“More needs to be done”: Self-insurers deliver patchy and unequal service to Victorian workers

Victoria’s workers compensation scheme has come under much scrutiny from the Victorian Ombudsman over the years, resulting in significant reforms. But the latest report WorkSafe 3: Investigation into Victorian self-insurers’ claims management and WorkSafe oversight, highlights the shortcomings of self-insurers – private companies that manage workers compensation themselves - which have not previously been scrutinised by the Ombudsman.

“It was apparent that self-insurers’ claims management processes did not always produce fair outcomes for workers, and that some echoed the undesirable practices used by WorkSafe agents, that my two previous reports exposed,” Victorian Ombudsman Deborah Glass said.

There are 34 approved self-insurers including many of Victoria’s largest employers, and WorkSafe is responsible for approving and monitoring self-insurers to enforce performance standards and promote good decision-making.

“We found some self-insurers performing well and delivering the benefits the system intends. But the cases we examined in detail exposed large differences in both practice and capability,” Ms Glass said.

In one case a worker was offered a settlement which if accepted would have disadvantaged the worker by tens of thousands of dollars. In another an injured worker’s payments were terminated without relevant supporting evidence.

The report also highlights gaps in WorkSafe’s oversight of self-insurers. While WorkSafe is constrained by the limits of its legislative powers, and does not have the ability to direct a self-insurer to overturn a decision that does not have a reasonable prospect of success in court, WorkSafe has been reluctant to use its approval power to support compliance.

“The picture we saw was not of a broken system, but a patchy and unequal one. Workers should not have a fundamentally different claims experience depending on who their employer is. All self-insurers are equally bound by legislation to ensure that compensation ‘is paid to injured workers in the most socially and economically appropriate manner, as expeditiously as possible’,” Ms Glass said.

The report made 4 recommendations:

• Government empowering WorkSafe to independently review and overturn self-insurers’ decisions that do not have a reasonable prospect of success at court
• WorkSafe reviewing self-insurers' claims management practices to ensure they align with legislative requirements and the conduct expected of public authorities
• WorkSafe making better-informed decisions about the approval and reapproval of self-insurers, including the term of the approval
• WorkSafe publishing information about self-insurers’ performance.

“It is in everyone’s interests to promote sustainable and timely decision-making on what are not merely numbers, files or claims, but people’s lives and livelihoods. Until all workers in Victoria with the right to claim compensation have the same rights when they disagree with a decision, the system will not be truly fair,” Ms Glass said.

Link to report