Thank you, David [Krawitz] for your kind introduction.
I am honoured to have the opportunity to address you today.
It is timely that you are holding a seminar on occupational health and safety and workers’ compensation today.
As many of you may be aware, tomorrow the Workplace Relations Ministers’ Council meets to consider the draft national model OHS laws. If the nine jurisdictions agree, WRMC will be releasing the draft model laws for public comment tomorrow afternoon.
The public comment period for the model laws will run for approximately six weeks. Assuming all goes well, and folks like yourselves like what we are proposing, WRMC will meet again in early December to vote on the first ever set of nationally harmonised OHS laws. The nine Parliaments of Australia will then have until December 2011 to enact these model laws.
To say this critical reform has been a long time coming is an understatement.
BRIEF HISTORY OF HARMONISATION PROCESS
The harmonisation of OHS laws was first raised by the Whitlam Government in 1974; some 25 years ago. During those 25 years harmonisation of OHS experienced many false starts. While many reports were written and reviews conducted the result was always the same; each jurisdiction doing essentially their own thing.
Over the past two decades, the efforts to reform OHS in Australia has been glacial.
The 2004 Productivity Commission report on National Workers’ Compensation and OHS Frameworks presented compelling arguments for the harmonisation of Australia’s OHS laws.
The Productivity Commission report found that employers, and particularly the approximately 39,000 multi-state businesses that operate across Australian jurisdictions and account for nearly 29 per cent of employment, strongly support the adoption of consistent legislation regulating OHS and workers compensation.
It has been obvious for decades that for the economy at large, national consistency in OHS laws has the potential to deliver reduced costs.
Currently there are ten principal OHS statutes across Australia -six State, two Territory and two Australian Government (one relating to Australian Government employees and the other relating to seafarers) and over 400 OHS regulations and codes of practice.
Such a situation is not only absurd it is confusing, time consuming and expensive for all involved.
The differences in OHS statutes, regulations and codes of practice across the nation mean that workers in different jurisdictions who face identical risks are afforded different levels of legal protection; that businesses conducting business in multiple jurisdictions are faced with inconsistent standards and enforcement which makes compliance complex and costly.
I will share with you just one example of the inefficiencies that have built up in our multi-jurisdictional OHS system. The Productivity Commission’s Annual Review of Regulatory Burdens on Business: Social and Economic Infrastructure Services released this month reported the following situation in relation to rail transport OHS:
There are 15 Acts with powers over occupational health and safety (OH&S) nationwide affecting rail operation and 72 different OH&S regulations. … The duplication of effort and inconsistencies in interpretation involved in adhering to the requirements of this framework across government jurisdiction impose significant compliance costs on multi-state employers and operators. (p.248)
At a time when businesses are trying to weather the effects of the global recession, this is an inexcusable waste of scarce resources.
Uniform workplace laws will reduce compliance costs for Australian businesses, it will reduce red tape and the myriad of regulations and it will increase Australia’s productivity at a time when Australia needs to maximise business efficiency.
These outcomes will unlock much need productivity, which is vital to Australia’s productivity and ongoing prosperity.
Harmonisation will ensure that equal standards and protections for all workers apply across the nation which is vitally important for the safety of workers in an increasingly mobile labour force.
A harmonised national OHS regime will provide significant efficiencies for multi-state employers who will be able to ensure that their management and employees understand the one set of requirements and any changes to it. Businesses will be able to establish a single safety culture, with common associated manuals and procedures, throughout their organisation. Employees will be able to be trained in, and understand, the one set of OHS requirements, irrespective of which jurisdiction they are working in.
Prior to the 2007 election the Labor stated that the fragmentation of OHS laws and standards and the compensation systems that underpin nine jurisdictions, with no national leadership, is bad for business. It is also bad for workers who face varying coverage and rules at work in different states and industries.
We promised that, if elected, we would work to fix this; and we are.
From the start, the Rudd Government has been committed to achieving harmonisation by consensus between the jurisdictions. You have heard the Prime Minister express his commitment to co-operative federalism; the OHS harmonisation process is a case in point.
The harmonisation of OHS laws and standards will in turn assist in the Government’s efforts in working towards a seamless national economy.
For example, other priority areas of the Business Regulation and Competition Working Group will be significantly assisted if harmonisation of OHS laws is achieved, including:
- the establishment of a national trade licensing system;
- nationally consistent rail safety legislation and regulation;
- regulation of chemicals and plastics;
- a nationally consistent mine safety regime and
- nationally consistent maritime safety standards.
It is through such achievements that the Rudd Government aims to reduce the regulatory burden on business and to deliver significant improvement in Australia’s competition and productivity.
OVERVIEW OF THE MODEL LAWS
Let me now give you an overview of some of the important features of the proposed laws.
The model laws do not significantly depart from existing OHS legislation; rather it consolidates existing features in a more consistent manner.
The goals of harmonised OHS laws are three fold:
- Reducing compliance costs for business,
- Improving efficiency for regulatory agencies, and
- Improving safety outcomes.
The importance of improving safety outcomes cannot be underestimated. In 2006-07 there were 132 055 serious workers’ compensation claims, which equates to 1.4 per cent of the Australian workforce. Safe Work Australia estimates the economic cost of workplace injuries, illness and deaths for 2005-06 was $57.5 billion or 5.9 per cent of GDP.
Key aspects of the model laws include:
- An unqualified obligation on employers to provide a safe workplace to employees and a broad approach to the duty of care which, given the changing nature of the workplace, needs to extend protection to persons other than traditional employees (eg extends duty to contractors);
- The capacity of regulators to share evidence across multiple jurisdictions will significantly enhance the ability of regulators to pursue upstream duty holders.
- Three categories of offences will be created;
- A high level of risk and the duty holder was reckless or grossly negligent;
- A high level of risk but without recklessness or gross negligence, and
- A breach of duty without the factors present in category 1 or 2.
- Penalties are substantially increased from the penalties under current State and Territory laws. The new maximum will be $3,000,000 for corporations and $600,000 for individuals. The increase of penalties will allow courts a greater capacity to respond meaningfully and proportionately to serious breaches by duty holders;
- The power for Health and Safety Representatives to issue Provisional Improvement Notices and direct the cessation of unsafe work, a power currently only available in three jurisdictions;
- Ensure that uniform cease work provisions apply in each jurisdiction. It also broadens the entitlement so that it applies to 'employees' and also other kinds of workers (e.g. contractors);
- The requirement for employers to consult employees over work-related matters that affect their health and safety;
- The protection of the rights and roles of elected workplace health and safety representatives;
- The proposed model laws allow appeals to the High Court, which is currently not available in all jurisdictions and this will ensure consistency and provide strong legal precedence; and
- The content and operation of the model laws will be subject to periodic review (at least once every five years) to ensure the laws remain relevant and take into account changes in workplace conditions or arrangements.
Much has been said recently with respect to the right of victims to prosecute employers.
All Australian governments recognise the need for victims and their families to be provided with confidence in a regulators enforcement activity. That is why the model laws contain very strong safeguards regarding inaction or a decision by a regulator not to prosecute.
These safeguards ensure that the process for deciding upon a prosecution must be transparent and consistent with publically available prosecution guidelines. A regulator’s decision not to prosecute must be speedily reviewable by the DPP in each jurisdiction and that, in the case of category 1 and 2 breaches, such a process may be initiated by request.
Finally, I am happy to note the legislation to establish the tripartite Safe Work Australia was passed by the Senate this month, one year and three days after it was introduced and on the Government’s fourth attempt to get it through (with no amendments after all that).
The establishment of Safe Work Australia ensures that there is an independent national body whose role is to improve OHS outcomes and workers’ compensation arrangements across Australia.
Furthermore, in order to maintain the reform agenda and momentum, one of Safe Work Australia’s principle functions is to progress the harmonisation of OHS laws across Australia.
Another matter of some concern has been the issue of right of entry for unions under the model OHS laws. Consistent with the philosophy that drives the Government’s seamless national economy agenda, the model laws remove the complexity that employers, employees and unions currently face in understanding rights and obligations regarding entry to a workplace for OHS purposes.
Under the model OHS laws unions will be subject to the right of entry provisions of the Fair Work Act and will be required to demonstrate the bona fides of their request to enter a workplace for OHS matters.
CONCLUSION
I said at the start of this speech that this critical reform has been a long time coming. Of course the process is not over; indeed we are only half way there.
Challenges still face the process to harmonise OHS laws in Australia.
In 2010 Safe Work Australia must continue to work diligently on drafting the all important model regulations and code that will give effect to the model laws. As with the model laws, the model regulations and codes must be agreed to by WRMC.
We will also have to bring into the harmonised system a number of discrete industries; many with strongly held views and justifications for wanting to be treated differently.
And of course the nine Parliaments of Australia all have to pass the model laws by the end of 2011 in order to actually achieve harmonised national OHS legislation; a process that should not be under-estimated.
But, as President Obama is fond of saying, “if it was easy, it would have been done by now.”
Harmonisation of OHS laws may be hard, but the benefits cannot be denied. Harmonised OHS laws will reduce compliance costs for Australian businesses, it will reduce red tape and the myriad of regulations and it will increase Australia’s productivity at a time when Australia needs to maximise business efficiency.
My commitment to this important reform reflects the Rudd Government’s broader commitment to building a modern Australia.
Australia’s long-term prosperity depends on this Government delivering reforms that reduce the regulatory burden on business and deliver significant improvement in Australia’s competition, productivity and international competitiveness.
Thank you.