Andrew: Okay, let’s get onto your headline topic, which is managing worker’s compensation.
Andrew: All right. You have a claim coming in, Kim, what do you do about it?
Kim: Okay. First of all… Most of our claims are coming in these days are psych claims. We’ll probably focus a bit more on that today. A fairly recent change, but you weren’t that familiar with it, so we’d better talk about it.
Andrew: We don’t have a lot of time for you to bag me. All right?
Kim: All right. Okay. Stress claim, now you don’t have to wait your 10 days, you must put in part A of your form within three days. The reason for this is workers just weren’t getting treatment quickly enough where an employee was just-
Andrew: In fact, it used to take about three months to get a psych claim. So, now they can get within three days.
Kim: … The idea is to get people treated because the longer people are off work, the much less chance of them coming back. So, we really want to get-
Andrew: So, line in the sand, three days for psych claims, 10 days for normal claims.
Kim: … For normal claims, and then still 28 days from the 10th day to determine liability. So, to answer your question, if we get a claim, we must make a decision as an employer, whether we accept it or not. Is it a valid claim? Most are, let’s be truthful, but a lot what we do with-
Andrew: Yeah, we are like pathologists. We only see the dead bodies.
Kim: … What the most important thing is, you don’t want to reject a claim or dispute a claim with an insurer, unless you’ve got evidence saying why it isn’t genuine.
Andrew: Yeah, we want it to be a strong argument.
Kim: It’s got to be a strong argument because they’re getting more and more accepted. So, you don’t want to burn your relationship with your insurer either by constantly disputing every claim that comes in, because they just won’t accept that it’s a-
Andrew: More over now because in many of the jurisdictions, it’s not the insurer that makes the psych claim anymore. It’s actually the government who makes the claim.
Kim: … Yeah.
Andrew: So, you’re burning your advocate. It’s crazy stuff. Let’s jump on a bit four. What are the risks raising management action. So, let’s talk about this. Psych claim, three parts for psych claim. Does a person have a psychological injury? Did it occur at work? And then-
Kim: Did it arise wholly or predominantly as a result of a reasonable management. If someone’s not performing at work, you must formalise the performance management of them. Whether it be from a lower level, from counselling, up to performance improvement planning up to a disciplinary outcome. It must be formalised and put some structure around it. If it’s not, the insurer will say, “You’ve taken this softly-softly approach with this person. Yes, they haven’t been performing well, but you actually haven’t managed them. There’s been no performance improvement or any sort of management action. Therefore, we’re going to accept the claim.”
Andrew: … For me, as lawyer who does wellbeing and also does the employment and the dirty side of employment law, please don’t be scared about formalising stuff. It’s actually a structure which gives people, certainty. People need certainty when their performance has dropped, it gives you clarity around what good looks like and it gives them a chance to know how to be good. So, it’s actually the right thing to do and people need to know when they’re not meeting standard.
Kim: And it will help them improve.
Kim: People don’t have to assume that, “Oh, you’re trying to get rid of me. You’re trying to terminate me.” If you do it properly, they’ll realise that you’re actually trying to support them and get them working more productively.
Andrew: And if you do go in there with your black hat in and use this as a process towards termination, A, you are going to get a shock and response from the person you’re talking about but, B, your claim’s going to be accepted. All right. What happens when the claim is accepted?
Kim: Okay. Well, your first question to me is, can the employer appeal it?
Andrew: That was but it wasn’t was meant to be the question.
Kim: No, we call it workers’ compensation for reason, it’s very skewed towards workers. We can, as an employer, seek an internal review. I think in my career, I’ve known one to succeed and then get overturned. And the only other option is to appeal to the Supreme court, incredibly expensive. So, that just doesn’t happen. So, when the claim is accepted, what we need to focus on is reducing the claims costs of that claim to get we people back to work as quickly as possible. And therefore we won’t see our premiums skyrocketing.
Andrew: Well, let’s do that by just having little jurisdiction by jurisdiction. What are the drivers of premium?
Kim: Okay. So, in Victoria, we’ve got Statistical Case Estimate, which is the cost of that claim that work safe assesses it will be.
Andrew: And that’s, basically, around three things, isn’t it? Which, is nature of the injury, history, nature of the industry that you’re in.
Kim: Yeah. Okay. So Victoria SCE industry classification, the more dangerous the occupation, the higher, in premium and your remuneration, business remuneration. New South Wales and South Australia are very similar. They no longer have Statistical Case Estimates they actually look at weekly benefits. So, this is why return to work is so important. If people aren’t returned to work, weekly benefits are higher, therefore premium gets higher.
Andrew: With your psychological claims, if someone’s not back within four weeks in a psych claim-
Kim: 45 days, 50% chance of getting back. I think if it’s 75 days, pretty well, they’re never going to get back to work. So, that’s why as soon as a claim comes in, you start talking about return to work. You engage with the worker. Don’t leave them at home for the 38 days while you’re rejecting the claim and then suddenly the claim’s accepted and, “Oh. Shit.” They’ve already been-
Andrew: … I don’t think anybody there said, “Oh, shit.” I would never have said that.
Kim: … I forgot. I’m not allowed to swear.
Andrew: She swore.
Kim: I swore. Anyway. You’re side tracking me. We need to focus on return to work, get them back-
Andrew: New South Wales and South Australia. Next one, move on.
Kim: … We’re going on. I did that one.
Andrew: I know. One after that.
Kim: Queensland, they look at three years of statutory claims, five years of commonwealth claim history. If you’re in the other states or territories, that’s a better thing because you can actually shop around because they determine their own premium based on their own claims history within their own insurance company and their own claims.
Andrew: It’s purely risk based.
Kim: Purely risk based.
Andrew: So, no regulator controlling. All those kind of things.
Kim: No, not at all.
Andrew: So, look, I think the lessons that come out of that is get people back, have really good engagement as quickly as possible.
Kim: With them and their doctor. Convince their doctor that you are actually supporting the worker because most doctors don’t trust employers.
Andrew: That’s right. So, keep a straight face. Yeah. Very important. Okay. Last-
Kim: Time flies.
Andrew: … It does when you’re having a lot of fun. So, why don’t we just talk about one thing, which is, you’ve got a difficult employee. They’ve gone on workers comp, their claim’s been accepted around bullying about a particular superior. What can we do?
Kim: Okay. So, what we want to do ideally is get medical evidence to say that this worker can still do their job just not with their manager or-
Andrew: Because worker’s compensation is about capacity.
Kim: … Yeah.
Andrew: It’s not about who you don’t like.
Kim: Yeah, exactly. So, very well could be that someone would have capacity to do their job, but just in a different workplace. And that provides the grounds to terminate the claim under what we call carriage.
Andrew: Yeah. And the important part about that is in your own business, it might be that Locke reports to Kim and Kim bulls Locke, which she doesn’t, I might add. And Locke says, “I can’t work with Kim,” gets a claim in succeeds. And then I just say, “Right. Locke report to me.” And I’m an easy guy to get on with anyway. I’ll tell you that. And after that Locke still says, “No,” and we terminate his claim.
Kim: Yeah. It’s a bit of a process.
Andrew: Yeah. Interesting case.