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Changes to the workers’ compensation legislation in the Northern Territory were introduced into Parliament last week. If passed, the amendments will have a significant impact on employers and insurers in the Northern Territory.

The Return to Work Legislation Amendment Bill 2020 was introduced into the Northern Territory Legislative Assembly by Attorney General Natasha Fyles on 19 February 2020.

The Bill proposes a number of amendments to the Return to Work Act 1986 (NT) and the Return to Work Regulations 1986. The Bill comes before the 2020 election and fulfils the pre-2016 election promise by the Labour Party Government to reverse elements of the 2015 amendments to the Act.

The key changes that are proposed are as follows.

Revising the definition of a worker

A worker is defined in s 3 of the Act as a natural person who performs work or a service under a contract and is an employee for the purposes of PAYG withholding tax.

The Bill inserts a new s 3B and expands (but in our opinion, not substantively changes) on the definition of a worker, to include (but not limited to):

  • an individual is a worker if they should be an employee for PAYG withholding purposes, even if the employer is not withholding income tax
  • the fact that an individual has an ABN does not automatically preclude them from being a worker, and
  • an individual employed under a labour hire arrangement is considered to be a worker of the labour hire services provider, if the provider is required to make PAYG withholding payments for that worker.

Effectively, these amendments make it clear that the definition of a worker is not confined to a person who is contracted and paid directly by the employer and that whether a person is considered a worker is to be determined on a case by case basis.

“Out of or in the course of employment” now extends to journey claims

The definition of this phrase in s 4 of the Act, has been extended to include journey claims as compensable claims under the Act, including:

  • when the worker is travelling to or from work, or to an educational facility for training for work
  • when the worker is travelling to or from home to work as a result of a call out by an employer, even if the worker is not being paid for the travel time, and
  • from one workplace to another (even if different employers), during the same day if the person worked for both employers.

Journey claims were removed from the legislation in the 2015 amendments. The rationale being that these claims would generally be covered under the Motor Accident Compensation legislation.

Employers/insurers liability for compensation of medical, surgical and rehabilitation treatment, family counselling and other costs) expenses extended to costs not yet incurred

Section 73 is amended to extend the employer’s liability for medical, surgical and rehabilitation treatment, family counselling and other costs to costs incurred, or proposed to be incurred by a worker.

Liability for proposed surgery and/or other medical costs has been a grey area and had not been tested by the courts as to whether an insurer’s liability extended that far. In our view, this amendment clarifies the position that liability does extend to proposed treatment and not only to costs already incurred.

Recovery of overpayments

Currently, there is no provision for employers or insurers to recover overpayments made to a worker in any circumstances. The Bill introduces a new s 74 that applies to overpayment of benefits.

In circumstances where a worker has been overpaid due to an incorrect calculation of the insurer or employer, or the overpayment has been made six months before recovery was sought, s 74 will provide that an insurer or employer cannot recover the amount from the worker.

It also sets out that a court must take into account whether a worker should have reasonably been aware that the benefit had been overpaid when deciding whether to make an order for recovery of an overpayment. This indicates there is now a mechanism for recovery to be made under the Act, and consequently, in the Work Health Court. Previously, there was a view there was no right of recovery against a worker under the Act, and such claims could only be made as a civil claim in the Local Court general jurisdiction.

Reasonable costs of childcare to be paid in certain circumstances

Section 78(4) will allow the reasonable costs of childcare to be covered in circumstances where a worker does not have any family members able to provide care and is either in hospital due to the work injury or having surgery related to the work injury.

These are very limited circumstances and should not allow for an influx of requests for childcare to be covered.

Section 78A settlement by agreement void in certain circumstances

A new s 78A(1A) voids any lump sum agreement for settlement of medical expenses, educational and vocational training, and home, transport and workplace modification in relation to a person who has suffered a catastrophic injury.

Catastrophic injuries are described in Schedule 2A of the Bill and include:

  • permanent spinal cord injury resulting in a permanent neurological deficit
  • traumatic brain injury resulting in a permanent impairment, and the injury has resulted in a post-traumatic amnesia of seven days or more, a non-induced coma for one hour or more, or brain imaging shows a significant brain abnormality and the person’s functional ability as a result of the injury is assessed as five or less for a moto or cognitive item using the FIM(TM) instrument
  • amputation of a leg through or above the femur
  • amputation of more than one limb or parts of different limbs
  • full thickness burns to all or part of the body
  • inhalation burn resulting in permanent respiratory impairment, and
  • permanent blindness caused by trauma.

The explanatory memorandum provides the intention of this section is to ensure that settlements that fall short of the National Injury Insurance Scheme (NIIS) benchmarks cannot be entered into. If provisions for these entitlements in the legislation falls short of the NIIS benchmarks, the National Insurance Disability Scheme (NDIS) may be expected to provide top-up care and support to individuals with catastrophic injuries. However, the state or territory with the shortfall will become liable for 100% of the cost of people who enter the NDIS. As such, the Government will avoid liability for the costs of these catastrophic injuries.

Section 78A agreements only enforceable after worker’s legal costs are paid

Section 78(4A) of the Bill clarifies that a worker must receive legal advice before entering into a settlement agreement, and any such agreement will only become enforceable once the employer has paid the legal fees. Further, the employer remains liable for those fees whether or not an agreement is reached.

Lump sum agreements for a particular period

Section 78B allows for lump sum agreements to be entered into for certain periods and also for certain aspects of the claim. This will provide the ability for employers/insurers to settle with the worker for say, medical expenses, however not be required to reach an overall settlement.

Post-traumatic stress disorder and emergency first responders

Section 4(6)(a) of the Act provides a presumption for certain workers who contract certain diseases that is has occurred during the course of their employment. This shifts the onus from the worker to the employer if they wish to dispute that the disease has been contracted at work. The prescribed diseases are listed in schedule 2 of the Regulations.

The Bill adds post-traumatic stress disorder for all first responders, including volunteers, as a prescribed disease. It does not, however, include a person trained as a first responder who has not attended in person at an emergency situation or incident.

Prescribed diseases for firefighters

Clause 29 of the Bill adds the following prescribed diseases for firefighters:

  • asbestos related disease
  • primary site liver cancer
  • primary site lung cancer, and
  • primary site skin cancer.

Each disease has a qualifying period of 15 years, meaning that a worker must have been working as a firefighter for 15 or more years to be able to apply.

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