report, by 5 March 2024, on the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023, and in undertaking this inquiry the committee is required to hold public hearings and is empowered, under the standing orders, to utilise a subcommittee.

Leave refused.

David DAVIS: President, since leave has been denied, I wonder if leave could be provided to put the motion on the notice paper now so that people can see what we are talking about exactly.

Jaclyn Symes: Email it around.

The PRESIDENT: I will take that as a no.