Due to the effects of COVID-19, the McGowan Government proposed the Workers’ Compensation and Injury Management Amendment Bill 2020 in June this year. It is also called the “COVID-19 Response Act.”
This blog post is a brief summary of the critical changes to this Act, particularly its proposed changes to the Workers’ Compensation and Injury Management Act 1981. We’ll tackle what these changes mean and their impacts.
The Five Key Changes
The Workers’ Compensation and Injury Management Amendment, also known as COVID-19 Response Act, along with its supporting regulations, was enacted on 12 October 2020.
This Act addresses five key changes to Workers’ Compensation and Injury Management Act of 1981 (WCIM Act), which we have summarised below:
1. Enable the Presumption That COVID-19 Was Contracted at Work by a Health Care Worker
Due to the pandemic, health care workers are at the highest risk of contracting COVID-19. With the new COVID-19 Response Act, the Government introduces a rebuttable presumption that ensures support for health care workers if ever they show symptoms of the disease. The presumption of work injury for COVID-19 applies to these three conditions:
- The worker has tested positive for COVID-19 or dies from the disease even before the diagnosis.
- The health care worker has actively participated in work-related duties upon diagnosis or date of death.
- The employee suffered the injury on 16 February 2020 or after the mentioned date when the first COVID -19 case was confirmed in Western Australia.
If the conditions stated above are met, employment is considered a significant contributing factor to the individual’s disease. If the employer believes it is not valid, there should be compelling evidence to contest the claim.
2. Abolish the Termination Day
This amendment has nothing to do with Covid and has effectively been “snuck in” under the radar. Before the amendment of WCIM, workers needed to elect to pursue a common law claim within 12 months of claiming compensation. This particular day is subject to a variety of exceptions that allow an extension. However, the Termination Day of an employee was 12 months after the worker claimed the compensation.
As a result of the COVID-19 Response Act, the Termination Day has been deleted. Upon doing so, it will create these exposures for employers:
- There is no time constraint that could affect the ability of the employee to go for common law damages. However, it should be noted that the Limitation Act 2005 still has effects on these time limits. The Limitation Act 2005 (WA) entails the requirement that the claim should be made three years from the date the injury is believed to have begun. The date may also be named from the first sign of the disease or any other manifestation of the injury.
- The change is retrospective for 3 years from the date the bill passed, which is potentially problematic for employers particularly for clients on a burning cost policy which generally have longer tails. In effect this means that where claims in the past may have been reserved by the insurer without common law entitlement as the termination date was missed, workers can now go back and pursue common law, leading to greater retrospective claim costs. If an employer’s policy has “closed off” then the insurer will bear the initial brunt of the payments (as the premium cannot be adjusted) however the overall costs increase will still be added to the claim history for the employer.
If the Termination Day of a worker has expired before 12 October 2020, they may still make an election. It may allow them to retain common law damages.
3. The Alternative Notice Should Be Given to Workers
The amendment gave way to eradicating Section 93O notices. Instead, works should receive alternative notice from insurers and self-insurers. Starting 16 November 2020, these insurance firms should notify workers about claims based on the following:
- Insurers should notify workers if liability for a claim for weekly payments is accepted simultaneously when the worker receives notification under Section 57A.
- Self-insurers should notify workers if liability is accepted for a claim with weekly payments on or before the first weekly payment.
According to this change, relevant notice may be sent to an email address given by the worker. This email address should be in the claim form of the worker for it to be recognised.
4. Liability Notices Can Be Emailed to Workers or Employers
Notices under Sections 57A or 57B of the Workers’ Compensation and Injury Management Act should be emailed to a worker or employer or both.
5. Capped Worker Entitlements Are Indexed Every Year Using Different Indices
The pandemic has had a considerable impact on the economy and may be reflected in the indices used, resulting in the potential reduction of some entitlements. Changes to address this to protect workers from a reduction include;
- The 2020/2021 Prescribed Amount will be defined under the amounts that are already implemented and preserve amounts from the past years.
- The indexation method now complies with regulations for financial years starting 1 July 2021.
- Protection is placed against any reduction that may occur on the mentioned amounts, which may be caused by the indexation method.