Employers must have a workers’ compensation insurance policy for their workforce and an injury management system.
Not having a workers’ compensation insurance policy may result in prosecution by WorkCover WA with fines of up to $5,000 per worker and 5 years in premium back payments. Your company could also be liable for the cost of the claim, should any of your workers suffer a work-related injury.
Costs associated with this type of claim could be more than $600,000. You could also be liable for any actions taken at common law.
Coverage
Under the Workers’ Compensation and Injury Management Act 1981 (the Act), a “worker” includes full-time, part-time, apprentice, casual and seasonal employees regardless of their age or whether they are paid by wages, salary, commissions or piece rates.
Contractors and Sub-contractors
In some cases, contractors and sub-contractors may also be considered “workers” under the Act and will therefore also require workers’ compensation under your insurance policy. If the contractor or subcontractor is performing actual activities of the employer’s trade or business or performing activities for the efficient conduct of the employer’s trade or business, then they are likely to be considered a worker.
A contractor / sub-contractor will be able to lodge a claim against your policy if they meet the definition of “worker” under the Act. In considering whether this will apply, you should declare details of all contractors to your insurance broker.
If a contractor/sub-contractor is not deemed a worker, you should ask for a copy of the Certificate of Currency – this is proof that they have a current workers’ compensation insurance policy. If the contractor/ sub-contractor does not have a workers’ compensation policy they may be able to lodge a claim for a work-related injury against your policy.
Volunteers and work experience students
Volunteers and work experience students are generally excluded from the employer’s workers’ compensation insurance because they are not remunerated for the work that they perform. If you provide remuneration, then they are likely to be covered by your policy if they have a work-related injury.
Visitors to your workplace are generally excluded from workers’ compensation.
Instead, volunteers, visitors and work experience students are likely to be covered by your public liability insurance. Be sure that your public liability insurance covers these people and check that work experience students are covered by their school insurance.
Working directors
A working director is a director who undertakes work on behalf of the company and their earnings reflect their personal manual labour or services to the company. In order for the working director to be covered under the relevant workers’ compensation policy, the employer must declare on the policy the name of the director and a statement of their wages, salary and other remuneration paid to the director.
Wages declaration for insurance
The word “wages” generally means all gross wages, salaries, remuneration, commissions, bonuses, overtime, allowances and the like, directors’ fees and all other benefits paid (whether at piece work rates or otherwise, and whether paid in cash or in kind) to or in relation to a worker before deduction of income tax.
Your insurance broker can clarify which payments need to be included in your declaration.
Injury management system
All employers must have a written Injury Management System which complies with the Workers’ Compensation Code of Practice (Injury Management) 2005. This system must document:
- what steps the employer will take when an injury occurs at the workplace; and
- details of the person who has day-to-day responsibility for the system and how they can be contacted.
Procedures should be in place to ensure that workers know that they must notify their employer as soon as possible if they are injured at work or suffering from a work- related illness.
An employee is entitled to a copy of the Injury Management System if they request it.
What is injury management?
Injury management is about ensuring that an injured employee obtains:
- timely and appropriate medical treatment; and
- assistance to return to sustainable employment.
The role of medical treatment in the workers’ compensation scheme is to facilitate the employee’s best possible recovery from the workplace injury.
As the employer you are encouraged to speak to the employee’s treating doctor about the employee’s medical treatment plan.
The most significant cost of a workers’ compensation claim is the time lost from work. Therefore, it is essential that the employer works with the employee and the treating doctor to develop a return to work program.
Return to work programs
A return to work program is required when an employee is medically certified as fit to return to work on a restricted basis by their treating doctor or treating medical specialist.
The employer is responsible for documenting the return to work program, and there are a number of steps in the process:
Step 1 - confirm the return to work goal.
In the majority of cases this will be for the employee to return to their pre-injury job.
The employer should seek the treating doctor’s opinion about when this goal is likely to be achieved. This will allow the employer to monitor the effectiveness of the return to work program. During the course of the return to work program, the employer in consultation with the treating doctor, will evaluate the likelihood of the employee achieving this goal.
Step 2 - treating doctor identifies the employee’s capabilities or restrictions.
Once this has been identified the employer and employee should discuss what workplace duties the employee can safely undertake. These duties are then documented on the return to work program.
Step 3 – agree to timeframes.
The employer, employee and treating doctor should agree on when the return to work program is to be reviewed.
A new return to work program will be required when the employee’s capabilities or restrictions are altered.
Submitting a claim
Upon notification of a workplace injury, employers should arrange for the appropriate documentation to be completed by the worker and forwarded to their insurer. Both the WorkCover WA – First Certificate of Capacity (Form 3) and the Workers’ Compensation Claim Form (available from the insurer) must be lodged with the insurance company within 5 working days of a claim being received by the employer.
The insurance company will then have 14 days to make a determination on the claim. They can either accept, decline or pend the claim. During this period, the employer may wish to pay the employee’s sick or other accrued leave. It is advisable that the employee agrees to the arrangement in writing.
If the worker cannot immediately return to their pre-injury duties they will require a return to work program.
Accident reporting
The Occupational Safety and Health Act 1984 requires notification by the employer to the WorkSafe WA Commissioner of certain injuries and diseases.
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- Contact CCI’s Occupational Safety & Risk Services team on (08) 9365 7415 to determine whether you need to report a particular injury. You can also contact WorkSafe WA on 1300 307 877.
Leave entitlements for employees on workers’ compensation
National system employer in WA, who are covered by The Fair Work Act 2009 (FW Act), are currently not required to accrue annual or personal leave while an employee is off work on workers’ compensation. A recent case in NSW, using NSW workers compensation legislation, determined that annual leave was to be accrued during a period of workers compensation. There is no test case on the matter in WA and as such annual leave does not need to be accrued at present time, however employer should be aware that this view may change should a test case be held.
Periods of workers compensation are deemed to be “paid” periods for the purposes of the FW Act and therefore count as service when calculating redundancy pay and determining eligibility to claim unfair dismissal for national system employers and employees.
Employers may approve requests to use annual leave and long service leave entitlements while an employee is off work on workers’ compensation. An employee can receive both workers’ compensation payments and payments for their accrued leave entitlement at the same time.
Personal leave, however, cannot be paid whilst an employee is receiving weekly payments for an injury or illness as prescribed under the Act.
Workers compensation benefits
When a workers’ compensation claim is accepted by the insurer, the injured worker is entitled to benefits as prescribed by the Act. These benefits include:
- funding for reasonable medical and allied health treatment that facilitates the worker’s recovery from the injury to a prescribed amount;
- compensation for time lost from work;
- funding for an accredited rehabilitation provider to assist the worker remain at or return to work to a prescribed amount;
- payment for vehicle running expenses at the prescribed rate;
- a legislative lump sum for a permanent loss of function (called a permanent impairment);
- fatality and funeral expenses;
- they may be entitled to a lump sum for payment of their future entitlement for medical treatment and time lost from work (called redemption).
Reasonable medical treatment
WorkCover WA has a list of prescribed fees and services. Insurance companies are required to pay for treatment at these rates.
There is a prescribed set of funds available for medical and hospital expenses of $68,492*.
* Amount valid to 30 June 2019 or as amended under the Western Australian Government Gazette.
Time lost
If a claim is accepted and the employee is unfit with an appropriate Medical Certificate, an employer is required to pay compensation to the worker from the date of incapacity.
The rate of compensation is dependent on whether the worker is employed under an “Industrial Award” (as defined) or not.
An Industrial Award is an award or order made by the Western Australian Industrial Relations Commission, an industrial agreement as defined by the Industrial Relations Act 1979 or an award or enterprise agreement as defined in the Fair Work Act 2009 (Cth).
A worker cannot be paid above the capped rate which is indexed 1 July. The capped rate is currently $2,665.70* weekly.
The maximum amount available to an employee in the form of weekly compensation, over the life of the claim is currently $228,307*.
| For weeks 1-13 of incapacity | For week 14 and beyond |
| Industrial Award - the rate of weekly earnings (including average of overtime, bonuses, allowance, over award and service payments paid on a regular basis) if the relevant Industrial Award was in operation. | Industrial Award - the rate of weekly earnings under the relevant Industrial Award including over award or service payment regularly paid and any allowance regularly paid relating to the number and pattern of hours worked. |
| Non-Industrial Award - the employee’s average weekly earnings over a period of one year prior to the date of injury. | Non-Industrial Award - 85% of the employee’s average weekly earnings. |
Vocational rehabilitation
The return to work is more likely to be successful when it takes place in the workplace between the employer, worker and the treating doctor. There are times when the return to work is complex or a specific service is required to facilitate the return to work.
- WorkCover WA has a list of accredited vocational rehabilitation providers on their website: www.workcover.wa.gov.au.
Where a referral is made for a specific service only (such as an ergonomic assessment) the employer does not need to obtain approval from the worker or treating doctor.
Where a referral is made for general vocational rehabilitation services agreement is required from the employer, worker and treating doctor. The choice of rehabilitation provider is the worker’s.
The maximum available for vocational rehabilitation services is $15,981*.
Vehicle running expenses
A worker is entitled to vehicle running expenses when they are required by the employer, the employer’s insurer or medical adviser to travel from home to a place for treatment or vocational rehabilitation.
The vehicle running expenses are compensated at 46* cents per kilometre.
Permanent impairment
A worker who does not fully recover from the effects of the injury may be entitled to a lump sum payment for permanent impairment.
An assessment of permanent impairment can be obtained from an approved medical specialist (listed on the WorkCover WA website). The approved medical specialist will provide the assessment of permanent impairment in accordance with strict Guidelines.
It should be noted that a worker who accepts a lump sum payment for permanent impairment may re-open their workers’ compensation claim or lodge a new workers’ compensation claim if they reinjure the same body part.
*Amount valid to 30 June 2019 or as amended under the Western Australian Government Gazette.
Damage to property
A worker is entitled to replacement glasses, contact lenses, clothing and other listed items if they are damaged or destroyed in the workplace incident.
Fatality and funeral expenses
In the event of a workplace fatality, dependents of the worker are entitled for a lump sum payment of $570,768*. Children of the worker are entitled to an allowance of $135* per week.
Funeral expenses entitlements are $9,903*.
Common law
A worker is entitled to pursue a claim for negligence at common law if they have a relevant level of whole person permanent impairment (WPPI) and this impairment was registered with the Director of WorkCover WA within the prescribed timeframe.
A worker must obtain a level of WPPI from an approved medical specialist and register this with WorkCover WA within 12 months of the date that the worker makes a claim for compensation against their employer (i.e. lodges a claim form and a medical certificate with a partial or total incapacity). This timeframe may be extended in limited circumstances.
Where a worker has registered a WPPI of not less than 15% and less than 25% with WorkCover WA and has elected to pursue a common law claim, they are entitled to a maximum of $479,448* (including any workers’ compensation claim payments).
Where a worker has elected to pursue common law and the whole person permanent impairment is not less than 25% they are entitled to seek unlimited damages.
Redemption
Workers may be entitled to a lump sum payment for likely future medical expenses and compensation that they would receive under the workers’ compensation claim. This lump sum is called redemption.
Redemption of a workers’ compensation claim will prevent a worker from re-opening the claim at a later date if they have a recurrence of the injury. It does not prevent a worker from lodging a new claim for the same body part if they have another incident at work. Family members (including children) who are dependent on the deceased worker’s earnings are entitled to a lump sum payment for the fatality and income support.
Further Information
Please contact the CCI Safety and Risk Services team on (08) 9365 7415 or email [email protected]. for further advice or assistance in writing your injury management system and describing the steps to be followed when there is an injury in your workplace (penalties can apply to employers who do not establish an injury management system).
