INSIGHTS: Queensland to remove 5% permanent impairment threshold for workers seeking damages

On 15 July 2015, the Queensland Government introduced the Workers’ Compensation and Rehabilitation and other Legislation Amendment Bill into Parliament. If passed, this Bill will remove the 5% threshold, which workers must currently meet to have an entitlement to seek common law damages. The 5% permanent impairment threshold was introduced by the Newman government and applied to injuries occurring after 15 October 2013.  The legislation is retrospective in its application and will commence on 31 January 2015 (the date of the election of the Labour government).

What do proposed amendments do?

The amendments remove the threshold of a 5% degree of permanent impairment (“DPI”) on workers seeking to claim common law damages and reinstates the position prior to the Newman government amendments. That is, those workers injured after 31 January 2015 with a DPI of less than 20% can to elect to claim damages for the injury or accept lump sum compensation while those with a DPI of 20% or more can both accept lump sum compensation and sue for common law damages.

What happens to workers injured between 15 October 2013 and 31 January 2015 with less than 5% DPI?

If a worker was injured prior to 31 January 2015 (and after 15 October 2013) and was assessed as having DPI of less than 5%, then it appears from the Bill that those persons will not have any common law rights. Section 709 of the Bill confirms that for injuries occurring before 31 January 2015 the pre-amended Act will apply in relation to access to damages. Therefore anyone injured before 31 January 2015 has lost their common law rights if their DPI was, or is, assessed at less than 5%.

If a worker was injured after 31 January 2015 and was assessed with a DPI of less than 5% and subsequently accepted the lump sum compensation it also appears that the worker will not have any rights. Section 711 of the Bill states that if a worker sustained injury after 31 January 2015, and subsequently made a decision under section 189 of the Act (a decision to accept or reject an offer of lump sum compensation) then the amendments will not affect any such decision.  The rationale for this appears to be that it was always the government’s election platform to reverse the Newman government’s amendments and workers were therefore on notice that their common law rights would be restored.  The decision to accept lump sum compensation was therefore affectively an election to waive those common law rights.

Additional lump sum compensation for workers injured between 15 October 2013 and before 31 January 2015

The amendments introduce a new Section 193A which applies to all workers injured between
15 October 2013 and 31 January 2015 who had a DPI of 5% or less and have not either accepted or rejected an offer of lump sum compensation under Section 189. That worker will be entitled to additional lump sum compensation. The amount of any such lump sum compensation will be subject to regulation, and the specifics are as yet unclear.

Other amendments

There are a number of other amendments made by the Bill. The most important of those are:

1. The Bill removes the right of an employer to access a prospective employee’s claims history by removing Section 571D;
2. The Bill allows the dependants of a worker who has suffered a fatal injury to seek common law damages without first applying for compensation by simply applying for a Certificate of Dependency whereby an insurer can certify that the person was a dependant of a deceased worker.  This simply puts dependants of a deceased worker in the same position as injured workers in that they can apply for damages without having first applied for compensation.

Effect on employers and insurers

The primary effect on employers and self-insurers will be that:

1. Employers will be exposed to claims for damages arising out of injuries in the period following 31 January 2015, for workers who are assessed as having a DPI of less than 5%;
2. There is the prospect of having to pay additional lump sum compensation, the amount and methods of calculation which is not yet known, to those workers who were injured between 15 October 2013 and 31 January 2015, and had a DPI of less than 5%.
3. The position on compensation and damages generally reverts back to as it was before 15 October 2013 (with some minor adjustments).
4. There may be financial consequences for self-insurers who had made decisions based upon the previous statutory regime and are now subject to retrospective amendments in respect of compensation in addition to damages.