Page 5721 - Week 15 - Thursday, 10 December 2009
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not expose the decision makers to effective penalties beyond perhaps smaller bonuses or an awkward conversation with shareholders.
Before the Labor and Liberal parties jump up and accuse us of not understanding why people form companies, let me say that we recognise the principle by which people choose to insulate themselves from liability in a company. However, we believe that providing minimum standards of insurance coverage for employees, as mentioned above, should be a basic minimum standard for anyone conducting business. Inability of a culpable executive to do so indicates a fundamental failure to the company, its workers and society at large.
In recognition that this is a special case, we believe that the chief executive responsible for pursuing recovery amounts should, at their discretion, be able to target a company director that has been deliberately or grossly negligent for part of the recovery amount. In a similar vein, we believe that solely targeting the company creates the perverse outcome where, in the effort to penalise irresponsible businesses for not looking after their employees, the government would create an incentive to reduce costs by firing employees. We question whether the workers, shareholders and other stakeholders should be the only ones to bear the burden of the repercussions of the inability of executives to fulfil basic duties.
Finally, allowing the chief executive to, at their discretion, seek recovery costs from culpable executives where appropriate will improve the rate of recovery for the default insurance fund. I would bring the Assembly’s attention to the uninsured employer fund section of the default insurance fund report within the Chief Minister’s Department annual report, which highlights that, despite expenditure of $3.5 million in claims and administrative costs, the fund has recovered only $0.2 million from uninsured employers.
I would like to believe that all parties here wish to see employers fully discharge their responsibilities to provide workers compensation insurance for their employees. This bill permits employers to do so in a simple and low-cost fashion. If this bill makes it easier to fulfil responsibilities, failure to do so becomes that much more problematic.
MS GALLAGHER (Molonglo—Deputy Chief Minister, Treasurer, Minister for Health and Minister for Industrial Relations) (4.08), in reply: I thank members for their contributions to the debate this afternoon. The Workers Compensation Amendment Bill 2009 is intended to improve the performance of the ACT private sector workers compensation scheme. The scheme is the second largest privately underwritten scheme in the country. As outlined to this Assembly previously, against a number of important criteria, the scheme itself is not performing well—and, indeed, is one of the most expensive schemes in the country.
An efficient and effective workers compensation scheme achieves a reasonable balance between the interests of employers and workers while, at the same time, providing effective rehabilitation and early return to work; providing fair compensation for work-related injuries; reducing the overall social and economic cost to the community of work-related injuries; and ensuring that employer costs are contained within reasonable limits.
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