Workers comp act places unfair burden on business

November 26, 2021
By Ioni Doherty

Industry groups have welcomed the New South Wales’ government’s move to repeal section 19B of the Workers Compensation Act 1987 (NSW).

Section 19B of the Act was introduced in May last year and was designed to ensure workers could file a Workers Compensation claim in the event they caught the virus during the normal course of their duties. The wording of the Act was amended to interpret that if workers contracted the virus, the presumption would be that they did so while at work.

NSW Premier, Dominic Perrottet, said the amendment to section 19B is expected to save businesses over half a billion dollars in insurance premiums that will now not happen.

“Now that the economy is steadily reopening, we want businesses investing in new staff and higher wages, not inflated insurance bills,” the Premier said.

“When the NSW Government originally made the amendments, we had little information about how COVID-19 was spread and whether it was more likely to be contracted in workplaces, and we certainly didn’t have a vaccine rollout.”

ClubsNSW, the Australian Hotels Association NSW and Restaurant and Catering Australia are just three of the industry bodies concur that section 19B as it currently stands places an unfair burden on business.

ClubsNSW CEO, Josh Landis says, “It’s impractical for businesses to prove that an employee contracted COVID-19 outside of the workplace, effectively making them liable for events to which they have no connection or fault. Section 19B will cause insurance premiums to skyrocket, placing undue financial pressure on businesses that are still trying to get back on their feet after being closed for an extended period.” 

With COVID case numbers expected to surge in the coming months, businesses could be held responsible for claims if the Act remains as is. 

“The workers compensation scheme exists to provide support to employees who sustain an injury or illness in the course of their employment — it’s not a universal safety net to compensate people for getting sick in the ordinary course of their lives,” said AHA NSW CEO, John Whelan. 

“If the repeal is passed, an employee who can establish they have contracted COVID at work still has full access to a workers compensation claim. That strikes a fair balance for employees and employers.” 

There are multiple tools for employees to trace their diagnosis to their workplace, including NSW Health case alerts and requirements for employers to monitor and report COVID-19 diagnoses among employees. 

“All business owners support their workers when they’re sick or unable to work. However, this current arrangement will only serve to bankrupt insurers that help keep workers in the first place,” said Restaurant and Catering Australia CEO, Wes Lambert. 

“If this happens, we don’t see how any long-term support could ever be provided to those who need it. 

“Workers’ safety and wellbeing is at the forefront of every venue operator’s mind. Reform in this space is absolutely critical to achieve that.”

Minister for Finance and Small Business Damien Tudehope said recent estimates based on Doherty Institute modelling, indicate COVID-19 claims could cost the NSW workers compensation system up to $638 million over the coming year.

“The NSW Government is calling on the Opposition to support this legislation to give businesses confidence and certainty as we reopen our economy,” Mr Tudehope said.

New South Wales COVID Update

Cases are expected to increase dramatically when restrictions are removed on Wednesday, 15 December or when the vaccination rate reaches 95 per cent. At this point, the 1 person per 2 square metre rule will come into play with no COVID limits on the number of people allowed in venues, stadiums and nightclubs.

Singing and dancing will be allowed and patrons may drink while sitting or standing inside or out at venues. Proof of vaccination will no longer be required for entry either.

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