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, WorkCover’s Claims Estimation Manual 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

 



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8 Responses to “Terminating an injured worker can cost a medium employer K70-300 in increased premiums”

  1. Perhaps a slightly unrelated comment – however, an injured worker recently told us that s/he found out that his/her insurer and employer failed to pay him/her workers comp payments while on Long Service Leave. The injured worker actually had to ring WorkCover in NSW who have been investigating  and s/he was paid about  $1700 for the entire [year]!

    The injured worker says they haven’t paid yet  for [the 2nd year] but it goes to show  that the employer – a local council – and the insurer broke workers comp act. If they have done this to him/her, says the injured worker, how many other people at council have been diddled of their entitlements and with the insurer?

    You are possibly looking at thousands of people that could have been denied rightful entitlements. If it wasn’t for WorkCover in NSW both the employer and the insurer StateCover failed to listen or reply to the injured worker’s concerns and ignored his/her lawyer.

    Nobody has offered an apology, the injured worker told us. S/he has fairly recently brought this to the attention of all members of nsw parliament via emails as his/her employer again threatens him/her with termination over code of conduct breaches for protesting publicly

    The injured worker was handed a constructive dismissal a few months ago and asked to leave  even though s/he was on modified duties which doesn’t mean anything as [the work s/he was doing]  is “light duties”. The injured worker did everything; reference work, circulation, cataloging and computer shifts etc. Council said they could no longer sustain his/her <15 hrs duties which denotes to the injured worker an economic circumstance but they refuse to pay redundancy, entitlements.

    The injured worker is going for a hearing IRC soon he says. Meanwhile council states there is no work available in the foreseeable future, yet they continue to hire casuals at a higher pay of rate than him/her!

    It is a circus.

    And we could not agree more, mate [thanks for sharing your story !]

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  2. 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).

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  3. 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 after 3 – 10 years of loyal employment – seems to coincidence with the 3 year premium window indeed!

    It may also explain why, frankly, case managers could not care less about injured workers’ RTW – all they usually want is to force an injured worker back to work asap for the sole purpose to obtain their personal bonus(RTW = bonus for case manager).

    After that they don’t care, at least not for 3 years it seems, and then oopsy daisy the doctor shopping (IMEs) come back with a vengeance to have the injured (usually very severe) worker certified “fit’ by ANY means possible.

    So basically the insurance company MAKES big money out of an injured worker when they’re sacked (in the 3 year window period). When the premiums can no longer rise, the insurer finds any way possible to get seriously injured workers “off their books” by making them RTW (think IME with dodgy psych etc)!

    It’s all about money, big money and there’s nothing else to it!

    If I just look back at my own “claims” or case, it really looks like this article has been followed – business transactions.

    May be a great article to bring to the attention of Mr Shoebridge and like minded supporters!

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  4. 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 people resigned this week …….

     

     

     

     

     

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  5. 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 not to waste my time voting in the nsw elections as barry ofarrell had already been appointed by the black hands in our government
    It kind of fits doesn,t it?
    Look at this persons attitude towards others
    His arrogance is merely scripted behaviour as he has to follow instructions
    Funny how some of us can be bought and sold eh?
    He is a pawn for a much larger ,darker secret operation
    His position is only titular much like our lovely potty-mouthed governor general
    It is common knowledge amongst the higher echelon wc employees that these mechanisms are and have been in place for a long time
    sorry but cold hard fact……..
    Supporting you

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    Supportingyou May 13, 2012 at 8:11 am
  6. 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

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    Angry Citizen May 13, 2012 at 1:03 pm
  7. 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?

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