Terminating an injured worker can cost a medium employer K70-300 in increased premiums

Thanks to our star contributor (and soon to be Author), @trinny61, we were alerted to this interesting HR article. It states that if an employee who is receiving compensation for an injury is terminated and ceases to work, the employer’s premiums could “go through the roof”. The risk is most significant in NSW, Victoria and South Australia, because of the way WorkCover factors the cost of injured employees “sitting off work” into its premiums. Organisations should think twice before dismissing employees who are receiving workers’ compensation – no matter how poor their performance…

Terminating an injured worker can cost a medium employer K70-300 in increased premiums

Organisations should think twice before dismissing employees who are receiving workers’ compensation – no matter how poor their performance, says Warwick Ryan, an employment partner at Swaab Attorneys.

If an employee who is receiving compensation for an injury or illness is terminated and ceases to work, the employer’s premiums could “go through the roof”, he says.

If a dismissal will result in a premium increase, the risk of legal action could be negligible, Ryan says.

Controversially, he says, “Quite frankly, when terminating injured workers, the Fair Work Act is almost irrelevant. I actually don’t care. I don’t even care if they bring a discrimination claim. [WTF]

“It can cost a medium-sized employer anywhere in the vicinity of $70,000 to $300,000 in increased premiums if they terminate an injured worker.

“There’s no award under a discrimination claim that has come anywhere near to that additional cost.”

In NSW, for example, [popup url=’http://www.workcover.nsw.gov.au/formspublications/publications/Documents/m4_claims_estimation_manual_july_%202010_update_2838.pdf ‘]WorkCover’s Claims Estimation Manual [/popup]says that if a worker’s employment is terminated up to 26 weeks after the date of their injury, the total estimate is increased to 104 weeks of weekly compensation benefits. And if dismissal occurs more than 52 weeks from the date of the injury, the total estimate can increase to eight years of weekly payments.

Further, while the cost of legal remedies is often picked up by a directors and officers policy, the cost of workers’ compensation premiums is inescapable.

From an insurance point of view, the reason for a worker’s termination is inconsequential – even if it is for misconduct “of the most brazen nature”, Ryan says.

Even if a worker has a compensation claim that has not been settled, an insurer will still factor it into its premiums, he adds, recalling a client whose premium for a single year rose by $120,000 because a worker he had dismissed lodged a compensation claim.

Another client retained all its injured workers for the “premium-affecting period” (three years) regardless of their performance, he says.

Even if workers are healthy when they commence performance management, the process often leads to psychological-injury claims, which could thwart plans for their dismissal.

And because “people who are non-performers are often opportunistic about making workers’ compensation claims” [WTF], the dilemma is “common”.

According to Ryan, deciding whether to retain a worker who deserves dismissal is “a commercial decision, not a legal decision”.

However, he admits that retaining a poor-performer for financial reasons can be “a real problem”.

Hicksons Lawyers partner Stewart Cameron recommends giving careful consideration to all of the issues involved in dismissing a worker on the basis of performance.

Although the possibility of an unfair dismissal claim should be considered, he agrees the cost of legal remedies (such as reinstatement or compensation in lieu of reinstatement) rarely rivals that of increased premiums.

“It’s a great challenge, but I think the employer does have to manage the two issues, and manage them separately,” Cameron says.

The performance issue will involve costs associated with productivity and morale. Although harder to quantify than the straight workers’ compensation costs, these are “very real costs”.

There is also the risk that other employees will see an opportunity to take advantage of the system and follow suit, he adds.

Cameron’s advice is to mitigate the risk of un-meritorious compensation claims by ensuring policies and practices are carefully developed, consistently implemented and thoroughly documented.

We can’t help but wonder whether the sacking (or not) of injured workers are purely [dodgy and calculated] “business transactions”?!

Perhaps this is the very reason why one of us, a very seriously injured worker, was sneakily reinstated (on paper) after having been (unlawfully) sacked? The injured worker still has her black on white, signed, termination letter, and subsequently those of her workcover agent, and even her “rehab service provider”, clearly stating that she has been referred to “NES = New Employment Services”…. Was the “business decision” of sacking this unfortunate injured worker an expensive mistake that needed rectifying (on the quiet)? Surely appears it was!

 

[Sourced by @trinny61with a thanks  – original source: http://www.hrdaily.com.au/nl06_news_selected.php?selkey=1635]

 

Shortlink: http://workcovervictimsdiary.com/?p=7799

 

  Subscribe  
Notify of
JanTeslar
Guest

I’m stil on workencompensation I was redundan of 17 weeks workencompensation sill not aprove my compo case I waiting on nerve conduction for carpeltunel do you think I can suing company they dismis me from job?

workcovervictim3
Guest

@JanTeslar – if your workcover claim is approved it is illegal for your employer to dismiss you for a certain period of time (i.e. Vic 12 months, NSW 6 months): see http://workcovervictimsdiary.com/injury-management/injured-workers-and-termination/

Also read unfair dismissal: http://workcovervictimsdiary.com/injury-management/unfair-dismissal/

Angry Citizen
Guest

So very pleased that Employers premiums sky rocket as a result of the mistreatment of Injured workers which ultimately results in termination. It gives me a warm Fuzzy Feeling.

If you really want to kick them in the Guts you can in NSW under Part 8 of the Workers Compensation Act apply to be reinstated into your former position or a entirely New Position provided   it  is  not more advantageous… ie  no more or no less than  5 % if your Income.

http://www.legislation.nsw.gov.au/maintop/view/inforce/act+70+1987+cd+0+N

Supportingyou
Guest
Dru Workcover and its band of parasitic hangers on will never treat you with equity because you are a negative on their balance sheet Even if you have incontrovertible evidence they will vilify,lie, distort facts and act in a way which can leave you wondering what the fuck is going on in the background In my particular case I have been told (face to face) by a higher ranking wc employee that a phone call was made re me. Then my employer,rehab agent and case manager were then instructed to stop me via any means possible I was also told… Read more »
Dru
Guest
Well, I know my Employer has been fined for lodging my WC claim in 19 days, instead of 48 hours! Hoping to find out next week that the insurance company accepts liability for my injury (psychological from workplace bullying) & their premiums will rise! I’m sure they will sack me – following proper procedure this time! 😉 – as soon as they can, so I’ll be happy that the premium goes up again – especially as my RTW Co is the business manager! 😉 Anybody know how often WC actually investigates Employers after a claim is accepted – 2 more… Read more »
victim of WC
Guest
I agree here, it’s a very very good article and gives us so much insight in the reason why: 1) injured workers are so often treated like dirt and made feel totally unwanted by their employer(s); are really not cared for; their needs are most often totally ignored (i.e. proper RTW plan, modified/suitable duties, restrictions etc); and 2)are almost always sacked “when the timing is right” – unlawfully, constructively or otherwise (i.e. “we have no suitable duties for you”) It surely explains a lot – some of my mates (who are also injured) have been gobsmacked to end up sacked… Read more »
ithurts
Guest

Wow, one of the best news stories I have had the pleasure of reading! Keep up the good work, finding these good news stories. I was terminated while on reduced hrs & to know that my former employer will pay the price via increased premiums is pure joy to my ears 🙂

Johnny’s Karma bus is filling fast, time to get your seat before it makes it’s next stop. Could be your ex employer or your WC agent (inside joke going within the forum).