Darien Fenton MP - Injury Prevention, Rehabilitation, and Compensation Amendment Bill

Darien Fenton MP

First Reading

Injury Prevention, Rehabilitation, and Compensation Amendment Bill

This Bill is one to be proud of and I congratulate the new Minister for ACC, my friend and colleague Maryan Street for its introduction. It deals with some of the harder issues for workers facing work related injuries or disease. It keeps pace with the changing world of work and work arrangements and ensures that our world class ACC scheme continues to be fair and sustainable.

As we head toward the summer holidays and most of us are able to have at least some time off, I am particularly conscious that there will be many New Zealanders who will be working during this period. Retail workers, hospitality workers, care workers, transport workers, tourism workers, many of them casual and seasonal workers, will all be at work. This is a time when there is a greater risk of work injury because of extra workloads, longer working hours and fewer breaks.

Sadly, some of them will be work injury casualties, but the good news is that we have an accident compensation scheme that is the envy of the world. We can be confident that most workers who find themselves in this situation will be adequately cared for.

But this government is committed to ensuring that our Accident Compensation System is fair and responsive to all. The Bill will close the gap for those workers who may have in the past been deprived of fair compensation. The Labour led government continues to work hard to eliminate any arrangement where workers can be disadvantaged, whether it be in ACC or other minimum rights.

Concerns have been raised that workers whose earnings fluctuate throughout the year because they are in casual or seasonal employment, or some other form of non standard work are being disadvantaged by current rules for calculating weekly compensation.

While the current rules continue to meet the needs of people in standard work,nearly 21% of the workforce, or around 457,000 people are in non-standard work and if they are unfortunate enough to have a work related injury, the current calculations don’t cut it.

Weekly compensation is paid at 80% of claimants’ pre-injury earnings. It is intended to provide real and actual compensation so workers can meet the every day expenses and focus on recovery.

But the reality in today’s labour market for around one quarter of the workforce is that the current arrangements can put these workers at risk of receiving inadequate or no weekly compensation.

The Bill addresses this by changing the way weekly compensation is calculated for casual and seasonal workers so that the compensation is based on the earning periods, rather than a combination of earning and non-earning periods.

This is a particularly welcome amendment given that casual and seasonal workers are more likely than permanent workers to face work injury.

The Bill also makes changes to cover for work related gradual process disease or infection. The Ministerial Advisory Panel on Work Related Gradual Process, Disease or Infection highlighted that the three part test is a barrier to cover for claimants with a work related gradual process, disease or infection. The burden of proof currently rests with the claimant and this can be hard to meet.

The government’s commitment to making these changes is reflected in the Bill. It amends the three part test of causation to clarify the threshold of allowable non-work exposure. In addition, the Bill clarifies that the responsibility and cost for investigating a claim rests with ACC.

The Bill addresses cover for mental injury arising from traumatic events in the workplace. No cover is currently available for mental injury caused by a sudden traumatic event while a person is at work.

We are all aware of awful situations that have occurred at work – shocking accidents or crimes that have been witnessed by workers. This exposure can lead to the development of longer term mental or psychological problems that impact on a person’s ability to function day to day. This is an important and essential addition to the ACC scheme.

This week is the 40th anniversary of Justice Woodhouse’s recommendations to introduce what became one of the most revolutionary and innovative system for accident compensation in the world. New Zealand’s universal, no-fault accident compensation scheme has stood the test of time and is still a landmark social insurance scheme of international significance.

Since the 19th Century, decent people have accepted that common law claims do not provide an equitable and socially desirable response to the industrial injuries of workers. Even way back then, there was a growing belief that industry needed to have better regard to the welfare of its workers and the cost of injury should be borne as part of the costs of production.

The first legislation in New Zealand to confer upon workers a right to compensation for work injuries was the Workers’ Compensation for Accidents Act 1900. New Zealand claimants had to prove “injury by accident arising out of and in the course of employment” before they were eligible for cover. Cover for disease was precluded.

From 1940 coverage for industrial disease was gradually introduced. After the passing of the Workers’ Compensation Act 1947 compensation became payable in respect of any disease contracted in the course of employment and due to the nature of employment.

The Workers’ Compensation Act 1956 provided a system of insurance at the expense of the employer of the workers against accidents arising out of and in the course of their employment.

However, the benefits available under the Workers’ Compensation Act 1956 proved far from satisfactory. The maximum compensation corresponded to approximately 52% of the average weekly earnings and compensation could only be paid for six years, after which it ceased automatically.

An injured person could sue for damages but had to prove fault, and if they couldn’t they got nothing. And of course, there was nothing available for those not in paid employment.

Dissatisfaction led to the establishment of the Royal Commission of Inquiry chaired by the Honourable Justice Woodhouse.

As we all know, a key recommendation made by the Commissioners was the abolition of common law claims for compensatory damages for those who had cover under the proposed scheme. It was recommended New Zealand should replace the common law “lottery” with a comprehensive, meaningful, no fault compensation scheme in exchange for which those who had cover would surrender their right to sue.

It is interesting to note that the 1972 Parliament voted unanimously to pass the Accident Compensation Bill 1972 into law, which demonstrates the consensus there was around the Woodhouse recommendations.

Unfortunately, that all changed under the National government of the 1990’s, and listeners should have no doubt that if they get the chance, National will wreck our ACC system again. They will privatise it and sacrifice the social contract that New Zealanders entered into all of those years ago on the altar of privatisation.

John Key has confirmed recently that National's policy is to re-establish a competitive market to provide accident insurance.

Murray McCully said when he was Minister of ACC that“Creating a competitive environment is a vital part of the reforms. Insurers, like everyone else, are in business to make a buck.”

And even Shane Adern’s been at it when he said :“Accident insurance should be no different to any other form of insurance…… The most price competitive way of making this cover available to any industry in New Zealand is to let the insurance market compete for this business. It worked before and it can work again.”

Well, the truth is that it didn’t work. It was a mess. It was a major botch up. The only people that did well out of it were the insurance company mates of the National Party.

I welcome this Bill as another step in this Labour-led government’s commitment to that very important social contract Justice Woodhouse introduced 40 years ago.

ENDS

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