11 separate workers’ compensation schemes across Australia: ‘It’s a fractured mess’

According to one risk director, the need for a national workers’ compensation scheme has never been clearer as the current system is a “fractured mess” manifesting a postcode privilege that discriminates against workers.

On a recent HR Leader podcast, Aon workplace risk director Gary McMullen proclaimed the need for a national workers’ compensation scheme, lamenting the current procedure that involves 11 separate schemes that offer varying compensation based on the location of the worker.

“There are 11 separate workers’ compensation schemes across Australia, and for those large multinational employers, and whether it be the likes of Coles, Woolworths, BHP, there are just dozens and dozens of examples,” said McMullen.

“In those, they have to have insurance in possibly up to eight or nine of those schemes. And the challenges for those employees is the difference in how each of the schemes are run, which is run locally by the individual regulators.”

Depending on where the workers are based, the compensation can vary, creating a system of privilege that should not exist pertaining to injured workers.

“It’s not uncommon for some of our large multinational employers to have injuries to their employees. And depending on where they live, they get a different amount of compensation, or there’s a different level of entitlement.

“The current workers’ compensation scheme, in my words, is fractured, and it doesn’t need to be, which is why I’ve been talking about a national workers’ compensation scheme of late,” said McMullen.

“They’re typically regulated by separate government bodies, and employers are required to have separate workers’ compensations per jurisdiction. It’s a bit of a fractured mess.”

McMullen spoke to the inequality and unfairness that can arise from these fractured compensation schemes, arguing that they manifest a type of postcode privilege that discriminates against workers.

“The inequality is real, and the perception of discrimination is an interesting sort of call out, but it’s a correct interpretation. I call it postcode privilege, and there’s a publication called the Comparison of Workers’ Compensation Arrangements 2003, which highlights the differences across the country, and that is 367 pages long,” said McMullen.

“Put differently, there are 367 pages of differences in workers’ compensation across Australia and New Zealand. In terms of discrimination, and I use a case study, one of my clients has a bizarre situation where they have employees sitting next to each other in the same office in the same jurisdiction who work for a different parent company.

“If they got injured in the same incident, say travelling to a conference in a car, one of the employees could most likely get different compensation than the other employee, whether it be entitlement to weekly benefits or even a permanent injury. And it is indeed postcode privilege. And I find that entire situation grossly unfair in terms of the equality that we are continually looking to strive for.”