Chapter 15

Workers Compensation and Rehabilitation

In This Chapter

Understanding your workplace injury responsibilities

Managing employees’ return to work plan

Working within doctor requirements

Fighting an injury claim

Finding solutions for permanently incapacitated staff

Advice after injury is like medicine after death.

Proverb

C ompensation and rehabilitation for personal injuries suffered while at work are two keystones in the three-part foundations of Australian workplace health and safety. (The statutory duty of care owed to your employees and the practical measures you can take to ensure the health, safety and welfare of all people employed or directly affected by the conduct of your small business is the other keystone — refer to Chapter 14 for more on this.)

In this chapter, I explain your responsibilities under the various state and territory laws regulating workers compensation. I explain who is covered by the law and the meaning of workplace-related injury. I outline your obligation to rehabilitate injured employees, and attempt to demystify return to work programs, including how to talk with medical practitioners and other health professionals involved with the treatment of injured employees. I cover disputing a workplace injury claim, and also explain how to manage permanently incapacitated employees.

Knowing Your Responsibilities

The origin of Australian workers compensation lies in 19th-century British law. Prior to the implementation of workers compensation laws, an injured worker’s only means of receiving compensation was to sue the employer for negligence at common law. Over many years, governments have curtailed the rights to damages for personal injury at work under common law as statutory compensation payments and access to rehabilitation became the primary means of ensuring injured workers were adequately supported.

You can find many similarities in the eight Australian state and territory workers compensation schemes; however, you need to be careful to also note the differences, because you’re obligated to comply with the insurance arrangements, compensation and rehabilitation schemes applicable in the state or territory in which your small business is based and in which your staff work.

The first similarity between all state and territory legislation is that, as the employer, you’re responsible for insuring your workforce against the possibility of injury suffered while performing work in your small business. The second similarity is that you’re responsible for administering weekly compensation payments to workers who are injured while performing work at your small business.

However, whether a person you employ is entitled to compensation for an injury suffered while at work depends on how the following key terms are defined by the state and territory law in which your small business operates:

Workers
Deemed Workers
Injury
Workplace

Generally, if a person working in your small business fits the definition of ‘worker’ or is otherwise deemed to be a worker by the law, and that person suffers an injury at your workplace, she is entitled to compensation and you’re responsible for her rehabilitation. However, defining ‘worker’ isn’t always that simple. The following sections cover the meaning of terms as they’re applied in each Australian state and territory.

Defining workers

A worker is generally defined as a person employed by you under a contract for service — that is, someone you would normally classify as an employee. However, the term also covers persons who fall within the grey areas of employment regulation, such as some independent contractors and labour-hire employees.

Table 15-1 summarises the definitions of ‘worker’ applied in each state and territory. Use it to determine who may be covered in your small business. Your local workers compensation insurer or state or territory Workcover authority will also be able to confirm the coverage.

Table 15-1 Defining Workers

State or Territory	Definition of ‘Worker’
Australian Capital Territory	An individual who has entered into or works under a contract of service with an employer, whether the contract is expressed or implied, oral or written, works for labour only or substantially labour only, or works for another person under contract unless the person is paid to achieve a stated outcome, and has to supply plant and equipment, and is liable for the cost of rectifying any defective work or has a personal services business determination.
New South Wales	A person who has entered into or works under a contract of service or a training contract with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing) including labour hire employees and outworkers.
Northern Territory	A person with a contract or agreement of any kind to perform work or a service. Exclusions apply for people who supply an ABN.
Queensland	An individual who works under a contract of service; a person who works under a contract, or at piecework rates, for labour only or substantially for labour only. In particular, any person who works for another person under a contract (regardless of whether the contract is a contract of service), unless the person can satisfy all three elements of a results test, or it can be shown that a personal services business determination is in effect for the person under the Income Tax Assessment Act 1997* (Cth).
South Australia	A person by whom work is done under a contract of service (whether or not as an employee), a person who is a worker deemed by virtue of the law, a self-employed worker; this includes a former worker and the legal personal representative of a deceased worker.
Tasmania	Any person who has entered into, or works under, a contract of service or training agreement with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is express or implied, or is oral or in writing, and any person or class taken to be a worker (deemed) for the purposes of the law.
Victoria	An individual who performs work for an employer or agrees with an employer to perform work at the employer’s direction, instruction or request, whether under a contract of employment (whether express, implied, oral or in writing) or otherwise; or someone who is deemed to be a worker.
Western Australia	Any person who has entered into or works under a contract of service or apprenticeship with an employer, whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, is oral or in writing.

*The three elements of the Queensland results test to be satisfied are that the person performing the work is paid to achieve a specified result or outcome, the person performing the work has to supply the plant and equipment or tools of trade needed to perform the work, and the person is, or would be, liable for the cost of rectifying any defect in the work performed.

Source: Safe Work Australia © Commonwealth of Australia 2012.

Understanding deemed workers

Many occupations have not traditionally been viewed as falling within the definition of employment or operating as contracts for service but, nevertheless, workers in these occupations are protected if they suffer an injury in the course of performing their chosen occupation, vocation, profession or endeavour. This protection has been achieved by deeming such people to be workers for workers compensation purposes even if they’re not considered workers under other forms of employment regulation.

Table 15-2 lists the types of employment or working arrangements outside of the traditional forms that are deemed workers for the purpose of workers compensation, by state and territory.

Table 15-2 provides a useful reference point to determine whether other people who work with or for your small business (not employees) are covered by workers compensation while working with or for your business.

Table 15-2 Defining Deemed Workers

State or Territory	Definition of ‘Deemed Workers’
Australian Capital Territory	Regular contractors, subcontractors, trainees, outworkers, timber contractors, family day care carers, religious workers, volunteers, public-interest voluntary workers
New South Wales	Workers lent or on hire; outworkers; other contractors; contractors under labour-hire services arrangements; rural workers; timber-getters; salespersons, canvassers, collectors and others; tributers; mine employees; mines rescue personnel; jockeys and harness racing drivers; drivers of hire-vehicles or hire-vessels (covered by contract of bailment); caddies and others employed through club; shearers’ cooks and others; fire fighters in fire district; workers at place of pick-up; boxers, wrestlers, referees and entertainers; voluntary ambulance workers; ministers of religion; ministers of religion covered by policies; participants in training programs
Northern Territory	Workers of householders, working directors, jockeys, taxi drivers, community workers and volunteers, family members, emergency service volunteers
Queensland	Workers lent or on hire (including through labour-hire firms and holding companies), share farmers, salespersons, labour workers, contractors and workers of contractors
South Australia	A person covered by a contract, arrangement or understanding under which the worker works for another in prescribed work or work of a prescribed class, including building work (other than wall or floor-tilers), cleaning work, council driving, taxi and hire car driving, transport driving, work as an entertainer, work as an outworker, work as a licensed jockey, work as a minister, priest or member of another religious order (except Anglican, Catholic, Lutheran and Uniting churches or the Salvation Army)
Tasmania	Contractors where the work exceeds $100 and is not incidental to a trade or business regularly carried on by the contractor; services of workers lent or on hire; police volunteers; volunteers performing fire-fighting operations, fire prevention operations and ambulance services; port and harbour persons engaged at places of pickup; salespersons, canvassers and collectors; luxury hire-car drivers and taxi drivers; jockeys; specified clergymen; participants in training programs
Victoria	Students under work experience and practical placement arrangements, apprentices, persons participating in declared training programs; secretaries of co-operative societies; door-to-door sellers; timber contractors; drivers of passenger vehicles; owner-drivers carrying goods for reward; contractors; share farmers; declared workers of religious bodies and organisations; Crown employees, ministers, government members, judicial officers, bail justices, public corporation members, retired police reserve members; municipal councillors; persons engaged at places of pick-up for the purposes of being selected for work (for example, fruit pickers); jockeys and track riders, riders and drivers in mixed sports gatherings; outworkers; sailors
Western Australia	Workers lent or let on hire, workers under a contract in substance for personal manual labour or service, workers under an industrial award or agreement, deceased workers, police officers (who suffer an injury and die as a result of that injury), clergy, tributers, jockeys, Crown workers, certain persons deemed workers, working directors

Source: Safe Work Australia © Commonwealth of Australia 2012.

Defining workplace injuries

Whether a person (worker) is entitled to workers compensation is dependent on the relationship of the injury to the person’s work. Although the ordinary meaning of injury includes harm caused to a person’s body as a result of trauma, determining whether a particular event, incident or series of incidents causing harm or damage to a person constitutes a workplace injury involves considering several factors, as follows:

Relationship to employment and contribution of employment: A relationship or link between the injury and employment needs to exist before the worker can claim workers compensation. In addition, a worker’s employment has to be a significant or substantial contributor to the injury.
Aggravation and acceleration: Sometimes employment isn’t the cause of an original injury, but the employee’s work may have aggravated or accelerated an existing injury, leading to a right to compensation.

tip_4c_fmt Employment forms often ask prospective employees whether they have a pre-existing illness or injury that may affect their ability to perform the work. This is an area of employment regulation that is quite complex and is a source of some risks for your small business if you manage it incorrectly. The right to ask the question must be viewed in the context of your other obligations under anti-discrimination and workplace rights laws. Refer to Chapter 12 for an explanation of the issues impacting on this area, and what you can ask prospective employees.

Diseases: Diseases are classed differently from physical injuries, and include any physical or mental impairment, disorder, defect or morbid condition, whether of sudden or gradual development.

tip_4c_fmt Because the term ‘disease’ is interpreted differently in each state and territory, all jurisdictions except Queensland have in their regulations tables of diseases that are deemed to be caused by work. Seek advice from your state or territory Workcover authority for more information on the most current table of diseases.

Industrial deafness: Industrial deafness is generally judged separately from other forms of injuries. All states and territories have an impairment threshold in place for industrial deafness, which means that injured workers aren’t entitled to lump sum compensation until they reach the threshold level. Seek advice from your state or territory Workcover authority for more information on the threshold level.

Injuries must occur in the workplace

Being injured is of itself not sufficient to entitle the worker to compensation. The injury must arise out of or in the course of employment. So, which part of the daily grind constitutes your workplace and what is excluded?

Physical injuries occurring on work premises during the course of performing a job are considered as arising in the course of employment. However, determining whether or not a person was at work when injured isn’t always simple. For example, do injuries that occur in the following circumstances satisfy the definition of a workplace injury:

Breaks spent at the work premises?
Breaks spent outside the work premises?
Journeys to and from work?
Work-related travel?

The good news for employees is that work-related travel (that is, travel on official working business) and authorised breaks at work premises are at the time of writing considered to be in the course of employment in each state and territory. However, journeys to and from work (that is, travelling from home to work and back) are only covered in NSW, Queensland, Northern Territory and the ACT.

Authorised breaks spent outside of the work premises are equally problematic. If workers suffer an injury during a lunch break while off normal work premises, for example, they’re covered for compensation everywhere in Australia except in South Australia and Tasmania (in which case they’re not covered).

Excluding reckless and wilful behaviour

In most states and territories, workers compensation laws prescribe certain circumstances in which workers compensation will be denied even though the worker has suffered an injury. Workers who suffer an injury but were reckless or wilfully misbehaving when they suffered the injury are excluded from receiving workers compensation benefits. However, an injury caused by the serious and wilful misconduct of a worker that results in death or serious and permanent impairment will usually mean workers compensation is payable. For example, a worker will have been reckless or wilfully misbehaving by driving drunk or at prohibited speeds or in contravention of clear directions and signage at worksite. Anyone hurt by their actions will be covered, but the worker at fault won’t be covered.

Mental stress, anxiety and other psychological injuries

To be eligible for compensation, workers who claim to have suffered a psychological injury must be able to demonstrate that the injury wasn’t related to any reasonable action taken by their employer in relation to a dismissal, retrenchment, transfer, performance appraisal, demotion or disciplinary action. In general, any management action taken on reasonable grounds and in a reasonable manner doesn’t expose your small business to successful claims for workers compensation.

One of the most frustrating experiences for any employer occurs when employees avoid a job performance warning by absenting themselves from work, claiming to be ill because of an action of their employer. In this situation, you may be tempted either to not provide notice to the employee that you intend to warn or counsel them or do nothing at all. However, continuing to address the unsatisfactory performance in the correct manner is vital, because failure to do so only adds to your frustration. Don’t issue a warning or dismiss an employee while he’s on personal leave or workers compensation. You will only expose yourself to a claim that you have unlawfully and adversely acted against the person because he’s ill. Wait until the employee returns to work or when it becomes apparent that he’s not going to be able to return to work. See the section ‘Managing Permanently Incapacitated Staff’, later in this chapter, for more on this.

Planning the Return to Work

As important as compensation is to employees who suffer a workplace injury, rehabilitating workers and helping them return to work as soon as possible is also important. The importance of this objective is reflected in every state and territory law regulating workers compensation. Whenever a worker is absent from work due to a workplace injury, you have an obligation to support the worker to recover and return to work.

Rehabilitation starts right away

Most of the injuries that occur at your work and that lead to claims for compensation shouldn’t be a surprise to you. (Notification of injuries should be part of your health and safety procedures — refer to Chapter 14 for more on this.)

Nevertheless, sometimes the first that you know about a workplace injury is when you’re notified of the employee’s absence and receive a medical certificate indicating that the person is unfit for work. The natural inclination of most employers is to leave such workers alone, not contact them and wait patiently for their return to work. The last thing that you want is to be accused of harassing injured workers when they’re at their most vulnerable. However, news flash folks — rehabilitation starts now. The obligation to support workers to return to their pre-injury health commences as soon as you become aware of the injury and usually extends for at least 12 months.

Implementing a return to work policy

Throughout Australia, small-business owners are expected to have a return to work policy or program in place, covering all of the workers in the business. This policy or program doesn’t have to be in writing, but doing so is worthwhile.

I’m a great fan of employment policies because they provide a convenient guide or checklist that you can follow when a situation arises, which enables you to act swiftly and confidently. Refer to Chapter 8 for more on employment policies.

Go to www.dummies.com/go/hrsmallbusinessau for a model workplace injuries return to work policy.

Designing an individualised return to work plan

The real rehabilitation work occurs when you create an individual return to work plan for an injured worker. This plan provides a map for the injured worker, the treating medical practitioner, occupational rehabilitation providers, insurer and yourself (as well as anyone else who contributes to the rehabilitation), guiding the return to work to a successful conclusion.

The individual return to work plan is a form of injury management planning, and should outline the medical and other health services required to return the injured worker to the workplace. Importantly, you should include information on the worker’s physical or mental capacity for work, the rehabilitation goal (such as return to full physical capacity), and the actions required by the worker, employer, nominated treating doctor, rehabilitation provider and insurance agent.

Follow these steps to create and implement an individual return to work plan:

Appoint a return to work (RTW) coordinator.

Appoint yourself to this role, because the coordinator needs to be a person in the business who has the authority to make decisions.
Collect and share information on the injured workers capacity.

See the section ‘Communicating well with doctors’, later in this chapter, for more.
Develop the RTW plan.

This plan should include information on the capacity of the injured worker, rehabilitation goals, health aids and workplace adjustments, hours of work, list of duties (and prohibited duties), timetable and the names of all parties that contribute to the RTW plan.
Consult with the injured worker and other parties on the RTW plan.

This could include the treating medical practitioner, your insurer and any rehabilitation providers that may be contributing to the return to work.
Get agreement to the RTW plan from all parties.
Implement the RTW plan.

This means the injured worker commences work in accordance with the RTW plan.
Monitor and review progress.

Progress must be monitored as required under the RTW plan. If appropriate, you can adjust the plan if the recovery is slower than expected, or accelerate it if the injured worker’s recovery is more rapid.
Return the worker to pre-injury job, or provide with permanently modified duties or an alternative job.

The goal is to return workers to full capacity so that they can resume the work that they performed for you before the injury occurred. However, that may not always be achievable and, therefore, you need to give consideration to a worker resuming work permanently in an alternative job or with modified duties, hours of work or similar.

Dealing with Doctors (and Not Getting a Headache)

The first useful task you can undertake in the return to work planning phase is to better understand the nature of the injury and the impact it has on the worker’s capacity to perform the job.

You can’t rely on the worker alone for information and to guide the return to work plan. You must make an attempt to involve the health professional who is treating the worker and others if necessary who have the professional capability to support the worker’s rehabilitation and return them to work.

The doctor and patient relationship is clearly confidential and the worker’s medical records are sensitive personal information. Therefore ask the worker for authority to speak directly to their treating medical practitioner and in turn they should permit the doctor to speak to you. You don’t need a written authority but I would recommend that you ask the worker to either sign a note or send you an email permitting you and their doctor to speak about the injury. State and territory Workcover authorities sometimes publish template forms that you can download and use for these purposes. I recommend you go to their websites and search for them as they can save a lot of time creating your own.

Communicating well with doctors

Make a list of the information that you need from the worker’s doctor and the information that you want to provide to the doctor about the work and the workplace.

Questions you could have for the doctor may include the following:

What is the nature of the injury?
How does the injury affect the worker’s physical or mental capacity? For example, does the injury restrict the worker’s capacity to walk, grip objects, use a computer, or drive a car or forklift?
What is the prognosis for recovery?
How long does the doctor predict a full recovery is likely to take?
What is the worker capable of performing now?
Could medical or other aids be used to assist in recovery?

Here is some information you may need to share with the doctor:

The primary purpose of the job and the tasks that the worker performs to successfully do the job.
The working environment — for example, factory, retail, warehouse, driving, public relations, office or dental clinic.
The current environmental and operational impediments (if any) to the worker returning to work — for example, minimum licensing standards or certificates that attest to the worker’s fitness to perform the work.
The potential adjustments that you can make to the work and workplace to assist in recovery and the return to work.

Talking with the treating doctor is a two-way conversation, and you should take the opportunity to share as much information as is necessary to manage the return to work plan.

Confirming incapacity and suitable duties

Medical practitioners throughout Australia usually certify the fitness of their patients to attend work and perform duties (in other words, their capacity for work) along one of the following lines:

Suitable duties only. This means work suited to the worker’s current abilities, taking into account his current capacity for work and medical condition, age, skills, work experience, place of residence and pre-injury employment.
Fit for restricted or light duties. This is similar to suitable duties and is a term usually applied to manual or physical work.
Unfit for any duties.

The certificate may also nominate a limited number of days per week or hours each day that the worker would be fit to work or perform some suitable duties.

Having workers return to work isn’t unusual, and is often beneficial to the rehabilitation, allowing employees to build confidence gradually while recovering from the injury. However, this measure should be temporary on the way to a return to full capacity and to the pre-injury work.

Certificates that nominate suitable, restricted or light duties usually stem from one-way conversations with doctors and their patients, the injured workers. The treating doctor can’t truly understand the worker’s capacity for work unless you explain the work to them and the environment in which it is performed. So be prepared to challenge medical practitioners to consider all of the information in certifying whether or not the worker is fit for suitable or restricted duties.

Disputing Claims of Workplace Injury

If you don’t dispute the claim that a worker has suffered a workplace injury, the procedure to manage injured workers is fairly straightforward. Your insurer investigates the matter, seeking your response to the claim and weighing the medical evidence it collects independently of the treating medical practitioner, and then decides the claim. Rehabilitation providers are appointed to assist in the return to work and the other steps then follow (refer to the section ‘Planning the Return to Work’, earlier in this chapter, for more).

If you dispute the claim, however, you need to inform the insurer’s investigator, providing as much factual material on the circumstances of the worker’s health and the events surrounding the alleged causes of the injury. Ultimately, whether the claim for compensation is accepted is up to the insurer, not you. It may be frustrating, but you cannot control the outcome. The only element that you can control is the arrangement for return to work.

Whether you dispute or accept the claim for workers compensation, your task is the same. You must implement a return to work plan.

If the treating doctor has certified the worker can only return to suitable or restricted duties (refer to the preceding section), the question still remains as to whether providing these duties short of a full recovery and return to the pre-injury work is reasonable.

You don’t have to accept injured workers back to work purely on the authority of the medical certificate if doing so isn’t reasonable or practicable. Your small business is likely to be less able than larger businesses to provide suitable duties. For example, if the worker’s pre-injury job was maintenance work and the doctor certifies that the worker is currently unfit to lift or bend over, allowing her to return to work may be unreasonable because she can’t practically perform any useful duties. If you do intend to dispute a claim and providing suitable duties isn’t reasonable, you should document the reasons for such a decision.

The objective of the return to work plan is to assist the worker to recover and return to work. At some stages of the plan, providing suitable duties may be reasonable and practical, and not so at other times. Even where the employee isn’t at work, you should continue the return to work plan, including regular consultation with the worker’s medical practitioner and rehabilitation providers.

Managing Permanently Incapacitated Staff

In some cases of workplace injury, you need to decide whether the injured worker is capable of resuming pre-injury employment or instead requires permanently modified duties or alternative employment in order to return to work. This is an incredibly tough decision, especially when the injured worker is permanently incapacitated and unable to return to their pre-injury job.

Note: In this section, I concentrate on injured employees because other injured workers (deemed or otherwise — refer to the section ‘Knowing Your Responsibilities’, earlier in this chapter) not directly employed by you are more likely to move on to alternative employment with other employers or businesses.

When deciding the future employment of the injured person and, in particular, whether he can continue to be employed in your small business, consider the following:

Whether or not you’ve satisfied all of the legal requirements. This includes providing a return to work plan and supporting the rehabilitation program for at least 12 months.
Whether you’ve made a thorough and objective assessment of the work capacity of the injured employee. You can’t make a decision about future employment unless you have sufficient medical information you can use to objectively determine the capacity of the person to perform the inherent requirements of their pre-injury position. Inherent requirements of the job are the fundamental aspects of the job that a person must be able to perform in order to meet the essential elements of the job — see Chapter 12 for a more extensive explanation and the exemptions for employers where the return to work would impose unreasonable hardship on the employer.

The medical information for the injured worker should provide a prognosis of the person’s capacity for work into the future and, if she hasn’t resumed any work at all, the likelihood of the person being capable of returning to work to perform the job in which they had been employed.

Armed with the medical information for the injured worker, you need to adopt one of the following courses of action:

Return the worker to pre-injury employment
Provide alternative employment or permanently modified duties
Terminate worker’s employment

The first two actions in the preceding list will primarily be based on the medical information, and your ability to make reasonable adjustments to the job duties and workplace to accommodate the permanent impairment of the injured employee. Termination of employment also depends upon the medical information but includes consideration of whether termination of employment would be discriminatory or unfair. See Figure 15-1 for a decision-making flow chart.

Figure 15-1: Return to work decision making flow chart.

Terminating the employment of an employee who’s not capable of performing the inherent requirements of the job isn’t unlawful discrimination. This means the only other consideration is whether termination would be unfair. The Fair Work Commission will take into account all of the circumstances of the decision to dismiss the employee including:

Validity of the decision in relation to the employee’s conduct and capacity
Whether the employee had an opportunity to respond
The opportunity to have a support person
Any other matters the Commission considers relevant

If you follow the steps outlined in this section and act on the advice provided in this chapter, you will significantly reduce the risk of the termination being treated as unlawful or unfair.