Upjohn Institute Technical Reports Upjohn Research home page 2-1-2000 The Third Way: Prevention and Compensation of Work Injury in Victoria, Australia Peter S. Barth University of Connecticut H. Allan Hunt W.E. Upjohn Institute for Employment Research, [email protected] Alan Clayton Bracton Consulting Services Ralph McGinn British Columbia. Workers' Compensation Board Robert W. Klein Georgia State University See next page for additional authors Follow this and additional works at: https://research.upjohn.org/up_technicalreports Part of the Workers' Compensation Law Commons Citation Barth, Peter, S., H. Allan Hunt, Alan Clayton, Ralph W. McGinn, Robert W. Klein, and Terrance J. Bogyo. 2000. "The Third Way: Prevention and Compensation of Work Injury in Victoria, Australia." Upjohn Institute Technical Report No. 00-015. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. https://doi.org/10.17848/tr00-015 This title is brought to you by the Upjohn Institute. For more information, please contact [email protected]. Authors Peter S. Barth, H. Allan Hunt, Alan Clayton, Ralph McGinn, Robert W. Klein, and Terrance J. Bogyo This report is available at Upjohn Research: https://research.upjohn.org/up_technicalreports/15 W.E. UPJOHN INSTITUTE for Employment Research THE THIRD WAY: PREVENTION AND COMPENSATION OF WORK INJURY IN VICTORIA, AUSTRALIA Upjohn Institute Technical Report No. 00-15 Peter S. Earth Department of Economics University of Connecticut H. Allan Hunt Assistant Executive Director W.E. Upjohn Institute for Employment Research Alan Clayton Bracton Consulting Services Victoria Australia Ralph W. McGinn President and CEO WCB of British Columbia Robert W. Klein Center for Risk Management and Insurance Research Georgia State University Terrance J. Bogyo Corporate Planning and Development British Columbia Workers© Compensation Board Submitted to Victorian WorkCover Authority February 2000 Table of Contents Table of Contents............................................................................................................................. i List of Tables ...................................................................................................................................x List of Figures............................................................................................................................... xii List of Acronyms.........................................................................................................................xiii Acknowledgments......................................... Executive Summary....................................................................................................................xvii Chapter 1 Introduction................................................................................................................ 1-1 Objectives of Workers© Compensation System........................................................................ 1-2 Background and Motivation.................................................................................................. 1-3 Study Approach................................................................................................................. 1-4 The Scope of the Study......................................................................................................... 1-5 Research Approach...............................................................................................................1-7 The Act and its Implementation......................................................................................... 1-7 Data Collection.................................................................................................................. 1-8 Interviews........................................................................................................................... 1-8 Reconciliation.................................................................................................................... 1-9 Organisation of the Report.................................................................................................. 1-10 Victoria©s Industrial and Employment Profile.................................................................... 1-11 Chapter 2 Legislative Foundations of the Victorian WorkCover System.................................. 2-1 Part I - Antecedents of the WorkCover System....................................................................... 2-1 Historical Origins..................................................................................................................2-2 Stability and Change.............................................................................................................2-4 The Crisis of Workers© Compensation in Victoria................................................................ 2-6 Medium-Term Factors....................................................................................................... 2-6 Immediate Impetus....................................................................._^ The Problem of Contested Claims..................................................................................... 2-9 The Road to WorkCare ....................................................................................................... 2-10 The Cooney Committee...................................................................................................2-10 The DMB Blueprint.........................................................................................................2-11 WorkCare in Operation.......................................................................................................2-15 Components of Scheme Operation.................................................................................. 2-16 Administration of the WorkCare Scheme........................................................................ 2-17 Pricing System ....................................................................................................................2-20 Dispute Resolution........................................................................................................... 2-22 The Road to WorkCover.....................................................................................................2-24 WorkCare a System under Review...............................................................................2-24 WorkCare the Internal Repositioning Process..............................................................2-26 The Move to WorkCover.................................................................................................2-28 Reflections on WorkCare....................................................................................................... 2-29 Part II-Legislative Evolution of WorkCover....................................................................... 2-32 Implementation of the WorkCover Programme..................................................................... 2-32 mtroduction.........................................................................................................................2-32 Accident Compensation (WorkCover) Act 1992................................................................2-34 Introduction...................................................................................................................... 2-34 Structural Basis of the Workers© Compensation System................................................. 2-35 Compensation Entitlement............................................................................................... 2-35 Return to Work ................................................................................................................2-36 Benefits.........................................................................................^^ Loss of Earnings Benefits.............................................................................................2-38 Common law................................................................................................................. 2-39 Table of Maims and statutory pain and suffering payment......................................... 2-39 Dispute Resolution........................................................................................................... 2-40 Jurisdiction of the Magistrates© Court.............................................................................. 2-41 Other Measures................................................................................................................ 2-42 Accident Compensation (WorkCover Insurance) Act 1993 ...............................................2-42 Introduction...................................................................................................................... 2-42 New Insurer Arrangements..............................................................................................2-43 Changes to the Premium System .....................................................................................2-44 Municipal Group Self-Insurance...................................................................................... 2-46 Other Matters................................................................................................................... 2-46 Accident Compensation (Amendment) Act 1994...............................................................2-47 Introduction.....................................................................................................................