WORK HEALTH AMENDMENT BILL 2006 Second Reading Speech

Northern Territory Second Reading Speeches

WORK HEALTH AMENDMENT BILL 2006

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Mr HENDERSON (Employment, Education and Training): Madam Speaker, I move that the bill be now read a second time.

The bill will amend the Work Health Act to enable the Northern Territory to comply with nationally agreed workers’ compensation cross-border provisions. The current workers’ compensation arrangements have placed a burden on employers in cases where workers are required to work interstate for periods of time. In such a case, a Territory employer is required to purchase workers’ compensation coverage for an individual worker in more than one state or territory.

Often, there is legal argument required to determine which compensation scheme is liable for workers injured, and this is costly for employers and workers alike. Over the past year or so, Australian jurisdictions have been working to introduce cross-border workers’ compensation provisions, and it is important that the Territory does the same.

The benefits of participating in nationally agreed workers’ compensation cross-border provisions are clear. Not only will this arrangement reduce premium and administrative costs for employers, it will reduce the confusion faced by workers injured interstate by ensuring their workers’ compensation coverage is in one jurisdiction only. It will also avoid the possibility of some insured workers falling through the gap when a dispute arises as to which jurisdiction should be liable for their injury.

These new provisions mean that employers will only need to obtain workers’ compensation insurance to cover a particular worker in one state or territory. Under the new provisions, the state or territory in which workers’ compensation premiums relating to a particular worker are payable is referred to as ‘the worker’s state of connection’. Similarly, the benefits to which an injured worker is entitled are also determined by the state of connection. It is in that jurisdiction the employer needs to purchase workers’ compensation insurance for that worker.

The state of connection of a worker is determined by a series of tests. These tests apply to a particular contract or term of employment for a worker. The tests provided by these amendments to the Work Health Act are designed to establish the worker’s state of connection. The tests are progressive in that, if a state of connection is not ascertained from the first limb of the test, the second limb of the test is examined. If the second limb of the test does not identify a single state of connection, then the third limb is examined.

The amendments establish that a worker’s state of connection is the jurisdiction in which the worker usually works in that employment. If no one jurisdiction is identified by that first test, then the jurisdiction in which the worker is usually based for the purposes of that employment is examined. If no one jurisdiction is identified by either the first or second test, then the employer’s principal place of business in Australia is located. A worker usually works in the jurisdiction where he or she spends the greatest proportion of his or her working time.

The new cross-border provisions allow a worker to work temporarily for the same employer outside their state of connection for up to six months without the employer needing to consider whether or not a new workers’ compensation insurance policy is required. There may be cases where a worker works comparable periods of time across a number of jurisdictions, and people driving transport rigs come to mind. In these cases, the worker’s employment is connected to the jurisdiction where they are usually based.

When deciding where a worker is usually based, a number of factors will be considered. These include: the work location specified in the worker’s contract of employment; the location the worker will attend routinely to receive directions or collect materials, equipment, or instructions; and the locations from which the worker’s wages are paid.

There may be cases where a worker works equally across a number of jurisdictions and is not usually based in any particular state or territory. In these cases, the worker’s employment is connected to the jurisdiction in which the employer’s principal place of business in Australia is located. The employer’s principal place of business is the address registered in connection with the employer’s Australian Business Number. If the employer is not registered for an ABN, the state registered on the Australian Securities and Investments Commission’s National Names Index is the jurisdiction in which the employer’s business or trade is carried out. If the employer is not registered for an ABN or on the National Names Index, the employer’s business mailing address will establish the employer’s principal place of business.

If no jurisdiction has been identified by these tests, the worker’s employment is connected to the Northern Territory if they were in the Territory when injured, and they can establish that no compensation may be payable to them under the law of another country. At any time, a worker will be linked to one single state or territory only, and any compensation payable will be linked to that one state of connection, regardless of where the injury occurred.

In the very rare situation where it cannot be decided to which jurisdiction a worker is connected, it is recommended the employer purchase a workers’ compensation policy in each of the jurisdictions to which the worker could reasonably be connected. While generally we expect that establishing a worker’s state of connection will be a simple process directed by the legislation, the states and territories, through the Heads of Workers Compensation, have developed and are continuing to enhance a set of scenarios to assist employers and insurers manage this process.

The amendments provide a defence to a prosecution for an employer accused of not having a valid workers’ compensation policy for a particular worker. The defence will be available if the employer establishes that they did not deliberately intend to avoid their workers’ compensation insurance responsibilities. This can be shown by evidence that:

(a) they believed on reasonable grounds that they did not need a Northern Territory policy for that worker; and

(b) they had a valid policy for the worker in the state to which they believe the worker was connected.

Finally, I anticipate the financial impact of this change on the Northern Territory Workers Compensation Scheme will be small, but positive. It will lessen the premium and administrative burden on those Territory businesses that have interstate operations by ensuring that they only need to insure any one worker in one jurisdiction, despite the fact that he or she may travel to other jurisdictions to work. The proposal will result in a very small overall premium income reduction for Northern Territory workers’ compensation insurers, but will in no way affect our scheme’s viability.

The bill repeals previous Work Health amendment bills passed but not commenced. In 1995, the Northern Territory embraced the need for cross-border consistency in workers’ compensation arrangements, and this House passed the appropriate amendment to the Work Health Act with the intent of commencing it when the other jurisdictions had complementary cross-border legislation in place. However, as a national agreement was unable to be reached at the time, the legislation was not commenced.

All Australian jurisdictions are now participating in cross-border provisions for workers’ compensation. This government believes it is vital that the Northern Territory joins this national strategy to improve the provision of workers’ compensation insurance in Australia. I commend the bill to honourable members.

Debate adjourned.

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