EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 126
Issued by the authority of the
Minister for Employment and Workplace Relations
Safety, Rehabilitation and Compensation Act 1988
Safety, Rehabilitation and Compensation Amendment Regulations 2008 (No. 2)
(the Regulations)
The Safety, Rehabilitation and Compensation Act 1988 (the Act) establishes a rehabilitation and workers’ compensation scheme for employees of the Commonwealth public sector and certain private sector corporations. All private sector corporations and certain Commonwealth authorities are licensees under the Act.
Section 122 of the Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Section 8 of the SRC Act deals with the calculation of normal weekly earnings (NWE) for employees as defined under section 5 of the Act. NWE is the average number of hours (including overtime) worked in a week by the employee for the purpose of calculating any payments to be made to the employee by Comcare.
Subsection 8(9F) provides for a current employee’s NWE to be updated by reference to a prescribed index, where the NWE cannot otherwise be updated under the other provisions of section 8. Subsection 8(9G) provides that the regulations may specify the manner in which the increase is calculated by reference to the prescribed index.
The purpose of the amending Regulations is to prescribe the Wage Price Index for calculating annual increases in NWE under subsection 8(9F). The amending Regulations also prescribe the formula to be used in calculating further increases in NWE under subsection 8(9G).
The Regulations also replace current references to ‘Wage Cost Index’ with ‘Wage Price Index’ in line with the naming arrangements adopted by the Australian Bureau of Statistics. This ensures that the same indexation factor is applied to an injured person who continues in employment as is applied to an injured person who ceases employment with the Commonwealth (i.e. the ‘Wage Price Index’).
An assessment was made under guidelines issued by the Office of Best Practice Regulation that a Regulation Impact Statement was not required for the Regulations.
Specific consultation in relation to the Regulations was not undertaken on the basis that they merely implement specific amendments to the SRC Act, which were themselves the subject of consultation.
The Act specifies no other conditions that needed to be satisfied before the power to make these Regulations is exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on the day after their registration on the Federal Register of Legislative Instruments.
Overview
The Safety, Rehabilitation and Compensation Amendment Regulations 2008 (No. 2) were enacted by the Minister for Employment and Workplace Relations to address a legislative gap concerning the calculation of normal weekly earnings (NWE) under the Safety, Rehabilitation and Compensation Act 1988. This Act establishes a rehabilitation and workers' compensation scheme for employees in the Commonwealth public sector and certain private sector corporations. The Regulations aim to ensure that the index used for updating NWE aligns with the naming conventions adopted by the Australian Bureau of Statistics, specifically by replacing the term 'Wage Cost Index' with 'Wage Price Index'. This change ensures consistency in the indexation factor applied to injured employees, whether they continue in employment or cease employment with the Commonwealth. The Regulations were developed under the authority provided by section 122 of the Act and do not require a Regulation Impact Statement or specific consultation, as they implement amendments to the Act that were previously subject to consultation.
Scope and Application
The Safety, Rehabilitation and Compensation Amendment Regulations 2008 (No. 2) are subsidiary legislation that complements the Safety, Rehabilitation and Compensation Act 1988, which establishes a workers' compensation scheme for employees of the Commonwealth public sector and certain private sector corporations. The Act applies to employees of specified Commonwealth authorities and certain private sector corporations that hold a licence under the Act. The Regulations extend the scope of the Act by providing detailed mechanisms for the calculation of normal weekly earnings (NWE) for employees, ensuring that these calculations are updated annually using the Wage Price Index as prescribed by the Australian Bureau of Statistics. This ensures consistency in the indexation factor applied to both employees who continue in employment and those who cease employment with the Commonwealth. The Regulations do not specify any exclusions or exemptions and apply across the Commonwealth as per the jurisdictional reach of the primary Act. The Regulations are designed to implement the amendments to the SRC Act, thus they do not require a separate regulatory impact statement or additional consultation beyond what was undertaken for the primary Act.
Key Provisions
The Safety, Rehabilitation and Compensation Amendment Regulations 2008 (No. 2) introduce significant changes to the calculation of normal weekly earnings (NWE) for employees covered by the Safety, Rehabilitation and Compensation Act 1988. Specifically, section 8 of the Act, which deals with the calculation of NWE, is amended to include provisions that allow for the updating of NWE through a prescribed index, as outlined in subsection 8(9F). The Regulations further specify the manner in which these increases are to be calculated, as permitted by subsection 8(9G). This is achieved by prescribing the Wage Price Index for calculating annual increases in NWE, and by setting a formula for calculating further increases in NWE.
Under these Regulations, the term ‘Wage Cost Index’ has been replaced with ‘Wage Price Index’ to align with the naming conventions used by the Australian Bureau of Statistics. This change ensures that the same indexation factor is applied to both injured employees who continue in employment and those who cease employment with the Commonwealth. The Wage Price Index is now the standard measure for updating NWE, providing consistency and accuracy in the calculation process.
The Regulations impose specific obligations on the parties governed by the Act. These include the requirement for employers to update the NWE of their employees in accordance with the prescribed index and formula. Employers must ensure that the updated NWE is used for calculating any payments to be made to the employee by Comcare. Additionally, the Regulations require that all references to the Wage Cost Index are replaced with references to the Wage Price Index to maintain consistency in the application of indexation across all affected employees.
Failure to comply with the obligations set out in the Regulations can lead to civil or criminal consequences. While specific penalties are not detailed in the explanatory statement, it is understood that breaches of the Safety, Rehabilitation and Compensation Act 1988 can result in significant penalties. These can include fines and, in severe cases, imprisonment. The precise penalties would be determined by the courts based on the nature and severity of the breach. It is essential for employers and other regulated parties to adhere to the Regulations to avoid any potential legal repercussions.