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Business groups welcome workers’ compensation changes

The Council of Small Business Organisations Australia (COSBOA) supports the NSW government’s decision to repeal section 19B of the Workers Compensation Act (1987).

Business groups welcome workers’ compensation changes
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  • Keeli Cambourne
  • November 17, 2021
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“Small business employers in New South Wales will be relieved to hear that that the NSW Government intends to repeal this presumption and that their workers compensation premiums won’t skyrocket,” COSBOA chief executive Alexi Boyd said.

“We understand that the presumption in section 19B was created with good intentions at the time, but it will do more harm than good if it stays.

“The workers compensation system wasn’t designed to offset losses from a virus that is likely to become endemic. Now that restrictions are easing and we’re starting to manage COVID-19 consistent with other infectious diseases – as dictated by National Cabinet’s Plan – it’s inevitable that employees will be exposed to COVID-19, whether at the workplace or in their personal lives.

The section, introduced in May 2020, stated that “if a worker… engaged in a prescribed employment contracts the disease COVID-19… it is presumed (unless the contrary is established) that the disease was contracted by the worker in the course of the employment, and the employment… was a substantial contributing factor… or… was the main contributing factor.

“This is especially true for workers in sectors like essential retail where people aren’t required to be vaccinated in order to enter a business premise,” Ms Boyd said.

“According to modelling, if section 19B isn’t repealed, this high risk of catching COVID-19 will increase workers compensation insurance premiums. If that happens, small business owners will have no choice but to employ fewer people.

“When a small business owner considers employing someone, they calculate the cost of wages, superannuation, and insurance. If mandatory insurance is too high, then they make decisions based on the overall cost of employing workers and therefore may decide to employ fewer people. That of course impacts the whole business and its capacity to trade and to grow.”

COSBOA was opposed to the introduction of this presumption in 2020 on the grounds that it would increase workers compensation premiums for small businesses and in turn disincentivise employment. It was also an inappropriate mechanism to deal with situations where casual staff who had no leave entitlements lost work due to COVID-19, and it potentially exposed small-business owners to litigation – that is, being held vicariously liable for harm caused to a third person infected by an employee deemed to have been infected at the workplace.

Ms Boyd added: “Some characterised this move as ‘a stab in the back to workers fighting COVID.’ This is not true at all. Employees who have to quarantine shouldn’t be left with no income, and we certainly don’t want people who are COVID positive to feel like they have to turn up to work because they don’t have any paid leave entitlements.

“However, workers compensation insurance isn’t the right mechanism to address this problem because it increases the cost of employment, leaving some workers with no job at all.

“A better way of compensating workers who contract COVID-19 would be the development of a system like the Federal Government’s Pandemic Leave Disaster Payment.”

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