OVERVIEW OF WORKCOVER SCHEME
The Workers’ Compensation and Rehabilitation Act 2003 (Qld) (“Workcover Act”) establishes a workers’ compensation scheme for Queensland, the purpose of which is to provide benefits to workers in respect of workplace injuries or fatalities, and to encourage improved health and safety performance by employers.
The main provisions of the scheme provide the following for injuries sustained by workers in their employment:
(b) regulation of access to damages;
(c) employers’ liability for compensation;
(d) employers’ obligation to be covered against liability for compensation and damages either under a WorkCover insurance policy or under a licence as a self-insurer;
(e) management of compensation claims by insurers;
(f) injury management, emphasising rehabilitation of workers particularly for return to work;
(g) procedures for assessment of injuries by appropriately qualified persons or by independent medical assessment tribunals;
(h) rights of review of, and appeal against, decisions made by Workcover;
(i) establishment of WorkCover to provide insurance; and
(j) establishment of the Workers’ Compensation Regulator to regulate the workers’ compensation scheme.
WHEN IS AN EMPLOYER LIABLE FOR COMPENSATION?
An employer is legally liable for compensation for injury sustained by a worker employed by the employer (s 46(1) Workcover Act).
Who is an employer?
An employer is a person who engages a worker to perform work (s 30(1) Workcover Act).
What is an injury?
An injury is personal injury arising out of, or in the course of, employment if (for an injury other than a psychiatric or psychological disorder) the employment is a significant contributing factor to the injury OR (for a psychiatric or psychological disorder) the employment is the major significant contributing factor to the injury (s 32(1) Workcover Act).
What is a worker?
A worker is (s 11 Workcover Act):
An individual person who (a) works under a contract AND (b) in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth) (“TAA”)(s 11(1) Workcover Act).
TAA: An entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity) (s 12-35, Sch 1 TAA). “Employee” is not defined by the TAA. Whether a person is an employee of another is a question of fact to be determined by examining the terms and circumstances of the contract between them having regard to the key indicators expressed in the relevant case law. No one indicator of itself is determinative – the totality of the relationship must be considered (Taxation Ruling TR 2005/16).
- Degree of control over worker;
- Does the worker operate on their own account or in the business of the payer?
- Whether the substance of the contract is to achieve a stated result – payment of fixed sum on completion;
- Power to delegate;
- Provision of tools;
- Payment of business expenses; and
Avoiding the risk:
A body corporate can implement the following practices to reduce the risk pf being captured by the Workcover Act:
- Only contract with corporate entitles (this will not always be possible);
- Obtain a fixed quotation for the completion of the task;
- Do not supply tools and equipment;
- Do not tell contractor how and when to do the task
- Frame task as the achievement of a particular result;
- Ensure contract provides that the contractor is responsible for the rectification of any defective work.
An individual person referred to in Schedule 2, part 1 of the Workcover Act:
A contractor, other than a contractor mentioned in part 2, section 4 of this schedule, is a worker if:
(a) the contractor makes a contract with someone else for the performance of work that is not incident to a trade or business regularly carried on by the contractor, individually or by way of a partnership; and
(b) the contractor:
- does not sublet the contract; or
- does not employ a worker; or
- if the contractor employs a worker, performs part of the work personally.
An individual person referred to in Schedule 2, part 2 of the Workcover Act:
A person is not a worker if the person performs work under a contract of service with:
- a corporation of which the person is a director; or
- a trust of which the person is a trustee; or
- a partnership of which the person is a member; or
- the Commonwealth or a Commonwealth authority.
Are Body Corporate office-holders “workers”?
Body corporate office holders will not usually be “workers” for the purpose of the Workcover Act. However, the Workcover Act contemplates that Workcover may enter into a contract of insurance with a non-profit organisation, with the contract to cover a person in volunteer or honorary position with the organisation. A person covered by such a contract is entitled to compensation for injury sustained only while attending meetings and performing any other duty the organisation requires, as a volunteer (s 19 Workcover Act).
Separately from the Workcover scheme, many third party insurers offer policies for voluntary office holders, which ought to be considered by committees in deciding upon appropriate insurances.
For more information read our WorkCover in relation to Body Corporate FAQs