Proposed changes to Return to Work Legislation 2020

The Return to Work Legislation Amendment Bill 2020, was tabled in parliament Wednesday 2 February 2020.

The Bill reverses a number of changes made to the legislation in 2015 and improves the operation of the Northern Territory Workers Compensation Scheme.

Summary of proposed changes to the Northern Territory Workers Compensation Scheme – 2020

Along with numerous administrative and technical changes, further changes include:

Proposed changes to Return to Work Act

    • current definition of ‘worker’ moved from s3 to new s3B
    • currently the definition for ‘attendant care services’ sits in s78. This has been moved to s74A
    • ‘catastrophic injury’ referenced in s78A(6) with reference to the Regulations for details
    • of the definition.
    • renames ‘statement of fitness for work’ and replaces it with ‘medical certificate of capacity’
  • A worker is defined in s3 of the Return to Work Act as a natural person who, performs work or a service of any kind for another person under a contract and is in relation to the contract an employee for the purpose of assessment for PAYG withholding under the 'Taxation Administration Act 1953 (Cth)', Schedule 1, Parts 2 - 5.

    • Some people have interpreted the legislation to mean that a person must be subject to PAYG to be a worker. The intent is broader and the legislation has been amended to clarify this - a person will be a worker if they are an employee for PAYG purposes even if the employer is not complying with the PAYG provisions.
    • There continues to be a misunderstanding that an individual with an Australian Business Number (ABN) is a contractor and not a worker. Use of an ABN has not determined worker status in the Northern Territory since 1 July 2012.
    • The amendment clarifies that an Australian Business Number is not a determinant factor in establishing whether or not a person is a worker.

    This change is not retrospective

  • Uncertainty can arise for some individuals employed by labour hire organisations, particularly for those situations where the labour hire organisation maintains that they are simply an agent between an independent contractor seeking work and a business that is seeking workers.

    There is also uncertainty for labour hire organisations as to when and how they might ensure that individual sub-contractors that they hire out, are covered by workers compensation insurance.

    The amendments to the Return to Work Act will deem that all individuals who work for a labour hire organisation are workers under the Act.

    This change is not retrospective

  • To meet the nationally agreed minimum benchmarks for catastrophically injured persons, changes are required to the definition of worker.

    The National Disability Insurance Scheme (NDIS) is administered by the National Disability Insurance Agency and is subject to Commonwealth legislation. The NDIS is a no-fault social insurance model that covers disability at birth or acquired through accident or health condition, but not due to the natural process of ageing which would come under Aged Care.

    The National Injury Insurance Scheme (NIIS) is a parallel or sister scheme to the NDIS and builds on existing State and Territory compensation schemes (for example, for motor vehicle and workplace accidents) to complement the NDIS and is subject to existing State and Territory compensation legislation.

    Under an Agreement entered into between the Northern Territory Government and the Commonwealth, the Northern Territory is required to reimburse the Commonwealth for the costs of any claims made on the NDIS that relate to a person catastrophically injured in a workplace accident.

    It is therefore important that the Act mirrors the minimum benchmarks for the NIIS that have been agreed nationally for catastrophically injured persons, so that the expense continues to be met by the workers compensation scheme.

    Immediate family members – a prescribed member of the immediate family of the employer is currently not covered for workers compensation unless they are named on the employers’ current insurance policy.

    This amendment is necessary because an injured family member of the employer who does not live with the employer would be denied workers compensation unless specifically named on the employers’ current insurance policy.

    The amendments will expand the definition of worker so that any immediate family member who is not living with the employer will be covered for workers compensation whether named on the policy or not.

    Domestic employee of householder – amendments to the definition simply refers to an individual who is employed or engaged by a householder and who does not earn more or is paid at the prescribed rate (being 20% of average weekly earnings).

    The effect of this is that more categories of domestic employees can be covered for workers compensation (currently access is limited to persons who perform ironing, house cleaning, cooking or gardening or are a chauffeur). The threshold remains at 20% of average weekly earnings (currently $338.06 per week).

    This change is not retrospective

  • This amendment reinstates the coverage for journey claims as applicable prior to the 2015 amendments.

    It is only for injuries that do not involve a motor vehicle that are covered by workers compensation with the following exceptions:

    • A journey to or from a workplace, other than the workers normal workplace at the request of the employer
    • Workers who are traveling from home to work as a result of a call out by an employer whether paid for the call out travel or not.

    Accordingly, injuries sustained involving a motor vehicle on a journey to or from work are covered by the Motor Accidents Compensation (MAC) scheme and therefore excluded from workers compensation.

    This amendment also reaffirms other scenarios where journey claims can be made:

    • to and from work or home and an educational facility as part of their training as expected by their employer
    • on a journey from the workplace of one employer, on a working day, to the workplace of another if the claimant works for both employers
    • for the purposes of a workers compensation claim

    This change is not retrospective

  • This is a new section to the Act providing the definitions of ‘Labour Hire Arrangement’ and ‘Provider of labour hire services’ which are terms needed to ensure individuals under a labour hire arrangement are deemed workers for the purposes of this Act.

    Labour hire arrangements – provides that a labour hire arrangement is a contract or an arrangement under which an individual is engaged by a labour hire provider to work for someone other than the provider (a client); as long as there is no contract to perform the work or service between the individual and the client, and the individual personally performs the work.

    Provider of labour hire services – provides that if, in the course of conducting a business, the person supplies to another person (the client) an individual to perform work or services in and as part of a business or commercial undertaking of the client. This includes where:

    • a contract is entered into between the individual (the worker) and the provider
    • a contract is entered into between the provider and the client
    • the worker is supplied by the provider to a client directly or indirectly through one or more agents or intermediaries
    • the work or services performed by the worker is under the control of the provider, the client or another person
  • The current legislation references ‘accident’ as having the same meaning as in the Motor Accidents (Compensation) Act 2014 (the MAC Act). As there is no definition in the MAC Act of ‘accident’, this clause amends the reference to ‘motor accident’ (as defined by the MAC Act).

  • Currently after 26 weeks of paid incapacity a cap on normal weekly earnings applies. The cap is 250% of average weekly earnings.

    The amendment will remove this cap on normal weekly earnings

    This change is not retrospective

  • One of the key amendments introduced in 2015 was that an insurer must not refuse to pay for medical treatment unless supporting medical opinion existed and a copy of that opinion was supplied to the worker together with a statement of rights of appeal.

    Unfortunately s73(4) is premised on the basis of ‘costs incurred’, leaving it open for an employer/insurer to argue that future or imminent treatment has not been “incurred”.

    The amendment made will ensure the employer/insurer can’t avoid liability for ‘proposed treatment’ unless they have supporting opinion.

    This change is not retrospective

  • This is a new section to the Act, which sets out that if an overpayment is made under the Act, overpayments cannot be recovered from the worker to whom the overpayments were made if:

    • the benefit payable was incorrectly calculated by the employer or insurer who made the payment
    • the payment was made in respect of a period more than six months before the date on which recovery of the overpaid amount was sought

    unless otherwise ordered by the Court.

    This change is not retrospective

  • Currently the definition for Attendant Care Services sits in s78. This has been moved to new s74A and makes it relevant to all of PART 5, Division 3 of the Act.

    The change in the wording of the definition reflects this.

  • In 2015 a change was made to improve return to work outcomes by imposing an obligation on an employer to develop a proposal for a return to work plan if the worker was likely to be incapacitated for more than 28 days. S75B (1A) should have been amended to allow for this plan to be developed by employers without the mandated use of vocational rehabilitation providers.

    The intention is to remedy this by removing s75B(1A) to make it clear that the employer may choose to use the services of an accredited Vocational Rehabilitation Provider to develop a proposal for a return to work plan required by s75A(1)(c) however it is not mandatory.

    This change is not retrospective

  • The Act amends this section, to clarify that household services include overnight childcare where the normal care provider is the injured worker who is required to be hospitalised or undergoing surgery.

    The amendment ensures that reasonable costs of childcare provisions are included for the period of hospitalisation or the period an injured worker is undergoing surgery directly related to the workers compensation injury for those circumstances where the worker is unable to access childcare or child minding support from family members.

    This change is not retrospective

  • Section 78A was introduced into the Act in 2015 to allow for negotiated settlements on workers’ compensation claims. Some issues have been identified in the wording of several sections which has created uncertainty for stakeholders over settlements for disputed claims.

    The amendments sets out:

    s78A(1) – the reference to the Regulations has been removed

    s78A(1A) – by creating section 78A(1A) any settlement for a catastrophically injured person is void if that settlement involves an amount that finalises a claim for any of the following expenses:

    • medical treatment (including pharmaceutical)
    • dental treatment
    • rehabilitation
    • ambulance transportation
    • respite care
    • attendant care services
    • domestic assistance
    • aids and appliances
    • artificial members, eyes and teeth
    • education and vocational training
    • home, transport and workplace modification

    This criteria meets the minimum benchmarks of the NIIS ensuring that the Territory would not be liable under the NDIS agreement with the Commonwealth for workplace injury compensation.

    This does not prevent the settlement of the weekly wages component.

    s78A(3) – by amending this section, it allows for settlements to be reached before a court.

    s78A(4) and s78A(4A) – s78A(4) is reworded and a new s78A(4A) added to clarify that the workers reasonable legal costs are met by the employer regardless of whether an agreement is entered into.

    s78A(5) – This amendment clarifies the settlement arrangements for disputed claims to ensure that the ‘cooling-off’ period (six months from settlement day) allowed under the Act for settlements is also allowed where liability is disputed by the employer.

    The new sections provide:

    • s78A(5A) - that a settlement of a disputed claim is made ‘without prejudice’ and is not an admission of fault or acceptance of further liability
    • s78A(5B) - that if the claimant withdraws from a settlement within the 6 month cooling off period, then any payment made by the employer is repayable by the claimant to the employer and is a debt due on demand
    • s78A(5C) – if claimant fails to repay the employer within the specified timeframe, the employer can set-off the debt against any further entitlement to compensation or initiate legal proceedings to recover the debt

    s78A(6) – The amendment provides the definition of ‘catastrophic injury’, with reference to the Regulations for details of the definition.

    These changes are not retrospective

  • This amendment to s78B ensures that a lump sum payable under this section is not required to be for ‘all amounts otherwise payable’.

    The intention is that the employer should be able (by agreement with the worker) to make a lump sum payment for part of a claim in advance to allow the worker to self-manage certain aspects. For example, but not limited to, treatment, retraining, workplace modifications, medications or payment of carers.

    This change is not retrospective

  • Uncertainty has arisen over whether the amount payable for legal representation and legal advice for the purposes of mediation is a combined total or a separate amount for each.

    Amendments to s103FA are required to clarify that the amount payable for legal representation and legal advice is a combined total, not a separate amount for each component.

    This change is not retrospective

  • The Nominal Insurer is established under the Act to manage and pay for claims from workers who are injured whilst working for an uninsured employer. The cost of these claims is funded by insurers and self-insurers contributions.

    This amendment moves the current methodology for contributions set out in s164(1)(d) and s164A of the Act into Regulation to make it easier to amend the methodology to allow for more flexible funding arrangements for the future.

  • The current Act has the potential for an employer to self-manage a claim despite it being intended by the changes made in 2015 that the claim must be passed to the Nominal Insurer.

    An amendment is required to s167 to ensure that an uninsured employer cannot self-manage a claim from an injured worker and that the Nominal Insurer has full rights to manage the claim.

  • Transitional arrangements have been addressed throughout this document under applicable clauses.

  • Schedule 1 identifies where in the Act and Regulations the current ‘statement of fitness for work’ is replaced by ‘medical certificate of capacity’.

    There is sometimes confusion among employers and workers about whether the “statement of fitness for work” is in fact a medical certificate. The change in name will clarify that it is a medical certificate.

Proposed changes to Return to Work Regulations

  • Regulation 3 provides a new definition for first-responders.

    A first responder is defined as a person with specialised training (such as a paramedic, police officer, fire-fighter, or other emergency personnel), who attends the site of an incident and provides assistance in:

    • involving actual or potential injury to persons or damage to property
    • risk to the first responder
    • where time may be of the essence to save lives and property

    The definition is required for the deemed diseases related to post-traumatic stress disorder (PTSD).

  • Regulations amended to reflect changes of references in the Act.

  • Regulation 4A is amended to refer to an individual who is employed or engaged by a householder and provides the prescribed rate as being 20% of average weekly earnings.

    This removes the current limitation of types of domestic employees to be covered for workers compensation.

  • The Northern Territory introduced presumptive legislation for fire fighters on 1 July 2015 for 12 cancers. This amendment expands the number of diseases to include:

    • Asbestos related diseases
    • Skin cancer
    • Lung cancer
    • Liver cancer

    A qualifying period of 15 years is required for the newly added diseases.

  • The new Regulation 11A references Schedule 2A for s78A(6) of the Act.

  • The new regulations 17B and 17C provides the methodology for the funding arrangements for the Nominal Insurer.

  • Amends Schedule 2 of the Regulations to include Post-Traumatic Stress Disorder (PTSD) for first responders.

    The changes are not to apply retrospectively however the presumption will apply to all undecided cases and to new claims if the injury occurred before commencement.

  • Inserts new Schedule 2A providing a comprehensive criteria for prescribed injuries, including:

    • spinal cord injury
    • traumatic brain injury
    • amputation of a leg through or above the femur
    • amputation of more than one limb or parts of different limbs
    • full thickness burn to all or part of the body
    • inhalation burn resulting in permanent respiratory impairment
    • permanent blindness caused by trauma
  • Amends Schedule 3 to modernise the language and permit insurers to cancel a policy without the consent of the Work Health Authority, where the request for cancellation is made by the employer in the following circumstances:

    • the employer is no longer employing a worker as defined by the Act;
    • there are no Territory workers required to be covered by the Act; or
    • the employer has another Policy with an Approved Insurer covering the same liability