Workers compensation rates falling short of national targets

The latest Compendium of Workers Compensation Statistics Report was released by the Australian Safety and Compensation Council on 12 March 2009, providing an analysis of accepted workers compensation claims among Australian employees from 2000–01 to 2006–07.

Fatalities

The report provides preliminary data that shows there were 236 compensated fatalities for the 2006–07 year. While the number of fatalities decreased by 21% over the period from 2000—01 to 2005–06, little change in the statistics from 2004–05 (255 fatalities) and 2005–06 (254 fatalities) indicates a decline in the rate of improvement.

The industries with the highest fatality rates were:

Industry	Number of fatalities	Percentage of all compensated fatalities
Construction	50	21%
Transport and storage	45 (with 31 in road freight transport)	19%
Manufacturing	36	15%
Property and business services	15	6%

The transport industry will focus on the fact that intermediate production and transport workers accounted for 30% of fatalities in the preliminary data from the 2006–07 year, with truck drivers accounting for almost two-thirds of those. This could indicate that recently introduced nationwide legislation on the chain of responsibility for the heavy vehicle truck driving industry has yet to improve safety outcomes.

Incidence rates

The national incidence rate for all industries in 2006–07 was 14 claims per 1000 employees, according to the report. However, four industries exhibited incidence rates substantially above that level, including:

• Manufacturing (28 claims per 1000 employees);
• Transport and storage (26 claims per 1000 employees);
• Agriculture, forestry and fishing (25 claims per 1000 employees); and
• Construction (22 claims per 1000 employees).

All industries recorded falls in incidence rates over the six-year period, with the electricity, gas and water supply industry showing the largest improvement with a staggering 43% fall from 14.6 in 2000–01 to 8.3 in 2005–06, now well below the national average for incidence rates.

The wholesale trade industry only recorded a 1% fall over the same period.

Serious claims

Over the period 2000–01 to 2005–06, the number of serious claims decreased 6% from 144,740 claims to 136,575. On average, 86% of all serious claims were injury and musculoskeletal disorder claims, although the report indicates a 7% decrease in this group (from 126,915 claims in 2000–01 to 117,930 in 2005–06).

This seems to support the assertion that the rate of improvement is too slow to meet the National OHS Strategy 2002–2012 target of a 40% reduction in the incidence rate of injury and musculoskeletal claims (the authors note that the recently released Comparative Performance Monitoring Report, 10th Edition, which uses a different baseline to this analysis, shows that the 16% improvement recorded from the base period up to 2006–07 is below the rate required to meet the 40% reduction by June 2012).

The most common injuries resulting in serious claims were:

• Sprains and strains of joints and adjacent muscles — 41.1% of all serious claims;
• Fractures — 8.4% of all serious claims;
• Open wounds (not involving traumatic amputation) — 8.4% of all serious claims; and
• Disorders of muscle, tendons and other soft tissues — 7.1% of all serious claims.

Falls, trips and slips continue to be over-represented in the statistics, with little change to their prevalence. Falls, trips and slips are the second most common mechanism resulting in serious injuries, consistently representing around 20% of all serious claims between 2000–01 and 2005–06.

Further incentives required

While many of the statistics show falling incidence rates, the rate of improvement is too slow to meet national targets. A picture is emerging in both the Compendium and the Comparative Performance Monitoring Report, 10th Edition, indicating that current OHS strategies are not achieving the targeted outcomes set by the National OHS Strategy 2002–2012.

This begs the question — is the existing regulatory regime working? Australia remains ranked as 6th for OHS performance behind Switzerland, Sweden, the UK, Norway and Denmark.

The results demonstrate the need for additional mechanisms to be used in the approach to current regulatory efforts to improve safety performance. As the economic climate continues to dominate the focus of business operations, industry needs more effective incentives to encourage safety expenditure and improve the rate of reduction of Australian workplace injuries. Governments in this economic climate should investigate the introduction of tax concessions for safety expenditure in Australian workplaces to drive further improvements in Australia’s safety performance.

*Michael Tooma, Alena Titterton and Laura Maytom, Deacons Lawyers.