19

Annual

2019-2020

20

Reducing workplace harm. Improving outcomes for injured workers. Letter to the Ministers

October 2020

Mr Danny Pearson MP Ms Ingrid Stitt MP Assistant Treasurer Minister for Workplace Safety Parliament House Parliament House Spring Street Spring Street East Melbourne VIC 3002 East Melbourne VIC 3002

Dear Ministers

I am pleased to submit the 2019-20 WorkSafe Victoria Annual Report for presentation to Parliament, as required by section 46 of the Financial Management Act 1994.

John Merritt Chair Contents

2019-20 Snapshot 1 Report from the Chair and Chief Executive 3 About WorkSafe 7 2019-20 Year in Review 11 1. Responding to extraordinary events 13 2. Delivering on workplace safety reforms 17 3. Reducing workplace harm 23 4. Improving outcomes for injured workers 41 5. Providing community value 47

Looking Ahead 57 2019-20 Financial Report 59 Appendices 126 Appendix 1: Prosecutions 127 Appendix 2: Agent performance results 137 Appendix 3: Self-insurance report 147 Appendix 4: Governance and compliance 153 Appendix 5: WorkSafe’s response to the Victorian Ombudsman’s 2019 investigation 171 Appendix 6: Disclosure index 175 1 WorkSafe WorkSafe AnnualReport 2019-20 82,711 Snapshot 6.27 -$3,54 4 treatment and/orweeklybenefits injured workerssupportedwith compared to$68min2018-19 performance frominsuranceoperations, insurance premiumrate its lowestaverage WorkSafe maintains 90.0% claims down 0.8%on2018-19 hours worked per million result client service ,580,4 4 visits toWorkSafe’swebsite Year inreview 0% on2018-19 1.272% compared to24in2018-19 1 37 Tragically mental injury were for of newclaimsin2019-20 of payrollsince2014-15 4 and 12.6%in2017-18 up from14%in2018-19 2.6m .3% 69 lost lives readiness program pave thewayfor Comprehensive new workplace manslaughter completed to million litres ofstockpiled laws waste chemicals removed from 16.9 warehouses Melbourne 4 workplace7,831 visits

3,105COVID-19 related visits

visits to bushfire- aected 564 workplaces Five months of intense activity by WorkSafe to support bushfire clean-up

2 3 WorkSafe WorkSafe AnnualReport 2019-20 Chief Executive the Report from loss anduncertainty. marked byprofounddisruption, imagined orpredicted;ayear It wasayearfewcouldhave outcomes for injured workers. what we are here to do–reduce workplace harmandimprove and, even inturbulent times,we remain resolutely focused on We take great prideinourplace withintheVictorian community Chair and 3,105 visits specific to COVID-19

Responding to From March 2020, all workplace The most significant of these was the extraordinary events inspections included an assessment introduction of the new criminal offence of COVID-19 safeguards. As at 30 June of workplace manslaughter, effective 1 Our strategic and consistent approach 2020, WorkSafe had conducted July 2020. The program of work leading to risk meant we were well-prepared to 3,105 visits specific to COVID-19, up to this historic day included the respond quickly to COVID-19, with a including targeted inspections of creation of a new Fatality Investigations focus on protecting workers and high-risk workplaces to ensure Team; a training program for WorkSafe supporting efforts to prevent the spread compliance with occupational health investigators and prosecutors of the virus. and safety legislation. focussing on the enforcement of the We worked closely with other It is difficult to gauge with any certainty new laws; additional support for the government agencies, our stakeholders how the next 12 months will unfold, but families of those killed at work; and the and partners to apply public health what is certain is that WorkSafe will development of workplace directions and guidance in a workplace remain vigilant and proactive. The manslaughter information sessions, setting, fulfilling our obligations as the safety of the Victorian community is updated guidance and fact sheets for State’s workplace health and safety paramount. employers. regulator. And we developed innovative This new offence, and the penalties it new service delivery models to ensure The COVID-19 pandemic emerged on carries – including up to 25 years in jail vulnerable injured workers continued to the back of another crisis in Victoria – – sends a clear message that negligent receive the benefits, entitlements and one of the most ferocious wildfires in conduct causing the death of an support they need to return to health. recent history. Lives were lost, properties and vast areas of bushland employee or member of the public is Guidance specific to COVID-19 was destroyed. never acceptable in a civilised society. developed and adapted to keep pace Also completed in 2019-20 was a large with the changing nature of the WorkSafe provided immediate relief program of work to support the pandemic, supporting workers and and recovery to workplaces and injured broadening of the workplace fatality employers to navigate this workers, followed by five months of definition, effective 1 July 2020, to unprecedented challenge. People intense activity to ensure the safety of include work-related road fatalities. seeking COVID-19 information clean-up operations, which we are still contributed to a surge in visits to helping to manage today. It also includes suicides attributable to a workplace health and safety failure, WorkSafe’s website. In 2019-20, visits Delivering on workplace deaths from industrial disease such as increased 40% to more than 4.5 million, safety reforms with page views exceeding 10 million. silicosis and workplace deaths resulting While the extraordinary events of 2020 from a criminal act. dominated the second half of the financial year, we remained committed to delivering a range of important workplace safety reforms.

4 118prosecutions

This will significantly increase the In 2019-20, there were 47,831 We have made good progress in number of deaths reported by workplace visits. More than 12,800 developing tailored programs that provide WorkSafe each year. Importantly, it will improvement notices were issued and clients with realistic pathways to recovery respect and recognise all Victorians 118 prosecutions completed. and a return to work but we also recognise killed at work and ensure their loved Mental injury remains a significant the need to do more. It was therefore ones receive the support they deserve. challenge for our community and pleasing to see the continuing It will shine a light on the full extent of workplaces are no exception. Claims for development of our new service delivery workplace deaths and reinforce to all mental injury grew to 14.3% of new model, notwithstanding some of the Victorians the need to make health and claims in 2019-20, up from 14% in inherent challenges that COVID-19 has safety the number one priority in every 2018-19 and 12.6% in 2017-18. The presented. At its core, our new service workplace. WorkWell program is among initiatives model requires a step change in thinking from everyone involved in an injured Reducing workplace harm addressing growth in this area. More than 6,000 businesses have now worker’s recovery. We need to shift from Despite new and emerging challenges registered to use the online toolkits to treating an injury, to treating the whole across the workplace landscape, support mentally healthy workplaces, person. Victoria maintains its proud reputation while 14 projects were recipients of the To this end, WorkSafe is progressively as one of the safest places to work in third and final round of WorkWell’s implementing all 13 recommendations the world. This doesn’t happen by Mental Health Improvement Fund aimed made by the Victorian Ombudsman in her chance. Everyone has a part to play. at preventing mental injury and illness second report into the management of One group that deserves our special among vulnerable working Victorians. injured workers with complex needs. As attention and thanks are the many the Ombudsman herself noted in her Health and Safety Representatives who Other key prevention activities in Report on Recommendations to the make it their business to keep their 2019-20 included a ban on the Victorian Parliament in June: ‘Real system workmates safe. uncontrolled dry cutting of engineered stone to better protect workers from reform will take time, but WorkSafe’s initial The key overall measure of workplace exposure to deadly silica dust; the actions are encouraging’. incidents, claims per million hours recruitment of more construction Recommendations implemented over the worked, finished the 2019-20 financial inspectors; investment in farm safety past 12 months include the creation of the year at 6.27, down 0.80% on 2018-19. and the development of a Dangerous Workers Compensation Independent However, this was in part due to the Goods Strategic Inspections program Review Service, which will independently drop in million hours worked from April to improve oversight of more than 200 review disputed workers compensation to June as a result of COVID-19 of the highest risk sites storing and decisions; a new centralised complaints restrictions. handling dangerous goods in Victoria. management system and extended Tragically, 2019-20 saw 37 people appointments with specialist medical Improving outcomes for killed at work, compared to 24 the providers for some of our longer-term injured workers previous year. injured workers. While we will always seek to prevent This is simply unacceptable. We must, workplace harm, when workers are Providing value to the community and we will, do better. injured, WorkSafe has a significant role Strong scheme management is critical to As a regulator, WorkSafe recognises to play in their return to health and safe ensuring we are able to protect and the important role that compliance and work. support working Victorians into the future enforcement plays in reducing In addition to supporting new and – no matter how the workplace workplace injuries, illness and deaths. existing clients impacted by Victoria’s landscape evolves. bushfires and COVID-19, WorkSafe It was a challenging year. helped 12,990 people return to work.

5 WorkSafe Annual Report Mental injury remains a signficant challenge for our community and workplaces are no exception.

WorkSafe’s net result was a deficit Thank you of $3.0 billion. This was driven by the The 2019-20 year will be remembered for considerable economic impacts of extraordinary events, in particular the COVID-19 on WorkSafe’s balance emergence of COVID-19, and the impact it has sheet, along with continued growth in had on how we live, work and communicate. the number of workers with mental For their support in a very different operating injury claims, who often take longer environment throughout the year, we would like to recover and require more services to thank our many stakeholders, whose and supports. partnerships we truly value. We also thank our Despite these challenges, WorkSafe’s former ministers, the Hon Jill Hennessey and balance sheet remains strong, with an the Hon Robin Scott, while welcoming our new Insurance Funding Ratio of 123%. This Ministers, Minister for Workplace Safety Ingrid means that for every $100 of liabilities, Stitt and Assistant Treasurer Danny Pearson. we have $123 in assets. It is also well We thank those Board members who retired within the preferred funding range of during the year, Paul Barker, Samantha Smith 100-140% and comfortably above the and Ross McCann and our former Chief mid-point. Executive, Clare Amies. We welcome new An important measure of the value we Directors, Elizabeth Lukin, Julie Warren and provide to the community is how our Flavia Gobbo. service is rated by workers, employers We thank the hard-working people here at and others who interact with WorkSafe. WorkSafe for their resilience, drive and inspired WorkSafe achieved a strong client collaboration – and for welcoming us both back service result of 90%. to the organisation late in 2019. We strive for excellence in this area and We are honoured to be serving our people are passionate about the Victorian community and committed to making every interaction count. Even as staying true to WorkSafe’s core purpose of large numbers of our workforce reducing workplace harm and improving transitioned to remote working due to outcomes for injured workers. COVID-19, the care and concern they have for the health and safety of Victorian workers did not waver. A clear sign of the engagement of our people in the work we do is captured in our annual Employee Opinion Survey. In 2019-20, the engagement score was an emphatic 85%. This was a 10-point improvement in absolute terms, compared to 2018-19 (75%). John Merritt Colin Radford Chair Chief Executive

6 About WorkSafe As Victoria’s health and safety regulator and workplace injury insurer, WorkSafe’s role is to reduce workplace harm and improve outcomes for injured workers.

WorkSafe strives to prevent workplace WorkSafe enforces Victoria’s injuries, illness and fatalities and over occupational health and safety, Raising the standard the past 35 years has raised the dangerous goods and accident of workplace health standard of health and safety in compensation laws. Its statutory and safety for over Victorian workplaces. obligations are covered in the following WorkSafe also provides a range of Acts of Parliament: benefits to injured workers, regardless • Occupational Health and Safety of fault, and helps them get back to safe Act 2004 – health, safety and welfare and sustainable work. Benefits include in the workplace 35years weekly payments, medical and allied • Workplace Injury Rehabilitation and health treatment, ambulance transport, Compensation Act 2013 – workers hospital treatment, personal and compensation and the rehabilitation household help, lump sums for of injured workers permanent impairment and common • Accident Compensation Act 1985 – law damages. workers compensation and the rehabilitation of injured workers These benefits are funded by Victorian • Dangerous Goods Act 1985 – employers who purchase insurance explosives and other dangerous cover by paying a percentage of their goods total employee remuneration to • Equipment (Public Safety) Act 1994 – WorkSafe. In 2019-20 this totalled high-risk equipment used in $2.458 billion. This was augmented non-work-related situations by investment income totalling • Workers Compensation Act 1958 – $0.214 billion. workers compensation prior to 1985. WorkSafe uses the revenue raised from premiums and investment income to fund both claims and health and safety activities, which reduces the overall burden on Victorian businesses.

7 WorkSafe Annual Report Our vision and mission Victorian workers returning home safe everyday.

Actively working with the community to deliver

WorkSafe’s stakeholders include outstanding workplace employee and employer safety and return representatives, medical and allied health providers, legal practitioners and to work, together industry bodies. They inform strategy, with insurance policies, program development and other initiatives to help deliver the best protection. outcomes for Victorians. Our Stakeholder Engagement Framework supports these important interactions. Stakeholder committees mandated by legislation are the Occupational Health and Safety Advisory Committee and the WorkCover Advisory Committee. Other working groups and committees include: • Occupational Health and Safety (OHS) Stakeholder Reference Group (SRG) • Rehabilitation and Compensation Working Group • Major Hazards Advisory Committee • Legal Liaison Group • Return to Work Working Group.

8 9 About WorkSafe AnnualReport WorkSafe WorkSafe Flavia Gobbo Appointed 2020 January Maria Wilton AM Elizabeth Lukin Doug Kearsley Appointed October 2019 Julie Warren Appointed October 2019 Peter McMullin John Merritt (Chair) Appointed November 2019 Reappointed March 2020 Appointed April2017 Appointed May 2019 Jane Brockington Appointed August 2017 Appointed February 2018 Board Organisational Structure

Roger Arnold Executive Director, Strategy

Marion Nagle Executive Director, Insights & Innovation Strategy

Sam Jenkin Executive Director, External Affairs

Kate Despot General Counsel Executive Director, Legal & Governance

Colin Radford Shane O’Dea Chief Executive Executive Director, Insurance Julie Nielsen Executive Director, Health & Safety

Fiona Schutt CFO Executive Director, Business Performance

Ashley West Executive Director, Operations

Tim Gove Chief Risk Officer

Andrew Keen Executive Director,

People & Culture Operations

Brad Kemp Head of ITSS (Acting)

10 11 11 WorkSafe WorkSafe AnnualReport Annual Report 2019-20 Review 12 13

WorkSafe AnnualReport Year in Review extraordinary events Responding to 1 The response to COVID-19 was multi-faceted, with stakeholder input playing a significant role.

It was a year like no other, with two major events testing the resilience of Victorians and giving rise to unprecedented challenges across the workplace landscape.

The COVID-19 global pandemic WorkSafe responded to all notifications Stakeholder input sparked a state of emergency in by making enquiries to determine Stakeholders were consulted in the Victoria and a rapid response from compliance with occupational health development of all COVID-related WorkSafe, focused on protecting and safety (OHS) laws. guidance, as businesses worked to workers and preventing the spread of As at 30 June 2020, WorkSafe had address a range of health, safety and the virus. conducted 3,105 visits specifically wellbeing challenges specific to their COVID-19 emerged on the back of one related to COVID-19, including targeted sectors and work environments. of the largest bushfires in the state’s inspections of high-risk workplaces to The OHS Stakeholder Reference recent history. WorkSafe continues to ensure compliance with OHS Group convened additional meetings help devastated communities safely legislation. in response to the pandemic. manage the clean-up operation. WorkSafe’s advisory service answered Regular meetings were established COVID-19 nearly 2,000 enquiries specific to with Safer Care Victoria, the DHHS, WorkSafe was well-prepared to COVID-19 between late March and 30 the Australian Nursing and Midwifery respond quickly to COVID-19, as a result June 2020. The highest number of Federation, the Health Workers Union of a robust risk management program. enquiries came from the health care and other relevant unions. and social assistance sector, followed The response was multi-faceted, As a member of the Building and by construction and retail. with stakeholder input playing a Construction Industry COVID-19 significant role. Taskforce, WorkSafe connected regularly with construction industry From March 2020, all of WorkSafe’s stakeholders and attended a range of workplace visits included an industry forums. WorkSafe’s assessment of COVID-19 safeguards. Construction Liaison Officers met daily WorkSafe entered into a Memorandum with industry representatives to focus of Understanding (MOU) with the on early intervention to resolve issues. Department of Health and Human Services (DHHS) that ensured WorkSafe was notified by the DHHS where a risk of COVID-19 or influenza transmission had been identified in a workplace.

14 Other activity included entering into a • Preventing and managing the • Safety alert – fire hazards when MOU with the Victorian Commission for increased risk of employee fatigue in manufacturing or storing Gambling and Liquor Regulation, Victoria healthcare during coronavirus alcohol-based hand sanitiser Police, the DHHS and the Department of • Managing coronavirus risks: • Safety alert - changes to medical Justice and Community Safety to facilitate healthcare and social assistance examinations and health monitoring collaboration and cooperation in relation to industry – respiratory protective due to coronavirus the re-opening of the hospitality industry equipment • Managing coronavirus risks: mental and the ongoing working from home • Managing the risk of COVID-19 health at work arrangements, in alignment with Chief exposure: construction industry • General COVID-19 frequently asked Health Officer directions • Managing the risk of exposure to questions for employees. coronavirus – a simplified checklist Additional support for workers for the construction industry and employers WorkSafe offered additional support to workers and employers in response WorkSafe has to COVID-19. This included: • providing additional income produced guidance payments to eligible workers, as a result of emergency measures in the and safety alerts COVID-19 Omnibus (Emergency Measures) Act 2020 • providing guidance to agents, that provide clear self-insurers and injured workers on return-to-work considerations, including extending certificates of COVID-19 control capacity, where appropriate, as well as conciliation and telehealth options • supporting workers with measures for COVID-related claims, with a particular focus on streamlining the workplaces. process for health care workers • encouraging employers with a reduced level of employment due to Safety alerts and guidance • Updated: Preparation for a COVID-19 to update their estimated WorkSafe has produced guidance and pandemic – a guide for employers remuneration for 2019-20, which had safety alerts that provide clear COVID-19 • Minimising the spread of the potential to generate a premium control measures for workplaces, coronavirus: working from home credit including: • Prevention and management of • suspending all overdue debt notices • Safety alert - exposure to exposure to coronavirus in the and late payment penalties coronavirus in workplaces healthcare and social assistance • fast-tracking the implementation of • Managing coronavirus risks: industry an online portal for the receipt of face coverings in workplaces • Managing coronavirus exposure: digital common law applications • Managing coronavirus exposure agriculture and labour hire • working with the courts and legal risks: travelling in vehicles • Managing the risk of coronavirus profession to encourage appropriate exposure: meat and poultry use of technology in preference to processing industry matters being adjourned.

15 WorkSafe Annual Report Bushfire crisis WorkSafe provided advice and In collaboration with Bushfire Recovery assistance in the safe management of Victoria and other government volunteers and contractors, supported agencies, WorkSafe provided local councils and provided immediate relief and recovery to information support at local workplaces, injured workers and community hubs. communities affected by the bushfires. WorkSafe continues to work closely In addition to the direct impact of the with Bushfire Recovery Victoria, fires on bushland and communities, government agencies, employers and smoke across Geelong, the Latrobe employee representatives and Valley, Melbourne, Gippsland and the community partners to ensure north east was at hazardous levels for a recovery efforts are kept safe and number of days in January 2020. legislative requirements are met for WorkSafe inspectors and specialists the clean-up of asbestos in provided technical advice to other bushfire-affected areas. agencies as well as on-the-ground Impact on workers and support across affected areas, with employers intense activity continuing for more WorkSafe identified injured workers than five months to ensure the safety of and employers impacted by the clean-up operations. bushfires. A range of guidance materials to Tragically, three workers died and manage hazards and risks associated WorkSafe continues to support those with the bushfires was provided, directly affected. ranging from safe demolition and disposal of asbestos to safe handling Recognising the potential impact of and disposal of LPG cylinders and the the bushfires on existing injured health risk of outdoor work in areas workers, WorkSafe identified all those impacted by bushfire smoke. living in affected areas to ensure continuation of care and support. As at 30 June 2020, WorkSafe had visited 564 workplaces in the bushfire WorkSafe visited zones, while WorkSafe’s advisory service had answered hundreds of calls, mostly relating to concerns 4 about air quality. 56workplaces in the bushfire zones

16 Delivering on workplace Year in Review safety reforms

2 17 WorkSafe Annual Report Despite a very dierent and sometimes challenging operating environment as a result of COVID-19, WorkSafe continued to deliver on workplace safety reforms. The reforms demonstrate WorkSafe’s WorkSafe and Victoria Police also Work-related road deaths strong and proactive commitment to updated their MOU. In 2019-20, WorkSafe completed a workplace safety, while holding to account Family support large piece of work to support the employers that disregard the state’s high WorkSafe’s family support model is broadening of the workplace fatality workplace safety standards and the being enhanced to ensure families definition to include workers who die on health and safety of their workforce. impacted by workplace fatalities or the roads. The reforms also prioritise the development serious injuries are provided with a Effective 1 July 2020, work-related road of regulatory practices that better support consistent level of service and support. fatalities – as well as suicides injured workers, including those with Two new family liaison officers have attributable to a workplace health and complex needs, and their families. been recruited and they will work with safety failure, deaths from industrial Significant progress was made during agent family support specialists to disease such as silicosis and workplace 2019-20, reflecting a sustained ensure families of deceased or deaths resulting from a criminal act – commitment to reducing workplace seriously injured workers are aware of, will be recognised in the WorkSafe toll. harm, delivering improved outcomes for and can easily access, the range of The change means a more accurate injured workers and providing value for support services available to them. account of workplace deaths, while the Victorian community. Both the family liaison officers and also ensuring those who are affected by Workplace manslaughter family support specialists have been workplace deaths can access In 2019-20, WorkSafe completed a trained in person-centred case WorkSafe’s support. comprehensive readiness program for management and in the delivery of Programs are in development to ensure the new criminal offence of workplace support to families experiencing grief proactive inspections are taking place manslaughter, effective 1 July 2020. and trauma. in the transport industry. This program of work included the Families will also be supported creation of a new Fatality Investigations throughout investigation and Team; a training program for WorkSafe prosecution processes as a result of investigators and prosecutors focussing any breaches to the Occupational on the enforcement of the new laws; Health and Safety Act 2004 (OHS Act). additional support for families of WorkSafe has developed a range of deceased workers; and the development digital and print communication of workplace manslaughter information resources to support families, including sessions, a public education campaign a dedicated section on WorkSafe’s and updated guidance and fact sheets website. for employers.

18 19 Year in of aninfringements scheme underthe WorkSafe AnnualReport the development

underway on Review OHS Act. Work is Appendix 5. recommendations befound can in An outlineof theprogress of all stricter requirements for agents • longerappointments withspecialist • anew centralised complaints • aWorkers Compensation • Deliverables in2019-20 included: complex needs. management of injured workers with Ombudsman’s 2019 report into the recommendations intheVictorian WorkSafe isresponding to recommendations Victorian Ombudsman to undertake surveillance. quarterly checks of agent decisions when usingsurveillance and specialists and attention of key medical ensure they get theappropriate time eligible long-term injured workers to independent examiners medical for workers compensation complaints management andresolution of all responsible for end-to-end management service, whichis centre of thedisputes process keeping theinjured worker at the compensation decisions,while review disputed workers (WCIRS), whichwillindependently Independent Review Service management of thedisease. 2019 to thediagnosis discuss and specialists was halfof heldinthesecond silicosis, asummitfor GPs and medical delivery andoutcomes for workers with As partof efforts to improve service changesto workers compensation • compensation outcomes for injured • workers withsilica-related diseases • The review considered whether: workers withsilica-related disease. relation to theprovisions that impact Compensation Act 1985(AC Act) in Act 2013 (WIRCAct) andtheAccident Injury, Rehabilitation andCompensation WorkSafe reviewed theWorkplace Silicosis compensation to test elements of design. thescheme established to allow for consultation and and employee representatives has been Reference Group comprisingemployer An Infringement Notices Stakeholder account for unsafe workplace practices. WorkSafe’s abilityto holdemployers to initiatives designedto strengthen OHS Act. The isamong scheme of aninfringements underthe scheme Work isunderway onthedevelopment Infringement notices contract asilica-related disease. compensation for workers who processes could expedite access to silica-related disease possibility of developing subsequent silica-related and/or diseases the by theprogressive nature of workers couldbeadversely impacted compensation early faced disincentives to accessing Enhanced oversight of more than of the highest risk sites storing and handling 200 dangerous goods

Provisional payments Workplace inspections Safe work method statements WorkSafe has been working closely WorkSafe’s Major Construction WorkSafe conducts six-monthly with the Department of Justice and Projects Team was expanded and now general blitzes to ensure compliance in Community Safety (DJCS) to support comprises 18 employees, including the construction sector. During blitzes, the Provisional Payments Pilot. highly experienced construction inspectors complete a checklist The pilot provides emergency workers inspectors – some with investigations summary of compliance activity at each and volunteers, who suffer a backgrounds, an occupational site visited. work-related mental health injury, with hygienist and several engineers of In 2019-20 there were also targeted access to payments for reasonable varying specialist disciplines. blitzes, with activity focusing on mobile medical and like expenses while their In other developments: crane safe use, ladder safety, falls in claim is being determined. This ensures • WorkSafe’s inspectorate is piloting construction and scaffold safety and that injured emergency workers and new approaches to inspections for compliance with construction volunteers have early access to large health employers and regulations. treatment and recognises the government agencies. The pilots WorkSafe is currently working with importance of early intervention to have involved organisational small businesses in the construction improve health and return to work psychologists, senior ergonomists, industry with a view to improving outcomes. psychosocial inspectors and guidance and information on safe work The pilot and its evaluation will inform multidisciplinary inspectors who are method statements, which are used potential legislative change. addressing systemic issues relating to identify and control hazards and to fatigue, workload, manual risks associated with high-risk handling, occupational violence and construction work. aggression. Stakeholder feedback has been positive. • WorkSafe has developed a Dangerous Goods Strategic Inspections program, effective July 2020. This will mean enhanced oversight of more than 200 of the highest risk sites storing and handling dangerous goods in Victoria. • WorkSafe’s dedicated data and analytics team has leveraged predictive models developed in 2019 to pilot how inspections could be optimised in the Mildura and Mulgrave regions. This resulted in a redirection of resources from 300 low-risk sites to higher risk sites. The application of workplace risk scores is being scaled to more explicitly target inspections in 2020-21.

20 21 Year in WorkSafe AnnualReport Review development. A new marketing in isalso campaign around theshed. safety onfarms andtractor safety issues includingquad bike safety, child delivered messaging onarange of In 2019-20, agricultural digital content amental healthandwellbeing • safety infrastructure andequipment • fundingfor research, events and • This includes: implementation of farm safety initiatives. advice andoversees the stakeholders. The councilprovides for Farmer Healthandother Farmers Federation, theNational Centre with Agriculture theVictorian Victoria, established Farm Safety Council,along WorkSafe isamemberof thenewly Investment infarm safety farming families. program tailored to farmers and grants for farm businesses safety activities focused onfarm healthand developing aMOUbetween • theVictorian supporting Trades Hall • planningfor additional training for • included: Other developments in2019-20 claims. measures for reported incidents and collection andestablishing baseline consultingstakeholdersalso ondata including sexual harassment, while of work to prevent gendered violence, WorkSafe isdelivering onaprogram gendered violence Occupational and Commission. andHumanRightsOpportunity WorkSafe, andtheVictorian Equal representatives (HSRs) violence coursefor healthandsafety Council to develop agendered Victorian workplaces including sexual harassment, in eliminating gendered violence, of complianceinitiatives aimedat build awareness andunderstanding advisors andinspectors, whichwill Statement of Expectations

WorkSafe is delivering on the Victorian Other priorities are: Government’s Statement of • providing client-centred services Expectations for the period 1 July 2019 (see pages 41-50) to 30 June 2021, which sets out • applying risk-based strategies WorkSafe’s contribution to achieving to improve workplace safety greater efficiency and effectiveness in (see pages 23-38) the administration and enforcement of • strengthening compliance and regulation. enforcement activity (see pages WorkSafe has identified a range of 23-38) opportunities to improve regulatory • ensuring a commitment to practice, while ensuring there is a accountability and transparency sustained focus on reducing workplace (see pages 171-174) harm and improving outcomes for • continuing cooperation with injured workers. stakeholders and other regulators to improve workplace safety A key focus of this Statement of (see pages 23-38). Expectations is delivering on workplace safety reforms (see pages 17-21 of this report for an overview of progress).

22 23

WorkSafe AnnualReport Year in Review workplace harm Reducing most rewarding for part me. together. Raising theawareness of thehazards intheworkplace -that’s the theshiftseeing inhow we communicate andconsultwork better bequiteimplement Itreally difficult. changecan has beenagreat achievement ofsort oldway of working here. It’s avery well-ingrained organisation andto The role of aHSR;it’s like alot of roles inlife, you get outwhat you putin.It’s a Safety Representative,Viva Energy Stephen OperatorandHealth 3 WorkSafe’s commitment to reducing workplace harm remains steadfast.

Compliance and enforcement activity We will continue to bolster our continues to play an important role in prevention-first approach with safe reducing injuries, illness and death in design and safe systems of work Victorian workplaces. interventions that remove or substantially As we upgrade our systems, this reduce injury, including mental injury, activity will be better targeted and even disease and death in the workplace. more effective. WorkSafe will be able to Employers and workers, in particular more readily capture and analyse data, HSRs, play an important role in creating which, over time, will mean identifying safe and healthy workplaces. Backed and mitigating potential risks and by research, we use marketing hazards in the workplace before they campaigns, targeted communications result in harm to workers. programs, industry events and sponsorships to engage workplaces and the community and encourage support for workplace safety and 14.3% prevention. mental injury claims

2019-20

47,831 26,286 25,843 26,429 27,606 27,686 27,686(total scheme insured workplace visits new claims standardised claims) 15-16 16-17 17-18 18-19 19-20

prosecutions completed with a improvement 118 success rate of 79% 12,888 notices issued

24 Key areas of focus • ongoing implementation of the quad Construction in 2019-20 bike strategy, following a review of WorkSafe continues to strengthen its enforcement and compliance oversight of the construction sector, Agriculture activities. Between 1 July 2019 and through compliance and enforcement In 2019-20 WorkSafe conducted 1,761 30 June 2020, 983 improvement activity, strategic education campaigns farm inspections with a focus on quad notices were issued where the risk and specialist teams that focus on the bikes and powered mobile plant, which of a quad bike rollover was identified greatest risks to worker safety. • the extension of the Victorian are the leading cause of serious injury WorkSafe’s Major Construction Government’s $6 million Quad Bike and death on farms. Visits were slightly Projects Team was expanded and now Safety Rebate Scheme to 30 June down on target due to the suspension comprises 18 employees, including 2020. The scheme commenced in of farm visits during the early part of the highly experienced construction July 2016 to assist farmers to COVID-19 pandemic. inspectors – some with investigations purchase an alternative work vehicle In addition to farm visits, WorkSafe backgrounds – an occupational or to fit an Operator Protection continued to engage farmers through a hygienist and several engineers of Device to their quad bike. range of activities, while also identifying varying specialist disciplines. The team • funding provided to the Australian and testing new strategies to support was established in 2018 in response to Workers Union for a Farm Safety behaviour change. Victoria’s infrastructure construction Officer program, which will focus on boom and is guided by an enhanced Activity over the past 12 months vulnerable workers oversight framework which mirrors the included: • partnering with the Department of life-cycle of major projects from design • development of the Agriculture Premier and Cabinet via its CivVic to completion, identifying strategic Strategy 2020-23 in consultation Labs initiative to work directly with intervention points and actions for each with stakeholders. The strategy aims two start-ups. Responding to the phase. to change the safety mindset of challenge ‘How can emerging farmers and workers so that technologies keep Victorian's safe In the past 12 months the team has fatalities and injuries are seen as at work?’ the teams have developed helped establish the National Major preventable, not inevitable promising work aimed at preventing Infrastructure Construction Health and • formation of an Agriculture Safety injuries in the agriculture sector Safety Regulators Forum to support Reference Group to provide key • support for the development and national exchange of information on stakeholder insight and delivery of the Safer Farms hazards, risks and regulatory opportunities for collaboration to component of Agriculture Victoria’s approaches specific to major improve the safety culture on farms. Smarter, Safer Farms initiative infrastructure projects. In 2019-20 activity included five through regular consultation and The team also provided significant meetings and three workshops to provision of advice and through oversight and planning for the assist with the development of the membership of the Farm Safety successful felling of the Hazelwood Agriculture Strategy 2020-23. The Council chimney stacks on 25 May 2020. In reference group was also consulted • attendance at six regional field days total, 100 air-monitoring samples were on communications tools, including and on farm walks organised by taken during the felling (from fall-zone guidance, and the planned media industry partners. out to a 500-metre perimeter) and all campaign results were returned below detection • research to identify ways to improve levels for asbestos fibres. the use of guidance in the agriculture sector

25 WorkSafe Annual Report Other activity in 2019-20 included: • 14,369 inspections, with 3,668 notices issued The team also • delivery of targeted blitzes in response to fatalities in the sector, provided signficant with activity focusing on mobile crane safe use, ladder safety, falls in construction and scaffold safety and oversight and compliance with construction regulations • increased focus on construction planning for the activity in regional Victoria, with WorkSafe a key stakeholder in the delivery of Build Aware and Cross successful felling Border programs focusing on engagement and education. Events of the Hazelwood were held in Wodonga, Warrnambool and Echuca/Moama • ongoing involvement in the Solar chimney stacks Panel Installation Regulatory Taskforce, alongside Energy Safe Manufacturing • establishing a cross-organisation Victoria, Consumer Affairs Victoria In 2019-20, the focus in manufacturing Manufacturing Working Group to and Solar Victoria was on five of the highest-risk sectors – address specific hazards and risks • delivery of presentations to TAFE food; metal; machinery and equipment; • developing a Large Employer students entering the construction wood; and chemicals. Priority hazards Intervention Project with a focus on industry as apprentices were manual handling; being hit by safety management systems and • support for HSRs, with the delivery objects; and slips, trips and falls, which safety culture of monthly newsletters, training cause the highest number of injuries. • consulting employers on the courses and other assistance. development of tailored information There were 2,140 workplace visits for the WorkWell toolkit aimed at during the year, with 1,007 notices creating a mentally healthy issued. workplace. Other activities included: • publishing a safety alert for use of truck-mounted cranes on construction sites following a fatality involving delivery of floor trusses 1,007 • review of guidance for loading and notices issued unloading of shipping containers following two fatalities • a targeted inspection program to Victorian meat and poultry processing plants in response to COVID-19 outbreaks in the sector

26 Public administration and safety • engagement with government • publication of a case study on best In 2019-20, WorkSafe conducted 1,553 employers experiencing the highest practice consultation during the inspections within the public number of claims, with activity build of a new StJohn of God health administration and safety sector, including quarterly operational facility focusing on the sub-industries meetings. The public sector OHS • development of safe design identified as high risk – corrections and IDC Subcommittee continues to guidance pages for the WorkSafe youth justice, police and local councils. operate and is chaired by WorkSafe. website • meetings with the Department of There were 229 improvement notices Health care and social assistance Education and Training to discuss issued. In addition to a comprehensive design issues identified during There were 335 visits conducted by response to the COVID-19 pandemic, inspector visits to childcare facilities, the Corrections Taskforce. Individual WorkSafe developed a three-year which were integrated into practice workplace profiles were developed, Health Care and Social Assistance • a review of the impact and which provided valuable background Strategy 2020-23 in collaboration with prevalence of fatigue on OHS information about ongoing stakeholders. They included the Health outcomes interventions addressing occupational Service and Aged Care Stakeholder • development of a program of work, violence and assault management, Working Group, the Social Assistance in consultation with stakeholders, mental health management, in Stakeholder Working Group, the that focused on addressing mental particular cumulative trauma, incident Australian Nursing and Midwifery injury rates in the health sector recording and notification, fatigue and Federation, the Disability OHS Advisory through improvements in fatigue risk rostering and support during Committee and the Aged Care OHS management. misconduct investigations. Network, with a focus on identifying Other activity in 2019-20 included: areas for improvement in leadership • the development of a Youth Justice and culture. Action Plan through a co-design Other activity in 2019-20 included: process with the University South • 3,396 inspections, with 843 notices Australia, the DJCS and the issued Community and Public Sector Union. • strategic workplace visits with a Topics for actions include: creating a focus on occupational violence and stable workforce; improving staff aggression (OVA) training and development; • development of the Large Employer optimising the behavioural Assessment Process (LEAP) to management of young people; and support detailed assessments of enhancing staff support. safety management systems used Implementation of the plan is by large healthcare and social underway and will be tracked for two assistance employers to control the years risk of manual handling, OVA, bullying, stress and fatigue

27 WorkSafe Annual Report Transport, postal and warehousing From 1 July 2020, work-related In 2019-20, WorkSafe focused on road fatalities will be recognised hazards including manual handling, in WorkSafe’s lives lost figure. powered mobile plant and slips, trips and falls. Fatigue and vehicle maintenance were the focus of cross-jurisdictional activities. There were 2,057 inspections, with 520 notices issued within transport, postal and warehousing workplaces. COVID-19 had an impact on the way WorkSafe operated in the fourth quarter. A COVID-19 Strategic Compliance Plan was developed and used within the transport and warehousing sector. This focused on essential industries that had to remain open during this period and included visits and virtual enquiries to communicate information on COVID-19 and to ensure vulnerable workers were supported. From 1 July 2020, work-related road fatalities will be recognised in WorkSafe’s lives lost figure, in addition to suicides attributable to a workplace health and safety failure and workplace deaths resulting from a criminal act. The change means a more accurate account of workplace deaths, while also ensuring those who are affected by workplace deaths can access WorkSafe’s support.

28 Dangerous goods Strengthened regulation of • abandoning, discarding, or neglecting WorkSafe is supporting a dangerous goods in Victoria to dispose of dangerous goods safely comprehensive, independent review of The Dangerous Goods Amendment • doing anything in or near any licensed the Dangerous Goods Act 1985 (DG Act) (Penalty Reform) Act 2019 makes premises which causes or is likely to and associated regulations, which changes to the DG Act to create a new cause an accident involving commenced in May 2020. The review is offence for reckless conduct that dangerous goods the latest step in the ongoing response endangers people and increases • failing to comply with requirements on to two large chemical fires in Melbourne penalties for various offences to better goods too dangerous to be in 2018 and 2019 and the discovery of reflect the serious nature of the transported. waste chemicals stockpiled at 13 sites in offending conduct. The changes came into effect on Melbourne’s north. The changes included a new reckless 7 November 2019. As at 30 June 2020, a WorkSafe-led conduct offence that was introduced High risk work taskforce had removed 16.9 million litres into the DG Act for: WorkSafe is responsible for the issuing of waste chemicals from the 13 sites, • individuals engaging in reckless and renewal of licences under the OHS representing 88% of the clean-up conduct in the manufacture, storage, Act and the DG Act. project. The project is scheduled to be transport, transfer, sale or use of In 2019-20, the Licensing Branch completed by September 2020. dangerous goods that places, or may processed 139,066 licences – 1,398 fewer place, a person in danger of death In 2019-20, WorkSafe conducted 1,738 than in 2018-19. proactive dangerous goods inspections, • body corporates engaging in Eight licences are now available through a issuing 629 notices for dangerous reckless conduct that places a new online licensing management system, goods-related contraventions. A Risk person, or may place a person in which was implemented in 2019-20 to Assessment Framework has been danger of death. improve the timeliness of responses. refined to determine and prioritise the Penalties for a range of offences in Applicants can complete their entire highest risk sites for inspection. regard to those who manufacture, application online, including verifying their store, transport, transfer, sell or use Over the past year, WorkSafe has also identification for these licences. Other dangerous goods have been increased developed a Dangerous Goods licences will progressively be transitioned and include: Strategic Inspections program, which to the online platform. will mean enhanced oversight of more • failing to comply with a direction than 200 of the highest risk sites issued by an inspector to dispose of Major hazard facilities storing and handling dangerous goods or render harmless dangerous In 2019-20, seven Major Hazard Facilities in Victoria. This is scheduled to goods or to stop the use, or use the had their licences approved for renewal. goods under specified conditions commence in July 2020. There are currently 36 licensed Major considered to be dangerous WorkSafe continues to support and Hazard Facilities in Victoria. Another five • failing to take reasonable contribute to the implementation of the registered Major Hazard Facilities are due precautions to prevent tampering, Coordinated Prevention and Response to go through the licensing process. theft, fire, explosion or damage Framework for high-risk waste sites, A review of Major Hazard Facility which is being led by the Department of guidance commenced in 2019-20, with Environment, Land, Water and Planning 23 pieces of guidance revised and (DELWP). published, or currently under review. 139,066 licences processed

29 WorkSafe Annual Report Mines and quarries Workers in the stonemasonry industry Since its launch in the second half of In 2019-20, audits were completed on are at higher risk due to the cutting and 2019, there have been 4,401 visits to all three coal-fired power generators in polishing of engineered stone the website, as at 30 June 2020, with Victoria, as part of the Power benchtops, which have become nearly 2,500 visits to the Find and Generators Strategy. increasingly popular, but contain very Identify asbestos tool. high concentrations of silica. A key objective of the strategy was to Victorian Asbestos develop and deliver an audit program In August 2019, the Occupational Eradication Agency focusing on the high consequence, low Health and Safety Amendment Throughout 2019-20 the Victorian probability incident of arc flash within (Crystalline Silica) Regulations Asbestos Eradication Agency (VAEA) power stations. commenced, while longer-term silica progressed work on the prioritised regulations are made. This was a result of a November 2018 removal of asbestos from fatality at Energy Australia’s Yallourn The regulations prohibit the cutting, government-owned buildings. This Power Station. grinding and abrasive polishing of included: engineered stone with power tools, • continuing to update information Following audits of coal-fired power unless on-tool water suppression or on the location and condition of generators, the program was expanded dust extraction devices are in place and asbestos-containing materials to gas-fired power stations. prescribed respiratory protection in the consolidated register (the The quarterly power generators forum equipment is used. AIRSystem) hosted by WorkSafe has also been In February 2020, WorkSafe developed • improving the AIRSystem’s data re-started as a result of the strategy. a compliance code, titled Managing quality and its usability Work continues on creating a program exposure to crystalline silica – • developing and testing online and that seeks to replicate the Causal engineered stone, to support the in-person training modules for new Investigation process used by the NSW regulations to provide practical users of the AIRSystem mines regulator. This involves guidance to duty holders on how to • preparing and piloting the adoption investigating the root cause of incidents comply with the OHS Act to manage of the AIRSystem by Victorian where insights can be of benefit to the the health and safety risks associated Government agencies and broader industry. with exposure to airborne crystalline departments • commencing operational planning The program’s progress slowed due to silica dust. for the implementation of prioritised COVID-19. COVID-19 also contributed The free silica health assessment asbestos removal to lower inspection numbers, with 314 program for stonemasons, launched on • working with other jurisdictions on conducted in 2019-20 against a target 13 May 2019, had received 770 the applicability of the AIRSystem to of 600. registrations as at 30 June 2020. This their needs represents more than half of the Silica • continuing the operation of the estimated 1,400 stonemasons in During 2019-20, WorkSafe continued Victorian Asbestos Forum Victoria, with 546 already completing its proactive approach to protecting • re-designing the VAEA’s website for the screening process. workers from exposure to crystalline improved accessibility and silica. Asbestos readability. The inhalation of crystalline silica dust In 2019-20, WorkSafe collaborated with can cause silicosis (scarring of the other government agencies on a new, lungs) and other diseases, including more user-friendly asbestos website, lung cancer. These diseases can be following an extensive content update. fatal. The new asbestos.vic.gov.au website is easier to navigate and enables Victorians to find the information they need more quickly.

30 The growth in workplace mental injury remains a challenge that WorkSafe is committed to addressing on a number of fronts.

Manual handling WorkWell highlights in 2019-20 • the development of the Workplace Hazardous manual handling is one of included: Wellbeing Insights Survey, a the biggest causes of injury in Victorian • delivery of the third and final round comprehensive online tool that workplaces. In 2019-20, WorkSafe of WorkWell’s Mental Health captures data on the mental health conducted inspections with a focus on Improvement Fund, which was and wellbeing of individuals and manual handling across a range of awarded to 14 recipients. A total of organisations. Piloting of the survey priority industries, reviewing and $25 million has now been allocated included extensive user testing. revising risk control measures and to 25 Mental Health Improvement The long-term objective is to provide systems-based approaches to safety Fund projects, aimed at helping to free access to the tool to all Victorian management. prevent mental injury and promote workplaces positive mental health in the • the creation of six learning networks Other activity during the year included: workplace. The WorkWell team to bring together experts and • working with stakeholders to maintains strong relationships with workplaces to address work-related develop a strategy for reducing funding recipients, who attend factors causing stress for vulnerable manual handling injuries, focused monthly meetings and submit workers including young workers, on key industries including health, quarterly and annual reports frontline workers and workers in manufacturing and warehousing • the development of new tailored industries in transition. Learning • the development of general and WorkWell toolkit content for Network Chairs were awarded more specialist inspector resources and construction, office work and than $3.5 million in funding to tools professional services, retail and facilitate projects in public • education and engagement hospitality. The WorkWell online administration and safety, activities focusing on manual toolkit, designed to help create accommodation and food services, handling, through Health and Safety mentally healthy workplaces, now retail trade, healthcare and social Month 2019, social media and has 6,000 registered users. A digital assistance, construction and electronic direct mail strategy has been developed to manufacturing. • working with two WorkSafe agents increase user registration and to complete a pilot project on the Other work in the area of mental health ensure existing users continue to review and revision of risk control has included updates to guidance on engage with the tool measures by employers. workplace bullying and the development of new guidance on Mental health work-related gendered violence, The growth in workplace mental injury including sexual harassment. remains a challenge that WorkSafe is WorkWell online toolkit now has committed to addressing on a number of fronts. With prevention a focus, the WorkWell 6,000 program plays an important role in registered delivering support and content tailored users to business needs.

31 WorkSafe Annual Report I started working in this role with the aim of looking at organisational systems that we could improve to prevent violence. Before the implementation (of the Empowir program) we had six significant injuries for our workforce and since implementation, two-and-a-half years later, we’ve had zero. We’ve been able to say it is a safe workplace for both our patients and our sta.

Elisa Occupational Violence and Aggression Prevention Coordinator Western Health

32 • consultation on improved data Vulnerable workers Culturally and linguistically diverse collection changes, including The safety of vulnerable workers is a workers establishing baseline measures for priority area for WorkSafe. As part of an ongoing commitment to sexual harassment reported WorkSafe has defined workplace reach all Victorians, WorkSafe incidents and claims vulnerability as circumstances where a commissioned a study into Victoria’s • planning for training advisors and worker is subject to increased exposure culturally and linguistically diverse inspectors to raise awareness and to OHS hazards, or is at increased risk (CALD) population, which makes up prepare for the introduction of of workplace injury, due to lack of more than a quarter of the Victorian compliance initiatives aimed at capacity or means to be able to workforce. The research, conducted by eliminating gendered violence in influence or improve the situation. CALD specialists, CultureVerse, was Victorian workplaces focused in particular on Victorians who Targeted activity in 2019-20 included: • development of a gendered speak little or no English. Young workers violence course for HSRs, in • launch of a new media campaign collaboration with the Victorian Using data from the Census, DET, Unsafe is Always Unacceptable, Trades Hall Council. Settlement Reports from the Department of Home Affairs and based on young workers’ willingness On-demand workforce to accept unsafe practices interviews with CALD community Research was conducted into the • development of new WorkWell members, the research has provided a on-demand workforce to build toolkit actions for new and young more complete picture of some of our WorkSafe’s understanding of who the workers in the construction industry most vulnerable workers. workers are, why they engage in • bullying and work-related violence The report revealed that established on-demand work, what sort of work strategic inspections in industries migrant groups, such as Vietnamese they’re doing and attitudes towards where there are a significant number and Chinese communities, still have health, safety and wellbeing. The of young workers large numbers of workers who speak research highlighted the challenges in • ongoing funding for the Bully Zero little to no English. More recent migrant the sector, with 36.9% of respondents Foundation and Brodie’s Law groups, such as those from Myanmar experiencing some kind of safety Foundation for the delivery of and Afghanistan, are particularly incident in the past 12 months although, anti-bullying sessions to school and vulnerable. A priority for many in these generally, they did not perceive high TAFE groups groups is to find work. Issues such as levels of risk in their environment. The work safety are secondary, if Labour hire research will provide greater clarity considered at all. The research also • development and delivery of an about the current worker population pointed to which language groups are inspection visit strategy in line with and will inform activity in 2020-21. the implementation of the labour hire common in which industries and licensing scheme provided recommendations for ways to reach these communities. WorkSafe Women will use this information to tailor • release of new guidance to increase communications and initiatives. the understanding and reporting of gendered violence • a Women at Work grant for the Victorian Trades Hall Council for three women safety organisers

33 WorkSafe Annual Report Employers WorkSafe supports employers to The project is understand and comply with their OHS obligations and to improve workplace health and safety. identifying and Targeted activity in 2019-20 included: Small business testing a range of • ongoing support for smaller businesses through the OHS Essentials Program. The program positive mental aims to help smaller businesses to understand and comply with their OHS obligations. It funds health strategies independent contractors to use a consistent approach to assess for shift workers. current state and provide a safety action plan for improvement that is customised to the business. The Large employers in health - Gippsland Women’s Health – program was refreshed in 2019 so • development of tailored WorkWell Working Well in Wellington. This that each business can access three toolkit content for the healthcare project is identifying and testing a visits, providing a 12-18 month and social assistance industry range of positive mental health relationship with a safety consultant. • funding through the WorkWell strategies for shift workers in the An employer satisfaction survey Mental Health Improvement Fund Wellington Shire. The project will found 96% of employers would for: focus in particular on strategies that recommend the program. Audits of - Peninsula Health – Thriving in can be implemented in a regional safety action plans prepared by Health. This project involves a setting. consultants showed 82% of consortium of 12 services and aims businesses met their requirements to improve mental health by Government delivering four key initiatives – job • WorkSafe’s Employer Performance control research through Black Dog Program, which consists of direct Institute, mental health education engagement with key government and training, sensory room research departments as part of targeted and the development of a critical efforts to improve OHS and return to incident framework work outcomes in the government - Prevention United – Wellbeing Track sector and Change. This project is working with two large aged care facilities to pilot an online, real-time mental health in the workplace feedback system

34 Compliance codes • funding for workplaces relying on OHS compliance and enforcement activity Compliance codes provide duty holders quad bikes to assist with upgrading sometimes requires operating in with practical guidance on how to equipment with roll-over protection or partnership with other agencies. Where this comply with their legal requirements. to purchase alternative work vehicles occurs, WorkSafe may develop a formal • funding for agricultural industry to MOU to establish protocols and remove In 2019-20 one new compliance code engage a Farm Safety Extension duplication. WorkSafe has a number of was made and 11 compliance codes were Officer to design a farm safety MOUs in place, including with the following: varied under the OHS Act. The new campaign that effectively challenges managing exposure to crystalline silica: • Australian Bureau of Statistics the way farmers view and engage Engineered stone compliance code was • Australian Maritime Safety Authority with farm health and safety made in February 2020. • Essential Services Commission • funding for personnel to coordinate • Country Fire Authority and Metropolitan The following compliance codes were and engage on OHS issues on behalf Fire and Emergency Services Board varied in December 2019: of key employee and employer • Department of Jobs, Precincts and • Hazardous manual handling representative organisations Regions (Earth Resources Regulation • Plant • funding to the Gippsland Asbestos Unit) • Noise and Related Diseases • Department of Health and Human • Confined spaces Support/Asbestos Council of Victoria Services (DHHS) • Hazardous substances to provide awareness-raising • Environment Protection Authority • Demolition education, support and advocacy for • Heads of Workplace Safety Authorities • Excavation people across Gippsland affected by • Labour Hire Authority • Prevention of falls in general asbestos • National Offshore Petroleum Safety and construction • grants for support programs to Environmental Management Authority • Prevention of falls in housing improve safety for workers with a • Office of the National Rail Safety construction focus on workplace bullying, young Regulator • Managing asbestos in workplaces worker safety and women’s rights in • Office of Public Prosecutions • Removing asbestos in workplaces. the workplace particularly with • Return to Work Corporation of South respect to domestic violence and its Funding to improve workplace Australia impact on a woman’s ability to attend health and safety • State Revenue Office the workplace In 2019-20, WorkSafe continued to • Transport Safety Victoria • funding for the OHS Essentials financially support a number of initiatives • Victoria Police Program which provides free, designed to improve workplace health • Victorian Building Authority independent OHS consultancy and safety including: • Victorian Registration and Qualifications services to assist small and medium • grants to the Victorian Trades Hall Authority. sized businesses (fewer than 200 Council for: employees) to improve safety and WorkSafe also worked closely with - the OHSReps@Work website, assist compliance with OHS government departments and other which provides online information legislation agencies in response to COVID-19, in to HSRs • funding for WorkWell initiatives. particular with the DHHS, Victoria Police - information, education, support and Emergency Management Victoria. and networks for HSRs Joint regulatory activity More information is available at - annual conference for more WorkSafe is committed to working worksafe.vic.gov.au than 1,000 HSRs collaboratively and efficiently with other regulators and government agencies to deliver better service and safety in Victoria.

35 WorkSafe Annual Report Deterrence The employee was physically The offender was charged with WorkSafe deters poor performance in uninjured, but suffered failing to comply with improvement workplace safety and non-compliance psychological injury and was no notices that were issued for the using a range of approaches, including longer able to work underground. alleged breaches. The offender undertaking workplace inspections, The court accepted the impact of pleaded guilty and was convicted enforcing remedial actions and the incident on the employee to be and fined $125,000. prosecutions. significant. The offender pleaded • Between April 2015 and August Prosecution results and guilty and was convicted and fined 2016, the offender engaged in occupational health and safety $110,000 and ordered to pay costs bullying behaviour directed at regulatory performance of $12,000. employees. The company’s failure to During 2019-20, WorkSafe completed • The offender operated a foundry in implement a bullying policy at the 118 prosecutions with a success rate of Wodonga that manufactures heavy workplace exposed employees to 79%. Eight enforceable undertakings metal components used in mining, risks to health and safety, including were entered into pursuant to the OHS excavation and transport. In July stress, anxiety, post-traumatic stress Act and a total of $6,187,150 in fines was 2014, an employee was operating a disorder and depression. The imposed. The following are some skid steer loader to move offender pleaded guilty and was significant 2019-20 OHS prosecutions: recently-cast heavy metal convicted and fined $97,000. Its • The offender operated an open cut components when a 276 kilograms managing director also pleaded brown coal mine in the Latrobe casting crashed through the skid guilty and was convicted and Valley. Embers from nearby steer windscreen. The court found personally fined $19,250. bushfires entered the mine and the offender knew or ought to have • The offender, a registered training ignited exposed coal on its operating known from previous incidents that organisation, was charged in relation face. Once the fire took hold on 9 castings could become unstable to Notices of Assessment for February 2014, it burned for 45 days. and roll towards skid steer loaders students attending courses in Basic Risks to employees at the workplace during operation. Following a jury Scaffolding and Forklifts that were and to members of the public trial at the Wangaratta County allegedly false. The Notices of included exposure to haze and Court, the offender was convicted Assessment certified that students particulates. The offender was found and fined $650,000. had attended a two-day course and guilty of 10 charges, convicted and • Between 15 January 2018 and 15 various mandated components of fined $1,560,000. March 2018 WorkSafe inspectors the courses had been completed, • The offender owns and operates a attended a Narre Warren when in fact this did not occur. The mine in Costerfield. In 2016, an construction site, at which the offender pleaded guilty to 14 charges employee was nearly crushed to offender was building multiple of knowingly providing false death when a two-tonne piece of residential properties, and observed information and was convicted and rock fell from a mine roof, landing numerous breaches of Victoria’s fined $200,000 and ordered to pay within two metres of where he stood. workplace health and safety laws. $26,734 in costs.

Compliance measures 2015-16 2016-17 2017-18 2018-19 2019-20

Annual workplace visits (OHS & Enforcement) 46,259 45,751 48,770 49,438 46,068 Prosecution success rate 94% 90% 91% 89% 79% Investigations proceeding to prosecution charges within 12 months 91% 82% 75% 79% 51% Completed investigations proceeding to legal review outcome 71% 68% 72% 68% 75% Prosecutions commenced 119 138 148 156 138

*In the 2017-18 Annual Report, total annual workplace visits was reported as 48,044. This was the number of OHS visits only an d did not include the 726 Enforcement visits.

36 of young workers surveyed said they would be willing to work 90% in unsafe conditions

Raising awareness Agriculture - quad bikes The campaign is communicated in WorkSafe’s ability to drive change in the Victorian farmers continue to be Vietnamese, Cantonese, Mandarin, Dari, behaviour and attitudes of employers, over-represented in workplace deaths. Burmese, Khmer, Korean, Arabic, Dinka, workers and the community through its WorkSafe’s quad bikes campaign Punjabi, Italian, Indonesian, Malay and campaigns, communications and involved educating farmers, their Thai. sponsorship strategy is fundamental to workers and their families about quad Young workers its core roles of reducing workplace bikes, which are the leading cause of Research shows there is a need to harm and improving outcomes for farm fatalities and serious injuries. increase awareness among employers injured workers. In 2019-20, public The 2019-20 campaign led with an about the vulnerability of young workers. awareness campaigns included: updated tagline of No two rides are the WorkSafe’s Unsafe is Always Enforcement same to target the behaviours leading to Unacceptable campaign targeted 15-24 year old workers in construction, WorkSafe’s More Inspectors. More farm accidents – namely complacency. manufacturing, retail and hospitality, as Inspections enforcement campaign The campaign messaging directed the aims to educate employers about their audience to WorkSafe’s quad bikes well as their employers. The campaign obligation to maintain employee safety. landing page creative was a first for WorkSafe and Messaging features greater emphasis (worksafe.vic.gov.au/quadbikes) for more adopted the unique approach of a social on preventing workplace injuries and information and advice, and encouraged experiment, asking young workers if they deaths, and on WorkSafe’s enforcement applications for the Victorian were willing to work in unsafe conditions. role – regularly inspecting workplaces, Government quad bike safety rebate. More than 90% said that they would. Audiences were directed to enforcing on-site safety, and holding Asbestos worksafe.vic.gov.au/youngworkers - to those who run unsafe workplaces This campaign was developed to accountable. The campaign focuses on seek further information on OHS rights educate tradespeople about the risk of and responsibilities. high risk industries of construction, asbestos in common building materials, manufacturing and agriculture. aiming to reduce their exposure and Holiday safety Enforcement - workplace ultimately prevent deaths. The Statistics show that a dangerous time of manslaughter messaging focused on generating year for Victorian workers is in the weeks In 2019, the Victorian Government discussion about asbestos and driving before the summer holidays, with nearly delivered on its election promise to people to asbestos.vic.gov.au for more 25% of all workplace fatalities over the make workplace manslaughter a information and advice. past decade occurring in November and criminal offence from 1 July 2020. In 2019-20, the campaign launched in December. WorkSafe’s Holiday Safety campaign acts as a reminder for all WorkSafe’s Tougher laws. Safer line with National Asbestos Awareness Victorians to stay safe in the workplace, workplaces campaign drives mass Week, and ran again once awareness about the new law, and tradespeople returned to work after the so that the holiday season doesn't sends a strong message to all Victorian summer holiday season. become a time of tragedy for their loved ones. employers that putting people’s lives at WorkSafe’s campaign concept risk in the workplace will not be highlighted the surprising places Dangerous goods tolerated, and if they fail to keep their asbestos-containing material can lurk, WorkSafe’s Dangerous Goods campaign employees safe, tougher challenging those who may think they was developed in direct response to the consequences now apply. The know where asbestos is and what it illegal stockpiling of dangerous toxic campaign clearly communicates that looks like. chemicals. It aimed to increase WorkSafe is enforcing tougher laws to awareness within the community, and Culturally and linguistically diverse ensure safer workplaces. among workers, about WorkSafe’s role in workers the handling of unsafe storage of This campaign shares basic OHS dangerous goods. Another objective of information and knowledge to ensure this campaign was to encourage the this vulnerable audience fully reporting of concerns to WorkSafe, to understands their rights at work and help identify high-risk workplaces. where to go to get advice. 37 WorkSafe Annual Report Occupational violence and Sponsorships aggression in healthcare Sponsorships enable WorkSafe to WorkSafe research shows that strengthen relationships with the community occupational violence and aggression and communicate strategic messages (OVA) in healthcare is a major OHS through a medium that has a personal concern, with up to 95% of healthcare connection with the audience. workers reporting to have experienced In 2019-20 WorkSafe renewed its some form of violence in their long-standing partnerships with AFL Victoria workplace. Since 2017, WorkSafe, in Country and Netball Victoria's country partnership with DHHS and Ambulance netball league, and continued its Victoria, has implemented this OVA partnerships with Melbourne Victory and the campaign to reduce occupational Western Bulldogs Community Foundation. violence and aggression in healthcare workplaces. WorkSafe's corporate partnerships are complemented by its community Occupational violence and sponsorship program which supported aggression campaign extension 12 community events and activities in Due to the COVID-19 pandemic, both 2019-20. media and stakeholders reported an Health and Safety Month increase in OVA towards healthcare and retail workers. To address this, an Health and Safety Month 2019 delivered 95 sessions in 27 locations across Victoria. extension of the existing OVA in The aim of the event is to engage, Healthcare campaign was developed, to communicate that there is never an influence and educate the community excuse for violence and aggression on a range of workplace health towards workers. The campaign and safety issues. Nearly 13,000 extension included retail workers, people attended the sessions specifically supermarket employees, with 91% of people reporting along with pharmacists, GPs and other they had learned something medical staff. new and 56% saying they would go back and make Silica changes in their organisation. Inhaling fine crystalline silica dust over The reasons for attending the time can cause lung cancer and events varied but the sessions on scarring of the lungs, a condition known wellbeing and mental health as silicosis. Both diseases can be fatal. represented a significant draw for WorkSafe’s Silica campaign was attendees. developed to build awareness about the risk of silica dust exposure in the workplace, how to prevent it and to encourage people to visit the WorkSafe website for more information. The campaign targeted all tradespeople working with engineered stone, with a focus on stonemasons and domestic builders. 27locations across Victoria

38 The WorkSafe Awards are held annually to celebrate best practice and innovation in workplace health and safety. In 2019, nine winners were selected from 26 finalists. WorkSafe Award winners:

• Commitment to workplace • OHS leadership/achievement health, safety and wellbeing Mark Keating – St John of God Scope Australia Healthcare • Return to work coordinator • Health and safety invention of excellence the year Winnie Tjong – Northern Health Sigmatec Pty Ltd – Poster Rise • Leading return to work practice • Best solution to a specific by an employer workplace health and safety Baw Baw Shire Council issue • Worker return to work Belle Banne Conveyor Services – achievement Knifeless Splice Alex McCrae – H.I.M Spares • Health and safety • Best solution to a manual representative of the year handling issue Sally Collier-Clarke and Sara Reece Group – Ute Side Lifter Jorgensen – Bendigo Health

39 WorkSafe Annual Report We were seeing knife injuries across our whole business and some of them were really serious injuries. We sat down and we thought, ‘Can we eliminate the knives altogether’? It (Knifeless Splice) wasn’t developed by our safety advisor or our manager; it was developed by our people and now they’re the guys that are running with it.

Glenn (pictured far right, with colleagues from left Nicholas, Dan and Brent) Belle Banne Conveyor Services

40 41 41

WorkSafe AnnualReport Year in Review for injuredworkers Improving outcomes Northern Health Winnie makes therole rewarding. so ‘ you’, they say, ‘Actually, noonehas ever asked meaboutme.’ Andthat’s what patient safety. WhenImeet withthemface to face, andgo, ‘Iwant to focus on it’. Our employees have of thissense compassion that’s really focused around I want peopleto focus on,‘I’ve andIneedto had aninjury dosomething about Statistics tell us that gets someone thesooner treatment, thebetter they are. Return toWorkCoordinator 4 Delivering on the Victorian Ombudsman’s recommendations is of the highest priority for WorkSafe

Fundamental to our success is how well we support injured workers and we will always strive to improve in this area. A return to work is a key part of this Delivering on recommendations made process and, together with employers by the Victorian Ombudsman in her and service providers, we work to second report into the management of facilitate suitable employment for injured workers with complex needs injured workers so that they can get was a priority for WorkSafe in 2019-20 back to safe and sustainable work as and will continue to be until all soon as possible. recommendations are actioned. We continue to develop and refine We are committed to monitoring and regulatory practices that deliver quality evaluating this evolving piece of work outcomes and put injured workers at to ensure this group of workers is the centre of decision making. This supported and has timely access to the includes tailored approaches that take treatment and compensation they need. into account a client’s injury and WorkSafe seeks to design and adopt personal circumstances to provide a services that principally protect workers, realistic pathway to recovery and a support employers in meeting their return to work. obligations and prevent further injury.

2019-20 70%of MCM visits were conducted in support of small and medium employers 12,990injured workers 5,705 assisted back to work Mobile Case Management (MCM) visits

injured workers commenced or 4,077 enrolled in a form claim interventions by of retraining, up 30% the Return to Work Inspectorate, 2,041 on the previous year up from 2,738 in 2018-19

42 Key developments Occupational rehabilitation Recovery Support Service in 2019-20 More than 11,000 injured workers WorkSafe recognises that a number received support from occupational of injured workers are, and will be, Mental injury innovation pilot rehabilitation services during 2019-20. impacted by COVID-19, which may In September 2019, a number of There are 23 approved occupational prevent them from returning to work, WorkSafe teams collaborated on a rehabilitation providers who support remaining at work, accessing standard project exploring strategies and both injured workers and employers. allied health treatment and/or accessing interventions to improve outcomes for They help facilitate a worker’s return to support from an occupational workers with a mental injury claim. their original or new employer, provide rehabilitation provider. The aim of the project was to challenge retraining services, assist with The Recovery Support Service was the notion that it was ‘more difficult’ to interpersonal conflict resolution and developed as an intervention, in addition support a return to work for workers keep workers ‘work ready’, while taking to current existing services, with the goal with mental injury claims. WorkSafe into account barriers, including to keep the injured worker, employer and engaged directly with injured workers COVID-19. treating health practitioner engaged, and employers, agents and connected and supported over the next occupational rehabilitation providers. six to 12 months. Regular contact will be The interactions focused on the WorkSafe recognises maintained using phone, video and, relationship between the injured worker that a number of injured where possible, face-to-face and the employer and the connections workers are, and will be, interactions. impacted by COVID-19, that can achieve an earlier, sustainable Meetings may include discussions on which may prevent them return to work outcome. the injured worker‘s current treatment from returning to work. The pilot commenced on 16 March and recovery plan, opportunities for 2020 and concluded on 22 May 2020. home-based recovery and rehabilitation Planning for concept development is initiatives, exercise regime, daily activity Facilitated Discussion now underway with a focus on the small schedule, community connection, to medium-sized employer segment. Facilitated Discussion was developed in psychosocial and practical concerns 2017 in response to an increase in This initiative reflects WorkSafe’s and remote retraining possibilities. This mental injury claims where commitment to taking a lead in new service has been accessed by 141 interpersonal conflict prevented a return improving return to work outcomes for injured workers since its introduction. to work. In the 2019-20 financial year, small and medium-sized employers. 169 injured workers accessed the Vocational retraining service. Some injured workers who cannot The program also underwent an return to their pre-injury employer are external review, with an updated able to access vocational retraining service effective from 1 July 2020. Due services. In the year ending to the complexity of the claims, updates 30 June 2020, 2,041 injured workers included additional funding to establish commenced or enrolled in a form of 169 an expert pool of occupational injured workers retraining, up about 30% on the previous accessed the rehabilitation consultants to deliver the year. Retraining can also support a service program. return to work with the pre-injury employer in an alternative role.

43 WorkSafe Annual Report More than 11,000 injured workers received support from occupational rehabilitation services in 2019-20

44 Mobile Case Management Case Conferences WorkSafe continues to expand the use Return to work Case Conferences aim to of personalised, face-to-face visits with improve communication between service

Year in injured workers, their treating health providers, agents, injured workers and Review practitioner and their employer. Mobile employers and help coordinate recovery. case managers attend the workplace of The concept was introduced in 2015 with the injured worker and visit the rooms of GPs and expanded in early 2016. the treating health practitioner to Since implementation, 12,718 Case support communication and Conferences have been conducted. collaboration between injured workers, Conferences with physiotherapists were employers, service providers, and agents introduced in August 2018 with positive to support the recovery and return to return to work and capacity outcomes. work process. Engagement with a psychologist was Recent WorkSafe analysis indicates piloted in late 2018. Further Case claims involving Mobile Case Conferences have been introduced for Management (MCM) visits have higher psychiatrist MCM visits, with scoping for Injured Worker Survey return to work osteopath and chiropractor conferences service results compared to control underway. cohorts. The use of Case Conferences continues to MCM visits for the 2019-20 year were grow, with 4,887 conducted in 2019-20, up impacted by COVID-19 restrictions, 58.41% on the previous year. Growth however, there were still 5,705 visits slowed in April 2020 due to COVID-19. conducted over the year. In line with the Recovery Assistance Program In line with increase in mental injury claims, 11.98% the increase in of visits were in support of workers with a A pilot of the Recovery Assistance mental injury claims, 11.98% of visits were mental injury. This increased from 9.64% Program commenced in 2018-19 and was in support of workers in 2018-29 and is above the 10% target expanded in 2019-20. The program is a with a mental injury - tailored case management approach that above the 10% set by WorkSafe. focuses on long-term injured workers who target Following reductions in face-to-face have been receiving weekly benefits for visits in April and May, WorkSafe more than four years. approved delivery of MCM via video and/or teleconference, allowing for The approach requires intensive ongoing support to be provided to the person-centred case management injured worker, their treating team, and focused on what injured workers can do, as the employer post COVID-19 restrictions opposed to what they can’t. The program being enacted. aims to provide long-term injured workers with greater support, identifying their More than 70% of MCM visits were unique needs and tailoring support to conducted in support of small and assist them to return to life and reintegrate medium employers, reflecting the with their community. additional support these employers need with a return to work due to a lack Injured workers involved in the program of resources within their business. have reported a positive experience.

45 WorkSafe Annual Report Other programs Secondary Mental Injury program Compliance codes Back on Track program The incidence of a secondary mental Compliance codes provide duty In February 2020, WorkSafe created injury after an initial physical injury holders with practical guidance on how the Back on Track program – a increased this financial year. to comply with their legal requirements. person-centred approach to improving Addressing this concern, WorkSafe has In 2019-20, the following four an injured worker’s experience and their developed a Secondary Mental Injury compliance codes under the WIRC Act return to work outcome. The program program, which continues to evolve. were varied in December 2019: comprises initiatives that focus on Employer Performance program • Providing employment, planning and consultation about return to work injured workers most at risk of slow The Employer Performance program • Return to work coordinators recovery, or becoming clients with commenced in early 2020 and consists • Return to work information complex needs, by providing them with of direct engagement with key • Cooperating with labour hire more intensive support to assist their government departments by the employees about return to work. recovery. Return to Work Team, with support The program uses data analysis to from the Return to Work Inspectorate. identify cases for review. The review The focus is to understand the involves case managers, clinical programs of support each department advisors, return to work inspectors and has in place to facilitate an early return treatment providers. to work for all claims and focuses As at 30 June 2020, more than 220 predominantly on primary mental injury. case conferences had been conducted, with an additional 160 scheduled. While COVID-19 has had an impact on the delivery of some initiatives, initial progress and results have been positive.

Return to Work Inspectorate Measure 2017-18 2018-19 2019-20 The Return to Work Inspectorate ensures employers and workers are Visits 1,999 2,274 1,763 meeting their legal obligations. In 2019-20, the Inspectorate intervened Claim Interventions 2,511 2,738 4,077 on 4,077 claims and conducted 1,763 Improvement Notices 133 423 445 workplace visits. The inspectorate also Voluntary Compliances 396 521 370 issued 445 improvement notices to employers for breaches of the law and achieved 370 voluntary compliances.

46 47 47 Year in WorkSafe AnnualReport Review community value Providing Mental Health ImprovementFund. an ArtsCentreMelbourneled initiativefundedbyWorkSafe’sWorkWell CEO, ArtsCentreMelbourne talkingabouttheArtsWellbeing Collective– Claire Spencer someone’s life’. emails letters from peoplewhosay things like, ‘You have literally helpedmesave organisations interested. We're now at over 250. It’s not uncommonto receive the preventive We about. space came thought we'd get aboutmaybe 10, 15other mental healthissuesandwe were devastated by that theideaof so moving into for suicide. We lost amemberof our(Arts Centre) family back in2015 through We (the arts sector) skew above thenational averages for anxiety, for depression, 5 WorkSafe’s role in the Victorian community is clear – to reduce workplace harm and to improve outcomes for injured workers. Maintaining a financially sustainable Our service performance is one way we scheme is integral to ensuring measure how well we are delivering for Victorians are protected and supported our community. We strive for excellence for many years to come – no matter in this area and our people are where, when or how people work. passionate about making every WorkSafe must manage costs to interaction count. minimise the burden on Victorian As new technologies are introduced, businesses and deliver social and we will further simplify our processes, economic benefits to the community. providing the community with new and better ways to access information and WorkSafe services.

1.34% breakeven premium

2019-20 40% increase in visits to Performance $280m $233m $73m $68m – $3,542.6m 90.0% WorkSafe’s from insurance client service result website operations 15-16 16-17 17-18 18-19 19-20

employee engagement score – an indicator of how connected WorkSafe employees feel to 196,274 85% workplace safety in Victoria phone calls to WorkSafe’s advisory service

48 Service Year in Review

Our service results measure the In 2019-20 this included: satisfaction of workers and employers • 4,580,469 visits to WorkSafe’s with WorkSafe’s agents, advisory and website – up 40% on 2018-19 inspectorate. • 10,511,345 page views – up 20% on We obtain these results by regularly 2018-19 asking workers and employers to • 48,393 emails rate the services they have received • 196,274 calls for advice on OHS, from us and our agents. We also track rehabilitation and compensation, with community perceptions of our 67% of calls answered within 40 education and enforcement activities. seconds In 2019-20 WorkSafe achieved a high Continuous improvement result of 90.0% for service to workers In 2019-20, WorkSafe launched a new and employers. Customer Relationship Management High ratings were also maintained for (CRM) System. When fully implemented our inspectorate, inspectorate advice and matured, the CRM will make and guidance, insurance premium interactions with WorkSafe simpler and services and advisory service. easier. It will also provide WorkSafe with a better understanding of its customers. Advisory service Also over the past year, an Experience WorkSafe provides advisory and client Measurement Framework has been services through multiple channels, developed to enable collection and including phone, email and the measurement of feedback from injured WorkSafe website. workers. When fully developed, insights will be used to enhance client experience and outcomes. 67% of calls answered within

49 WorkSafe Annual Report Client service 2018-19 2019-20 Client service 90.4% 90.0% Employer service 91.4% 90.4% Agents to employers 87.2% 86.2% Advisory to employers 94.5% 89.6% Inspector interactions with employers 98.3% 98.4% Advice and guidance 96.7% 96.5% Premium service to employers 90.5% 91.4% Employee/ Worker Service 89.4% 89.6% Agents to injured workers 82.2% 83.0% Advisory to workers 93.3% 93.1% Inspector interactions with workers 97.9% 97.5% Advice and guidance 98.0% 97.3%

Agent service In 2019-20, our agents maintained strong results for their level of service to injured workers and employers. Injured worker satisfaction was 83.01%, an increase on the previous year’s result of 82.2%. Employer satisfaction was 86.2%, down on the 87.2% in 2018-19. In 2019-20, WorkSafe agents received more than 1.9 million phone calls and 4.1 million emails, and made more than 1.7 million outbound calls. 2018-19 2019-20 Worker service agent Allianz 82.3% 84.3% CGU 81.5% 82.7% EML 82.5% 84.8% Gallagher Bassett Services 81.4% 81.4% Xchanging 83.2% 82.2% Scheme 82.2% 83.0% Employer service agent Allianz 88.5% 86.2% CGU 84.8% 85.2% EML 87.3% 88.2% Gallagher Bassett Services 85.6% 83.0% Xchanging 89.5% 88.8% Scheme 87.2% 86.2% 50 Financial Year in Review sustainability

Our performance from insurance operations (PFIO) for the year was a deficit of $3.5 billion, $3.4 billion below target. The result was profoundly impacted by the COVID-19 pandemic, which reduced both premium and investment revenues as well as increasing the cost of claims as direct and indirect COVID-19 cases emerged. WorkSafe is also seeing continued growth in mental health injuries coming into the scheme. The net result was a deficit of $3.0 billion, $2.9 billion below target, with some relief provided via the impact of external factors and tax. External factors, for the purposes of WorkSafe's annual financial reporting, include factors outside of WorkSafe's influence which can have a material impact on financial results such as bond rates, investment returns and changes in legislation. Notwithstanding these significant challenges, our balance sheet remains strong with the key measure of scheme sustainability, the Insurance Funding Ratio, at a healthy 123%.

2019-20 2018-19 2017-18 2016-17 2015-16 Financial results ($m) ($m) ($m) ($m) ($m)

Impact on result from internal factors Performance from insurance operations (3,542.6) 68.0 73.5 233.0 280.4 Work Health and Research Institute initiatives 0.0 0.0 0.0 0.0 0.0 Result from internal factors (3,542.6) 68.0 73.5 233.0 280.4 Impact on result from external factors Difference between actual returns and long-term expected returns (1,065.0) 109.4 524.9 589.9 (621.4) Change in inflation assumptions and discount rates 304.4 (1,372.5) 60.6 582.2 (366.7) Impact from legislative changes (32.4) (14.2) 0.0 (446.3) 0.0 Tax 1,314.7 386.2 (175.3) (264.7) 232.4 Net result (3,021.0) (823.1) 483.7 694.1 (475.3)

Operational expenditure by core activities

25% Core activity 2019-20 % 2018-19 %

Occupational health and safety 316,144 63% 277,370 62% 12% Insurance and claims management 125,889 25% 112,627 25% Dispute resolution 61,363 12% 54,787 12% 63%

51 WorkSafe Annual Report Assets and liabilities As at 30 June 2020, WorkSafe’s total assets were $20.9 billion, compared to $19.2 billion at 30 June 2019. Total liabilities were $21.5 billion, compared to $16.8 billion at 30 June 2019.

Average Net result PFIO* Actuarial Dividend WorkSafe scorecard 2010-2020 premium rate ($m) ($m) release ($m) paid ($m)

2019-20 1.272% (3,021.0) (3,542.6) (2,905) - 2018-19 1.272% (823) 68 (190) - 2017-18 1.272% 484 73 (141) - 2016-17 1.272% 694 233 (169) - 2015-16 1.272% (475) 280 (135) - 2014-15 1.272% 454 211 (60) 242 2013-14 1.298% 824 483 303 59 2012-13 1.298% 1,084 119 179 193 2011-12 1.338% (676) 385 182 147 2010-11 1.338% 521 294 136 - 2009-10 1.387% 176 654 189 -

Low cost insurance Sound scheme management enabled WorkSafe to maintain its lowest average premium rate of 1.272% of payroll in 2019-20. This has been maintained since 2014-15 and will continue in 2020-21. Employers continue to be able to take advantage of discount options for early payment. In 2019-20, around 34% of employers took up the 5% discount by paying in August and around 11% took up the 3% discount by paying in October.

WorkSafe injury insurance average premium rates 1.460% 1.387% 1.387% 1.388% 1.338% 1.298% 1.298% 1.272% 1.272% 1.272% 1.272% 1.272% 1.272%

07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

52 Protecting scheme integrity To maintain the integrity and It is important sustainability of the WorkSafe scheme, it is important employers and workers comply with their legal obligations employers and under the WIRC Act. WorkSafe ensures that employers pay their insurance premiums and detects and takes action workers comply against fraud by health professionals and workers. with their legal In 2019-20, there were 14 prosecutions under the WIRC Act. A total of $254,390 in restitution and $10,900 in obligations. fines were imposed. The following are examples of some of • A florist with a back injury subject to • A truck driver in Warrnambool who the prosecutions conducted under the a compensation claim defrauded lodged a claim for a rib injury took WIRC Act: the scheme by taking payment to employment as an interstate truck • In April 2014, an offender suffered a work in another floral design driver for cash payments. The hand injury at work and his claim for enterprise. She failed to disclose her offender failed to disclose to his GP, weekly workers compensation activity to her GP or the insurance the WorkSafe agent and an payments was accepted. While in agent. The offender was convicted occupational physician that he had receipt of weekly payments, the and placed on an adjourned returned to work. The offender offender drove taxis. The offender undertaking for two years and pleaded guilty and was, without pleaded guilty and was fined $4,000. ordered to pay $8,000 in restitution. conviction, sentenced to pay a fine • An offender pleaded guilty to three • A storeman with a shoulder injury of $900 and to re-pay $8,261. counts of fraudulently obtaining lodged a claim for compensation in payments totalling $112,975.24. The Termination Review Panels mid-2016. A subsequent offender began working as a painter Where there is sufficient evidence to investigation established that the 10 days after claiming he was unable substantiate fraud, a Termination offender had registered a business to work. He later used three Review Panel is convened to review the name and had commenced fraudulent medical certificates to relevant evidence and recommend the operating as a home handyman. A continue to receive benefits. The agent immediately terminate a worker’s number of witnesses provided offender was sentenced to nine weekly payments under s183(4) of the evidence of hiring the offender to do months’ imprisonment and ordered WIRC Act, on the basis that the home maintenance or renovation to pay restitution in the amount of payments were obtained fraudulently. work at their homes during the $112,975.24. period that he was receiving weekly In 2019-20, eight Termination Review payments of compensation. The Panels were convened, which saved offender pleaded guilty and was, the scheme $3,004,740. without conviction, placed on a 12-month community corrections order with a condition to perform 100 hours of community work. He was also ordered to pay restitution of $28,525.20.

53 WorkSafe Annual Report Self-insurance At 30 June 2020, common law Self-insurers are approved by accounted for 25% of WorkSafe’s total WorkSafe to manage their own workers scheme liability (including recoveries, compensation claims and WorkSafe excluding claims handling expenses continues to work with them to promote and risk margin), with damages best practice in safety and return to payments accounting for 18% and legal work. As at 30 June 2020, there were costs 7%. 40 self-insurers operating in Victoria, In 2019-20, about 70% of serious injury representing about 7% of total scheme cases were settled without litigation, remuneration. with only 7% resulting from a court In 2019-20 two organisations ceased to judgement. In the same period, about be a self-insurer. The Injured Workers 83% of damages claims were settled Survey includes injured workers without litigation, with about 1% covered by self-insurers. In 2019-20, resulting from a court judgment. the service score was 64% for all WorkSafe continues to focus on self-insurers, compared to 70% in delivering common law benefits In 2019-20, about 2018-19. Further information can be efficiently and cost effectively where it found in Appendix 3. is satisfied a worker has an entitlement 83% Common law to common law damages. During the of damages claims year, about 93% of common law were settled without Common law benefits provide applicants established a serious injury litigation important support for workers with and about 88% of workers with an serious and permanent consequences accepted serious injury established an from work-related injuries, where there entitlement to damages from their is fault by the employer or another employer. person. WorkSafe also provides important common law support for employers. WorkSafe continues to In 2019-20 WorkSafe received 3,011 focus on delivering common common law applications, compared to law benefits eciently and 2,729 in 2018-19 and 2,734 in 2017-18. cost eectively where it is Any substantial increase in the rate of satisfied a worker has an lodgement of common law applications entitlement to common law can pose a risk to the financial viability damages. of the WorkSafe scheme.

54 WorkSafe’s people Year in Review

Our culture and capability We continue to work with the Victorian Capability Culture Equal Opportunity and Human Rights WorkSafe’s people continue to grow Commission to progress WorkSafe’s At WorkSafe, our people are at the and expand their capabilities as the Diversity and Inclusion Strategy and centre of everything that we do. We nature of work in Victoria evolves. Action Plan, which will be launched in want every employee to feel connected, WorkSafe has put in place a Capability 2021. safe and valued in their team, for teams Framework, which articulates the skills, to feel valued in the workplace, and for Engagement experiences and qualifications WorkSafe to be valued in the We conduct employee opinion surveys expected to perform WorkSafe roles. It community. It is important to us that every six months to provide employees also provides a structure for building employees experience a culturally safe with the opportunity to give feedback capabilities to align with legislative or workplace where diverse ideas, on their WorkSafe experiences. industry-based changes. perspectives, experiences and skills are The most recent survey, undertaken in In 2019-20, the Capability Framework actively sought and celebrated. May 2020, was completed by 85% of guided the development of an Our culture is underpinned by three WorkSafe’s employees. Our Inspector Capability Strategy to ensure organisational values. At WorkSafe engagement score was 85%, an that WorkSafe’s inspectors remain we are: increase on the previous results of 75% safety leaders, and are able to provide accurate and timely compliance advice, Connected by being caring, inclusive in 2018-19 and 73% in 2017-18. education and guidance to workplaces and collaborative Engagement is an indicator of how well our people feel connected to and support a reduction in workplace Persistent by being purposeful, flexible WorkSafe’s purpose of reducing harm. Planning is underway for training and resilient workplace harm and improving to build capability across our Dynamic by being passionate, outcomes for injured workers. multi-skilled inspectorate in the areas of innovative and courageous psychosocial, sexual harassment, The increase in employee engagement occupational violence and gendered As Victoria’s OHS regulator, we are is a very positive result, achieved during violence in the workplace. responsible for protecting the physical a period of significant change and and psychological, health, safety and during an extended period of remote wellbeing of Victorian workers. Our working in response to the COVID-19 organisation is no exception. We seek pandemic. to build an inclusive workplace which promotes psychological safety as a workplace norm and actively reduces incidents of harassment, bullying, discrimination and victimisation.

employee engagement score 55 WorkSafe Annual Report85% Health, safety and wellbeing Dedicated health and wellbeing Supporting employees through WorkSafe strives to provide a working professionals joined the team in COVID-19 environment which proactively 2019-20 and have focused on reducing Extensive support has been provided to supports the health, safety and harm and improving recovery for our WorkSafe’s people through the wellbeing of its people. people, particularly in mental health. COVID-19 pandemic, with HSRs WorkSafe is participating in the This year, WorkSafe was the first providing input and guidance on Victorian Government ‘Leading the Australian government entity to achieve employee requirements. Via a Way’ strategy to improve health and accreditation to ISO 45001: COVID-19 Survey, employees reported safety in the public sector, which has Occupational Health and Safety feeling well supported and connected included the completion of mental Management Systems. Through audit to their teams. Most people also health training by all employees and the activity, it was demonstrated that appreciated the increased flexibility of delivery of targeted programs to WorkSafe is driving a safety culture home-based working. support our people through challenges through strong management Initiatives to support people through the presented by the COVID-19 pandemic. commitment and widespread pandemic included: ownership of safety management. Programs to reduce potential harm for • employee guidelines and frequently Safety and compliance attention is now our people this year included: asked questions focused on process improvement and • an Occupational Violence and • additional resources, including an further enhancing communications and Aggression Working Group to online ergonomics module to risk control programs. assess the risk to field workers support the home-based working • support for the Bushfire Taskforce Strong participation from HSRs, along set up • roll out of Lone Worker Duress with extensive employee consultation, • specific support for field-based roles Device has been essential in building the safety • mental and physical wellbeing • pre-employment medical management system and ensuring its programs delivered digitally and evaluations for new inspectors and active use by employees. This has tailored for the home-based work proactive health checks for existing positioned WorkSafe well to manage environment employees the health, safety and wellbeing • the re-design of learning programs • participation in the DHHS’s Civility implications of the Victorian bushfires for digital delivery, including a and Respect Program and the global COVID-19 pandemic. Leading in Times of Ambiguity • Employee Assistance Program, session for People Leaders The simplification and digitisation of including support for critical incident • recruitment and training of online incident and hazard reporting responses inspectors online has resulted in an increase in employee • Financial Wellbeing Program • additional carer’s leave for those reports, enabling a more consistent and • Social/Community Wellbeing with increased caring informative flow of data to our safety Program responsibilities as a result of the team, and demonstrates the • Peer Support Program pandemic. engagement of our people in sustaining • psychological wellbeing programs, Please see Appendix 4 for further detail a safety culture. Our HSRs are closely including mindfulness workshops, on WorkSafe’s OHS performance. involved in the resolution of reported gratitude workshops and Mental incidents and hazards and play a key Health and Wellbeing training for all role in the reduction of potential employees workplace harm. • proactive physical health program, including flu vaccinations and heart checks.

56 WorkSafe’s ahead

Looking Strategy

WorkSafe’s role

Reduce workplace harm

Improve outcomes for injured workers

Provide community value

57 WorkSafe Annual Report For 35 years, WorkSafe has raised the It clearly positions WorkSafe as a tough The Strategy prioritises activities that standard of health and safety in health and safety regulator that will not will deliver significant reductions in Victorian workplaces and provided tolerate employers who flout the law, harm and improved outcomes for compensation, medical help and while meeting its statutory duties to injured workers. In alignment with rehabilitation services to more than educate, to provide guidance and to workplace safety reforms, it 1.2 million injured workers. support all members of the community deliberately focuses on workplace But the workplace landscape is to maintain safe workplaces. The fatalities, the most prevalent injuries constantly evolving and throwing up Strategy is also about future proofing a and the most vulnerable workers. new challenges. financially sustainable scheme to ensure Significantly, it provides clear direction the health and safety of Victorians for WorkSafe’s Strategy provides a strong for building the technology and many years to come – no matter when, framework for responding to these systems capability to better identify where or how people work. challenges. and mitigate potential risks and hazards in the workplace before they result in harm to workers. How we are delivering

Enforcement Recovery and Advice Transformation digital tools to a better experience strengthen core for injured business workers Platform Prevention Upgrade First customer-focused finding solutions technology for online to workplace claims, payments risks and premiums Strategic Data and Priorities Analytics programs focused using data to drive on high-risk issues health, safety and industries and recovery initiatives

58 Financial Report Report Annual for the year ended 30 June 2020

59 WorkSafe Annual Report How this report is structured

The Victorian WorkCover Authority (WorkSafe) has presented its audited general purpose financial statements for the financial year ended 30 June 2020 in the following structure to provide users with the information about WorkSafe’s stewardship of resources entrusted to it.

Financial Statement 5. Other assets and liabilities 91 Comprehensive operating statement 61 Other non‐insurance assets and liabilities Balance sheet 62 5.1 Other receivables 91 Statement of changes in equity 63 5.2 Property, plant and equipment 92 Cash flow statement 64 5.3 Right‐of‐use assets and lease liabilites 92 5.4 Intangibles 96 Notes to the financial statements 5.5 Other payables 97 1. About this report 65 5.6 Other provisions 98 5.7 Commitments and contingencies 99 The basis on which the financial statements have been prepared and compliance with reporting 6. Taxation and transactions with regulations. the state 100 2. Results from insurance operations 68 Items subject to taxation and transactions with the State Insurance related activities 6.1 Income tax 100 2.1 Underwriting result 68 6.2 Deferred tax 101 2.2 Premiums 69 6.3 Dividends 102 2.2.1 Premium revenue 69 2.2.2 Premium receivables 69 7. Financial instruments and valuation 2.2.3 Premium creditors 70 judgements 103 2.3 Claims 71 Financial instruments and fair value determination 2.3.1 Claims expense 71 7.1 Financial instruments 103 2.3.2 Outstanding claims 72 7.2 Off‐setting of financial assets and 2.3.3 Recoveries revenue 76 financial liabilities 108 2.3.4 Recoveries receivable 76 7.3 Fair values 108 2.3.5 Actuarial assumptions and methods 77 8. Other disclosures 113 2.4 Authorised agent fees 80 8.1 Responsible persons 113 2.5 Insurance contracts - risk 8.2 Remuneration of executives 114 management policies and procedures 81 8.3 Related parties 115 3. Investment portfolio and performance 82 8.4 Entity consolidated pursuant to section Investment results and portfolio 53(1)(b) of the FMA 3.1 Investment income and 8.5 Remuneration of auditors 118 investment expenses 82 8.6 Events after reporting date 118 3.2 Investments 83 8.7 Australian Accounting Standards issued 3.3 Cash and cash equivalents 85 that are not yet effective 118 3.4 Explanation of volatility of 9. Statement by the Chair, Chief Executive financial results 86 and Chief Financial Ocer 120 4. Cost of operations 87 Operational activities 4.1 Other income 87 4.2 Other operating costs 88 4.3 Employee superannuation 88 4.4 Employee related provisions 89

60 Financial Report Annual statements

Comprehensive operating statement For the financial year ended 30 June 2020

2020 2019 Note $000s $000s

Revenue and Income Premium revenue 2.2.1 2,458,846 2,516,299 Investment income 3.1 214,367 1,311,628 Recoveries revenue 2.3.3 185,723 182,440 Other income 4.1 23,792 23,305 Total revenue and income 2,882,728 4,033,672 Expenses Claims expense 2.3.1 (6,438,228) (4,529,947) Authorised agent fees 2.4 (265,785) (250,779) Investment expenses 3.1 (47,846) (51,280) Other operating costs 4.2 (466,569) (411,009) Total expenses (7,218,428) (5,243,015) Result before income tax (4,335,700) (1,209,343) Tax expense 6.1 1,314,662 386,219 Net result for the year (3,021,038) (823,124) Other comprehensive income - - Other comprehensive income, net of income tax - - Total comprehensive result for the year (3,021,038) (823,124)

61 WorkSafe Annual Report Balance sheet

2020 2019 Note $000s $000s

Current assets Cash in hand and at bank 3.3 77,022 48,254 Premium receivables 2.2.2 80,751 130,315 Investment assets 3.2 4,370,885 2,578,090 Recoveries receivable 2.3.4 52,177 50,385 Prepayments 5,785 6,765 Other receivables 5.1 6,424 8,754 Total current assets 4,593,044 2,822,563 Non-current assets Investment assets 3.2 13,959,606 15,540,063 Recoveries receivable 2.3.4 263,729 255,965 Premium revenue 2.2.1 2,458,846 2,516,299 Property, plant and equipment 5.2 40,676 44,166 Investment income 3.1 214,367 1,311,628 Right-of-use assets 5.3 119,833 - Recoveries revenue 2.3.3 185,723 182,440 Intangibles 5.4 134,927 81,292 Other income 4.1 23,792 23,305 Deferred tax assets 6.2 1,810,583 495,921 Total non-current assets 16,329,354 16,417,407 Total revenue and income 2,882,728 4,033,672 Total assets 20,922,398 19,239,970 Expenses Current liabilities Claims expense 2.3.1 (6,438,228) (4,529,947) Premium creditors 2.2.3 178,925 77,770 Authorised agent fees 2.4 (265,785) (250,779) Other payables 5.5 117,198 134,828 Investment expenses 3.1 (47,846) (51,280) Outstanding claims 2.3.2 2,829,641 2,417,820 Other operating costs 4.2 (466,569) (411,009) Lease liabilities 5.3 8,380 - Total expenses (7,218,428) (5,243,015) Investment related liabilities 3.2 759,055 336,479 Result before income tax (4,335,700) (1,209,343) Tax liabilities 6.1 - - Tax expense 6.1 1,314,662 386,219 Employee related provisions 4.4 32,033 29,294 Net result for the year (3,021,038) (823,124) Other provision 5.6 57,007 41,308 Other comprehensive income - - Total current liabilities 3,982,239 3,037,499 Non-current liabilities Other comprehensive income, net of income tax - - Outstanding claims 2.3.2 17,402,106 13,762,890 Total comprehensive result for the year (3,021,038) (823,124) Lease liabilities 5.3 118,656 - Employee related provisions 4.4 4,853 3,804 Other provision 5.6 375 570 Total non-current liabilities 17,525,990 13,767,264 Total liabilities 21,508,229 16,806,771 Net assets (585,831) 2,435,207 Equity Accumulated surplus (585,831) 2,435,207 Total equity (585,831) 2,435,207

The above balance sheet should be read in conjunction with the accompanying notes to the financial statement.

62 Statement of changes in equity

Total $000s

Balance at 1 July 2018 3,258,331 Current assets Net result for the year (823,124) Cash in hand and at bank 3.3 77,022 48,254 Premium receivables 2.2.2 80,751 130,315 Other comprehensive income - Investment assets 3.2 4,370,885 2,578,090 Total comprehensive income for the year (823,124) Recoveries receivable 2.3.4 52,177 50,385 Balance at 30 June 2019 2,435,207 Prepayments 5,785 6,765 Net result for the year (3,021,038) Other receivables 5.1 6,424 8,754 Other comprehensive income - Total current assets 4,593,044 2,822,563 Total comprehensive income for the year (3,021,038) Non-current assets Balance at 30 June 2020 (585,831) Investment assets 3.2 13,959,606 15,540,063 Recoveries receivable 2.3.4 263,729 255,965 The above statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements. Property, plant and equipment 5.2 40,676 44,166 Right-of-use assets 5.3 119,833 - Intangibles 5.4 134,927 81,292 Deferred tax assets 6.2 1,810,583 495,921 Total non-current assets 16,329,354 16,417,407 Total assets 20,922,398 19,239,970 Current liabilities Premium creditors 2.2.3 178,925 77,770 Other payables 5.5 117,198 134,828 Outstanding claims 2.3.2 2,829,641 2,417,820 Lease liabilities 5.3 8,380 - Investment related liabilities 3.2 759,055 336,479 Tax liabilities 6.1 - - Employee related provisions 4.4 32,033 29,294 Other provision 5.6 57,007 41,308 Total current liabilities 3,982,239 3,037,499 Non-current liabilities Outstanding claims 2.3.2 17,402,106 13,762,890 Lease liabilities 5.3 118,656 - Employee related provisions 4.4 4,853 3,804 Other provision 5.6 375 570 Total non-current liabilities 17,525,990 13,767,264 Total liabilities 21,508,229 16,806,771 Net assets (585,831) 2,435,207 Equity Accumulated surplus (585,831) 2,435,207 Total equity (585,831) 2,435,207

63 WorkSafe Annual Report Cash flow statement

2020 2019 Note $000s $000s

Balance at 1 July 2018 3,258,331 Cash flows from operating activities Net result for the year (823,124) Premium received 2,871,510 2,743,378 Other comprehensive income - Claims paid (2,411,420) (2,066,871) Total comprehensive income for the year (823,124) Self insurer exit settlement 7,801 (3,530) Balance at 30 June 2019 2,435,207 Recoveries received 176,166 151,679 Net result for the year (3,021,038) Authorised and management agent fees (256,478) (371,569) Other comprehensive income - Dividends and distributions received 398,035 363,686 Total comprehensive income for the year (3,021,038) Interest received 35,015 39,376 Balance at 30 June 2020 (585,831) Health and safety licence fees received 6,964 6,652 Contribution to DTF Consolidated Fund for court use (8,664) (12,766) Sundry receipts 16,828 19,403 Goods and services tax paid to the ATO (177,425) (174,162) Income tax paid - (22,674) Total cash outflow for leases (16,370) - Payments to suppliers and employees (477,044) (340,837) Net cash flows from operating activities 3.3 164,918 331,765 Cash flows from investing activities Sale of investments 6,694,373 5,774,644 Purchase of investments (6,040,694) (5,979,235) Purchase of property, plant and equipment (3,806) (8,917) Proceeds from disposal of plant and equipment 11 Payments for intangibles (69,416) (43,661) Net cash flows (used in) investing activities 580,457 (257,158) Net increase in cash and cash equivalents 745,375 74,607 Cash and cash equivalents at beginning of the year 1,468,634 1,394,034 Effects of exchange rate changes on cash held in foreign currencies (2,266) (7) Cash and cash equivalents at end of the year 3.3 2,211,743 1,468,634

64 About Report 1 Financial this report

Cash flows from operating activities Premium received 2,871,510 2,743,378 WorkCover Authority Fund Claims paid (2,411,420) (2,066,871) The WorkCover Authority Fund was established on 1 December 1992 under Self insurer exit settlement 7,801 (3,530) the Accident Compensation Act 1985 and is maintained by the Victorian WorkCover Authority. The Victorian WorkCover Authority is a statutory Recoveries received 176,166 151,679 authority established by statute enacted by the Victorian State Parliament Authorised and management agent fees (256,478) (371,569) and domiciled in Australia. The Victorian WorkCover Authority trades under Dividends and distributions received 398,035 363,686 the name of WorkSafe Victoria (WorkSafe). Interest received 35,015 39,376 Health and safety licence fees received 6,964 6,652 Basis of preparation recoveries receivable, employee benefits Contribution to DTF Consolidated Fund for court use (8,664) (12,766) These financial statements cover liabilities and leasehold restoration Sundry receipts 16,828 19,403 WorkSafe as an individual reporting provision which are included at present Goods and services tax paid to the ATO (177,425) (174,162) entity and include the Victorian value, and investments, intangibles and Income tax paid - (22,674) Asbestos Eradication Agency (VAEA), property, plant and equipment which are Total cash outflow for leases (16,370) - which has been consolidated into included at fair value. Historical cost is based on the fair value of the Payments to suppliers and employees (477,044) (340,837) WorkSafe’s financial statements pursuant to a determination made by consideration given in exchange for Net cash flows from operating activities 3.3 164,918 331,765 the Assistant Treasurer under section assets. Cash flows from investing activities 53(1)(b) of the Financial Management Amounts have been rounded to the Sale of investments 6,694,373 5,774,644 Act 1994. The VAEA is not controlled by nearest thousand dollars, unless Purchase of investments (6,040,694) (5,979,235) WorkSafe. All transactions and otherwise stated. The presentation Purchase of property, plant and equipment (3,806) (8,917) balances between consolidated currency of WorkSafe is the Australian Proceeds from disposal of plant and equipment 11 entities are eliminated. dollar, which is also its functional currency. Payments for intangibles (69,416) (43,661) The financial statements have been Accounting policies are selected and prepared on a going concern basis. applied in a manner which ensures that Net cash flows (used in) investing activities 580,457 (257,158) While WorkSafe recorded an operating the resulting financial information satisfies Net increase in cash and cash equivalents 745,375 74,607 deficit after tax for the year of the concepts of relevance and reliability, Cash and cash equivalents at beginning of the year 1,468,634 1,394,034 $3,021 million (2019: $823 million thereby ensuring that the substance of Effects of exchange rate changes on cash held in foreign currencies (2,266) (7) deficit), it delivered positive cash flows the underlying transactions or other Cash and cash equivalents at end of the year 3.3 2,211,743 1,468,634 from operating activities of $165 million events is reported. Unless otherwise (2019: $332 million) and has a $609 stated, accounting policies selected have million surplus of current assets over been consistently applied to all periods

current liabilities (2019: $217 million presented in the financial statements. deficit) at the date of reporting. Based on WorkSafe has adopted AASB16 Leases the cash flow projections being positive using the modified retrospective method 12 months to the signing of the financial of transition, with the date of initial statements, the Directors have application of 1 July 2019. Under the concluded that the going concern modified approach, WorkSafe has chosen, assumption of WorkSafe remains on a lease‐by‐lease basis, to measure the appropriate. related right‐of‐use asset at an amount The financial statements have been equal to the lease liability, adjusted by the prepared on an accrual basis, and are amount of any prepaid or accrued lease based on historical costs and do not take payments relating to that lease recognised into account changing money values, in the balance sheet immediately before except for outstanding claims liability, the date of initial application.

65 WorkSafe Annual Report The nature and effect of the changes as WorkSafe as a lessee Income from the rendering of services a result of adoption of AASB16 are as WorkSafe previously classified leases is recognised at a point in time when described below: as operating or finance leases based the performance obligation is satisfied Definition of lease on its assessment of whether the lease when the service is completed; and over time when the customer WorkSafe applied the recognition and transferred substantially all of the risks simultaneously receives and consumes measurement requirements of AASB16 and rewards incidental to ownership of the services as it is provided. only to contracts that were previously the underlying asset to WorkSafe. Consideration received in advance of identified as leases, and does not apply Under AASB16, this classification no recognising the associated revenue AASB16 to contracts that were longer exists for WorkSafe as a lessee. from the customer is recorded as a previously not identified as leases. Instead, practically all leases are now recognised on the balance sheet as liability. Where the performance Definition of right‐of‐use asset obligation is satisfied but not yet billed, right‐of‐use assets with corresponding The right‐of‐use asset is a lessee's right lease liabilities comprising all amounts an asset is recorded. to use an asset over the life of a lease. which are considered to be lease There has been no material impact to To qualify as a right‐of‐use asset, the payments (see Note 5.3). WorkSafe’s financial statements as a contract must meet 3 criteria: result of adopting AASB15, and Leases previously classified as 1. Identified asset ‐ There must be an accordingly there are no retrospective operating leases under AASB117 identified asset. An asset can only adjustments. be identified if it is physically distinct On transition to AASB16, WorkSafe Judgements, estimates and or if the lessee receives recognised lease liabilities for leases assumptions are required to be made substantially all of the capacity of previously classified as operating about financial information being the asset. In addition, the lessor leases by discounting the remaining presented. The significant judgements cannot have substantive rights to lease payments using the incremental in the preparation of these financial substitute the asset. borrowing rate as at the date of initial statements are disclosed in the notes 2. Economic benefit The lessee must application, i.e. 1 July 2019. The ‐ where amounts affected by those receive substantially all of the right‐of‐use assets were recognised at judgements are disclosed. Estimates economic benefit. To determine an amount equal to the lease liability, and judgements are continually what qualifies as “substantially all,” adjusted by the amount of any prepaid evaluated and are based on historical the parties must define the or accrued lease payments relating to experience and other factors, including economic benefits of the asset and that lease recognised in the balance expectations of future events that are then determine the allocation of sheet immediately before the date of believed to be reasonable under the economic benefits. initial application. circumstances. Actual results may 3. Direct use of asset The lessee ‐ WorkSafe has applied the following differ from these estimates. must have the right to direct the use practical expedients in transitioning Revisions to accounting estimates are of the asset. If how the asset will be existing operating leases: recognised in the period in which the used was predetermined, the lessee (a) Applied a single discount rate to a estimate is revised if the revisions affect must have the right to operate the portfolio of leases with reasonably only that period, or in the period of the asset or they must have designed similar characteristics (such as leases revision and future periods if the the asset in a way that with a similar remaining lease term for revisions affect both current and future predetermines how it will be used. a similar class of underlying asset in a periods. The areas involving a higher similar economic environment) Incentives degree of judgement or complexity, or Under AASB117, the previous leasing WorkSafe has also applied AASB15 areas where assumptions and standard, lease incentives received Revenue from Contracts with Customers estimates are significant to the financial were recognised as an integral part of adopting the partial retrospective statements have been disclosed in the total lease expense, over the term application approach, with the date of Notes 2.3.4, 2.3.5, 5.6 and 7.3. initial application of 1 July 2019. of the lease. Under AASB16, WorkSafe Critical estimates and assumptions for recognises incentives as part of the The core principle of AASB15 is that an the year ended 30 June 2020 include initial lease liability. entity should recognise revenue to consideration of the COVID-19 depict the transfer of promised goods pandemic. or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

66 Compliance information Regulatory context These general purpose financial WorkSafe administers the following statements have been prepared in legislation: accordance with the Financial • Occupational Health and Safety Act Management Act 1994 and applicable 2004 – health, safety and welfare in Australian Accounting Standards which the workplace include Interpretations, issued by the • Workplace Injury Rehabilitation and Australian Accounting Standards Compensation Act 2013 – workers Board. For the purposes of preparing compensation and the rehabilitation the financial statements, the Victorian of injured workers, where the injury State Government has determined that occurred after 1 July 2014 WorkSafe is a not‐for‐profit entity. • Accident Compensation Act 1985 – Where appropriate, those paragraphs in workers compensation and the the Australian Accounting Standards rehabilitation of injured workers, applicable to not‐for‐profit entities have where the injury occurred prior to 1 been applied. July 2014 The audited annual financial statements • Workers Compensation Act 1958 – were authorised for issue in workers compensation prior to 1985 accordance with a resolution of the • Dangerous Goods Act 1985 – Board on 26 August 2020. explosives and other dangerous goods • Equipment (Public Safety) Act 1994 – high‐risk equipment used in non‐work‐related situations WorkSafe also administers regulations made under these Acts.

67 WorkSafe Annual Report Results from Report 2 Financial insurance operations

Introduction to this section Structure WorkSafe has two important functions 2.1 Underwriting result being prevention of workplace injuries 2.2 Premiums and helping injured workers back into 2.2.1 Premium revenue the workforce. 2.2.2 Premium receivables WorkSafe provides workplace injury 2.2.3 Premium creditors insurance for employers and manages 2.3 Claims the workers compensation scheme in 2.3.1 Claims expense Victoria. 2.3.2 Outstanding claims 2.3.3 Recoveries revenue The funding required to support 2.3.4 Recoveries receivable WorkSafe’s functions are sourced from 2.3.5 Actuarial assumptions insurance premiums collected from and methods employers within Victoria, and 2.4 Authorised agent fees investment income (Section 3). 2.5 Insurance contacts – risk This section provides details of management policies and premium collected by WorkSafe and procedures expenditure incurred to perform its functions.

2.1 Underwriting result

2020 2019 Note $000s $000s

Premium revenue 2.2.1 2,458,846 2,516,299 Underwriting expenses Gross claims incurred 2.3.1 (6,401,776) (4,496,479) Recoveries revenue 2.3.3 185,723 182,440 Net claims incurred (6,216,053) (4,314,039) Dispute resolution expenses 2.3.1 (36,452) (33,468) Authorised agent fees 2.4 (265,785) (250,779) Total underwriting expenses (6,518,290) (4,598,286) Underwriting result (4,059,444) (2,081,987)

68 2.2 Premiums

2.2.1 Premium revenue

2020 2019 Note $000s $000s

Gross premium 2,554,915 2,564,675 Reassessment of prior years' premium (4,946) 21,106 Premium discount allowed (80,014) (74,137) Premium fines and penalties 10,474 11,726 (Decrease) increase in provision for impairment of premium debts (10,903) 7,433 Premium bad debts written-off (10,680) (14,504) 2,458,846 2,516,299

Premium revenue comprises amounts Confirmed premium estimate makes The rateable remuneration estimate on charged to employers by WorkSafe for allowance for employers who have not which the confirmed premium estimate WorkCover insurance. The earned yet certified their remuneration. The is based, is obtained through an portion of premiums received and premium increase or decrease that may independent actuary. receivable is recognised as revenue. result from the reassessment of prior Bad debts written‐off during the year Premium is treated as earned from the year’s premium estimate (i.e. the include unpaid premium for prior years. effective registration date and is difference between the actuarial recognised as revenue over the period. estimation and actual certification) is Included above is an estimated taken up as a part of current year’s decrease of $93.3 million (2019: $62.9 premium. million increase) in relation to confirmed premium.

2.2.2 Premium receivables

2020 2019 Note $000s $000s

Premium receivables 131,535 107,321 Provision for impairment (50,784) (39,882) Premium revenue 2.2.1 2,458,846 2,516,299 Underwriting expenses 80,751 67,439 Gross claims incurred 2.3.1 (6,401,776) (4,496,479) Confirmed premium estimate 62,876 Recoveries revenue 2.3.3 185,723 182,440 80,751 130,315

Net claims incurred (6,216,053) (4,314,039) Dispute resolution expenses 2.3.1 (36,452) (33,468) Authorised agent fees 2.4 (265,785) (250,779) Premium receivable amounts due from The confirmed premium estimate at 30 Included within premium receivables at employers (being the amounts due June 2020 represents a decrease in the reporting date are $81.1 million Total underwriting expenses (6,518,290) (4,598,286) excluding the provision for confirmed premium receivables of $93.3 million (2019: $54.0 million) of past due Underwriting result (4,059,444) (2,081,987) premium) are initially recognised at fair (2019: $62.9 million increase) based on receivables and WorkSafe has value. They are subsequently measured the actuarial assessment. Accordingly, provided provision for impairment for at amortised cost which is the current year figure has been these receivables. WorkSafe does not approximated by taking the initially disclosed as a premium creditor in note hold any collateral over these balances. recognised amounts and reducing 2.2.3. The average credit period for The average age of those receivables them for impairment as appropriate. premium receivables is 30 days. that are past due but not impaired is 147 days (2019: 73 days).

69 WorkSafe Annual Report 2020 2019 Note $000s $000s

Ageing of past due premium receivable 30 days past due 9,167 4,928 31 - 60 days past due 2,615 3,090 61 - 90 days past due 1,366 1,132 91 - 180 days past due 7,759 4,017 More than 180 days past due 60,208 40,813 81,115 53,980

WorkSafe applies the AASB 9 simplified approach for all contractual receivables to measure expected credit losses using a lifetime expected loss allowance based on the assumptions about risk of default and expected loss rates. WorkSafe has grouped contractual receivables on shared credit risk characteristics and days past due and selected the expected credit loss rate based on past history, existing market conditions and forward‐looking estimates at the end of the financial year. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows. The impairment charge is recognised in the comprehensive operating statement. WorkSafe provides fully for uncollected debts of the employers who are in administration, receivership, liquidation or bankruptcy, and those debts where events have occurred and/or historical experience exists, which indicates that recovery of the debt is considered unlikely. A provision is also made for other past due debts based on historical loss experience as well as an overlay for the expected impact of COVID‐19 on the ability of businesses to pay outstanding amounts.

2020 2019 Note $000s $000s

Movement in provision for impairment Balance at beginning of the year 39,882 47,315 Amounts written-back during the year 16 (2,229) (Decrease) Increase in allowance recognised in comprehensive operating statement 10,886 (5,204) Balance at end of the year 50,784 39,882

Unexpired risk liability

All WorkCover insurance expires on 30 June and hence no unearned premium exists at the year-end reporting date. Given no unearned premium exists at the year-end reporting date a liability adequacy test is not undertaken at 30 June. A liability adequacy test assesses whether the unearned premium liability is sufficient to cover all expected future cash flows relating to future claims against current insurance contracts.

2.2.3 Premium creditors

2020 2019 Note $000s $000s

Premium creditors 85,641 77,770 Confirmed premium estimate 93,284 - 178,925 77,770

70 2.3 Claims

2.3.1 Claims expense

2020 2019 Current Prior Current Prior Year Years Total Year Years Total $000s $000s $000s $000s $000s $000s

Gross claims paid 268,555 2,082,184 2,350,739 221,118 1,791,880 2,012,998 Movement in outstanding claims 4,373,502 (21,042) 4,352,460 3,358,899 (1,597,107) 1,761,792 Gross claims incurred - undiscounted 4,642,057 2,061,142 6,703,199 3,580,017 194,773 3,774,790 Discount and discount movement (440,349) 138,926 (301,423) (351,660) 1,073,349 721,689 Gross claims incurred 4,201,708 2,200,068 6,401,776 3,228,357 1,268,122 4,496,479

Current year claims relate to risks borne in the current financial year. Prior year claims relate to a reassessment of the

expense for risks borne in all previous financial years. The claim payments and movement in outstanding claims liability during the year by payment type are as follows:

2020 2019 Claims Liability Claims Liability Liability Movement Total Paid Movement Total $000s $000s $000s $000s $000s $000s

Weekly compensation 950,507 2,643,857 3,594,364 782,358 1,138,129 1,920,487 Medical including medico-legal 480,866 401,246 882,112 427,510 617,417 1,044,927 Impairment benefits 120,074 94,161 214,235 120,393 2,010 122,403 Common law 637,773 154,388 792,161 514,172 250,349 764,521 Other payment types 169,320 95,913 265,233 165,035 132,842 297,877 Claims handling expenses - 108,397 108,397 - 147,937 147,937 Risk margin - 553,075 553,075 - 194,797 194,797 Self-insurer (re-entry) exit settlement (7,801) - (7,801) 3,530 - 3,530 Gross claims incurred 2,350,739 4,051,037 6,401,776 2,012,998 2,483,481 4,496,479

Claims handling expenses are an allowance made for the expenses to be incurred in settling claims. The risk margin provides for the inherent uncertainity in the central estimate of the outstanding claims.

71 WorkSafe Annual Report 2020 2019 Note $000s $000s

Gross claims incurred 6,401,776 4,496,479

Dispute resolution expenses Certified payments to Accident Compensation Conciliation Service (ACCS) 18,682 17,027 Contribution to DTF Consolidated Fund for court use 8,999 8,664 Medical Panel costs 4,700 4,199 WorkCover Assist costs 2,968 2,477 Union Assist costs 1,103 1,101 36,452 33,468 Total claims expense recognised in the comprehensive operating statement 6,438,228 4,529,947

The estimated cost of claims includes expenses to be incurred in settling claims gross of the expected value of recoveries. Claims expense which includes the movement in outstanding claims liability, is recognised in respect of insurance business and uninsured employers.

2.3.2 Outstanding claims

2020 2019 Note $000s $000s

Summary of valuation Expected future claim payments (undiscounted) 19,255,368 15,685,039 Discount to present value (2,305,993) (2,125,229) 16,949,375 13,559,810 Claims handling expenses 1,512,290 1,403,893 18,461,665 14,963,703 Risk margin 1,770,082 1,217,007 Outstanding claims liability 20,231,747 16,180,710 Current 2,829,641 2,417,820 Non-current 17,402,106 13,762,890 20,231,747 16,180,710

Refer to Note 2.3.5 for detailed disclosures of how the claim liability is estimated and actuarial assumptions applied.

72 2020 2020 2019 2019 2019 Liability Movement Liability Movement Liability $000s $000s $000s $000s $000s

Movement in outstanding claims liability

Weekly compensation 7,590,698 2,643,857 4,946,841 1,138,129 3,808,712 Medical including medico-legal 3,771,868 401,246 3,370,622 617,417 2,753,205 Impairment benefits 508,907 94,161 414,746 2,010 412,736 Common law 4,067,731 154,388 3,913,343 250,349 3,662,994 Other payment types 1,010,171 95,913 914,258 132,842 781,416 Claims handling expenses 1,512,290 108,397 1,403,893 147,937 1,255,956 Risk margin 1,770,082 553,075 1,217,007 194,797 1,022,210 20,231,747 4,051,037 16,180,710 2,483,481 13,697,229

Reconciliation of movement in discounted net outstanding claims liability

2020 2019 Gross Recoveries Net Gross Recoveries Net $000s $000s $000s $000s $000s $000s

Balance at beginning of the year 16,180,710 (306,350) 15,874,360 13,697,229 (275,590) 13,421,639 Effect of change in economic assumptions (232,271) 6,750 (225,520) 1,153,409 (12,215) 1,141,194

Effect of past inflation rate different to assumptions (351) 648 297 12,270 (1,162) 11,108

Effect of changes in other assumptions 2,635,368 (17,529) 2,617,838 178,108 (6,785) 171,323

Increase in claims incurred in current accident year 4,204,573 (168,270) 4,036,303 3,228,118 (153,783) 3,074,335

Release of risk margin and claims handling expenses (441,499) - (441,499) (427,949) - (427,949)

Cost of prior period claims moving closer to payment 235,957 (7,322) 228,635 352,523 (8,495) 344,028

Incurred claims recognised in the comprehensive operating statement 6,401,777 (185,723) 6,216,053 4,496,479 (182,440) 4,314,039

Claim (payments) recoveries during the year (2,350,739) 176,166 (2,174,573) (2,012,998) 151,680 (1,861,318)

Balance at end of the year 20,231,747 (315,907) 19,915,840 16,180,710 (306,350) 15,874,360

73 WorkSafe Annual Report The following tables show the development of gross and net undiscounted outstanding claims relative to the ultimate expected claims for the 10 most recent accident years.

Gross

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Accident year $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

- At end of - accident year 2,023,875 2,106,262 2,179,643 2,118,630 2,235,807 2,314,811 2,529,716 2,693,267 3,019,924 3,914,471

- One year later 2,007,352 2,104,767 2,008,636 2,107,834 2,228,919 2,409,244 2,554,784 2,860,342 3,663,806

- Two years later 1,958,725 2,064,478 1,983,982 2,056,635 2,287,387 2,426,400 2,630,835 3,364,006

- Three years later 1,942,964 2,041,238 1,960,339 2,084,681 2,309,455 2,468,873 2,896,925

- Four years later 1,930,671 2,050,669 1,936,883 2,062,883 2,307,049 2,639,646

- Five years later 1,971,275 2,124,491 1,965,360 2,021,488 2,458,677

- Six years later 1,949,871 2,083,736 1,913,212 2,053,782

- Seven years later 1,895,597 2,060,907 1,928,692

- Eight years later 1,959,062 2,067,560

- Nine years later 1,988,050

Current estimate of cumulative claims cost 1,988,050 2,067,560 1,928,692 2,053,782 2,458,677 2,639,646 2,896,925 3,364,006 3,663,806 3,914,471 26,975,614

Cumulative payments (1,540,745) (1,551,778) (1,388,224) (1,335,772) (1,329,704) (1,199,591 (1,047,997) (860,112) (621,862) (268,508) (11,144,294)

Outstanding claims - undiscounted 447,305 515,782 540,468 718,010 1,128,973 1,440,055 1,848,928 2,503,894 3,041,944 3,645,963 15,831,320

2009 and prior years 3,424,048

Total outstanding claims - undiscounted 19,255,368

Discount (2,305,993)

Claims handling expenses 1,512,290

Risk Margin 1,770,082

Total gross outstanding claims per balance sheet 20,231,747

74 Net

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Accident year $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

- At end of - accident year 1,918,524 1,986,223 2,060,784 1,996,268 2,101,986 2,182,305 2,393,970 2,549,701 2,862,337 3,744,125

- One year later 1,902,261 1,987,432 1,890,925 1,983,244 2,096,658 2,276,919 2,422,012 2,714,346 3,507,927

- Two years later 1,855,485 1,947,150 1,863,242 1,931,906 2,155,537 2,296,213 2,497,064 3,219,348

- Three years later 1,839,386 1,922,210 1,838,918 1,958,459 2,181,619 2,336,053 2,763,530

- Four years later 1,820,899 1,930,712 1,817,542 1,939,257 2,179,877 2,507,738

- Five years later 1,860,879 2,004,565 1,849,943 1,897,791 2,332,567

- Six years later 1,839,273 1,968,034 1,798,897 1,928,290

- Seven years later 1,782,409 1,944,122 1,813,356

- Eight years later 1,842,001 1,947,767

- Nine years later 1,869,619

Current estimate of cumulative claims cost 1,869,619 1,947,767 1,813,356 1,928,290 2,332,567 2,507,738 2,763,530 3,219,348 3,507,927 3,744,125 25,634,266

Cumulative payments (1,426,374) 1,439,196) (1,284,494) (1,227,434) (1,228,759) (1,101,680) (957,127) (767,076) (523,536) (158,748) (10,114,424)

Outstanding claims - undiscounted 443,245 508,571 528,862 700,856 1,103,808 1,406,058 1,806,403 2,452,272 2,984,391 3,585,377 15,519,842

2009 and prior years 3,412,360

Total outstanding claims - undiscounted 18,932,202

Discount (2,298,734)

Claims handling expenses 1,512,290

Risk Margin 1,770,082

Total gross outstanding claims per balance sheet 19,915,840

75 WorkSafe Annual Report 2.3.3 Recoveries revenue

2020 2019 Current Prior Current Prior Year Years Total Year Years Total $000s $000s $000s $000s $000s $000s

Recoveries received 109,763 66,403 176,166 95,447 56,233 151,680 Movement in recoveries receivable 60,585 (57,351) 3,234 62,140 (42,191) 19,949 Recoveries revenue - undiscounted 170,348 9,052 179,400 157,587 14,042 171,629 Discount and discount movement (2,076) 8,399 6,323 (3,803) 14,614 10,811 Recoveries revenue 168,272 17,451 185,723 153,784 28,656 182,440

Recoveries from the Transport Accident Commission (TAC), prior insurers and other third parties are recognised as revenue.

2.3.4 Recoveries receivable

2020 2019 $000s $000s

Expected future recoveries (undiscounted) 323,165 319,932 Discount to present value (7,259) (13,582) Recoveries receivable on incurred claims 315,906 306,350 Current 52,177 50,385 Non-current 263,729 255,965

Recoveries receivable are reported as assets and measured as the present value of the expected future receipts. The actuarial assessment of the recoveries receivable is in a manner similar to the assessment of outstanding claims (see Note 2.3.2). A provision for impairment is established when there is objective evidence that WorkSafe will not be able to collect all the recovery amounts.

76 2.3.5 Actuarial assumptions and methods

WorkSafe provides WorkCover Provision is made for the estimated cost The estimation of outstanding claims insurance which is long‐tail in nature, of claims incurred but not settled at the liabilities is based largely on the meaning that claims may not be reporting date, including the cost of assumption that past developments are reported until many years after the claims incurred but not reported to an appropriate predictor of the future injury and are typically settled more WorkSafe. WorkSafe takes all and involves a variety of actuarial than one year after being reported. reasonable steps to ensure that it has techniques that analyse experience, Significant estimates and judgements appropriate information regarding its trends and other relevant factors. are made by WorkSafe’s independent claims exposures. However, given the Various types of payments made by valuation actuary in respect of uncertainty in establishing claims WorkSafe are grouped into a number of outstanding claims liability amounts provisions, it is likely that the final benefit categories and are analysed disclosed in the financial statements. outcome will prove to be different from separately. It is then followed by These estimates and judgements are the original liability established. calculations that take into account of continually being evaluated and are inflation, discount rates and various based on historical experience, as well assumptions, etc. This is illustrated on as enhancements to actuarial page 78. modelling techniques. The key areas of significant estimates and judgements and the methodologies used to determine key assumptions are set out below.

Various actuarial models are applied to estimate future claim payments and claims handling expense payments (can be a combination of methods depending on the benefit type and extent of development of past incident period). Actuarial modelling techniques include: Modelling • payments per claim incurred model • payments per claim settled model • payments per active claim model • annuity based individual claim model

Prior claims experience is analysed and this provides a basis for assumptions to be used in the actuarial models. Assumptions selected include allowances for uncertainties which may create distortions in the experience including: • changes in WorkSafe processes • changes in the legal environment Assumptions which might accelerate or slow down • the effects of inflation the development and/or recording of • medical and technological paid or incurred claims, compared with developments. the statistics from previous periods Assumptions are selected to produce actuarial projections that are unbiased and central.

The actuarial projections are converted to inflated values, taking into account assumptions about future inflation. Results The inflated estimated liability is discounted to its present value. Discount rates are based on the risk-free rates. This is the net central estimate of the outstanding claims liability. A risk margin is applied to achieve a 75% probability of adequacy. This is the provision.

77 WorkSafe Annual Report Actuarial assumptions

The following assumptions have been made in determining the outstanding claims liabilities:

2020 2019

Average claim frequency (claims per worker) 0.89% 0.86% Average claim size $109,821 $82,992 • Average weekly size $53,984 $34,799 • Average common law size $24,313 $23,217 • Average all other payments size $31,524 $24,976 Expense rate 8.9% 10.4% Discount rate • Weighted average discount rate (0 – 20 years) 1.17% 1.50% • Long‐term discount rate (21+ years) Inflation rate 2.83% 2.86% Inflation rate • Weighted average AWE inflation rate (0 – 20 years) 2.32% 3.37% • Long‐term AWE inflation rate (21+ years) 3.02% 3.02% • Weighted average CPI inflation rate (0 – 20 years) 1.79% 2.14% • Long‐term CPI inflation rate (21+ years) 2.02% 2.02% Average weighted term to settlement from balance date 7.8 years 7.3 years Risk margin 9.5% 8.0%

Process used to determine assumptions

A description of the processes used to The figures shown in the above table Discount rate determine these assumptions is are in current values, i.e. in dollars at the Discount rates are based on observed provided below: respective balance date before the bond yields where these are available Average claim frequency impact of inflation to the time of (the longest duration Australian payment and discounting the resultant Claim frequency for the current Government bond will mature in March payments back to the valuation date. underwriting year is estimated by 2047). Beyond this point, an projecting the number of claims The average claim size is further extrapolation approach is used to blend incurred and dividing this by the number broken down into two key to the long term discount rate of workers for the year. The average components; the costs of weekly assumption. compensation and common law claim frequency is not used directly in Inflation rate compensation (including legal costs) the valuation models but provides a high Short term economic inflation level indicator of claim experience. per claim. This takes into account the number of injured workers expected to assumptions are set by reference to Average claim size access the particular compensation DTF forecasts. The long term CPI The average claim size is in respect of as well as the amount of inflation rate assumption is based on the current underwriting year and takes compensation expected to be paid. the Reserve Bank target. The long into account the expected payments For completeness, the average sizes of term AWE inflation rate assumption has for each payment type (e.g. weekly, other compensations are also shown. been set by maintaining a fixed gap with medical, impairment benefits, common the CPI, based on the historic gap Expense rate law, other), as well as the proportion of between CPI and AWE. total injured workers who receive each The claims handling expense allowance benefit. is calculated as a proportion of total projected claim payments of the scheme at the balance date based on recent historical experience.

78 Average weighted term to An overall risk margin is determined Sensitivity analysis – insurance settlement allowing for the relative uncertainty of contracts the outstanding claims estimate. The average weighted term to WorkSafe’s valuation actuary Uncertainty is analysed for each benefit settlement is calculated separately by conducts sensitivity analyses to type taking into account potential benefit type based on historical quantify the exposure to risk of uncertainties relating to the actuarial settlement patterns. It is an outworking changes in the key underlying models and assumptions, the quality of of the models rather than an explicit variables. The valuations included in the the underlying data used in the models, assumption and represents the average reported results are calculated using the general insurance environment, and inflated and discounted term of certain assumptions about these the impact of legislative reform. payments in the outstanding liability variables as disclosed above. The from the balance date to payment. The estimate of uncertainty is greater movement in any key variable will for long‐tail business when compared impact the financial performance and Risk margin to short‐tail business due to the longer equity of WorkSafe. The table below The risk margin provides for the time until settlement of outstanding describes how a change in each inherent uncertainty in the central claims. The assumptions regarding assumption will affect the insurance estimate of the outstanding claims. uncertainty are applied to the net liabilities and shows an analysis of the central estimates in order to arrive at an sensitivity of the net result and equity to overall provision which is intended to changes in these assumptions. have a 75% probability of adequacy.

Variable Impact of movement in variable

Average weekly size The average weekly size per claim will vary with the number of injured workers receiving weekly compensation and the amount of that compensation. The amount of compensation depends not only on the amount paid per week but more significantly on the durations for which injured workers receive this compensation. Increases or decreases in any of these components will result in a corresponding impact on claims expense. The ± 1% movement shown in the impact table following represents a 1% increase or decrease in all future estimated weekly payments included in the outstanding claims liability.

Average common The average common law size per claim will vary with the number of injured workers law size receiving common law compensation and the amount of that compensation (including legal costs). Increases or decreases in any of these components will result in a corresponding impact on claims expense. The ± 1% movement shown in the impact table following represents a 1% increase or decrease in all future estimated common law payments included in the outstanding claims liability.

Expense rate An estimate for the internal costs of handling claims is included in the outstanding claims liability. An increase or decrease in the expense rate assumption would have a corresponding impact on claims expense.

Discount rates The outstanding claims liability is calculated by reference to expected future payments. These payments are discounted to adjust for the time value of money. An increase or decrease in the assumed discount rate will have an opposing impact on claims expense.

Inflation rates Expected future payments are inflated to take account of expected future cost increases. An increase or decrease in the assumed levels of future inflation would have a corresponding impact on claims expense.

79 WorkSafe Annual Report The impact on net result and equity, had changes in the key variables occurred at the end of the reporting period, is summarised in the table below:

2020 2019 Net Net Result Equity Result Equity $000’s $000’s $000’s $000’s

Recognised amounts per the financial statements (3,021,038) (585,831) (823,124) 2,435,207

Variable Movement Average weekly size +1% (3,079,221) (644,014) (860,522) 2,397,809 -1% (2,962,856) (527,649) (785,726) 2,472,605 Average common law size +1% (3,052,217) (617,010) (852,709) 2,405,622 -1% (2,989,859) (554,652) (793,539) 2,464,792 Expense rate +1% (3,149,891) (714,684) (924,264) 2,334,067 -1% (2,892,185) (456,978) (721,984) 2,536,347 Weighted average discount +0.5% (2,552,021) (116,814) (476,470) 2,781,861 rate (0-20 years) -0.5% (3,523,107) (1,087,900) (1,193,411) 2,064,920 Long-term discount rate (21+years) +0.5% (2,113,315) 321,892 (784,301) 2,474,030 -0.5% (4,061,254) (1,626,047) (865,363) 2,392,968 Weighted average AWE & CPI +0.5% (2,970,644) (535,437) (1,184,809) 2,073,522 inflation rate (0-20 years) -0.5% (3,075,527) (640,320) (480,950) 2,777,381 Long-term AWE & CPI +0.5% (2,923,917) (488,710) (865,940) 2,392,391 inflation rate (21+ years) -0.5% (3,134,601) (699,394) (783,427) 2,474,904

The impact of changes in the key variables on net result and equity represents the impact on the net outstanding claims liability inclusive of risk margin.

2.4 Authorised agent fees

2020 2019 $000s $000s

Authorised agent fees 263,286 248,388 Management agent fees 2,499 2,391 265,785 250,779

Authorised agents operating under an instrument of appointment issued pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013 are paid fees for acting on behalf of WorkSafe in the issuing of WorkCover insurance, collection of premiums and the administration of claims. The agent remuneration includes performance based components. Under section 494 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is empowered to administer the Workers Compensation Act 1958. Management agent fees represent amounts paid for managing liabilities under the 1958 Act, and the payments made to the TAC for the management of WorkSafe claims of injured workers with catastrophic injuries.

80 2.5 Insurance contracts - risk management policies and procedures

The financial condition and operation of Key aspects of the processes in place Concentration of insurance risk WorkSafe is affected by a number of to mitigate risks include: WorkSafe underwrites WorkCover key risks including insurance, interest • the use of sophisticated insurance for Victorian employers. The rate, credit, market, liquidity, financial management information systems, employers are diversified by sector, and operational risks. WorkSafe’s which provide reliable and industry, size and geographic location. policies and procedures in respect of up‐to‐date data on the risks to which Concentration of insurance risk managing these risks are set out below. the business is exposed at any point principally arises from major sites or in time Objectives in managing risks centres of employment such as the • the use of detailed internal arising from insurance contracts Melbourne CBD. Such issues are monitoring tools which link actuarial and policies mitigating those considered when determining scheme valuation projections with the risks financing strategies. management information systems WorkSafe has an objective to manage to monitor claim patterns Interest rate risk insurance risk thus reducing the • adherence to reliable procedures for Assets and liabilities arising from volatility of insurance premiums and pricing risk insurance contracts entered into are performance from insurance • an investment allocation strategy directly exposed to interest rate risk. operations. In addition to the inherent which seeks to optimise returns Changes in interest rates affect the uncertainty of insurance risk, which can within the balance sheet risk valuation of WorkSafe’s assets and lead to significant variability in the loss parameters adopted by WorkSafe liabilities. experience, the net result for WorkSafe Terms and conditions of Credit risk is significantly affected by short‐term market and economic factors external insurance business Assets and liabilities arising from to the organisation as explained in The terms and conditions of the insurance contracts are stated in the Note 3.4. WorkCover insurance scheme balance sheet at the amounts that best administered by WorkSafe were represent the maximum credit risk WorkSafe has developed, implemented established under the exposure at the reporting date. There and maintained a sound and prudent Accident and have are no significant concentrations of risk management strategy that Compensation Act 1985 continued operation under the credit risk. encompasses all aspects of its operations. Workplace Injury Rehabilitation and Compensation Act 2013. Cover is for The strategy sets out WorkSafe’s annual periods ending 30 June each policies and procedures, processes year. The terms and conditions of the and controls in relation to the scheme are the same for all insured management of likely financial and employers non‐financial risks.

81 WorkSafe Annual Report Investment Report 3 Financial portfolio and performance

Introduction to this section Structure This section includes the investments 3.1 Investment income and that are held by WorkSafe, as well as investment expenses the associated returns outlined in 3.2 Investments Section 2, that are utilised to fund its 3.3 Cash and cash equivalents functions. 3.4 Explanation of volatility of financial results

3.1 Investment income and investment expenses

2020 2019 Note $000s $000s

Underwriting expenses Dividends and distributions 1,125,118 1,159,360 Interest 31,373 37,846

Change in fair value of investments at fair value through the comprehensive operating statement (942,124) 114,422

Total investment income 214,367 1,311,628 Investment expenses (47,846) (51,280) Net investment income 166,521 1,260,348

Change in fair value of investments is Interest represents interest earned on the difference between the fair value of deposits and money market securities, the investments at 30 June 2019 and together with coupon interest. the cost of acquisition (for investments Investment expenses are fees paid to purchased during the year), and sales the Victorian Funds Management proceeds or their fair value at 30 June Corporation (VFMC) under the Client 2020. Funds Management Service Agreement Dividend income is recognised when and other sundry professional fees WorkSafe’s right to receive payment incurred by WorkSafe in relation to has been established, whilst interest management of the investment portfolio. revenue is recognised on an accrual The net return on the investment basis. Trust distribution income is portfolio for the year was 0.80% (2019: recognised when the market prices are 7.59%). quoted ex-distribution for listed trusts. Unlisted trust distribution income is recognised when the trustee declares distributions.

82 3.2 Investments

Summary of investments integral Investment performance, including to general insurance activities comparisons to market benchmarks, is carried at fair value through the reported to the WorkSafe Board. The comprehensive operating Board’s standing Risk and Audit statement Committees review strategic financial risks and balance sheet matters, WorkSafe’s investment activity is including the examination of investment undertaken pursuant to the Workplace objectives and portfolio performance. Injury Rehabilitation and Compensation Each six months, the VFMC Board Act 2013, the Borrowing and Investment certifies that the investment portfolio Powers Act 1987 and formal approvals has been managed in accordance with issued by the Treasurer of Victoria. the approved IRMP and WorkSafe’s WorkSafe’s investment portfolio is investment objectives. A certification is managed by the VFMC in accordance also provided to the DTF annually. with the Prudential Standard covering The investment portfolio consists of a Victorian insurance agencies. All range of asset exposures including: WorkSafe investments must be placed cash and nominal bonds to cover with the VFMC. short‐term risk and liquidity needs; WorkSafe’s responsibility is to set inflation linked assets that more closely investment objectives for the VFMC match WorkSafe’s liability after considering such matters as characteristics; equities to provide for WorkSafe’s capital needs, pricing and long‐term growth; and other assets that the Government’s risk preferences. The provide diversification benefits across WorkSafe Board is not responsible for the general portfolio. the management or prudential As a part of the VFMC’s investment supervision of the investments – the strategy, contracts are entered into management responsibility rests with which require WorkSafe to contribute the VFMC and the prudential additional future capital. These future supervision responsibility rests with the investment commitments are not Department of Treasury and Finance recognised in the balance sheet and (DTF). amount to $1,541.4 million (2019: The investment approach that is $1,947.0 million). determined by the VFMC for WorkSafe WorkSafe’s investments at the is documented in a detailed Investment reporting date comprises: Risk Management Plan (IRMP) which is approved by the Treasurer. The IRMP is prepared by the VFMC and addresses issues concerning strategy, portfolio construction, benchmarks and risk management.

83 WorkSafe Annual Report 2020 2019 Note $000s $000s

Investment assets Cash and cash equivalents 2,134,721 1,420,380 Cash collateral and margin accounts 18,171 9,060 Receivables 1,618,375 1,039,701 Derivative assets 678,807 236,494 Equity and managed investment schemes 13,780,362 15,191,493 Debt securities 100,055 221,025 18,330,491 18,118,153

Investment related liabilities Cash collateral and margin accounts (228,649) (154,438) Payables (413,861) (119,084) Derivative liabilities (116,545) (62,957) (759,055) (336,479) 17,571,436 17,781,674

Current Investment assets 4,370,885 2,578,090 Investment related liabilities (759,055) (336,479) 3,611,830 2,241,611 Non-current Investment assets 13,959,606 15,540,063 13,959,606 15,540,063 17,571,436 17,781,674

WorkSafe has determined that all The details of categories of financial Investments are derecognised when investments are held to back instruments and the methods and the rights to receive future cash flows WorkCover insurance liabilities. assumptions used to estimate fair value from the assets have expired, or have Investments are designated at fair value are included in Note 7.3. been transferred, and WorkSafe has through the comprehensive operating Investments that are due to mature, transferred substantially all the risks statement on the basis that the expire or be realised within 12 months and rewards of ownership. investments are managed as a portfolio of reporting date are classified as The details on how WorkSafe manages based on their fair values, and have current investments for the purposes of its exposure to financial risks are their performance evaluated in classification in the balance sheet. included in Note 7.1. accordance with documented risk While this classification policy may management and investment result in a reported working capital strategies. Initial recognition is at cost in deficit, included in non‐current the balance sheet, with attributable investments is a large proportion of transaction costs expensed as liquid securities which the VFMC can incurred. Subsequent measurement is use to ensure sufficient liquidity is at fair value with any resultant realised available to meet WorkSafe’s operating and unrealised gains or losses requirements. recognised in the comprehensive operating statement.

84 3.3 Cash and cash equivalents

Reconciliation of cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents include cash in hand and highly liquid investments that have short periods to maturity and are readily convertible to cash at the option of WorkSafe. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement are reconciled to the related items in the balance sheet as follows:

2020 2019 $000s $000s Cash in hand and at bank 77,022 48,254 Investment - Cash and cash equivalents 1 2,134,721 1,420,380 2,211,743 1,468,634

Note:  Included in cash and cash equivalents at 30 June 2020 is the net amount of $226.8 million (2019: $151.2 million), representing cash received as collateral and cash held with brokers against future repayment obligations under derivative contracts.

2020 2019 $000s $000s

Reconciliation of net result to net cash flows from operating activities Net result of the year (3,021,038) (823,124)

Change in fair value of investments at fair value through the comprehensive operating statement, net of reinvested dividends and distributions 263,800 (911,082)

Depreciation on property, plant and equipment 7,230 6,966 Amortisation on intangibles 12,200 12,792 (Profit) loss on disposal of plant and equipment 1 (4) Depreciation Right-of-use assets 17,367 - Interest expense on lease liabilities 3,664 - Right-of-use benefit (16,438) - Movements in provisions due to changes in discount rates (512) 368

Changes in assets and liabilities: (Increase) decrease in premiums receivable 49,547 (26,877) (Increase) decrease in investment income receivable 7,101 2,516 (Increase) decrease in recoveries receivable (9,556) (30,760) (Increase) decrease in sundry receivable 2,347 (2,536) (Increase) decrease in prepayments 981 57 (Increase) decrease in net deferred tax assets (1,314,662) (377,260) (Decrease) increase in premium creditors 101,155 5,398 (Decrease) increase in other payables (11,119) (13,691) (Decrease) increase in outstanding claims 4,051,037 2,483,481 (Decrease) increase in tax liabilities - (31,632) (Decrease) increase in provisions 21,813 37,153 Total adjustments 3,185,957 1,154,889 Net cash flows from operating activities 164,918 331,765

85 WorkSafe Annual Report 3.4 Explanation of volatility of financial results

This note provides additional analysis of the result before income tax of -$4,335.7 million (2019: ‐$1,209.34 million). Given the long‐term nature of the WorkSafe scheme both from investment and outstanding claims perspectives, the net result for WorkSafe is significantly affected by short‐term market and economic factors external to the organisation. External factors contribute to the difference between actual returns and the long‐term estimated returns established by management, and also include major changes in economic assumptions and legislative changes. External factors can cause significant variations in reported results from year to year as illustrated below. Accordingly for internal management reporting purposes, WorkSafe monitors and measures its financial performance based on performance from insurance operations (PFIO) without the impact of external factors. This approach is considered a more appropriate indicator for measuring financial performance and is adopted for reporting to the Victorian State Government.

The impact of external factors on the financial result is explained below:

2020 2019 Note $000s $000s

Impact on result from internal factors Performance from insurance operations (3,542,632) 67,979

Difference between actual investment returns and long-term expected returns (1,065,011) 109,372 Changes in inflation assumptions and discount rates 304,369 (1,372,477) Legislative changes (32,426) (14,217) Result before income tax (4,335,700) (1,209,343)

Due to the impact of COVID‐19 on A review of the risk margin used to value Premium revenue was also impacted by global financial markets since March outstanding claims was also undertaken, the COVID-19 pandemic, as rateable 2020, the actual investment return increasing from 8% to 9.5%. This remuneration levels dropped across was lower than the expected contributed $400 million to the Victoria (including the deeming of long‐term rate of return. The net return movement for the 12-month period. COVID-19 government benefit payments (after fees) on the investment portfolio Discount rates used to value the liability at as non-rateable) and the deterioration of for the year was 0.80% (2019: 7.59%), present values have also been impacted economic conditions slowed down compared to the long‐term estimated by the volatility caused by COVID-19, recovery of outstanding premium return established by management of falling by 33 basis points during the year, amounts from employers. Accordingly, 7.00% (2019: 6.95%) per annum but this was more than offset by the WorkSafe provided for an increase in based on its investment strategy. impact of falling inflation rates used to confirmed premium creditors of $93.3 There was an increase in the net value the liability, which declined by 105 million (note 2.2.3), whereas in the outstanding claims liability of $4,051 basis points for Average Weekly Earnings previous year a premium receivable of million since June 2019 as a result of a and 34 basis points for Consumer Price $62.9 million was booked, representing significant reassessment by the Index. The net impact of these economic an unfavourable movement of $156.2 independent actuaries across nearly factors improved the net result by $304.4 million. all benefit types, with the greatest rise million. of $2.6 billion coming in weekly benefits (both mental and non-mental injuries).

86 Cost of Report 4 Financial operations

Introduction to this section Structure This section provides details of other 4.1 Other income non-insurance income and cost 4.2 Other operating costs earned/incurred by WorkSafe in its 4.3 Employee superannuation day-to-day operating activities. 4.4 Employee related provisions

4.1 Other income

2020 2019 $000s $000s

Self-insurer receipts 15,284 14,375 Health & safety licensing income 6,964 6,652 Fines and penalties 174 947 Asset rental income - ACCS 208 209 Property rental income - TAC 511 - Sundry receipts 651 1,122 23,792 23,305

Fines and penalties income is recognised upon receipt of the payment. All other income is recognised when earned. WorkSafe receives rental income from Accident Compensation Conciliation Service (ACCS) for the use of its plant and equipment and Transport Accident Commission (TAC) for the use of its leased property.

87 WorkSafe Annual Report 4.2 Other operating costs

2020 2019 $000s $000s

Employee and related 1 206,598 171,083 Information technology 2 68,826 36,363 Professional services 3 90,805 85,850 Marketing and communication 17,860 19,429 Occupancy and utilities 4 8,120 23,787 Research and external funding 5 17,750 33,638 Bad and doubtful debts written (back) off 41 81 Movements in provisions due to changes in discount rates (512) 368 Depreciation 7,230 6,966 Amortisation 12,200 12,792 Depreciation - Right-of-use assets 17,367 - Interest expense on lease liabilities 3,664 - Loss on disposal of plant and equipment 1 (4) Write-down of intangibles - - Other expenses 16,619 20,656 466,569 411,009

1. Salaries and wages have increased due to the additional 40 new inspectors recruited, as part of the increased focus on enforcement, and resourcing required to deliver the suite of government strategic priorities (approximately 70 sta ). 2. Information technology costs have risen primarily through the acceleration of work in Strategy and other projects which have significant software and technical requirements. Additionally, the increase in sta numbers has resulted in higher demand for IT resources. 3. Expenditure relating to dangerous goods site clean-up was $55.0 million (2019: $56.0 million). This expenditure is predominantly included within professional services expenses. 4. In prior years, the full cost of property leases went through Occupancy and utilities costs. Following the introduction of AASB16, operating costs are now split between interest and lease liability, with the corresponding right-of-use assets depreciated. Occupancy and utilities costs now only contain the variable component of property leases (outgoings). $4.68 million in variable costs has been incurred as at 30 June 2020. 5. A grant of $20 million was paid to the Department of Health and Human Services to establish the Violence Prevention Fund in the financial year ending 30 June 2019.

4.3 Employee superannuation Superannuation is provided for employees via the following schemes:

2020 2019 $000s $000s

Defined contribution plans VicSuper 6,320 5,776 Other 7,399 5,992 13,719 11,768 Defined benefit plans Emergency Services Superannuation Scheme 541 638 14,260 12,406

WorkSafe does not recognise any defined benefit liability under the Emergency Services Superannuation Scheme, as WorkSafe has no legal or constructive obligation to pay future benefits relating to its employees. WorkSafe’s only obligation is to pay superannuation contributions as they fall due and this is expensed when incurred. The Department of Treasury and Finance discloses the State’s defined benefit liabilities in its financial report. The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plan represents the contributions made by WorkSafe to the superannuation plans in respect of the current services of current WorkSafe employees. Employee superannuation excludes contributions paid under salary sacrifice arrangements. At 30 June 2020, contributions outstanding were $0.7 million (2019: $1.1 million). 88 4.4 Employee related provisions

2020 2019 $000s $000s

Current Annual leave Unconditional and expected to be settled wholly within 12 months 5,926 4,224 Unconditional and expected to be settled wholly after 12 months 4,114 4,366 10,040 8,590 Long service leave Unconditional and expected to be settled wholly within 12 months 4,310 3,569 Unconditional and expected to be settled wholly after 12 months 13,316 13,293 17,626 16,862 Termination benefits Unconditional and expected to be settled wholly within 12 months - - 27,666 25,452 On-costs Unconditional and expected to be settled wholly within 12 months 1,600 1,088 Unconditional and expected to be settled wholly after 12 months 2,767 2,754 4,637 3,842 Total current employee benefit provisions 32,033 29,294 Non-current Long service leave 4,184 3,280 On-costs 669 524 Total non-current employee benefit provisions 4,853 3,804 Total employee benefit provisions 36,886 33,098

2020 $000s

Reconciliation of movement in on-cost provisions Opening balance 4,366 Additional provisions recognised 2,658 Reductions arising from payments (1,911) Unwinding of discount and effect of changes in discount rates (76) Closing balance 5,036

89 WorkSafe Annual Report Wages, salaries and annual leave Termination benefits Liabilities for wages, salaries and Termination benefits are payable when annual leave are recognised in payables employment is terminated before the and employee related provisions as normal retirement date, or when an current liabilities, because WorkSafe employee decides to accept an offer of does not have an unconditional right to benefits in exchange for the termination defer settlements of these liabilities. of employment. WorkSafe recognises Depending on the expectation of the termination benefits when it is timing of settlement, liabilities for demonstrably committed to either wages, salaries and annual leave are terminating the employment of current measured at: employees according to a detailed • undiscounted value – if WorkSafe formal plan without possibility of expects to wholly settle within 12 withdrawal or providing termination months benefits as a result of an offer made to • present value – if WorkSafe does encourage voluntary redundancy. not expect to wholly settle within 12 Benefits falling due more than 12 months months after the end of the reporting period are discounted to present value. Long service leave On‐costs Unconditional long service leave (LSL) is disclosed as a current liability, even Provisions for superannuation, payroll where WorkSafe does not expect to tax and WorkCover insurance premium settle the liability within 12 months are recognised separately from the because it will not have the employee related provisions. unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of this current LSL liability are measured at: • undiscounted value – if WorkSafe expects to wholly settle within 12 months • present value – if WorkSafe does not expect to wholly settle within 12 months. Conditional LSL is disclosed as a non‐current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non‐current LSL liability is measured at present value.

.

90 Other assets Report 5 Financial and liabilities

Introduction to this section Structure This section includes other assets and 5.1 Other receivables liabilities that are employed by 5.2 Property, plant and equipment WorkSafe to support its day-to-day 5.3 Right-of-use assets and operating activities. lease liabilities 5.4 Intangibles 5.5 Other payables 5.6 Other provisions 5.7 Commitments and contingencies

5.1 Other receivables

2020 2019 $000s $000s

Contractual Sundry receivables 6,549 8,896 Provision for impairment (125) (142) 6,424 8,754

The average credit period for sundry WorkSafe has grouped contractual receivables is 28 days. Included within receivables on shared credit risk sundry receivables at 30 June 2020 are characteristics and days past due and $1.8 million (2019: $3.7 million) of past selected the expected credit loss rate due receivables. based on past history, existing market Worksafe applies the AASB 9 simplified conditions and forward looking estimates approach for all contractual receivables at the end of the financial year. to measure expected credit losses WorkSafe does not charge interest on using a lifetime expected credit loss overdue receivables nor hold collateral allowance based on the assumptions over these balances. The average age of about risk of default and expected loss those receivables that are past due but rates. not impaired was 61 days (2019: 90 days).

2020 2019 $000s $000s

Movement in provision for impairment Balance at beginning of the year (142) (61) Increase in allowance recognised in the comprehensive operating statement 17 (81) Balance at end of the year (125) (142)

91 WorkSafe Annual Report 5.2 Property, plant and equipment

2020 2019 $000s $000s

Gross carrying amounts and accumulated depreciation Freehold land and buildings 4,867 4,853 Accumulated depreciation (573) (387) 4,294 4,466 Leasehold improvements 42,603 64,145 Accumulated depreciation (13,987) (33,933) 28,616 30,212 Computer equipment 9,083 20,156 Accumulated depreciation (5,950) (16,329) 3,133 3,827 Furniture and equipment 9,077 16,585 Accumulated depreciation (4,443) (10,924) 4,634 5,661 Total property, plant and equipment 65,630 105,739 Total accumulated depreciation (24,953) (61,573) Balance at end of the year, at fair value 40,676 44,166

Movements in carrying amounts

Freehold Furniture Land and Leasehold Computer and Buildings Improvements Equipment equipment Total $000s $000s $000s $000s $000s

30 June 2020 Balance at beginning of the year 4,466 30,212 3,827 5,661 44,166 Additions 14 1,605 1,651 508 3,778 Disposals/reclassifications - (37) - (1) (38) Depreciation expense (186) (3,163) (2,346) (1,535) (7,230) Balance at end of the year 4,294 28,617 3,132 4,633 40,676

30 June 2019 Balance at beginning of the year 4,652 27,385 5,498 4,964 42,499 Additions - 5,513 1,087 2,138 8,738 Disposals/reclassifications - (29) - (76) (105) Depreciation expense (186) (2,657) (2,758) (1,365) (6,966) Balance at end of the year 4,466 30,212 3,827 5,661 44,166

92 Property, plant and equipment are Impairment of assets measured initially at cost and Assets are assessed annually for subsequently at fair value less indications of impairment except for: accumulated depreciation and • financial instrument assets impairment. Fair value is determined • deferred tax assets. based on management’s assessment If there is an indication of impairment, and for property, external valuations the assets concerned are tested as to every five years. whether their carrying value exceeds The cost of leasehold improvements is their recoverable amount. Where an capitalised as an asset and depreciated asset’s carrying value exceeds its over the remaining term of the lease. recoverable amount, the difference is This includes the fair value of any written‐ off by a charge to the dismantling, removal or restoration comprehensive operating statement. costs, where an obligation existed at The recoverable amount is measured at the time of entering the contract for the the higher of depreciated replacement premises to be returned to their original cost and fair value less costs to sell. It is state upon vacation of the premises. deemed that, in the event of a loss of an Depreciation asset, the future economic benefits Depreciation is provided on a arising from the use of the asset will be straight‐line basis on plant and replaced unless a specific decision to equipment to write off those assets the contrary has been made. over their estimated useful lives to WorkSafe to the assets’ estimated residual value. The depreciation rate applied to computer equipment is 33.33% (2019: 33.33%) and the rate applied to furniture and equipment is 20% (2019: 20%). Leasehold improvements to buildings are written‐off over their estimated useful lives to WorkSafe or the remaining lease term, whichever is the lesser, using the straight‐line method. The remaining lease terms range from 1 to 13 years (2019: 1 to 14 years). The estimated useful lives, residual values and depreciation methods are reviewed at the year end reporting date and adjusted if appropriate. Freehold land is not depreciated. Buildings have an estimated useful life of 40 years. Any gain or loss on disposal is recognised in the comprehensive operating statement

93 WorkSafe Annual Report 5.3 Right-of-use assets and lease liabilities

On adoption of AASB 16 Leases, The weighted average incremental WorkSafe recognised lease liabilities in borrowing rate applied to lease liabilities relation to leases which had previously on 1 July 2019 was 2.82%. been classified as ‘operating leases’ Right‐of‐use assets were measured at under the principles of AASB 17 Leases. the amount equal to the lease liability, These liabilities were measured at the adjusted by the amount of any prepaid or present value of the remaining lease accrued lease payments related to that payments, discounted using the lease recognised in the balance sheet as incremental borrowing rate as of 30 at 30 June 2019. Lease incentives of June 2019. $3.7 million were applied as part of the initial adoption entries. The opening balance sheet as at 1 July 2019 includes the following amounts relating to leases:

2019 $000s

Measurement of lease liability Operating lease commitments disclosed as at 30 June 2019 (Note 5.7) 201,886 Discounted using incremental borrowing rate as of the date of initial application (26,983) Adjustments relating to variable payments (42,812) Lease liability recognised as at 1 July 2019 132,091

2020 2019 $000s $000s

Right-of-use assets Buildings 114,314 - Equipment - - Vehicles 5,518 - 119,833 - Lease liabilities Buildings 121,532 - Equipment - - Vehicles 5,504 - 127,036 - Current 8,380 - Non-current 118,656 - 127,036 -

On initial adoption of AASB16, right-of-use assets of $128.4 million were taken up. Additions for new leases and extensions during the 12 months to 30 June 2020 were a further $9.1 million.

94 Freehold Land and Motor Computer Buildings Vehicles Equipment Total 30 June 2020 $000s $000s $000s $000s

Movements in ROU asset carrying amounts

Balance at beginning of the year 121,403 6,638 321 128,362 Additions 6,062 2,903 117 9,082 Disposals/reclassifications - (244) (244) Depreciation expense (13,151) (4,022) (194) (17,367) Balance at end of the year 114,314 5,519 - 119,833

On initial adoption of AASB16, By their nature, variable lease Whilst some right-of-use leases right-of-use assets of $128.4 million payments will fluctuate with contain extension options and market were taken up. Additions for new consumption patterns, the effects of review clauses, in the event that leases and extensions during the 12 inflation and other factors all of which WorkSafe exercises its option to months to 30 June 2020 were a are difficult to estimate. WorkSafe has renew, none are due for renewal within further $9.1 million. used the most recent actual data the next 12 months that are material in Future variable lease payments are available to estimate its future cash nature. WorkSafe does not have an excluded from right‐of‐use liabilities flow commitments. option to purchase the leased assets but form part of commitments and at the expiry of the lease period. contingencies in note 5.7.

2020 2019 $000s $000s

Maturity Analysis - undiscounted contractual cash flow Less than one year 16,605 - One to five years 54,358 - More than 5 years 83,482 - Total undiscounted contractual cash flows 154,445 Lease liabilities recognised in the statement of financial position 127,036 -

Total cash outflow for leases during the period ended 30 June 2020 was $16.4 million. The comprehensive operating statement includes the following amounts relating to leases:

2020 2019 $000s $000s Depreciation charge of right-of-use assets Buildings 13,151 - Equipment 194 - Vehicles 4,022 - 17,367 - Interest expense 3,664 - Expense relating to variable lease payments not included in lease liabilities 4,684 -

95 WorkSafe Annual Report 5.4 Intangibles

2020 2019 $000s $000s

Computer software Cost Balance at beginning of the period 217,565 163,603 Additions 65,835 53,962 Balance at end of the year 283,400 217,565 Accumulated amortisation and impairment losses Balance at beginning of the year (136,273) (123,481) Amortisation expense (12,200) (12,792) Balance at end of the year (148,473) (136,273) Carrying amounts Balance at beginning of the year 81,292 40,122 Balance at end of the year 134,927 81,292

Intangible assets represent identifiable All intangible assets of WorkSafe have Included in intangibles is the cost of non‐monetary assets without physical definite useful lives. The useful lives software development in progress of substance. Intangible assets are range from 2 to 10 years (2019: 2 to 10 $114.9 million (2019: $53.7 million). No recognised at cost. Costs incurred years). amortisation has been allocated to subsequent to initial recognition are Internally‐generated intangible assets software development in progress as the capitalised when it is expected that representing internally developed related software was not yet available for additional future economic benefits will software are recognised only from the use at the reporting date. flow to WorkSafe. point that it is probable that the expected Amortisation is allocated to intangible future economic benefits attributable to assets with finite useful lives on a the asset will flow to WorkSafe, the cost systematic basis over the assets’ useful of the item can be measured reliably and lives. The amortisation period and the the asset is ready‐for‐use as intended by amortisation method for intangible management. Where no internally assets with a finite useful life are generated intangible asset can be reviewed at least at each year end. In recognised, development expenditure is addition an assessment is made at expensed in the period as incurred. each year end reporting date to Internally‐generated intangible assets determine whether there are indicators are stated at cost less accumulated that the intangible assets concerned amortisation and impairment, and are are impaired. If so, the assets amortised on a straight‐line basis over concerned are tested as to whether their useful lives from the date the assets their carrying value exceeds their are available for use. Where incurred recoverable amount. impairment losses are included in the comprehensive operating statement.

96 5.5 Other payables

2020 2019 $000s $000s

Contractual Other payables for supplies and service 115,501 133,500 Statutory Accumulated amortisation and impairment losses Goods & services and fringe benefits taxes payable 1,697 1,328 117,198 134,828

The normal settlement terms of Goods and services tax WorkSafe’s payables are 30 days, Income, expenses and assets are however, in line with the State recognised net of the amount of Government‘s response to the associated goods and services tax COVID‐19 pandemic, payable terms (GST), unless the GST incurred is not were reduced to five days from March recoverable from the Australian Taxation 2020 . Office (ATO). In these circumstances the Payables consist of: GST is recognised as part of the cost of • contractual payables, such as acquisition of the asset or as part of the accounts payable, which represent expense. liabilities for goods and services Receivables and payables are stated provided to WorkSafe prior to the inclusive of the amount of GST end of the financial year that are receivable or payable. The net amount of unpaid, and arise when WorkSafe GST recoverable from, or payable to, the becomes obliged to make future ATO is included as part of the payments in respect of the purchase receivables or payables in the balance of those goods and services sheet. • statutory payables, such as goods Cash flows are presented on a gross and services tax and fringe benefits basis. The GST components of cash tax payables. flows arising from investing and financing Contractual payables are classified as activities, which is recoverable from, or financial instruments and measured at payable to, the ATO are classified as amortised cost. Statutory payables are operating cash flows. recognised and measured similarly to contractual payables, but are not classified as financial instruments because they do not arise from a contract.

97 WorkSafe Annual Report 5.6 Other provisions

Provision for dangerous Leasehold goods site restoration clean up costs provision Total $000s $000s $000s

Balance at beginning of the year 41,000 878 41,878 Additional provisions recognised 55,041 37 55,004 Reductions resulting from payments (39,463) (95) (39,558) Unwinding of discount and effect of changes in discount rates - 58 58 Balance at end of the year 56,578 804 57,382 Current 56,578 429 57,007 Non-current 375 375 56,578 804 57,382

The provision for clean‐up costs The amount recognised as a provision is represents the best estimate of the the best estimate of the consideration consideration required to clean up required to settle the present obligation several dangerous good sites. Under at the reporting date, taking into account the Dangerous Goods Act 1985, the risks and uncertainties surrounding WorkSafe is empowered to take actions the obligation. Where a provision is that it considers necessary to safely measured using the cash flows remove dangerous goods that pose an estimated to settle the present immediate danger. In December 2018, obligation, its carrying amount is the WorkSafe identified 13 sites containing present value of those cash flows, using dangerous chemicals and has a discount rate that reflects the time commenced work to clean up these value of money and risks specific to the sites. WorkSafe will also commence provision. work on the clean‐up of the West Footscray site.

98 5.7 Commitments and contingencies

2020 2019 $000s $000s

Operating lease commitments Future minimum lease payments under non-cancellable operating lease arrangements - 20,177 Due later than one year and less than five years - 84,716 Due later than five years - 117,182 Total operating lease commitments (inclusive of GST) - 222,075 GST recoverable from the ATO - (20,189) Total operating lease commitments (exclusive of GST) - 201,886

Operating leases relate to leasehold premises, vehicles and office equipment with lease terms between 1 and 14 years (2019: 1 and 15 years). Operating lease payments that are fixed in nature are now reported under AASB 16 Leases as part of note 5.3 (see also note 1 for a more detailed description of how this new standard works). The variable portion of the future lease payments is captured as an operating lease commitment and is an estimate based on actual costs at balance date, which will be charged as an expense in the comprehensive operating statement over the lease term as they are incurred. The table above is an aggregate to both the fixed and variable future lease payments. Some operating lease contracts contain market review clauses in the event that WorkSafe exercises its option to renew. WorkSafe does not have an option to purchase the leased assets at the expiry of the lease periods.

2020 2019 Note $000s $000s

Other operating commitments Amounts payable under non-cancellable other operational contractual arrangements Due within one year 29,864 10,653 Due later than one year and less than five years 32,043 12,558 Total other operating commitments (inclusive of GST) 61,907 23,211 GST recoverable from the ATO (5,628) (2,110) Total other operating commitments (exclusive of GST) 56,279 21,101

Other operating commitments include those operating and capital commitments arising from non‐cancellable contractual sources and are disclosed at their nominal value, inclusive of GST. Contingent assets and contingent liabilities WorkSafe had no contingent assets (2019: nil) or contingent liabilities at the reporting date (2019: Geelong relocation benefits of $10 million and spinal fusion medical panel ruling of $30 million to $100 million). The matter raised at 30 June 2019 of damages relating to spinal fusion surgery was settled in the period to 31 December 2019 and now forms part of the claims liability. No further contingent liability exists in respect of this matter. Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note and, if quantifiable, are measured at nominal value, inclusive of GST.

99 WorkSafe Annual Report Taxation and Report 6 Financial transactions with the state

Introduction to this section Structure WorkSafe is required to pay income tax 6.1 Income tax equivalent under the National Tax 6.2 Deferred tax Equivalent Regime in accordance with 6.3 Dividends the Section 88 (3D) of the State Owned Enterprise Act 1992. This section provides tax-related information and transactions with the state.

6.1 Income tax

2020 2019 $000s $000s

Current income tax

Current tax income (expense) 1,086,243 408,649 Adjustments in respect of current income tax of prior years 1,111 32 Deferred income tax Relating to origination and reversal of temporary differences 227,308 (22,462) Tax income (expense) reported in the comprehensive operating statement 1,314,662 386,219

The tax expenses or income represents the tax payable on the current year’s taxable income or tax loss based on the prevailing income tax rate, adjusted for changes in deferred tax assets and liabilities.

2020 2019 $000s $000s

Reconciliation of accounting result to tax income (expense) Result before income tax (4,335,700) (1,209,343) At the statutory income tax rate of 30% (2018: 30%) 1,300,710 362,802 Adjustments in respect of current income tax of prior years 1,111 32 Franking credits and withholding tax on dividends received 21,665 38,389 Imputation gross-up on dividends received (8,791) (14,980) Other (33) (24) Tax expense reported in the comprehensive operating statement 1,314,662 386,219

100 2020 2019 $000s $000s

Tax liabilities Balance at beginning of the year - (31,632) Income tax for current year - - Income tax paid - 22,674 Income tax of prior years - 8,958 Balance at end of the year - -

6.2 Deferred tax

2020 2019 $000s $000s

Deferred tax assets Claims handling expense included in outstanding claims 497,195 455,271 Provisions not currently deductible 44,361 34,663 Accruals not currently deductible 1,998 2,644 Right of use assets and lease liabilities 1,326 - Unutilised tax losses 1,488,386 408,648 2,033,266 901,226 Deferred tax liabilities Unrealised gains on investments (215,047) (400,906) Difference in depreciation of plant and equipment and amortisation of intangibles (7,636) (4,399) (222,683) (405,305) Net deferred tax assets 1,810,583 495,921

Deferred tax is accounted for in respect Deferred tax assets are recognised to The carrying amount of deferred tax of temporary differences between the the extent that it is probable that assets is reviewed at each reporting carrying amount of assets and liabilities sufficient taxable amounts will be date and reduced to the extent that it is in the financial statements for financial available against which deductible no longer probable that sufficient reporting purposes and the amounts temporary differences or unused tax taxable profit will be available to allow all used for taxation purposes. Deferred losses and tax off‐sets can be utilised. or part of the deferred tax asset to be tax assets and liabilities are recognised However, deferred tax assets and utilised. for temporary differences at the tax liabilities are not recognised if the Deferred tax assets and liabilities are rates that are expected to apply when temporary differences giving rise to off‐set as WorkSafe settles its current the assets and liabilities are realised or them arise from the initial recognition of tax assets and liabilities on a net basis. settled, based on tax rates that have assets and liabilities which affect been enacted or substantially enacted neither taxable income nor accounting by the reporting date. result.

101 WorkSafe Annual Report 6.3 Dividends

Pursuant to section 516 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is required to pay to the State Government a dividend determined by the Treasurer. In determining the dividend policy applicable to WorkSafe, the Treasurer must have regard to the solvency margin determined to maintain the long‐term financial viability of the scheme. An obligation to pay a dividend only arises after a formal determination is made by the Treasurer following consultation between WorkSafe, the Minister and the Treasurer. No dividends were paid during the year (2019: nil).

102 Financial Report 7 Financial instruments and valuation judgements

Introduction to this section Structure This section sets out WorkSafe’s 7.1 Financial instruments financial instrument specific 7.2 Off-setting of financial assets information, including exposures to and financial liabilities financial risks, and disclosures of those 7.3 Fair values items that require a higher level of judgement to be applied in their fair value determination.

7.1 Financial instruments

WorkSafe’s financial assets and Agreements also contain provisions for liabilities are exposed to a variety of the agreements to be reviewed or financial risks: credit risk, liquidity risk rescinded upon the occurrence of and market risk. specified events relating to counterparty credit and liquidity. Credit risk Credit risk refers to the risk that an The following analysis excludes trade issuer or a counterparty will default on receivables and non‐trade receivables. its contractual obligations resulting in The details of trade receivables that are financial loss to WorkSafe. The past their due dates are included in Victorian Funds Management Note 2.2.2. Corporation (VFMC) manages WorkSafe’s maximum exposure to counterparty credit risk by conducting credit risk at the reporting date in due diligence on counterparties and will relation to each class of financial asset only deal with counterparties of high is the carrying amount of those assets quality with substantial balance sheets. as indicated in the balance sheet.

103 WorkSafe Annual Report Concentrations of credit risk The VFMC manages credit risk by The table below provides information diversifying the exposure amounts with regarding the credit risk exposure of particular issuers and counterparties WorkSafe by classifying assets and operating in liquid markets. according to the VFMC’s credit ratings WorkSafe does not have any significant of counterparties. concentration of credit risk on an industry, regional or country basis. The investment strategy for WorkSafe is to ensure a diversified portfolio.

Non- Investment investment 30 June 2020 Grade Grade Total $000s $000s $000s

Financial assets Cash in hand and at bank 77,022 - 77,022 Investments - Cash and cash equivalents 2,134,721 - 2,134,721 Debt securities 100,055 - 100,055 Derivative assets - 678,807 678,807 Investments - Receivables - 1,618,375 1,618,375 2,311,798 2,297,182 4,608,980

30 June 2019 $000s $000s $000s

Financial assets Cash in hand and at bank 48,254 - 48,254 Investments - Cash and cash equivalents 1,420,380 - 1,420,380 Debt securities 221,025 - 221,025 Derivative assets - 236,494 236,494 Investments - Receivables - 1,039,701 1,039,701 1,689,659 1,276,195 2,965,854

Assets classified with Standard and Poor’s credit ratings of AAA to BBB‐ (long‐term) or A‐1+ to A‐3 (short‐term) are classified as investment grade. Non‐investment grade assets include assets that fall outside the range of Standard and Poor’s investment grade credit ratings as well as non‐rated assets that are within the risk parameters outlined in the Investment Risk Management Plan.

104 Liquidity risk The following table summarises the Liquidity risk arises from WorkSafe maturity profiles of WorkSafe’s financial being unable to meet financial liabilities. The table includes the liquidity obligations as they fall due. WorkSafe analysis in relation to contractual (as has a payment policy of settling opposed to statutory) financial financial obligations within 30 days. liabilities. While the liability for outstanding claims is the most The VFMC uses a combination of cash significant liability for which payments and futures portfolios plus a large will need to be made in the future, they proportion of listed securities to ensure are excluded from the definition of a sufficient liquidity is available at all times financial instrument under AASB 9 to meet WorkSafe’s operating Financial Instruments. Details on the requirements. average term to settlement for the claims liabilities portfolio are included in Note 2.3.5.

Less than 3 4-12 1-5 5+ months months years years Total 30 June 2020 $000s $000s $000s $000s $000s

Non-statutory payables 237,043 57,383 - - 294,426 Derivative liabilities 104,871 11,674 - - 116,545 Investments - Payables 413,861 - - - 413,861 755,775 69,057 - - 824,832 30 June 2019 Non-statutory payables 161,384 49,886 - - 211,270 Derivative liabilities 60,703 2,254 - - 62,957 Investments - Payables 119,084 - - - 119,084 341,171 52,140 - - 393,311

Market risk Interest rate risk Market risk is the risk that the fair value Interest rate risk is the risk that the fair To the extent that these assets and of future cash flows of a financial value of future cash flows of a financial liabilities can be matched, unrealised instrument will fluctuate because of instrument will fluctuate because of gains and losses on the changes in market prices. Market risk changes in market interest rates. remeasurement of liabilities resulting comprises three types of risk: market The VFMC seeks to manage the from interest rate movements will be interest rates (interest rate risk), foreign interest rate risk through an asset off‐set by unrealised losses or gains on exchange (currency risk) and market allocation strategy for the investment the remeasurement of investment prices (price risk). portfolio, which acts as an economic assets. When establishing the investment asset hedge against the insurance liabilities The VFMC may use financial allocation, the VFMC considers input of WorkSafe. derivatives to manage the interest rate from actuaries to ensure that the risk associated with the portfolio. investment mix is appropriate to service future WorkSafe liabilities and that projected outcomes are in line with the overall investment objectives and remain within the risk parameters approved by the Treasurer.

105 WorkSafe Annual Report A summary of WorkSafe’s exposure to interest rate risk on financial instruments is as follows:

Interest rate risk

30 June 2020 30 June 2019 Non- Non- Variable Fixed interest Variable Fixed interest rate rate bearing Total rate rate bearing Total $000s $000s $000s $000s $000s $000s $000s $000s

Financial assets

Cash in hand and at bank 77,022 - - 77,022 48,254 - - 48,254

Premium receivables - - 80,751 80,751 - - 67,439 67,439 Investments - Derivative assets - - 678,807 678,807 - 1,343 235,151 236,494 - Other investments 2,236,656 - 15,415,297 17,651,953 1,524,090 120,515 16,237,054 17,881,659 Sundry receivables - - 6,424 6,424 - - 8,754 8,754 2,313,678 - 16,181,279 18,494,957 1,572,344 121,858 16,548,398 18,242,600

Financial liabilities

Non-statutory payables - - 201,142 201,142 - - 211,270 211,270 Investments - Derivative liabilities - 7 116,538 116,545 - - 62,957 62,957 - Other investments 228,649 - 413,861 642,510 154,438 - 119,084 273,522 228,649 7 731,541 960,197 154,438 - 393,311 547,749 Net financial assets 2,085,029 (7) 15,449,738 17,534,760 1,417,906 121,858 16,155,087 17,694,851

Interest rate sensitivity A 0.5% movement in interest rates (or These movements are attributable to discount rates) is used by WorkSafe’s WorkSafe’s exposure to interest rates actuaries to present the sensitivities of on its variable rate investments and its the actuarial claims liabilities to fair value movement on its fixed rate management to allow them to monitor investments. interest rate risk on liabilities. This At the reporting date, if interest rates percentage has been used to present had moved 0.5% up or down and all the impact on interest sensitive other variables were held constant, investments. WorkSafe’s net result and equity would change as follows:

2020 2019 $000 $000

Impact on net result and equity from a movement in interest rates Increase of 0.5% 447 (7,398) Decrease of 0.5% (447) 7,398

106 Foreign currency risk Foreign currency sensitivity All foreign currency transactions are WorkSafe is exposed to foreign The foreign exchange sensitivity has converted to Australian currency at the exchange risk through its investments been prepared on the basis of rates of exchange applicable at the which are denominated in foreign WorkSafe’s direct investments and not dates of the transactions. Investments currency, and anticipated future on a look-through basis for investments held at reporting date in foreign transactions. held indirectly through unit trusts. currencies are converted to Australian The VFMC manages foreign exchange Consequently the disclosure of currency using the exchange rate at risk in accordance with the approved currency risk may not represent the balance sheet date. Gains or losses IRMP and uses financial derivatives to true currency risk profiles of WorkSafe arising on foreign currency transactions control exposures. The proportion of where the unit trust has significant are included in investment income in foreign exchange risk which is hedged investments which have exposure to the period in which they arise. is reviewed regularly to ensure that the the currency markets. Foreign currency risk is the risk that the net exposure is maintained at a level The following table details WorkSafe’s fair value of a financial instrument will which is consistent with the overall sensitivity to a 10% increase or fluctuate because of changes in foreign investment objectives. decrease in the Australian Dollar exchange rates. WorkSafe’s exposure is mainly via the against the relevant foreign currencies major currencies such as United States with all other variables held constant. dollar, Japanese yen, the Euro and British pound.

2020 2019 $000s $000s

Impact on net result and equity from a movement in foreign exchange rates Increase of 10% 51,842 69,206 Decrease of 10% (63,363) (84,585)

Price risk Price risk sensitivity Price risk is the risk that the fair value of WorkSafe is exposed to price risk At reporting date, if the value of a financial instrument will fluctuate through its investments in listed and WorkSafe’s investment had been 10% because of changes in market prices unlisted shares and managed higher or lower and all other variable whether those changes are caused by investment schemes. The VFMC held constant year end, WorkSafe’s net factors specific to the individual manages price risk through result and equity would change as financial instrument or its issuer, or diversification and careful selection of follows: factors affecting all similar financial securities within the strategic asset instruments traded in the market. Such allocation for each class of asset. factors may include changes in the WorkSafe’s sensitivity to equity price performance of the economies, risk is set out below. markets and securities in which the VFMC invests.

2020 2019 $000s $000s

Impact on net result and equity from a movement in investment prices Increase of 10% 952,051 1,073,101 Decrease of 10% (952,051) (1,073,101)

107 WorkSafe Annual Report 7.2 O-setting of financial assets and financial liabilities

The following table presents the recognised financial instruments that are offset, or subject to enforceable master netting arrangements and other similar agreements but not offset, as at 30 June 2020 and 30 June 2019. The column ‘net amount’ shows the impact on the balance sheet if all set‐off rights were exercised.

Amount not Set-o in the Balance Sheet Amounts Net Amounts Subject Presented in to Master the Balance Netting Collateralised Sheet Agreements Obligation Net Amount $000s $000s $000s $000s

30 June 2020 Derivative assets 678,807 (114,007) (228,555) 336,245 Derivative liabilities (116,545) 114,007 1,418 (1,120) Total 562,262 - (227,137) 335,125

30 June 2019 $000s $000s $000s $000s Derivative assets 236,494 (51,767) (152,428) 32,299 Derivative liabilities (62,957) 51,767 705 (10,485) Total 173,537 - (151,723) 21,814

7.3 Fair values

This section sets out information on Level 2 Valuation techniques for Worksafe holds financial instruments how WorkSafe determined fair value for which the input that is that are recorded in the financial financial reporting purposes. Fair value significant to the fair value statements where the carrying is the price that would be received to measurement is directly or amounts approximate to fair value due sell an asset or paid to transfer a liability indirectly observable. to their short‐term nature. These in an orderly transaction between Level 3 Valuation techniques for financial instruments are measured at market participants at the which the input that is amortised cost and include: measurement date. significant to the fair value • premium receivables, • sundry receivables, and Fair value hierarchy measurement is unobservable. • non‐statutory payables. All assets and liabilities for which fair For the purpose of fair value value is measured or disclosed in the disclosures, WorkSafe has determined financial statements are categorised classes of assets and liabilities on the within the fair value hierarchy as follows, basis of the nature, characteristics and based on the lowest level input that is risks of the asset or liability and the level significant to the fair value of the fair value hierarchy as explained measurement as a whole: above. In addition, WorkSafe Level 1 Quoted (unadjusted) market determines whether transfers have prices in active markets for occurred between levels in the identical assets or liabilities. hierarchy by re‐assessing categorisation at the end of each reporting period.

108 The following table shows the fair values of financial assets and financial liabilities measured at fair value, including their fair value hierarchy:

Level 1 Level 2 Level 3 Total $000s $000s $000s $000s 30 June 2020

Financial assets Cash in hand and at bank 77,022 - - 77,022 Investment assets Cash and cash equivalents 2,134,721 - - 2,134,721 Cash collateral and margin accounts 18,171 - - 18,171 Receivables 618,375 - - 1,618,375 Derivative assets 2,665 676,142 - 678,807

Equity and managed investment schemes Australian bonds - 839,299 - 839,299 Australian equity - 2,061,749 - 2,061,749 Emerging Market Debt - 220,272 - 220,272 Hedge Funds - 209,315 561,444 770,759 Inflation Linked Bond - 1,543,143 - 1,543,143 Infrastructure - 515 1,328,878 1,329,393 Insurance - - 323,419 323,419 International Equity - 4,148,565 - 4,148,565 Private Credit - - 579,096 579,096 Private Equity - - 19,483 19,483 Property - 31,161 1,416,327 1,447,488 US Bonds - 497,696 - 497,696 - 9,551,715 4,228,647 13,780,362 Debt securities - 100,055 - 100,055 3,850,954 10,327,912 4,228,647 18,407,513 Financial liabilities Investment related liabilities Cash collateral and margin accounts 228,649 - - 228,649 Payables 413,861 - - 413,861 Derivative liabilities 53,598 62,947 - 116,545 696,108 62,947 - 759,055 Net financial assets 3,154,846 10,264,965 4,228,647 17,648,458

109 WorkSafe Annual Report Level 1 Level 2 Level 3 Total $000s $000s $000s $000s 30 June 2019

Financial assets Cash in hand and at bank 48,254 - - 48,254 Investment assets Cash and cash equivalents 1,420,380 - - 1,420,380 Cash collateral and margin accounts 9,060 - - 9,060 Receivables 1,039,701 - - 1,039,701 Derivative assets 2,665 233,829 - 236,494

Equity and managed investment schemes Australian bonds - 1,933,266 - 1,933,266 Australian equity - 2,307,865 - 2,307,865 Emerging Market Debt - - - - Hedge Funds - 285,256 344,569 629,825 Inflation Linked Bond - 2,015,207 - 2,015,207 Infrastructure - 517 1,228,402 1,228,919 Insurance - - 369,843 369,843 International Equity - 4,957,601 - 4,957,601 Private Credit - - 410,546 410,546 Private Equity - - 52,409 52,409 Property - - 1,286,012 1,286,012 US Bonds - - - - - 11,499,712 3,691,781 15,191,493 Debt securities - 221,025 - 221,025 2,520,060 11,954,566 3,691,781 18,166,407 Financial liabilities Investment related liabilities Cash collateral and margin accounts 154,438 - - 154,438 Payables 119,084 - - 119,084 Derivative liabilities 10 62,947 - 62,957 273,532 62,947 - 336,479 Net financial assets 2,246,528 11,891,619 3,691,781 17,829,928

110 Transfer between categories Cash collateral and margin Equity and managed investment There have been no transfers between accounts: Cash collateral refers to schemes: Holdings in unlisted levels during the year ended 30 June amounts held as security against future funds/trusts are recorded at fair value 2020 (2019: $nil). counterparty performance. These assets as determined by the fund manager or are recorded at face value and valuations by other skilled independent Fair value determination categorised as Level 1. Margin accounts third parties. WorkSafe reviews the level The fair value of the financial assets and represent cash held with a broker or of valuation uncertainty typically liabilities is included at the amount at central counterparties against open associated with the assets managed by which the instrument could be futures contracts and/or other derivatives. the fund/trust, whether there are exchanged in a current transaction Receivables/payables: redemption restrictions, the pricing between willing parties, other than in a Miscellaneous receivables/payables frequency and whether there is an forced or liquidation sale. The following include interest income, GST active market. Depending on the methods and assumptions were used obligations, investment expenses, etc. outcome of these reviews, the assets to estimate fair value. and are carried at the full value of the may be classified as either Level 2 or Cash and cash equivalents entitlement. Amounts due to/from Level 3. (including discount securities): brokers represent outstanding Debt securities: The fair value of debt Cash and cash equivalents consist settlement amounts arising from the securities is established by using primarily of deposits with banks and purchase/sale of securities and are observable inputs such as recently highly liquid financial assets with carried at the settlement amount executed transaction prices in maturity dates less than three months, pending. This is deemed fair value given securities of the issuer or comparable together with units held in cash the short term nature of these balances issuers and yield curves. Adjustments funds/trusts. Cash equivalents are and the items are categorised as Level 1. are made to the valuations when assets that are subject to an Derivative assets and liabilities: necessary to recognise differences in a insignificant risk in the change in fair Derivatives are originally recognised at particular instrument’s terms or credit value and are used to manage short fair value at the date a derivative worthiness. To the extent that the term commitments. Amounts classified contract is entered into and are significant inputs are observable, as cash and cash equivalents are subsequently remeasured to their fair WorkSafe categorises these recorded at face value, except for value at each reporting date with gain or investments as Level 2. discount securities which are recorded loss recognised in the comprehensive Reconciliation of Level 3 fair at market value. WorkSafe categorises operating statement. value movements these instruments as Level 1. Fair value is derived from the prices The following table presents the published by recognised exchanges or, changes in Level 3 instruments for over‐the‐counter instruments, (financial assets) for the years ended generally accepted valuation 30 June 2020 and 30 June 2019: techniques. WorkSafe classifies these instruments as either Level 1 or Level 2.

2020 2019 $000s $000s

Investments

Balance at beginning of the year 3,691,781 3,452,749 Gains recognised in the comprehensive operating statement (337,597) (16,368) Purchases 1,510,830 566,242 Sales (636,367) (310,842) Balance at end of the year 4,228,647 3,691,781 Total gains (losses) for the year included in gains for assets held at end of the year (359,816) (54,905)

111 WorkSafe Annual Report Estimation uncertainty WorkSafe is reliant on third parties for The Level 3 financial assets relate to these valuations and the quantitative private equities and managed information regarding significant investment schemes that are managed unobservable inputs used in the fair by the VFMC on behalf of WorkSafe. value measurement cannot be assessed. A majority of these investments are held via third party pooled investment An example of the key inputs and vehicles, and as such WorkSafe is not assumptions typically considered is privy to the detailed assumptions or shown below. valuation techniques used to value the underlying investment assets

Key inputs and assumptions subject to estimation uncertainty

Asset Class Valuation Techniques Key Inputs and Assumptions

Infrastructure Discounted cash flows. • risk free discount rates investments • risk premium • asset utlisation rates • capital expenditure forecasts • operating costs • other estimated future cash flows

Private Equity Multiples of earnings, discounted cash • identification of appropriate comparables investments flow, market equivalents and other • estimated future profits market accepted methodologies. • risk free rate, risk premium • estimated future cash flows Property Discounted cash flow, capitalisation • future economic and regulatory conditions investments and direct comparison methodologies.

Fixed interest Diversified fixed interest investments - • appropriate credit spread and other investments Third party pricing servicers, which risk premium source prices from brokers and market • future risk free rate and makers. • estimated future cash flows Non-traditional strategies investments - • identification of appropriate comparable Non-traditional Prices quoted on an exchange or assets strategies traded in a dealer market • life expectancy estimates and mortality investments probabilities Less liquid fixed interest and • future economic and regulatory condtions non-traditional strategies investments - Discounted cash flow, amortised cost, direct comparison and others.

112 Other Report 8 Financial disclosures

Introduction to this section Structure

This section includes additional 8.1 Responsible persons material disclosures required by 8.2 Remuneration of executives accounting standards or otherwise, for 8.3 Related parties the understanding of this financial 8.4 Entity consolidated pursuant to report. section 53(1)(b) of the FMA 8.5 Remuneration of auditors 8.6 Events after reporting date 8.7 Australian Accounting Standards issued that are not yet effective

8.1 Responsible persons In accordance with the Ministerial Directions issued by the Assistant Treasurer under the Financial Management Act 1994, the responsible persons who held office during the financial year were:

Responsible Ministers Mr Danny Pearson MP The Hon Jill Hennessy Assistant Treasurer Minister for Workplace Safety (Appointment June 2020) The Hon Robin Scott Assistant Treasurer (Ceased June 2020)

Board Members Mr John Merritt (Chairman) Ms Elizabeth Lukin (Appointment (Appointment effective effective 29 October 2019) 1 November 2019) Mr Ross McCann Mr Paul Barker (Chairman) (Ceased 24 October 2019) (Ceased 31 October 2019) Mr Peter McMullin Ms Clare Amies Dr Samantha Smith (Ceased 8 November 2019) (Ceased 17 October 2019) Ms Jane Brockington Ms Julie Warren (Appointment Ms Flavia Gobbo (Appointment effective 29 October 2019) effective 1 January 2020) Ms Maria Wilton Mr Doug Kearsley

Chief Executives Ms Clare Amies Mr Colin Radford (Ceased 8 November 2019) (Appointment 11 November 2019)

113 WorkSafe Annual Report The number of responsible persons of WorkSafe whose remuneration falls within the following bands was:

$ 2020 2019

10,000 - 19,999 1 1 20,000 - 29,999 2 - 30,000 - 39,999 2 - 50,000 - 59,999 1 3 60,000 - 69,999 4 2 90,000 - 99,999 1 - 140,000 - 149,999 - 1 300,000 - 309,999 1 - 360,000 - 369,999 1 - 600,000 - 619,999 - 1

The compensation detailed above excludes the salaries and benefits the Portfolio Ministers receive. The Ministers’ remuneration and allowances are set by the Parliamentary Salaries and Superannuation Act 1968 and are reported within the Department of Parliamentary Services’ financial report. 8.2 Remuneration of executives

The number of executive officers, other Remuneration comprises employee Post‐employment benefits include than the responsible Ministers and benefits (as defined in AASB 119 pensions and other retirement benefits Board members, and their total Employee Benefits) in all forms of paid or payable on a discrete basis remuneration during the reporting consideration paid, payable or provided when employment has ceased. period are shown in the table below. by the entity, or on behalf of the entity, in Other long‐term benefits include long Total annualised employee equivalents exchange for services rendered. service leave, other long service provides a measure of full time Accordingly, remuneration is benefits or deferred compensation. equivalent executive officers over the determined on an accrual basis, and is Termination benefits include reporting period. disclosed in the following categories. termination of employment payments, The number of executives may vary Short‐term employee benefits include such as severance packages. from year to year due to the timing of amounts such as wages, salaries, The remuneration of executives is as appointments, resignations and the annual leave or sick leave that are follows: composition of executives. usually paid or payable on a regular basis, as well as non‐monetary benefits such as allowances and free or subsidised goods or services.

2020 2019 $000s $000s

Short-term employee benefits 3,376 3,644 Post-employment benefits 265 285 Other long-term benefits 114 131 Termination benefits 172 106 Total remuneration 3,927 4,166 Total number of executives 16 19 Total annualised employee equivalents  13.0 15.0

 Annualised employee equivalent is based on the time fraction worked over the reporting period.

114 8.3 Related parties

WorkSafe is a controlled entity of the Key management personnel of State of Victoria. WorkSafe comprise the responsible The Victorian Asbestos Eradication Ministers, Board members and Agency (VAEA) has been consolidated members of the executive leadership into WorkSafe’s financial statements team. Key management personnel of pursuant to the determination made by the VAEA comprise the responsible the Assistant Treasurer under section Minister and its Board members. 53(1)(b) of the FMA. As both VAEA and WorkSafe share common directors (Jane Brockington and Ross McCann until his resignation from the Board of WorkSafe on 24 October 2019), the relationship between the two entities comprises financial, governance and operational support. The remuneration of key management personnel is as follows:

2020 2019 $000s $000s

Short-term employee benefits 4,439 4,559 Post-employment benefits 371 381 Other long-term benefits 152 153 Termination benefits 172 106 Total remuneration 5,134 5,199

The compensation detailed above Transactions with key excludes the salaries and benefits the management personnel Portfolio Ministers receive. The There were no transactions with key Ministers’ remuneration and allowances management personnel during the year is set by the Parliamentary Salaries and (2019: none), other than those Superannuation Act 1968 and is disclosed above. reported within the Department of Parliamentary Services’ financial report. Transactions with other related parties Related parties of WorkSafe and the VAEA include all key management Transactions with other related parties personnel and their close family are entered into on an arm’s length members and personal business basis. Conflicts of interest are interests (controlled entities, joint overcome where warranted, by the key ventures and entities they have management personnel declaring their significant influence over). interests and abstaining from final decision making.

115 WorkSafe Annual Report 30 June 2020

Total Outstanding Committed Value of balances at amount at Name of Nature of Details of Transactions 30 June 2020 30 June 2020 Terms and Counterparty relationship Transactions $000s $000s $000s Conditions

Board Members

Victorian Arts Mr Paul Barker was a Grant funding (38) - - Standard Centre Victorian Arts Centre Trust member Training and conferences (83) - - Standard

Institute of Public Ms Clare Amies Membership (31) - - Standard Administration was a board fees Australia VICTORIA member of IPAA (IPAA) Training and (3) - - Standard conferences

Leadership Ms Clare Amies Training and (25) - - Standard Victoria was a Leadership conferences Victoria Council member

Victoria Police Ms Jane Brockington Service charge (79) 1 - Standard was chair of the Audit and Risk Committee and is a member of - the Corporate Advisory Group of Victoria Police

Victorian Funds Ms Maria Wilton is a Service charge (47,828) (9,623) - Standard Management VFMC board Corporation (VFMC) member - Transport Accident Dr Samantha Smith, Recovery of 107,200 - - Based on Commission (TAC) Ms Jane Brockington compensation independent and Mr John Merritt paid actuarial valuation were TAC board Management of (2,149) - - Standard members catastrophic claims Cost 5,656 483 - Standard reimbursement receivable Cost (3,298) (506) - Standard reimbursement payable

Emergency Mr Doug Kearsley Pension (151) - - Standard Services and State was a board member contributions Super (ESS) of ESS -

Executives

Personal Injury Mr Shane O'Dea was Membership fees (51) - - Standard Education a PIEF board Sponsorship and (23) (19) - Standard Foundation (PIEF) member training Service charge 200 (75) - Standard Cost 1,350 483 - Standard reimbursement receivable

116 30 June 2019

Total Outstanding Committed Value of balances at amount at Name of Nature of Details of Transactions 30 June 2019 30 June 2019 Terms and Counterparty relationship Transactions $000s $000s $000s Conditions

Board Members Victorian Arts Mr Paul Barker was a Grant funding (292) - - Standard Centre Victorian Arts Centre Trust member Training and conferences (12) - - Standard Institute of Public Ms Clare Amies Membership (23) - - Standard Administration was a board fees Australia VICTORIA member of IPAA (IPAA) Training and (49) - - Standard conferences Leadership Ms Clare Amies Training and (39) (5) - Standard Victoria was a Leadership conferences Victoria Council member Partnerships (66) - - Standard

Victoria Police Ms Jane Brockington Service charge (75) (2) - Standard was chair of the Audit and Risk Committee and is a member of - the Corporate Advisory Group of Victoria Police

Victorian Funds Ms Maria Wilton is a Service charge (7,395) (12,234) - Standard Management VFMC board Corporation (VFMC) member - Transport Accident Dr Samantha Smith, Recovery of 94,200 - - Based on Commission (TAC) Ms Jane Brockington compensation independent were TAC board paid actuarial valuation members Management of (2,041) - - Standard catastrophic claims Cost 5,685 666 - Standard reimbursement receivable Cost (3,420) (1,586) - Standard reimbursement payable

Emergency Mr Doug Kearsley Pension (170) - - Standard Services and State was a board member contributions Super (ESS) of ESS -

Executives Personal Injury Mr Shane O'Dea was Membership fees (49) - - Standard Education a PIEF board Sponsorship and (49) (19) - Standard Foundation (PIEF) member training Service charge 414 62 - Standard Cost 1,253 362 - Standard reimbursement receivable

 Value of transactions with VFMC reported in the above table covers the period from the appointment of Ms Maria Wilton on 28 May 2019 to June 2019. NB Mr Ashley West was an executive of the TAC during the 2019 financial year but ceased to be during the 2020 financial year. Transactions with the TAC are included in the above table for Board members.

117 WorkSafe Annual Report 8.4 Entity consolidated pursuant to section 53(1)(b) of the FMA

The financial effects of the VAEA, which has been consolidated into WorkSafe’s financial statements, are as follows:

WorkSafe VAEA Eliminations Consolidated

2020 2019 2020 2019 2020 2019 2020 2019 $000s $000s $000s $000s $000s $000s $000s $000s

Total income from transactions 2,883,063 4,033,995 2,320 2,197 (2,655) (2,520) 2,882,728 4,033,672

Net result from transactions (3,021,038) (823,124) - - - - (3,021,038) (823,124)

Total assets 20,922,398 19,239,970 - - - - 20,922,398 19,239,970 Total liabilities 21,508,229 16,804,763 - - - - 21,508,229 16,804,763

8.5 Remuneration of auditors

2020 2019 $000s $000s

Victorian Auditor-General's Office - Audit of WorkSafe's financial statements 330 330 330 330

8.6 Events after reporting date

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of WorkSafe, the results of those operations, or the state of affairs of WorkSafe in future financial years.

8.7 Australian Accounting Standards issued that are not yet eective

The Australian Accounting Standards Board (AASB) has issued the following new or revised Australian Accounting Standards, which are applicable to WorkSafe:

AASB Title Operative Date

17 Insurance Contracts 1 January 2022 2018-7 Amendments to Australian Accounting Standards - Definitioin of Material 1 January 2020 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-Current 1 January 2023

118 AASB 17 establishes principles for the WorkSafe has not early adopted this recognition, measurement, Standard, and is in the process of presentation and disclosure of analysing the impacts of adoption. insurance contracts issued. It replaces However, it is not anticipated to have a AASB 1023 General Insurance material impact. Contracts and AASB 1038 Life AASB 2020‐1 amends AASB 101 to Insurance Contracts. The impact of clarify requirements for the adopting AASB 17 has not been fully presentation of liabilities in the assessed. statement of financial position as AASB 2018‐7 principally amends current or non‐current. It initially applied AASB 101 Presentation of Financial to annual reporting periods beginning Statements and AASB 108 on or after 1 January 2022 with earlier Accounting Policies, Changes in application permitted however the Accounting Estimates and Errors. It AASB has recently issued ED 301 applies to reporting periods beginning Classification of Liabilities as Current or on or after 1 January 2020 with earlier Non‐Current – Deferral of Effective Date application permitted. with the intention to defer the application The amendments refine and clarify the by one year to periods beginning on or definition of material in AASB 101 and its after 1 January 2023. application by improving the wording WorkSafe is in the process of analysing and aligning the definition across AASB the impacts of this Standard. However, it is Standards and other publications. The not anticipated to have a material impact. amendments also include some WorkSafe will apply these standards for supporting requirements in AASB 101 in the annual reporting periods beginning on the definition to give it more or after the operative dates set out above. prominence and clarify the explanation accompanying the definition of material.

119 WorkSafe Annual Report Statement by Report 9 Financial the Chair, Chief Executive and Chief Financial Ocer

The attached financial statements of the Victorian WorkCover Authority have been prepared in accordance with Direction 5.2 of the Standing Directions of the Assistant Treasurer under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2020 and the financial position of the Victorian WorkCover Authority at 30 June 2020. At the time of signing, we are not aware of any circumstances which would render any particulars included in the financial statements to be misleading or inaccurate. We authorise the attached financial statements for issue on 26 August 2020.

John Merritt Colin Radford Fiona Schutt Chair Chief Executive Chief Financial Officer

120 121 WorkSafe Annual Report 122 123 WorkSafe Annual Report 124 125 WorkSafe Annual Report Appendices Report Annual 2019-20

126 127 Omid Amirshahi Diversion 4of2019-20 Fenge Wei Syed Nasim Matthew JohnBrain Diversion 2of2019-2020 Wheelie WastePtyLtd Daniel Majd Brett Watts Andres CanepaUranga Lukas Goon Kylie Scascighin HiteshGuha Mohammed Aktifan Defendant Name Compensation ProsecutionOutcomes2019-20 WorkSafe AnnualReport

Appendix 1 Prosecutions A.C.N. N/A N/A N/A N/A N/A N/A 058 653802 N/A N/A N/A N/A N/A N/A N/A No PleaTaken-Diversion ordered torepay$8,000. adjourned undertakingfortwoyearsand Pleaded Guilty–Convicted,placedonan conviction. Pleaded Guilty–Fined$4,000without and costsof$1,000. conviction andorderedtorepay$19,077 Pleaded Guilty–Fined$1,000without No PleaTaken-Diversion Enforceable Undertakingwithconditions. and costsof$500. conviction andorderedtorepay$3,600 Pleaded Guilty-Fined$1,000without conviction andorderedtorepay$8,216. Pleaded Guilty-Fined$900without $112,75.24 inrestitutionandcostsof$1,000. imprisonment. Alsoorderedtopay to serveanaggregatetermofninemonths Pleaded Guilty-Convictedandsentenced $28,525.20 inrestitution. community work.Alsoorderedtorepay with aconditionthatheperform100hours a 12-monthCommunityCorrectionsOrder Pleaded Guilty-Withoutconviction,placedon ordered torepay$6,421.60. placed onanadjournedundertakingand Pleaded Guilty-Withoutconviction, in restitution $1,500 andorderedtorepay$26,062.06 Pleaded Guilty-Convictedandfined in restitution. conviction andorderedtopay$11,513.20 Pleaded Guilty–Fined$2,500without condition. period ofsixmonths,withaspecial undertaking, withoutconviction,fora Pleaded Guilty-Placedonanadjourned Result $4,000.00 $1,000.00 $1,000.00 $900.00 $1,500.00 Fine $ $2,500 - - -

- - - - -

Restitution $112,975.24 $28,525.20 $26,062.06 $19,077.00 $8,000.00 $5,000.00 $3,600.00 $8,216.00 $6,421.60 $11,513.20 - - -

-

outcome 28-Jan-20 29-Jan-20 19-Mar-20 26-Sep-19 13-Mar-20 23-Sep-19 12-Feb-20 27-Aug-19 12-Jun-20 16-Dec-19 13-Aug-19 13-Aug-19 15-Aug-19 Date of 12-Jul-19 OHS Prosecution Outcomes 2019-20

Date of Defendant Name A.C.N. Result Fine $ outcome

Hussein Al Mosawi N/A Pleaded Guilty - Fined without conviction $5,000.00 01-Jul-19

Ser Brothers & Co Pty Ltd 601 701 053 Pleaded Guilty - Fined without conviction $8,000.00 01-Jul-19

David McNeill N/A Pleaded Guilty - Convicted and fined $1,800.00 02-Jul-19

Bradken Resources Pty Ltd 098 300 988 Convicted and fined $650,000.00 10-Jul-19

Spence Building and Joinery Pty Ltd 096 915 678 Pleaded Guilty - Fined without conviction $7,500.00 15-Jul-19

Vincent Marino N/A Pleaded Guilty - Fined without conviction $25,000.00 16-Jul-19

ATTA Quality Training Services Pty Ltd 150 638 770 Pleaded Guilty - Convicted and fined $200,000.00 16-Jul-19 $200,000 and ordered to pay costs of $26,734.

NY Brickworks Pty Ltd 621 667 007 Pleaded Guilty - Convicted and fined $12,000.00 18-Jul-19

Turrisi Enterprises Pty Ltd 005 280 599 Pleaded Guilty - Fined $17,500 without $17,500.00 19-Jul-19 conviction and ordered to pay costs of $6,032

SPC Ardmona Operations Ltd 004 077 105 Pleaded Guilty - Fined without conviction $25,000.00 31-Jul-19

Spotlight Pty Ltd 005 180 861 Pleaded Guilty - Fined $150,000 without $150,000.00 31-Jul-19 conviction and ordered to pay costs of $4,217

Simcat Enterprises Pty Ltd 126 670 166 Pleaded Guilty - Fined $75,000 without $75,000.00 01-Aug-19 conviction and ordered to pay costs of $5,335

PB Construction Services Pty Ltd 168 726 476 Convicted and fined $100,000 and $100,000.00 01-Aug-19 ordered to pay costs of $3,187

Atholl Robertson N/A Pleaded Guilty - Aggregate fine of $3,500 with $3,500.00 07-Aug-19 conviction and ordered to pay $127.40 in statutory costs.

A.Alderton Plumbing Services Pty Ltd 121 402 168 Pleaded Guilty - Fined $20,000 without $20,000.00 07-Aug-19 conviction and ordered to pay costs of $4,725

CEM International Pty Ltd 004 933 135 Pleaded Guilty - Convicted and fined $10,000 and $10,000.00 08-Aug-19 ordered to pay costs in the amount of $3,592.

JBS Australia Pty Ltd 011 062 338 Pleaded Guilty - Convicted and fined $90,000 $90,000.00 08-Aug-19 and ordered to pay costs of $4,800

The GEO Group Australia Pty Ltd 051 130 600 Pleaded Guilty - Convicted and fined $75,000 $75,000.00 08-Aug-19 and ordered to pay costs of $3,891

C&M Commercial Holdings Pty Ltd 146 564 525 Pleaded Guilty - Fined without conviction $20,000.00 14-Aug-19

Industrial Laser Services Pty Ltd 083 545 617 Pleaded Guilty - Fined $30,000 without $30,000.00 15-Aug-19 conviction and ordered to pay costs of $4,217.

Action Events Group Pty Ltd 167 300 156 Pleaded Guilty - Fined $10,000 without $10,000.00 16-Aug-19 conviction and ordered to pay costs of $4,842.

Midland Pipes Pty Ltd 147 896 222 Pleaded Guilty – Fined $80,000 without $80,000.00 16-Aug-19 conviction and ordered to pay costs of $1,796.

128 OHS Prosecution Outcomes 2019-20

Date of Defendant Name A.C.N. Result Fine $ outcome

Warburton National 082 316 336 Pleaded Guilty - Fined $20,000 without $20,000.00 16-Aug-19 Investments Pty Ltd conviction and ordered to pay costs of $1,796.

Caelli Constructions (Vic) Pty Ltd 080 995 204 Pleaded Guilty - Convicted and fined $35,000 $35,000.00 19-Aug-19 and ordered to pay costs of $4,822.

WT Logistics Pty Ltd 142 156 170 No Plea Taken (ex parte) - Convicted and fined $30,000.00 29-Aug-19 a total of $30,000 and ordered to pay costs of $4,396.10

Monjon Australia Pty Ltd 113 118 371 Pleaded Guilty - Convicted and fined $97,000 $97,000.00 30-Aug-19

John Moncrie n/a Pleaded Guilty - Convicted and fined $19,250 $19,250.00 30-Aug-19

Star (Aust) Constructions Pty Ltd 123 010 846 Pleaded Guilty - Fined $35,000 without $35,000.00 04-Sep-19 conviction and ordered to pay costs of $10,112

Helms Plumbing Pty Ltd 138 750 357 Pleaded Guilty - Fined $28,000 without $28,000.00 04-Sep-19 conviction and ordered to pay costs of $5,945

Melbourne Cricket Club N/A Pleaded Guilty - Without conviction, placed on - 05-Sep-19 an undertaking with a special condition to make a charitable donation to the Lighthouse Foundation in the sum of $50,000 within two months, and to pay costs of $5,412.

ADGR Realty Pty Ltd 124 412 291 Pleaded Guilty - Convicted and fined $15,100 $15,100.00 13-Sep-19 and ordered to pay costs of $2,452

ADGR Realty Pty Ltd 124 412 291 Pleaded Guilty - Convicted and fined $1,000 $1,000.00 13-Sep-19 and ordered to pay costs of $2,712

Robert Phillips N/A Pleaded Guilty - Fined $5,000 without $5,000.00 17-Sep-19 conviction and ordered to pay costs of $4,292.

Farm Pride Foods Ltd 080 590 030 Pleaded Guilty - Fined $15,000 without $15,000.00 19-Sep-19 conviction and ordered to pay costs of $5,467.

Vanderlande Industries Australia Pty Ltd 164 889 838 Enforceable Undertaking with conditions. - 19-Sep-19

Caps and Closures Pty Ltd 114 161 527 Pleaded Guilty - Fined $17,500 without $17,500.00 19-Sep-19 conviction and ordered to pay costs of $4,000

Stephen Reidy N/A Pleaded Guilty - Fined $10,000 without $10,000.00 24-Sep-19 conviction and ordered to pay costs of $4,217.

Hotel Sorrento Pty Ltd 005 875 383 Pleaded Guilty - Fined $17,500 without $17,500.00 26-Sep-19 conviction and ordered to pay costs of $3,592.

DP World Melbourne Ltd 000 049 301 Enforceable Undertaking with conditions. - 26-Sep-19

Technicolour Pty Ltd 000 978 343 Pleaded Guilty - Fined $50,000 without $50,000.00 02-Oct-19 conviction and ordered to pay costs of $3,500.

Tyre Recycling Australia Pty Ltd 623 097 183 Pleaded Guilty - Convicted and fined $80,000 $80,000.00 03-Oct-19 and ordered to pay costs of $4,217.

129 WorkSafe Annual Report OHS Prosecution Outcomes 2019-20

Date of Defendant Name A.C.N. Result Fine $ outcome

Regal Beloit Australia Pty Ltd 122 303 084 Pleaded Guilty - Fined $12,500 without $12,500.00 10-Oct-19 conviction and ordered to pay costs of $3,592.

Sandarra Electrics Pty Ltd 158 784 313 No Plea Taken (ex parte) - Convicted and $120,000.00 11-Oct-19 fined a total of $120,000.

K & C Constructions Pty Ltd 163 726 234 Pleaded Guilty - Fined $15,000 without $15,000.00 15-Oct-19 conviction and ordered to pay costs of $3,354.50

All Scaolding Pty Ltd 161 722 863 Pleaded Guilty - Fined $10,000 without $10,000.00 15-Oct-19 conviction and ordered to pay costs of $3,354.50

Hamid Reza Talebi N/A Pleaded Guilty - Fined $18,000 without $18,000.00 23-Oct-19 conviction and ordered to pay costs of $5,540.

All In One Plumbing Pty Ltd 167 636 491 Pleaded Guilty - Fined $32,500 without $32,500.00 23-Oct-19 conviction and ordered to pay costs of $7,500.

Keech Foundry Pty Limited 002 888 600 Pleaded Guilty - Fined $20,000 without $20,000.00 25-Oct-19 conviction and ordered to pay costs of $3,904.

Probuild Constructions (Aust) Pty Ltd 095 250 945 Enforceable Undertaking with conditions. - 06-Nov-19

Princes Laundry Sevices Pty Ltd 071 339 323 Pleaded Guilty - Fined without conviction $40,000.00 06-Nov-19

Concorp Group Pty Ltd 159 067 160 Convicted and fined a total of $650,000 $650,000.00 08-Nov-19 ($325,000.00 on each charge). Heard ex-parte and deemed to have pleaded not guilty

Western Scaold Pty Ltd 124 693 581 Pleaded Guilty - Fined $12,500 without $12,500.00 13-Nov-19 conviction and ordered to pay costs of $4,217.

Warrnambool Cheese and Butter 071 945 232 Pleaded Guilty - Fined $15,000 without $15,000.00 15-Nov-19 Factory Holdings Ltd conviction and ordered to pay costs of $5,094

Bluescope Steel Ltd 000 001 058 Enforceable Undertaking with conditions. - 21-Nov-19

Gisborne Golf Club Incorporated 92 796 775 897 Pleaded Guilty - Without conviction, placed on - 25-Nov-19 an undertaking to be of good behaviour for two years with a special condition to pay a contribution of $10,000 to the Court Fund and costs in the sum of $3,592.

Mandalay Resources Costerfield 006 711 119 Pleaded Guilty - Convicted and fined $110,000 $110,000.00 27-Nov-19 Operations Pty Ltd and ordered to pay costs of $12,000.

Premier De Fit Pty Ltd 157 785 361 Pleaded Guilty - Fined $60,000 without $60,000.00 28-Nov-19 conviction and ordered to pay costs of $9,158.

130 OHS Prosecution Outcomes 2019-20

Date of Defendant Name A.C.N. Result Fine $ outcome

APTL Beam Builders Pty Ltd 105 021 216 Pleaded Guilty - Fined $10,000 without $10,000.00 28-Nov-19 conviction and ordered to pay costs of $3,592.

Brickwood (Dandenong) Pty Ltd 102 195 219 Pleaded Guilty - Fined $21,000 without $21,000.00 28-Nov-19 conviction and ordered to pay costs of $5,945.

Halpin Transport Pty Ltd 105 722 549 Pleaded Guilty - Fined $14,000 without $14,000.00 29-Nov-19 conviction and ordered to pay costs of $3,592.

Ultra Pak Australia Pty Ltd 079 168 013 Pleaded Guilty - Fined $10,000 without $10,000.00 04-Dec-19 conviction and ordered to pay costs of $6,700.

Specified Electrical Process 006 453 679 Pleaded Guilty - Fined $10,000 without $10,000.00 04-Dec-19 Heating Co. Australia Pty Ltd conviction and ordered to pay costs of $4,725.

SJ & TA Structural Pty Ltd 067 214 206 Pleaded Guilty - Convicted and fined $400,000 $400,000.00 06-Dec-19

Australian Hi-Tech Fabric 074 442 498 Pleaded Guilty - Fined $40,000 without $40,000.00 05-Dec-19 Protection Pty Ltd conviction and ordered to pay costs of $3,505.

Diversion 1 of 2019-2020 N/A No Plea Taken - Diversion. - 09-Dec-19

Lakeside Packaging Pty Ltd 006 802 731 Pleaded Guilty - Convicted and fined $55,000. $55,000.00 11-Dec-19

AAA Above Group Pty Ltd 091 854 643 Pleaded Guilty - Fined $15,000 without $15,000.00 09-Jan-20 conviction and ordered to pay costs of $3,592.

Parkton Enterprises Pty Ltd 131 988 960 Pleaded Guilty - Convicted and fined $30,000 $30,000.00 10-Jan-20 and ordered to pay costs of $3,367.

L.E. Constructions Pty Ltd 092 388 415 Pleaded Guilty - Fined $12,000 without $12,000.00 20-Jan-20 conviction and ordered to pay costs of $4,000

Goodstart Early Learning Ltd 139 967 794 Enforceable Undertaking with conditions. - 22-Jan-20

Wilsons Sheet Metals Pty Ltd 600 080 671 Enforceable Undertaking with conditions. - 21-Jan-20

Retpro Management Pty Ltd 155 736 771 Enforceable Undertaking with conditions. - 16-Jan-20

Terra Harvest Australia Pty Ltd 095 445 480 Pleaded Guilty - Fined $7,000 without conviction $7,000.00 31-Jan-20 and ordered to pay costs of $9,296.83

Andrew Frank Lowrie N/A Pleaded Guilty - Fined $15,000 without $15,000.00 31-Jan-20 conviction and ordered to pay costs of $3,505.

Mainline Developments Pty Ltd 120 540 258 Pleaded Guilty - Convicted and fined a total of $125,000.0 31-Jan-20 $125,000.

Oliver Projects Pty Ltd 600 935 706 No Plea Taken (ex parte) - Convicted and fined $60,000.00 06-Feb-20 $60,000 and ordered to pay costs of $4248.

Cliord Hallam Healthcare Pty Ltd 001 655 554 Pleaded Guilty - Fined $25,000 without $25,000.00 10-Feb-20 conviction and ordered to pay costs of $4,873

Western Region Water Corporation 67 433 835 375 Pleaded Guilty - Fined $22,500 without $22,500.00 10-Feb-20 conviction and ordered to pay costs of $3,779.25

131 WorkSafe Annual Report OHS Prosecution Outcomes 2019-20

Date of Defendant Name A.C.N. Result Fine $ outcome

Volgren Australia Pty Ltd 006 772 774 Pleaded Guilty - Convicted and fined $30,000 $30,000.00 11-Feb-20 and ordered to pay costs of $4,250.

Cosmax NBT Australia 610 396 006 Pleaded Guilty – Convicted and fined $40,000 $40,000.00 11-Feb-20 and ordered to pay costs of $1,875.

Arrow Wood Products Pty Ltd 006 685 249 Pleaded Guilty - Fined $12,000 without $12,000.00 12-Feb-20 conviction and ordered to pay costs of $4,873.

South Gippsland Quarries Pty Ltd 004 169 466 Pleaded Guilty - Fined an aggregate of $20,000.00 14-Feb-20 $20,000 without conviction and ordered to pay costs of $4,842.

Chloch Homes & Developments Pty Ltd 167 511 042 Pleaded Guilty - Convicted and fined $15,000 $25,000.00 18-May-20 and ordered to pay costs of $2,500. On appeal, convicted and fined.

Diversion 3 of 2019-2020 N/A No Plea Taken - Diversion. - 20-Feb-20

Rodger Constructions Pty Ltd 005 246 097 Pleaded Guilty - Fined without conviction. $55,000.00 21-Feb-20 Appeal was allowed. Fined $55,000 and ordered to pay costs of $6,642.

Hussey & Co Asset Holdings Pty Ltd 124 404 799 Pleaded Guilty - Fined $25,000 without $25,000.00 02-Mar-20 conviction and ordered to pay costs of $3,623.

The Australian Steel Company 0369 426 955 Pleaded Guilty - Fined $27,500 without $27,500.00 02-Mar-20 (Operations) Pty Ltd conviction and ordered to pay costs of $3,000

Monaco Hickey Pty Ltd 144 945 611 Enforceable Undertaking with conditions - 03-Mar-20

Pivot Construction Group Pty Ltd 146 262 786 Pleaded Guilty - Fined $15,000 without $15,000.00 11-Mar-20 conviction and ordered to pay costs of $4,248.

Kevin Evans N/A Pleaded Guilty - Fined $15,000 without $15,000.00 17-Mar-20 conviction and ordered to pay costs of $5,751.59

New Sector Engineering Pty Ltd 007 043 987 Pleaded Guilty - Convicted and fined $300,000.00 06-Apr-20

Solar 2.0 Pty Ltd 617 582 171 Pleaded Guilty - Convicted and fined $30,000 $30,000.00 01-May-20 and ordered to pay costs of $14,197.

Hazelwood Power Corporation Ltd 065 381 204 Convicted of 10 charges in the Supreme $1,560,000.00 19-May-20 Court on 19 May 2020 and fined a total of 1,560,000.

Aged Care Group Pty Ltd 006 605 410 Pleaded Guilty – Fined $10,000 without $10,000.00 18-Jun-20 conviction and ordered to pay costs of $4,200.

132 Enforceable Undertakings 2019-20

Vanderlande Industries Vanderlande manufactures, produces and installs robotic and automated plant. VIP Towing & Transport Australia Pty Ltd Pty Ltd as the trustee for the Frangiosa Family Trust was engaged by Vanderlande to collect required products and deliver them to customers. Vanderlande engaged a company called Construction Contract Labour (Vic) Pty Ltd (CCL), a labour-hire company, to provide labour to Vanderlande. On 4 November 2016, an employee of CCL engaged in discussions with other workers about a task he was required to do the following day. The task was to move a conveyor, weighing approximately 2 tonnes, onto a truck. An employee of Vanderlande showed the CCL employee the conveyors that required moving the following day. The CCL employee also had conversations with a VIP Towing employee about the equipment needed to move the conveyor on the next day. On 5 November 2016, the CCL employee attended the workplace. The ‘Clark’ forklift that he was about to use had a jib attached to the forklift. He was told that the truck driver from VIP Towing had attached the jib. The CCL employee engaged in pre-operational checks. He adjusted the chain on the conveyor and test lifted the conveyor. According to the CCL employee, he had two ‘spotters’ for the lift. After a few minutes, the truck that was to be loaded with the conveyor pulled up alongside where the conveyor was waiting. Once it stopped, the CCL employee used the forklift to commence loading the conveyor with the jib as short as it could be. The VIP Towing truck driver hopped out of his cab and then walked in front of the load. Someone at the workplace noticed the truck driver's position and called out, "Stop." The CCL employee braked and noticed the forklift start to tip. The truck driver was pinned between the conveyor and the truck. Another person used a different forklift to lift the conveyor off the truck driver. The charges against Vanderlande were withdrawn after an Enforceable Undertaking was accepted by WorkSafe pursuant to s. 16 of the Occupational Health and Safety Act 2004.

DP World Melbourne Ltd DP World Melbourne Limited (“the offender) is a stevedoring company operating 24 hours per day, 7 days a week, from West Swanson Dock Terminal, Mackenzie Road, West Melbourne (the workplace) and employs machinery maintenance workers. DP World has about 60 Straddle Carriers on site which lift and move 20 and 40 foot shipping containers around the dock. On 22 February 2017 maintenance personnel were working on a Straddle Carrier to change a hydraulic steering cylinder (the task), which weighs approximately 100 kgs. The first worker was attempting to position the eye of the hydraulic cylinder into the bracket. This process involved turning the steering to line up the eye and bracket, whilst in communication with the cabin driver of the straddle carrier who was operating the hydraulic steering. The hydraulic cylinder slipped out and under great force, hit him in the forehead and nose. The steering hydraulics operate at 160 bars and this would have been the approximate pressure that struck the worker. A second worker was injured requiring knee surgery after the first worker fell on him. DP World did not have any procedures in place as the task was a common job and an Improvement Notice was issued regarding carrying out the task of replacing the hydraulic steering cylinders on straddle cranes. Compliance was achieved. A new procedure was developed by DP World for replacing of cylinders on straddle carriers and steps to undertake this task have now been documented. The Straddle Carrier is no longer required to control the hydraulics of the steering cylinder. This new process was communicated to staff at a tool box talk. An Enforceable Undertaking was accepted in lieu of prosecution with an operational period of 14 months. The total cost of the research undertaking is $312,000 (inclusive of GST). The charge was withdrawn at the Melbourne Magistrates Court on 26 September 2019.

Probuild Constructions Probuild Constructions (Aust) Pty Ltd (‘the Offender’) was the head contractor for a commercial building (Aust) Pty Ltd development of part of the existing Chadstone shopping centre, requiring installation of glass panels in the grid shell roof. The Offender engaged a sub-contractor to install the panels, and a second sub-contractor to supply and erect scaffolding. The scaffolding was erected with open-ended uprights which exposed employees installing the glass to a risk of being impaled on an upright if they fell. The risk eventuated on 29 August 2016 when an employee of the first sub-contractor was installing glass panels and stepped backwards onto the scaffolding. He lost his footing and fell onto a scaffold upright (spigot) that penetrated his backside, causing significant injuries. It was reasonably practicable for the Offender to either raise the height of the uprights above the working level at which workers were working, or to fit or require the second contractor to fit, plastic caps on the ends of the uprights. The Offender failed to do either. An Enforceable Undertaking was accepted by WorkSafe in lieu of prosecution with an operational period of 18 months, commencing on 6/11/19. The total cost to the Offender to carry out the undertakings and donation is $175,000.00. The charge was withdrawn at the Moorabbin Magistrates Court on 6/11/19.

133 WorkSafe Annual Report Enforceable Undertakings 2019-20

Bluescope Steel Limited Bluescope is a manufacturer of steel, zinc and aluminum coloured products. It operated a facility known as Western Post in Hastings (“the workplace”). There were a number of packing stations at the workplace. At one station, steel outer edge protection and securing banding was manually wrapped around metal coils and the core of the coils had inner packing fitted for protection during transport. That station was an area of the workplace that contained plant including a conveyor belt and an overhead crane used to move the metal coils. On 23 April 2017, an employee was working inside a station. He was attempting to pack a metal coil but some of the packing components were misaligned. It was necessary for the employee to manually re-align the components and he entered the station to do so. There was a system of work that required operator’s to tag out and lock out plant before working in the vicinity. The employee put his identification tag on the isolation switch as required and then entered the station. Another worker passing by noticed the station was “flashing” but could not see anyone in the vicinity, nor did he see the identification tag on the isolation switch. That other worker then decided to re-energise the switch to move the crane. As that occurred, the first employee’s second and third fingers became jammed between the inner edge of the coil and the crane. He suffered de-gloving injuries to those fingers. After the incident, the identification tag was found on the ground beside the isolation switch. Consequently, Bluescope: a. Provided multi-lock hasps, and personal locks for employees to isolate the switch; and b. Reconfigured a light sensing guard to the conveyor and crane located inside the station. An Enforceable Undertaking (“EU”) was accepted by WorkSafe in lieu of prosecution. The operation period of the EU is 18 months and the total cost to Bluescope to carry out the undertakings is estimated to be $364,200.00 excluding GST.

Goodstart Early Goodstart Early Learning Ltd (Goodstart) owns and operates approximately 650 childcare facilities Learning Ltd around Australia. Goodstart is incorporated and registered as a charity with the Australian Charities and Not-for-profits Commission. On 3 April 2017, a four year-old child was in the care of Goodstart at one of its facilities in Preston. A window connected the Kindergarten Room to an outside play area. It measured 1440 millimetres by 725 millimetres. The bottom of the window was 730 millimetres from the ground (externally) and 650 millimetres from the floor (internally). The child was in the outside play area. The child leaned against the window, the glass broke and she received a serious laceration to her right wrist. At the time of the incident, there was a requirement that glass within 1000 millimetres of the floor level or ground level of structures including but not limited to childcare centres be Grade A safety glass. WorkSafe’s investigation revealed that the glass in place at the time of the incident was not safety glass. WorkSafe accepted an Enforceable Undertaking pursuant to section 16 of the Occupational Health and Safety Act 2004 in lieu of prosecution.

Wilsons Sheet Metals Wilsons Sheet Metals Pty Ltd (“the offender”) is a company which specialises in the manufacture of Pty Ltd aluminium down pipes, gutters and clips. On 22 September 2017 a Wilsons employee was feeding sheet metal into an unguarded roller machine. His glove was dragged into the machine, which lifted him off the floor and caused his foot to come off the operating pedal and the roller stopped. There was no guarding affixed to the in-running scored rollers which were used to shape the metal. There was a risk to employees of bodily entrapment or crushing if body parts came into contact with the nip points. The risk eventuated when the employee suffered partial digital amputations and crush injuries to the right hand. A fixed metal guard was subsequently affixed to the front of the roller with an 8mm slot allowing metal to be passed through, at approximately 30mm from the in-running nip points on the roller. An Enforceable Undertaking was accepted in lieu of prosecution pursuant to section 16 of the Occupational Health and Safety Act 2004.

Retpro Management Retpro is a large leasing and management company which operates shopping centres across Australia Pty Ltd and New Zealand, including the Dandenong Plaza Shopping Centre at 23-55 McCrae Street, Dandenong ("the workplace"). On 21 August 2017, a female store manager of a massage shop located in the shopping centre was walking to work across a loading dock at the rear of the shopping centre. The loading dock area was a shared loading zone and pedestrian area. There was no traffic management system in place and forklifts were being driven in circumstances where the forklift operator did not have a clear view ahead. There was a risk of powered mobile plant such as forklifts colliding with pedestrians or other mobile plant. The risk eventuated when the injured person was struck by a forklift owned and operated by the co-accused A&S Wholesale Fruit & Vegetables Pty Ltd (ACN 006 598 796). The forklift driver was in the process of unloading pallets of fruit and vegetables from a truck. The pallets obscured his view whilst driving in a forward direction and the injured person was hit and driven over. The forklift driver was unaware he had struck the pedestrian until alerted by others in the vicinity. She sustained significant injuries including fractured ribs, difficulty breathing and a fracture to her right foot. An Enforceable Undertaking was accepted in lieu of prosecution pursuant to section 16 of the Occupational Health and Safety Act 2004.

134 Enforceable Undertakings 2019-20

Monaco Hickey Pty Ltd Monaco Hickey Pty Ltd was charged with offences under s 21(1) & (2)(a), and s 26 of the OHS Act relating to an incident on 30 May 2017. In May 2017 Monaco Hickey was the principal contractor for the re-development of the Barwon Water head office in Geelong. It sub-contracted Boom Logistics Ltd to provide a truck-mounted elevating work platform (EWP) to assist with the installation of sun shades on the western facia of the building. On the morning of 30 May one Boom employee and two other workers entered the basket of the EWP and ascended to a height of about 15 metres at a 30 metre radius. Shortly after reaching working height, the right rear out-rigger of the EWP sank into the ground, causing the basket to drop suddenly. The basket hit the western wall of the building and then fell further, coming to a stop about 6 metres above the ground. The two workers were taken to hospital for a check-up and then discharged. The matter resolved by way of an Enforceable Undertaking and the charges were withdrawn on 3 March 2020.

Wheelie Waste Pty Ltd Wheelie Waste Pty Ltd failed to forward two claims for compensation within 10 days of receiving them, in contravention of section 73.

2019-20 Statistics Statement pursuant to section 40A(6) of the Dangerous Goods Act 1985 (DG Act) OHS Prosecution success rate 79% In 2019-20, the Authority: received no requests Completed OHS investigations proceeding under section 40A(1) of the DG Act; gave no to legal review outcome 75% advice under subsections 2(b) or 2A(a)(ii); and OHS Investigations proceeding to did not fail to respond or report within the times prosecution within 12 months 51% set out in section 40A to a person making a request under subsection (1). The Director of Number of OHS prosecutions commenced Public Prosecutions gave no advice pursuant to (counted by defendant) 138 subsection (4) that a prosecution should be Number of compensation prosecutions brought or should not be brought with respect to commenced (counted by defendant) 38 a request made under subsection (1). Number of completed OHS prosecutions Statement pursuant to section 28A(6) of (counted by defendant) 118 the Equipment (Public Safety) Act 1994 Number of completed ACA and WIRCA (EPS Act) prosecutions (counted by defendant) 14 In 2019-20, the Authority: received no requests Number of matters withdrawn 14 under subsection 28A(1) of the EPS Act; gave no Notice of discontinuance filed by the DPP 4 advice under subsections 2(b) or 2A(a)(ii); and did not fail to respond or report within the times Number of matters discharged 4 set out in section 28A to a person making a Number of matters acquitted 2 request under subsection (1). The Director of Number of OHS Cautions 24 Public Prosecutions gave no advice pursuant to Number of Compensation Cautions 19 subsection (4) that a prosecution should be brought or should not be brought with respect to Number of PI Code of Conduct Cautions 4 a request made under subsection (1). Total Cautions 47

135 WorkSafe Annual Report Requests for the authority to commence prosecutions Pursuant to section 131 of the OHS Act and sections 577 and 607 of the WIRC Act, if a person considers that an act, matter or thing constitutes an offence and no prosecution has been brought in respect of the act, matter or thing within six months of its occurrence, the person may request in writing that the Authority bring a prosecution. The OHS Act and the WIRC Act require that the following information be published in the Authority’s annual report and on its website.

Statement pursuant to section 131(6) of the OHS Act

Number of requests received by the Authority under subsection (1) in 2019/2020 11

How long it took to commence each investigation pursuant to a request under subsection (1) (number of days including weekends and public holidays)

1 2 3 4 5 6 7 8 9 10 11 Days 4 0 5 2 19 0 0 (*) (*) 6 10

Explanatory note: (*) denotes that the investigation commenced prior to receipt of a request under subsection (1)

The number of cases in which the Authority has advised under subsection 2(b) or (2A)(a) that a prosecution has been or will be brought, or will not be brought in 2019/-2020 10 Explanatory note: includes investigations commenced in prior years but concluded in 2019/2020

How long it took to complete each investigation pursuant to a request under subsection (1) (number of days including weekends and public holidays)

1 2 3 4 5 6 7 8 9 10 Days 189 177 108 44 87 143 84 151 201 108

Explanatory note: includes investigations commenced in prior years but concluded in 2019/2020 and excludes investigations commenced in 2019/2020 but not complete as at 30 June 2019

The number of times the Authority failed to report in accordance with subsection (2A) to a person making a request under subsection (1) and any reason for such failure in 2019-2020 0

The number of cases in which the Director of Public Prosecutions has advised under subsection (4) that a prosecution should be brought or should not be brought in 2019-2020 7

Statement pursuant to section 577(6) of the WIRC Act

Number of requests received by the Authority under subsection (1) in 2019-2020 1

The number of cases in which the Authority has advised under subsection 2(b) that a prosecution has been or will be brought, or will not be brought in 2019-2020 1

The number of cases in which the Director of Public Prosecutions has advised under subsection (4) that a prosecution should be brought or should not be brought in 2019-2020 0

Statement pursuant to section 607(6) of the WIRC Act

Number of requests received by the Authority under subsection (1) in 2019-2020 1

The number of cases in which the Authority has advised under subsection 2(b) that a prosecution has been or will be brought, or will not be brought in 2019-2020 1

The number of cases in which the Director of Public Prosecutions has advised under subsection (4) that a prosecution should be brought or should not be brought in 2019-2020 0

136 Agent performance Appendix 2 results

Agent performance 2019-20 This appendix includes data on agent Employers should make their own performance which WorkSafe Victoria independent assessment of the uses to assess the performance of its capabilities of each agent and, where authorised agents for remuneration appropriate, seek professional advice. purposes and management. The Note that the market allocation of information is provided to inform agents may differ between years due to employers and the public on aspects of employers transferring agents and/or the performance of WorkSafe’s from entries or exits to self-insurance or authorised agents. other schemes. These movements can The information does not purport to be impact the trend performance indicated all-inclusive or contain all information in this appendix. which employers may require to make an informed assessment as to the selection of an agent.

Authorised agents

Agent name Full description

Allianz Allianz Australia Workers’ Compensation (Victoria) Limited CGU CGU Workers Compensation (Vic) Limited

EML EML Vic Pty Ltd GBS Gallagher Bassett Services Workers Compensation Vic Pty Ltd Xchanging Xchanging Integrated Services Victoria Pty Ltd trading as Xchanging

137 WorkSafe Annual Report Claims management and return to work

Timeliness of employer Agent notifications to Agent Back@Work

% received within 12 days % returned to work within 6 months Result Trend Result Trend

Allianz 94.58% Steady 73.65% Deteriorated CGU 93.88% Steady 74.14% Deteriorated EML 95.01% Steady 76.89% Steady GBS 95.81% Steady 72.95% Deteriorated Xchanging 95.26% Steady 73.16% Deteriorated Scheme 94.96% Steady 73.93% Deteriorated

Back@Work Trend information Improved Performance in current year has improved by more than 1% of that in the previous year Steady Performance in current year is within +/- 1% of the previous year Deteriorated Performance in current year has deteriorated by more than 1% of that in the previous year

Agent Duration - % of workers on weekly payments at:

13 weeks 26 weeks 52 weeks 134 weeks Result Trend Result Trend Result Trend Result Trend

Allianz 46.86% Deteriorated 28.70% Deteriorated 12.01% Deteriorated 3.08% Deteriorated CGU 46.21% Deteriorated 28.44% Deteriorated 12.23% Deteriorated 3.40% Deteriorated EML 44.97% Deteriorated 27.60% Steady 11.12% Steady 3.20% Deteriorated GBS 45.81% Deteriorated 28.67% Deteriorated 12.72% Deteriorated 4.08% Deteriorated Xchanging 44.90% Deteriorated 28.09% Deteriorated 12.03% Deteriorated 3.68% Deteriorated Scheme 45.89% Deteriorated 28.39% Deteriorated 12.10% Deteriorated 3.50% Deteriorated

Note: a lower percentage represents higher performance.

Duration Trend information Improved Performance in current year has improved by more than 4% of that in the previous year Steady Performance in current year is within +/- 4% of the previous year Deteriorated Performance in current year has deteriorated by more than 4% of that in the previous year

138 Service and processing

Agent Worker levels of service Employer levels of service

Result Trend Result Trend

Allianz 84.3% Steady 86.2% Steady CGU 82.7% Steady 85.2% Steady EML 84.8% Steady 88.2% Steady GBS 81.4% Steady 83.0% Steady Xchanging 82.2% Steady 88.8% Steady Scheme 83.0% Steady 86.2% Steady

Valid conciliation – Agent non-compliance complaints Wrongful disentitled reviews 1

Number Number of Number of Number of of valid valid complaints decisions decisions reviewed complaints per $10m billed reviewed and and overturned result premium 3 overturned 2 per $10m billed premium3

Allianz 10 0.15 17 0.25 CGU 7 0.13 22 0.42 EML 4 0.11 11 0.29 GBS 3 0.05 5 0.08 Xchanging 0 0.00 9 0.19 Scheme 24 0.09 64 0.24

Notes 1 Reviews of decisions identified through WorkSafe audits and complaints received by WorkSafe. 2 All decisions were overturned by the Agent following WorkSafe’s review without the need for a formal Direction. 3 Billed premium per $10M excludes base premium GST, buyout premium and its GST.

Worker and employer service Trend information Improved Performance in current year has improved by more than 4% of that in the previous year Steady Performance in current year is within +/- 4% of the previous year Deteriorated Performance in current year has deteriorated by more than 4% of that in the previous year

139 WorkSafe Annual Report Timeliness % of payments Timeliness Agent direct to injured workers of employer reimbursements

Weekly payments - Medical reimbursements - Calendar days to pay 75% % paid within 7 days % paid within 11 days of employer reimbursements

Result Trend Result Trend Result Trend

Allianz 98.60% Steady 85.92% Deterioration 10 Steady CGU 98.57% Steady 90.00% Improved 10 Deterioration EML 98.70% Steady 87.33% Steady 10 Steady GBS 98.26% Steady 89.77% Improved 11 Steady Xchanging 99.40% Steady 90.53% Improved 10 Deterioration Scheme 98.69% Steady 88.77% Steady 10 Steady

Agent Timeliness of processing provider accounts

% paid within 30 days % paid within 70 days of receipt of invoice of service

Result Trend Result Trend

Allianz 96.17% Steady 85.82% Steady CGU 97.79% Steady 84.81% Steady EML 97.11% Steady 83.90% Steady GBS 96.90% Steady 84.82% Steady Xchanging 93.60% Deterioration 85.86% Steady Scheme 96.35% Steady 85.11% Steady

Timeliness of processing (excluding employer reimbursements) Trend information

Improved Performance in current year has improved by more than 2% of that in the previous year Steady Performance in current year is within +/- 2% of the previous year Deteriorated Performance in current year has deteriorated by more than 2% of that in the previous year

Timeliness of employer reimbursements Trend information Improved Performance in current year has improved by more than 2 calendar days of that in the previous year Steady Performance in current year is within +/- 2 calendar days of the previous year Deteriorated Performance in current year has deteriorated by more than 2 calendar days of that in the previous year

140 Agent fees The authorised agents operate under an Instrument of Appointment issued by WorkSafe pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013 and are remunerated for acting on behalf of WorkSafe in the issuing of WorkCover insurance, collection of premium and the administration of claims. The agent remuneration model includes performance based components and also allows for the reduction of an agent’s remuneration upon the occurrence of an event such as a failure to meet performance criteria. Reductions applicable to 2019-20 None as at June 2020.

Agent performance definitions 2019-20

Measure Description

RTW measures

26 weeks Back@Work Assesses an agent’s performance on the proportion of workers working six months after their claim was received by the agent and where that work is sustained for a minimum period of three weeks. For 2019-20 the 26 weeks Back@Work measure is calculated as a composite measure for all injuries or via three separate measures comprising: physical injuries, mental injuries and all injuries, with the agent being remunerated based on “best” performance for either.

52 weeks Back@Work Assesses an agent’s performance on the proportion of workers returning to work 52 weeks after their claim was received by the agent and if a genuine capacity improvement has been achieved.

104 weeks Back @ Work Assesses an agent’s performance on the proportion of workers returning to work 104 weeks after their claim was received by the agent and if a genuine capacity improvement has been achieved.

Service / quality measures

Worker Survey - Assesses an agent’s performance in two parts: Events Index a) an injured worker survey measuring client perception of an agent’s service delivery; b) RTW triage information collection designed to capture data to support triage and inform management of new claims.

Sustainability measures

Second Entitlement Assesses the number of workers who have exceeded 134 and 156 weeks of compensation Review (134 Weekly) for claims with a date of injury after 1 July 2014 (134 week) and 1 April 2014 (156 weeks) expressed as a proportion of workers who have received at least 10 days of compensation. This measure is linked to the quality decision audit program. Agents must achieve the minimum requirement of quality and have no workers who have been identified as wrongly disentitled to be able to access income under this measure.

Long Tail Claims Assesses an agent’s performance in reducing the number of active weekly payments claims Management from mature accident years relative to WorkSafe’s independent actuary’s projections. Active Claims) For 2019-20 the measure includes claims from the 1985 to 2014 accident years.

141 WorkSafe Annual Report Measure Description

Sustainability measures

Complex Care Measure A tailored case management approach focusing on long-term injured workers in receipt of – Recovery Assistance weekly payments in excess of four years. The approach is designed to assist in return to Program life and reintegration in the community.

Complex Care Measure An initiative providing additional services to injured workers to connect them with supports – Transition Support as they navigate through the Scheme and change in entitlements. Services

Impairment Benefits Assesses an agent’s performance in resolving an Impairment Benefit claim. The focus of Resolution Timeliness the measure is on quality and throughput.

Variable measures

Mobile Case Assesses an agent’s performance on the volume of cases where face to face engagement Management occurs with any combination of the worker, their employer and their treating health practitioner. This measure focuses on the first 52 weeks after the claim is received by the Agent.

Co funded A flexible measure to enable the continuation of current initiatives while allowing for the trial of (WorkSafe/Agent new innovations. The initiatives are agreed between each individual agent and WorkSafe Innovations)

The delivery of some measures was adjusted to align with Government restrictions for COVID-19.

Market share as at 30 June 2020

Percentage of Percentage of Percentage of Premium Agent Policies (excluding Remuneration (excluding (excludes base premium GST, exempt employers) exempt employers) buyout premium and its GST)

Allianz 36.53% 26.14% 26.04% CGU 25.79% 22.71% 19.86% EML 9.87% 14.46% 14.16% GBS 13.74% 19.57% 22.28%

Xchanging 14.08% 17.12% 17.65% Scheme 100% 100% 100%

Notes “Policies” refers to the employers with WorkCover Insurance managed by each agent. “Remuneration” refers to the salaries and wages (including superannuation) paid by employers managed by each agent. “Premium” refers to the premium payable for the 2019-20 year for employers managed by each agent. Due to rounding, market share may not equate to 100%.

142 Agent performance metrics 2020-21 Each year, WorkSafe sets a number of performance measures for the agent panel. These measures are intended to align agent performance with WorkSafe’s goals of delivering improvements in return to work and service, while driving quality case management and ensuring the overall sustainability of the Scheme. Table 1 provides a comparison of measures from 2019-20 to 2020-21. Table 2 summarises the package of metrics that have been set for the 2020-21 year. Table 3 provides a brief description of these measures. Agents can earn payments capped at a specified level for achieving the targets for the defined measures. The payments are measured as a percentage of the agent Premium Fee Base which Agents are paid for the portfolio of WorkCover registrations they manage for the year. Where an agent does not meet the set targets they may incur a remuneration reduction. Conversely, where an agent exceeds the targets, they may receive an incentive payment. As a guide, a one percent payment equates to approximately $1.8 million. The amount that Agents will either earn in incentives or repay in remuneration reductions will depend on their agent Premium Fee Base and their performance.

Table 1 Comparison of allocation of weighting proposed for 2020-21 compared to previous year

30.00% 2019-20 2020-21 25.00%

20.00%

15.00%

10.00%

5.00%

0.00% RTW SERVICE SUSTAINABILITY VARIABLE IN RESERVE QUALITY

Measures are designed to work together as a package and many measures impact both quality and sustainability

143 WorkSafe Annual Report Table 2 Agent performance metrics package for 2020-21

Return to Work Measures

Measure Incentive Remuneration reduction

Recovery and RTW Work Practice 10.00% 0.00%

Total 26.00% -5.25%

Physical Injury at 26 weeks* 5.10% -3.19% Mental Injury at 26 weeks 3.40% -1.06%

Total Composite at 26 weeks 8.50% -4.25% Physical Injury at 52 weeks 2.40% 0.00% Mental Injury at 52 weeks 1.60% 0.00%

Total Composite at 52 weeks 4.00% 0.00% Physical Injury at 104 weeks 2.10% -0.75% Mental Injury at 104 weeks 1.40% -0.25%

Total Composite at 104 weeks 3.50% -1.00%

Service / Quality Measure

Measure Incentive Remuneration reduction

Survey – Events Index 9.50% -4.25%

Total 9.50% -4.25%

Sustainability Measures

Measure Incentive Remuneration reduction

Recovery Assistance Program 3.00% -1.00%

Total 3.00% -1.00%

Variable Measures

Measure Incentive Remuneration reduction

Mobile Case Management (co-funded measure) 3.50% -1.00%

Total 3.50% -1.00%

144

In reserve

Measure Incentive Remuneration reduction

Strategic Priority Programs – Premium (6 months from January 2021) 2.00% 0.00%

Capacity Support Services (co-funded measure) 1.00% 0.00%

Service – Impairment Benefit resolution timeliness measure (6 months from January 2021) 1.00% 0.00%

Total 4.00% 0.00%

Total 2020-21 Incentive Pool

Measure Incentive Remuneration reduction

Return to work measures 26.00% -5.25% Service / quality measure 9.50% -4.25% Sustainability measures 3.00% -1.00% Variable measures 3.50% -1.00% In reserve 4.00% 0.00%

Total 46.00% -11.50%

Table 3: Definitions of Agent Performance Metrics for 2020-21

RTW measures

Measure Description

26 weeks Back@Work Assesses the proportion of injured workers working six months after their claims were received by the agent and where that work is sustained for a minimum period of three weeks. In 2020-21 the 26 week Back@Work measure will be calculated based on “best” performance on either the overall measure for all injury types or the separate measures for mental injuries and physical injuries.

52 weeks Back@Work Assesses the proportion of injured workers recorded as working on the date 52 weeks after their claim was received by the agent and if a genuine capacity improvement has been achieved

145 WorkSafe Annual Report Measure Description

104 weeks Back@Work Assesses the proportion of injured workers recorded as working on the date 104 weeks after their claim was received by the agent, where that work is sustained for a minimum period of three weeks and if a genuine capacity improvement has been achieved.

Recovery & RTW Specialised multidisciplinary intervention program for complex needs workers. This Work Practice program is directly aligned to the Back on Track response.

Service / quality measures

Service Measure Assesses Agents’ performance in three parts: a) An injured worker survey measuring client perception of an agent’s service delivery b) A RTW Triage Information Collection designed to capture data to support triage and inform management of new claims c) A Customer Experience Initiative designed to trial and learn from small scale implementation of a service recovery initiative.

Sustainability measures

Recovery Assistance A tailored case management approach focusing on long-term injured workers who have Program been in receipt of weekly payments in excess of four years as at December 2018. The program aims to provide support unique to the workers’ needs and assist in return to life and reintegration in the community. For 2020-21, this expands to additional support for families of workers killed in the workplace.

Variable measures

Mobile Case Assesses agents where a face to face engagement occurs with any combination of the Management worker, their employer and their treating health practitioner with the aim of achieving a quality (co funded measure) and durable focused return to work within the first year of injury. This measure also supports mental injury recovery through the funding of a psychological resource to support agents in their management of these complex needs claims.

In reserve

Premium Collection Assesses an agent’s performance on the timely collection of premium by 30 June 2021.

Capacity Support A tailored recovery service for complex needs workers one year post injury. Service

Impairment Benefit Assesses an agent’s performance against compliance with legislative timeframes for the Resolution Timeliness progressing and decision on an Impairment Benefit claim. Measure

Note The delivery of some measures may be adjusted to align with Government restrictions for COVID-19.

146 Self-insurance report Appendix 3

Overview Self-insurers form part of the WorkSafe • safety of working conditions workers compensation scheme. Their • compliance with the WIRC Act and status is derived from the Workplace Regulations Injury Rehabilitation and Compensation • compliance with any terms and Act 2013. conditions (where the application is Employers are eligible to apply for for re-approval) self-insurance in Victoria if they satisfy • any other matters that WorkSafe prescribed minimum requirements of thinks fit financial strength and viability. Approval as a self-insurer is then subject As at 30 June 2020, there were to certain prescribed terms and 40 self-insurers operating in Victoria. conditions specified in Ministerial This represents about 7% of total Orders, as well as any terms and scheme remuneration (forecast using conditions determined by WorkSafe. 2018-19 remuneration). Initial approval takes effect for a period of three years. Renewal of approval has traditionally been for a period of four Applications and approvals years, unless WorkSafe, in its discretion, during 2019-20 determines that approval has effect for Applications for self-insurance are six years. This longer period of approval made to WorkSafe. WorkSafe has the is designed to reward good power to approve or refuse any performance in the area of health and application. safety, injury management and return to In determining whether an applicant is work. suitable, WorkSafe must be satisfied In 2019-20, the following organisations that the applicant is ‘fit and proper’ to ceased to be a self-insurer: be a self-insurer. In this regard, • Unilever Australia Holdings Pty Ltd – WorkSafe examines the applicant’s: returned to the scheme on • financial viability 29 November 2019 • capacity to administer claims for • Spicers Limited – returned to compensation scheme on 1 June 2020. • incidence of injuries to workers and the cost of claims in respect of such injuries

147 WorkSafe Annual Report In 2019-20, the following organisations • Hanson Australia Holdings Pty Ltd – Service were successful in their application for for six years, effective 1 December WorkSafe’s Injured Workers Survey renewal of approval to self-insure: 2019 includes injured workers covered by • BlueScope Steel Limited – for six • Ford Motor Company of Australia – self-insurers. In 2019-20, the service years, effective 22 July 2019 for four years, effective 7 January score was 64% per cent for all • ExxonMobil Australia Pty Ltd – for 2020 self-insurers, compared to 70% the six years, effective 31 August 2019 • Inghams Group Limited – for six previous year. • Food Investments Limited – for four years, effective 12 January 2020 years, effective 12 September 2019 • Melbourne Water Corporation – for • Robert Bosch Australia Pty Ltd – for six years, effective 31 August 2020 six years, effective 30 September 2019

List of self-insurers as at 30 June 2020

Self-insurer in 2019-20 Employer Alcoa of Australia Limited Alcoa of Australia Limited Amcor Ltd Amcor Flexibles (Australia) Pty Ltd Amcor Flexibles (Port Melbourne) Pty Ltd Amcor Limited Australia And New Zealand Banking Group Limited Australia And New Zealand Banking Group Limited BHP Group Limited BHP Group Limited Bluescope Steel Limited Bluescope Distribution Pty Ltd Bluescope Steel (Ais) Pty Ltd Bluescope Steel Limited Fielders Manufacturing Pty Ltd Lysaght Building Solutions Pty Ltd Orrcon Distribution Pty Ltd BP Australia Group Pty Ltd Air Refuel Pty Ltd BP Australia Pty Ltd Centrel Pty Ltd

Elite Customer Solutions Pty Ltd No. 1 Riverside Quay Pty Ltd

Brambles Limited Brambles Industries Limited Chep Australia Limited

Brickworks Ltd Austral Precast (Vic) Pty Ltd Austral Masonry Holdings Pty Ltd Brickworks Limited Bristile Roofing (East Coast) Pty Ltd Daniel Robertson Pty Ltd Nubrik Pty Ltd Nubrik Concrete Masonry Pty Ltd

148 Self-insurer in 2019-20 Employer

Carter Holt Harvey Building Products Pty Limited Carter Holt Harvey Building Products Pty Ltd Carter Holt Harvey Lvl Pty Ltd Carter Holt Harvey Pinepanels Pty Ltd Carter Holt Harvey Plywood Pty Ltd

Coles Group Limited Coles Group Limited Coles Supermarkets Australia Pty Ltd Eureka Operations Pty Ltd Chef Fresh Pty Ltd Coles Group Supply Chain Pty Ltd Liquorland (Australia) Pty Ltd

Crown Resorts Limited Capital Club Pty Ltd Betfair Pty Ltd Crown Melbourne Limited Crown Resorts Limited

CSR Limited AFS Systems Pty Ltd Bricks Australia Services Pty Ltd CSR Limited CSR Martini Pty Ltd

Exxonmobil Australia Pty Ltd Esso Australia Pty Ltd Mobil Exploration & Producing Australia Pty Ltd Mobil Oil Australia Pty Ltd Mobil Refining Australia Pty Ltd APP Corporation Pty Ltd

Ferrovial Services Australia Pty Ltd Broadspectrum (Australia) Pty Ltd Broadspectrum Services Pty Ltd ICD (Asia Pacific) Pty Ltd O.G.C. Services Pty Ltd Ten Rivers Pty Ltd

Food Investments Pty Limited George Weston Foods Limited

Ford Motor Company Of Australia Limited Ford Motor Company Of Australia Limited

Hanson Australia (Holdings) Proprietary Limited Hanson Construction Materials Pty Ltd Hanson Landfill Services Pty Ltd Hymix Australia Pty Ltd

Healius Ltd Adora Fertility Pty Ltd Healthcare Imaging Services (Victoria) Pty Ltd Idameneo (No. 789) Pty Ltd Idameneo (No 125) Pty Ltd Montserrat DH Pty Ltd Sidameneo (No. 456) Pty Ltd Specialist Diagnostic Services Pty Ltd Specialist Veterinary Services Pty Ltd The Trustee For Artlu Unit Trust

149 WorkSafe Annual Report Self-insurer in 2019-20 Employer

Inghams Group Limited Inghams Enterprises Pty Ltd

Liberty One Steel (Manufacturing) Pty Ltd Onesteel Wire Pty Ltd SSX Services Pty Ltd Steelforce Australia Pty Ltd

Melbourne Water Corporation Melbourne Water Corporation

Municipal Association Of Victoria Bass Coast Shire Council Bayside City Council Cardinia Shire Council Casey City Council Corangamite Regional Library Service City Of Greater Dandenong East Gippsland Shire Council Glenelg Shire Council Golden Plains Shire Council Hepburn Shire Council Hindmarsh Shire Council Horsham Rural City Council Indigo Shire Council Melton City Council Mildura Rural City Council Moyne Shire Council Municipal Association Of Victoria Murrindindi Shire Council Northern Grampians Shire Council Port Phillip City Council Pyrenees Shire Council Queenscliff Shire Council South Gippsland Shire Council Southern Grampians Shire Council Stonnington City Council Strathbogie Shire Council Swan Hill Rural City Council Wangaratta Rural City Council Warrnambool City Council West Wimmera Shire Council Wodonga City Council

150 Self-insurer in 2019-20 Employer

Mondelez Holdings Mondelez Australia Pty Ltd

Myer Holdings Limited Myer Pty Ltd Sass & Bide Pty Ltd Warehouse Solutions Pty Ltd Marcs David Lawrence Pty Ltd

Onesteel Recycling Pty Limited Onesteel Recycling Onesteel Trading Pty Ltd Onesteel Reinforcing Pty Ltd Onesteel Trading Pty Ltd

Paper Australia Pty Ltd Opal Packaging Pty Ltd Paper Australia Pty Ltd

Philip Morris (Australia) Limited Philip Morris Limited

Qantas Airways Limited A.C.N. 619 963 263 Pty Ltd Eastern Australia Airlines Pty Ltd Express Freighters Australia (Operations) Pty Ltd Jetstar Airways Pty Ltd Jetstar Group Pty Ltd Jetstar Services Pty Ltd Qantas Airways Ltd Qantas Domestic Pty Ltd Qantas Ground Services Pty Ltd Qantas Information Technology Limited Qantas Road Express Pty Ltd Qf Cabin Crew Australia Pty Ltd

Robert Bosch (Australia) Proprietary Limited Robert Bosch (Australia) Pty Ltd

Royal Automobile Club Of Victoria (RACV) Limited RACV Finance Limited RACV Insurance Services Pty Ltd Royal Automobile Club Of Victoria (RACV) Limited Gippsland Solar Pty Ltd Gippsland Heating and Cooling Pty Ltd

The University Of Melbourne Australian Music Examinations Board (Vic) Limited Melbourne Dental Clinic Limited Melbourne University Publishing Limited MU Student Union Limited Nossal Institute Limited University Of Melbourne UOM Commercial Limited Goulburn Valley Equine Hospital Pty Ltd

TLC Aged Care Pty Ltd TLC Aged Care Pty Ltd

151 WorkSafe Annual Report Self-insurer in 2019-20 Employer Toll Holdings Limited Toll Toll Ipec Pty Ltd Toll North Pty Ltd Toll Transport Pty Ltd Holdings Limited

Toyota Motor Corporation Australia Limited Toyota Motor Corporation Australia Limited

Viva Energy Group Limited Viva Energy Australia Pty Ltd Viva Energy Refining Pty Ltd Liberty Oil Corporation Pty Ltd

Wesfarmers Limited Australian Vinyls Corporation Pty Ltd Australian Light Minerals Pty Ltd Blackwoods Training Pty Ltd Bullivants Pty Ltd Bunnings Group Limited Catch Pty Ltd Coregas Pty Ltd CSBP Limited Greencap Pty Ltd J. Blackwood & Son Pty Ltd Kidman Resources Limited Kmart Australia Limited Lawvale Pty Ltd Modwood Technologies Pty Ltd Officeworks Businessdirect Pty Ltd Officeworks Limited Protector Alsafe Pty Ltd Target Australia Pty Ltd The Workwear Group Pty Ltd Trimevac Pty Ltd Wesfarmers Chemicals Energy & Fertilisers Limited Wesfarmers Finance Pty Ltd Wesfarmers Limited

Westpac Banking Corporation Asgard Wealth Solutions Limited BT Financial Group Pty Ltd Westpac Banking Corporation Westpac Financial Consultants Limited

Wrigleys Uno 2 Australia Pty Limited The Wrigley Company Pty Ltd Mars Australia Pty Ltd

Woolworths Ltd Langtons Pty Ltd Philip Leong Stores Pty Ltd Queensland Property Investments Pty Ltd Woolstar Pty Ltd Woolworths Lmited

152 Governance and compliance Appendix 4

Board of management Directors The WorkSafe Board of Management is The directors serving on the established under section 24 of the Board at 30 June 2020: Accident Compensation Act 1985 and John Merritt (chair) continued under section 502 of the Appointed: November 2019-2022 Workplace Injury Rehabilitation and Jane Brockington Compensation Act 2013 (WIRC Act). Appointed: August 2017-2020 The Board consists of eight directors, each of whom is appointed by the Doug Kearsley Governor in Council. The Board sets Appointed: April 2017-2020 / the framework for the achievement of Reappointed March 2020 WorkSafe’s objectives and the Peter McMullin execution of its functions. The Board Appointed: February 2018-2021 does this by overseeing strategic Maria Wilton AM planning, policy development, auditing Appointed: May 2019-2022 and compliance, prudent financial management, fostering stakeholder Julie Warren relationships and reviewing Appointed: October 2019-2022 management performance. Elizabeth Lukin Management of the operations and Appointed: October 2019-2022 administration of WorkSafe is Flavia Gobbo delegated by the Board to the Chief Appointed: January 2020-2023 Executive, who manages and controls the affairs of WorkSafe in accordance Further information relating to with the policies and practices set by Board members can be found the Board. at worksafe.vic.gov.au

153 WorkSafe Annual Report Directors’ access to Board committees Risk Committee independent legal advice The Board is supported by three WorkSafe Board members of the Risk WorkSafe provides a budget for committees chaired by independent Committee as at 30 June 2020: Jane directors to obtain independent legal non-executive directors. Brockington (chair), Doug Kearsley, John Merritt, Maria Wilton and Elizabeth Lukin. advice in respect to their individual Audit Committee obligations as directors. The Chief Executive is a standing attendee. WorkSafe Board members of the Conflict of interest Audit Committee as at 30 June 2020: The Risk Committee reviews and makes recommendations to assist the Board to Directors are governed in respect to Doug Kearsley (chair), John Merritt, fulfil its responsibilities in relation to: conflicts of interest by the relevant Maria Wilton, Julie Warren and Jane • the adequacy of WorkSafe’s processes provisions of the Public Administration Brockington. The Chief Executive for managing risk Act 2004 and binding codes issued by is a standing attendee. • the efficacy of the risk management the Victorian Public Sector The Audit Committee reviews and framework and internal controls used to Commission. makes recommendations to assist the identify and manage material Board to fulfil its responsibilities in The directors are also required by operational and strategic risks that relation to: section 31 of the Accident impact business decision making, or • the effectiveness of WorkSafe’s Compensation Act 1985 (section 511 of which threaten the achievement of systems and controls for financial the WIRC Act) to declare any pecuniary business objectives or critical business management, performance and interest in any matter being considered processes sustainability, including financial risk by the Board or in any other matter in • WorkSafe’s compliance with relevant management which WorkSafe is concerned. laws, regulations, standards and codes • the integrity, effectiveness and quality The Board is provided at each of its including the Victorian Government of WorkSafe’s financial management, meetings with a consolidated list of the Risk Management Framework as financial reporting and disclosures personal interests disclosed by mandated by Ministerial Standing • the independence, work plan, and directors. Directors are required to Direction 3.7.1 – Risk Management effectiveness of the Victorian Auditor complete a declaration of private Framework and Processes . interests upon appointment and General (WorkSafe’s external auditor) People and Culture Committee annually while remaining a director and • the external auditor’s annual audit of from 1 July 2016 were required to WorkSafe’s financial statements WorkSafe Board members of the People provide a declaration of related party • the qualifications, engagement, fees, and Culture Committee as at 30 June transactions. scope of work and effectiveness of 2020: John Merritt (chair), Peter McMullin WorkSafe’s internal auditors and Elizabeth Lukin. • internal audit reports regarding the The People and Culture Committee internal control environment reviews and makes recommendations to • material financial risks, including but assist the Board to fulfil its responsibilities not limited to, management of liquidity in relation to WorkSafe’s: and investment risks • strategies and initiatives to support a • actuarial assessments, including positive workplace culture and diversity outstanding claims valuation, pricing, • strategic workplace planning and peer reviews and financial workforce capability initiatives sustainability reviews • remuneration guidelines and practices • WorkSafe’s compliance with relevant with regard to government policies. laws, regulations, standards and codes regarding the financial management, performance and sustainability of WorkSafe.

154 Board and committee meetings Number of meetings attended/eligible to attend

People & Directors Board (8) Audit (4) Risk (5) Culture (3)

John Merritt 6/6 = 100% 2/2 100% 2/2 100% 2/2 100% Doug Kearsley 8/8 = 100% 4/4 100% 5/5 100% Jane Brockington 8/8 = 100% 4/4 100% 5 /5 100% Peter McMullin 8/8 = 100% 1/2 50% Maria Wilton 8/8 = 100% 3/3 100% 2/3 66% Flavia Gobbo 3/4 = 75% Elizabeth Lukin 6/6 = 100% 2/2 100% 3/3 100% Julie Warren 6/6 = 100% 2/2 100%

Occupational Health and Safety • COVID-19 workplace issues and • Mental Health Provisional Pilot Advisory Committee guidelines implementation and uptake of The Occupational Health and Safety • COVID-19 Omnibus (Emergency services Advisory Committee (OHSAC) is Measures) Act • inspector strategy and employment established under the OHS Act to • Ombudsman’s report following the pathways advise the WorkSafe Board about Independent Review into Care of • gendered violence guidance promoting healthy and safe working Clients with Complex Claims • dangerous goods environments and the operation and • quarterly performance reporting on • workplace manslaughter readiness, administration of the OHS Act and health and safety e.g. lives lost, implementation and education regulations. The purpose of the OHSAC claims, Inspectorate visits and • ARREO training is to focus on strategic issues, providing notices and enforcement including • manual handling in the health sector an important interface between prosecutions • victim impact statements and court WorkSafe’s operational activity and the • workplace fatalities processes Board. • WorkSafe Strategy • firefighters and cancer • silica and silicosis • WorkSafe’s targeted campaigns e.g. In 2019-20 matters considered by the • Notices Analysis Project – occupational violence committee in achieving its purpose preliminary findings • legislative and regulatory changes included: • preventing harm in the gig economy to the operation of the OHS Act and • two extraordinary OHSAC meetings • major construction projects – regulations. were held in April and May to mental health and fatigue consider the health and economic • workplace mental health and impact to Victorian workplaces in implementation of the WorkWell response to the COVID-19 pandemic program and the Chief Health Officer’s advice on keeping Australians safe

155 WorkSafe Annual Report OHSAC meeting attendance (Membership as at 30 June 2020)

Meetings Member Representing Attended/Eligible to Attend

John Merritt (Chair) WorkSafe 5/5 100% Colin Radford (Chief Executive) WorkSafe 4/5 80% Julie Nielsen (Exec. Dir. Health & Safety) WorkSafe 5/6 83% Malcolm Sim Independent 5/6 83% (Vacant) Independent 0/6 0% Gerry Ayres (CFMEU) Employees 6/6 100% Michael Donovan (SDAEA) Employees 2/6 33% Karen Batt (CPSU) Employees 5/6 83% Luke Hilakari (VTHC) Employees 1/6 16% Ben Davis (AWU) Employees 5/6 83% Susie Allison (NUW) Employees 5/6 83% Tim Piper (AIG) Employers 5/6 83% Samantha Read (Chemistry Aust.) Employers 3/6 50% Fiona Nield (HIA) Employers 6/6 100% Stuart McCullough (VHIA) Employers 4/6 66% Stephen Sheridan (VFF) Employers 4/6 66% Rebecca Casson (MBAV) Employers 3/6 50% Judy O’Connell (SBC) Crown 5/6 83% Julia Grith (VPSC) Crown 2/3 66%

WorkCover Advisory Committee In 2019-20 matters considered by the • Victorian Injured Worker Study – The WorkCover Advisory Committee committee in achieving its purpose themes and responses (WAC) is established under the WIRC included: • actuarial results and WorkSafe’s Act to advise the WorkSafe Board • quarterly performance reporting on response about workers’ entitlement to claims, return to work, disputation • WorkSafe’s response to the compensation, return to work, and agent service to workers and Victorian Ombudsman’s rehabilitation, and the operation and employers Investigation into Care of Clients administration of the WIRC Act and • workplace fatalities with Complex Claims and relevant regulations. The purpose of the • WorkSafe Strategy implementation of WAC is to focus on strategic issues, • COVID-19 (WorkSafe’s response recommendations providing an important interface and member discussion) • provisional payments between WorkSafe’s operational • silica and silicosis • premium activity and the Board. • health strategy – mental health • WorkSafe’s targeted campaigns e.g. initiatives occupational violence • improving the experience and • legislative and regulatory outcomes for injured workers development in the area of workers compensation.

156 WAC meeting attendance (Membership as at 30 June 2020)

Meetings Member Representing Attended/Eligible to Attend

John Merritt (Chair) WorkSafe 3/3 100% Colin Radford (Chief Executive) WorkSafe 3/3 100% Ben Davis (AWU) Employees 3/4 75% Gwynnyth Evans (AMIEU) Employees 3/4 75% Wil Stracke (VTHC) Employees 3/4 75% Tim Piper (AIG) Employers 4/4 100% Paul Guerra (VECCI) Employers 1/1 100% John McNamara (GBWC) Employers 3/4 75% Robyn Horsley (HDA Med Gr) Knowledge & experience in occupational rehabilitation 3/4 75% James Casey (S&G) Knowledge of applicable law 0/4 0% (Vacant) Knowledge of applicable law 0/4 0% Dr Cameron Loy (RACGP) Provision of hospital or medical services 0/4 0% Frances Mirabelli (APS) Provision of hospital or medical services 3/4 75%

Financial management compliance attestation

WorkSafe Victoria Victorian Asbestos Eradication Agency I, John Merritt, on behalf of the Board, I, Dianne Foggo, on behalf of the Board, certify certify that the Victorian WorkCover that the Victorian Asbestos Eradication Agency Authority has no Material Compliance has no Material Compliance Deficiency with Deficiency with respect to the applicable respect to the applicable Standing Directions Standing Directions under the Financial under the Financial Management Act 1994 Management Act 1994 and Instructions. and Instructions.

John Merritt Dianne Foggo Chair Chair Victorian WorkCover Authority Victorian Asbestos Eradication Agency

Date signed: 26 August 2020 Date signed: 13 August 2020

Victorian WorkCover Authority trading as WorkSafe Victoria

157 WorkSafe Annual Report Compliance Ministerial Directions Access to information This section includes disclosures No Ministerial Directions were given WorkSafe discloses a large volume required by the Financial Management under section 495 of the WIRC Act of information online, via printed Act 1994, the Accident Compensation during the financial year 2019-20. publications and through its Act 1985, the Workplace Injury WorkSafe’s objectives, functions metropolitan and regional offices. It also Rehabilitation and Compensation Act and powers provides information services in person 2013, the Public Interest Disclosure Act and/or by phone, through its Advisory WorkSafe’s primary objectives, 2012, the Carers Recognition Act 2012 Services, annual report, website, library functions and powers are found in and the Freedom of Information Act at 1 Malop Street, Geelong and any of sections 492, 493 and 494 of the 1982. It also includes voluntary its own or its authorised agents’ offices Workplace Injury Rehabilitation and disclosure of additional regulatory across Victoria. Compensation Act 2013 and sections 2, compliance information. 7 and 8 of the Occupational Health and The Freedom of Information Act Manner of establishment and Safety Act 2004. These Acts are 1982 relevant Minister available on WorkSafe’s website. In addition to organisational structure, WorkSafe was established by section WorkSafe’s role in the governance and compliance, this 18 of the Accident Compensation Act community section shows how WorkSafe makes 1985 as in force immediately before information readily available to workers WorkSafe is the regulator of 1 July 2014 as a body corporate with and the public in accordance with occupational health and safety and the perpetual succession. Part II of the Freedom of Information accident compensation scheme in Act 1982. Responsibilities are currently divided Victoria and its objectives and between two Victorian Government functions include (among others): The Freedom of Information Act 1982 Ministers in accordance with the • providing insurance to employers gives members of the public the right, General Order issued by the Premier of • receiving, assessing and subject to certain exemptions, to apply Victoria: the Assistant Treasurer and determining claims for payment of for access to information held by the Minister for Workplace Safety. compensation to injured workers WorkSafe and/or to correct their Accountability of WorkSafe • conducting and defending legal personal information if it is incomplete, incorrect or out of date. Pursuant to section 492 of the proceedings before courts and tribunals Workplace Injury Rehabilitation and The Freedom of Information Act 1982 • assisting employers and workers in Compensation Act 2013, WorkSafe is applies to documents created by required to exercise its powers and achieving healthy and safe working WorkSafe, as well as those created by perform its functions under the environments other organisations, which are in the • promoting the effective Workplace Injury Rehabilitation and possession of WorkSafe and its occupational rehabilitation of injured Compensation Act 2013, the Accident authorised agents. workers and their early return to Compensation Act 1985, the Workers For requests under the Freedom of work Compensation Act 1958, the Information Act 1982, applicants may • developing and implementing Occupational Health and Safety Act use the online form provided at programs to provide incentives for 2004, the Equipment (Public Safety) Act www.ovic.vic.gov.au. employers to implement measures 1994 and the Dangerous Goods Act In 2019-20, WorkSafe received 1,432 to eliminate or reduce risks to health 1985. Pursuant to section 495 of the Freedom of Information (FOI) requests. and safety and to otherwise improve Workplace Injury Rehabilitation and The Office of the Victorian Information occupational health, safety and Compensation Act 2013, WorkSafe is Commissioner (OVIC) received 17 welfare subject to the general direction and applications for review and 12 • promoting public awareness and control of the Minister and any specific complaints in relation to WorkSafe FOI discussion of occupational health written directions given by the Minister. decisions. The Victorian Civil and and safety and providing information The Minister cannot give a direction in Administrative Tribunal (VCAT) services to workers, employers and relation to a specific person. received one application for appeal of a the Victorian community. WorkSafe FOI decision. VCAT is yet to make a decision on this appeal.

158 Details on the outcome of reviews by Categories of documents • Return to work OVIC and appeals to VCAT are Records are managed using a • Risk available on the OVIC website and cataloguing system called HPE • Service requests annual report. Records Manager, are organised by • Scheme Performance, including data FOI is just one of the processes subject and type (form, policy, and statistics available to the public to access guidance, etc.) and filed by business • Strategic and operational planning WorkSafe documents or information. area and subject matter. • Workplace visit entry reports, improvement and prohibition notices WorkSafe has processes in place to Injury claims are filed by name and provide information to workers and the managed by authorised agents in Health and safety public outside the formal FOI process. accordance with WorkSafe’s record WorkSafe is responsible for improving Most communication or exchange of management policy, authorities and health, safety and welfare in Victorian information with third parties occurs in standards issued by the Public Record workplaces under the Occupational the normal course of our business and Office Victoria under the Public Health and Safety Act 2004 and with injured workers directly, or through Records Act 1973. associated legislation. our authorised agents, or under the Categories of records/files include: Information held by WorkSafe is primarily Workplace Injury Rehabilitation and • Actuarial related to workplace visit entry reports, Compensation Act 2013. • Annual reports notices and licence applications. As part of normal claim management • Complaints WorkSafe is currently trialling an Informal and administration, injured workers may • Compliance Release of Information Program, in access information in relation to their • Compliance Codes addition to the more formal freedom of claim under Section 9 of the Workplace • Contracts information process. Under the Informal Injury Rehabilitation and Compensation • Correspondence, including Release of Information Program, the type Act 2013 directly from agents or their ministerial of information for release is limited and employer (including a self-insurer) or in • Dangerous Goods those who are seeking the information accordance with other provisions of the • Dispute Management must meet specific eligibility criteria. In Workplace Injury Rehabilitation and • Enforcement Group 2019-20, there were 186 applications, Compensation Act 2013. • Financial with 82 deemed eligible for the release of In 2019-20, 14,709 requests for • Freedom of Information requests information, resulting in the release of a information in relation to workers’ injury • Health and Disability Services, total of 205 documents. The most claims were received by agents under including Clinical and Independent common applicant types were the Workplace Injury Rehabilitation and Medical Examiner services employees, injured workers or Compensation Act 2013. • Health and Safety representatives of injured workers. • Human Resources (employee Organisation and functions Insurance records) Information about WorkSafe and its WorkSafe is responsible for the • Information Technology Shared structure, business units, authorised compensation and rehabilitation of Solutions agents, objectives, functions, powers, injured workers and managing employer • Injury claims (managed by the legislation it administers and workplace injury insurance and premiums authorised agents) requests for access to information under the • Insurance, including self-insurance, Workplace Injury Rehabilitation made under the Freedom of Information . and premium and Compensation Act 2013 Act 1982 or the Workplace Injury • Independent Review (Internal The rehabilitation and compensation Rehabilitation and Compensation Act Review & Workers Compensation scheme is administered by a number of 2013 can be found in the annual report Independent Review) authorised agents on behalf of WorkSafe. and/or on the WorkSafe website. • Investigations These agents are currently responsible Publications including policies, • Legislation and policy for a range of functions including manuals, guidelines, codes of practice, • Legal and litigation premium collection, claim lodgement and brochures and other materials are • Licensing applications and renewals the delivery of benefits to, and available on the WorkSafe website. • Policies, procedures and manuals, rehabilitation of, workers. Therefore, Legislation administered by WorkSafe including the Online Claims Manual personal or case files of workers are held is also available on the website. • Programs or events (eg WorkSafe by the agents who manage their claims. Awards) Other operational and policy files are • Prosecution stored at WorkSafe’s offices at 1 Malop Street, Geelong.

159 WorkSafe Annual Report Examples of the types of documents to Other information Protected disclosures which members of the public usually For information not related to a worker’s WorkSafe has established procedures apply for access are: injury claim file or an employer’s in accordance with the Public Interest • documents relating to their personal premium, requests must be made in Disclosures Act 2012. The purpose of information, for example a particular writing and should be addressed to: these procedures is to facilitate the worker’s injury claim, or a workplace Freedom of Information making of disclosures and the complaint made against an WorkSafe Victoria protection of people who make individual or company PO Box 279 disclosures from reprisals. The • documents of a non-personal Geelong Victoria 3220 procedures are available at nature, for example details on worksafe.vic.gov.au. WorkSafe’s processes or decisions, Requests under the Freedom of or information on an incident at a Information Act 1982 must be made in Independent Review Division workplace. writing, or using the online form The Independent Review Division of provided at www.ovic.vic.gov.au. A Not all documents are automatically WorkSafe’s Legal and Governance statutory fee of $29.60 is payable for made available in response to a department encompasses the Internal each request and must be paid by request. A concerned person may Review Unit (IRU) as well as the newly credit card online, or enclosed with the check WorkSafe’s website or contact established Workers Compensation letter of request (cheques should be the Advisory Service to enquire as to Independent Review Service (WCIRS), made payable to WorkSafe Victoria). whether the information they require is which began operating from 30 April available for inspection or whether the The fee may be waived if the applicant 2020. person should apply for it under the requests and provides evidence as to The IRU conducts administrative law provisions of the Freedom of why payment of the fee would cause merits reviews of decisions made by Information Act 1982. them financial hardship. Additional WorkSafe’s inspectors under the costs for access to documents may Making a request Occupational Health and Safety Act also be incurred, such as for 2004 (OHS), Dangerous Goods Act WORKERS’ INJURY CLAIM FILES photocopying (e.g. 20 cents per each 1985 (DG), Equipment (Public Safety) If you are a worker who has claimed A4 size black and white paper) and Act (EPS), Workplace Injury compensation and wishes to access search time. Rehabilitation and Compensation Act documents in relation to your injury Decisions are made under the Freedom 2013 (WIRC) and associated claim file you can contact the agent of Information Act 1982 by the Principal Regulations relating to health and managing your claim to apply for Officer or authorised FOI Officers in safety or return to work obligations of documents under section 9 of the accordance with the requirements of workplaces, together with procedural Workplace Injury Rehabilitation and section 26 of the Freedom of reviews of decisions made relating to Compensation Act 2013. Under this Act Information Act 1982. the issuing of licenses. agents are required to process and respond to a request within 28 days Further information The IRU decision-makers have from the date they receive the request. Further information and forms are delegated powers under the relevant Information in relation to the injury claim available online at Acts to confirm, set aside or vary the access to information process is www.worksafe.vic.gov.au. decisions it reviews. available on the WorkSafe website – Online publications and library WCIRS is responsible for conducting Online Claims Manual. independent reviews of decisions WorkSafe produces a wide range of made by WorkSafe’s authorised agents WORKPLACE INJURY INSURANCE publications, many of which can be under the WIRC Act at the request of an PREMIUM accessed at worksafe.vic.gov.au. For injured worker or their representative. Information Documents relating to further information or enquiries, the In order to give effect to independent employer premiums are held by the contact number is (03) 4243 7375. reviewing findings, the WCIRS agents. Certain documents can be The library operates from WorkSafe’s decision-makers have been delegated released by the agents without the head office at 1 Malop Street, Geelong. the power to give directions to agents need to use the Freedom of Information under section 501(2)(b) of the WIRC Act 1982 process. Employers should Act. contact the agent managing their WorkCover insurance to request access to particular documents.

160 Applications for internal review

Internal review outcomes 2017-18 2018-19 2019-20

Health and safety Inspector’s decision affirmed (no change) 35 67 31 Inspector’s decision set aside 86 53 67 Inspector’s decision varied (other than compliance date) 59 23 56 Compliance date only changed 1186 1236 1352 Extension refused 9 23 0 Application invalid/ineligible/not reviewable 9 15 18 Application withdrawn 109 126 77 Inspector’s decision set aside under s114 OHS/s17F DG /s19D EPS Acts) – – 232 Inspector decision varied under s114 OHS/s17F DG /s19D EPS Acts – – 152 Requests under s114 OHS/s17F DG /s19D EPS Acts withdrawn – – 2 Total health and safety applications outcomes 1493 1543 1987

Licensing Decision affirmed 8 10 9 Decision set aside 3 4 9 Application invalid 4 1 5 Application withdrawn 0 2 4 Total licensing outcomes 15 17 27

Return to work Decisions set aside 1 2 0 Compliance date only changed 2 1 4 Decision affirmed 4 3 2 Varied 1 0 0 Invalid 2 1 1 Withdrawn 0 0 1 Inspector’s decision set aside under s138 WIRC Act – – 1 Inspector’s decision varied under s138 WIRC Act – – 0 Total return to work outcomes 10 7 9

Application for review of agent decisions by Workers Compensation Independent Review Service

Workers Compensation Independent Review Service outcomes 2017-18 2018-19 2019-20

Decisions affirmed – – 1 Decisions overturned (by direction) – – 11 Decisions withdrawn (by agent) – – 1 Application withdrawn (by worker) – – 0 Ineligible decisions – – 12 Eligible decisions pending outcome 15 Total review applications – – 40

161 WorkSafe Annual Report Victorian Civil and Administrative Both electricity and paper usage will During 2019-20, WorkSafe completed Tribunal applications continue to be monitored and four Local Jobs First applicable minimised. projects, collectively valued at $44 During 2019-20, there were six new million. The four projects were identified applications lodged to the Victorian All redundant mobile phones and IT as state-wide projects and were lodged Civil and Administrative Tribunal for equipment are donated to a range of with the Industry Capability Network review of Internal Review Unit charitable entities for recycling if they during the 2018-19 period. decisions. cannot be re-used within our offices. Of the four projects, the Industry Of the active applications, four were Local Jobs First – Capability Network assessed that an withdrawn and one was struck out. Victorian Industry LIDP was not required for one of the There are currently nine applications Participation Policy projects. The project in question was before the Tribunal: two have assessed as being a state-wide administrative mention dates The Victorian Industry Participation non-contestable project with a 100% scheduled, two have a directions Policy Act 2003 requires departments estimated local content. hearing scheduled, and one has a final and public sector bodies to report on hearing scheduled. the implementation of the Local Jobs Of the six projects that incorporated a First - Victorian Industry Participation Local Industry Development Plan, the Environmental performance Policy (Local Jobs First - VIPP). evaluation criteria of each project Departments and other public sector WorkSafe is committed to reducing its incorporated a minimum formal bodies are required to apply the Local environmental footprint and weighting of 10% to Industry Jobs First - VIPP for all procurement consistently manages sustainability Development and 10% to Jobs activities valued at $3 million or more in through resource conservation, Outcomes. metropolitan Melbourne and for pollution prevention and promoting The expected outcomes from the state-wide projects, and $1 million or awareness among employees and implementation of the LIDP for these more for procurement activities based stakeholders. projects collectively are as follows: in regional Victoria. WorkSafe proactively manages its • across the six procurement During 2019-20, WorkSafe commenced environmental footprint through activities, an average of 78% local three procurement activities totalling employee participation. content was committed per project $38 million, which were lodged with the • a total of 78 local jobs to be created The introduction of electronic Industry Capability Network - Local – Annualised Employee Equivalent document management is reducing Jobs First. The three procurement (AEE) paper and storage. Our recycle and activities were assessed by the Industry • a total of 47 local jobs retained – compost programs are also proving Capability Network and were identified (AEE) successful. as state-wide projects which required a • one traineeship created Bicycle and end of trip facilities (e.g. Local Industry Development Plan • nine small to medium enterprises to showers and lockers) are encouraging (LIDP). be utilised in the provision of goods employees to ride to work and sensory and services lighting throughout the building is reducing electricity consumption.

2018-19 2019-20 Change Percentage

Electricity (kWH) 2,193,044 1,720,782 -472,262 -22% Paper Consumption (Reams) 12,222 10,640 -1,582 -13% Paper Consumption (Reams) Per FTE 10.39 7.87 -2.52 -24% Recycled Papers (Reams) 11,889 9,325 -2,564 -22% Recycled Papers (%) 97.28% 89.48% 7.80% 7.80%

162 National Competition Policy Competitive neutrality The Carers Recognition Act 2012 Review of legislative restrictions Under the Victorian Government’s WorkSafe has taken all practical In accordance with its National Competitive Neutrality Policy, WorkSafe measures to comply with its obligations Competition Policy commitments, the is listed as a Public Financial Enterprise. under the Carers Recognition Act 2012. Victorian Government commissioned a Therefore, in accordance with the These include considering the carer review of Victoria’s accident obligations set out in the Competition relationships principles set out in the compensation legislation in 1998. The Principles Agreement, WorkSafe pays Act when setting policies which affect review identified three main restrictions the full suite of Commonwealth and employees in care relationships. on competition; the mandatory nature State taxes or tax equivalents where of the insurance, monopoly provision applicable. WorkSafe is not a borrower WorkSafe has employment policies and centralised premium setting. in its own right and therefore is not including the provision of carers leave, subject to the Financial flexible working hours, purchased leave Pursuant to section 490 of the Accommodation Levy. and the ability to work from home Workplace Injury Rehabilitation and which comply with the statement of Compensation Act 2013, the Minister The Building Act 1993 principles in the Act. must before 1 July 2015 and once every five years after that, cause a review on WorkSafe’s policy with respect to new Additional information any matter relating to the setting of building works, and alterations to available on request premiums. The review is to be existing buildings, is to comply with the undertaken by an independent expert Building Act 1993 as if WorkSafe is not To the extent applicable, the review body. An independent review of exempt from compliance as a public information listed in Financial Reporting WorkSafe premiums was ‘caused’ by authority (as provided in section 217(3) Direction 22H, issued by the Minister 1 July 2020 by the relevant Minister in of the Building Act 1993). for Finance, is available on request line with legislative requirements. Some buildings occupied by WorkSafe subject to provisions of the Freedom of The previous review was undertaken by may have been constructed or altered Information Act 1982. the Department of Treasury and under exemptions for public bodies Finance, which appointed an which applied at the time. WorkSafe is independent actuarial firm to assist with unaware of any material the review. Overall the actuaries found non-compliance with the current that WorkSafe’s current premium building standards for buildings of their system is fair, performing well and is nature and age. financially sustainable.

Merit and equity, and employment and conduct principles WorkSafe is committed to the application of principles of merit and equity in the employment process. These principles ensure applicants are assessed and evaluated fairly and equitably on the basis of key selection criteria and required competencies. All decision making recognises WorkSafe’s code of conduct, organisation values and relevant policies and processes.

Workforce metrics

30 June 30 June 30 June 30 June WorkSafe workforce data 2017 2018 2019 2020

Total number of employees 1,074 1,070 1,202 1,385 Full time equivalent 1,040 1,041 1,176 1351.56 Males 521 525 562 639 Females 553 545 637 746 Self-described gender - - 3 0 Full time 960 974 1,001 1265 Part time 114 96 101 120 Average age 46 45 44 43.9

163 WorkSafe Annual Report WorkSafe’s commitment to Online tools to support safety within the Key safety initiatives 2019-20 health, safety and wellbeing business are embedded and have • Online management of occupational The health, safety and wellbeing of greatly increased the usability and health testing has streamlined the WorkSafe’s people is of the highest investigation, compliance and process and improved the review of priority. Significant changes in work statistical analysis of incidents and test outcomes, for greater data practices were required this year as a hazards. There have also been reliability, reporting and higher rates result of the COVID-19 pandemic. significant improvements in the of compliance WorkSafe recognises it has a response to, and management of, • Following the introduction of new responsibility to lead the way in injuries, which is reflected in claims data workplace manslaughter legislation supporting employees against a for 2019-20. and the formation of WorkSafe’s backdrop of increasing social challenge WorkSafe’s Health and Safety Fatalities Investigations Team, a and open recognition of mental illness Representatives (HSRs) are review of trauma response was in the community, which has been increasingly involved in all aspects of undertaken, with elements of exacerbated by COVID-19. organisational safety, including the psychosocial risk and client-facing reporting of incidents and hazards. role safety introduced to the safety Safety management They are also consulted on the larger management system WorkSafe has now fully implemented its risk programs, such as the responses • The issuing of infringement notices new safety management system, which to the COVID-19 pandemic and by the Inspectorate has also is certified to the requirements of the occupational violence. prompted a review of occupational ISO 45001 global standard for safety violence and aggression (OVA) management systems. against WorkSafe staff. A consultation working group has been established to assist in applying the OVA framework for the public service.

The following reports our performance against key health, safety and wellbeing (HSW) performance indicators.

Hazards 2017-18 2018-19 2019-20

Total hazards 35 65 67 Hazards per 100 FTE* 3.04 5.8 5.2 Number of incidents** 177 171 247 Incidents per 100 FTE 15.4 15.1 19 Incidents raised within 3 days of occurrence n/a n/a 83% Incidents investigated within 10 days of reporting n/a n/a 87%

Safety management 2017-18 2018-19 2019-20 Total hazards 35 65 67 Hazards per 100 FTE* 3.04 5.8 5.2 Number of incidents** 177 171 247 Incidents per 100 FTE 15.4 15.1 19 Incidents raised within 3 days of occurrence n/a n/a 83% Incidents investigated within 10 days of reporting n/a n/a 87%

164 Claims and return to work 2017-18 2018-19 2019-20 Number of claims (standardised) 23 13 20 Claims – rate per 100 FTE 2.04 1.08 1.56 Number of time-loss claims 9 7 6 Time-loss claims – rate per 100 FTE 0.80 0.58 0.47 Number of 13-week claims 6 6 5 13-week claims – rate per 100 FTE 0.53 0.49 0.39 Number of fatality claims 0 0 0 Number of claims with return to work plans initiated 7 4 4 Percentage of 13-week claims with return to work plans initiated 0.17 0.67 0.80

* An average FTE of 1275 for the full year has been used in these calculations. ** It should be noted that the increase in incidents reported for 2019-20 are indicative of an evolving reporting culture, supported by the implementation of a new incident reporting system.

Performance against lead safety indicators

Representation 2018-19 2019-20

Designated Work Groups 25 25 Health and Safety Representatives 44 45 Deputy Health and Safety Representatives 5 3 First Aid Officers (Level 2) 47 44 First Aid Officers (Level 3) 18 16 Emergency Wardens 77 89 Peer Support Officers 52 40 Mental Health First Aiders - 61 Designated Work Groups Management Representatives 29 34

Safety systems 2018-19 2019-20

Committee meetings in total 36 13 Non-conformances from ISO45001 certification 1 0

Ergonomic assessments completed 2018-19 2019-20

Committee meetings in total 36 13 Non-conformances from ISO45001 certification 1 0

Workers compensation and The increase is considered positive, and Proactive work is underway to deliver job non-compensation support enables WorkSafe to better support the task analysis for roles that commonly needs of its workforce. Where injury sustain injuries. This is being delivered In 2019-20 there was an increase in the occurs, WorkSafe strives to continually through a full consultation process and number of employees seeking support improve its return to work practices. updates to our Claim Information Pack, for mental health and physical injury, While claim numbers increased from 15 which will ensure any injured employee both work and non-work related. It’s in 2018-19 to 20 in 2019-20, employees has clear guidance on how to lodge a believed this is due to greater returned to work in less time and claim and actively participate returning awareness of educational offerings and required less medical treatment through to health and work. a growing willingness to proactively the life of their claim. seek help.

165 WorkSafe Annual Report Consultancy expenditure

Consultancy expenditure over $10,000 During the year, WorkSafe engaged consultants to assist in the planning and delivery of the Strategy program, in addition to its ongoing operations. In 2019-20, there were 20 consultancies where the total fees payable to the consultant were $10,000 or greater (excluding GST). The total expenditure during the 2019-20 financial year in relation to these consultancies was $4.2 million (excluding GST). Details of individual consultancies are outlined below.

Total approved Expenditure Future expenditure 2019-20 expenditure (excl GST) (excl GST) (excl GST) Consultant Purpose of consultancy ‘000 ‘000 ‘000

Strategy program

CHANGEWORKS Design of External Change Management for the CONSULTING PTY LTD Recovery Transformation Stream at Worksafe 135 79 -

CULTURE HQ PTY LTD T/ Research on "Culturally And Linguistically AS CULTUREVERSE Diverse communities" (CALD) 80 80 -

DELOITTE CONSULTING PTY LIMITED Design of Transition State Operating Model 1,280 1,319 -

DELOITTE CONSULTING Consulting services to refresh Future Operating PTY LIMITED Model for Business Activities 655 655 -

DELOITTE CONSULTING PTY LIMITED Design of Recovery Management Office 249 247 -

DELOITTE CONSULTING Development of three Transformation Scenarios PTY LIMITED in Relation to Business Priorities 242 242 -

GRANT THORNTON Report on vendor performance management AUSTRALIA LTD design principles 173 168 -

MCKINSEY & COMPANY Revisit Strategy baseline review 740 740 -

PORTER NOVELLI Research project to uncover key insights AUSTRALIA PTY LTD on the use of guidance in Agriculture 72 64 -

PORTER NOVELLI Research project to uncover key insights on the use AUSTRALIA PTY LTD of guidance in the construction industry 76 37 -

Other

BRIDGET ANN BLACKFORD

T/AS TRISKEL COACHING Prepare a prevention-led strategy for the CONSULTANCY Health & Social Assistance Industry 45 45 -

DELOITTE ACCESS Independent expert engaged to advise on ECONOMICS PTY LTD industry/sector structural reform 53 36 -

GRANT THORNTON Review Motor Vehicle fleet financing arrangements AUSTRALIA LTD and policy to provide recommendations to optimise value leading to tender. 140 151 -

GREENCAP PTY LTD Consulting on Respirable Crystalline Silica code of practice 47 22 25

166 Total approved Expenditure Future expenditure 2019/20 expenditure (excl GST) (excl GST) (excl GST) Consultant Purpose of consultancy ‘000 ‘000 ‘000

Other

KPMG Provide Research findings in Behaviour Management 180 161 19

PRICEWATERHOUSECOOPERS Review the process governing engagement CONSULTING (AUSTRALIA) with Ministerial offices/engagement administration 51 51 - PTY LIMITED

PRICEWATERHOUSECOOPERS Review of Framework for Financial CONSULTING (AUSTRALIA) Assesment of Self Insurers - 50 - PTY LIMITED

RISK MENTOR PTY LTD Provide recommendations relating to an assessment of risk concerning program developments and delivery 84 20 -

SOCIAL TRADERS Development of a social procurement strategy 28 13 15

THE TRUSTEE FOR RTK PEOPLE STRATEGIES TRUST Advice relating to Work Stress Guidance Review 31 31 -

Consultancy expenditure under $10,000 In 2019-20, there was one consultancy engaged where the total fees payable was less than $10,000 (excluding GST)

Total approved Expenditure Future expenditure 2019/20 expenditure (excl GST) (excl GST) (excl GST) Consultant Purpose of consultancy ‘000 ‘000 ‘000

Strategy program

TRANSITIONING WELL Development of a framework PTY LTD for benchmarking 6 6 -

167 WorkSafe Annual Report Information and communication technology (ICT) expenditure

For the 2019-20 reporting period, WorkSafe had a total ICT expenditure of $155 million, with the details shown below:

BUSINESS AS USUAL ICT EXPENDITURE NON-BUSINESS AS USUAL ICT EXPENDITURE

TOTAL OPERATION EXP CAPITAL EXP 37,413 117,543 52,332 65,211

Details: BAU Category Total Opex Capex ITSS BAU 36,566,686 36,487,733 78,953 Other BAU 846,471 846,471

Total 37,413,156 37,334,204 78,953

Details: Non-BAU Category Total Opex Capex Projects Sponsored by ITSS 822,555 297,960 524,596 Business Sponsored Projects - IT Costs 14,570,771 5,684,272 8,886,499 Geelong Relocation program 58,257 36,044 22,214 H1 Technology Platforms 62,107,567 20,105,377 42,002,190 H2 Technology Platforms 34,049,366 20,812,252 13,237,115 Other W2030 CCs with IT Account Codes and 5244 Costs 5,934,397 5,396,153 538,244

Total 117,542,914 52,332,057 65,210,857

Total 154,956,070 89,666,260 65,289,810

168 Advertising expenditure In 2019-20 there were nine government advertising campaigns with total media spend of $100 000 or greater (exclusive of GST). The details of each campaign are outlined below.

Creative Advertising and campaign Research Other Name of Start/end (media development and evaluation Campaign campaign Campaign summary dates expenditure) expenditure expenditure expenditure Total

Enforcement Keeping employees safe is an Campaign employer's responsibility. The enforcement campaign aims to educate employers about their OHS obligation to ensure employees stay safe at work and return home every day. WorkSafe inspects workplaces regularly to enforce on-site safety, and informs those running an unsafe workplace, or doing the wrong thing, that they will be Aug 2019 - held accountable. Jun 2020

Enforcement: Keeping employees safe is an ‘More employer's responsibility and the 'More Inspectors’ inspectors. More inspections' campaign Campaign is targeting businesses running unsafe workplaces or neglecting their OHS obligations. Focusing on Construction, 1,510 932 82 0 2,525 Agriculture and Manufacturing industries, the campaign drives home the message that with more WorkSafe inspectors now out in the field, you will be caught if you’re running an unsafe Aug 2019 - workplace. Oct 2019

Enforcement: WorkSafe is enforcing tougher laws to ‘Workplace ensure safer workplaces. It sends a send Manslaughter’ a strong message to all Victorian Campaign employers that putting people's lives at risk in the workplace will not be tolerated and if they fail to keep their employees safe, tougher consequences now apply. The campaign drives awareness amongst employers of the introduction of the new workplace manslaughter law Feb 2020 - from July, 2020. Jun 2020

Occupation Unacceptable behaviour can have a Violence in negative impact on the physical and Healthcare mental wellbeing of our healthcare BURST 4 workers. We need everyone to work Mar 2020 - together to ‘Recognise. Report. Prevent’. Apr 2020 1,139 214 187 0 1,540 Occupational This campaign was produced as a direct Violence in response to COVID-19, due to the higher Healthcare rates of OVA being committed to Apr 2020 - Extension Campaign - healthcare and retail workers. May 2020 COVID-19 Response

WorkWell WorkWell contains practical resources, funding and networking opportunities to prevent mental injury and promote Nov 19 - mentally healthy Victorian workplaces. Jun 20 0 599 81 72 751

169 WorkSafe Annual Report Creative Advertising and campaign Research Other Name of Start/end (media development and evaluation Campaign campaign Campaign summary dates expenditure) expenditure expenditure expenditure Total

Jobs at The Jobs at Home Day campaign Home Day promotes WorkSafe's vision of Victorian workers returning home safe every day. The campaign encourages 85 151 0 46 282 employees to think about their most important reason for workplace safety - Mar 2020 - their jobs at home. Mar 2020

Christmas Workers and employers must put safety Safety Alert first in the busy lead-up to Christmas to prevent workplace fatalities. “Our statistics show almost 25 per cent of workplace fatalities occur in the final 78 44 0 0 122 eight weeks of the year. Safety is everyone’s responsibility, so it’s up to all employers and workers to work together to make sure fatalities do not Dec 2019 - happen. Feb 2020

Health & Health and Safety Month is the time to Safety Month discuss safety in your workplace. Leading Industry experts present on mental, physical wellbeing and industry 64 58 0 0 122 best practice to keep your workplace Oct 2019 - safe year round. Oct 2019

Total 2,877 1,998 351 119 5,342

The following campaigns are below the disclosure threshold of $100,000.

Name of Start/end campaign Campaign summary dates

Functional Advertising driven by operational or legal obligations including Jul 2019 - Advertising functional notices, public tender notices and recruitment advertising Jun 2020

170 WorkSafe’s response to Appendix 5 the Victorian Ombudsman’s 2019 report

In 2019 the Victorian Ombudsman The remaining 13 recommendations handed down her report: WorkSafe 2: were made to WorkSafe. The Follow-up Investigation into the response to those recommendations, Management of Complex Workers and the timeframe by which they will Compensation Claims. be addressed, is listed in the table In her report, the Ombudsman made below. WorkSafe accepts all of the 15 recommendations, the first two of recommendations. which were made to government.

Recommendation Response Timing 3. Establish a dedicated business unit to Accepted 30 Apr 2020 independently review disputed decisions when WorkSafe has established the Workers and ongoing requested by workers following unsuccessful Compensation Independent Review conciliation. Where necessary, WorkSafe should Service (WIRCS) to independently use its existing powers to direct agents to overturn review disputed decisions following decisions which do not have a reasonable conciliation, with independent review prospect of success at court (i.e. would not be officers empowered to make sustainable). determinations on the sustainability of decisions.

4. Amend its quality decision making audit procedure to Accepted 30 Apr 2020 ensure that: WorkSafe has embedded Sustainability and ongoing • only sustainable decisions pass of Decision-making Framework (SDMF) • unsustainable decisions identified through principles into quality assurance audits the audit process are overturned. and health checks of agent decision making.

171 WorkSafe Annual Report Recommendation Response Timing 5. Establish a centralised complaints process which Accepted 31 Mar 2020 triages and provides a single point of contact for WorkSafe has established a Centralised and ongoing all complaints about the claims process, including Complaints Management Service for all agent decisions and independent medical workers compensation complaints examinations received by WorkSafe. As at 30 June 2020, the average complaints resolution time was 10 days, down from 27 days in June 2019.

6. Update the claims manual, and provide training to Accepted and in progress 30 Sept 2020 agent staff, to: WorkSafe is updating its claims manual, • require that agents make sustainable decisions adding Sustainability of Decision-making • require that agents provide reasons in an adverse Framework (SDMF) principles, guidance decision notice if they have disregarded or for the use of surveillance, referrals for discounted any relevant evidence or information in psychiatrist Independent Medical making the decision Examiners (IME) and chronic pain • clarify and expand the requirements about agents’ syndrome guidance. use of surveillance, including what constitutes Training requirements are being finalised ‘adequate evidence’, record keeping standards to support agents to implement the and the use of surveillance in mental injury claims revised information in the claims manual. • clarify the circumstances in which agents should Mandatory training will be rolled out to all refer a worker to a psychiatrist IME for assessment those responsible for making decisions of a potential secondary mental injury about injured workers’ entitlements, • provide guidance on the appropriate IME specialty commencing August 2020. to assess workers with chronic pain syndrome or a pain disorder • provide guidance on the rejection of mental injury claims under section 40(1) of the WIRC Act (reasonable management ground), including the evidence required to support a decision on this ground • provide clarification and greater guidance regarding the circumstances in which it is appropriate to issue a return to work non-compliance notice, including assessment of whether a worker has made ‘reasonable efforts’ to comply with their obligations • provide guidance on the evidence required to show a ‘material change’ in a worker’s condition since a previous Medical Panel examined them and provided an opinion.

172 Recommendation Response Timing 7. Increase WorkSafe’s oversight of the following claims Accepted 31 May 2020 management activities by agents, through targeted WorkSafe has strengthened requirements and ongoing ‘health checks’ or audits: in relation to agents’ use of surveillance, by • agents’ use of surveillance providing further clarity around when it is • mental injury claims rejected under section 40(1) of appropriate to undertake surveillance, the the WIRC Act (reasonable management ground) evidence required and sufficient • return to work non-compliance notices documentation of reasons requirements. • terminations of ‘top up’ weekly payments provided WorkSafe has introduced quarterly ‘health under section 165 of the WIRC Act (or section 93CD checks’ of agents’ surveillance decisions of the Accident Compensation Act). and use of return to work non-compliance warnings. WorkSafe has expanded oversight of mental injury claims rejected under s40(1) of the WIRC Act and has increased the number of audits incorporated into the monthly quality assurance program. Terminations of ‘top up’ weekly payments (Under s165 of the WIRC Act or s93CD of Accident Compensation Act) are now included in the population of claims decisions that may be audited in the quality assurance audit program.

8. Amend the Injured Worker Survey measure so that Accepted and in progress 1 Jul 2020 it better targets complex claims, which may The Injured Worker Survey has been include: amended to better target complex claims. • increasing the focus on complex claims in the Specific reporting on complex claims is curret survey being tested and additional survey • introducing a separate survey of workers with questions focused on complex claims complex claims. have been developed.

9. Introduce a contractual requirement regarding the Accepted 31 Mar 2020 timeframe in which agents must respond to: WorkSafe has introduced a contractual and ongoing • requests for reinstatement of weekly payments requirement that decisions in relation to • requests for medical and like treatment. requests for reinstatement of weekly payments and requests for medical and like treatment must be taken within 28 days of receipt of the request, unless there are documented, exceptional circumstances. Compliance is currently being monitored.

10. Establish a mechanism enabling the regular review of Accepted and in progress Sep 2020 Medical Panel outcomes to identify potential trends Analysis is underway to determine in: effective ways to share trend reporting of • IME opinions Medial Panel outcomes. • agents’ use of independent medical examinations • agent decision making.

173 WorkSafe Annual Report Recommendation Response Timing

11. Amend its IME Quality Assurance processes to Accepted 31 Mar 2020 ensure that reviewers are provided all of the IME quality assurance peer review and and ongoing documentation the IME considered to inform their Clinical Panel desktop review processes examination of the worker and prepare their report. have been amended to ensure all documents considered by IMEs in examinations are provided to reviewers.

12. Ensure IMEs consider the definition of ‘suitable Accepted and in progress Sep 2020 employment’ in the WIRC Act when forming A training module is in development for opinions about whether a worker has a current IMEs to assist them in determining what work capacity, by: constitutes ‘suitable employment’. • amending the relevant template question(s) so Amended templates are in development. that IMEs are required to detail how they considered each factor in the definition of ‘suitable employment’ when providing their opinion, similar to the way in which Medical Panels address this • providing training to IMEs on what constitutes ‘suitable employment’.

13. Provide different time allocations for independent Accepted 1 Jul 2020 and medical examinations of injured workers with Injured workers who have been ongoing ‘complex claims’ and remunerate IMEs for these supported by the scheme for 78 weeks or accordingly. longer are able to have longer appointments with specialist IMEs. Higher fees will be paid for these specialist examinations.

14. Provide guidance and/or training to IMEs Accepted Sep 2020 regarding: Training package in development for IMEs • what constitutes ‘material change’ in a worker’s to help them determine what constitutes condition since a previous Medical Panel ‘material change’ in a worker’s condition, examined them and provided an opinion and how surveillance materials should be • how surveillance material should be considered considered when forming opinions about when forming an opinion about a worker’s work work capacity. capacity.

15. Undertake a further review of the issues identified by Accepted Feb 2020 and the investigation regarding IME Y and engage with A further review of issues identified ongoing them directly to ensure any necessary changes to regarding IME Y has been completed and their practices occur. a plan for improvement is in place.

174 Disclosure index Appendix 6

The annual report of WorkSafe Victoria is prepared in accordance with all relevant Victorian legislations and pronouncements. This index has been prepared to facilitate identification of WorkSafe’s compliance with statutory disclosure requirements.

Page Legislation Requirement reference

Ministerial Directions & Financial Reporting Directions

Report of operations Charter and purpose FRD 22H Manner of establishment and the relevant Ministers 158 FRD 22H Purpose, functions, powers and duties 158 FRD 22H Key initiatives and projects 3-6, 17-58 FRD 22H Nature and range of services provided 7-8, 13-46

Management and structure

FRD 22H Organisational structure 10

175 WorkSafe Annual Report Page Legislation Requirement reference

Ministerial Directions & Financial Reporting Directions

Report of operations Financial and other information FRD 10A Disclosure index 175 FRD 22H Employment and conduct principles 163 FRD 22H Occupational health and safety policy 56, 164 FRD 22H Summary of the financial results for the year 51-52 FRD 22H Significant changes in financial position during the year 62 FRD 22H Major changes or factors affecting performance Throughout FRD 22H Subsequent events 118 FRD 22H Application and operation of Freedom of Information Act 1982 158 FRD 22H Compliance with building and maintenance provisions of Building Act 1993 163 FRD 22H Statement on National Competition Policy 163 FRD 22H Application and operation of the Public Interest Disclosure Act 2012 160 FRD 22H Application and operation of the Carers Recognition Act 2012 163 FRD 22H Details of consultancies over $10,000 166-167 FRD 22H Details of consultancies under $10,000 167 FRD 22H Disclosure of advertising expenditure 169-170 FRD 22H Disclosure of ICT expenditure 168 FRD 22H Statement of availability of other information 163 FRD 24C Reporting of office based environmental impacts 162 FRD 25D Local Jobs First 162 FRD 29C Workforce Data disclosures 163 SD 5.2 Specific requirements under Standing Direction 5.2 120

Compliance attestation and declaration SD 3.7.1 Attestation for compliance with Ministerial Standing Direction 157 SD 5.2.3 Declaration in report of operations 3-6 Financial statements Declaration SD 5.2.2 Declaration in financial statements 120 SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements 67 SD 5.2.1(a) Compliance with Standing Directions 120 SD 5.2.1(b) Compliance with Model Financial Report 120 FRD 11A Disclosure of Ex gratia Expenses 113-117 FRD 21C Disclosures of Responsible Persons, Executive Officers and other Personnel in the Financial Report 113-117 FRD 103G Non Financial Physical Assets 96 FRD 110A Cash Flow Statements 64 FRD 112D Defined Benefit Superannuation Obligations 88

Legislation Freedom of Information Act 1982 158 Building Act 1993 163 Public Interest Disclosure Act 2012 160 Carers Recognition Act 2012 163 Disability Act 2016 55 Victorian Industry Participation Policy Act 2003 162 Financial Management Act 1994 67

176

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