The recent parliamentary report by Victorian Ombudsman Ms Deborah Glass, OBE, provides telling insights into the management of complex workers compensation claims and oversight by Worksafe within the Victorian scheme. The key findingswere damming for the Insurance Agents and Worksafe and include:
- Complex cases make up 20% of all claims, yet account for 90% of the scheme’s liabilities.
- Evidence of unreasonable decision making by Agents.
- Agent’s selectively used evidence to reject or terminate claims.
- 75% of 130 week termination decisions are overturned by the courts.
- There is a focus on achieving a return to work, not the quality of a worker’s return to work or whether they remain at work.
For those of us familiar with complex WorkCover claims, this investigation report was not surprising.
While Worksafe and the Agents have indicated motivation to improve their management of complex claims, employers are increasingly acknowledging their place in ensuring positive outcomes for them and their staff. Remedial action taken only by the Agents and Worksafe will fail to reduce the impact of these complex cases for employers. To counteract these challenges, we encourage employers to develop their own approach to managing staff wellbeing.
Employers with whom we consult consistently discuss their challenges with the scheme and their experiences of the real-life impact on their staff, teams, and premium payments arising from costly and poorly managed claims. It is hard to evaluate true overall costs to employers, but here are key observations we have made in these situations:
- Premiums increase but positive outcomes decrease.
- Good staff members leave (remember that replacing a staff member costs between 50-150% of their salary).
- Remaining staff are fearful of how they would be treated if they lodge a claim and issues across the wider staff group fester, with a loss of trust developing.
- If a staff member returns to work and has not been supported effectively, they often do not perform a useful function and this impacts their morale, their Manager’s morale and the morale of their team.
- Due to the staff member experiencing an adversarial claims experience, conflict can develop between them and their Manager, or other employer representatives.
Without implementing their own Psychological Risk Management practices, even if a claim is not lodged, employers will still experience the above challenges within their organisation.
If you would like to know more about how to manage complex workers compensation claims or situations within your organisation, please contact us.