Everyone. Every workplace.
Annual Report 2018 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Contents
Letter to the Minister 2 Everyone. Every workplace. 2017/18 Overview 4 Report from the Chairman and Chief Executive 6 Safety is for everyone, in every workplace. About WorkSafe 8 That is the message for the community in WorkSafe’s latest public awareness campaign and the theme Healthy and Safe 12 at the centre of the organisation’s new long-term strategy WorkSafe 2030. Recovery 22 It is about broadening the community’s awareness Value 28 and understanding that safety is both physical and mental wellbeing. It is about the community – no Our People 38 matter when, where or how people work – being able Financial Report 42 to define what safety is so that every Victorian can share in WorkSafe’s vision for all workers to return Appendices 102 home safe. Appendix 1: Prosecutions 103 Appendix 2: Agent performance results 118 Appendix 3: Self-insurance report 126 Appendix 4: Governance and compliance 134 Appendix 5: Disclosure index 155
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Letter to Our vision is Victorian workers the Minister returning home safe every day.
September 2018 Our mission Robin Scott MP Minister for Finance is actively working with 1 Macarthur Street the community to deliver East Melbourne Victoria 3002 outstanding workplace
Dear Minister safety and return to work, together with
I am pleased to submit the 2017/18 WorkSafe Victoria Annual insurance protection. Report for presentation to Parliament, as required by section 46 of the Financial Management Act 1994.
Yours sincerely
Paul Barker Chairman
Everyone can help shape a safe culture. I think you can make a difference just by calling out unsafe behaviours. For me, safety is about not coming to work anxious or worried. It’s not only physical, but mental wellbeing.”
Jessica WorkSafe Departmental Liaison Officer
2 3 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018 2017/18 Overview
268,810 6.23 24 90.3% 77.74% Mental health total workplaces claims per million lives lost in record high client injured workers back at in Victorian workplaces hours worked workplace incidents service result work within six months prioritised through the down 0.8% on 2016/17 21 in 2016/17 89.6% in 2016/17 above target of 76.79% development of $50m WorkWell program
1.272% $73m WorkSafe 48,044 New website 700+ lowest average performance from 2030 workplace inspections for easier community WorkSafe employees insurance premium insurance operations work begins on long exceeding target of 45,000 access to information now working from new rate maintained compared to $233 million in 2016/17 term strategy Geelong headquarters
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Report from the Chairman and Chief Executive
We have significantly increased our presence in the health WorkSafe faces the challenge of an increase in more Safety and wellbeing for everyone, in every care sector and re-aired our It’s Never Ok campaign as we complex injuries, including mental injuries, together with the continue to address the unacceptable level of violence and continuing challenge of common law. However, our scheme workplace, is at the heart of what drives WorkSafe aggression against health workers. We are also partnering remains financially sound. We have maintained consistently with our stakeholders in construction to educate and low premium rates, with one of the fairest and most affordable to continually evolve and build on its strong history motivate the sector to reduce the risk of serious injury premium rates in the country. We have been able to do this and death. while maintaining compensation and rehabilitation benefits of supporting Victorians. to support injured workers in their recovery and return to More broadly, our efforts are focused on growing the work. The accounting funding ratio is 123% and is above community’s understanding of what a workplace culture the target range of 82.5% to 117.5%. In 2017/18 we began work on our new long-term strategy Adopting new technologies has been another focus area of health, safety and wellbeing looks like and the role WorkSafe 2030 – a guide to our transformation over the next this year. We are working in partnership with some of the everyone can play in achieving it. Our new Hearts and Minds Our people decade. Workplaces are changing rapidly and community best in the field to ensure we move forward with platforms campaign, featuring real Victorians, aims to encourage expectations are shifting. WorkSafe 2030 will ensure we are that will deliver the level of service Victorians expect and that conversation and support the shift towards shared The past year has been a period of tremendous change. in a position to navigate the social, cultural and technological that will enable the delivery of WorkSafe 2030. community workplace safety goals. We began delivering on our commitments under WorkSafe challenges that lie ahead. 2030, while also completing the enormous task of moving These technologies will allow us to simplify our services, cut Recovery our headquarters to Geelong, with more than 700 WorkSafe WorkSafe 2030 marks a pivotal turning point for the red tape and make it easier for Victorians to interact with us. employees now in the new location. Until we realise our vision of all Victorians returning home organisation. More than ever before, we will be focusing Work has begun with the development of a new user-friendly safe every day, we will continue to deliver high quality care on developing stronger partnerships with workers and website where workers, employers – in fact all Victorians – We would like to acknowledge the warm welcome we and treatment when workers are injured. employers so that together we can create a positive, can easily find the guidance and education materials they’re have received from the Geelong community, the support prevention-led culture of health and wellbeing in every looking for. We know getting back to work is a critical milestone in the of our stakeholders and our Minister Robin Scott, and the workplace across the state. recovery process, so in 2017/18 we raised the bar to focus leadership of our Board. We have also developed a roadmap to enhance our data and on a return to work that can be sustained. We acknowledge We are very pleased to be embarking on this journey with the Finally, we would like to take this opportunity to recognise analytics capability. This will help us to better understand it is a more challenging goal but this is about achieving better Victorian community in an environment where our scheme the extraordinary efforts of our people, including those our clients and improve their experience and outcomes, outcomes for workers and their families. remains financially sound and with one of the lowest premium valued employees who left the organisation this year after while providing the insights we need for the delivery of more rates in the country. The longer a person is off work with an injury, the less chance deciding not to make the move to Geelong. They have efficient operations, including better targeted inspections. they have of ever going back. We want the best for our clients shown remarkable resilience and agility and an unwavering There will be challenges and we are committed to so, as a priority, our new Innovation Centre is investing time commitment to the safety of the Victorian community. Healthy and safe overcoming them. The growth in mental injury is of great into identifying what we need to do better to assist people concern to the community and this has again been a focus who have been off work for more than 26 weeks. area for us over the past year. In 2017/18 we conducted 48,044 workplace inspections, exceeding our target by more than 3,000 visits. Value In 2017/18, in partnership with the Department of Health and Human Services, we developed WorkWell, a five-year We have focused on key areas, including the health care We measure our success in many ways and it is extremely $50 million program that will empower employers to make sector, construction, manufacturing and agriculture. pleasing to report that our services continue to be rated well mental health a priority in the workplace. The program by workers and employers. The ratings for our inspectorate, provides access to research, information, tools and Tragically, 24 people lost their lives in workplace incidents inspectorate advice and guidance and insurance premium funding opportunities. in the 12 months to 30 June 2018 — 12 on Victorian farms, services were maintained through a period of significant with quad bikes and tractors the leading causes. change for the organisation. As part of WorkSafe 2030, we will continue to develop preventative programs and work collaboratively with workers In addition to the WorkSafe quad bike public awareness Fundamental to our success is being able to maintain a and employers on how to make a positive difference in this campaign and the government rebate scheme, direct financially sustainable scheme. Performance from insurance complex area. engagement through farm walks and regional field days operations was $73 million. This result was influenced by the reflect our efforts to build closer ties with farmers. full year actuarial increase which increased our projected Paul Barker Clare Amies claims cost by $141 million. Chairman Chief Executive
6 7 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018 About Our Values Constructive in the way we provide information, advice and service WorkSafe Accountable for what we do and what we say; we live up to our promises WorkSafe strives to prevent workplace injuries, Transparent in the way we illness and fatalities. work; our environment is
It also oversees Victoria’s workers compensation scheme, WorkSafe’s stakeholders include employee and employer open and honest which provides benefits to injured workers and helps them representatives, medical and allied health providers, legal get back to safe and sustainable work. Benefits include practitioners and industry bodies. They inform strategy, policies, Effective by working weekly payments, medical and allied health treatment, program development and other initiatives to help deliver the ambulance transport, hospital treatment, personal and best outcomes for Victorians. Our Stakeholder Engagement collaboratively to deliver household help, lump sums for permanent impairment and Framework supports these important interactions. common law damages. high quality services Stakeholder committees mandated by legislation are the WorkSafe is funded by Victorian employers who pay a Occupational Health and Safety Advisory Committee and Caring by showing WorkSafe insurance premium. In 2017/18 this totalled $2.336 the WorkCover Advisory Committee. billion. This was augmented by investment income totalling empathy in our dealings Other working groups and committees include: $1.606 billion. with everyone WorkSafe enforces Victoria’s occupational health and safety • Occupational Health and Safety (OHS) Stakeholder and accident compensation laws. Its statutory obligations Reference Group are covered in the following Acts of Parliament: • Rehabilitation and Compensation Working Group
• Occupational Health and Safety Act 2004 – health, • Major Hazards Advisory Committee safety and welfare in the workplace • Legal Liaison Group • Workplace Injury Rehabilitation and Compensation Act 2013 – workers compensation and the rehabilitation of • Return to Work Working Group injured workers
• Accident Compensation Act 1985 – workers compensation and the rehabilitation of injured workers
• Workers Compensation Act 1958 – workers compensation prior to 1985
• Dangerous Goods Act 1985 – storage, handling and transport of dangerous goods
• Equipment (Public Safety) Act 1994 – high-risk To me, safety means freedom – freedom for me to equipment used in non-work-related situations focus on what I’m really here to do. We spend a lot of time at work and if we don’t have the freedom and the comfort to do what we need to do, then we’re really being deprived of something. Safety is critical.”
Rohit WorkSafe Program Manager
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Our Our Organisational Board Structure as at 30 June 2018
Paul Barker (Chairman) Clare Amies (Chief Executive) Clare Amies B.Bus, FCA, AGIA and ACIS, MAICD BA, BSW, MSW, Grad. Cert. Public Policy, Chief Executive Appointed September 2015 AMP (Harvard), MAICD Appointed March 2015 Jane Brockington B. Eco, GradDip (Economics) Peter McMullin Appointed August 2017 Roger Arnold Marnie Williams Leanne Hughson Susannah Palmer Linda Timothy B.Laws, B.Com Chief, Chief, Chief, Acting Executive Appointed February 2018 Corporate Business Transformation General Director Ross McCann AM Operations Operations Operations Counsel External Affairs B.Eng (Chem) (Hons), Dr Samantha Smith FIChemE, FRACI DBA, MA, B.Bus (Mktg), GAICD, FGIA Appointed October 2013 Appointed October 2016 Tim Gove Roger Arnold Paul Fowler Marion Nagle Chief Risk Officer Chief Acting Executive Doug Kearsley Financial Executive Director Director Officer Health & Safety Innovation B.Sc(Math) (Hons), GradDip (Operations Research) Appointed April 2017 Mikki Swindon Shane O’Dea Acting Executive Executive Director Director People Insurance & Culture
Ashley West Head of ITSS
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We work to prevent injury, disease and death in Victorian workplaces. 2017/18 We do this by raising public awareness, providing advice and information, fostering co-operative, consultative relationships, initiating and encouraging research and publishing information and findings. We enforce Victoria’s occupational health and safety and accident compensation laws and we inspect workplaces, grant licences and 6.23 26,429 prosecute to enforce the law and deter non-compliance. claims per million total standard claims The world of work is changing and over the next decade hours worked many Victorians will be operating in very different workplace down 0.8% on 2016/17 environments with changing hazards and risks. A key goal under our new strategy WorkSafe 2030 is to build stronger partnerships with workers and employers so that together Four week claims we can create a positive, prevention-led culture of health and wellbeing in every workplace across the state. 2.6% [off work four weeks] 26,757 25,843 26,588 26, 286 26, 24 26,429* lives lost 13/14 14/15 15/16 16/17 17/18 * figure reflects exits to self-insurance from I view safety very much as a shared responsibility scheme-insured between the employer and the employee. Looking after your mate so to speak - that’s what safety is all about. I find myself saying this to employees regularly, if you don’t bring 12 an issue to an employer’s attention, they cannot 48,044 fix it. You can’t fix something that you don’t know lives lost workplace inspections exists. That’s why sharing the responsibility for on Victorian farms more than 3,000 above target safety is so important.”
Nick WorkSafe Health & Safety Inspector Western Region
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Up to 95% of health care workers have experienced The VAEA progressed work on the prioritised schedule Prioritising mental Industry focus areas occupational violence and aggression, which is significantly for removal of asbestos-containing materials from those impacting their health, safety and wellbeing. buildings. The VAEA will present a report to government Agriculture in December 2018, outlining the plan for removing asbestos health and wellbeing from Victorian government buildings. WorkSafe has sought to further improve farm safety in Construction WorkWell program Victoria throughout 2017/18. An asbestos media campaign was also rolled out, WorkSafe’s dedicated construction industry program targeting tradespeople, particularly carpenters, electricians In partnership with the Department of Health and Human In addition to conducting 2,855 farm visits, we have engaged continues to target the causes of serious injury and death and plumbers. The aim of the campaign was to increase Services, WorkSafe has developed the WorkWell program, with farmers and the broader community through attending that construction industry workers face. More than 12,000 awareness of asbestos and encourage workers to which aims to make mental health and wellbeing a priority in 12 regional field days and conducting eight farm safety walks. workplace visits have been conducted in 2017/18. The seek further information, including from the website, the workplace. Workplace inspections have continued to focus on quad aim of the program is to inform, educate and motivate the asbestos.vic.gov.au. bikes and powered mobile plant, which are the leading causes construction industry to voluntarily improve behaviour, while Mental health and wellbeing is a growing concern in Victorian of serious injury and death on farms. maintaining a strong compliance and enforcement function. workplaces, with mental injury claims on the rise. Dangerous goods In March 2018, following a review of enforcement and The program includes an education component, with The five-year $50 million program centres on the WorkWell compliance activities, WorkSafe inspectors commenced the particular emphasis on achieving ‘generational’ change and As part of a five-year strategic program, which commenced toolkit, an online hub that provides Victorian workplaces with next phase of the quad bike strategy, which includes issuing improvement, by engaging with young workers via TAFEs, in 2015, WorkSafe is addressing the risks associated with access to research, information and tools to help create a improvement notices to employers where the risk of a quad apprentice schemes, VCAL programs and other training the storage, handling and transport of dangerous goods. mentally healthy workplace. bike roll-over is identified. During inspections, employers are providers and educational institutions. In 2017/18 the program has used information shared Initially focused on small to medium businesses, the toolkit asked to consider whether they are using the right vehicle for between government agencies to focus on identifying will continue to evolve, with new tools and functionality added the tasks they are undertaking. Where employers continue priority workplaces throughout the state with storage over time, including resources suitable for large workplaces to use a quad bike and where the risk of roll-over is present, Hazard focus areas quantities of up to 100,000 litres. This approach will continue and tailored content for specific industries. improvement notices are being issued to control the hazard throughout 2018/19. so far as is reasonably practicable. In addition to roll-over Occupational disease Employers and managers will be able to access information hazards, quad bike operators are being assessed to ensure WorkSafe’s Occupational Disease program 2015–2017 to meet the particular needs of their workplace. After other elements that form a safe system of work are present Safe design completed its planned schedule of activities covering cancers completing a brief questionnaire about their current practices, e.g. helmets supplied and used, the vehicle is maintained, (including skin cancer), asthma, contact dermatitis and WorkSafe collaborates with stakeholder working groups policies and working environment, they are provided with the operator is trained and people under the age of 16 are noise-induced hearing loss. This program was aligned with to promote change and improve the design of workplace simple actions and materials, including videos and tip sheets. not operating adult-sized quad bikes. the Australian Work Health and Safety Strategy 2012–2022 structures, layouts and work processes to ensure healthy and safe working conditions for all Victorians. Areas of focus Almost half (45%) of the population will experience a mental The WorkSafe quad bike public awareness campaign from Safe Work Australia. in 2017/18 were traffic management design, plant interaction illness at some point in their lifetime, and one in five (20%) complements the inspections program and has resulted in Crystalline silica will continue to be an area of focus for and the supply chain referral project. Australians will experience a mental disorder in the next many farmers moving away from quad bikes and taking up WorkSafe. WorkSafe has undertaken compliance and 12 months. the option of a small utility vehicle, which may be a safer option enforcement activities with the stonemason industry (kitchen This has involved working with manufacturers and suppliers for some workplaces. The number of farmers moving to an The workplace provides an ideal setting to promote mental and bathroom stone bench manufacturing) with the focus on to ensure risks are controlled before equipment is purchased, alternative vehicle is evidenced by the number of applications health and wellbeing, ensuring all Victorian employees are employee exposure to silica. Guidance titled Dust Containing distributed and used. WorkSafe will continue to work in these for small utility vehicles under the Victorian Government’s supported to thrive at work, whether they are experiencing Crystalline Silica in Construction Work was developed and will areas in consultation with industry partners and stakeholders. $6 million rebate scheme. The scheme assists farmers to mental health issues or not. be published shortly. purchase an alternative work vehicle or to fit an operator protection device to their quad bike. Hazardous manual handling
Funding Tragically 12 people lost their lives on Victorian farms in 2017/18. Asbestos Musculoskeletal disorders are the leading cause of injury in Victorian workplaces and are most commonly attributed Funding opportunities are available under the WorkWell WorkSafe has implemented several asbestos-related to hazardous manual handling; that is, work where a person Mental Health Improvement Fund. The fund supports initiatives during 2017/18 including proactive on-site has to lift, lower, push, pull, carry or move something. large-scale programs that aim to promote mental health and Health care and social assistance inspections targeting education institutions – from This might include lifting boxes, wheeling trolleys, moving wellbeing as well as prevent mental injury and illness among kindergartens through to universities. Initiatives have also Over the past two years, WorkSafe has significantly patients out of beds and using heavy tools. A new program vulnerable Victorian workers. The focus is currently on involved response inspections addressing asbestos removal increased its presence in hospitals, aged care facilities, has been developed following significant research on key young and older workers, frontline workers and industries prior to renovations/refurbishments/demolitions as well disability, community support services and early learning influencing factors. The program will target more than 5,000 in transition. A total of $17 million has been allocated to the as the approval and audit of licensed removalists, and the centres, focusing on key hazards including manual handling, workplaces in priority industries with a focus on the review fund over five years. amendment of asbestos-related guidance. occupational violence and aggression and bullying. of risk controls following a reported injury. New guidance A number of strategic programs have been implemented At a national level, WorkSafe chaired and is an active member materials have been developed to help Victorian employers Public sector program to engage key stakeholders and peak bodies. of the Heads of Workplace Safety Authorities (HWSA) comply with their statutory obligations. The inspectorate As part of a multi-faceted strategy to protect workers from Imported Materials with Asbestos Working Group, providing maintained a focus on manual handling in priority industries, Mental health and wellbeing is also an ongoing focus for occupational violence and aggression, WorkSafe has a nationally coordinated response to the detection of illegally along with other hazards. the Public Sector OHS Leadership Group. The Group has re-aired the It’s Never Ok campaign, which was developed imported asbestos. WorkSafe is also a member of the endorsed a Mental Health and Wellbeing Charter, which is in partnership with the Department of Health and Human National Asbestos Safety and Eradication Council. supported by the Leading the Way framework. Mental heath Services, Ambulance Victoria and other stakeholders. In addition, the Victorian Asbestos Eradication Agency and wellbeing performance indicators, minimum education The campaign encourages health care workers to report and training requirements, and frameworks and resources (VAEA) developed a centralised register of the condition incidents, asks employers to do more to prevent harm, and and location of identified asbestos in government-owned on preventing and managing occupational violence and reminds the community that It’s Never Ok to commit acts of aggression have been developed. buildings in Victoria. The VAEA worked closely with Victorian violence or aggression against healthcare workers. Guidance government public sector bodies to gather the information videos and tools to assist in incident investigation have also needed for the centralised register. been developed in partnership with health services and can be found at worksafe.vic.gov.au.
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Vulnerable workers There was a risk to health and safety as the skid steer Key developments Deterrence was not periodically inspected and maintained. An Vulnerable work ers are those at risk of ongoing exposure expert who examined the skid steer said the condition to occupational health and safety hazards or who are at Independent Review of OHS Compliance In applying its constructive compliance strategy, WorkSafe of the skid steer was such that it was not safe to be used increased risk of work-related injury or illness due to and Enforcement in Victoria balances the use of positive motivators with deterrents by even an experienced operator personal or work-related factors, and where the worker to improve workplace health and safety across Victoria. has limited capacity or means to be able to do anything In consultation with stakeholders, WorkSafe has WorkSafe deters poor performance in workplace safety • A company that provided high volume concrete to influence or improve this. A Vulnerable Workers’ Program implemented, or is on track to implement, the Victorian and non-compliance using a range of approaches, including pumping services to the construction industry was was developed to ensure a strategic and comprehensive Government’s response to the recommendations of the undertaking workplace inspections, enforcing remedial fined a total of $500,000 for an incident where an approach to assisting this cohort. Key outcomes of the Independent Review of OHS Compliance and Enforcement actions and undertaking prosecutions. employee sustained fatal crush injuries. Employees program in 2017/18 included more information for employers in Victoria. The Review made 22 recommendations, were instructed to disassemble a concrete pumping and a website (worksafeinfo.com.au) focused on people which were supported in principle, in part or in full by component (tower tube) to enable it to be loaded by with culturally and linguistically diverse (CALD) backgrounds, the government. Prosecution results and OHS crane onto a truck. One employee took up position with information in nine languages. regulatory performance in the cabin of the forklift, while two others stood in front of the tower tube. The tynes were lifted and the Inquiry into the Labour Hire Industry and During 2017/18, WorkSafe completed 127 prosecutions tower tube slid off the tynes and struck one of the Insecure Work with a success rate of 91%. Five enforceable undertakings employees, trapping him against an adjacent brick wall Other focus areas were entered into pursuant to the OHS Act and a total of • The state government operator of a maximum-security The final report of the Victorian Inquiry into the Labour $9,467,025¹ in fines were imposed, representing a significant Major hazard facilities remand prison was fined $300,000 following a full- Hire Industry and Insecure Work, tabled in Parliament in increase of 268% in fines imposed, compared to 2016/17. scale riot that occurred as a result of the introduction In 2017/18, seven out of the 38 licensed major hazard October 2016, made three recommendations relating to The following are some significant 2017/18 OHS prosecutions: of a smoking ban. The risk of harm to general duties facilities in Victoria submitted their safety cases for the occupational health and safety of labour hire workers, staff could have been reduced by ensuring additional assessment by WorkSafe as part of their licence renewal which have been supported in principle by the Victorian • A provider of emergency medical services was fined a security members were deployed in the days leading applications. In January 2018, the government released its Government. WorkSafe continues to work with government total of $400,000 on two charges relating to an incident up to the ban response to the Major Hazard Facilities Advisory Committee to ensure that labour hire workers have access to the same involving an employee’s death as a result of mixed Report on how to better manage land surrounding major workplace safety standards as other workers and to improve drug toxicity (morphine and fentanyl). The emergency • A company responsible for road maintenance in Victoria hazard facilities. WorkSafe continues to support the occupational health and safety practices in the industry. service purchases and stores morphine and fentanyl. was fined $250,000 following an incident where a traffic Department of Environment, Land, Water and Planning The charges arose because there was a risk of improper management worker was struck and killed by a sweeper with the development of an improved process for land access and consumption of morphine and fentanyl vehicle when it breached the exclusion zone and use planning around major hazard facilities and improved by the emergency service employees and volunteers reversed into him without warning. The company had dissemination of information on major hazard facilities to Compliance codes due to the failure of the emergency service to maintain the authority to stop works at the workplace if there was councils and the community. Eight new compliance codes have been made to reflect an adequate system for the recording and storage of imminent danger to safety. The contractor was fined the Occupational Health and Safety Regulations 2017 and morphine and fentanyl $1,300,000 for the same incident Equipment (Public Safety) Regulations 2017 and to take into • A company engaged to perform earthmoving and • A company contracted by a major poultry producer to Earth resources program account modern work practices. landscaping works at a residential property was fined catch and load live chickens was fined a total of $1,137,525 In 2017/18, WorkSafe began implementing a strategy aimed The eight compliance codes are: $350,000 for an incident involving the operation of an following an incident involving a collision between a forklift at helping mining industry stakeholders to collectively own unsafe skid steer. Work had finished for the day when and an employee which resulted in death • Demolition and drive occupational health and safety improvements. the company’s site supervisor left the skid steer with • A company involved in carpentry works was fined • Excavation keys in the residential owner’s garage. The residential Mines continue to be regulated by WorkSafe and the $700,000 following an incident involving the collapse • Hazardous manual handling owner’s 37-year-old son was observed operating the Department of Economic Development, Jobs, Transport of the second floor trusses which resulted in injury skid steer by his father. The son was later found slumped and Resources (DEDJTR). Both have built strong working • Facilities in construction to one employee and the death of a second employee in the skid steer operator’s seat, bleeding from the head relationships through a Memorandum of Understanding • Confined spaces (an apprentice) He was pronounced dead at the scene and a Joint Activity Protocol. The Joint Activity Protocol • Plant ensures a proactive approach to areas of regulatory overlap • Noise including mine stability, mine fire prevention, mitigation and suppression, explosives and blasting, and the maintenance • Hazardous substances Compliance measures 2014/15 2015/16 2016/17 2017/18 of well integrity. Annual workplace visits 40,711 46,259 45,751 48,044
Licensing Prosecution success rate 93% 94% 90% 91% WorkSafe is responsible for the issuing and renewal of licences under the Occupational Health and Safety Act Investigations proceeding to prosecution charges within 83% 91% 82% 75% 2004 and the Dangerous Goods Act 1985. In 2017/18, 12 months the Licensing Branch processed 107,738 licences – 800 more than in 2016/17. Completed investigations proceeding to legal 66% 71% 68% 72% review outcome
Prosecutions commenced 114 119 138 148
1 In the 2016/17 Annual Report, the total fines imposed was incorrectly recorded as $3,460,000; the total fines imposed was $3,535,000.
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Joint regulatory Funding to improve Raising awareness activity workplace health Public awareness campaigns Christmas safety campaign 2017 Hearts and Minds With the holiday season a traditionally dangerous time of WorkSafe is committed to working collaboratively and year, this campaign pleads with workers and employers efficiently with other regulators and government agencies and safety The Hearts and Minds campaign, a cornerstone of WorkSafe to ‘put safety first’ so everyone can enjoy Christmas with to deliver better service and safety in Victoria. In 2017/18, WorkSafe continued to financially support a 2030, carries the message that safety is for everyone, their loved ones. Over the past decade, nearly 25% of all in every workplace. It aims to broaden the community’s workplace fatalities occurred in November and December. OHS compliance and enforcement activity sometimes number of initiatives designed to improve workplace health understanding of what a workplace culture of health, The campaign encourages employers to think about what requires operating in partnership with other agencies, for and safety including: safety and wellbeing looks like to ensure positive, proactive systems they have in place to protect employees and example, those dedicated to emergency management. Stakeholder support prevention is front and centre in Victorian workplaces. With a encourages workers to maintain safe work practices in the WorkSafe may also develop a formal Memorandum of focus on both physical and mental wellbeing, the campaign lead up to the holidays. Understanding (MOU) to establish protocols and • Funding to assist workplaces relying on quad bikes is designed to support the shift towards shared community remove duplication. to upgrade the equipment with roll-over protection workplace safety goals. Hearts and Minds is a multi-phased Quad bike safety campaign or to purchase alternative work vehicles behavioural change campaign, designed to shape and WorkSafe has a number of MOUs in place, including The quad bike safety campaign is the second phase of a • Funding to assist the agricultural industry to design change community social norms on safety and prevention. with the following government agencies: longer-term communications and awareness program a farm safety campaign that effectively challenges focusing on farm safety. Quad bikes are used on most • Australian Bureau of Statistics the way farmers view and engage with farm health Occupational violence and aggression in healthcare Australian farms but they are also one of the main causes of and safety campaign, It’s Never OK • Convenor of Medical Panels serious injuries and fatalities among farmers and agricultural • Department of Economic Development, Jobs, • Personnel to coordinate and engage on OHS issues This campaign reminds the community that it’s never OK to workers. The campaign focuses on quad bike safety and Transport and Resources on behalf of key employee and employer commit acts of violence or aggression against healthcare WorkSafe’s revised approach to risk management and representative organisations • Department of Health and Human Services and workers, while also encouraging and empowering workers prevention on farms. the Transport Accident Commission • Grant funding to the Gippsland Asbestos and Related to report incidents. The campaign was developed in Diseases Support/Asbestos Council of Victoria to partnership with the Department of Health and Human Return to Work Getting Back campaign • Energy Safe Victoria provide support and advocacy for people in the Latrobe Services following the release of a 2015 Victorian Auditor- This campaign, which was first launched in May 2015, aims • Environment Protection Authority Valley affected by asbestos General’s Office report that found healthcare workers to support injured workers to return to safe work and build • National Offshore Petroleum Safety and Environmental faced unnecessary levels of risk in relation to occupational • Grants to support programs to improve safety for an understanding that returning to work is a positive step in Management Authority workers with a focus on workplace bullying, young violence. Healthcare workers are nearly five times more likely than other workers to lodge an occupational violence claim. the recovery process. The campaign encourages injured • Office of Public Prosecutions worker safety and women’s rights in the workplace workers, as well as their GPs and employers, to be proactive particularly with respect to domestic violence and its • Return to Work Corporation South Australia Culturally and Linguistically Diverse (CALD) workers and engaged in the return to work process. It promotes early impact on a woman’s ability to attend the workplace • Royal Australasian College of Surgeons communication between all involved, with key messages • Grant funding to support the Arts Wellbeing Collective This campaign is focused on employees who do not speak including ‘work is good for you’ and ‘getting back to work after • Safe Work Australia pilot program, an Arts Centre Melbourne initiative, English, or English isn’t their first or preferred language. an injury is an important step on the road to recovery.’ • State Revenue Office delivered in partnership with Entertainment Assist. WorkSafe recognises this group of employees is particularly • Transport Safety Victoria This initiative involves a consortium of Victorian arts vulnerable as the language and cultural barriers may prevent • Victoria Police and cultural organisations whose shared vision is better them from getting access to the right information about mental health and wellbeing for Victorian performing Australian OHS laws. Based on WorkSafe and Australian • Victorian Building Authority arts workers Bureau of Statistics data, we know CALD workers are highly • Victorian Registration and Qualifications Authority represented in manufacturing and accommodation and Small-medium employer support food services, where many injuries occur. The campaign More information is available at worksafe.vic.gov.au. • The OHS Essentials Program provides free, encourages employees to visit the campaign website, independent OHS consultancy services to assist small worksafeinfo.com.au, which explains the role of WorkSafe and medium businesses (fewer than 200 employees) and houses simple translated animations explaining what to to improve safety and assist compliance with OHS do if they get injured at work or see something unsafe. legislation
Injury prevention funds • WorkSafe provided funding to the Victorian Trades Hall Council for the OHSReps@Work website (ohsrep.org.au), which provides important guidance and support to OHS health and safety representatives • WorkSafe provided funding to the Major Transport Infrastructure Program (MTIP) to undertake safety related research and deliver applied industry-relevant research to support the program’s safety vision and objectives
18 19 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Raising awareness Recognising Sponsorships excellence With a mental illness, if you don’t In 2017/18, WorkSafe was a major sponsor and official The WorkSafe Awards are held annually to celebrate best achieve even the minor things community partner of the Melbourne Victory Football Club; practice and innovation in workplace health and safety. a naming rights sponsor of the Victorian Country Football you start feeling worthless. League and the Victorian Country Netball League; and a In 2017, nine winners were selected from 13 finalists after more For me returning to work was a premier sponsor of the AFL Western Bulldogs Football Club. than 160 entries were received from Victorian businesses, WorkSafe is proud of these associations, which provide health and safety representatives and individuals. an opportunity to make genuine connections with people, no-brainer. Since coming back workplaces and communities across the state. from injury my role with Victoria WorkSafe award winners Police has changed. I’m not Health and Safety Month • Best Solution to a Specific Workplace Health repaired. I still have PTSD [but] Health and Safety Month 2017 featured a packed program and Safety Issue of events across the state. The events, which took place Melbourne Water – Virtual reality in design I’ve still got my wife, I’ve still got from 4 October to 1 November, included more than • Best Solution to a Manual Handling Issue my life and I’ve still got my job, 60 seminars, covering a range of topics including leadership HIAB Australia and Miglas – Mechanical devices that in mental health, understanding young workers, workplace eliminate manual handling so I think I’ve come a long way.” bullying and civility in the workplace. Well-known guests included award-winning stage and screen star Catherine • OHS Achievement McClements, former Geelong Football Club player Cameron HALT- Hope Assistance Local Tradies Richard Ling and former Federal MP Lindsay Tanner, as well as Victoria Police • Health and Safety Invention of the Year a diverse range of keynote speakers and subject matter WorkSafe Award Winner 2017 experts from industry and government. Eziloader- Ground Level Loading Trailers • Health and Safety Representative of the Year Michael Muscat- Visy Board
• Commitment to Workplace Health and Wellbeing Fonterra Australia
• Leading Return to Work Practice by an Employer HORNER
• Return to Work Coordinator Excellence Lindsey Doolin – Salvation Army
• Worker Return to Work Achievement Richard Wallace – Victoria Police
20 21 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018 Recovery
We support injured workers to access early and effective treatment and occupational rehabilitation. 2017/18
We know how important it is for a person’s recovery to 80.0% get back to safe work and we know the best outcome is achieved when workers and employers work together throughout the process. 79.0% 77.74% Back at work within six The longer a person is off work with an injury, the less chance they have of ever going back. One of our aims 78.0% months Jun 18 under WorkSafe 2030 is to identify how we can better up on target of 76.79 77.74% support these clients. 77.0%
Target 76.0%
75.0%
Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 15 16 16 16 16 17 17 17 17 18 18 81.16% 53.26% Back at work within six Back at work within six months (physical injury) months (mental injury)
Return to work From my perspective as an employee and in my inspectorate visits role as a Return to Work Inspector, safety is being 2,900 able to go home to your family. I think people take safety for granted until something happens. mobile case Focusing on prevention means injuries can be avoided and people can return home safe to their 1,999 management visits to families every day.” 1,901 visits in 2016/17 support return to work
Jenny WorkSafe Return to Work Inspector
22 23 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
The range of new and enhanced approaches Supporting a return currently in place to assist injured workers to get back to work includes: to work Mobile Case Management In returning to work I had to Getting back to work after an injury is a team effort. With this initiative, the case manager is mobile, meeting overcome the inertia after not Employers, health practitioners and agents all play an face-to-face with the relevant parties to remove barriers to a doing very much for three to important role in making sure that a person who is injured return to work. More than 2,900 Mobile Case Management is supported through their recovery and return to work. services have been delivered across the scheme during four months. I had to believe that Returning to safe work is a critical milestone in the recovery 2017/18. About 10% of Mobile Case Management services I could. I was brought up to be process. It’s a triumph for everyone involved; a great are delivered on mental injury claims and there will be an outcome for the injured worker and a key measure of increased focus on this cohort in 2018/19. The Institute for resilient and that’s the thing, you success for WorkSafe. Safety Compensation and Recovery Research (ISCRR) has been engaged to complete a review of the program. just don’t give up. I’m very glad In 2017/18, WorkSafe set a new standard in this area. The focus is now not just on a return to work, but a return Functional Assessments to be back at work and I’m happy to work that can be sustained. We have expanded the questions we ask Independent that Melbourne Pathology has The change provides a more accurate picture of a worker’s Medical Examiners to focus on the functional capacity of recovery and transition back to work, but more importantly, an injured worker with a mental injury. Requests now focus supported me so much.” it is a better outcome for workers and employers. on identifying what the injured worker can do within the limitations of their current symptoms. The assessment is used by the treating health practitioner to determine Kate appropriate treatment pathways and certification, and Medical Scientist in return to work planning. The program commenced Melbourne Pathology in November 2017 and is currently undergoing its Finalist, WorkSafe Awards 2017 first evaluation.
Facilitated Discussions
These discussions are face-to-face meetings for injured workers and other workplace parties where interpersonal conflict has been identified as the key barrier to getting back to work. The program, launched in August 2017, aims to facilitate an agreement between the parties about future behaviours and actions, using a structured and consistent approach by experienced qualified occupational rehabilitation consultants. Early signs are positive.
Building industry capability around work-related mental injury
A new Mental Injury Mastery Skill Set, consisting of six eLearning assets, has been developed for agents to build knowledge and awareness of mental injury in conjunction with a best practice approach for holistic claims management. The Skill Set has been developed in association with the Australian Psychological Society and is benchmarked against a nationally accredited unit of competency for the Certificate IV in Personal Injury Management. WorkSafe and its agents have committed to adopting the Safe Work Australia framework for best practice claims management of psychological injuries.
24 25 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
For people who have been off work with an injury Return to Work Inspectorate for a prolonged period, there are often more complex Other developments issues involved. WorkSafe is exploring and addressing The Return to Work Inspectorate ensures employers and these issues on a number of fronts: workers are meeting their legal obligations. In 2017/18, Occupational rehabilitation the inspectorate intervened on 2,511 claims and conducted Victorian Injured Workers Outcome Study 1,999 workplace visits. The inspectorate also issued 133 Occupational rehabilitation assists injured workers to remain improvement notices to employers for breaches of the law at, or return to, safe and sustainable work. Every year more Stages one and two of the Victorian Injured Worker and achieved 396 voluntary compliances. than 9,500 workers receive occupational rehabilitation, Outcomes Study (VIWOS) have highlighted the impact which is delivered by approved providers. During 2017/18, administrative processes and practices are having on the The Return to Work Inspectorate aims to strategically target WorkSafe reviewed its approach to occupational experience and recovery of injured workers. Building on new claims to ensure early interventions assist an injured rehabilitation services. A new arrangement, implemented the research findings, WorkSafe has piloted a number of worker back to work. from 1 July 2018, will see a move to more targeted and initiatives to better assist injured workers approaching defined interventions, which more accurately meet the 130 weeks off work and those who have been receiving needs of injured workers and their workplaces. workers compensation for more than 130 weeks. The pilots Measure 2015/16 2016/17 2017/18 will continue to be tested and scaled to ensure the best outcomes for these clients. Visits 1,866 1,901 1,999 Independent Medical Examination (IME) changes The third and final stage of the study has involved a survey of Claim Interventions 1,964 2,906 2,511 697 long-term injured workers, examining the Multidisciplinary approach personal, social, economic and psychological impacts Improvement Notices 271 229 133 of their injuries. A final report is expected in late 2018. The multidisciplinary IME approach brings together a spinal surgeon and pain management specialist to jointly Focused pilots Voluntary Compliances 466 367 396 examine an injured worker and provide them and their treater with advice and guidance. The new approach offers As a priority, WorkSafe’s Innovation Centre is testing injured workers alternative treatments when surgery might prevention, treatment and recovery pathways for injured not be appropriate. Early indications from injured workers workers who have been off work long term. Many of these participating in a pilot program have been positive. workers have health and psychosocial issues and the pilot programs are providing insights into factors Recruitment influencing health outcomes. WorkSafe has revised its recruitment and on-boarding One of the pilots involves small interventions that provide extra processes for independent medical examiners, with the aim support to the worker in their everyday life to help increase of improving outcomes for injured workers and improving activity, mobility and engagement with the community. This is their experience with the IME process. having a significant positive impact.
Implementation of the recommendations of the Victorian Ombudsman
In her report, Investigation into the Management of Complex Workers Compensation Claims and Worksafe Oversight, the Victorian Ombudsman made 15 recommendations to WorkSafe Victoria. WorkSafe has implemented all recommendations directed to it. WorkSafe is continuing to identify other ways as part of both short-term and long-term initiatives to improve the experiences of injured workers and the overall management of ‘complex’ claims.
The Victorian Ombudsman has commenced an investigation to follow up her 2016 investigation and is examining whether the implementation of the 2016 recommendations has changed agent practices and decision making, and improved the effectiveness of WorkSafe’s oversight.
26 27 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018 Value
Maintaining a sustainable workers compensation scheme enables us to deliver the most 2017/18 appropriate services and Performance from support to injured workers insurance operations as quickly as possible.
Compensation entitlements include weekly payments, treatment costs and impairment lump sums. We must ensure workers compensation costs are 90.3% managed to minimise the burden Client service result on Victorian businesses and deliver social and economic benefits to the Victorian community.
We know great service helps our clients to achieve health and return 91.0% to work outcomes so we will always Employer service seek to improve in this area. Under WorkSafe 2030, we will be using new technologies to continue to streamline services, cut red tape and make it easier for the Victorian community $233m $73m $73m $211m $483m 89.6% $280m to interact with us. Worker service 13/14 14/15 15/16 16/17 17/18 Breakeven premium Accounting funding ratio 1.249% 123%
I think a safe workplace is an environment where people can be their best; where they can get the most out of their day for themselves but also give back to the business. This is how we want to be when interacting with our clients. We want the best for them. We want to take the time and show them that we really do care.”
Kelly WorkSafe Client Services Manager
28 29 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Service Advisory service Agent service WorkSafe strives for excellence in service to workers, In 2017/18, our agents achieved strong results for their level Our service results measure the satisfaction of workers and employers and the wider community through its Advisory of service to injured workers and employers. Injured worker employers with WorkSafe’s agents, the WorkSafe Advisory and client services. These services use multiple channels satisfaction was 81.9%, compared to the previous year’s and our inspectorate. including phone, email and the WorkSafe website to provide result of 81.3%. Employer satisfaction was 86.6%, compared information. to 86.4% in 2016/17. We obtain these results by regularly asking workers and employers to rate the services they have received from us In 2017/18 this included: and our agents. We also track community perceptions of 2016/17 2017/18 our education and enforcement activities. • 2,909,206 website visits • 10,945,236 visits to specific website pages In 2017/18, WorkSafe achieved a record high result of 90.3% Worker service agent • 43,893 emails for services to workers and employers. • 213,578 phone calls for advice on OHS, rehabilitation Allianz 80.0% 81.5% The ratings for our inspectorate, inspectorate advice and and compensation guidance, insurance premium services and Advisory service CGU 79.4% 81.5% mostly improved or remained steady when compared to last year. EML 82.9% 81.4%
Gallagher Bassett Services 82.7% 81.9%
Xchanging 82.7% 83.4%
Scheme 81.3% 81.9% 2016/17 2017/18 Employer service agent Client service 89.6% 90.3% Allianz 87.8% 86.1% Employer service (50%) 90.6% 91.0% CGU 85.2% 87.3% Agent service to employers (50%) 86.4% 86.6% EML 88.3% 88.2% Advisory service to employers (10%) 92.8% 92.4% Gallagher Bassett Services 86.3% 83.2% Inspector interaction with employers (15%) 98.0% 98.2% Xchanging 85.5% 88.1% Advice and guidance (15%) 96.4% 97.1% Scheme 86.4% 86.6% Premium service to employers (10%) 89.8% 91.8%
Employee/worker service (50%) 88.5% 89.6%
Agent service to injured workers (50%) 81.3% 81.9%
Advisory service to workers (15%) 91.8% 95.9%
Inspector interaction with workers (17.5%) 97.6% 98.0%
Advice and guidance (17.5%) 97.1% 97.4%
30 31 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Continuous Innovation Centre Financial Operational expenditure An Innovation Centre has been established to respond by core activities to trends and market demands by testing new ideas, improvement products and services, and, if successful, rolling them sustainability 14% out to business areas. Streamlining and simplifying Our performance from insurance operations (PFIO) for our processes The Innovation Centre will work with a range of partners, the year was $73 million, which is $13 million above target. 34% including workers, employers, government agencies and This result was impacted by our full year actuarial valuation, We are committed to streamlining and simplifying our subject matter experts to ensure feasibility, viability and which increased our projected claims costs by $141 million. processes to make it easier for our clients to interact with us. client-focused outcomes. The net result of $484 million was $430 million above target In 2017/18, this work involved a number of system changes and after the impact of external factors. This was primarily the ongoing digitisation of claims and premium documents. due to higher than budget investment returns, as well as New website the favourable impact of lower inflation, partially offset by As a result: changes in discount rates on claims liabilities. 52% WorkSafe has developed a new user-friendly website • All current claims and employer documents are now to make it simpler, faster and easier for people to find the ‘electronic files’, allowing for quick and easy access guidance and education materials they’re looking for. to information and a more timely response to the needs Core activity $000s of workers and employers There will be ongoing testing and building to ensure new Occupational Health and Safety 191, 257 • Employers and providers will receive payments and features meet the needs of all users, from employers and reimbursements into their bank account sooner workers through to health and safety representatives, Insurance and Claims Management 124,606 following refinements to electronic funds transfer health professionals and safety experts. (EFT) processing Dispute Resolution 51,631 WorkSafe stakeholders will continue to be involved • Employers and providers will receive an electronic at key points along the development journey. Total Operating Expenses 367,494 remittance at the same time as a payment is made
This work has helped improve service delivery by reducing duplicate invoices and the number of telephone inquiries about payments.
WorkSafe will continue to simplify its business and deliver further efficiencies under WorkSafe 2030. The following table highlights the impact of external factors on WorkSafe’s result before short-term fluctuations and economic assumptions: Improving capture of data and analytics
We recognise that an important step towards improving 2017/18 2016/17 2015/16 2014/15 2013/14 the efficiency of our operations and delivering better client Financial Results ($m) ($m) ($m) ($m) ($m) outcomes is improving the way we capture and analyse data. Impact on result from internal factors In 2017/18, we developed a roadmap and strategy to enhance our data and analytics capability. Implementation of the Performance from Insurance Operations 73.5 233.0 280.4 210.5 483.4 strategy will begin over the next year, initially focusing on Work Health and Research Institute initiatives - - - - 12.1 inspections and licensing. Result from internal factors 73.5 233.0 280.4 210.5 495.5 As capability matures, it’s expected insights will deliver an improved client experience, better outcomes for clients, Impact on result from external factors a more sustainable scheme and more efficient operations. Difference between actual returns and long-term expected returns1 524.9 589.9 (621.4) 525.2 798.0
Change in inflation assumptions and discount rates2 60.6 582.2 (366.7) (156.5) (143.3)
Impact from legislative changes - (446.3) - - -
Tax (175.3) (264.7) 232.4 (125.3) (326.4)
Net Result 483.7 694.1 (475.3) 453.9 823.8
1. Favourable conditions experienced in the investment markets in 2017/18 resulted in the actual investment return being higher than the expected long-term rate of return. 2. There was a favourable impact from changes in economic assumptions (i.e. lower future inflation rates partially offset by lower assumed discount rates) used to determine claims liability in 2017/18.
32 33 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Assets and liabilities Low cost insurance
As at 30 June 2018, WorkSafe’s total assets were Sound scheme management enabled us to maintain a Employers continue to be able to take advantage of $17.8 billion, compared to $16.5 billion at 30 June 2017. record low average premium rate of 1.272% of payroll discount options for early payment. In 2017/18, around Our total liabilities were $14.5 billion, compared to in 2017/18.This premium rate will continue in 2018/19. 39% of employers took up the 5% discount by paying $13.7 billion at 30 June 2017. The valuation determined This is the lowest rate in the scheme’s history and has in August and around 12% took up the 3% discount by that our accounting funding ratio was 123%, compared to been maintained at this level since 2014/15. Competitive paying in October. 119% at 30 June 2017. This was above the target range of workplace injury insurance premiums reflect low injury 82.5 to 117.5%. rates and good claims management.
WorkSafe Scorecard 2008-2018 WorkSafe injury insurance average premium rates
Accounting Average funding Actuarial Year premium rate ratio Net result PFIO* release Dividend paid 2017/18 1.272% 123% $484m $73m ($141m)
2016/17 1.272% 119% $694m $233m ($169m)
2015/16 1.272% 112% ($475m) $280m ($135m)
2014/15 1.272% 120% $454m $211m ($60m) $242m
2013/14 1.298% 116% $824m $483m $303m $59m
2012/13 1.298% 108% $1,084m $119m $179m $193m
2011/12 1.338% 96% ($676m) $385m $182m $147m
2010/11 1.338% 108% $521m $294m $136m 1.62% 1.46% 1.272% 1.272% 1.272% 1.272% 1.272% 1.387% 1.387% 1.338% 1.338% 2009/10 1.387% 100% $176m $654m $189m 1.298% 1.298%
2008/09 1.387% 97% ($1,254m) $277m $78m 06/ 07/ 08/ 09/ 10/ 11/ 12/ 13/ 14/ 15/ 16/ 17/ 18/ 2007/08 1.46% 120% ($587m) $958m $511m 07 08 09 10 11 12 13 14 15 16 17 18 19
*Performance from insurance operations
34 35 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Protecting scheme integrity Self-insurance Statement of Expectations Common Law Working Group
To maintain the integrity and sustainability of the WorkSafe Self-insurers are approved by WorkSafe to manage their own WorkSafe has implemented a range of red tape reduction The Common Law Working Group reported to the scheme, it is important employers and workers comply workers compensation claims and WorkSafe continues to initiatives in response to the Victorian Government’s WorkCover Advisory Committee in October 2017, with with their legal obligations under the Workplace Injury work with them to promote best practice in safety and return Statement of Expectations for the period ending 31 seven recommendations. WorkSafe is now working with Rehabilitation and Compensation Act (WIRC Act). WorkSafe to work. As at 30 June 2018, there were 40 self-insurers December 2017. legal stakeholders to further develop the recommendations ensures that employers pay their insurance premiums operating in Victoria. This represents about 8% of total into working models, with the aim of improving benefit and detects fraud by health professionals and workers. scheme remuneration. The greatest benefits have been achieved in the Reducing delivery to eligible workers and reducing legal costs In 2017/18, there were 28 prosecutions under the WIRC Act. Regulatory Burden area through reforms to the OHS associated with common law claims. The Common Law In 2017/18, six organisations were granted approval to Regulations 2017 and Equipment (Public Safety) Working Group was established to consider the long-term The following are some of the significant prosecutions under self‑insure and three organisations ceased to be a self- Regulations 2017. Compliance costs for self-insurers have trend of increasing common law lodgements, the cost of this Act: insurer. The Injured Workers’ Survey service score was 69% been reduced and premium interactions for employers have delivering common law benefits and how the interests of for all self-insurers. Further information can be found been streamlined. workers and employers can be better served in relation • A worker was convicted and sentenced to a Community in Appendix 3. to common law. The Working Group was made up of Corrections Order for a period of 24 months, with a In the area of Compliance Related Assistance and Advice, representatives from a range of organisations with an condition to perform 250 hours of community work, for the digitisation of claim and premium documents was interest in the sustainability of common law. fraudulently obtaining compensation payments. The 2016/17 2017/18 2017/18 completed in November 2017 and will enable WorkSafe and worker was also ordered to pay $33,361 in restitution Compliance activity result target result its agents to provide better and faster services to injured workers, employers and health practitioners by instantly • A worker was in receipt of weekly payments as a result Number of completed retrieving case information to respond to queries. of a right shoulder and right wrist injury he received investigations 132 127 153 while working as a cleaner. The worker was convicted The experience for injured workers has also been improved and sentenced to four months imprisonment, wholly Number of prosecutions through the Worker Claim App improvements, the suspended, and ordered to pay restitution of $66,049 completed 20 n/a 28 introduction of face-to-face mobile claims management, for failing to disclose that he had worked for a number of integration of the role of GPs and physiotherapists in employers while receiving compensation Audits of bills certificates of capacity and the health literacy program. submitted by medical • A worker was convicted and placed on a Community practitioners and WorkSafe is currently working through the 2018/19 Corrections Order for a period of 24 months with a allied health providers 439 400 473 Statement of Expectations which identifies opportunities condition to perform 250 hours of unpaid community for WorkSafe to make improvements in key areas of work for fraudulently receiving payments. He was also government and operational performance, resulting in Investigations ordered to pay $17,997 reduced costs for business and improved services to completed in injured workers and employers. • A worker, employed as a crowd controller, was shot and 180 days 79% 90% 98% injured in the course of employment. During the period 4 June 2010 to 18 July 2015 the worker failed to disclose Common law a return to work and continued to receive compensation payments totalling $188,680.80. Restitution of Common law applications continue to pose a risk to the $190,680.80 was made. The offender pleaded guilty financial viability of the WorkSafe scheme, despite receiving and was convicted and sentenced to six months lower than expected lodgements during 2017/18. imprisonment, wholly suspended for two years WorkSafe received 2,734 common law applications, • A worker, employed as a carpenter and joiner, made a representing an increase of 4.8% compared with 2016/17 claim for weekly compensation payments which was (2,608). At 30 June 2018 common law accounted for 33% accepted. Whilst in receipt of compensation payments, of WorkSafe’s total scheme liability (including recoveries, the worker commenced employment with a third excluding claims handling expenses and risk margin), with party. The worker was sentenced to three months damages payments accounting for 24% and legal costs imprisonment, wholly suspended for 12 months, and 9%. In 2017/18, 64.5% of serious injury cases were settled ordered to pay restitution of $59,976 without litigation with only 7.7% resulting from a court judgment. In the same period 81.4% of damages claims were settled without litigation with 1.3% resulting from a court judgment. WorkSafe continues to focus on delivering common law benefits efficiently and cost effectively where it is satisfied a worker has an entitlement to common law damages. During the year about 9% of common law applicants failed to establish a serious injury, and about 11% of workers with an accepted serious injury failed to establish an entitlement to damages from their employer’s fault.
36 37 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018 Our People
Our skilled and highly-valued employees are central to what we do and drive our success. 2017/18
We aim to foster a dynamic and engaged workplace culture where our employees consistently demonstrate their commitment to our vision for Victorian workers to return home safe every day. 700+ employees now working from new Geelong headquarters
New headquarters awarded platinum WELL rating and 6 star Green Star rating
13,000+ 68% GameChangers’ employees responses recorded Physical wellbeing is intertwined registered with new with your psychological wellbeing. You need to put work into both to engagement platform get the best out of yourself. In the GameChangers workplace we know that when we’re psychologically well, we’re able to 73% perform much better. We need to look employee after ourselves and each other to best support the Victorian community.” engagement score 75% in 2016/17 Ben WorkSafe Health and Wellbeing Program Officer
38 39 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Geelong relocation GameChangers An integrated safety and wellbeing focus OHS performance
WorkSafe has relocated its headquarters to Geelong and In 2017/18, WorkSafe employees were introduced to a new An integrated approach to the safety and wellbeing of OHS risks at WorkSafe include psychological risks, motor it is now home to more than 700 WorkSafe employees. employee engagement platform called GameChangers. WorkSafe employees has been a key focus for the 2017/18 vehicle incidents, occupational violence and musculoskeletal period. Work has included: injuries associated with ergonomics in cars as well as in the The move from Exhibition Street in Melbourne was confirmed The new platform will play an important role as we office environment. in 2015, with the construction of a new 14-storey building at reposition the organisation’s values and prepare for the Health and safety certification 1 Malop Street in Geelong’s CBD commencing in 2016. change under WorkSafe 2030. We are transitioning to Our safety management system ensures safety is embedded a client-centred and prevention-led culture and our values Following the successful attainment in 2018 of SafetyMAP across the organisation through on-boarding, induction, The $120 million building is the first in Victoria to be awarded will enable us to engage and interact with the Victorian certification (Safety Management Achievement Program), training programs, safe work practices, consultative WELL Platinum certification. WELL is a new international community as we make the shift towards shared work has commenced to transition WorkSafe in 2019/20 structures and processes for incident investigation and standard for healthy buildings and WorkSafe’s new Geelong community workplace safety goals. towards ISO 45001 certification, the new international emergency management. headquarters is only the second building in the world to standard for occupational health and safety. This aligns achieve platinum accreditation. The building also has a GameChangers has been embraced by employees, with with WorkSafe’s holistic approach to health, safety Our Health Safety and Wellbeing Strategy outlines our five-star NABERS and six-star Green Star rating. 68% of the workforce registering in the first seven weeks and wellbeing (HSW) that recognises the relationship approach to risk reduction and management including: of its launch. More than 13,000 responses to a range of between the organisation, its people and the operational In the past 12 months, 160 WorkSafe employees have questions, activities and conversation topics have environment. The requirements of ISO 45001 and a • Analysis of incident data and research into left the organisation, choosing not to make the move to been recorded. redesigned heath, safety and wellbeing framework drive technology‑based controls to increase capacity Geelong. These employees were provided with access a high level of continual improvement, consultation and to locate employees working alone and respond to redeployment within the Victorian public sector or The employee engagement score that emerged from input leadership engagement. to distress alerts redundancy payments. into GameChangers was 73% for 2017/18. This represents • Refresher training for field-based employees in a small shift from the 75% figure for 2016/17, which is a very Duress systems implementation managing difficult people and conflict resolution A small contingent of Melbourne-based employees will work positive result in light of the significant change that WorkSafe • Redesign of office spaces and early intervention from offices in Collins Street. has undergone this year. WorkSafe has tested and implemented duress systems and safety technology for our employees working in the to reduce the effect of musculoskeletal injuries field. Mental health and trauma exposure management have and ergonomic risks Our culture been integrated into incident first response protocols to • Engaging leaders in training and development activities encourage an early intervention and supportive environment to assist in the management of psychological risk in WorkSafe is guided by five values: constructive, accountable, for employees. Mobile-enabled systems for reporting the workplace transparent, effective and caring. These values underpin the of incidents and gathering of trend data for process work we do and guide us in our day-to-day activities. • Raising awareness of how to manage psychological improvement have also been developed and implemented. risk and how to seek support We are committed to creating a workplace that represents Mental Health and Wellbeing Charter the diversity of the community and our stakeholders. We are Please see Appendix 4 for further detail. also committed to providing our employees with a workplace WorkSafe’s Health, Safety and Wellbeing Strategy that is free from discrimination, harassment and bullying. recognises and aligns with the Victorian Public Sector Mental Health and Wellbeing Charter, promoting positive mental Our Disability Action Plan is now in its second year, with a health and wellbeing for all of our people. Our activities in number of significant milestones achieved. The opening of 2017/18 had a strong preventative focus with training centred the new WorkSafe building in Geelong has provided a fully on recognising mental health issues in the workplace. This accessible space for employees and visitors. We are working was enhanced by the work of our peer support network towards ensuring the new standard we have set in Geelong and through encouraging employees to participate in team is created in WorkSafe’s offices across Victoria. WorkSafe psychological strengths workshops. Our programs are has also prioritised the creation of employment opportunities well supported by online resources for individual wellbeing for people with a disability through targeted recruitment plans and professional psychological support through our initiatives and updates to procurement processes. Employee Assistance Program (EAP) partners. We are active Through delivery of initiatives under the Disability Action participants on the Public Sector OHS IDC, sharing our Plan, WorkSafe has continued its commitment to safe and expertise to improve OHS in the public sector. inclusive workplace practices, both within our workforce and in partnership with stakeholders. Focused support programs
Our 50-strong Peer Support Program network is growing, as is the uptake of our Employee Assistance Programs for both employees and their families. Our Talking Health lunchtime program has had guest speakers presenting on a range of topics with excellent engagement and follow up from our employees.
40 41 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Financial statements 5. Other assets and liabilities Other non-insurance assets and liabilities Comprehensive Operating Statement 5.1 Other receivables Balance Sheet Statement of Changes in Equity 5.2 Property, plant and equipment Financial Cash Flow Statement 5.3 Intangibles 5.4 Other payables Notes to the financial statements 5.5 Other provision 1. About this report 5.6 Commitments and contingencies The basis on which the financial statements have 6. Taxation and transactions Report been prepared and compliance with reporting with the State regulations. Items subject to taxation and transactions 2. Results from insurance operations with the State Insurance related activities 6.1 Income tax How this report is structured 2.1 Underwriting result 6.2 Deferred tax The Victorian WorkCover Authority has presented its audited general 2.2 Premiums 6.3 Dividends purpose financial statements for the financial year ended 30 June 2.2.1 Premium revenue 2018 in the following structure to provide users with the information 2.2.2 Premium receivables 7. Financial instruments and about WorkSafe’s stewardship of resources entrusted to it. valuation judgements 2.2.3 Premium creditors Financial instruments and fair value determination 2.3 Claims 7.1 Financial instruments 2.3.1 Claims expense 7.2 Off-setting of financial assets and 2.3.2 Outstanding claims financial liabilities 2.3.3 Recoveries revenue 7.3 Fair values 2.3.4 Recoveries receivable 8. Other disclosures 2.3.5 Actuarial assumptions and methods 8.1 Responsible persons 2.4 Authorised agent fees 8.2 Remuneration of executives 2.5 Insurance contracts – risk management policies and procedures 8.3 Related parties 8.4 Entity consolidated pursuant to section 3. Investment portfolio and performance 53(1)(b) of the FMA Investment results and portfolio 8.5 Remuneration of auditors 3.1 Investment income and investment 8.6 Events after reporting date expenses 8.7 Australian Accounting Standards issued 3.2 Investments that are not yet effective 3.3 Cash and cash equivalents 3.4 Explanation of volatility of financial results 9. Statement by Chairman, Chief Executive and Chief 4. Cost of operations Financial Officer Operational activities 4.1 Other income 4.2 Other operating costs 4.3 Employee superannuation 4.4 Employee related provisions
42 43 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Balance Sheet Financial Statements At 30 June 2018 2018 2017 Comprehensive Operating Statement Note $000s $000s Current assets For the financial year ended 30 June 2018 Cash in hand and at bank 3.3 42,425 40,325 2018 2017 Premium receivables 2.2.2 103,357 75,882 Note $000s $000s Investment assets 3.2 2,558,608 2,682,312 Revenue and Income Recoveries receivable 2.3.4 48,786 49,080 Premium revenue 2.2.1 2,336,040 2,213,806 Prepayments 6,822 8,199 Investment income 3.1 1,606,140 1,660,600 Other receivables 5.1 6,299 5,759 Recoveries revenue 2.3.3 144,295 132,328 Total current assets 2,766,297 2,861,557 Other income 4.1 24,028 21,268 Non-current assets Total revenue and income 4,110,503 4,028,002 Investment assets 3.2 14,639,416 13,093,466 Expenses Recoveries receivable 2.3.4 226,804 232,740 Claims expense 2.3.1 (2,788,910) (2,512,048) Property, plant and equipment 5.2 42,499 18,220 Authorised agent fees 2.4 (275,734) (227,953) Intangibles 5.3 40,122 49,612 Investment expenses 3.1 (52,106) (48,733) Deferred tax assets 6.2 118,661 262,338 Other operating costs 4.2 (334,798) (280,453) Total non-current assets 15,067,502 13,656,376 Total expenses (3,451,548) (3,069,187) Total assets 17,833,799 16,517,933 Result before income tax 658,955 958,815 Current liabilities Tax expense 6.1 (175,309) (264,666) Premium creditors 2.2.3 72,372 65,992 Net result for the year 483,646 694,149 Other payables 5.4 138,492 99,478 Other comprehensive income - - Outstanding claims 2.3.2 2,245,123 1,940,747 Other comprehensive income, net of income tax - - Investment related liabilities 3.2 598,286 553,729 Total comprehensive income for the year 483,646 694,149 Tax liabilities 6.1 31,632 - Employee related provisions 4.4 31,264 36,075
The above comprehensive operating statement should be read in conjunction with the accompanying notes to the financial statements. Other provision 5.5 2,373 67 Total current liabilities 3,119,542 2,696,088
Non-current liabilities Outstanding claims 2.3.2 11,452,106 11,039,682 Investment related liabilities 3.2 2 105 Employee related provisions 4.4 2,982 3,729 Other provision 5.5 836 3,644 Total non-current liabilities 11,455,926 11,047,160 Total liabilities 14,575,468 13,743,248 Net assets 3,258,331 2,774,685
Equity Accumulated surplus 3,258,331 2,774,685 Total equity 3,258,331 2,774,685
The above balance sheet should be read in conjunction with the accompanying notes to the financial statements.
44 45 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Statement of Changes in Equity Cash Flow Statement For the financial year ended 30 June 2018 For the financial year ended 30 June 2018 Tot al 2018 2017 $000s Note $000s $000s
Balance at 1 July 2016 2,080,536 Cash flows from operating activities Net result for the year 694,149 Premium received 2,540,146 2,419,035
Other comprehensive income - Claims paid (1,990,928) (1,864,700) Self insurer re-entry settlement (65,956) 1,393 Total comprehensive income for the year 694,149 Claim recoveries received 141,136 127,927 Balance at 30 June 2017 2,774,685 Authorised and management agent fees (332,559) (309,987) Net result for the year 483,646 Dividends and distributions received 627,279 428,276 Other comprehensive income - Interest received 32,152 56,989
Total comprehensive income for the year 483,646 Health and safety licence fees received 7,091 4,910 Contribution to DTF Consolidated Fund for court use - (4,293) Balance at 30 June 2018 3,258,331 Sundry receipts 22,775 20,335 The above statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements. Goods and services tax paid to the ATO (160,450) (155,396) Income tax paid - - Payments to suppliers and employees (351,329) (288,337) Net cash flows from operating activities 3.3 469,357 436,152
Cash flows from investing activities Sale of investments 4,890,191 4,642,857 Purchase of investments (5,602,721) (4,986,011) Purchase of property, plant and equipment (32,775) (8,996) Proceeds from disposal of plant and equipment 2 61 Payments for intangibles (5,988) (6,425) Net cash flows (used in) investing activities (751,291) (358,514) Net increase in cash and cash equivalents (281,934) 77,638 Cash and cash equivalents at beginning of the year 1,672,215 1,621,083 Effects of exchange rate changes on cash held in foreign currencies 3,752 (26,506) Cash and cash equivalents at end of the year 3.3 1,394,033 1,672,215
The above cash flow statement should be read in conjunction with the accompanying notes to the financial statements.
46 47 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
1. About this report Compliance information These general purpose financial statements have been prepared in accordance with theFinancial Management Act 1994 and applicable Australian Accounting Standards which include Interpretations, issued by the Australian Accounting Standards WorkCover Authority Fund WorkCover Authority Fund Board. For the purposes of preparing the financial statements, the Victorian State Government has determined that WorkSafe is a not-for-profit entity. Where appropriate, those paragraphs in the Australian Accounting Standards applicable to not-for- The WorkCover Authority Fund was established on 1 December 1992 under the Accident Compensation Act 1985 and is profit entities have been applied. maintainedThe WorkCover by the Victorian Authority WorkCover Fund was Authority. established The on Victorian 1 December WorkCover 1992 under Authority the Accident is a statutory Compensation authority Act established 1985 by and is maintained by the Victorian WorkCover Authority. The Victorian WorkCover Authority is a statutory authority statute enacted by the Victorian State Parliament and domiciled in Australia. The Victorian WorkCover Authority trades under The audited annual financial statements were authorised for issue in accordance with a resolution of the Board on 23 August 2018. the nameestablished of WorkSafe by statute Victoria enacted (WorkSafe). by the Victorian State Parliament and domiciled in Australia. The Victorian WorkCover Authority trades under the name of WorkSafe Victoria (WorkSafe). Regulatory Context
WorkSafe administers the following legislation:
• Occupational Health and Safety Act 2004 – health, safety and welfare in the workplace Basis of preparation • Workplace Injury Rehabilitation and Compensation Act 2013 – workers compensation and the rehabilitation of injured These financial statements cover WorkSafe as an individual reporting entity and include the Victorian Asbestos Eradication workers, where the injury occurred after 1 July 2014 Agency (VAEA), which has been consolidated into WorkSafe’s financial statements pursuant to a determination made by the • Accident Compensation Act 1985 – workers compensation and the rehabilitation of injured workers, where the injury Minister for Finance under section 53(1)(b) of the Financial Management Act 1994. The VAEA is not controlled by WorkSafe. occurred prior to 1 July 2014 All transactions and balances between consolidated entities are eliminated. • Workers Compensation Act 1958 – workers compensation prior to 1985. The financial statements have been prepared on an accrual basis, and are based on historical costs and do not take into • Dangerous Goods Act 1985 – explosives and other dangerous goods account changing money values, except for outstanding claims liabilities, recoveries receivable, employee benefits liabilities • Equipment (Public Safety) Act 1994 – high-risk equipment used in non-work-related situations and leasehold restoration provision which are included at present value, and investments and property, plant and equipment which are included at fair value. Historical cost is based on the fair value of the consideration given in exchange for assets. WorkSafe also administers regulations made under these Acts.
Amounts have been rounded to the nearest thousand dollars, unless otherwise stated. The presentation currency of WorkSafe is the Australian dollar, which is also its functional currency.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. Unless otherwise stated, accounting policies selected have been consistently applied to all periods presented in the financial statements.
Judgements, estimates and assumptions are required to be made about financial information being presented. The significant judgements in the preparation of these financial statements are disclosed in the notes where amounts affected by those judgements are disclosed. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revisions affect only that period, or in the period of the revision and future periods if the revisions affect both current and future periods. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements have been disclosed in Notes 2.3.4, 2.3.5 and 7.3.
48 49 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
2. Results from insurance operations 2.2 Premiums 2.2.1 Premium revenue
Introduction to this section This section is structured as follows: 2018 2017 WorkSafe has two important functions being prevention 2.1 Underwriting result $000s $000s of workplace injuries and helping injured workers back 2.2 Premiums Gross premium 2,388,959 2,230,804 into the workforce. 2.2.1 Premium revenue 2.2.2 Premium receivables Reassessment of prior years’ premium 15,239 47,010 WorkSafe provides workplace injury insurance for 2.2.3 Premium creditors employers and manage the workers compensation Premium discount allowed (66,235) (63,270) 2.3 Claims scheme in Victoria. Premium fines and penalties 10,794 10,290 2.3.1 Claims expense The funding required to support WorkSafe’s functions 2.3.2 Outstanding claims (Increase) decrease in provision for impairment of premium debts (2,146) 157 are sourced from insurance premiums collected from 2.3.3 Recoveries revenue Premium bad debts written-off (10,571) (11,185) employers within Victoria, and investment income 2.3.4 Recoveries receivable (Section 3). 2.3.5 Actuarial assumptions and methods 2,336,040 2,213,806 2.4 Authorised agent fees This sections provides details of premium collected Premium revenue comprises amounts charged to employers by WorkSafe for WorkCover insurance. The earned portion of by WorkSafe and expenditure incurred to perform 2.5 Insurance contacts – risk management premiums received and receivable is recognised as revenue. Premium is treated as earned from the effective registration date its functions. policies and procedures and is recognised as revenue over the period. Included above is an estimated increase of $44.9 million (2017: $27.8 million) in relation to confirmed premium. Confirmed premium estimate makes allowance for employers who have not yet certified their remuneration. The premium increase or 2.1 Underwriting result decrease that may result from the reassessment of prior year’s premium estimate (i.e. the difference between the actuarial estimation and actual certification) is taken up as a part of current year’s premium. 2018 2017 The rateable remuneration estimate on which the confirmed premium estimate is based, is obtained through an independent actuary. Note $000s $000s Bad debts written-off during the year include unpaid premium for prior years. Premium revenue 2.2.1 2,336,040 2,213,806 2.2.2 Premium receivables Underwriting expenses
Gross claims incurred 2.3.1 (2,756,539) (2,480,979) 2018 2017 Recoveries revenue 2.3.3 144,295 132,328 $000s $000s Net claims incurred (2,612,244) (2,348,651) Premium receivables 105,692 93,251 Dispute resolution expenses 2.3.1 (32,371) (31,069) Provision for impairment (47,315) (45,169) Authorised agent fees 2.4 (275,734) (227,953) 58,377 48,082 Total underwriting expenses (2,920,349) (2,607,673) Confirmed premium estimate 44,980 27,800 Underwriting result (584,309) (393,867) 103,357 75,882
Premium receivable amounts due from employers (being the amounts due excluding the provision for confirmed premium) are initially recognised at fair value. They are subsequently measured at fair value which is approximated to by taking the initially recognised amounts and reducing them for impairment as appropriate. The confirmed premium estimate at 30 June 2018 represents an increase in premium receivables of $44.9 million (2017: $27.8 million) based on the actuarial assessment. The average credit period for premium receivables is 30 days.
Included within premium receivables at the reporting date are $50.98 million (2017: $50.36 million) of past due receivables and WorkSafe has provided provision for impairment for these receivables. WorkSafe does not hold any collateral over these
50 51 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
balances. The average age of those receivables that are past due but not impaired is 71 days (2017: 71 days). 2.3 Claims
2.3.1 Claims expense 2018 2017 2018 2017 $000s $000s Current Year Prior Years Total Current Year Prior Years Total $000s $000s $000s $000s $000s $000s Ageing of past due premium receivable Gross claims paid 211,724 1,828,016 2,039,740 205,868 1,634,473 1,840,341 30 days past due 4,650 3,928 Movement in 2,998,401 (2,137,860) 860,541 2,823,360 (1,681,420) 1,141,940 31 - 60 days past due 2,342 1,883 outstanding claims 61 - 90 days past due 585 686 Gross claims incurred - 3,210,125 (309,844) 2,900,281 3,029,228 (46,947) 2,982,281 91 - 180 days past due 2,391 1,899 undiscounted More than 180 days past due 41,022 41,964 Discount and discount (476,122) 332,380 (143,742) (440,960) (60,342) (501,302) movement 50,989 50,360 Gross claims incurred 2,734,003 22,536 2,756,539 2,588,268 (107,289) 2,480,979 A provision for impairment of receivables is established when there is objective evidence that WorkSafe will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between Current year claims relate to risks borne in the current financial year. Prior year claims relate to a reassessment of the expense the asset’s carrying amount and the present value of estimated future cash flows. The impairment charge is recognised in the for risks borne in all previous financial years. comprehensive operating statement. The claim payments and movement in outstanding claims liability during the year by payment type are as follows: 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 2018 2017 of the debt is considered unlikely. A provision is also made for other past due debts based on historical loss experience. Liability Liability Claims Paid Movement Total Claims Paid Movement Total 2018 2017 $000s $000s $000s $000s $000s $000s $000s $000s Weekly compensation 714,015 423,373 1,137,388 669,448 587,187 1,256,635 Movement in provision for impairment Medical including medico-legal 415,623 197,428 613,051 404,556 5,757 410,313 Balance at beginning of the year 45,169 45,326 Impairment benefits 92,806 (29,661) 63,145 87,360 (31,212) 56,148 Amounts written-back during the year (876) (773) Common law 596,923 54,099 651,022 522,767 87,966 610,733 Increase in allowance recognised in comprehensive operating statement 3,022 616 Other payment types 154,417 (17,077) 137,340 157,603 (47,717) 109,886 Balance at end of the year 47,315 45,169 Claims handling expenses - 34,978 34,978 - (9,702) (9,702) Risk margin - 53,660 53,660 - 48,359 48,359 Unexpired risk liability Self-insurer re-entry settlement 65,956 - 65,956 (1,393) - (1,393) All WorkCover insurance expires on 30 June and hence no unearned premium exists at the year end reporting date. Gross claims incurred 2,039,740 716,800 2,756,540 1,840,341 640,638 2,480,979 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 Claims handling expenses are an allowance made for the expenses to be incurred in settling claims. The risk margin provides relating to future claims against current insurance contracts. for the inherent uncertainty in the central estimate of the outstanding claims.
2.2.3 Premium creditors
Premium creditors represent amounts owing to employers as a result of premium being in credit at the reporting date.
52 53 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Reconciliation of movement in discounted net outstanding claims liability 2018 2017 $000s $000s 2018 2017
Gross claims incurred 2,756,539 2,480,979 Gross Recoveries Net Gross Recoveries Net $000s $000s $000s $000s $000s $000s Dispute resolution expenses Balance at beginning 12,980,429 (281,820) 12,698,609 12,339,792 (281,804) 12,057,988 Certified payments to Accident Compensation Conciliation Service (ACCS) 16,496 14,966 of the year Contribution to DTF Consolidated Fund for court use 8,473 8,587 Effect of change in economic (65,455) 6,894 (58,561) (600,411) 5,272 (595,139) Medical Panels costs 4,043 4,194 assumptions WorkCover Assist costs 2,261 2,232 Effect of past inflation rate (2,686) 725 (1,961) 12,919 - 12,919 different to assumptions Union Assist costs 1,098 1,090 Effect of changes in other 154,030 3,083 157,113 645,324 6,471 651,795 32,371 31,069 assumptions Total claims expense recognised in 2,788,910 2,512,048 Increase in claims incurred 2,931,870 (137,432) 2,794,438 2,768,463 (128,813) 2,639,650 the comprehensive operating statement in current accident year The estimated cost of claims includes expenses to be incurred in settling claims gross of the expected value of recoveries. Release of risk margin and (525,480) - (525,480) (483,809) - (483,809) Claims expense which includes the movement in the liability for outstanding claims, is recognised in respect of insurance claims handling expenses business and uninsured employers. Cost of prior period claims 264,261 (17,567) 246,694 138,493 (15,258) 123,235 2.3.2 Outstanding claims moving closer to payment Incurred claims recognised 2,756,540 (144,297) 2,612,243 2,480,979 (132,328) 2,348,651 2018 2017 in the comprehensive operating statement $000s $000s Claim (payments) recoveries (2,039,740) 150,527 (1,889,213) (1,840,341) 132,311 (1,708,030) Summary of valuation during the year Expected future claim payments (undiscounted) 14,265,981 13,504,135 Balance at end of the year 13,697,229 (275,590) 13,421,639 12,980,429 (281,820) 12,698,609 Discount to present value (2,846,918) (2,713,234) 11,419,063 10,790,901 Claims handling expenses 1,255,956 1,220,978 12,675,019 12,011,879 Risk margin 1,022,210 968,550 Liability for outstanding claims 13,697,229 12,980,429 Current 2,245,123 1,940,747 Non-current 11,452,106 11,039,682 13,697,229 12,980,429
Refer to Note 2.3.5 for detailed disclosures of how the claim liability is estimated and actuarial assumptions applied.
2018 2018 2017 2017 2016 Liability Movement Liability Movement Liability $000s $000s $000s $000s $000s Movement in outstanding claims liability Weekly compensation 3,808,712 423,373 3,385,339 587,186 2,798,153 Medical including medico-legal 2,753,205 197,428 2,555,777 5,757 2,550,020 Impairment benefits 412,736 (29,661) 442,397 (31,212) 473,609 Common law 3,662,994 54,099 3,608,895 87,966 3,520,929 Other payment types 781,416 (17,077) 798,493 (47,717) 846,210 Claims handling expenses 1,255,956 34,978 1,220,978 (9,702) 1,230,680 Risk margin 1,022,210 53,660 968,550 48,359 920,191 13,697,229 716,800 12,980,429 640,637 12,339,792
54 55 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
The following tables show the development of gross and net undiscounted outstanding claims relative to the ultimate expectedclaims for the ten most recent accident years. Net Gross Accident year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tot al
Accident year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tot al $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s
$000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s Estimate of ultimate claims cost:
Estimate of ultimate claims cost: −−At end of 1,578,047 1,724,918 1,912,564 1,969,438 2,052,636 1,982,997 2,086,879 2,166,413 2,375,647 2,549,701 accident −−At end of 1,655,804 1,812,507 2,016,583 2,088,919 2,171,166 2,105,325 2,220,406 2,298,765 2,511,356 2,698,267 year accident year −−One year 1,626,949 1,774,606 1,896,357 1,970,647 1,883,439 1,970,041 2,081,595 2,260,372 2,422,012 later −−One year 1,712,256 1,873,937 2,000,119 2,087,436 2,000,824 2,094,596 2,213,565 2,392,543 2,554,784 later −−Two years 1,608,655 1,729,784 1,849,733 1,930,696 1,855,861 1,919,025 2,140,070 2,296,213 later −−Two years 1,698,567 1,828,707 1,951,668 2,047,479 1,976,266 2,043,718 2,271,630 2,426,400 later −−Three years 1,570,928 1,699,844 1,833,695 1,905,956 1,831,630 1,945,403 2,181,619 later −−Three years 1,662,678 1,795,588 1,935,963 2,024,430 1,952,715 2,071,589 2,309,455 later −−Four years 1,538,342 1,695,400 1,815,331 1,914,384 1,810,339 1,939,257 later −−Four years 1,629,026 1,792,511 1,923,715 2,033,784 1,929,350 2,062,883 later −−Five years 1,556,909 1,690,995 1,855,172 1,987,630 1,849,943 later −−Five years 1,648,122 1,793,105 1,964,172 2,106,998 1,965,360 later −−Six years 1,528,977 1,676,042 1,833,646 1,968,034 later −−Six years 1,623,086 1,776,244 1,942,846 2,083,736 later −−Seven years 1,548,322 1,682,277 1,782,409 later −−Seven years 1,642,423 1,779,662 1,895,597 later −−Eight years 1,549,044 1,655,822 later −−Eight years 1,641,479 1,757,293 later −−Nine years 1,520,006 later −−Nine years 1,612,428 later Current 1,520,006 1,655,822 1,782,409 1,968,034 1,849,943 1,939,257 2,181,619 2,296,213 2,422,012 2,549,701 20,165,015 estimate of Current 1,612,428 1,757,293 1,895,597 2,083,736 1,965,360 2,062,883 2,309,455 2,426,400 2,554,784 2,698,267 21,361,202 cumulative estimate of claims cost cumulative claims cost Cumulative (1,201,568) (1,254,310) (1,324,031) (1,277,354) (1,069,707) (947,195) (847,450) (644,081) (431,935) (123,594) (9,121,226) payments Cumulative (1,290,225) (1,349,616) (1,427,182) (1,376,843) (1,161,235) (1,038,202) (933,145) (726,376) (513,515) (211,546) (10,027,884) payments Outstanding 318,437 401,512 458,378 690,680 780,236 992,062 1,334,169 1,652,132 1,990,077 2,426,106 11,043,789 claims - Outstanding 322,203 407,678 468,415 706,892 804,125 1,024,682 1,376,310 1,700,023 2,041,269 2,481,722 11,333,318 undiscounted claims - undiscounted 2008 and 2,922,208 prior years 2008 and 2,932,663 prior years Total 13,965,997 outstanding Total 14,265,981 claims - outstanding undiscounted claims - undiscounted Discount (2,822,525)
Discount (2,846,918) Claims 1,255,956 handling Claims 1,255,956 expenses handling expenses Risk margin 1,022,210
Risk margin 1,022,210 Total outstanding claims net of recoveries per balance sheet 13,421,639
Total gross outstanding claims per balance sheet 13,697,229 Note: The development table has been updated to allow for the exit of the Municipal Association of Victoria (MAV) from the scheme during the year.
56 57 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
2.3.3 Recoveries revenue 2.3.5 Actuarial assumptions and methods
2018 2017 WorkSafe provides WorkCover insurance which is long-tail in nature, meaning that claims may not be reported until many years after the injury and are typically settled more than one year after being reported. Current Year Prior Years Total Current Year Prior Years Total $000s $000s $000s $000s $000s $000s Significant estimates and judgements are made by WorkSafe’s independent valuation actuary in respect of outstanding claims liability amounts disclosed in the financial statements. These estimates and judgements are continually being evaluated and Recoveries received 88,492 62,035 150,527 79,628 52,683 132,311 are based on historical experience, as well as enhancements to actuarial modelling techniques.The key areas of significant estimates and judgements and the methodologies used to determine key assumptions are set out below. Movement in recoveries 55,615 (60,990) (5,375) 55,645 (50,992) 4,653 receivable Provision is made for the estimated cost of claims incurred but not settled at the reporting date, including the cost of claims incurred but not reported to WorkSafe. WorkSafe takes all reasonable steps to ensure that it has appropriate information Recoveries revenue - 144,107 1,045 145,152 135,273 1,691 136,964 regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome undiscounted will prove to be different from the original liability established. Discount and discount (6,674) 5,817 (857) (6,459) 1,823 (4,636) The estimation of outstanding claims liabilities is based largely on the assumption that past developments are an appropriate movement predictor of the future and involves a variety of actuarial techniques that analyse experience, trends and other relevant factors. Recoveries revenue 137,433 6,862 144,295 128,814 3,514 132,328 Various types of payments made by WorkSafe are grouped into a number of benefit categories and are analysed separately. It is then followed by calculations that take into account of inflation, discount rates and various assumptions, etc. Recoveries from the Transport Accident Commission, prior insurers and other third parties are recognised as revenue.
2.3.4 Recoveries receivable This is illustrated below: 2018 2017
$000s $000s • 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 Expected future recoveries (undiscounted) 299,983 305,356 extent of development of past incident period). Actuarial modelling technique include: Discount to present value (24,393) (23,536) −− payments per claim incurred model Recoveries receivable on incurred claims 275,590 281,820 −− payments per active claim model Modelling −− payments per claim settled model Current 48,786 49,080 −− annuity based individual claim model. Non-current 226,804 232,740
275,590 281,820 • Prior claims experience is analysed and this provides a basis for assumptions to be used Recoveries receivable are reported as assets and measured as the present value of the expected future receipts. The actuarial in the actuarial models. 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 • Assumptions selected include allowances for uncertainties which may create distortions recovery amounts. in the experience including: −− changes in WorkSafe processes which might accelerate or slow down the development and/or recording of paid or incurred claims, compared with the Assumptions statistics from previous periods −− changes in the legal environment −− the effects of inflation −− medical and technological developments. • 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. • The inflated estimated liability is discounted to its present value. Discount rates are based Results 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.
58 59 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Actuarial assumptions Inflation rate
The following assumptions have been made in determining the outstanding claims liabilities: Short term economic inflation assumptions are set by reference to DTF forecasts. The long term CPI inflation rate assumption is based on the Reserve Bank target. The long term AWE inflation rate assumption has been set by maintaining a fixed gap with 2018 2017 the CPI, based on the historic gap between CPI and AWE. Average claim frequency (claims per worker) 0.87% 0.91% Average weighted term to settlement Average claim size $77,741 $73,438 The average weighted term to settlement is calculated separately by benefit type based on historical settlement patterns. • Average weekly size $29,891 $26,538 It is an outworking of the models rather than an explicit assumption and represents the average inflated and discounted term • Average common law size $24,405 $23,770 of payments in the outstanding liability from the balance date to payment. • Average all other payments size $23,445 $23,130 Expense rate 11.0% 11.3% Risk margin Discount rate The risk margin provides for the inherent uncertainty in the central estimate of the outstanding claims. • Weighted average discount rate (0 – 20 years) 2.68% 2.73% An overall risk margin is determined allowing for the relative uncertainty of the outstanding claims estimate. Uncertainty is • Long-term discount rate (21+ years) 3.87% 4.58% analysed for each benefit type taking into account potential uncertainties relating to the actuarial models and assumptions, the quality of the underlying data used in the models, the general insurance environment, and the impact of legislative reform. Inflation rate • Weighted average AWE inflation rate (0 – 20 years) 2.96% 3.43% The estimate of uncertainty is greater for long-tail business when compared to short-tail business due to the longer time until settlement of outstanding claims. The assumptions regarding uncertainty are applied to the net central estimates in order to • Long-term AWE inflation rate (21+ years) 3.27% 3.29% arrive at an overall provision which is intended to have a 75% probability of adequacy. • Weighted average CPI inflation rate (0 – 20 years) 2.17% 2.12% Sensitivity analysis – insurance contracts • Long-term CPI inflation rate (21+ years) 2.01% 2.03% Average weighted term to settlement from balance date 6.5 years 6.1 years WorkSafe’s valuation actuary conducts sensitivity analyses to quantify the exposure to risk of changes in the key underlying variables. The valuations included in the reported results are calculated using certain assumptions about these variables as Risk margin 8.0% 8.0% disclosed above. The movement in any key variable will impact the financial performance and equity of WorkSafe. The table below describes how a change in each assumption will affect the insurance liabilities and shows an analysis of the sensitivity of the net result and equity to changes in these assumptions. Process used to determine assumptions
A description of the processes used to determine these assumptions is provided below: 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 Average claim frequency 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 Claim frequency for the current underwriting year is estimated by projecting the number of claims incurred and dividing this workers receive this compensation. Increases or decreases in any of these components will by the number of workers for the year. The average claim frequency is not used directly in the valuation models but provides result in a corresponding impact on claims expense. The ± 1% movement shown in the impact a high level indicator of claim experience. table below represents a 1% increase or decrease in all future estimated weekly payments included in the outstanding claims liability.
Average claim size Average common The average common law size per claim will vary with the number of injured workers receiving law size common law compensation and the amount of that compensation (including legal costs). The average claim size is in respect of the current underwriting year and takes into account the expected payments for each Increases or decreases in any of these components will result in a corresponding impact on payment type (e.g. weekly, medical, impairment benefits, common law, other), as well as the proportion of total injured workers claims expense. The ± 1% movement shown in the impact table below represents a 1% increase or who receive each benefit. The figures shown in the above table are in current values, i.e. in dollars at the respective balance decrease in all future estimated common law payments included in the outstanding claims liability. date before the impact of inflation to the time of payment and discounting the resultant payments back to the valuation date. Expense rate An estimate for the internal costs of handling claims is included in the outstanding claims liability. The average claim size is further broken down into two key components; the costs of weekly compensation and common law An increase or decrease in the expense rate assumption would have a corresponding impact on compensation (including legal costs) per claim. This takes into account the number of injured workers expected to access claims expense. the particular compensation as well as the amount of compensation expected to be paid. For completeness, the average sizes of other compensations are also shown. 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. Expense rate Inflation rates Expected future payments are inflated to take account of expected future cost increases. The claims handling expense allowance is calculated as a proportion of total projected claim payments of the scheme An increase or decrease in the assumed levels of future inflation would have a corresponding at the balance date based on recent historical experience. impact on claims expense.
Discount rate
Discount rates are based on observed bond yields where these are available (the longest duration Australian Government bond is 30 years). Beyond this point, an extrapolation approach is used to blend to the long term discount rate assumption.
60 61 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
The impact on net result and equity, had changes in the key variables occurred at the end of the reporting period, is summarised 2.5 Insurance contracts – risk management policies and procedures in the table below: The financial condition and operation of WorkSafe is affected by a number of key risks including insurance, interest rate, 2018 2017 credit, market, liquidity, financial and operational risks. WorkSafe’s policies and procedures in respect of managing these risks are set out below. Net Result Equity Net Result Equity $000s $000s $000s $000s Objectives in managing risks arising from insurance contracts and policies mitigating those risks
Recognised amounts per the financial statements 483,646 3,258,331 694,149 2,774,685 WorkSafe has an objective to manage insurance risk thus reducing the volatility of insurance premiums and performance from insurance operations. In addition to the inherent uncertainty of insurance risk, which can lead to significant variability in the loss Variable Movement experience, the net result for WorkSafe is significantly affected by short-term market and economic factors external to the organisation as explained in Note 3.4. Average weekly size +1% 454,852 3,229,537 668,556 2,749,092 WorkSafe has developed, implemented and maintained a sound and prudent risk management strategy that encompasses -1% 512,440 3,287,125 719,742 2,800,278 all aspects of its operations. Average common law size +1% 455,954 3,230,639 666,866 2,747,402 The strategy sets out WorkSafe’s policies and procedures, processes and controls in relation to the management of likely -1% 511,338 3,286,023 721,432 2,801,968 financial and non-financial risks.
Expense rate +1% 397,973 3,172,658 613,222 2,693,758 Key aspects of the processes in place to mitigate risks include:
-1% 569,319 3,344,004 775,076 2,855,612 • the use of sophisticated management information systems, which provide reliable and up-to-date data on the risks to which the business is exposed at any point in time Weighted average discount +0.5% 745,233 3,519,918 931,729 3,012,265 • the use of detailed internal monitoring tools which link actuarial valuation projections with the management information rate (0-20 years) -0.5% 205,590 2,980,275 442,086 2,522,622 systems to monitor claim patterns • adherence to reliable procedures for pricing risk Long-term discount rate (21+years) +0.5% 506,528 3,281,213 712,026 2,792,562 • an investment allocation strategy which seeks to optimise returns within the balance sheet risk parameters adopted -0.5% 458,803 3,233,488 674,735 2,755,271 by WorkSafe.
Weighted average AWE & CPI +0.5% 209,040 2,983,725 447,287 2,527,823 Terms and conditions of insurance business inflation rate (0-20 years) -0.5% 744,519 3,519,204 929,106 3,009,642 The terms and conditions of the WorkCover insurance scheme administered by WorkSafe were established under the Accident Compensation Act 1985 and have continued operation under the Workplace Injury Rehabilitation and Compensation Long-term AWE & CPI +0.5% 458,263 3,232,948 674,335 2,754,871 Act 2013 . Cover is for annual periods ending 30 June each year. The terms and conditions of the scheme are the same for inflation rate (21+ years) -0.5% 507,211 3,281,896 712,527 2,793,063 all insured employers. Concentration of insurance risk 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. WorkSafe underwrites WorkCover insurance for Victorian employers. The employers are diversified by sector, industry, size and geographic location. Concentration of insurance risk principally arises from major sites or centres of employment such as the Melbourne CBD. Such issues are considered when determining scheme financing strategies.
2.4 Authorised agent fees Interest rate risk
2018 2017 Assets and liabilities arising from insurance contracts entered into are directly exposed to interest rate risk. Changes in interest rates affect the valuation of WorkSafe’s assets and liabilities. $000s $000s Credit risk Authorised agent fees 273,437 225,740 Assets and liabilities arising from insurance contracts are stated in the balance sheet at the amounts that best represent Management agent fees 2,297 2,213 the maximum credit risk exposure at the reporting date. There are no significant concentrations of credit risk. 275,734 227,953
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.
62 63 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
The investment approach that is determined by the VFMC for WorkSafe is documented in a detailed Investment Risk 3. Investment portfolio and performance 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.
Investment performance, including comparisons to market benchmarks, is reported to the WorkSafe Board. The Board’s Introduction to this section This section is structured as follows: standing Risk and Audit Committees review strategic financial risks and balance sheet matters, including the examination of investment objectives and portfolio performance. Each six months, the VFMC Board certifies that the investment portfolio This section includes the investments that are held by 3.1 Investment income and investment expenses has been managed in accordance with the approved IRMP and WorkSafe’s investment objectives. A certification is also WorkSafe, as well as the associated returns outlined in 3.2 Investments provided to the DTF annually. Section 2, that are utilised to fund its functions. 3.3 Cash and cash equivalents The investment portfolio consists of a range of asset exposures including: cash and nominal bonds to cover short-term risk 3.4 Explanation of volatility of financial results and liquidity needs; inflation linked assets that more closely match WorkSafe’s liability characteristics; equities to provide for long‑term growth; and other assets that provide diversification benefits across the general portfolio.
As a part of the VFMC’s investment strategy, contracts are entered into which require WorkSafe to contribute additional 3.1 Investment income and investment expenses future capital. These future investment commitments are not recognised in the balance sheet and amount to $1,296.95 million (2017: $1,215.79 million). WorkSafe’s investments at the reporting date comprises: 2018 2017 2018 2017 $000s $000s $000s $000s Gross investment income Investment assets Dividends and distributions 629,686 425,652 Cash and cash equivalents 1,351,609 1,631,890 Interest 32,214 49,347 Cash collateral and margin accounts 28,907 7,269 Change in fair value of investments at fair value through 944,240 1,185,601 Receivables 961,769 768,387 the comprehensive operating statement: Derivative assets 201,397 372,461 Total investment income 1,606,140 1,660,600 Equity and managed investment schemes 14,273,691 12,768,385 Investment expenses (52,106) (48,733) Debt securities 380,651 227,386 Net investment income 1,554,034 1,611,867 17,198,024 15,775,778 Investment related liabilities Change in fair value of investments is the difference between the fair value of the investments at 30 June 2017 or the cost of acquisition (for investments purchased during the year), and sales proceeds or their fair value at 30 June 2018. Cash collateral and margin accounts (151,073) (263,485)
Dividend income is recognised when WorkSafe’s right to receive payment has been established, whilst interest revenue is Payables (281,731) (233,136) recognised on an accrual basis. Trust distribution income is recognised when the market prices are quoted ex-distribution Derivative liabilities (165,484) (57,213) for listed trusts. Unlisted trust distribution income is recognised when the trustee declares distributions. (598,288) (553,834) Interest represents interest earned on deposits and money market securities, together with coupon interest. 16,599,736 15,221,944 Investment expenses are fees paid to the Victorian Funds Management Corporation (VFMC) under the Client Funds Management Service Agreement and other sundry professional fees incurred by WorkSafe in relation to management of the investment portfolio. 2018 2017 $000s $000s The net return on the investment portfolio for the year was 9.89% (2017: 11.57%). Current 3.2 Investments Investment assets 2,558,608 2,682,312 Investment related liabilities (598,286) (553,729) Summary of investments integral to general insurance activities carried at fair value through the comprehensive operating statement 1,960,322 2,128,583 Non-current WorkSafe’s investment activity is undertaken pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013, the Borrowing and Investment Powers Act 1987 and formal approvals issued by the Treasurer of Victoria. Investment assets 14,639,416 13,093,466 Investment related liabilities (2) (105) WorkSafe’s investment portfolio is managed by the VFMC in accordance with the Prudential Standard covering Victorian insurance agencies. All WorkSafe investments must be placed with the VFMC. 14,639,414 13,093,361
WorkSafe’s responsibility is to set investment objectives for the VFMC after considering such matters as WorkSafe’s capital 16,599,736 15,221,944 needs, pricing and the Government’s risk preferences. The WorkSafe Board is not responsible for the management or prudential supervision of the investments – the management responsibility rests with the VFMC and the prudential supervision responsibility rests with the Department of Treasury and Finance (DTF).
64 65 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
WorkSafe has determined that all investments are held to back WorkCover insurance liabilities. 2018 2017 Investments are designated at fair value through the comprehensive operating statement on the basis that the investments are managed as a portfolio based on their fair values, and have their performance evaluated in accordance with documented risk $000s $000s management and investment strategies. Initial recognition is at cost in the balance sheet, with attributable transaction costs expensed as incurred. Subsequent measurement is at fair value with any resultant realised and unrealised gains or losses Reconciliation of net result to net cash flows from operating activities recognised in the comprehensive operating statement. Net result for the year 483,646 694,149
The details of categories of financial instruments and the methods and assumptions used to estimate fair value are included in Change in fair value of investments at fair value through the comprehensive (944,240) (1,185,601) Note 7.3. operating statement
Investments that are due to mature, expire or be realised within twelve months of reporting date are classified as current Depreciation on property, plant and equipment 6,513 4,731 investments for the purposes of classification in the balance sheet. While this classification policy may result in a reported working capital deficit, included in non-current investments is a large proportion of liquid securities which the VFMC can use to Amortisation on intangibles 15,552 15,946 ensure sufficient liquidity is available to meet WorkSafe’s operating requirements. Loss on disposal of plant and equipment 3 59 Investments are derecognised when the rights to receive future cash flows from the assets have expired, or have been transferred, and WorkSafe has transferred substantially all the risks and rewards of ownership. Write-down of intangibles - - Movements in provisions due to changes in discount rates 331 (681) The details on how WorkSafe manages its exposure to financial risks are included in Note 7.1. Changes in assets and liabilities:
3.3 Cash and cash equivalents (Increase) in premiums receivable (27,419) (23,121)
Reconciliation of cash and cash equivalents Decrease in investment income receivable (2,469) 10,622
For the purposes of the cash flow statement, cash and cash equivalents include cash in hand and highly liquid investments that (Increase) in recoveries receivable 6,230 (17) 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: Decrease in sundry receivable (598) 78 (Increase) in prepayments 1,377 (1,789) 2018 2017 Decrease (increase) in net deferred tax assets 143,677 264,667 $000s $000s Increase (decrease) in premium creditors 6,380 10,144 Cash in hand and at bank 42,425 40,325 Increase (decrease) in other payables 39,014 6,603 Investments - Cash and cash equivalents1 1,351,609 1,631,890 Increase in outstanding claims 716,800 640,637 1,394,034 1,672,215 (Decrease) in tax liabilities 31,632 - Note: (Decrease) increase in provisions (7,072) (275) 1. Included in cash and cash equivalents at 30 June 2018 is the net amount of $134.23 million (2017: $256.22 million), representing cash received as collateral and cash held with brokers against future repayment obligations under derivative contracts. Total adjustments (14,289) (257,997) Net cash flows from operating activities 469,357 436,152
66 67 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
3.4 Explanation of volatility of financial results 4. Cost of operations This note provides additional analysis of the result before income tax of $658.96 million (2017: $958.82 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 Introduction to this section This section contains the disclosures: 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. This section provides details of other non-insurance 4.1 Other income income and cost earned/incurred by WorkSafe in its 4.2 Other operating costs External factors can cause significant variations in reported results from year to year as illustrated below. day‑to-day operating activities. 4.3 Employee superannuation Accordingly for internal management reporting purposes, WorkSafe monitors and measures its financial performance based 4.4 Employee related provisions 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: 4.1 Other income
2018 2017 2018 2017 $000s $000s $000s $000s Impact on result from internal factors Self-insurer receipts 13,568 12,348 Performance from insurance operations 73,415 233,049 Health & safety licensing income 7,091 4,910 Fines and penalties 1,809 2,781
Impact on result from external factors Asset rental income - ACCS 231 572 Difference between actual investment returns and long-term expected returns 524,934 589,918 Sundry receipts 1,329 657 Changes in inflation assumptions and discount rates 60,606 582,220 24,028 21,268 Legislative changes - (446,372) Fines and penalties income is recognised upon receipt of the payment. Result before income tax 658,955 958,815 WorkSafe receives rental income from ACCS for the use of its plant and equipment.
Favourable conditions experienced in the investment markets in the 12 months to 30 June 2018 resulted in the actual 4.2 Other operating costs investment return being higher than the expected long-term rate of return. The net return on the investment portfolio for the year was 9.89% (2017: 11.57%), compared to the long-term estimated return established by management of 6.80% (2017: 7.50%) per annum based on its investment strategy. 2018 2017 $000s $000s There was a decrease of $58.56 million in the net outstanding claims liability at 30 June 2018 due to the impact of lower expected future inflation rates partially offset by lower assumed discount rates. There was also a decrease in claims liability of Employee and related1 179,728 155,881 $1.96 million due to actual inflation in the 12 months to 30 June 2018 being lower than expected. At 30 June 2017 there was a Information technology 27,836 23,374 decrease of $595.14 million in the net outstanding claims liability at 30 June 2017 due to the higher assumed discount rates and lower expected future inflation rates. This decrease was partially off-set by an increase in claims liability of $12.92 million due to Professional services 30,554 15,545 actual inflation in the 12 months to 30 June 2017 being higher than expected. There was an increase of $446.37 million in claims Marketing and communication 15,452 14,085 liability at 30 June 2017 resulting from legislative changes relating to the Compensation Legislation Amendment Act 2016. Occupancy and utilities 25,708 20,540 Research and external funding 12,835 14,376 Bad and doubtful debts written (back) off 56 (1) Movements in provisions due to changes in discount rates 331 (681) Depreciation 6,513 4,731 Amortisation 15,552 15,946 Loss on disposal of plant and equipment 3 59 Other expenses2 20,230 16,598 334,798 280,453
Note:
1. Employee and related costs include $12.83 million (2017: $2.21 million) of termination benefits. 2. Other expenses include $19.02 million (2017: $14.80 million) of operating lease rentals.
Other operating costs include $45.39 million (2017: $23.69 million) associated with the implementation of Geelong relocation program, and $22.28 million (2017: $nil) relating to the WorkSafe 2030 program.
68 69 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
4.3 Employee superannuation 4.4 Employee related provisions
Superannuation is provided for employees via the following schemes: 2018 2017
2018 2017 $000s $000s $000s $000s Current
Defined contribution plans Annual leave
VicSuper 6,232 5,143 Unconditional and expected to be settled wholly within 12 months 4,666 5,117
Other 5,384 5,255 Unconditional and expected to be settled wholly after 12 months 4,900 5,292
11,616 10,398 9,566 10,409
Defined benefit plans Long service leave
Emergency Services Superannuation Scheme 886 1,062 Unconditional and expected to be settled wholly within 12 months 3,228 3,238
12,502 11,461 Unconditional and expected to be settled wholly after 12 months 13,622 16,809 16,850 20,047
WorkSafe does not recognise any defined benefit liability under the Emergency Services Superannuation Scheme, as Termination benefits 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 Unconditional and expected to be settled wholly within 12 months 832 808 and Finance discloses the State’s defined benefit liabilities in its financial report. 27,248 31,264 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 On-costs employees. Employee superannuation excludes contributions paid under salary sacrifice arrangements and the 2017 Unconditional and expected to be settled wholly within 12 months 1,142 1,302 comparatives have been restated accordingly. At 30 June 2018, contributions outstanding were $nil (2017: $nil). Unconditional and expected to be settled wholly after 12 months 2,874 3,509
4,016 4,811
Total current provisions 31,264 36,075
Non-current
Long service leave 2,574 3,210
On-costs 408 519
Total non-current provisions 2,982 3,729
Total provisions 34,246 39,804
2018 $000s
Reconciliation of movement in on-cost provisions
Balance at beginning of the year 5,330
Additional provisions recognised 1,096
Reductions arising from payments (2,137)
Unwinding of discount and effect of changes in discount rates 135
Balance at end of the year 4,424
70 71 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave are recognised in payables and provision for employee benefits as current 5. Other assets and liabilities liabilities, because WorkSafe does not have an unconditional right to defer settlements of these liabilities. Introduction to this section This section contains the following disclosures: Depending on the expectation of the timing of settlement, liabilities for wages, salaries and annual leave are measured at: This section includes other assets and liabilities that 5.1 Other receivables • undiscounted value – if WorkSafe expects to wholly settle within 12 months are employed by WorkSafe to support its day-to-day 5.2 Property, plant and equipment • present value – if WorkSafe does not expect to wholly settle within 12 months. operating activities. 5.3 Intangibles Long service leave 5.4 Other payables 5.5 Other provisions Unconditional long service leave (LSL) is disclosed as a current liability, even where WorkSafe does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should 5.6 Commitments and contingencies 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 5.1 Other receivables • present value – if WorkSafe does not expect to wholly settle within 12 months. 2018 2017 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. $000s $000s
Termination benefits Contractual
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee Sundry receivables 6,360 5,764 decides to accept an offer of benefits in exchange for the termination of employment. WorkSafe recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a Provision for impairment (61) (5) detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage 6,299 5,759 voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
On-costs The average credit period for sundry receivables is 28 days. Included within sundry receivables at 30 June 2018 are $0.27 million (2017: $0.34 million) of past due receivables. WorkSafe provides fully for all receivables over 360 days because historical Provisions for superannuation, payroll tax and WorkCover insurance premium are recognised separately from the provision experience indicates that sundry receivables that are past due beyond 360 days are generally not recoverable. WorkSafe does for employee benefits. not charge interest on overdue receivables nor hold collateral over these balances. The average age of those receivables that are past due but not impaired was 119 days (2017: 132 days).
2018 2017 $000s $000s
Movement in provision for impairment
Balance at beginning of the year 5 6
Increase in allowance recognised in the comprehensive operating statement (66) (1)
Balance at end of the year (61) 5
72 73 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
5.2 Property, plant and equipment Property, plant and equipment are measured initially at cost and subsequently at fair value less accumulated depreciation and impairment. Fair value is determined based on management’s assessment and for property, external valuations every 5 years.
2018 2017 The cost of leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease. This includes the fair value of any dismantling, removal or restoration costs, where an obligation existed at the time of entering $000s $000s the contract for the premises to be returned to their original state upon vacation of the premises. Gross carrying amounts and accumulated depreciation Depreciation Freehold land and buildings 4,853 4,940 Accumulated depreciation (201) (15) Depreciation is provided on a straight-line basis on plant and equipment to write off those assets over their estimated useful lives to WorkSafe to the assets’ estimated residual value. The depreciation rate applied to computer equipment is 33 1/3 % 4,652 4,925 (2017: 33 1/3 %) and the rate applied to furniture and equipment is 20% (2017: 20%). Leasehold improvements 58,661 37,217 Leasehold improvements to buildings are written-off over their estimated useful lives to WorkSafe or the remaining lease term, Accumulated depreciation (31,276) (29,019) whichever is the lesser, using the straight-line method. The remaining lease terms range from 1 to 15 years (2017: 1 to 15 years). 27,384 8,197 The estimated useful lives, residual values and depreciation methods are reviewed at the year end reporting date and adjusted Computer equipment 19,596 18,282 if appropriate.
Accumulated depreciation (14,098) (14,355) Freehold land is not depreciated. Buildings have an estimated useful life of 40 years. 5,497 3,926 Any gain or loss on disposal is recognised in the comprehensive operating statement. Furniture and equipment 14,528 10,277 Impairment of assets Accumulated depreciation (9,564) (9,107) 4,964 1,170 Assets are assessed annually for indications of impairment except for: Total property, plant and equipment 97,638 70,716 • financial instrument assets Total accumulated depreciation (55,139) (52,496) • deferred tax assets.
Balance at end of the year, at fair value 42,499 18,220 If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off by a charge Movements in Freehold Land Leasehold Computer Furniture and to the comprehensive operating statement. carrying amounts and Buildings Improvements Equipment Equipment Tot al The recoverable amount is measured at the higher of depreciated replacement cost and fair value less costs to sell. It is $000s $000s $000s $000s $000s deemed that, in the event of a loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. 30 June 2018 Balance at beginning of 4,925 8,198 3,926 1,171 18,220 the year Additions - 22,132 4,362 4,388 30,883 Disposals/reclassifications (87) (3) (2) - (91) Depreciation expense (186) (2,941) (2,791) (595) (6,513) Balance at end of the year 4,652 27,386 5,496 4,964 42,499
30 June 2017 Balance at beginning of 51 7,473 4,274 628 12,426 the year Additions 4,889 3,435 1,442 880 10,646 Disposals/reclassifications - (52) (37) (32) (121) Depreciation expense (15) (2,658) (1,753) (305) (4,731) Balance at end of the year 4,925 8,198 3,926 1,171 18,220
74 75 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
5.3 Intangibles 5.4 Other payables
2018 2017 2018 2017 $000s $000s $000s $000s
Computer software Contractual
Cost Other payables for supplies and services 136,183 96,733 Balance at beginning of the period 157,541 150,370 Statutory Additions 6,062 7,171 Goods & services and fringe benefits taxes payable 2,309 2,745 Balance at end of the year 163,603 157,541 138,492 99,478
Accumulated amortisation and impairment losses The normal settlement terms of WorkSafe’s payables are 30 days. Balance at beginning of the year (107,929) (91,983) Amortisation expense (15,552) (15,946) Payables consist of: Balance at end of the year (123,481) (107,929) • contractual payables, such as accounts payable, which represent liabilities for goods and services provided to WorkSafe prior to the end of the financial year that are unpaid, and arise when WorkSafe becomes obliged to make future payments Carrying amounts in respect of the purchase of those goods and services Balance at beginning of the year 49,612 58,387 • statutory payables, such as goods and services tax and fringe benefits tax payables.
Balance at end of the year 40,122 49,612 Contractual payables are classified as financial instruments and measured at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments because they do not arise from a contract. Intangible assets represent identifiable non-monetary assets without physical substance. Intangible assets are recognised Goods and services tax at cost. Costs incurred subsequent to initial recognition are capitalised when it is expected that additional future economic benefits will flow to WorkSafe. Income, expenses and assets are recognised net of the amount of associated goods and services tax (GST), unless the GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances the GST is recognised as part Amortisation is allocated to intangible assets with finite useful lives on a systematic basis over the assets’ useful lives. of the cost of acquisition of the asset or as part of the expense. The amortisation period and the amortisation method for intangible assets with a finite useful life are reviewed at least at each year end. In addition an assessment is made at each year end reporting date to determine whether there are indicators that the Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable intangible assets concerned are impaired. If so, the assets concerned are tested as to whether their carrying value exceeds from, or payable to, the ATO is included as part of the receivables or payables in the balance sheet. their recoverable amount. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing activities, All intangible assets of WorkSafe have definite useful lives. The useful lives range from 2 to 10 years (2017: 2 to 10 years). which is recoverable from, or payable to, the ATO are classified as operating cash flows. Internally-generated intangible assets representing internally developed software are recognised only from the point that it is probable that the expected future economic benefits attributable to the asset will flow to WorkSafe and that the cost of the item can be measured reliably. Where no internally-generated intangible asset can be recognised, development expenditure is expensed in the period as incurred.
Internally-generated intangible assets are stated at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives from the date the assets are available for use. Impairment losses are included in the comprehensive operating statement.
Included in intangibles is the cost of software development in progress of $3.58 million (2017: $5.81 million). No amortisation has been allocated to software development in progress as the related software was not yet available for use at the reporting date.
76 77 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
5.5 Other provision 5.6 Commitments and contingencies
2018 2018 2017 $000s $000s $000s
Leasehold restoration provision Operating lease commitments
Balance at beginning of the year 3,711 Future minimum lease payments under non-cancellable operating lease arrangements Reductions resulting from re-measurement or settlement without cost (603) Due within one year 29,114 28,671 Unwinding of discount and effect of changes in discount rates 101 Due later than one year and less than five years 66,828 63,188 Balance at end of the year 3,209 Due later than five years 148,682 136,798 Current 2,373 Total operating lease commitments (inclusive of GST) 244,624 228,657 Non-current 836 GST recoverable from the ATO (22,239) (20,787) 3,209 Total operating lease commitments (exclusive of GST) 222,385 207,870
The provision for leasehold restoration represents the fair value of the dismantling, removal or restoration costs estimated to be Operating leases relate to leasehold premises, vehicles and office equipment with lease terms between 1 and 15 years required to be paid upon vacating the leased premises, where the obligation under these lease contracts for the premises to be (2017: 1 and 15 years). Operating lease payments are charged as an expense in the comprehensive operating statement returned to its original state existed at the time of entering into the lease. on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Some operating lease contracts contain market review The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the clauses in the event that WorkSafe exercises its option to renew. WorkSafe does not have an option to purchase the leased reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using assets at the expiry of the lease periods. the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using a discount rate that reflects the time value of money and risks specific to the provision. 2018 2017 $000s $000s
Other operating commitments
Amounts payable under non-cancellable other operational contractual arrangements
Due within one year 6,011 13,850
Due later than one year and less than five years 3,542 5,003
Total other operating commitments (inclusive of GST) 9,553 18,853
GST recoverable from the ATO (868) (1,714)
Total other operating commitments (exclusive of GST) 8,685 17,139
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 at the reporting date (2017: nil).
WorkSafe relocated its head office to Geelong on 2 July 2018. As a part of this transition, eligible employees whose roles have relocated to Geelong are entitled to relocation benefits in accordance with a relocation deed. While the ultimate relocation benefits to which the employees are entitled will be contingent on the specific relocation decisions made by the individual employees, WorkSafe could incur a liability of up to $21 million (2017: $9 million) in respect of these benefits over the next 2 years.
A matter relating to the assessment of impairment for workers that have undergone spinal fusion surgery was heard in the Supreme Court on 6 August. While the outcome of the hearing is not yet known, should the court rule against WorkSafe’s defense, the estimated impact on the 30 June 2018 outstanding claims liability would be an increase ranging between $60 and $140 million.
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.
78 79 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
6. Taxation and transactions with the state 6.2 Deferred tax
2018 2017 Introduction to this section This section contains the following disclosures: $000s $000s WorkSafe is required to pay income tax equivalent under 6.1 Income tax Deferred tax assets the National Tax Equivalent Regime in accordance 6.2 Deferred tax with Section 88 (3D) of the State Owned Enterprise Act Claims handling expense included in outstanding claims 408,487 395,655 6.3 Dividendss 1992. This section provides tax related information and Provisions not currently deductible 25,584 26,683 transactions with the State. Accruals not currently deductible 1,169 924 - 107,038 6.1 Income tax 435,240 530,300 Deferred tax liabilities 2018 2017 Unrealised gains on investments (310,692) (259,412) $000s $000s Difference in depreciation of plant and equipment and amortisation of intangibles (5,887) (8,550) Current income tax (316,579) (267,962) Current tax (expense) income (126,778) (40,719) Net deferred tax assets 118,661 262,338 Adjustments in respect of current income tax of prior years (3,587) (3,001) Deferred income tax Deferred tax is accounted for in respect of temporary differences between the carrying amount of assets and liabilities in the financial statements for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets Relating to origination and reversal of temporary differences (44,944) (220,946) and liabilities are recognised for temporary differences at the tax rates that are expected to apply when the assets and Tax expense reported in the comprehensive operating statement (175,309) (264,666) liabilities are realised or settled, based on tax rates that have been enacted or substantially enacted by the reporting date.
Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against The tax expenses or income represents the tax payable on the current year’s taxable income or tax loss based on the prevailing which deductible temporary differences or unused tax losses and tax off-sets can be utilised. However, deferred tax assets income tax rate, adjusted for changes in deferred tax assets and liabilities. and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities which affect neither taxable income nor accounting result. 2018 2017 The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer $000s $000s probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Reconciliation of accounting result to tax (expense) income Deferred tax assets and liabilities are off-set as WorkSafe settles its current tax assets and liabilities on a net basis. Result before income tax 658,955 958,815 At the statutory income tax rate of 30% (2017: 30%) (197,688) (287,645) 6.3 Dividends Adjustments in respect of current income tax of prior years (3,587) (3,001) Pursuant to section 516 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is required to pay Franking credits and withholding tax on dividends received 36,708 32,197 to the State Government a dividend determined by the Treasurer. In determining the dividend policy applicable to WorkSafe, Imputation gross-up on dividends received (11,012) (9,659) the Treasurer must have regard to the solvency margin determined to maintain the long-term financial viability of the scheme.
Other 270 3,442 An obligation to pay a dividend only arises after a formal determination is made by the Treasurer following consultation Tax expense reported in the comprehensive operating statement (175,309) (264,666) between WorkSafe, the Minister and the Treasurer.
No dividends was paid during the year (2017: nil). 2018 2017 $000s $000s Tax liabilities Balance at beginning of the year - - Movements during the year: Income tax for current year (31,632) - Balance at end of the year (31,632) -
80 81 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Investment Non-investment 7. Financial instruments and 30 June 2017 Grade Grade Tot al valuation judgements Financial assets Cash in hand & at bank 40,325 - 40,325
Introduction to this section This section contains the following disclosures: Investments - Cash and cash equivalents 1,631,890 - 1,631,890
This section sets out WorkSafe’s financial instrument 7.1 Financial instruments Debt securities 227,386 - 227,386 specific information, including exposures to financial 7.2 Off-setting of financial assets Derivative assets - 372,461 372,461 risks, and disclsoures of those items that require and financial liabilities a higher level of judgement to be applied in their fair 7.3 Fair values Investments - Receivables - 768,387 768,387 value determination. 1,899,601 1,140,848 3,040,449
7.1 Financial instruments 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. WorkSafe’s financial assets and liabilities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk. Non-investment grade assets include assets that fall outside the range of Standard and Poor’s investment grade credit ratings Credit risk as well as non-rated assets that are within the risk parameters outlined in the Investment Risk Management Plan. Credit risk refers to the risk that an issuer or a counterparty will default on its contractual obligations resulting in financial loss to WorkSafe. The VFMC manages counterparty credit risk by conducting due diligence on counterparties and will only deal Liquidity risk with counterparties of high quality with substantial balance sheets. Agreements also contain provisions for the agreements Liquidity risk arises from WorkSafe being unable to meet financial obligations as they fall due. WorkSafe has a payment policy of to be reviewed or rescinded upon the occurrence of specified events relating to counterparty credit and liquidity. settling financial obligations within 30 days.
The following analysis excludes trade receivables and non-trade receivables. The details of trade receivables that are past their The VFMC uses a combination of cash and futures portfolios plus a large proportion of listed securities to ensure sufficient due dates are included in Note 2.2.2. liquidity is available at all times to meet WorkSafe’s operating requirements.
WorkSafe’s maximum exposure to credit risk at the reporting date in relation to each class of financial asset is the carrying The following table summarises the maturity profiles of WorkSafe’s financial liabilities. The table includes the liquidity analysis amount of those assets as indicated in the balance sheet. in relation to contractual (as opposed to statutory) financial liabilities. While the liability for outstanding claims is the most significant liability for which payments will need to be made in the future, they are excluded from the definition of a financial Concentrations of credit risk instruments under AASB 139 Financial Instruments: Recognition and Measurement. The VFMC manages credit risk by diversifying the exposure amounts with particular issuers and counterparties and operating Details on the average term to settlement for the claims liabilities portfolio are included in Note 2.3.5. in liquid markets. WorkSafe does not have any significant concentration of credit risk on an industry, regional or country basis. The investment strategy for WorkSafe is to ensure a diversified portfolio. Less than The table below provides information regarding the credit risk exposure of WorkSafe by classifying assets according to the 30 June 2018 3 Months 4-12 Months 1-5 Years 5+ Years Tot al VFMC’s credit ratings of counterparties. $000s $000s $000s $000s $000s
Non-statutory payables 140,519 68,036 - - 208,555 Investment Non-investment 30 June 2018 Grade Grade Tot al Derivative liabilities 154,323 11,159 2 - 165,484
$000s $000s $000s Investments - Payables 281,731 - - - 281,731
Financial assets 576,573 79,195 2 - 655,770 Cash in hand & at bank 42,425 - 42,425 30 June 2017 Investments - Cash and cash equivalents 1,351,609 - 1,351,609 $000s $000s $000s $000s $000s Debt securities 380,651 - 380,651 Non-statutory payables 115,190 47,535 - - 162,725 Derivative assets - 201,397 201,397 Derivative liabilities 51,549 5,559 105 - 57,213 Investments - Receivables - 961,769 961,769 Investments - Payables 233,136 - - - 233,136 1,774,685 1,163,166 2,937,851 399,875 53,094 105 - 453,074
82 83 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Market risk Interest rate sensitivity
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market A 0.5% movement in interest rates (or discount rates) is used by WorkSafe’s actuaries to present the sensitivities of the prices. Market risk comprises three types of risk: market interest rates (interest rate risk), foreign exchange (currency risk) and actuarial claims liabilities to management to allow them to monitor interest rate risk on liabilities. This percentage has been market prices (price risk). used to present the impact on interest sensitive investments. These movements are attributable to WorkSafe’s exposure to interest rates on its variable rate investments and its fair value movement on its fixed rate investments. When establishing the investment asset allocation, the VFMC considers input from actuaries to ensure that the investment mix is appropriate to service future WorkSafe liabilities and that projected outcomes are in line with the overall investment At the reporting date, if interest rates had moved 0.5% up or down and all other variables were held constant, WorkSafe’s net objectives and remain within the risk parameters approved by the Treasurer. result and equity would change as follows:
Interest rate risk 2018 2017 Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes $000s $000s in market interest rates. Impact on net result and equity from a movement in interest rates The VFMC seeks to manage the interest rate risk through an asset allocation strategy for the investment portfolio, which acts as an economic hedge against the insurance liabilities of WorkSafe. To the extent that these assets and liabilities can Increase of 0.5% (1,707) (5,476) be matched, unrealised gains and losses on the remeasurement of liabilities resulting from interest rate movements will be off-set by unrealised losses or gains on the remeasurement of investment assets. Decrease of 0.5% 1,707 5,476
The VFMC may use financial derivatives to manage the interest rate risk associated with the portfolio. Foreign currency risk A summary of WorkSafe’s exposure to interest rate risk on financial instruments is as follows: All foreign currency transactions are converted to Australian currency at the rates of exchange applicable at the dates of the 30 June 2018 30 June 2017 transactions. Investments held at reporting date in foreign currencies are converted to Australian currency using the exchange rate at balance sheet date. Gains or losses arising on foreign currency transactions are included in investment income in the Non- Non- period in which they arise. Variable Fixed interest Variable Fixed interest Rate Rate Bearing Total Rate Rate Bearing Total Foreign currency risk is the risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange $000s $000s $000s $000s $000s $000s $000s $000s rates. WorkSafe is exposed to foreign exchange risk through its investments which are denominated in foreign currency, and anticipated future transactions. Financial assets The VFMC manages foreign exchange risk in accordance with the approved IRMP and uses financial derivatives to control exposures. The proportion of foreign exchange risk which is hedged is reviewed regularly to ensure that the net exposure is Cash in hand 42,425 - - 42,425 40,325 - - 40,325 maintained at a level which is consistent with the overall investment objectives. and at bank WorkSafe’s exposure is mainly via the major currencies such as United States dollar, Japanese yen, the Euro and British pound. Premium - - 58,377 58,377 - - 48,082 48,082 receivables Foreign currency sensitivity
Investments The foreign exchange sensitivity has been prepared on the basis of WorkSafe’s direct investments and not on a look-through basis for investments held indirectly through unit trusts. Consequently the disclosure of currency risk may not represent −− Derivative - 98 201,299 201,397 - - 372,461 372,461 the true currency risk profiles of WorkSafe where the unit trust has significant investments which have exposure to the assets currency markets.
−− Other 1,317,721 280,296 14,965,806 16,563,823 1,370,601 227,386 13,308,709 14,906,696 The following table details the WorkSafe’s sensitivity to a 10% increase or decrease in the Australian Dollar against the relevant investments foreign currencies with all other variables held constant. Sundry - - 6,299 6,299 - - 5,759 5,759 receivables 2018 2017
1,360,146 280,394 15,231,781 16,872,321 1,410,926 227,386 13,735,011 15,373,323 $000s $000s
Financial Impact on net result and equity from a movement in foreign liabilities exchange rates
Non-statutory - - 208,555 208,555 - - 162,725 162,725 Increase of 10% 151,211 111,544 payables Decrease of 10% (184,814) (136,333) Derivative - 1,781 163,703 165,484 - 761 56,452 57,213 liabilities
- 1,781 372,258 374,039 - 761 219,177 219,938
Net financial 1,360,146 278,613 14,859,523 16,498,282 1,410,926 226,625 13,515,834 15,153,385 assets
84 85 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Price risk 7.2 Off-setting of financial assets and financial liabilities
Price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices whether those The following table identifies financial assets and liabilities which have been off-set in the balance sheet in accordance with changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial AASB 132 Financial Instruments: Presentation and those which have not been off-set in the balance sheet but are subject to instruments traded in the market. Such factors may include changes in the performance of the economies, markets and enforceable master netting agreements with trading counterparties or similar agreements (i.e. offsetting agreements and any securities in which the VFMC invests. related financial collateral in accordance with AASB 7 Financial Instruments). WorkSafe is exposed to price risk through its investments in listed and unlisted shares and managed investment schemes. The VFMC manages price risk through diversification and careful selection of securities within the strategic asset allocation Amount not Set-off in the Balance Sheet for each class of asset. Net Amounts Amounts Subject WorkSafe’s sensitivity to equity price risk is set out below. Presented in the to Master Netting Collateralised 30 June 2018 Balance Sheet Agreements Obligation Net Amount Price risk sensitivity $000s $000s $000s $000s At reporting date, if the value of WorkSafe’s investment had been 10% higher or lower and all other variable held constant year Derivative assets 201,397 (52,470) (146,077) 2,850 end, WorkSafe’s net result and equity would change as follows: Derivative liabilities (165,484) 52,470 16,140 (96,874) 2018 2017 Total 35,913 - (129,937) (94,024) $000s $000s
Impact on net result and equity from a movement in listed 30 June 2017 and unlisted investment prices Derivative assets 372,461 (55,109) (255,378) 61,974
Listed investment prices Derivative liabilities (57,213) 55,109 942 (1,162) Increase of 10% - 1 Total 315,248 - (254,436) 60,812 Decrease of 10% - (1)
Unlisted investment prices 7.3 Fair values
Increase of 10% 994,123 899,770 This section sets out information on how WorkSafe determined fair value for financial reporting purposes. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the Decrease of 10% (994,123) (899,770) measurement date.
Fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 – Valuation techniques for which the input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 – Valuation techniques for which the input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, WorkSafe has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. In addition, WorkSafe determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.
86 87 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
The following table shows the fair values of financial assets and financial liabilities, including their fair value hierarchy:
30 June 2018 Level 1 Level 2 Level 3 Tot al 30 June 2017 Level 1 Level 2 Level 3 Tot al $000s $000s $000s $000s $000s $000s $000s $000s
Financial assets Financial assets
Cash in hand and at bank 42,425 - - 42,425 Cash in hand and at bank 40,325 - - 40,325
Premium receivables - 58,377 - 58,377 Premium receivables - 48,082 - 48,082
Investment assets Investment assets
Cash and cash equivalents 1,351,609 - - 1,351,609 Cash and cash equivalents 1,631,890 - - 1,631,890
Cash collateral and margin 28,907 - - 28,907 Cash collateral and margin 7,269 - - 7,269 accounts accounts
Receivables 961,769 - - 961,769 Receivables 768,387 - - 768,387
Derivative assets 367 201,030 - 201,397 Derivative assets 184 372,277 - 372,461
Equity and managed Equity and managed investment schemes investment schemes
Cash - - - - Cash - - - -
Australian equities - 2,049,840 - 2,049,840 Australian equities 21 1,859,170 - 1,859,191
International equities - 5,096,792 - 5,096,792 International equities 65,632 4,408,351 - 4,473,983
Private equity - - 51,380 51,380 Private equity - - 65,930 65,930
Inflation linked bonds - 1,808,085 - 1,808,085 Inflation linked bonds - 1,677,061 - 1,677,061
Infrastructure - 515 1,129,502 1,130,017 Infrastructure - 495 961,244 961,739
Property - - 1,218,029 1,218,029 Property - - 1,145,662 1,145,662
Diversified fixed income - 1,671,311 157,111 1,828,422 Diversified fixed income - 1,436,284 134,565 1,570,849
Non traditional strategies - 194,399 896,727 1,091,126 Non traditional strategies - 223,925 790,045 1,013,970
- 10,820,942 3,452,749 14,273,691 65,653 9,605,286 3,097,446 12,768,385
Debt securities - 380,651 - 380,651 Debt securities - 227,386 - 227,386
Sundry receivables - 6,299 - 6,299 Sundry receivables - 5,759 - 5,759
2,385,077 11,467,299 3,452,749 17,305,125 2,513,708 10,258,790 3,097,446 15,869,944
Financial liabilities Financial liabilities
Non-statutory payables - 208,555 - 208,555 Non-statutory payables - 162,725 - 162,725
Investment related liabilities Investment related liabilities
Cash collateral and 151,073 - - 151,073 Cash collateral and 263,485 - - 263,485 margin accounts margin accounts
Payables 281,731 - - 281,731 Payables 233,136 - - 233,136
Derivative liabilities 2,394 163,090 - 165,484 Derivative liabilities 1,068 56,145 - 57,213
435,198 371,645 - 806,843 497,689 218,870 - 716,559
Net financial assets 1,949,879 11,095,654 3,452,749 16,498,282 Net financial assets 2,016,019 10,039,920 3,097,446 15,153,385
88 89 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Transfer between categories Estimation uncertainty
No amounts were transferred between Level 1 and Level 2 during the year ended 30 June 2018 (2017: $nil). The Level 3 financial assets relate to private equities and managed investment schemes that are managed by the VFMC on behalf of WorkSafe. Fair value determination A majority of these investments are held via third party pooled investment vehicles, and as such WorkSafe is not privy to the The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in detailed assumptions or valuation techniques used to value the underlying investment assets. WorkSafe is reliant on third a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions parties for these valuations and the quantitative information regarding significant unobservable inputs used in the fair value were used to estimate fair value. measurement cannot be assessed.
Cash and cash equivalents (including discount securities): Cash and cash equivalents consist primarily of deposits with banks An example of the key inputs and assumptions typically considered is shown below. and highly liquid financial assets with maturity dates less than three months, together with units held in cash funds/trusts. Cash equivalents are assets that are subject to an insignificant risk in the change in fair value and are used to manage short term Key inputs and assumptions subject to estimation uncertainty commitments. Amounts classified as cash and cash equivalents are recorded at face value, except for discount securities which are recorded at market value. WorkSafe categorises these instruments as Level 1. Asset Class Valuation Techniques Key Inputs and Assumptions Cash collateral and margin accounts: Cash collateral refers to amounts held as security against future counterparty Infrastructure investments Discounted cash flows. • risk free discount rates performance. These assets are recorded at face value and categorised as Level 1. Margin accounts represent cash held with • risk premium a broker or central counterparties against open futures contracts and/or other derivatives. • asset utilisation rates • capital expenditure forecasts Receivables/payables: Miscellaneous receivables/payables include interest income, GST obligations, investment expenses, • operating costs etc. and are carried at the full value of the entitlement. Amounts due to/from brokers represent outstanding settlement amounts • other estimated future cash flows arising from the purchase/sale of securities and are carried at the settlement amount pending. This is deemed fair value given the short term nature of these balances and the items are categorised as Level 1. Private Equity investments Multiples of earnings, discounted cash • identification of appropriate comparables flow, market equivalents and other • estimated future profits Derivative assets and liabilities: Derivatives are originally recognised at fair value at the date a derivative contract is market accepted methodologies. • risk free rate, risk premium entered into and are subsequently remeasured to their fair value at each reporting date with gain or loss recognised • estimated future cash flows in the comprehensive operating statement. Property investments Discounted cash flow, capitalisation and • future economic and regulatory direct comparison methodologies. conditions Fair value is derived from the prices published by recognised exchanges or, for over-the-counter instruments, generally accepted valuation techniques. WorkSafe classifies these instruments as either Level 1 or Level 2. Fixed interest Diversified fixed interest investments-Third • appropriate credit spread and other risk investments party pricing servicers, which source prices premium Equity and managed investment schemes: Holdings in unlisted funds/trusts are recorded at fair value as determined by the from brokers and market makers. • future risk free rate fund manager or valuations by other skilled independent third parties. WorkSafe reviews the level of valuation uncertainty and • estimated future cash flows typically associated with the assets managed by the fund/trust, whether there are redemption restrictions, the pricing Non-traditional strategies investments ‐ • identification of appropriate comparable frequency and whether there is an active market. Depending on the outcome of these reviews, the assets may be classified Non-traditional Prices quoted on an exchange or traded in a assets as either Level 2 or Level 3. strategies dealer market. • life expectancy estimates and mortality Debt securities: The fair value of debt securities is established by using observable inputs such as recently executed investments probabilities transaction prices in securities of the issuer or comparable issuers and yield curves. Adjustments are made to the valuations Less liquid fixed interest and non-traditional • future economic and regulatory when necessary to recognise differences in a particular instrument’s terms or credit worthiness. To the extent that the strategies investments - conditions significant inputs are observable, WorkSafe categorises these investments as Level 2. Discounted cash flow, amortised cost, direct comparison and others. Reconciliation of Level 3 fair value movements
The following table presents the changes in Level 3 instruments (financial assets) for the year ended 30 June 2018 and 30 June 2017:
2018 2017
Investments $000s $000s
Balance at beginning of the year 3,097,446 2,568,775
Gains recognised in the comprehensive operating statement 131,383 110,354
Purchases 393,423 681,562
Sales (169,503) (263,245)
Balance at end of the year 3,452,749 3,097,446
Total gains (losses) for the year included in gains for assets 9,096 (18,964) held at end of the year
90 91 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
8. Other disclosures 8.2 Remuneration of executives Remuneration of executives
The number of executive officers, other than the responsible minister and Board members, and their total remuneration Introduction to this section This section contains the following disclosures: during the reporting period are shown in the table below. Total annualised employee equivalents provides a measure of full This section includes additional material disclosures 8.1 Responsible persons time equivalent executive officers over the reporting period. required by accounting standards or otherwise, 8.2 Remuneration of executives The number of executives may vary from year to year due to the timing of appointments, resignations and the composition for the understanding of this financial report. 8.3 Related parties of executives. 8.4 Entity consolidated pursuant to section 53(1)(b) The remuneration of executives (including key management personnel of the VAEA in 8.3 below) is as follows: of the FMA 8.5 Remuneration of auditors 2018 2017 8.6 Events after reporting date 8.7 Australian Accounting Standards issued that $000s $000s are not yet effective Short-term employee benefits 2,981 2,457
Post-employment benefits 244 226 8.1 Responsible persons Other long-term benefits 79 77 In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 Termination benefits 136 - (FMA), the responsible persons who held office during the financial year were: Total remuneration 3,439 2,760 Responsible Minister Total number of executives 16 11 Robin Scott MP, Minister for Finance Total annualised employee equivalents1 10.5 8.4 Board members Note: • Mr Paul Barker (Chairman) • Ms Clare Amies (Chief Executive) 1. Annualised employee equivalent is based on the time fraction worked over the reporting period. • Ms Jane Brockington (appointed 15 August 2017) • Mr Doug Kearsley 8.3 Related parties • Mr Neil Lucas (until 25 August 2017) WorkSafe is a controlled entity of the State of Victoria. • Mr Ross McCann AM • Mr Peter McMullin (appointed 6 February 2018) The Victorian Asbestos Eradication Agency (VAEA) has been consolidated into WorkSafe’s financial statements pursuant to the determination made by the Minister for Finance under section 53(1)(b) of the FMA. • Dr Samantha Smith Key management personnel of WorkSafe comprise the responsible minister, Board members and members of the executive The number of responsible persons of WorkSafe whose remuneration falls within the following bands was: leadership team. Key management personnel of the VAEA comprise the responsible minster and its Board members.
Income Band 2018 2017 The remuneration of key management personnel is as follows: $ 2018 2017 0 - 9,999 - 1 $000s $000s 10,000 - 19,999 1 2 20,000 - 29,999 1 - Short-term employee benefits 3,845 3,269 30,000 - 39,999 - 1 Post-employment benefits 298 291 40,000 - 49,999 1 1 Other long-term benefits 101 95
50,000 - 59,999 3 2 Termination benefits 136 - 130,000 - 139,999 1 1 Total remuneration 4,380 3,656 540,000 - 549,999 1 1
The compensation detailed above excludes the salaries and benefits the Portfolio Minister receives. The Minister’s The compensation detailed above excludes the salaries and benefits the Portfolio Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within the Department of Parliamentary Services’ financial report. the Department of Parliamentary Services’ financial report. The remuneration includes accrued leave entitlements and the 2017 comparatives have been restated accordingly.
92 93 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Related parties of WorkSafe and the VAEA include all key management personnel and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over).
Transactions with key management personnel and other related parties
There were no transactions with key management personnel during the year (2017: none), other than those disclosed above. Outstanding Committed Name of Nature of Details of Total Value of Balances at Amount at Terms and Transactions with other related parties Counterparty Relationship Transactions Transactions 30 June 2018 30 June 2018 Conditions
Transactions with other related parties are entered into on an arm’s length basis. Conflicts of interest are overcome where $000s $000s $000s warranted, by the key management personnel declaring their interests and abstaining from final decision making. Executives
Personal Injury Mr Shane O’Dea Membership fees (42) - - Standard 30 June 2018 Education is a PIEF Board Foundation member Outstanding Committed (PIEF) Name of Nature of Details of Total Value of Balances at Amount at Terms and Counterparty Relationship Transactions Transactions 30 June 2018 30 June 2018 Conditions Funding (250) - - Standard contribution $000s $000s $000s Sponsorship and (3) - - Standard Board members training
Victorian Arts Mr Paul Barker is Grant funding (36) - - Standard Service charges 245 61 - Standard Centre a Victorian Arts Centre Trust Cost 1,249 316 - Standard member reimbursement receivable Venue hire (9) - - Standard Institute Mr David Watson Funding (2,705) - (446) Standard Leadership Ms Clare Amies Training and 90 - - Standard for Safety, was and Ms Victoria is a Leadership conferences Compensation Marion Nagle is Victoria Council and Recovery an ISCRR Board member Research member (ISCRR) Partnership (30) - - Standard Office 169 - - Standard Transport Dr Samantha Recovery of 87,100 - - Based on accommodation Accident Smith and Ms compensation independent Commission Jane Brockington paid actuarial Mr Ashley West is an executive of the TAC, and the transactions with the TAC are included in the above table for Board members. (TAC) are TAC Board valuation members
Management (1,947) - - Standard of catastrophic claims
Cost 6,109 778 - Standard reimbursement receivable
Cost (3,649) (1,142) - Standard reimbursement payable
Victorian Mr Ross McCann Funding (1,912) - - Standard Asbestos is a VAEA Board Eradication member Agency (VAEA)
94 95 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
30 June 2017
Outstanding Committed Outstanding Committed Name of Nature of Details of Total Value of Balances at Amount at Terms and Name of Nature of Details of Total Value of Balances at Amount at Terms and Counterparty Relationship Transactions Transactions 30 June 2017 30 June 2017 Conditions Counterparty Relationship Transactions Transactions 30 June 2017 30 June 2017 Conditions $000s $000s $000s $000s $000s $000s
Board members Executives
Victorian Arts Mr Paul Barker Grant funding - - (36) Standard Personal Injury Mr Shane O’Dea Membership fees (42) - - Standard Centre was a Victorian Education is a PIEF Board Arts Centre Trust Foundation member member (PIEF)
Leadership Ms Clare Amies Training and (56) - - Standard Sponsorship and (17) - - Standard Victoria was a Leadership conferences training Victoria Council member Service charges 248 62 - Standard
Transport Mr John Walter Recovery of 79,500 - - Based on Cost 1,080 294 - Standard Accident and Mr Paul Kirk compensation independent reimbursement Commison were TAC Board paid actuarial receivable (TAC) members valuation Institute Mr David Watson Funding 3,155 - 3,151 Standard for Safety, was an ISCRR Dr Samantha Compensation Board member Smith was a TAC and Recovery Board member Research Office 168 - - Standard Management (1,861) - - Standard (ISCRR) accommodation of catastrophic claims
Cost 7,538 705 - Standard reimbursement receivable
Cost (5,357) (923) - Standard reimbursement payable
Corrs Chambers Mr John Walter Legal services (359) - - Standard Westgarth was a partner of Corrs Chambers Westgarth
Victorian Funds Mr John Walter’s Investment (30,598) - - Standard Management spouse was a management fees Corporation VFMC Board (VFMC) member
Victorian Mr Ross McCann Funding (477) - - Standard Asbestos is a VAEA Board Eradication member Agency (VAEA)
96 97 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
8.4 Entity consolidated pursuant to section 53(1)(b) of the FMA 9. Statement by Chairman, Chief Executive The financial effects of the VAEA, which has been consolidated into WorkSafe’s financial statements, are as follows.
WorkSafe VAEA Eliminations Consolidated and Chief Financial Officer
2018 2017 2018 2017 2018 2017 2018 2017 The attached financial statements of the Victorian WorkCover Authority have been prepared in accordance with Direction $000s $000s $000s $000s $000s $000s $000s $000s 5.2 of Standing Directions of the Minster for Finance under the Financial Management Act 1994, applicable Financial Total 4,110,828 4,028,002 1,912 477 (2,237) (477) 4,110,503 4,028,002 Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional income from reporting requirements. transactions We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, Net result from 483,646 694,149 - - - - 483,646 694,149 statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions transactions during the year ended 30 June 2018 and the financial position of the Victorian WorkCover Authority at 30 June 2018.
Total assets 17,833,799 16,517,933 - - - - 17,833,799 16,517,933 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. Total liabilities 14,575,468 13,743,248 - - - - 14,575,468 13,743,248 We authorise the attached financial statements for issue on 23 August 2018.
8.5 Remuneration of auditors
2018 2017 $000s $000s
Victorian Auditor-General’s Office - Audit of WorkSafe’s financial statements 322 315
322 315
8.6 Events after reporting date Paul Barker Clare Amies Roger Arnold No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly Chairman Chief Executive Chief Financial Officer 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 effective Dated at Geelong this 23rd day of August 2018
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
9 Financial Instruments 1 January 2018
2010–7 Amendments to Australian Accounting Standards arising from AASB 9 (December 1 January 2018 2010)
16 Leases 1 January 2019
17 Insurance Contracts 1 January 2021
The preliminary assessment has not identified any material impact arising from the adoption of AASB 9 and AASB 2010-7, and these standards will continue to be monitored and assessed. The key changes introduced by AASB 16 include the recognition of most operating leases on balance sheet. Rather than expensing the lease payments, depreciation of right-of-use assets and interest on lease liabilities will be recognised in the income statement with marginal impact on the operating result. AASB 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It replaces AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts. The impact of adopting AASB 17 has not been fully assessed.
WorkSafe will apply these standards for the annual reporting periods beginning on or after the operative date set out above.
98 99 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Auditor’s As required by the Audit Act 1994, my responsibility is to express an opinion on the financial r s o si i iti s report based on the audit. My objectives for the audit are to obtain reasonable assurance Independent Auditor’s Report or t udit about whether the financial report as a whole is free from material misstatement, whether To the Board of the Victorian WorkCover Authority o t i i due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable r ort assurance is a high level of assurance but is not a guarantee that an audit conducted in pinion I have audited the financial report of the ictorian or over uthority the uthority accordance with the Australian Auditing Standards will always detect a material which comprises the misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected • balance sheet as at une to influence the economic decisions of users taken on the basis of this financial report. • comprehensive operating statement for the year then ended • statement of changes in equity for the year then ended As part of an audit in accordance with the Australian Auditing Standards, I exercise • cash flow statement for the year then ended professional judgement and maintain professional scepticism throughout the audit. I also: • notes to the financial statements, including significant accounting policies • identify and assess the risks of material misstatement of the financial report, whether • tatement by the hairman, hief xecutive and hief inancial fficer. due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my In my opinion the financial report presents fairly, in all material respects, the financial opinion. The risk of not detecting a material misstatement resulting from fraud is position of the uthority as at une and its financial performance and cash flows for higher than for one resulting from error, as fraud may involve collusion, forgery, the year then ended in accordance with the financial reporting requirements of art of the intentional omissions, misrepresentations, or the override of internal control Financial Management Act 1994 and applicable ustralian ccounting tandards. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose sis or I have conducted my audit in accordance with the Audit Act 1994 which incorporates the of expressing an opinion on the effectiveness of the Authority’s internal control opinion ustralian uditing tandards. I further describe my responsibilities under that ct and • evaluate the appropriateness of accounting policies used and the reasonableness of those standards in the Auditor’s responsibilities for the audit of the financial report section accounting estimates and related disclosures made by the Board of my report. • conclude on the appropriateness of the Board’s use of the going concern basis of y independence is established by the Constitution Act 1975. y staff and I are accounting and, based on the audit evidence obtained, whether a material independent of the uthority in accordance with the ethical requirements of the ccounting uncertainty exists related to events or conditions that may cast significant doubt on Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional the Authority’s ability to continue as a going concern. If I conclude that a material Accountants the ode that are relevant to my audit of the financial report in ictoria. y uncertainty exists, I am required to draw attention in my auditor’s report to the staff and I have also fulfilled our other ethical responsibilities in accordance with the ode. related disclosures in the financial report or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to I believe that the audit evidence I have obtained is sufficient and appropriate to provide a the date of my auditor’s report. However, future events or conditions may cause the basis for my opinion. Authority to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial report, o rd’s he oard of the uthority is responsible for the preparation and fair presentation of the including the disclosures, and whether the financial report represents the underlying responsi i ities financial report in accordance with ustralian ccounting tandards and the Financial transactions and events in a manner that achieves fair presentation. or t e Management Act 1994, and for such internal control as the oard determines is necessary in n i to enable the preparation and fair presentation of a financial report that is free from I communicate with the Board regarding, among other matters, the planned scope and report material misstatement, whether due to fraud or error. timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. In preparing the financial report, the oard is responsible for assessing the uthority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.
MELBOURNE Andrew Greaves 28 August 2018 Auditor-General
2
100 101 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Appendix 1: Appendices Prosecutions
Compensation Prosecution Outcomes 2017/18
Date of Defendant Name A.C.N. Result Fine Restitution outcome Bruce E Bartrop Pty Ltd 004 411 Pleaded Guilty - Without conviction $0 $0 04-Jul-17 634 placed on an undertaking to be of good behaviour with a special condition to donate $500 to the Children's Cancer Foundation and ordered to pay costs in the amount of $1,960.
Cameron Atkins N/A Pleaded Guilty - Without conviction $0 $13,650 10-Jul-17 placed on an undertaking to be of good behaviour and ordered to pay the amount of $13,650 in restitution.
Christopher Peat N/A Pleaded Guilty - Without conviction $0 $0 09-Aug-17 placed on an undertaking to be of good behaviour with a special condition to pay $750 to the Salvation Army.
Shaun Paszyna N/A Pleaded Guilty - Convicted $0 $59,976 18-Sep-17 and sentenced to 3 months imprisonment, wholly suspended for a period of 12 months. Ordered to pay restitution in the amount of $59,976 and costs in the amount of $2,200.
Cedar Ferry N/A Pleaded Guilty - Convicted $0 $188,548 21-Sep-17 and sentenced to 6 months imprisonment wholly suspended for a period of 2 years. Ordered to pay restitution in the amount of $188,548 and costs in the amount of $2,000.
Paul Weiser N/A Pleaded Guilty - Convicted $0 $66,048 02-Oct-17 and sentenced to 4 months imprisonment and ordered to pay restitution in the amount of $66,048 and costs in the amount of $11,619.
Smash Masters Geelong 155 850 Pleaded Guilty - Convicted and fined $10,000 $0 10-Oct-17 Pty Ltd 614 fined $10,000 and ordered to pay costs in the amount of $1,981.
Rajiv Kumar N/A Pleaded Guilty - Convicted and $1,200 $2,558 11-Oct-17 fined $1,200 and ordered to pay the amount of $2,558 in restitution the amount of $1,468 in costs.
102 103 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Compensation Prosecution Outcomes 2017/18 Compensation Prosecution Outcomes 2017/18
Date of Date of Defendant Name A.C.N. Result Fine Restitution outcome Defendant Name A.C.N. Result Fine Restitution outcome
Bahtiyar Aktepe N/A Pleaded Guilty - Fined $1,000 $1,000 $0 02-Nov-17 Lester Aloiai N/A Pleaded Guilty - Without conviction $0 $0 21-Jun-18 without conviction. placed on an undertaking to be of good behaviour with a special Dale Kilpatrick N/A Pleaded Guilty - Convicted and fined $1,000 $906 27-Nov-17 condition to take part in the $1,000 and ordered to pay restitution in WorkSafe OHS Essentials Program the amount of $906. and pay the amount of $2000 to the Roadhouse Burgers 600 767 No Plea Taken - Convicted and fined $8,500 $0 10-Jan-18 Court Fund and costs in the amount Pty Ltd 913 $8,500 and ordered to pay costs of $1,748. in the amount of $1,663. Tyson King N/A Pleaded Guilty - Without conviction $0 $5,000 26-Jun-18 Robert Smith N/A Pleaded Guilty - Without conviction, $0 $5,000 24-Jan-18 sentenced to an undertaking to be placed on an undertaking to be of good of good behaviour for a period of 12 behaviour with a speacial condition to months with a special conditions pay $5,000 to a Court fund. to pay $500 to the Court Fund and ordered to pay restitution in the Craig Parkinson N/A Pleaded Guilty - With conviction $0 $17,977 29-Jan-18 amount of $5,000 and costs in the placed on a Community Corrections amount of $500. Order for a period of 24 months with a special condition to perform 250 Travis Smith N/A Pleaded Guilty - Without conviction $1,000 $14,560 25-Jun-18 hours of unpaid community work fined $1,000 and sentenced to pay and ordered to pay the amount of restitution in the amount of $14,560 $17,997 in restitution. and ordered to pay costs in the amount of $2,143. Gary Stewart N/A Pleaded Guilty - Convicted and fined $1,500 $0 13-Feb-18 $1,500 and ordered to pay costs in Carol Anne Leslie N/A Pleaded Guilty - Convicted and $0 $59,006 27-Jun-18 the amount of $757. placed on a Community Correction Order for a period of 24 months Robert Sortino N/A Pleaded Guilty - Without conviction, $0 $1,049 13-Feb-18 with a special condition to perform placed on an undertaking to be of 250 hours of community work good behaviour for a period of 12 and ordered to pay the amount of months with a special condition to $59,006 in restitution. pay $500 to the Court Fund, the amount of $500 in costs and the Vaisima Liu N/A Pleaded Guilty - Without conviction $0 $10,948 28-Jun-18 amount of $1,049 in restitution. placed on an undertaking to be of good behaviour for a period Benjamin Dunmall N/A Pleaded Guilty - Without conviction $1,200 $5,500 15-Feb-18 of 12 months and ordered to pay fined $1,200 and ordered to pay restitution in the amoun of $10,948 the amount of $5,500 in restitution and costs in the amount of $500. and the amount of $2,000 in costs.
David Jackson‑Grose N/A Pleaded Guilty - Without conviction $0 $2,728 19-Apr-18 placed on an undertaking to be of good behaviour for a period of 6 months and ordered to pay the amount of $2,728 in restitution.
Jarrod Brewer N/A Pleaded Guilty - Convicted and $0 $33,361 26-Apr-18 placed on a Community Correction Order for a period of 24 months with a special condition to perform 250 hours of community work and ordered to pay the amount of $33,361 in restitution.
Australia Cenvic 608 196 Pleaded Guilty - Convicted and fined $10,000 $0 05-Jun-18 Constructions 747 $10,000 and ordered to pay costs in Pty Ltd the amount of $1,425
104 105 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
OHS Prosecution Outcomes 2017/18 OHS Prosecution Outcomes 2017/18 Date of Date of Defendant Name A.C.N. Result Fine outcome Defendant Name A.C.N. Result Fine outcome L. Arthur Pty Ltd 004 264 706 Pleaded Guilty - Convicted and fined $20,000 15-Aug-17 Pro Wall Retaining Walls & 159 246 714 Pleaded Guilty - Without conviction $35,000 03-Jul-17 $20,000 and ordered to pay costs in Excavations Pty Ltd fined $35,000 and ordered to pay the amount of $5,818. costs in the amount of $3,728. Industrial Lining Pty Ltd 065 225 096 Pleaded Guilty - Convicted and fined $55,000 25-Aug-17 SPTC Services Pty Ltd 158 692 963 Pleaded Guilty - Without conviction $20,000 06-Jul-17 $30,000 and ordered to pay costs fined $20,000 and ordered to pay in the amount of $4,096. On Appeal: costs in the amount of $4,116. convicted and fined $55,000 and ordered to pay costs in the amount Prolay Roofing Pty Ltd 132 787 136 Pleaded Guilty - Without conviction $0 07-Jul-17 of $11,246. placed on an undertaking to be of good behaviour for a period of 12 Phil McDonald 159 325 265 Pleaded Guilty - Convicted and $0 28-Aug-17 months with a special condition to Plumbing Pty Ltd placed on an undertaking to be of pay $3,000 to the Court Fund and good behaviour for a period of 12 ordered to pay costs of $2,000. months with a special condition to make a donation to the Ballarat Base SKM Services Pty Ltd 130 867 220 "Pleaded not Guilty - Convicted $150,000 19-Jul-17 Hospital of $3,000 by 27 November and fined 2017 and to pay costs in the amount Charge 1: Convicted and fined of $3,430. $75,000 Charge 2: Convicted and fined Jacbe Builder Pty Ltd 098 693 979 Pleaded Guilty - Convicted and fined $700,000 05-Sep-17 $25,000 $700,000. Charge 3: Convicted and fined David Shane Fergusson N/A Pleaded Guilty - Convicted and fined $180,000 05-Sep-17 $50,000 $180,000. and ordered to pay costs in the amount of $45,000." CK Crouch Pty Ltd 138 273 266 No Plea Taken (ex parte) - Convicted $1,137,525 11-Sep-17 and fined $379,175 on each charge The JMAL Group Pty Ltd 165 661 414 Pleaded Guilty - Convicted and fined $275,000 25-Jul-17 making a total effective sentence of an aggregate fine of $275,000 and $1,137,525. ordered to pay costs in the amount of $12,000. IVE Group Australia Pty Ltd 000 205 210 Enforceable Undertaking with $0 12-Sep-17 conditions R & J Todio Car Parts Pty Ltd 151 212 672 Pleaded Guilty - Convicted and fined $10,000 27-Jul-17 an aggregate fine of $10,000 and Masbuild (Vic) Pty Ltd 117 430 261 Pleaded Guilty - Convicted and $7,500 19-Sep-17 ordered to pay costs in the amount fined an aggregate of $15,000 and of $4,000. ordered to pay costs in the amount Damian Ruth Plumbing Pty Ltd 080 310 309 Pleaded Guilty - Without conviction, $25,000 27-Jul-17 of $3,000. fined $10,000 and ordered to pay Masbuild (Vic) Pty Ltd 117 430 261 Pleaded Guilty - Convicted and fined $7,500 19-Sep-17 costs in the amount of $2,500. an aggregate $15,000 and ordered On Appeal: convicted and fined to pay costs in the amount of $3,000 $25,000 and ordered to pay costs in (refer to incident # 189904) the amount of $2,500. Aveo Homes Pty Ltd 168 747 279 Pleaded Guilty - Convicted and fined $30,000 20-Sep-17 Stadelmann Enterprises Pty Ltd 006 250 228 Pleaded Guilty - Convicted and fined $175,000 28-Jul-17 $30,000 and ordered to pay costs in $40,000 and ordered to pay costs the amount of $4,624. of $2,349. On Appeal: convicted and fined $175,000 and ordered to pay Paper Australia Pty Ltd 061 583 533 Pleaded Guilty - Convicted and fined $40,000 27-Sep-17 costs in the amount of $2,349. $40,000 and ordered to pay costs in the amount of $4,027. Supreme Caravans Pty Ltd 006 939 322 Pleaded Guilty - Convicted and fined $15,000 28-Jul-17 $15,000 and ordered to pay costs C.M.D HOME WORKS PTY LTD 007 260 460 Pleaded Guilty - Convicted and fined $10,000 03-Oct-17 in the amount of $4,624. $10,000 with costs in the anount of $3,283. Conductix-Wampfler Pty Ltd 004 612 533 Pleaded Guilty - Without conviction $10,000 03-Aug-17 fined $10,000 and ordered to pay McFees Pty Ltd 604 990 374 Pleaded Guilty - Convicted and fined $100,000 03-Oct-17 costs in the amount of $4,000. $100,000.
106 107 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
OHS Prosecution Outcomes 2017/18 OHS Prosecution Outcomes 2017/18
Date of Date of Defendant Name A.C.N. Result Fine outcome Defendant Name A.C.N. Result Fine outcome
Bakers & Co. Australia Pty Ltd 154 056 158 Pleaded Guilty - Convicted and fined $30,000 05-Oct-17 The Greater Geelong City Council N/A Enforceable Undertaking $0 30-Oct-17 $30,000 and ordered to pay costs in with conditions the amount of $3,430. DFC Packaging (Sleeves) Pty Ltd 088 253 212 Pleaded Guilty - Without conviction $25,000 30-Oct-17 Retmar Pty Ltd 109 131 580 Pleaded Guilty - Convicted and fined $175,000 06-Oct-17 fined $25,000 and ordered to pay $175,000 and ordered to pay costs costs in the amount of $5,221. in the amount of $3,580. Recoat Smash Repairs Pty Ltd 104 089 554 Pleaded Guilty - Convicted and fined $25,000 01-Nov-17 Mitec Group Pty Ltd 134 492 658 Pleaded Guilty - Convicted and fined $20,000 06-Oct-17 $25,000 and ordered to pay costs in $20,000 and ordered to pay costs in the amount of $3,430. the amount of $2,836. Redback Tree Services Pty Ltd 142 559 340 Pleaded Guilty - Convicted and fined $150,000 03-Nov-17 Adrian Padoin N/A Pleaded Guilty - without conviction $10,000 10-Oct-17 $150,000. fined $10,000 and ordered to pay costs in the amount of $1,000. Brad Perryman Builders Pty Ltd 138 066 172 Pleaded Guilty - Without conviction $18,000 06-Nov-17 fined $18,000 and ordered to pay Skyrider Tower Hire Pty Ltd 005 829 434 Pleaded Guilty - Convicted and fined $20,000 11-Oct-17 costs in the amount of $3,430. $20,000 and ordered to pay costs in the amoun of $15,000. Garrhon Pty Ltd 098 140 446 No Plea Taken (ex parte) - Convicted $85,000 17-Nov-17 and fined $85,000 and ordered to Imagebuild Pty Ltd 142 525 924 Pleaded Guilty - Convicted and fined $24,000 11-Oct-17 pay costs in the amount of $4,027. $24,000 and ordered to pay costs in the amount of $6,387. Digga Excavations Pty Ltd 080 006 364 Pleaded Guilty - Without conviction, $27,000 23-Nov-17 fined $27,000 and ordered to pay WK Marble and Granite Pty Ltd 074 331 981 Pleaded Guilty - Convicted and fined $90,000 17-Oct-17 costs in the amount of $3,880. $90,000 and ordered to pay costs in the amount of $13,728. Australian Blending Company 074 485 591 Pleaded Guilty - Without conviction, $30,000 27-Nov-17 Pty Ltd fined $30,000 and ordered to pay Project Group Construction 603 347 833 Pleaded Guilty - Without conviction $25,000 18-Oct-17 costs in the amount of $4,624. Pty Ltd fined $25,000 and ordered to pay costs in the amount of $5,221. ALYFAB Pty Ltd 124 909 673 Pleaded Guilty - Convicted and fined $20,000 30-Nov-17 $20,000 and ordered to pay costs in Lojac Civil Pty Ltd 137 526 348 Pleaded Guilty - Fined $35,000 $35,000 19-Oct-17 the amount of $4,027. without conviction and ordered to pay costs in the amount of $4,000. Downer EDI Works Pty Ltd 008 709 608 Pleaded Guilty - Convicted and $1,300,000 01-Dec-17 fined $1,300,000. J.R. D'Herville Pty Ltd 082 961 895 Pleaded Guilty - Without conviction, $0 23-Oct-17 placed on an undertaking to be of VicRoads N/A Pleaded Guilty - Convicted and fined $250,000 01-Dec-17 good behaviour for a period of 12 $250,000. months with a special condition to Sanikleen Pty Ltd 098 037 819 Pleaded Guilty - Convicted and fined $30,000 06-Dec-17 pay $17,500 to the Ballarat Base $30,000 and ordered to pay costs in Hospital and ordered to pay costs the amount of $9,000. of $2,441. Airstep Australia Pty Ltd 144 967 215 Pleaded Guilty - Without conviction, $50,000 08-Dec-17 Australia Electric Group Pty Ltd 605 602 686 Pleaded Guilty - Without conviction $24,000 24-Oct-17 fined $50,000 and ordered to pay fined $24,000 and ordered to pay costs in the amount of $7,012. costs in the amount of $2,441. City Circle Demolition 006 399 766 Pleaded Guilty - Without conviction, $30,000 12-Dec-17 Pinnacle Bakery & Integrated 161 203 005 Pleaded Guilty - Without conviction $30,000 24-Oct-17 & Excavation Pty Ltd fined $30,000 and ordered to pay Ingredients Pty Ltd fined $30,000 and ordered to pay costs in the amount of $30,000. costs in the amount of $5,221. Lindsay F Nelson Manufacturing 004 867 163 Pleaded Guilty - Without conviction, $30,000 14-Dec-17 S.V.C. Products Pty Ltd 004 279 458 Pleaded Guilty - Without conviction $4,000 25-Oct-17 Pty Ltd fined $30,000 and ordered to pay fined $4,000 and ordered to pay costs in the amount of $3,430. costs in the amount of $4,624. The Crown in the Right of the State N/A Pleaded Guilty - Convicted and fined $300,000 15-Dec-17 Wodonga Rendering Pty Ltd 074 885 457 Pleaded Guilty - Convicted and fined $85,000 25-Oct-17 of Victoria, Department of Justice $300,000.and ordered to pay costs $85,000 and ordered to pay costs in and Regulation (Corrections in the amount of $14,215. the amount of $5,221. Victoria)
108 109 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
OHS Prosecution Outcomes 2017/18 OHS Prosecution Outcomes 2017/18
Date of Date of Defendant Name A.C.N. Result Fine outcome Defendant Name A.C.N. Result Fine outcome
Dhillon Scaffolding Pty Ltd 144 611 227 Pleaded Guilty - Convicted and fined $100,000 11-Jan-18 Michael O'Sullivan N/A Pleaded Guilty - Without conviction, $16,000 22-Feb-18 $100,000 and ordered to pay costs fined $16,000 and ordered to pay in the amount of $3,503. costs in the amount of $1,000.
Ardex Australia 000 550 005 Enforceable Undertaking with $0 12-Jan-18 Martyn Nicholls Electrics Pty Ltd 120 490 128 Pleaded Guilty - Without conviction, $12,000 22-Feb-18 Pty Ltd conditions fined $12,000 and ordered to pay costs in the amount of $1,000. Birch Automotive Pty Ltd 131 759 781 Pleaded Guilty - Convicted and fined $40,000 25-Jan-18 $40,000 and ordered to pay costs in Villa Lipari Pty Ltd & Villante 105 295 038 Pleaded guilty - Convicted and fined $25,000 01-Mar-18 the amount of $3,500. Investments (Queensland) A 010 656 881 $25,000 and ordered to pay costs in partnership trading as Extrusion the amount of $5,924. Myrti Pty Ltd 162 476 753 No Plea Taken (ex parte) - Convicted $25,000 25-Jan-18 Profiles Australia and fined $25,000 and ordered to pay costs in the amount of $2,897 B.E. Timber Pty Ltd 106 689 409 Pleaded Guilty - Without conviction, $10,000 02-Mar-18 fined $10,000 and ordered to pay Park Street Child Care & N/A Pleaded Guilty - Without conviction, $0 31-Jan-18 costs in the amount of $6,277. Kindergarten Co-Operative Limited placed on an undertaking to be of good behaviour with a special Ramabo Pty Ltd 081 921 931 Pleaded Guilty - Without conviction, $42,000 06-Mar-18 condition to donate $15,000 to fined $42,000 and ordered to pay the Alfred Hospital Burns Unit and costs in the amount of $5,867. ordered to pay costs in the amount of $1,000. JBS Australia Pty Ltd 011 062 338 Pleaded Guilty - Convicted and fined $20,000 06-Mar-18 $20,000 and ordered to pay costs in Defor Pty Ltd 005 844 860 Pleaded Guilty - Without conviction, $25,000 31-Jan-18 the amount of $6,556. fined $25,000 and ordere to pay costs in the amount of $3,505. Ambulance Victoria N/A Pleaded Guilty - Convicted and fined $400,000 08-Mar-18 $400,000. Bozweld Fabrications Pty Ltd 167 781 151 Pleaded Guilty - Convicted and fined $25,000 01-Feb-18 $25,000 and ordered to pay costs in AM Design & Construction 055 903 181 Pleaded Guilty - Convicted and fined $380,000 23-Mar-18 the amount of $3,500. Pty Ltd $380,000.
Kintestsu World Express 051 932 097 Pleaded Guilty - Without conviction, $30,000 08-Feb-18 Aldo DiTonto N/A Pleaded Guilty - Convicted and fined $100,000 23-Mar-18 (Australia) Pty Ltd fined $30,000 and ordered to pay $100,000. costs in the amount of $4,027. Australian Lamb (Colac) Pty Ltd 087 919 944 Pleaded Guilty - Without conviction, $27,500 26-Mar-18 RTL Mining and Earthworks Pty Ltd 152 855 135 Pleaded Guilty - Without conviction, $25,000 08-Feb-18 fined $27,500 and ordered to pay fined $25,000 and ordered to pay costs in the amount of $2,000. costs in the amount of $3,505. Melbourne Tree Stump Removal 087 792 943 Pleaded Guilty - Convicted and $0 27-Mar-18 Michael Semmens N/A Pleaded guilty - Without conviction, $10,000 13-Feb-18 Pty Ltd fined $7,500 with conviction and fined $10,000 and ordered to pay ordered to pay costs in the amount costs in the amount of $2,512. of $3,000.
Specialised Concrete 153 660 827 Pleaded Guilty - Convicted and fined $500,000 15-Feb-18 B Central Constructions Pty Ltd 117 641 460 Pleaded Guilty - Without conviction, $17,500 04-Apr-18 Pumping Pty Ltd $500,000. fined $17,500 and ordered to pay costs in the amount of $4,089. Menzies Aviation (Australia) 076 623 213 Pleaded Guilty - Without conviction, $40,000 15-Feb-18 Pty Ltd fined $40,000 and ordered to pay Whineray Consulting Pty Ltd 156 471 715 No Plea Taken (ex parte) - Convicted $45,000 04-Apr-18 costs in the amount of $4,624. and fined $45,000 and ordered to pay costs in the amount of $4,699. Phelpsys Constructions Pty Ltd 601 655 869 Pleaded Guilty - Convicted and fined $350,000 21-Feb-18 $350,000. AAD Services Australia Pty Ltd 605 532 849 Pleaded guilty - Convicted and $120,000 09-Apr-18 fined $120,000. Strategy One Human 130 466 732 Pleaded Guilty - Convicted and $3,500 22-Feb-18 Resources Pty Ltd placed on an undertaking to be Shalik Pty Ltd 103 514 530 Pleaded guilty - Convicted and fined $3,000 10-Apr-18 of good behaviour with a special $3,000 and ordered to pay costs in condition. Fined $3,500 and the amount of $4,115. ordered to pay costs in the amount Hobson Engineering Co Pty Ltd 000 289 958 Pleaded Guilty - Without conviction, $20,000 12-Apr-18 of $4,725. fined $20,000 and ordered to pay costs in the amount of $4,115.
110 111 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
OHS Prosecution Outcomes 2017/18 OHS Prosecution Outcomes 2017/18
Date of Date of Defendant Name A.C.N. Result Fine outcome Defendant Name A.C.N. Result Fine outcome
VicRig Pty Ltd 114 869 591 Pleaded Guilty - Convicted and fined $35,000 17-Apr-18 Earthwerx Pty Ltd 098 216 801 Pleaded Guilty - Without conviction, $0 23-May-18 $35,000. placed on an undertaking to be of good behaviour. Adjourned PJL Building Group Pty Ltd 606 368 012 Pleaded Guilty - Convicted and fined $25,000 17-Apr-18 undertaking for a period of 24 $25,000 and ordered to pay costs in months with a special condition to the amount of $4,725. pay $15,000 into the Court Fund. The company was ordered to pay Cornerstone HR Pty Ltd 145 074 102 Pleaded Guilty - Without conviction, $15,000 18-Apr-18 costs in the sum of $4,083. fined $15,000 and ordered to pay costs in the amount of $15,000. Deepcore Australia Pty Ltd 115 967 809 Enforceable Undertaking with $0 24-May-18 conditions Australian Precast Pty Ltd 053 770 200 Pleaded Guilty - Without conviction, $15,000 19-Apr-18 fined $15,000 plus $5,335 costs Mainfreight Distribution Pty Ltd 003 840 319 Pleaded Guilty - Without conviction, $25,000 24-May-18 fined $25,000 and ordered to pay Ricegrowers Limited 007 481 156 No Plea Taken - Convicted and $260,000 23-Apr-18 costs in the amount of $4,699. fined $260,000. Reborn Projects Pty Ltd 605 007 225 Pleaded Guilty - Without conviction, $10,000 28-May-18 KDR Victoria Pty Ltd 138 066 074 Enforceable Undertaking with $0 30-Apr-18 fined $10,000 and ordered to pay conditions. costs in the amount of $3,505. Charalambos Maheras N/A Pleaded Guilty - Without conviction, $5,000 01-May-18 Francesco Taraborrelli N/A Pleaded Guilty - Without conviction, $20,000 28-May-18 fined $5,000 and ordered to pay fined $20,000 and ordered to pay costs in the amount of $3,000. costs in the amount of $15,064. Nautical Training Australia Pty Ltd 156 039 824 No Plea Taken (ex parte) - Convicted $20,000 03-May-18 Mask Rentals Pty Ltd 130 718 311 Pleaded Guilty - Convicted and fined $80,000 04-Jun-18 and fined $20,000 and ordered to $80,000 and ordered to pay costs in pay costs in the amount of $8,779. the amount of $10,000. Olive Construction Pty Ltd 130 676 078 Pleaded Guilty - Convicted and fined $80,000 03-May-18 Ballarat Construction Management 117 326 244 Pleaded Guilty - Without conviction, $20,000 06-Jun-18 $80,000 and ordered to pay costs in Pty Ltd fined $20,000 and ordered to pay the amount of $3,505. costs in the amount of $4,000. Kalafatis Packing Pty Ltd 144 731 733 Pleaded Guilty - Convicted and $150,000 04-May-18 Campbell Niblett N/A Pleaded Guilty - Without conviction, $0 07-Jun-18 fined. On Appeal: penalty increased placed on an undertaking to be $150,000 and ordered to pay costs of good behaviour with a special in the amount of $22,000. condition to pay $3,300 to the Court Jeld-Wen Glass Australia Pty Ltd 116 051 391 Pleaded Guilty - Without conviction, $40,000 10-May-18 Fund and ordered to pay costs in the fined $40,000 and ordered to pay amount of $2,200. costs in the amount of $4,725. Creel Manufacturing Pty Ltd 004 800 088 Pleaded Guilty - Convicted and fined $30,000 07-Jun-18 H&A Majestic Plumbing Pty Ltd 133 087 760 Pleaded Guilty - Convicted and fined $40,000 15-May-18 $30,000 and ordered to pay costs in $40,000 and ordered to pay costs in the amount of $2,412. the amount of $11,973. Kwikserv Formwork 110 883 817 Pleaded Guilty - Without conviction, $20,000 07-Jun-18 Baron Forge Contractors Pty Ltd 160 547 035 Pleaded not Guilty - Without $50,000 18-May-18 & Scaffolding Pty Ltd fined $20,000 and ordered to pay conviction, fined $50,000 plus costs in the amount of $4,115. $29,000 costs.
Lexon Group Pty Ltd 081 822 059 Pleaded Guilty - Without conviction, $8,000 21-May-18 fined $8,000 and ordered to pay costs in the amount of $1,000.
Coates Hire Operations Pty Ltd 117 641 460 Pleaded Guilty - Convicted and fined $15,000 22-May-18 $15,000 and ordered to pay costs in the amount of $3,479.
TJKJ PTY LTD 6126341452 Pleaded Guilty - Convicted and fined $25,000 22-May-18 $25,000 and ordered to pay costs in the amount of $2,500.
112 113 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
OHS Prosecution Outcomes 2017/18 Enforceable Undertakings 2017/18
Date of Ardex Australia Pty Ltd On 12 January 2018, Ardex Australia Pty Ltd entered into an Enforceable Undertaking Defendant Name A.C.N. Result Fine outcome with WorkSafe Victoria in relation to incident where employees from the engineering company attended the workplace and commenced welding work. During the work a The Crown in the Right of the N/A "Pleaded Guilty - With conviction, $0 18-Jun-18 piece of hot metal fell into the mixer and an orange glow appeared. An Ardex employee State of Victoria (Department placed on a s137 undertaking with went to assist, assessed the situation as safe, and attempted to put the fire out by turning of Health and Human Services) a special condition. The Undertaking on the mixer. As he did so a combustible dust cloud was created and a fireball came out is subject to the following conditions: of the mixer’s open door. This resulted in burns to the Ardex employee and employee - To be of good behaviour during the of the engineering company. period of the adjournment. - To attend before the Court if KDR Victoria Pty Ltd On 30 April 2018, KDR Victoria Pty Ltd entered into an Enforceable Undertaking with you get a notice telling you to WorkSafe Victoria in relation to an incident in January 2016 when an electrical apprentice do so during the period of the employee suffered electrical burns after coming into contact with live power lines. adjournment. Special conditions: Deepcore Australia Pty Ltd On 24 May 2018, Deepcore Australia Pty Ltd entered into an Enforceable Undertaking The Department of Health & Human with WorkSafe Victoria in relation to an incident where Deepcore was operating a drill Services is to make a contribution rig at the Fosterville Gold Mine, when there was a problem with the drilling. Hours were in the sum of $50,000 to Djirra and spent removing and re-inserting casings to fix the problem, until eventually it was provide a receipt to the Registrar of decided to modify and insert a casing. this court by 18/07/18." There was a risk of serious injury by crushing, entrapment or amputation to persons A-Line Partitions Pty Ltd 005 511 035 Pleaded Guilty - Convicted and fined $15,000 21-Jun-18 required to hold the modified casing. When the rod landed a worker had his thumb $15,000 and ordered to pay costs in over the top lip of the casing and his entire right thumb was amputated. the amount of $5,393.
Vision Precast Pty Ltd 142 354 256 Pleaded Guilty - Without conviction, $30,000 22-Jun-18 fined $30,000 and ordered to pay 2017/18 Statistics costs in the amount of $5,945. OHS Prosecution success rate 91% Edge Deck Melbourne 613 398 717 Pleaded Guilty - Without conviction, $10,000 22-Jun-18 North West Pty Ltd fined $10,000. Completed OHS investigations proceeding to legal 72% review outcome Park Lane Investment 062 275 030 Pleaded Guilty - Convicted and fined $5,000 26-Jun-18 Nominees Pty Ltd $5,000 and ordered to pay costs in OHS Investigations proceeding to prosecution within 75% the amount of $2,000. 12 months
Campbellfield Bin Hire Pty Ltd 108 419 807 Pleaded Guilty - Convicted and fined $16,000 28-Jun-18 Number of OHS prosecutions commenced 148 $16,000 and ordered to pay costs in (counted by defendant) the amount of $4,500. Number of compensation prosecutions commenced 31 Transplumb Maintenance Pty Ltd 148 002 957 Pleaded Guilty - Without conviction, $25,000 29-Jun-18 (counted by defendant) fined $25,000 and ordered to pay costs in the amount of $5,238.
Enforceable Undertakings 2017/18
IVE Group Australia Pty Ltd On 12 September 2017, IVE Group Australia Pty Ltd entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident where a worker at the workplace was operating an item of plant known as the Plastic Wrap Machine (“the plant”) which wraps books using ply sheets. The rear hopper covers on the plant did not have an interlocked switch and there was no safe system of work to ensure the safe setting, maintenance and repair of the plant. There was a risk of serious injury as workers could access the area where the rotating cams and belts were located (“the danger point”) and their hand(s) or finger(s) could become entangled.
The Greater Geelong City Council On 30 October 2017, The Greater Geelong City Council entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident on 23 March 2016 when a first year apprentice working without fall protection on the roof of the Lara Community Centre fell through an uncovered skylight 3.1 metres to the floor below. The employee was taken by ambulance to hospital and suffered bruised ribs.
114 115 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Requests to WorkSafe for prosecutions to be brought pursuant to section 131 of the Occupational Health and Safety 2017/18 Statistics Act 2004 (OHS Act) Number of completed OHS prosecutions 127 Excludes Committal Includes successful In 2017/18, WorkSafe received 15 requests for a prosecution to be brought for an alleged offence against the OHS Act under (counted by defendant) outcomes and unsuccessful section 131(1). Three of these requests were deemed invalid. prosecutions
Number of completed ACA and WIRCA prosecutions 28 Excludes Committal Pursuant to section 131(2), within three months of the request being made, WorkSafe must advise the person in writing whether (counted by defendant) outcomes prosecution proceedings will be brought.
Number of OHS Cautions 22 In 2017/18, 12 valid requests were made:
Number of Compensation Cautions 17 • Four decisions were made within three months.
Number of PI Code of Conduct Cautions 3 • One decision was made within 113 days. This investigation related to a significant serious injury where a 12-year-old girl at a school swimming lesson dived into the water, hit the bottom of the pool and suffered a crush injury to vertebrae Total Cautions 42 in L5 spine and loss of feelings in her legs. The investigation was complex, requiring evidence from numerous witnesses. The matter resulted in charges being laid.
• One decision was made within 96 days. This investigation related to an allegation of discriminatory conduct. The investigation was complex. WorkSafe did not commence a prosecution. Following a request from the applicant, the matter is currently under review by the Director of Public Prosecution (DPP).
• One decision was made within 93 days. The matter related to an allegation of improper conduct directed towards an employee. WorkSafe did not commence a prosecution.
• Three investigations are continuing.
• Two investigations are currently being legally reviewed.
Pursuant to section 131(3), where WorkSafe advises a person that prosecution will not be brought, the person may request that WorkSafe refer the matter to the DPP for advice on whether a prosecution should be brought (section 131(4)): two matters were referred to the DPP in 2017/18. The DPP recommended not to prosecute in one matter. One is still under consideration by the DPP.
Requests to WorkSafe for prosecutions to be brought pursuant to sections 242AC and 252AA of the Accident Compensation Act 1985 (AC Act) and sections 577 and 607 of the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act)
Where WorkSafe has not brought prosecution proceedings within six months of an alleged offence against the AC Act or the WIRC Act, a person may request that WorkSafe bring a prosecution pursuant to sections 242AC or 252AA of the AC Act or pursuant to sections 577 or 607 of the WIRC Act.
In 2017/18, WorkSafe received one request to bring a prosecution pursuant to section 607 of the WIRC Act. This request was deemed invalid.
One section 242AC matter was referred to the DPP in 2017/18. The request is still under consideration by the DPP.
116 117 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Agent Duration - % of workers on weekly payments at: Appendix 2: 13 weeks 26 weeks 52 weeks 134 weeks Result Trend Result Trend Result Trend Result Trend
Allianz 42.14% Steady 25.50% Steady 9.86% Steady 2.23% Deteriorated
Agent performance results CGU 41.36% Steady 24.96% Deteriorated 9.59% Steady 1.95% Deteriorated
EML 41.97% Deteriorated 25.49% Steady 9.90% Improved 3.09% Improved Agent performance 2017/18 GBS 39.60% Steady 23.34% Improved 9.64% Steady 2.58% Deteriorated This appendix includes data on agent performance which WorkSafe Victoria uses to assess the performance of its authorised agents for remuneration purposes and management. The information is provided to inform employers and the public on Xchanging 41.42% Deteriorated 24.21% Steady 9.64% Deteriorated 2.04% Deteriorated aspects of the performance of WorkSafe’s authorised agents. Scheme 41.24% Steady 24.66% Steady 9.72% Steady 2.33% Deteriorated The information does not purport to be all-inclusive or contain all information which employers may require to make an informed Note: a lower percentage represents higher performance assessment as to the selection of an agent. Employers should make their own independent assessment of the capabilities of each agent and, where appropriate, seek professional advice. Duration Trend information Note that the market allocation of agents may differ between years due to employers transferring agents and/or from entries or exits to self-insurance or other schemes. These movements can impact the trend performance indicated in this appendix. 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
Authorised agents Deteriorated Performance in current year has deteriorated by more than 4% of that in the previous year
Agent name Full description
Allianz Allianz Australia Worker’s Compensation (Victoria) Limited Service and processing
CGU CGU Workers Compensation (Vic) Limited Worker levels Employer levels Valid conciliation – Agent of service of service non-compliance complaints EML EML Vic Pty Ltd Number of valid GB Gallagher Bassett Services Workers Compensation Vic Pty Ltd Number of valid complaints per $10m Xchanging Xchanging Integrated Services Victoria Pty Ltd trading as Xchanging Service attribute score complaints result billed premium Result Trend Result Trend
Allianz 81.5% Steady 86.1% Steady 4 0.1 Claims management and return to work CGU 81.5% Steady 87.3% Steady 7 0.1 Agent Timeliness of employer notifications to agent Back@Work EML 81.4% Steady 88.2% Steady 2 0.1 % received within 12 days % returned to work within 6 months GB 81.9% Steady 83.2% Steady 8 0.1 Result Trend Result Trend Xchanging 83.4% Steady 88.1% Steady 4 0.1 Allianz 94.46% Steady 78.15% Steady Scheme 81.9% Steady 86.6% Steady 25 0.1 CGU 93.71% Steady 77.83% Improved
EML 94.11% Steady 76.07% Improved Worker and employer service Trend information
GBS 94.99% Steady 77.72% Improved Improved Performance in current year has improved by more than 4% of that in the previous year
Xchanging 96.04% Steady 78.36% Steady Steady Performance in current year is within +/- 4% of the previous year
Scheme 94.73% Steady 77.74% Improved Deteriorated Performance in current year has deteriorated by more than 4% of that in the previous year
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
118 119 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Timeliness of employer 2017/2018 Definitions Agent Timeliness % of payments direct to injured workers reimbursements
Weekly payments - Medical reimbursements - Calendar days to pay 75% of Measure Definition % paid within 7 days % paid within 11 Days employer reimbursements 26 Week Back Assesses an agent’s performance on the proportion of workers working six months after the claims @ Work were received by the agent utilising data recorded on ACCtion and where that work is sustained for a Result Trend Result Trend Result Trend minimum period of three weeks Allianz 99.25% Steady 87.76% Improved 8 Steady 104 Week Back Assesses an agent’s performance on the proportion of workers working at 104 weeks after the claims CGU 98.84% Steady 90.27% Steady 9 Steady @ Work were received by the agent, where the worker was not working at the 26 week RTW Index point utilising data recorded on ACCtion 94.89% Deteriorated 83.35% Steady 10 Steady EML 52 Weekly Assesses the number weekly payment claims reported during the relevant report period (report GBS 98.92% Steady 87.53% Deteriorated 9 Steady period 1) under which weekly payments of compensation have been paid greater than 52 weeks of incapacity as at 30 June each year as a proportion of the number of greater than 10 days’ time lost Xchanging 98.82% Steady 86.24% Deteriorated 8 Steady claims reported in the relevant report period (report period 2).* Scheme 98.20% Steady 87.31% Steady 8 Steady Impairment Assesses an agent on their ability to manage impairment benefit claims with a focus on quality, Benefits sustainability and service. The Impairment Benefits (IB) Measures include: Agent Timeliness of processing provider accounts 1. Sustainability Measure % Paid within 30 days of receipt of invoice % Paid within 70 days of service This measure encourages adherence to an upper limit of both the percentage of injured workers to receive an Impairment Benefit and the Average Whole Person Impairment of the benefit Result Trend Result Trend payable for High and Low risk IB claims. Allianz 96.7% Improved 85.0% Improved 2. Timeliness Measure CGU 98.7% Steady 84.4% Steady This measure is designed to encourage timely management of all IB claims in High and Low Risk. EML 97.4% Steady 84.3% Steady 3. Unresolved Days Measure This measure is designed to encourage timely management and good customer service for all GBS 96.1% Steady 81.6% Steady Low risk claims. Xchanging 97.2% Steady 82.4% Steady Long Tail Claims Assesses agent performance in reducing the number of active weekly payments claims from mature Management accident years relative to WorkSafe’s independent actuary’s projections as defined in a separate Scheme 97.2% Steady 83.5% Steady document issued by WorkSafe as APA Business Rules. The measure includes claims from the 1985 to 2012 accident years for the 2017/18 APA Timeliness of processing Second Entitlement Assesses an agent’s performance on the number of weekly payment claims reported during the (excluding employer reimbursements) Trend information Review relevant report period 1 for which weekly payments of compensation have been paid in respect of 134 weeks of incapacity as at 30 June each year and as a proportion of the number of time lost claims Performance in current year has improved by more than 2% of that in the Improved reported in the relevant report period 2^. previous year Mobile Case Assesses agents on the volume of cases where face to face engagement occurs with any Steady Performance in current year is within +/- 2% of the previous year Management combination of parties (worker, employer and Treating Health Practitioner). The selection method is at Deteriorated Performance in current year has deteriorated by more than 2% of that in the Measure agent discretion up to 26 weeks post ARD and the program will be supported by WorkSafe led service previous year and RTW reporting and a monthly QA process. Treatment Measure Assesses agents on their ability to pay for the right treatment at the right time on the right claims at a reasonable cost. Timeliness of employer Premium Collection Assesses an agent’s performance on the timely collection of premium reimbursements Trend information Processing Assesses an agent’s performance on the service aspects of key claims management processes. Improved Performance in current year has improved by more than 2 calendar day of that Sustainability in the previous year Measure Steady Performance in current year is within +/- 2 calendar days of the previous year Information A measure which aims to improve the quality and consistency of information gathering on Impairment Gathering Impairment Benefit claims, in order to support quality decision making taking into account factors such as the Deteriorated Performance in current year has deteriorated by more than 2 calendar days Benefits history of the injury, treatment, prognosis, stability, clinical examination findings and apportionment. of that in the previous year The aim of the measure is achieved by ensuring that: • All information available is gathered at the outset of an impairment benefit claim. Agent fees • The need for any additional information is identified and the information actively sourced. • All information is provided to the Independent Impairment Assessor (IIA). The authorised agents operate under an Instrument of Appointment issued by WorkSafe pursuant to the Workplace Injury Injured Worker Assesses an agent’s performance in an injured worker survey which measures the perception of an Rehabilitation and Compensation Act 2013 and are remunerated for acting on behalf of WorkSafe in the issuing of WorkCover Survey (Events) agent’s service delivery based on key events. insurance, collection of premium and the administration of claims. The agent remuneration model includes performance based Quality Decisions Assesses the agent’s performance on the quality of decisions made for initial eligibility, medical and like components and also allows for the reduction of an agent’s remuneration upon the occurrence of an event such as a failure to Measure entitlements, and adverse decisions including the second entitlement decision (134week) meet performance criteria. Notes *”Report period 1” refers to any claim reported on or after 1 April 2014 exceeding 52 weeks during 2017/18. “Report period 2” refers to 1 April 2015 and 31 March Reductions applicable to 2017/18 2017 inclusive. ^”Report period 1” refers to any claim with a Date of Injury after 1 July 2012 exceeding 134 weeks during 2017/18. “Report period 2” refers to 1 September 2013 and 31 Due to a conciliation non-compliance event, Xchanging were issued with a Minimum Performance Non-Compliance August 2015 inclusive. Adjustment and incurred a remuneration reduction of $5,000.
120 121 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Market share as at 30 June 2018 Agent Performance Metrics 2018/19
Each year, WorkSafe sets a number of performance measures for the agent panel. These measures are intended to align Percentage of Percentage of Percentage of agent performance with WorkSafe’s goals of delivering improvements in return to work and service, while driving quality case Agent Policies Remuneration Premium management and ensuring the overall sustainability of the Scheme. Allianz 34% 25% 25% Table 1 provides a comparison of measures from 2017/18 vs 2018/19. Table 2 summarises the package of metrics that have CGU 26% 23% 21% been set for the 2018/19 year. Table 3 provides a brief description of these measures.
EML 11% 14% 13% 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 GBS 14% 20% 22% 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 Xchanging 16% 18% 19% approximately $1.6 million. The amount that agents will either earn in incentives or repay in remuneration reductions will depend Scheme 100% 100% 100% on their agent Premium Fee Base and their performance.
Table 1: Comparison of allocation of weighting proposed for 2018/19 compared to prior year Notes “Policies” refers to the employers with WorkCover Insurance managed by each agent. 18.00% “Remuneration” refers to the salaries and wages (including superannuation) paid by employers managed by each agent. “Premium” refers to the premium payable for the 2017/18 year for employers managed by each agent. 16.00% Due to rounding, market share may not equate to 100%. 14.00%
12.00%
10.00% 2017/18 8.00% 2018/19 6.00%
4.00%
2.00%
0.00% RTW Sustainability Service / Variable Quality
*Measures are designed to work together as a package and many measures impact both quality and sustainability
122 123 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Table 2: Agent Performance Metrics Package for 2018/19 Table 3: Definitions of Agent Performance Metrics for 2018/19
Remuneration Measure Definition Measure Incentive reduction Back @ Work 26 Weeks Assesses an agent’s performance on the proportion of workers working six months after the Return to Work Measures claims were received by the agent utilising data recorded on ACCtion and where that work is sustained for a minimum period of three weeks. 26 Week Back @ Work* 8.50% -4.25%
* The 26 Week Back @ Work measure is measured over a number of ways assessing the different mix of claims e.g. mental vs physical. For 2018/19 the Back @ Work measure will be calculated as a composite measure for all injuries or via three separate measures comprising: physical injuries, mental injuries and all Service / Quality Measure injuries, with the agent being remunerated based on “best” performance for either.
Worker Survey – Events Index 8.50% -4.25% 104 Week Back @ Work Assesses an agent’s performance on the proportion of workers working at 104 weeks after the claims were received by the agent, utilising data recorded on ACCtion. This measure aims to Sustainability Measures ensure there is an ongoing focus on RTW after the first six months.
Second Entitlement Review (134W CR) 4.00% -2.00% Injured Worker Survey Assesses an agent’s performance in an injured worker survey which measures the perception Long Tail Claims Management (Active Claims) 4.50% -1.00% (Events) of an agent’s service delivery based on key events.
Premium Collection Measure 2.00% 0.00% Agents are assessed against six separate survey sections known as the Key Events Surveys.
Tot al 10.50% -3.00% Second Entitlement Assesses an agent’s performance on the number of weekly payment claims reported during Review (134 Weekly) the relevant report period 1 for which weekly payments of compensation have been paid in Variable Measures respect of 134 weeks of incapacity as at 30 June each year and as a proportion of the number of time lost claims reported in the relevant report period 2. RTW - Back @ Work 104 weeks 3.00% -1.50%
Service - IB Resolution Timeliness Measure 3.50% -1.50% A critical legislative test to ensure the viability of the scheme for the community over the long term by ensuring that only those who continue to have no capacity continue to receive weekly Co funded Measures (MCM combined) 2.25% -1.00% compensation as the Act requires. Co funded Measures (Agent Other) 2.25% -1.00% SER (report period 1) Tot al 11.00% -5.00% Any claim with a Date of Injury after 1 July 2013 exceeding 134 weeks during 2018/19
Total 2018/19 Incentive Pool SER (report period 2) 1 September 2014 and 31 August 2016 inclusive. Return to work measures 8.50% -4.25% Long Tail Claims Assesses agent performance in reducing the number of active weekly payments claims from Service / quality measure 8.50% -4.25% Management mature accident years relative to WorkSafe’s independent actuary’s projections. For the Sustainability measures 10.5% -3.00% (Active Claims) 2018/19 APA the measure includes claims from the 1985 to 2013 accident years.
Variable measures 11.00% -5.00% Premium Collection Assesses an agent’s performance on the timely collection of premium.
Tot al 38.50% -16.50% Impairment Benefits Assesses an agent’s performance in resolving an Impairment Benefit claim. The focus of the Resolution Measure measure is on quality and throughput.
‘Co funding: Mobile Case Assesses agents on the volume of cases where face to face engagement occurs with any Management Measure’ combination of parties (worker, employer and Treating Health Practitioner). The selection method is at agent discretion up to 26 weeks post ARD and the program will be supported by WorkSafe led service and RTW reporting and a monthly QA process.
‘Co funding: other’ A flexible measure to be agreed between an individual agent and WorkSafe throughout the year
124 125 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Service
WorkSafe’s Injured Workers Survey includes injured workers covered by self-insurers. In 2017/18, the service score was 69 per cent for all self-insurers. This result was the same as in the previous year and was lower than the equivalent service score for Appendix 3: 1 WorkSafe agents, which was 76 per cent.
Self-insurance report List of Self-insurers as at 30 June 2018 Overview Self-insurer in 2017/18 Employer Self-insurers form part of the WorkSafe workers compensation scheme. Their status is derived from the Workplace Injury Rehabilitation and Compensation Act 2013. ALCOA OF AUSTRALIA LIMITED ALCOA OF AUSTRALIA LIMITED
Employers are eligible to apply for self-insurance in Victoria if they satisfy prescribed minimum requirements of financial AMCOR LTD AMCOR FLEXIBLES (AUSTRALIA) PTY LTD strength and viability. AMCOR FLEXIBLES (PORT MELBOURNE) PTY LTD As at 30 June 2018, there were 40 self-insurers operating in Victoria. This represents approximately 8.0 per cent of total Scheme remuneration (forecast using 2016/17 remuneration). AMCOR LTD AUSTRALIA AND NEW ZEALAND AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED BANKING GROUP LIMITED Applications and approvals during 2017/18 ANZ ILP PTY LTD
Applications for self-insurance are made to WorkSafe. WorkSafe has the power to approve or refuse any application. BHP BILLITON LIMITED BHP BILLITON LIMITED In determining whether an applicant is suitable, WorkSafe must be satisfied that the applicant is ‘fit and proper’ to be a BLUESCOPE STEEL LIMITED BLUESCOPE DISTRIBUTION PTY LTD self-insurer. In this regard, WorkSafe examines the applicant’s: BLUESCOPE STEEL (AIS) PTY. LTD. • financial viability BLUESCOPE STEEL LIMITED • capacity to administer claims for compensation • incidence of injuries to workers and the cost of claims in respect of such injuries FIELDERS MANUFACTURING PTY LTD • safety of working conditions LYSAGHT BUILDING SOLUTIONS PTY LTD • compliance with the Act and Regulations ORRCON DISTRIBUTION PTY LTD • compliance with any terms and conditions (where the application is for re-approval) BP AUSTRALIA GROUP PTY LTD AIR REFUEL PTY LTD • any other matters that WorkSafe thinks fit B P AUSTRALIA PTY LTD Approval as a self-insurer is then subject to certain prescribed terms and conditions specified in Ministerial Orders, as well as any terms and conditions determined by WorkSafe. CENTREL PTY LTD Initial approval takes effect for a period of three years. Renewal of approval can be for a period of four or six years depending ELITE CUSTOMER SOLUTIONS PTY LTD on overall performance in the areas of health and safety, injury management and return to work. NO. 1 RIVERSIDE QUAY PROPRIETARY LIMITED In 2017/18, the following organisations were granted approval to self-insure: BRAMBLES LIMITED BRAMBLES INDUSTRIES LIMITED • Liberty OneSteel Manufacturing Pty Ltd for three years effective from 1 May 2018 CHEP AUSTRALIA LIMITED • OneSteel Recycling Pty Ltd for three years effective from 1 May 2018 • OneSteel Manufacturing Pty Ltd for three years effective from 1 May 2018 CHEP PALLECON SOLUTIONS PTY LTD • Municipal Association of Victoria (‘MAV’) for three years effective from 1 November 2017 KEGSTAR PTY LIMITED • Viva Energy Holding Pty Ltd commenced effective 21 October 2017 following a joint application to transfer the approval BRICKWORKS LTD AUSTRAL PRECAST (VIC) PTY LTD from Viva Energy Australia Group Pty Ltd AUSWEST TIMBERS PTY. LTD. • Ferrovial Services Australia Pty Ltd for three years effective 1 March 2018 BRICKWORKS LTD In 2017/18, the following organisations ceased to be a self-insurer: BRISTILE ROOFING (EAST COAST) PTY LTD • ACN 004 410 833 (formerly Arrium Limited) DANIEL ROBERTSON PTY. LTD. • Viva Energy Australia Group Pty Ltd • Broadspectrum Pty Ltd NUBRIK CONCRETE MASONRY PTY. LTD. NUBRIK PTY LTD In 2017/18, the following organisations were successful in their application for renewal of approval to self-insure: • The University of Melbourne - for six years effective from 30 September 2017 URBAN STONE P/L • Philip Morris (Australia) Limited - for six years effective from 14 October 2017 • Mondelez Australia Holdings Pty Ltd - for six years effective from 4 November 2017 • Carter Holt Harvey Building Products Limited - for six years effective from 5 November 2017 1. Due to the differences between the self-insurers survey methodology and that of WorkSafe agents, it is not possible to make a direct comparison between • Brambles Limited - for six years effective from 5 November 2017 the respective 2017/18 service results. This average has been calculated to provide an approximate comparison only. • Royal Automobile Club of Victoria (RACV) Limited - for four years effective from 16 December 2017
126 127 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Self-insurer in 2017/18 Employer Self-insurer in 2017/18 Employer
BROADSPECTRUM LIMITED APP CORPORATION PTY LIMITED MUNICIPAL ASSOCIATION OF BASS COAST SHIRE COUNCIL VICTORIA BROADSPECTRUM (AUSTRALIA) PTY LTD BAYSIDE CITY COUNCIL BROADSPECTRUM SERVICES PTY LTD CARDINIA SHIRE COUNCIL ICD (ASIA PACIFIC) PTY LIMITED CASEY CITY COUNCIL O.G.C. SERVICES PTY LTD CORANGAMITE REGIONAL LIBRARY SERVICE TEN RIVERS PTY LTD CITY OF GREATER DANDNEONG
CARTER HOLT HARVEY BUILDING CARTER HOLT HARVEY WOODPRODUCTS (CENTRAL AND NORTHERN EAST GIPPSLAND SHIRE COUNCIL PRODUCTS PTY LIMITED REGIONS) GLENELG SHIRE COUNCIL PTY LIMITED GOLDEN PLAINS SHIRE COUNCIL CARTER HOLT HARVEY WOODPRODUCTS AUSTRALIA PTY LIMITED HEPBURN SHIRE COUNCIL BETFAIR PTY LIMITED HINDMARSH SHIRE COUNCIL CROWN RESORTS LIMITED CAPITAL CLUB PTY. LTD. HORSHAM RURAL CITY COUNCIL CROWN MELBOURNE LIMITED INDIGO SHIRE COUNCIL CROWN RESORTS LIMITED MELTON CITY COUNCIL CSR LIMITED AFS SYSTEMS PTY LTD MILDURA RURAL CITY COUNCIL
BRICKS AUSTRALIA SERVICES PTY LIMITED MOYNE SHIRE COUNCIL CSR LIMITED MUNICIPAL ASSOCIATION OF VICTORIA EXXONMOBIL AUSTRALIA PTY LTD ESSO AUSTRALIA PTY LTD MURRINDINDI SHIRE COUNCIL MOBIL EXPLORATION & PRODUCING AUSTRALIA PTY LTD NORTHERN GRAMPIANS SHIRE COUNCIL MOBIL OIL AUSTRALIA PTY LTD PORT PHILLIP CITY COUNCIL MOBIL REFINING AUSTRALIA PTY. LTD. PYRENEES SHIRE COUNCIL FOOD INVESTMENTS PTY LIMITED QUEENSCLIFFE SHIRE COUNCIL FORD MOTOR COMPANY OF FORD MOTOR COMPANY OF AUSTRALIA LIMITED SOUTH GIPPSLAND SHIRE COUNCIL AUSTRALIA LIMITED SOUTHERN GRAMPIANS SHIRE COUNCIL HANSON AUSTRALIA (HOLDINGS) HANSON CONSTRUCTION MATERIALS PTY LTD STONNINGTON CITY COUNCIL PROPRIETARY LIMITED HANSON LANDFILL SERVICES PTY LTD STRATHBOGIE SHIRE COUNCIL HYMIX AUSTRALIA PTY LIMITED SWAN HILL RURAL CITY COUNCIL INGHAMS GROUP LIMITED INGHAMS ENTERPRISES PTY. LIMITED WANGARATTA RURAL CITY COUNCIL LIBERTY ONESTEEL ONESTEEL WIRE WARRNAMBOOOL CITY COUNCIL MANUFACTURING SSX SERVICES WEST WIMMERA SHIRE COUNCIL
MARS AUSTRALIA PTY LTD MARS AUSTRALIA PTY LTD WODONGA CITY COUNCIL
MELBOURNE WATER MELBOURNE WATER CORPORATION CORPORATION
MONDELEZ AUSTRALIA HOLDINGS MONDELEZ AUSTRALIA PTY LIMITED PTY LIMITED
128 129 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Self-insurer in 2017/18 Employer Self-insurer in 2017/18 Employer
MYER HOLDINGS LIMITED MARCS DAVID LAWRENCE PTY LTD (FORMERLY FSS RETAIL PTY LTD) ROYAL AUTOMOBILE CLUB OF R.A.C.V. FINANCE LIMITED VICTORIA (RACV) LIMITED MYER PTY LTD RACV INSURANCE SERVICES PTY LTD SASS & BIDE PTY LTD ROYAL AUTOMOBILE CLUB OF VICTORIA (RACV) LIMITED WAREHOUSE SOLUTIONS PTY LTD INTELEMATICS AUSTRALIA PTY LTD
ONESTEEL RECYCLING ONESTEEL REINFORCING SPICERS LIMITED PAPERLINX SERVICES PTY LTD
SPICERS AUSTRALIA PTY LTD ONESTEEL TRADING PAPER AUSTRALIA PTY LTD TOLL HOLDINGS LIMITED TOLL HOLDINGS LIMITED PAPER AUSTRALIA PTY LTD TOLL IPEC PTY LTD PHILIP MORRIS (AUSTRALIA) PHILIP MORRIS LIMITED TOLL NORTH PTY LTD LIMITED TOLL TRANSPORT PTY. LIMITED PRIMARY HEALTH CARE LIMITED HEALTHCARE IMAGING SERVICES (VICTORIA) PTY LIMITED TOYOTA MOTOR CORPORATION TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED IDAMENEO (NO 125) PTY LTD AUSTRALIA LIMITED IDAMENEO (NO.789) LTD UNILEVER AUSTRALIA (HOLDINGS) TEA TOO PTY. LTD. SIDAMENEO (NO. 456) PTY LTD PROPRIETARY LIMITED UNILEVER AUSTRALIA (HOLDINGS) PROPRIETARY LIMITED SPECIALIST DIAGNOSTIC SERVICES PTY LTD UNILEVER AUSTRALIA LIMITED SPECIALIST VETERINARY SERVICES PTY LTD UNILEVER AUSTRALIA SUPPLY SERVICES LIMITED THE TRUSTEE FOR ARTLU UNIT TRUST UNILEVER AUSTRALIA TRADING LIMITED QANTAS AIRWAYS LIMITED ACCUMULATE LOYALTY SERVICES LIMITED UNIVERSITY OF MELBOURNE AUSTRALIAN MUSIC EXAMINATIONS BOARD (VIC) LIMITED EASTERN AUSTRALIA AIRLINES PTY. LIMITED MELBOURNE DENTAL CLINIC LTD EXPRESS FREIGHTERS AUSTRALIA (OPERATIONS) PTY LIMITED MELBOURNE UNIVERSITY PUBLISHING LIMITED JETSTAR AIRWAYS PTY LIMITED MU STUDENT UNION LIMITED JETSTAR GROUP PTY LTD NOSSAL INSTITUTE LIMITED JETSTAR SERVICES PTY LIMITED UNIVERSITY OF MELBOURNE Q CATERING LIMITED UOM COMMERCIAL LTD QANTAS AIRWAYS LIMITED GOULBURN VALLEY EQUINE HOSPITAL PTY LTD QANTAS DOMESTIC PTY LIMITED VIVA ENERGY AUSTRALIA GROUP VIVA ENERGY AUSTRALIA PTY LTD QANTAS GROUND SERVICES PTY LIMITED PTY LTD VIVA ENERGY REFINING PTY LTD QANTAS INFORMATION TECHNOLOGY LTD ZIP AIRPORT SERVICES PTY LTD QANTAS ROAD EXPRESS PTY LIMITED QF CABIN CREW AUSTRALIA PTY LIMITED SUNSTATE PTY LTD
ROBERT BOSCH (AUSTRALIA) ROBERT BOSCH (AUSTRALIA) PROPRIETARY LIMITED PROPRIETARY LIMITED
130 131 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Self-insurer in 2017/18 Employer Self-insurer in 2017/18 Employer
WESFARMERS LIMITED AUSTRALIAN VINYLS CORPORATION PTY LTD WESTPAC BANKING CORPORATION ASGARD WEALTH SOLUTIONS LTD BLACKWOODS TRAINING PTY LTD BT FINANCIAL GROUP PTY LIMITED BULLIVANTS PTY LIMITED HASTINGS MANAGEMENT PTY LIMITED BUNNINGS GROUP LIMITED WESTPAC BANKING CORPORATION CHEF FRESH PTY LTD WESTPAC FINANCIAL CONSULTANTS LIMITED
COLES FINANCIAL SERVICES PTY LTD WOOLWORTHS LTD LANGTONS PTY. LTD. COLES GROUP LIMITED PHILIP LEONG STORES PTY LIMITED COLES SUPERMARKETS AUSTRALIA PTY LTD QUEENSLAND PROPERTY INVESTMENTS PTY LTD COREGAS PTY LTD WOOLSTAR PTY. LIMITED CSBP LIMITED WOOLWORTHS LTD EUREKA OPERATIONS PTY LTD GREENCAP PTY LTD J. BLACKWOOD & SON PTY LTD KMART AUSTRALIA LIMITED LAWVALE PTY LTD LIQUORLAND (AUSTRALIA) PTY. LTD. MODWOOD TECHNOLOGIES PTY LTD OFFICEWORKS BUSINESSDIRECT PTY LTD OFFICEWORKS LTD PROTECTOR ALSAFE PTY LTD TARGET AUSTRALIA PTY. LTD. THE WORKWEAR GROUP PTY LTD TRIMEVAC PTY LTD TYRE AND AUTO PTY LTD WESFARMERS CHEMICALS ENERGY & FERTILISERS LIMITED WESFARMERS FINANCE PTY LTD WESFARMERS LIMITED
132 133 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Directors’ access to independent legal advice Appendix 4: WorkSafe provides a budget for Directors to obtain independent legal advice in respect of their individual obligations as Directors. Conflict of interest
Directors are governed in respect of conflicts of interest by the relevant provisions of thePublic Administration Act 2004 and Governance and compliance binding codes issued by the Victorian Public Sector Commission.
Board of Management The Directors are also required by section 31 of the Accident Compensation Act 1985 (section 511 of the Workplace Injury Rehabilitation and Compensation Act 2013) to declare any pecuniary interest in any matter being considered by the Board The WorkSafe Board of Management is established under section 24 of the Accident Compensation Act 1985 and continued or in any other matter in which WorkSafe is concerned. under section 502 of the Workplace Injury Rehabilitation and Compensation Act 2013. The Board presently consists of seven Directors, each of whom is appointed by the Governor in Council. One of the Directors is also the appointed Chief Executive. The Board is provided at each of its meetings with a consolidated list of the personal interests disclosed by Directors. The Board sets the framework for the achievement of WorkSafe’s objectives and the execution of its functions. The Board does Directors are required to complete a declaration of private interests upon appointment and annually whilst remaining a this by overseeing strategic planning, policy development, auditing and compliance, prudent financial management, fostering director and from 1 July 2016 were required to provide a declaration of related party transactions. stakeholder relationships and reviewing management performance. Management of the operations and administration of WorkSafe is delegated by the Board to the Chief Executive who manages and controls the affairs of WorkSafe in accordance with the policies and practices set by the Board. Board committees
The Board is supported by three committees chaired by independent non-executive Directors. Directors Audit Committee The Directors serving on the Board at 30 June 2018 are: WorkSafe Board members of the Audit Committee as at 30 June 2018: Doug Kearsley (Chair), Paul Barker, Ross McCann AM Paul Barker (Chairman) and Jane Brockington. The Chief Executive also attends. B.Bus, FCA, AGIA and ACIS, MAICD Appointed September 2015 The Audit Committee assists the Board to fulfil its oversight responsibilities relating to:
Clare Amies (Chief Executive) • the integrity, effectiveness and quality of WorkSafe’s financial reporting and disclosures BA, BSW, MSW, Grad. Cert. Public Policy, AMP (Harvard), MAICD • the effectiveness of WorkSafe’s risk management framework Appointed March 2015 • the independence, work plan, and effectiveness of WorkSafe’s External Auditor Jane Brockington B. Eco, GradDip (Economics) • the External Auditor’s annual audit of WorkSafe’s financial statements Appointed August 2017 • the qualifications, engagement, fees, scope of work and effectiveness of WorkSafe’s Internal Audit function
Peter McMullin • WorkSafe’s compliance with relevant laws, regulations, standards and codes including the Financial Management Act 1994 B.Laws, B.Com (Vic), Standing Directions of the Minister for Finance under the Financial Management Act 1994 and audit requirements Appointed February 2018 under the Prudential Standard for Victorian Government Insurance Agencies 2015 Ross McCann AM Risk Committee B.Eng (Chem) (Hons), FIChemE, FRACI Appointed October 2013 WorkSafe Board members of the Risk Committee as at 30 June 2018: Jane Brockington (Chair), Doug Kearsley, Paul Barker and Ross McCann AM. The Chief Executive also attends. Doug Kearsley B.Sc(Math) (Hons), GradDip (Operations Research) The Risk Committee assists the Board to fulfil its oversight responsibilities relating to: Appointed April 2017 • the implementation, operation and adequacy of the risk management and internal control framework that WorkSafe uses Dr Samantha Smith to identify and manage key business, financial, fraud and regulatory risks DBA, MA, B.Bus (Mktg), GAICD, FGIA Appointed October 2016 • WorkSafe compliance with relevant laws, regulations, standards and codes including the Prudential Insurance Standard for Victorian Government Insurance Agencies (with the exclusion of audit requirements which are overseen by the Audit Directors whose term expired or who resigned during 2017/18 were: Committee), the Victorian Funds Management Corporation (VFMC) and Centralised Investment Model, and the Victorian Neil Lucas (August 2014 – August 2017) Government Risk Management Framework (with the exclusion of the attestation requirements which are overseen by the Audit Committee) Further information relating to Board members can be found at worksafe.vic.gov.au. Remuneration Committee
WorkSafe Board members of the Remuneration Committee as at 30 June 2018: Paul Barker (Chair), Jane Brockington and Dr Samantha Smith.
The WorkSafe Board Remuneration Committee assists the Board to fulfil its oversight responsibilities by ensuring that WorkSafe has executive remuneration policies, guidelines and practices that are consistent with Government policy.
134 135 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Board and committee meetings Occupational Health and Safety Advisory Committee
Number of meetings attended/eligible to attend The Occupational Health and Safety Advisory Committee (OHSAC) is established under the Occupational Health and Safety Act 2004 (OHS Act) to advise the WorkSafe Board about promoting healthy and safe working environments and the operation Directors Board Audit Risk Remuneration and administration of the OHS Act and regulations. The purpose of the OHSAC is to focus on strategic issues, providing an important interface between WorkSafe’s operational activity and the Board. Paul Barker 8/8 4/4 3/3 2/2 In 2017/18 matters considered by the Committee in achieving its purpose included: Ross McCann AM 8/8 3/4 2/3 • Recommendations from the Independent Review of WorkSafe’s Compliance and Enforcement Framework Report Doug Kearsley 8/8 4/4 3/3 commissioned by the Responsible Minister
Dr Samantha Smith 8/8 2/2 • Stakeholder input into the planning and development of WorkSafe’s 2030 strategy
Jane Brockington 6/7 2/2 1/1 1/1 • Quarterly performance reporting on health and safety e.g. claims, Inspectorate visits and notices and enforcement
Peter McMullin 3/4 • Review of the existing definition of bullying
Clare Amies 8/8 • Increasing incidence of mental injury claims
Neil Lucas 2/2 1/1 1/1 1/1 • Cumulative trauma exposure • Gendered violence strategy Note: Neil Lucas’s term ended 25 August 17. • WorkSafe’s website redevelopment
• WorkSafe’s targeted campaigns e.g. occupational violence
• Legislative and regulatory changes to the operation of the OHS Act and regulations
Occupational Health and Safety Advisory Committee – Meeting attendance
Member Representing Meetings attended/Eligible to attend Paul Barker (Chair) WorkSafe 4/4
Clare Amies (Chief Executive) WorkSafe 4/4
Marnie Williams WorkSafe 4/4 (Chief, Business Operations)
Gerry Ayres (CFMEU) Employees 4/4
Ben Davis (AWU) Employees 2/4
Luke Hilakari (VTHC) Employees 2/4
Michael Donovan (SDAEA) Employees 0/4
Gary Maas (NUW) Employees 0/4
Karen Batt (CPSU) Employees 4/4
Fiona Nield (HIA) Employers 4/4
Samantha Read (Chemistry Aust.) Employers 4/4
Tim Piper (AIG) Employers 0/4
Heath Michael (ARA) Employers 2/4
Professor Malcolm Sim Independent 2/4
Bill Coleby Independent 3/4
John Ragg Independent 1/4
Jeremy Nott (DTF) Crown 1/1
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WorkCover Advisory Committee Financial Management Compliance Attestation The WorkCover Advisory Committee (WAC) is established under the Workplace Injury Rehabilitation and Compensation Act WorkSafe Victoria 2013 (WIRC Act) to advise the WorkSafe Board about a worker’s entitlement to compensation, return to work, rehabilitation, and the operation and administration of the WIRC Act and relevant regulations. The purpose of the WAC is to focus on strategic I, Paul Barker, on behalf of the Board, certify that the Victorian WorkCover Authority has complied with the applicable Standing issues, providing an important interface between WorkSafe’s operational activity and the Board. Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.
In 2017/18 matters considered by the Committee in achieving its purpose included:
• Review of Common Law
• Long term injured worker pilots Paul Barker Chairman • Stakeholder input into the planning and development of WorkSafe’s 2030 strategy Victorian WorkCover Authority • Increasing incidence of mental injury claims Date signed: 23 August 2018 • Independent Medical Examinations
• WorkSafe’s targeted campaigns e.g. occupational violence Victorian WorkCover Authority trading as WorkSafe Victoria. • Recommendations from the Ombudsman’s report into the management of complex claims
• Quarterly performance reporting on claims, return to work, disputation and agent service to workers and employers
• Legislative and regulatory changes to the operation of the WIRC Act • Literacy issues for non-English speaking workers Victorian Asbestos Eradication Agency
I, Dianne Foggo, on behalf of the Board, certify that the Victorian Asbestos Eradication Authority has complied with the WorkCover Advisory Committee – Meeting attendance applicable Standing Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.
Member Representing Meetings attended/Eligible to attend Paul Barker (Chair) WorkSafe 3/3
Clare Amies (Chief Executive) WorkSafe 3/3 Dianne Foggo Chair Gwynnyth Evans (AMIE) Employees 3/3 Victorian Asbestos Eradication Agency David Cragg (VTHC) Employees 1/3 Date signed: 8 August 2018 Ben Davis (AWU) Employees 3/3
Tim Piper (AIG) Employers 3/3
Mark Stone (VCCI) Employers 2/3
John McNamara Employers 2/3
Meaghan Hoare Knowledge of applicable law 2/3
Robyn Horsley Provision of hospital or medical services 2/3
Shaun Marcus Knowledge of applicable law 1/3
138 139 WorkSafe Annual Report 2018 WorkSafe Annual Report 2018
Compliance Access to information
This section includes disclosures required by the Financial Management Act 1994, the Accident Compensation Act 1985, the WorkSafe discloses a large volume of information online, via printed publications and through its metropolitan and regional Workplace Injury Rehabilitation and Compensation Act 2013, the Protected Disclosure Act 2012, the Carers Recognition Act 2012 offices. It also provides information services in person and/or by phone, through it Advisory Services, annual report, website, and the Freedom of Information Act 1982. It also includes voluntary disclosure of additional regulatory compliance information. library at 1 Malop Street, Geelong and any of its own or its authorised agents’ offices across Victoria.
Manner of establishment and relevant Minister Freedom of Information Act 1982
WorkSafe was established by section 18 of the Accident Compensation Act 1985 as in force immediately before 1 July 2014 In addition to organisational structure, governance and compliance, this section shows how WorkSafe makes information as a body corporate with perpetual succession. readily available to workers and the public in accordance with Part II of the Freedom of Information Act 1982 (FOI Act).
Robin Scott MP was appointed the Minister for Finance in December 2014, with responsibility to manage Victoria’s The FOI Act gives members of the public the right, subject to certain exemptions, to apply for access to information held by occupational health and safety laws, and the accident compensation scheme. WorkSafe and/or to correct their personal information if it is incomplete, incorrect or out of date.
Accountability of WorkSafe The FOI Act applies to documents created by WorkSafe, as well as those created by other organisations, which are in the possession of WorkSafe and its authorised agents. Pursuant to section 492 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is required to exercise its powers and perform its functions under the Workplace Injury Rehabilitation and Compensation Act 2013, the Accident For requests under the FOI Act, applicants may use the online form provided at www.foi.vic.gov.au. Compensation Act 1985, the Workers Compensation Act 1958, the Occupational Health and Safety Act 2004, the Equipment (Public Safety) Act 1994 and the Dangerous Goods Act 1985. Pursuant to section 495 of the Workplace Injury Rehabilitation In 2017/18, WorkSafe and its agents received 1,331 FOI requests. The Office of the Victorian Information Commissioner (OVIC) and Compensation Act 2013, WorkSafe is subject to the general direction and control of the Minister and any specific written received 16 applications for review and complaints and the Victorian Civil and Administrative Tribunal received two applications directions given by the Minister. The Minister cannot give a direction in relation to a specific person. for review, all of which are current and carried over into the next financial year.
Ministerial Directions Details on the outcome of reviews by OVIC and the Victorian Civil and Administrative Tribunal are available on the OVIC website and its annual report. No Ministerial Directions were given under section 495 of the WIRC Act during the financial year 2017/18. FOI is just one of the processes available to the public to access WorkSafe documents or information. WorkSafe has processes WorkSafe’s objectives, functions and powers in place to provide information to workers and the public outside the formal FOI process. Most communications or exchange of information with third parties occurs in the normal course of our business and with injured workers directly, or through our WorkSafe’s primary objectives, functions and powers are found in sections 492, 493 and 494 of the Workplace Injury authorised agents, or under the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act). Rehabilitation and Compensation Act 2013 and sections 2, 7 and 8 of the Occupational Health and Safety Act 2004. These Acts are available from worksafe.vic.gov.au. As part of normal claim management and administration, injured workers may access information in relation to their claim under Section 9 of the WIRC Act directly from agents or their employer (including a self-insurer) or in accordance with other WorkSafe’s role in the community provisions of the WIRC Act.
WorkSafe is the regulator of occupational health and safety and the accident compensation scheme in Victoria and its In 2017/18, 17,219 requests for information in relation to workers’ injury claims were received by agents under the Workplace objectives and functions include (amongst others): Injury Rehabilitation and Compensation Act 2013.
• providing insurance to employers Organisation and functions • receiving, assessing and determining claims for payment of compensation to injured workers Information about WorkSafe and its structure, business units, authorised agents, objectives, functions, powers, the legislation • conducting and defending legal proceedings before courts and tribunals it administers and requests for access to information made under the Freedom of Information Act 1982 or the Workplace Injury Rehabilitation and Compensation Act 2013 can be found in the annual report and/or at worksafe.vic.gov.au. • assisting employers and workers in achieving healthy and safe working environments Publications including policies, manuals, guidelines, codes of practice, brochures and other materials are available at • promoting the effective occupational rehabilitation of injured workers and their early return to work worksafe.vic.gov.au, which also includes legislation administered by WorkSafe. • developing and implementing programs to provide incentives for employers to implement measures to eliminate or reduce risks to health and safety and to otherwise improve occupational health, safety and welfare
• promoting public awareness and discussion of occupational health and safety and providing information services to workers, employers and the Victorian community
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Categories of documents Insurance
Records are managed using a cataloguing system called HPE Records Manager and are organised by subject and type (form, WorkSafe is responsible for the compensation and rehabilitation of injured workers and managing employer workplace policy, guidance, etc.) and filed by business area and subject matter. injury insurance and premiums under the Workplace Injury Rehabilitation and Compensation Act 2013.
Injury claims are filed by name and managed by authorised agents in accordance with WorkSafe’s record management policy The rehabilitation and compensation scheme is administered by a number of authorised agents on behalf of WorkSafe. and authorities and standards issued by the Public Record Office Victoria under thePublic Records Act 1973. These agents are currently responsible for a range of functions including premium collection, claim lodgement and the delivery of benefits to, and rehabilitation of, workers. Therefore, personal or case files of workers are held by the agents who manage Categories of records/files include: their claims. Other operational and policy files are stored at WorkSafe’s offices at 1 Malop Street, Geelong.
• Actuarial Examples of the types of documents to which members of the public usually apply for access are: • Annual reports • documents relating to their personal information, for example a particular worker’s injury claim, or a workplace complaint • Complaints made against an individual or company • Compliance • documents of a non-personal nature, for example details on WorkSafe’s processes or decisions, or information on an • Compliance Codes incident at a workplace. • Contracts Not all documents are automatically made available in response to a request. A concerned person may check WorkSafe’s • Correspondence, including ministerial website or contact the Advisory Service to enquire as to whether the information they require is available for inspection or • Dangerous goods whether the person should apply for it under the provisions of the Freedom of Information Act 1982. • Dispute management Making a request • Enforcement Group • Financial Workers’ injury claim files • Freedom of Information requests If you are a worker who has claimed compensation and wish to access documents in relation to your injury claim file you • Health and Disability Services, including clinical and Independent Medical Examiner services can contact the agent managing your claim to apply for documents under section 9 of the Workplace Injury Rehabilitation • Health and safety and Compensation Act 2013. Under this Act agents are required to process and respond to a request within 28 days from • Human Resources (employee records) the date they receive the request. Information in relation to the injury claim access to information process is available at worksafe.vic.gov.au. • Information Technology Shared Solutions • Injury claims (managed by authorised agents) Workplace Injury Insurance Premium • Insurance, including self-insurance, and premium Information documents relating to employer premiums are held by the agents. Certain documents can be released by the • Internal review agents without the need to use the Freedom of Information Act 1982 process. Employers should contact the agent managing • Investigations their WorkCover insurance to request access to particular documents. • Legislation and policy Other Information • Legal and litigation • Licensing applications and renewals For information not related to a worker’s injury claim file or an employer’s premium, requests must be made in writing and should be addressed to: • Policies, procedures and manuals, including the Online Claims Manual • Programs or events (e.g. WorkSafe Awards) Freedom of Information • Prosecution WorkSafe Victoria PO Box 279 • Return to work Geelong Victoria 3220 • Risk • Service requests Requests under the Freedom of Information Act 1982 (FOI Act) must be made in writing, or using the online form provided at www.ovic.vic.gov.au. A statutory fee of $28.40 from 1 July 2017 is payable for each request and must be paid by credit card • Scheme Performance, including data and statistics online, or enclosed with the letter of request (cheques should be made payable to WorkSafe Victoria). • Strategic and operational planning • Workplace visit entry reports, improvement and prohibition notices The fee may be waived if the applicant requests and provides evidence as to why payment of the fee would cause them financial hardship. Additional costs for access to documents may also be incurred, such as for photocopying (eg 20 cents Health and safety per each A4 size black and white paper) and search time.
WorkSafe is responsible for improving health, safety and welfare in Victorian workplaces under the Occupational Health Decisions are made under the FOI Act by the Principal Officer of authorised FOI Officers in accordance with the requirements and Safety Act 2004 and associated legislation. of section 26 of the FOI Act. The FOI team may be contacted for general queries on (03) 9641 1555.
Information held by WorkSafe is separated into the categories of personal or case files, operational and policy files Online publications and library (on legislation or particular aspects of legislation) and correspondence files. Current files are stored electronically WorkSafe produces a wide range of publications, many of which can be accessed at worksafe.vic.gov.au or by attending its at WorkSafe’s head office at 1 Malop Street, Geelong or at one of its regional offices. library. Members of the public are welcome to use the collection but must first make an appointment by phoning (03) 4243 7008 or 1800 671004.
The library operates from our head office at 1 Malop Street, Geelong.
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Protected disclosures Environmental performance
WorkSafe has established procedures under Part 9 of the Protected Disclosure Act 2012. The purpose of these procedures WorkSafe is committed to reducing its environmental footprint and consistently manages sustainability through resource is to facilitate the making of disclosures and the protection of people who make disclosures from reprisals. The procedures are conservation, pollution prevention and promoting awareness among employees and stakeholders. available at worksafe.vic.gov.au. WorkSafe proactively manages its environmental footprint through employee participation. Application for internal review The use of recycled paper has now increased from 95.01% in 2016/17 to 98.75% in 2017/18, while the gradual introduction of electronic document management is reducing paper and storage. Our recycle and compost programs are also proving Internal review outcomes 2016/17 2017/18 successful.
Health and safety Bicycle and end of trip facilities (e.g. showers and lockers) are encouraging employees to ride to work and sensory lighting throughout the building is reducing electricity consumption. Inspector’s decision affirmed (no change) 44 35 Both electricity and paper usage will continue to be monitored and minimised. Inspector’s decision set aside 74 86 All redundant mobile phones, IT and camera equipment are donated to a range of charitable entities for recycling if they cannot Inspector’s decision varied (other than compliance date) 59 59 be re-used within our offices. WorkSafe also recycles batteries, CDs, DVDs and other media.
Compliance date only changed 1,000 1,186 Energy consumption has increased primarily as a result of WorkSafe occupying 1 Malop St (January to June 2018) while continuing our operations at 222 Exhibition St. Extension refused 22 9
Application refused 5 5 2016/17 2017/18
Application withdrawn 81 109 Electricity (kWh) 2,697,871 2,823,758
Application ineligible/not reviewable 11 4 Paper consumption (reams) 19,751 17,300
Total health and safety 1,296 1,493 Paper consumption (reams) per FTE 15.50 16.62
Recycled paper (reams) 18,766 17,083 Internal review outcomes 2016/17 2017/18 Recycled paper (%) 95.01 98.75% Licensing
Decision affirmed 3 8 Local Jobs First – Victorian Industry Participation Policy
Decision set aside 0 3 The Victorian Industry Participation Policy Act 2003 requires departments and public sector bodies to report on the implementation of the Local Jobs First - Victorian Industry Participation Policy (Local Jobs First - VIPP). Departments and other Application invalid 0 4 public sector bodies are required to apply the Local Jobs First - VIPP for all procurement activities valued at $3 million or more in metropolitan Melbourne and for state-wide projects, and $1 million or more for procurement activities based in regional Victoria. Application withdrawn 0 0 During 2017-18, WorkSafe commenced six Local Jobs First - VIPP or Local Industry Development Plan (LIDP) applicable Total licensing 3 15 procurements totalling $104 million. Three projects were assessed as having no contestable products or services. Three projects were assessed as contestable, requiring the completion of a VIPP plan.
Internal review outcomes 2016/17 2017/18 The committed outcomes from the Local Jobs First – VIPP include:
Return to work • an average of 81 per cent of local content commitment was made per project
Decisions set aside 1 1 • a total commitment of 259 jobs (Annualised Employee Equivalent (AEE)) was made, which includes the creation of 41 new jobs and the retention of 218 existing jobs (AEE) Compliance date only changed 1 2 • a total commitment of 40 positions for apprentices/trainees was made, which includes the creation of 10 new Decision affirmed 4 4 apprenticeships/traineeships, and the retention of 30 existing apprenticeships/traineeships Varied 0 1
Invalid 0 2
Withdrawn 3 0
Total return to work 9 10
Victorian Civil and Administrative Tribunal applications
During 2017/18 there were nine applications to VCAT for review of Internal Review Unit decisions. Of these, two were dismissed and one was struck out. There are six matters currently at VCAT: four have administrative mention dates scheduled, one has a compulsory conference scheduled and one has a directions hearing scheduled.
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National Competition Policy Merit and equity, and employment and conduct principles
Review of legislative restrictions 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. In accordance with its National Competition Policy commitments, the Victorian Government commissioned a review of All decision making recognises WorkSafe’s code of conduct, organisation values and relevant policies and processes. Victoria’s accident compensation legislation in 1998. The review identified three main restrictions on competition; the All WorkSafe employees have access and support available to them via the Equal Employment Opportunity Contact Officers. mandatory nature of the insurance, monopoly provision and centralised premium setting.
Pursuant to section 490 of the Workplace Injury Rehabilitation and Compensation Act 2013, the Minister must before 1 July WorkSafe Workforce data 30 June 2017 30 June 2018 2015 and once every five years after that, cause a review on any matter relating to the setting of premiums. The review is to be Total number of employees 1,074 1,085 undertaken by an independent expert review body. Full time equivalent 1,040 1,056 An independent review of premium setting was started prior to 1 July 2015 by the Department of Treasury and Finance. Overall the actuaries found that WorkSafe’s current premium system is fair, performing well and is financially sustainable. Males 521 524
WorkSafe agrees in principle with the majority of the review recommendations, particularly around simplification, transparency Females 553 561 and enhancing the means in which the broader scheme objectives for Occupational Health and Safety (OHS) and Return to Work (RTW) are supported within the premium model. Full time 960 989
WorkSafe will consider the recommendations as part of WorkSafe 2030 which is focused on delivering greater social and Part time 114 96 economic value to the Victorian community through the regulation of workplace health and safety and delivery of the workers Average age 46 45 compensation scheme.
Competitive neutrality
Under the Victorian Government’s Competitive Neutrality Policy, WorkSafe is listed as a Public Financial Enterprise. Therefore, in accordance with the obligations set out in the Competition Principles Agreement, WorkSafe pays the full suite of Commonwealth and State taxes or tax equivalents where applicable. WorkSafe is not a borrower in its own right and therefore is not subject to the Financial Accommodation Levy.
The Building Act 1993
WorkSafe’s policy with respect to new building works, and alterations to existing buildings, is to comply with the Building Act 1993 as if WorkSafe is not exempt from compliance as a public authority (as provided in section 217(3) of the Building Act 1993).
Some buildings occupied by WorkSafe may have been constructed or altered under exemptions for public bodies which applied at the time. WorkSafe is unaware of any material non-compliance with the current building standards for buildings of their nature and age.
The Carers Recognition Act 2012
WorkSafe has taken all practical measures to comply with its obligations under the Carers Recognition Act 2012. These include considering the carer relationships principles set out in the Act when setting policies which affect employees in care relationships. WorkSafe has employment policies including the provision of carers leave, flexible working hours, purchased leave and the ability to work from home which comply with the statement of principles in the Act.
Additional information available on request
To the extent applicable, the information listed in Financial Reporting Direction 22, issued by the Minister for Finance, is available on request subject to provisions of the Freedom of Information Act 1982.
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Our commitment to Health, Safety and Wellbeing Early intervention case management
We are committed to the implementation of our Health, Safety and Wellbeing Strategy and active risk assessment and control. Cases open at Cases closed Cases open at We acknowledge our responsibility to audit processes and are committed to the analysis and reporting of results. Case management 1 July 2017 1 July 2017 to 30 June 2018 1 July 2018 Proactive wellbeing services Work-related 24 85 15 We are committed to the implementation of our Health, Safety and Wellbeing Strategy, and active risk assessment and control. Non-work related 29 73 14 We acknowledge that the health, safety and wellbeing of our employees is the foundation for our success as an organisation. Our integrated approach also includes a strong focus on maintaining our safety systems and supporting our employees Total 53 158 29 through our early intervention support program for both work related and non-work related injuries and health issues.
2017/18 Exceptional sick leave 2017/18 (Total pax.) Number of employees 1 People leader training attendance Days 36 Leading through times of change* Exceptional sick leave is granted in the event of a serious or terminal illness of an employee, which results in the employee being Building your leadership capital 148 absent from work for an extended period of time, and where the employee has exhausted their personal leave balance. Finding your leadership edge 126 Leading through the PROSCI methodology 61 Mental wellbeing support Total participants 2017/18 Switching your growth mindset 63 Critical incident follow up 32 Unconscious bias 184
* The ‘Leading through times of change’ program is a series of five individual programs captured as part of a leadership curriculum focusing on the development of Employee assistance program 426 change leadership capabilities. Peer support officer support 15 individual support and planning sessions Psychological wellbeing training participation Team strengths workshops and people leader induction participation 145 Supporting through transition 30 Building your leadership capital 148 Growth mindset participation 61 Mental health workshops for executive 90% participation Specialist mental health related group sessions 65 Individual wellbeing ‘tune ups’: 60 Peer support training participation 57 Physical wellbeing attendance Fitness squads 923 Swim passes 1101 Gym subsidy reimbursements 144 Walking group 133 Flu vaccination 466 Financial wellbeing attendance On-site health insurance 61 On-site superannuation 62 Retirement planning (Changing Gears) 17
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Our Occupational Health and Safety (OHS) performance The following reports our performance against lead safety performance indicators
The following reports our performance against key OHS performance indicators. 2017/18
2016/17 2017/18 Induction/training completed in three months
Hazards New employees 227
Total hazards 52 35 Representation
Hazards per 100 FTE 5.0 3.04 Designated Work Groups 42
Number of incidents 121 177 Health and Safety Representatives 30
Incidents per 100 11.63 15.4 Deputy Health and Safety Representatives 12
Inspections First Aid Officers (Level 2) 38
Number of inspections 60 53 First Aid Officers (Level 3) 13
Resolution close out of inspections 100% 100% Emergency Wardens 68
Number of Provisional Improvement Notices - - Peer Support Officers 52
Number of Improvement and Prohibition Notices - - Equal Employment Opportunity Contact Officers 15
Scheduled OHS Committee meetings completed 100% 93% Designated Work Groups Management Representatives 25
Claims and return to work Safety systems
Number of claims (standardised) 10 23 Committee meetings in total 36
Claims – rate per 100 FTEs 0.96 2.04 Ergonomic assessments completed
Estimated average cost per claim $81,768 $106,503 Initial workstation set-up support sessions 41
Number of time-loss claims 6 9 Office ergonomic assessments 32
Time-loss claims – rate per 100 FTEs 0.58 0.80 Vehicle ergonomic assessments 18
Number of 13-week claims 1 6
13-week claims – rate per 100 FTEs 0.096 0.53
Number of fatality claims - -
Number of claims with return to work plans initiated 6 7
Percentage of 13-week claims with return to work plans initiated 100% 33%
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Consultancy expenditure Total approved Expenditure Future Consultancy expenditure over $10,000 Consultant Purpose of consultancy expenditure 2017/18 expenditure During the year, WorkSafe engaged consultants to assist in the planning and delivery of the WorkSafe 2030 Strategy and Geelong Relocation Programs, in addition to its ongoing operations. $000s $000s $000s In 2017/18, there were twenty six consultancies where the total fees payable to the consultants were $10,000 or greater Other (excluding GST). The total expenditure during the 2017/18 financial year in relation to these consultancies was $15.21 million (excluding GST). Details of individual consultancies are outlined below. Australian National Development of framework for better 20 20 - University understanding on uplifting organisational health and performance Total approved Expenditure Future Business Olympian Pty Ltd Development of Business Continuity and 20 20 - Consultant Purpose of consultancy expenditure 2017/18 expenditure Crisis Framework Catherine Anne Marshall Review of ISCRR to evaluate the current 98 45 - $000s $000s $000s performance and the manner in which it WorkSafe 2030 Strategy Program aids WorkSafe Strategy
Capgemini Australia Pty Ltd Establishment of strategic direction and 878 838 - Darcy Associates Development of a competency framework 62 24 - operating model of the innovation centre for medical panels Deloitte Touche Tohmatsu Advice for strategic policy review, 3,793 1,227 - Deloitte Access Economics Regulatory impact analysis for the 99 99 - reform and project development, and Dangerous Goods (Transport by Road or development of preliminary business case Rail) Regulations for WorkSafe 2030 Greg Bailey Consulting Review of Advisory and 49 49 - Deloitte Touche Tohmatsu Development of Business Design and 7,511 7,511 - Licensing functions Technology Solution for WorkSafe 2030 Instinct And Reason Pty Ltd Advice on tools and resources focusing 40 40 - Deloitte Touche Tohmatsu Development of Business Case for 1,926 1,405 521 on creating a workplace that positively WorkSafe 2030 and Market Sounding impacts mental health and wellbeing Isobar Communications Research and future state design of 248 172 76 Noetic Solutions Pty Ltd Review of Regulatory Approach to the 65 65 - Pty Ltd customer experience blueprint Major Hazards Facilities IT Newcom Pty Ltd Advice on development and 27 27 - PricewaterhouseCoopers Review use of Hazardous Industries data 74 55 19 implementation of Data Analytics Strategy sources for improved analytics outcomes
KPMG Lean scoping exercise on claims process 37 37 - RMIT University Research to explore opportunities to 186 186 - KPMG Develop Change Strategy and Roadmap 1,801 1,801 - apply restorative justice processes and for WorkSafe 2030 principles in the enforcement and claims processes The Quantium Group Development of analytics roadmap 1,400 1,400 - Pty Ltd including gap analysis and implementation RTK People Strategies Advice on improving workplace mental 72 39 33 health and wellbeing, and reducing Geelong Relocation Program incidence and serverity of work-related injury and disease Australian National Research Studies On Prioritising 45 45 - The Clinic Group Pty Ltd Advice on creative and advertising agencies 55 19 - University Wellbeing During Organisational Change Bellrock Partners Pty Ltd Review of Head Office Security System 12 12 - Consultancy expenditure under $10,000 Gordian Global Solutions Review of Onboarding and Induction 37 37 - In 2017/18, there were five consultancies engaged where the total fees payable to the consultant was less than $10,000 Pty Ltd process (excluding GST). Kienco Pty Ltd Labour Market Analysis 16 16 - SenateSHJ Development of ‘Dynamic City Strategy’ 40 20 - for Geelong
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Information and Communication Technology (ICT) Expenditure For the 2017/18 reporting period, WorkSafe had a total ICT expenditure of $51.91 million, with the details shown below: Appendix 5: Business As Usual ICT expenditure Non-Business As Usual ICT expenditure
Total Total Operational expenditure Capital expenditure $000s $000s $000s $000s Disclosure index 35,386 16,527 9,268 7,259 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.
Legislation Requirement Page ref Advertising Ministerial Directions and Financial Reporting Directions Details of advertising and communications expenditure (for campaigns with a media spend of $100,000 or greater) in 2017/18: Report of operations
Creative and Charter and purpose Advertising campaign Research and Other Name of Campaign Start/end (media) development evaluation campaign FRD 22H Manner of establishment and the relevant Ministers 140 campaign summary dates expenditure expenditure expenditure expenditure FRD 22H Purpose, functions, powers and duties 140 $000s $000s $000s $000s FRD 22H Key initiatives and projects 6-7 Return to Work TV, press, radio, Oct – Jun 826 936 - - (Getting Back) outdoor, digital FRD 22H Nature and range of services provided 8, 12-32
Enforcement TV, press, radio, Dec – Jun 1,787 219 - - Management and structure (Bad Days) cinema, outdoor, digital FRD 22H Organisational structure 11 Hearts and TV, radio, digital, Jun 2018 646 1,289 104 - Financial and other information Minds (New) outdoor Advertising TV, outdoor, digital Jun – Jul 2017 & 919 17 15 - FRD 10A Disclosure index 155-156 (media) May – Jun 2018 FRD 22H Employment and conduct principles 147 expenditure Creative and Radio, outdoor, Mar – Jun 398 36 29 - FRD 22H Occupational health and safety policy 41, 148-151 campaign digital FRD 22H Summary of the financial results for the year 33-34 development expenditure FRD 22H Significant changes in financial position during the year 45
Farm Safety- TV, press, radio, Nov – Feb 441 8 - 1 FRD 22H Major changes or factors affecting performance * Quad Bikes outdoor, digital FRD 22H Subsequent events 98 Other campaign TV, radio, digital, Dec – Jun 121 22 - - expenditure outdoor FRD 22H Application and operation of Freedom of Information Act 1982 141
FRD 22H Compliance with building and maintenance provisions of Building Act 1993 146
FRD 22H Statement on National Competition Policy 146
FRD 22H Application and operation of the Protected Disclosure Act 2012 144
FRD 22H Application and operation of the Carers Recognition Act 2012 146
FRD 22H Details of consultancies over $10 000 152-153
FRD 22H Details of consultancies under $10 000 153
FRD 22H Disclosure of government advertising expenditure 154
FRD 22H Disclosure of ICT expenditure 154
FRD 22H Statement of availability of other information 146
FRD 25C Victorian Industry Participation Policy disclosures 145
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Legislation Requirement Page ref
SD 5.2 Specific requirements under Standing Direction 5.2 7
Ministerial Directions and Financial Reporting Directions
Compliance attestation and declaration
SD 5.1.4 Attestation for compliance with Ministerial Standing Direction 139
SD 5.2.3 Declaration in report of operations 7
Financial statements
Declaration
SD 5.2.2 Declaration in financial statements 99
Other requirements under Standing Directions 5.2
SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements 49
SD 5.2.1(a) Compliance with Ministerial Directions 99
Other disclosures as required by FRDs in notes to the financial statements
FRD 11A Disclosure of ex gratia expenses N/A
FRD 21C Disclosures of responsible persons and executive officers in the financial report 92-93
FRD 103G Non-financial physical assets 76
FRD 110A Cash flow statements 47
FRD 112D Defined benefit superannuation obligations 70
Legislation
Freedom of Information Act 1982 141
Building Act 1993 146
Protected Disclosure Act 2012 144
Carers Recognition Act 2012 146
Victorian Industry Participation Policy Act 2003 145
Financial Management Act 1994 49
*Throughout
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