On 2 December 2013, Employment Minister Senator Eric Abetz announced the lifting of a moratorium on private corporations becoming self-insurers under the Comcare scheme which had been put in place by the Rudd Labor Government in December 2007.
This was followed, on 19 March 2014, by the introduction into federal Parliament of the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014 (Bill). The main purpose of the Bill is to enable employers who operate in two or more States or Territories to apply for a licence to self-insure under Comcare. Employers which obtain such a licence will also be covered by the Work Health and Safety Act 2011 (Cth) (WHS Act 2011). This would ensure that licence-holders operated under an integrated workers’ compensation and work health and safety regime.
The Comcare scheme was established under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) to provide workers’ compensation and rehabilitation coverage for Commonwealth and ACT Government employees. The SRC Act was amended in 1992 to enable certain categories of non-Commonwealth corporations to self-insure under the Comcare scheme, with the consequence that their workers’ compensation arrangements were no longer regulated by State or Territory law.
Further legislative changes in 2006 enabled private corporations which were licensed to self-insure under the SRC Act also to be covered by the Occupational Health and Safety Act 1991 (Cth) (OHS Act 1991), rather than State and Territory occupational health and safety legislation.
The moratorium imposed by the Rudd Government in December 2007 had the effect that no further non-Commonwealth corporations could self-insure under Comcare, although existing licence-holders were permitted to remain in the Scheme. This moratorium remained in place until the Minister’s announcement of 2 December 2013, despite the fact that two reports commissioned by the previous government had recommended that it be lifted.
The lifting of the moratorium means that companies can once again apply under section 100 of the SRC Act to be declared eligible to be granted a self-insurance licence. To be declared eligible a corporation must either:
Amongst the corporations which have obtained licences in reliance upon this provision are Commonwealth Bank of Australia Ltd, John Holland Group Pty Ltd, Linfox Australia Pty Ltd and Optus Administration Pty Ltd.
The Bill clearly contemplates that current and former Commonwealth authorities will be able to obtain licences to self-insure as at present. It also contains a number of provisions which will make it easier for non-Commonwealth corporations to self-insure under the SRC Act. They include:
In addition, the Bill proposes:
There are a number of factors that employers should consider in determining whether to seek a licence to self-insure under Comcare.
It is not clear whether or when the Bill will become law. Although the federal Opposition has not yet indicated whether it will support or oppose the legislation, it seems reasonable to suppose that the Labor Party would oppose passage of the Bill given its position on Comcare when in government. This suggests that the Abbott Government may have to wait until the composition of the Senate changes on 1 July 2014, although even then the Bill’s passage cannot be assured.
 In addition, guidelines have been issued by the SRCC which outline criteria for whether self-insurance licenses should be granted (see Australian Government, Comcare, “Guidelines – Licence Application Evaluation”, January 2006). These guidelines require employers to demonstrate that granting a licence will not be contrary to the interests of employees, and that certain prudential requirements are met so that the SRCC is satisfied appropriate funding is in place to cover workers’ compensation claims. It can be expected that these guidelines will be updated if and when the Bill becomes law.
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