Push for Nationally Harmonised Workers' Compensation Scheme

The emergence of the gig economy and the changing nature of work may be the catalyst for Australia expanding access to workers’ compensation, and harmonising workers’ compensation systems nationally, according to a new report.

Last week, the NSW and Victorian Governments launched the McKell Institute report, which estimates that one million Australians are employed as independent contractors, including at least 100,000 gig economy workers.

The report states that a large number of these workers are often not covered by workers compensation, and that current schemes are structured to cater for a traditional workforce of full time and permanent employees.

“The system of workers’ compensation in Australia is complex. Rather than a consistent national framework, each state and territory has its own workers’ compensation system. Like many of the established norms in Australia’s industrial relations system, the workers’ compensation system seen today in Australia emerged before the forces of the fourth industrial revolution were conceived, let alone realised,” the report states.

There are currently 11 individual workers’ compensation systems operating in Australia: one in each state and territory, along with the Federal Government maintaining three workers compensation systems – one for Commonwealth workers, one for seafarers, and one for veterans.

“Australia’s workers compensation system has been slow to evolve in such a way that workers on short-term, independent contracts, or those in the gig-economy, are often not covered by workers compensation.”

Alarmingly, up to 26 per cent of Australian workers in the high-risk construction industry are not covered by workers’ compensation due to the nature of their employment, according to Safe Work Australia. The construction industry accounts for the second highest number of compensation claims in Australia.

We can’t apply old world regulations to new world industries. Our report outlines ways that we can protect workers while navigating the changes in our industries and economy. #McKellForum

— The McKell Institute (@McKellInstitute) November 7, 2019

In response to the problem, the report makes reccomendations on reforming the workers compensation framework in Australia to extend coverage to the growing pool of non-permanent workers in the gig-economy and other industries with a high ratio of contractual, short-term employer-employee relationships.

“While there has long been interest in harmonising Australia’s existing workers’ compensation framework, the 11 existing systems across Australia continue to difer in the nature of their coverage. This is largely due to the diferent legislative paradigms within each jurisdiction that they operate.”

“Given the unprecedented scale of disruption in the workplace, there is a need for Australian Governments to pursue a national workers’ compensation scheme that not only harmonises existing schemes, but also works towards covering more Australian workers.”

The report also suggests the changing nature of work, along with technological disruption, will continue to challenge workers, industries and governments for the foreseeable future.

“Australia’s entitlement framework and industrial relations system needs improvements to remain relevant in the future – as labour markets change and become more flexible.”