About this seminar
For most small businesses, a workers' compensation claim may only occur once every several years. Many employers pay their annual premium and have no further contact or relationship with their insurer.
A challenge for small businesses is the number of stakeholders involved with the workers' compensation process, and the various relationships that exist between these stakeholders.
This seminar features three panel members representing the employer, insurer and regulator. Panellists discuss the role of each in the workers’ compensation process, emphasising the importance of communication, consultation and education. They also discuss various supports available for business, for example vocation rehabilitation and work trials.
Who is this seminar for?
This panel discussion is for small business owners and operators who wish to find out more about workers’ compensation. Managers and leaders working in micro, small and medium enterprises, and workers’ compensation professionals may find the information valuable. This panel will also assist businesses wanting to take advantage of recovery and return to work programs run by the NSW Government State Insurance Regulatory Authority (SIRA).
About the presenters
This broadcast is facilitated by Olivia McDonnell from SmartCompany. She is accompanied by three panel members representing the employer, insurer and regulator:
Peter Meighan, Manager, Policy Services, icare NSW, and
Spencer McCabe, Manager, Claims Supervision, State Insurance Regulatory Authority (SIRA).
The panel is presented in partnership with the Australian Chamber of Commerce and Industry, Biz Better Together program and SmartCompany.
Where small business can go for assistance
Each state and territory has its own workers’ compensation scheme and there are differences between them. Please contact the relevant workers’ compensation authority to access guidance material aimed at helping small business navigate the workers’ compensation system.
Safe Work Australia’s small business information and resources page also provides helpful information and a directory of Australia’s workers’ compensation authorities.
Workers’ compensation, Safe Work Australia
Return to work, Safe Work Australia
List of workers’ compensation contacts in each state and territory, Safe Work Australia
Preventing psychological injury under work health and safety laws fact sheet, Safe Work Australia
Workers' compensation legislation and psychological injury fact sheet, Safe Work Australia
Best practice workers’ compensation for small business
Virtual Seminar Series - Transcript
Jennifer Low, Australian Chamber of Commerce and Industry: Small business accounts for more than 95% of all Australian businesses, and are responsible for the health and safety of approximately 4.8 million workers. For most small businesses, a workers' compensation claim may only occur once every several years. For many employers, they pay their premium annually and have no further contact or relationship with their insurer.
One of the most challenging elements of workers' compensation schemes is the number of stakeholders involved, and the various relationships that exist between these stakeholders.
At the immediate level, you have the relationship between the employer and the worker. As the claim progresses, you then have the claims manager or claims agent, the insurer, and the treating doctor involved. You may also have other allied health professionals, such as the VOC rehab providers. And finally, the regulator may become involved, although not always.
So managing these relationships is understandably challenging. In addition to this, our employer members also report difficulties with the lack of scheme experience, poor understanding of roles and responsibilities, limited training options for their staff in understanding these workers' compensation duties and responsibilities, an increase in stress claims, poor understanding of, and support of, claims management and return to work in general.
The Australian Chamber is a member of Safe Work Australia, and represents employers on both work health and safety, and workers' compensation matters. Over the past year, Safe Work Australia has had an increased focus in workers' compensation, with a number of active projects addressing common issues, such as the role of the GP, best practice management of psychological claims, and a focus and look into return to work data and improvements there.
The presentation today is a partnership between the Australian Chamber, Biz Better Together program, Safe Work Australia, and Smart Company, aimed at providing audience members and viewers with firsthand information from multiple stakeholders within the scheme, information on resources, and clarification of roles and responsibilities.
[On screen: Best practice workers’ compensation]
Olivia McDonnell, Smart Company: We're luck and fortunate enough to have three different perspectives on the workers' compensation process today. Our goal today is to guide small businesses on the workers' compensation journey and process. So Liz, if we can start with you for the first question? What are the top three concerns that employers have when it comes to workers' compensation?
Liz Greenwood, NSW Business Chamber (Employer representative): Well, the Chamber recently conducted a survey, and there were quite a few common themes that came out. But, the overarching principle was the need to understand the employer's business, and how a claim affects the workplace.
But, in terms of the three top items, I guess the importance of consultation and communication, that's very important. Effective return to work outcomes is also very important. As is premiums not being too volatile, and having enough notice in advance so they can structure their cash flow accordingly.
I guess the underpinning driver is the communication and consultation. That's the most important thing, and basically talking to the employer. So what is the role of the injured worker when the injury occurred? What happened? What are suitable duties? And how do we get everyone back on track?
Olivia McDonnell: Sure. So what about small business in particular? Do they have the same concerns? Or do they differ considering that they're less resourced?
Liz Greenwood: They have the same concerns, they just have additional concerns, because they are less resourced. As Jen said, that often they don't have much experience with claims. It tends to be the larger employers that have more experience with claims and claims management. So obviously, once you've had one or two under your belt you're a bit more familiar with the process.
So, I guess it's the awareness of what to do, and when to do it, how to do it, who can I call on. From a resourcing aspect, I think, it's not just money. We tend to forget it's time poor as well as not having enough money to spend on things, adapting the workplace. Also, especially with small business, they're under resourced in terms of labor. So they can't just pick up the phone and hire someone else. Often, you've got the remaining employees there. So if someone's off work then it's basically everyone shoulder to the wheel and try and cover all the bases until that person gets back to work and things can go back to normal.
[On screen: Resources for business]
Peter Meighan, icare (Insurer representative): Data shows that most small businesses have one claim every 15 years. So, as Liz said, they don't have the resources, or it falls under the HR manager, or somebody else whose main job has nothing to do with safety, or return to work, or anything like that. Scheme agency in the past and icare in the future will perhaps look at providing, or have provided return to work courses and information around that to support employers, especially small employers.
But, I guess to Liz's point earlier, communication's key. Whether it's icare, or EML, or GIO moving forward. That contact with the employer to help that return to work process from day one is absolutely key to a successful outcome.
Olivia McDonnell: Sure.
Liz Greenwood: If I can just pick up on the HR management? Many small businesses don't have an HR manager. So, we do need to keep in mind in that small businesses aren't big businesses shrunk. Small businesses start, and they grow organically with one person or a couple of people. So you really need to keep in mind where small businesses come from.
In terms of the communication, one positive thing that came out was the experience with insurances brokers. So we found those employers who had insurance brokers overall, had a much better experience with claims management and return to work, because they just found that person was the go between, and that person understood their business well, and understood the system well, and it actually helped them navigate the system.
Olivia McDonnell: So that extra layer of support?
Liz Greenwood: Yes, yeah.
[On screen: Workers’ compensation insurance]
Olivia McDonnell: So clearly insurance is an issue of concern and perhaps a bugbear for businesses, and we all know that insurance can vary greatly. When it comes to workers' compensation, what's the insurer's role?
Spencer McCabe, SIRA (Regulator representative): The insurer's role-
Olivia McDonnell: In supporting employers?
Spencer McCabe: Yeah. I think the insurer's role begins as a protection mechanism, particularly for small employers. It's a statutory purchase, not all purchases of workers' compensation necessarily want to buy it, but it's, as I say, a statutory purchase that all employers must buy. Well, virtually all employers. There are a few exceptions to that.
But really what it's doing is it's providing that protection mechanism to the employers. I think that's particularly relevant with small employers. If you have one significant incident within your workplace, and you're a small employer that could effectively be the end of your business, in terms of the financial consequences to that incident.
So the provision of insurance in the first place is that protection. That's before the event. Once the event occurs then, and again, relative to small employers, that's where the insurer's role really kicks in and actually providing support at the time that it's needed. So there's that sort of hard line financial support.
So by buying the policy, what the employer's effectively doing is it's, what the insurer's effectively doing is saying I will discharge your financial liabilities associated with the injury. So I will pay the benefits that are payable, such as the weekly benefits to the worker, the medical expenses, that sort of thing, but the role is much broader than that.
The insurer can help in terms of orchestrating the rehabilitation and the injury management for the worker following the injury. So that happens on a number of levels really. It happens quite on a high level, from an organisational perspective. So all insurers should have an injury management program in place. Which just articulates their processes and procedures that they're going to adopt in order to support their employers.
But, more specifically on a case-by-case basis, where there's a significant injury for a worker, and ... Our definition of significant injury is where it involves and absence of seven days from work, or more. Then there's a requirement for an injury management plan. That is basically the insurer sitting down, talking to all of the stakeholders and saying, what do we need to do in order to get this worker back to health, back to work?
So they're talking to the doctor, they're talking to the worker themselves obviously, they're talking to the employer, and they're saying these are the things that we can put into place. So we've got a soft tissue injury, we can put some physiotherapy in place. We got a psychological injury, we can look at bringing a psychologist in to provide some support. We can make those payments of weekly payments to the worker so that the worker's not financially disadvantaged whilst they're going through this process and we can actually get everybody's mind set on what it is we're here to do. Which is actually achieve return to health, return to work.
[On screen: The insurer’s role in supporting employers]
Olivia McDonnell: What should an employer expect from an insurer, in terms of support?
Peter Meighan: Liz touched on it earlier, and Spencer has as well. For us, we need to understand our customers. It's the first time in 30 years that we've actually had face-to-face communications with our customers. In the past, it's been through scheme agents. There's always been a third party there. For us to just come into the scheme and say that we know everybody would be remiss of us.
We absolutely need to understand the inherent risks of businesses, we need to have conversations with them, understand what it is that you do day in and day out, and then if you do have an injury understand what you've got in place to help you navigate that injury and what support you need to promote recovery at work. For us, that's the first key thing.
The other thing, and part of the reason why we made the changes we made, was to provide a system that's easy to navigate and easy to understand. Even if it's as simple as turning an eight page renewal document into a four page renewal document with a couple of nice graphics on there that show you how you're performing, what your premium's doing, what your wages have done.
We will move towards, early next year, a portal where small employers can go in and pretty much manage their workers' compensation without talking to us if they don't want to. I think Spencer and Liz, both touched on the fact that for a lot of small employers, you pay your workers' insurance because you have to. It's a statutory class, but then you don't need to talk to us for another 12 months until you pay it again.
So for us, it was understanding that customers wanted to have a simple online process if they can, and the key thing for me around those 4,700 new businesses we've put in place, is about 80% of that has been done online. Again, we listen to our customers. Another good thing for me is about 15-20% of that was actually done on weekends or outside of business hours. Again, small employers, they've got enough on their plate just managing their business without having to deal with insurance or anything like that.
So, we're listening to our customers, we're not there yet. Nowhere near where we want to be as far as providing an insurance product that meets the needs of our customers. We'll continue to reach out to peak bodies, like the business chamber, associations, industries, and have those conversations, just so that we can get a better understanding of what's happening, and what impacts on you, whether you're a small employer, or medium, or a large employer, and what we can do to support you.
Spencer McCabe: Sorry. I think I'd just support that and elaborate a little bit on what Peter was saying about the explaining to employers what it's all about. I think that's true from an underwriting perspective. What am I actually buying? Because, not all employers know what they're actually buying. Also, post incident. The workers' compensation legislation is really quite complex. So understanding what a worker is entitled to, from either worker's or an employer's perspective is a pretty tricky thing.
I've been knocking around for a few years, and I'm still struggling with it myself sometimes. So I think that we probably have a joint responsibility, as the insurer and as the regulator, to actually try and unpack that as much as we can. I know you've been doing work on your website, we've been doing work on ours as well, to actually try and cut through some of that complication of the legislation and actually unpack for workers and for employers what it's all about, and what they're buying, and what entitlements that brings at the end of the day.
Olivia McDonnell: So it's important, the clarification process is important.
Liz Greenwood: I think clarification is very important. As well as being a statutory scheme, it's compulsory. So let's not-
Olivia McDonnell: There's no getting around it.
Liz Greenwood: Let's not skirt around it. It's compulsory. It is convoluted, the legislation, the two pieces of legislation. What I would like to see as well, is not only assistance post claim, but understanding who is covered and when they need to take out cover. Because, a worker is not just an employee who's on wages, a worker includes particular types of contractors, subcontractors, and also working directors.
You can have a director who's taken out key man insurance, and yet strictly speaking should be, or should be looking at whether or not they should have workers' comp instead of that. So they think they're covered. I think education's quite key, and I personally would like to see a little bit more than just masses of information stuck on a website. I think it needs to be more helping employers along the way, and understanding what they have to do and when they have to do it.
[On screen: The role of vocational rehabilitation providers]
Olivia McDonnell: Can the panel tell us a little bit about how occupational rehabilitation fits in with the scheme, and whether or not rehabilitation providers are being utilised as much as they could be when it comes to supporting the worker or employer?
Spencer McCabe: I think in general terms, that the use of rehabilitation providers is on the increase within the New South Wales scheme at the moment. Certainly the statistical data supports that conclusion. I think that they're potentially a very useful resource within a case.
An insurer and an employer ... An insurer will engage a rehab provider essentially on behalf of the employer, and really it's their job to come in and bring the stakeholders together and talk about, well what does work look like? What does a return to work look like? How do we take what the GP is telling us, in terms of what this worker has capacity to do and translate that into some meaningful work for that individual with their employer ideally, or with an alternative employer if that's not possible?
Olivia McDonnell: Sure.
Spencer McCabe: And, what are the things that are stopping that from happening? And how can we circumnavigate those issues? It's quite a ... It's probably more of an art than a science I think, and it's a really it's just about cutting through and getting back to the basics that we keep talking about. Which is keep talking, keep the communication going.
Olivia McDonnell: So, generally how do employers engage with the rehabilitation provider? Is that the role of the employer, or is that the role of the insurer?
Peter Meighan: As Spencer said, it's generally the insurer that will instigate that contact, and it can be a number of reasons. It can be that the worker is struggling to get back to work, the communication's broken down between the employer and the employee, or the worker. The treating doctor is probably not where we want them to be, in regards to the return to work process.
So generally it's the insurer, but there's other stakeholders in the relationship that have relationships with rehab providers that might recommend it. So whether it's insurance broker. Some employers retain rehab providers to do the return to work process for them. So, it provides that level of support that they don't have, at a cost, but it provides the detail around suitable duties, or how they might manage a particular situation for that particular claim or injured worker.
So, primarily it's the insurer, but certainly there's no reason why an employer can't open dialogue with a rehab provider and/or their insurance broker if they use a broker.
Olivia McDonnell: Liz, what sort of support do you think employers would like to receive as part of this process from insurance, through to rehabilitation, and then eventually and hopefully the outcome of returning back to work?
Liz Greenwood: Well I think it depends on the profile of the employer. So, if the employer hasn't had any claims or many claims, then I think it's more of an awareness education piece. It's what do I do? How do I do it? When do I have to do it by? Who do I talk to?
Olivia McDonnell: Who do I speak to?
Liz Greenwood: So it's really basic stuff. Very simple, straightforward. If they understand the process from go to whoa, and what's required of them, and when they need to do it, and how to do it, that is the very minimal level of support.
Then I guess the next level is, once you've got the claim you've got the administrative side of things, and managing the claim. So employers, what is the effect that this claim has on the employer's workplace? You're one person down, who's going to cover that? You don't just ring up a labour hire agency and pull them in. They might not be able to afford that. So, what's the effect of that claim on that workplace? As well as the physical labour, and as I touched on before, getting those who are able bodied to cover off on that type of work.
You've also got the morale. There's a fair bit of a morale aspect involved from the employer's perspective in keeping the whole team happy, and things going along quite well.
Olivia McDonnell: Especially in a small business where-
Liz Greenwood: Especially, yes, definitely. The admin side of things. I've heard that even though well with the weekly, the calculation of the weekly payments is an absolute nightmare. First the calculation of it, and then secondly having it fit into their own payroll system. It often means that employers have to create their own manual system for their workers on workers' comp, and have that totally outside their normal payroll system.
Then there are some employers who have told me that it's just too hard to sort out for now, so they just keep paying the normal amount of wage. Then they work it out later, and then ask for a refund, but not all employers can do that. Not all employers have the cash flow to do that so it's very much the practical hands on. How do the employers actually figure out what to do in amongst their normal business activities?
[On screen: Support for employers]
Spencer McCabe: I think there are also other supports that are available, and are at risk of preempting a future question, that address some of the issues that you raise. For example, we have vocational rehab programs, which SIRA provides and insurers can access. They cover a range of different scenarios.
Probably the most pertinent one to this audience is our return to work assist for micro employers. This is talking about when an employer has five or fewer employees, and you have an injury, and the employer is absent from work. If they have some capacity to come back into work, but not capacity to fulfil their pre-injury duties, then what micro assist does is it says well the insurer can continue to pay the weekly benefits, the wages for that person whilst they come back into the working environment. Which means that the small employer is not disadvantaged so that they can actually go to an external contractor and get somebody else in to fulfil the substantive part of that role.
It's almost allowing the worker to come back on a supernumerary basis. Which is good for the worker. Getting out of the house, getting back into the working environment is fundamentally good for you, and it builds that capacity, and it builds that capability whilst at the same time not disadvantaging the employer.
There are other things that the vocation rehab programs can do as well. Such as, work trials. So where a worker has some capacity, but there's no suitable duties within their employer, then they can go to a host employer. That host employer again doesn't pay their wages, but helps to build that capacity and their capability, whilst they're recovering. Then they can return to their pre-injury employer.
We have a job cover placement program. Which financially incentivises employers to take on a worker with a previous injury. So there's a financial incentive there for the employer to take that on. Then there are a range of more bespoke solutions. Such as retraining for the worker to enable them to pick up new skills, workplace modifications.
So things like, we've paid in the past for modifications to a ... I was going to say pickup truck, that's English... to a utility truck and put a sort of a crane type device on the back so that would enable the worker to fulfil their role. If you get creative, and you can use some of these things. Again, this is really where the insurer can add some value for the employer and say, these things are available let's talk to you about them.
My advice to employers would be, always to come back to the insurer and say, what else can you do? What else can you do? What else can you do? Actually promote those conversations as well.
Olivia McDonnell: Because there are resources it seems.
Spencer McCabe: There are resources available, yeah.
[On screen: Small business considerations]
Olivia McDonnell: I think probably small businesses' perspective on workers' compensation is that it is a one-size-fits-all. I think what we've got out of this conversation today that it can be a collaborative process, and there are supports in place, and readily accessible. There's a lot of information there to support very specific cases, as well as quite generic ones as well. So-
Spencer McCabe: The other thing that employers can do is obviously they can visit our websites, or they can call 13 10 50. Which is our call centre line, and there's information available. So you can actually speak to a real person and say, I've got a question about whether I need to buy insurance, or I've got a problem with my claim, or whatever the case may be. So there is always a resource there as well.