NSW Labor government attacks workers’ compensation
The Minns Labor government plans to slash workers’ compensation in New South Wales. Unions, as well as legal and mental health groups, have vehemently opposed the changes, which will make it more difficult to claim workers’ compensation for psychological injuries. This will hit essential front-line workers like nurses, teachers, paramedics, firefighters, aged care and transport workers particularly hard.
NSW Treasurer Daniel Mookhey defended the proposals as essential cost-cutting measures intended to bring down employer insurance premiums. They will do this not by making workplaces safer, but by denying workers the support they need. Mookhey has frozen cash injections to icare, the state workers’ compensation insurer, and issued an ultimatum: either these attacks are passed through the Legislative Assembly, or the government won’t fund its own insurer properly.
Mookhey wants to turn back the clock and de-legitimise workers’ mental health issues, citing the doubling of psychological injury claims in the past six years.
The most obviously cruel change is to increase the threshold for minimum Whole Person Impairment (the scale used to measure the degree of impairment resulting from workplace illness or injury) to 31 percent for psychological injury claims beyond 130 weeks or for permanent impairment. But people who meet this threshold are “essentially catatonic” according to NSW Unions leader Mark Morey. According to psychiatrist Anthony Dinnen, who assesses workplace psychological injuries, imposing this threshold “would exclude 99 percent of patients from benefits”.
“The workers compensation system is the only reason I am still alive”, explained a NSW firefighter in a Unions NSW report, Cast Adrift. “Without being able to access essential mental health services and receive diagnosis, treatment, education and support to begin my recovery, I would have certainly taken my own life. My whole person impairment is 24 percent which is a very significant injury. If the threshold was increased to 30 percent and that affected me by taking away my entitlements again, I would be destitute and would have no hope of survival or recovery.”
The report shows how prevalent psychological hazards are in NSW workplaces. Of 10,000 workers surveyed, 60 percent had been exposed to trauma, 44 percent had experienced bullying and 22 percent had faced harassment, including sexual harassment.
The government wants to narrow the definition of compensable psychological injuries. If an injury is sustained due to “reasonable management action”, workers will not be eligible for compensation. This wording provides an easy out for negligent and bullying bosses to argue their conduct was “reasonable”.
Work pressure and burnout are major causes of the growing rates of psychological injury to workers in NSW, yet these will no longer be eligible for compensation. Workers who face bullying, sexual harassment or racial harassment won’t be eligible for compensation until they have had a court, commission or tribunal ruling in their favour. They will also have to pay their own legal fees.
This suite of changes constitutes a major attack on the rights and conditions of all workers. Unsafe work conditions will be allowed to flourish if it becomes easier to reject workers’ compensation claims.
The government and business have argued that workers make frivolous claims that clog up the system. In reality, claiming workers’ comp is already a difficult bureaucratic process in which workers are treated with suspicion and hostility by an adversarial system. Dealing with that system can itself be traumatic. The NSW State Insurance Regulatory Authority had to admit this year that it contributed to the psychological injuries of a group of already injured workers by mishandling their cases.
It is rich for the government to use the failures of the state insurer icare as an excuse to attack workers. Icare has been plagued by scandal, including chronic underpayment of workers, blatant corruption, intimidation of a whistleblower and outrageous executive bonuses. Between 2012 and 2019, icare underpaid at least 53,000 workers and was forced to pay back $38 million. During that time, the former chief executive of icare, John Nagle, awarded his wife a contract without tender, paying her $800,000 over three years. Icare leaders were accused of the homophobic bullying and harassment of a senior whistleblower, Chris McCann, causing him to be hospitalised, diagnosed with PTSD.
Despite these scandals, icare still awarded its executives with some of the highest salaries and bonuses in the public service, bringing CEO Richard Harding’s salary to over $1 million.
The NSW government has done nothing to rein in icare’s mismanagement or its executive salaries. Instead, it is attacking the victims of unsafe workplaces.
Unions NSW has called protests across Sydney to respond to Labor’s attacks. It’s important that unionists and supporters stand against the gutting of workers’ comp. We are facing an onslaught of overwork and underpay, and now we’re being denied compensation for the damage done to us. Ultimately, we need to build a movement against the anti-worker Labor government and the business interests it serves.
