On 19 March 2014, The Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014 was introduced to parliament. The Bill represents a significant change from the previous position outlined in late 2013. The Bill now provides an opportunity for national employers to consider self-insurance without the previous barriers under the previous framework.
The Bill addresses the eligibility for non-Commonwealth employers to join the Comcare scheme and recommends implementation of some key recommendations from the Hanks and Hawke review of the Commonwealth Safety, Rehabilitation and Compensation legislation (SRC Act).
The Bill outlines five key changes to the SRC Act:
- removal of the requirement to demonstrate competition with a Commonwealth Authority or previous Commonwealth Authority to be eligible to apply for a licence (‘Competition test’)
- introduction of a national employer test to demonstrate eligibility – requiring the corporation to operate in two or more states or territories of Australia and have workers’ compensation obligations either as a premium payer or self-insurer
- introduction of group licenses
- exclusion of access to compensation when an employee is injured during a recess break away from the employer premises
- exclusion of access to compensation when an employee engages in serious and willful misconduct.
These recommended changes to the SRC Act have the potential to significantly reduce the compliance, administrative and financial burden on employers that operate nationally across Australia.
The introduction of a single group license will also remove previous financial barriers for large corporations to enter the Comcare scheme. A decision is still to be made in relation to the impact on Work Health and Safety (WHS) compliance for national self-insurers, however a number of options have been outlined in the licensing and other immediate amendments under the Safety, Rehabilitation and Compensation Act 1988 Regulation Impact Statement prepared by the Department of Employment.
These options include:
- maintain status quo – no access to WHS arrangements nationally
- national employers to access self-insurance and group licences but not WHS under the Comcare scheme
- national employers to access self-insurance and group licences and WHS provisions under the Comcare scheme.
Aon Hewitt recommends that organisations examine how these amendments will affect your business operations to ensure you remain compliant with the changing legislative requirements.
For further information, start a conversation with the Aon People Risk team.