Proposed Section 18 changes and implicat…
25 Jul 2023
Proposed Section 18 changes and implications - aspects to consider
Since 1986, one of the primary objectives of the workers compensation legislation has been to facilitate a return to work for injured workers in some capacity by imposing an obligation on pre-injury employers to provide suitable duties.
Originally, section 58B of the repealed Workers Rehabilitation and Compensation Act, 1986 made it mandatory for a pre-injury employer to provide suitable duties. The onus was placed on the employer to show cause as to why it was not reasonably practicable to provide those duties. However, the requirement to do so was administrative with Workcover being empowered to impose a monetary penalty on the employer’s premium on those who did not comply or show cause.
The current “duty to provide work” provisions were introduced in 2015 with the new section 18 provisions pursuant to the Act providing for:
Since the introduction of section 18, there have been a number of applications to the Tribunal, but it is fair to say that the respective parties to such disputes approached the matter by way of a financial payment for a resignation under a deed of release in exchange for a release from section 18 of the Act.
The proposed amendments under section 5 of the Return to Work (Employment and Progressive Injuries) Amendment Bill, 2023 are intended to address a number of concerns about the operation of the current provisions. There are two main concerns addressed.
The first is to create some flexibility in the section insofar as it required there to be suitable employment identified that the worker was able to undertake. The proposed provisions under section 18(5a) allow for the Tribunal to decide the nature of the duties to be provided, whether there needs to be some modification or alteration to the duties of the identified employment, the reduction in the hours of employment (temporary or otherwise) for the worker’s level of capacity to be accommodated and any need for a gradual increase in the duties or hours of work.
The Tribunal also has power under the proposed section 18(15a) to consider employment not nominated by the worker and to take into consideration any change to the level of the capacity of the worker after making the application under section 18.
The second relates to the way that the section applies to labour hire companies and host employers. The draft bill seeks to address this concern by imposing a dual obligation on both the labour hire company and the host employer to provide the suitable employment in cases where the worker has expressly requested this to occur in the initial request. It does so by imposing a statutory duty on the host employer to co-operate with the labour hire company to provide suitable duties at the host employer’s workplace consistent with the worker’s capacity. It expressly does not create a contract of employment between the worker and the host employer. However, the Tribunal now has powers to make appropriate orders for the host employer to co-operate with the pre-injury employer and the extent of any obligations that may be imposed on the host employer.
The definition of labour hire worker defers to the definition that is contained in the Labour Hire Licensing Act, 2017. This Act sets out detailed definition of what is and is not a labour hire situation and would need to be considered as a primary reference. To facilitate any potential application, the labour hire company is obliged to provide the host employer with details of the request by the worker under section 18(16b)(a) as soon as practicable and, in any event within 14 days of a receipt of an application under section 18(3) of the Act.
It should be noted that the provisions do not make the host employer a party to proceedings.
There are a number of other amendments that include:
It is important to note that the Transitional provisions contained in Clause 3 of Schedule 1 provides that the amendments made by section 5 of the amendment Act are to apply on or after the designated day including in respect of any work injury attributable to a trauma that occurred before that date.
Finally, it should be noted that section 19 of the Act has been amended to provide the Tribunal, constituted as the South Australian Employment Court, to hear and determine any monetary claims that may arise.
The duty of a pre-injury employer to provide suitable employment to an injured worker who has an ongoing incapacity for work due to the injury is not new to the jurisdiction. However, the proposed provisions extend the role of the Tribunal to consider any employment that may be suitable for the worker beyond the employment as nominated by the worker. The role is more related to an investigatory role as opposed to an adversarial role that has been the primary function of the Tribunal to date.
Additionally, the extension of the section 18 employment obligation to host employers now transforms the labour hire market from one that is focused on temporary causal labour in times of need to imposing a continuing statutory duty that adds ongoing commitment for the host employer to provide suitable employment to a worker who is injured in the course of the hire agreement with the host employer.
This raises the question of what is the nature of the relationship, notwithstanding the qualification under the proposed section18(16b)(d) of the Act. Such questions include:
As noted, the provisions do not clarify whether a host employer has any locus standii (legal standing) in any application brought under section 18 and to what extent the Tribunal can exercise its investigatory function under the new provisions. It can hardly be said to be in the interest of justice to impose an order on a party who is not a party to proceedings under section 18. Additionally, there are ramifications for self-insured employers who fall under the umbrella of a Group of Companies which needs to be considered and explored on a case-by-case basis.