BULLETIN

Friday, 12 February 2010

Information Paper regarding Labour Hire and Recovery Actions

As you are aware the key to effective management of workers compensation premium is to develop an integrated system of injury and claims management. The main points of the process are;

• Early intervention from the reporting of an incident.
• The provision of early suitable duties.
• Progression of RTW plan from modified to full normal duties.
• Influencing the decision making of the key players; Injured Worker, Doctors, Supervisors & Insurers.
• Strategic planning for complex cases.
• Monitoring ongoing claim costs and premium forecasts.

A gap in the process can occur when a company choose to use labour hire companies for the provision of labour.

The labour hire employee is not an employee of the host company and in the case of an injury, the responsibility of managing that employee falls to the labour hire company and affects their own premium.

Unfortunately, regulated states have provision within their workers compensation legislation, to seek recovery of costs paid from a host employer under the Public Liability provisions.

To do this they need to demonstrate negligence in either the supervision of the worker or the system of work provided by the host employer. The relevant regulator will then issue proceedings against the host employer to recover monies paid.

As it is a public liability action there are no limits such as a premium sensitive period, claim cost capping etc. and the host employer will be liable for costs on an ongoing basis including Common Law.

The labour hire company has no influence on the decision of the regulator to pursue recovery and “hold harmless” clauses are generally of no effect.

It therefore becomes essential that a Labour Hire company can demonstrate that they have an effective Injury and Claim management process in place in order to protect the host employer from this potential action.

The process should be able to demonstrate that suitable return to work will be provided at the earliest opportunity, perhaps in conjunction with the host employer, (maybe at a reduced cost). They should be able to demonstrate strategic interaction with their insurer and perhaps involving the host employer in claim conferences in relation to their specific injured hire workers. They should be able to demonstrate their methods to minimise the wage replacement component of injuries.

This should be the minimum requirements.

As discussed, at present OccCorp provides management of the injury in the initial phase until it is handed over to the labour hire company. This is currently at a cost to the employer. We feel there would be benefit in the labour hire company considering the use of OccCorp services as this would provide a consistent and integrated approach to reduce the potential liabilities occurring through the recovery process.

This could be arranged by direct negotiation between OccCorp and the labour hire company or by some other chargeback arrangement between the employer and the labour hire company.

To discuss this further please contact Michael Simpson at OccCorp on tel; 0421 645 354 or e-mail Michael.Simpson@OccCorp.com.au