Changes to Worker’s Compensation Legislation

Significant amendments were made to the NT 'Workers' Rehabilitation and Compensation Act' following completion of the review of the scheme in 2014.

The scheme provides no fault coverage for eligible workers who are injured at work and supports injured workers financially whilst they are assisted to return to work.

The review made 58 recommendations in its final report to government with all the recommendations being accepted with minor variations. The purpose of the amendments is to reduce the cost for businesses and maintain the long-term viability of the scheme, while providing reasonable financial support for injured workers.

The amendments were set out in two parts.

The first amendment bill, Workers' Rehabilitation and Compensation Legislation Amendment Bill 2015, was tabled in February 2015, passed in March 2015 and came into effect 1 July 2015.

The second amendment bill, the Return to Work Legislation Amendment Bill 2015, was tabled in June 2015, passed in August 2015 and came into effect on 1 October 2015.

Summary of key changes in the first amendment bill, Workers' Rehabilitation and Compensation Legislation Amendment Bill 2015

• Legislation name change
• Presumptive legislation for firefighters and volunteers
• Definition of worker
• Increased period of compensation for older workers
• Five year cap on benefits for less serious injuries
• Increase in death and funeral benefits
• Stroke and heart attack claims
• Capping the calculation for normal weekly earnings
• Clarification on when compensation payments are reduced to 75% of normal weekly earnings

Summary of key changes in the second amendment bill, the Return to Work Legislation Amendment Bill 2015

• Payment of reasonable expenses for family counselling
• Reasonable payment for medical and rehabilitation costs during deferment
• Mental stress claims
• Formal notice be provided to the worker of any pending step down or cancellation
• Payment for legal advice at mediation
• Negotiated settlements
• Settlement of disputed claims
• Exclusion of journey claims
• Enforcement of compulsory insurance provisions by ability to stop work
• Involvement of support persons at mediation
• Improving return to work outcomes

Legislation name change

The name of the legislation has changed to Return to Work Act 1986 and Regulations. The change is to reflect the primary objective of the legislation, which is to assist injured workers to return to work.

Presumptive legislation for firefighters and volunteers

Presumptive legislation has been introduced to make it easier for firefighters and volunteer firefighters to claim workers' compensation if they are diagnosed with one of the 12 cancers listed in the legislation schedule. This change recognises that fire fighters are at greater risks of developing certain types of cancers as a result of exposure to hazardous substances while performing fire fighting activities.

Definition of worker

The definition of worker has been aligned with the PAYG definition used by the Australian Taxation Office (ATO). This change will make it easier for employers and workers to identify who is covered for workers' compensation.

Increased period of compensation for older workers

This change recognised that Territorians are staying in the workforce beyond the pension age. The period of compensation for workers aged 67 years or older has increased from 26 weeks to 104 weeks, providing older workers with a more reasonable level of financial protection should they get injured at work.

Five year cap on benefits for less serious injuries

Under this change, workers who suffer a less serious injury will be limited to five years of compensation, with a maximum of one additional year for medical and other costs. This change does not affect workers who have suffered a more serious injury and have been evaluated as having a permanent impairment of 15% or higher. These more seriously injured workers depending on work capacity may be entitled to compensation payments until pension age.

Increase in death and funeral benefits

The death benefit for the dependants of a deceased worker will increase from 260 times to 364 times the average weekly earnings. Based on the 2015 average weekly earnings figure of $1,417.20, the death benefit will increase from $368,472 to $515,860.

Stroke and heart attack claims

Compensation will not be provided for stroke or heart attacks that are not caused by work. Compensation will be paid if it is established that a person's employment is the real, proximate or effective cause of the disease.

Capping the calculation for normal weekly earnings

During the first 26 weeks when a worker is unable to work, their compensation payments are paid at their normal weekly earnings. After 26 weeks, compensation payments are paid at 75% of their normal weekly earnings. There is now a cap on the calculation of a worker's normal weekly earnings after 26 weeks to 250% of the average weekly earnings¹ ($3,543). This provision will only affect very high income earners, and in such cases will provide incentive, for both the worker and the employer to focus on return to work.

¹ The average weekly earnings figure is determined by the Australian Bureau of Statistics and is the level of average earnings in Northern Territory. The figure is used to calculate certain workers' compensation benefits and is updated annually. The 2015 average weekly earnings figure is $1,417.20.

Clarification on when compensation payments are reduced to 75% of normal weekly earnings

The legislation has been amended to clarify that compensation payments to an injured an injured worker are reduced to 75% of their normal weekly earnings after receiving a total of 26 weeks of compensation payments, rather than the period of 26 weeks from the date they were injured.

Payment of reasonable expenses for family counselling

This provision relates to broader counselling and support at an early stage, including in relation to a worker’s family to assist the process of rehabilitation.

The amount payable will be to a maximum of 1.5 times Average Weekly Earnings (this is currently equal to $2,125.80).

Reasonable payment for medical and rehabilitation costs during deferment

Where a decision is made to defer liability of a claim, there is a requirement on the employer to make weekly payments of compensation and, in the case of claims for mental stress, engage in rehabilitation.

For claims involving mental stress, payments for treatment and rehabilitation during the deferral period will ensure that a worker’s recovery is not compromised by lack of treatment or rehabilitation during that period.

This benefit excludes hospital inpatient and associated surgical costs as well as costs of interstate evacuations.

Mental stress claims

The current defence to a mental injury claim is based on reasonable administrative action and reasonable disciplinary action.

Reasonable administrative action will be replaced with management action. Management action has been defined in the legislation and will include any communication in connection with identified actions.

Formal notice to be provided to the worker of any pending step down or cancellation

Formal notice will be required to be provided to the worker of the pending step down (or cancellation), and the step down not to take effect until 14 days after the worker has been notified.

This will apply to all step downs 26 weeks, 260 weeks and 104 weeks (age).

Payment for legal advice at mediation

A mediator may recommend workers receive paid legal advice of and incidental to the mediation for an amount up to one times AWE (currently $1,513.50 (inc GST)). The entitlement is subject to approval by NT WorkSafe.

Access to a lawyer will not be provided as a right, however the mediator can recommend to the Authority that legal advice be paid for by the employer where the mediator believes it will facilitate the mediation. Examples would be a more complex matter or where a worker is mentally impaired.

Negotiated settlements

There will be provision for the finalisation of the claim by the payment of a lump sum through negotiated settlement.

The legislation requires a qualifying period of 104 weeks before a negotiated settlement. This will minimise the possibility of negotiated settlements preventing effective rehabilitation.

Any settlement will involve mandatory independent legal advice funded by the employer (insurer).

Financial advice funded by the employer (insurer) is to be provided on the request of the worker.

It will not apply to claimants that are catastrophically injured and covered by the NIIS.

Settlement of disputed claims

There is provision to allow for the settlement of disputed claims for compensation (whether disputed on a question of fact or law or both) and settlement of contested applications to the Work Health Court.

As with negotiated settlements, any settlement will involve mandatory independent legal advice funded by the employer (insurer) and financial advice at the request of the worker also to be funded by the employer (insurer).

Any settlement within the first 104 weeks from injury will be subject to a six month cooling off period.

In other words, the settlement is not binding until six months has elapsed.

Exclusion of journey claims

This provision will exclude claims for all journeys to and from work. Journeys that are considered to be in the course of employment are not excluded. Examples are where the journey is to or from a workplace other than the worker’s normal workplace at the request of the employer or where the worker is required to work outside their normal hours of work and is paid for the time taken for the journey to or from work.

Enforcement of compulsory insurance provisions by ability to stop work

If an employer does not hold the necessary workers' compensation insurance policy there will be power to order the employer to stop work until such time as the situation is rectified.

Involvement of support persons at mediation

Mediators will now be able to consent to a person, who is not a legal representative, to represent a claimant during the mediation.

If the mediator considers that a claimant is not best equipped to fully present their own case and that the mediation will be best facilitated if assistance is provided by an advocate, then the mediator may consent to the claimant being represented by an advocate.

Improving return to work outcomes

To assist in improving return to work outcomes the legislation includes the following:

• The employer must produce a return to work plan, developed and agreed between the employer and worker for any injury that involves incapacity of more than 28 days.
• An employer will be unable to dismiss a worker for a period of six months following the date of injury unless during that period the worker ceases to be totally or partially incapacitated because of the injury.
• This is not to apply if the employer proves the worker was dismissed on the grounds of serious and wilful misconduct.

These changes will help ensure that all employers and workers are focused on return to work.​

Contact us

For further information please contact us on 1800 250 713, via email at datantworksafe@nt.gov.au or go to the NT WorkSafe website at www.worksafe.nt.gov.au