EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment
Safety, Rehabilitation and Compensation Act 1988
Subsection 100(1)
Safety, Rehabilitation and Compensation (Licence Eligibility—Virgin Australia Airlines) Declaration 2015
The Safety, Rehabilitation and Compensation Act 1988 (‘the Act’) establishes the Commonwealth workers’ compensation and rehabilitation scheme.
Under Part VIII of the Act, an ‘eligible corporation’ may apply to the Safety, Rehabilitation and Compensation Commission (‘the Commission’) for a licence to:
(a) accept liability to pay workers’ compensation in respect of its employees in accordance with the Act; and
(b) manage the claims of its employees in accordance with the Act.
An ‘eligible corporation’ is a corporation that has been declared to be such by the Minister for Employment under subsection 100(1) of the Act. Subsection 100(1) of the Act provides that if the Minister is satisfied that it would be desirable for the Act to apply to employees of a corporation that:
(a) is, but is about to cease to be, a Commonwealth authority; or
(b) was previously a Commonwealth authority; or
(c) is carrying on business in competition with a Commonwealth authority or with another corporation that was previously a Commonwealth authority;
the Minister may, by legislative instrument, declare the corporation to be eligible to be granted a licence under Part VIII of the Act.
Virgin Australia Airlines Pty Ltd (ABN 36 090 670 965) (‘Virgin Australia Airlines’) is a corporation carrying on business in competition with Australian Air Express, a former Commonwealth authority, and Australia Post, a current Commonwealth authority. Virgin Australia Airlines has requested that the Minister declare it to be an eligible corporation under subsection 100(1) of the Act.
Applications for declarations under subsection 100(1) of the Act are assessed against the following principles:
(a) the likely impact on employees of the applicant;
(b) the likely impact on the applicant;
(c) the likely impact on the operation of the Commonwealth workers’ compensation scheme; and
(d) the likely impact on the operation of the State and Territory schemes.
Having assessed the application against the principles, the Minister is satisfied that it would be desirable for the Act to apply to the employees of Virgin Australia Airlines.
The declaration provides that Virgin Australia Airlines is eligible to be granted a licence under Part VIII of the Act.
If the Commission subsequently decides to grant an eligible corporation a licence, State and Territory workers’ compensation legislation will cease to apply to that corporation from the date the licence comes into force. Any liability or obligation incurred by the corporation under a State or Territory law in relation to the injury or death of an employee, or any loss or damage suffered by an employee, before the licence comes into force is not affected.
The Office of Best Practice Regulation was consulted regarding this declaration and indicated that a Regulation Impact Statement was not required for this declaration (OBPR ID Number 19958).
Wider consultation was not undertaken as this declaration was made at the request of Virgin Australia Airlines itself and it is not likely to have a direct or substantial indirect effect on business, or restrict competition.
This declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003. This declaration takes effect on the day after it is registered on the Federal Register of Legislative Instruments.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Safety, Rehabilitation and Compensation (Licence Eligibility—Virgin Australia Airlines) Declaration 2015
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Safety, Rehabilitation and Compensation (Licence Eligibility—Virgin Australia Airlines) Declaration 2015 is made in accordance with subsection 100(1) of the Safety, Rehabilitation and Compensation Act 1988 (‘the Act’). The Act establishes the Commonwealth workers’ compensation and rehabilitation scheme.
Under Part VIII of the Act, an ‘eligible corporation’ may apply to the Safety, Rehabilitation and Compensation Commission (‘the Commission’) for a licence to:
(a) accept liability to pay workers’ compensation in respect of its employees in accordance with the Act; and
(b) manage the claims of its employees in accordance with the Act.
An ‘eligible corporation’ is a corporation that has been declared to be such by the Minister for Employment (‘the Minister’) under subsection 100(1) of the Act.
If the Minister makes a declaration that a corporation is an eligible corporation under subsection 100(1), then the Commission may, on application made in accordance with section 102 of the Act, grant the eligible corporation a licence for a specified period. If a licence is granted, the Commonwealth workers’ compensation scheme, as established by the Act, will apply to the eligible corporation from the date the licence comes into force. Any liability or obligation incurred by the corporation under a State or Territory law in relation to the injury or death of an employee, or any loss or damage suffered by an employee, before the licence comes into force is not affected.
Declaration of Virgin Australia Airlines as an ‘eligible corporation’
The declaration has the result that Virgin Australia Airlines is eligible to be granted a licence under Part VIII of the Act. A licence will only be granted if the Commission is satisfied that it is appropriate to do so.
Human rights implications
Article 9 of the International Covenant on Economic, Social and Cultural Rights provides for the right of everyone to social, including social insurance. General Comment 19 by the Committee on Economic, Social and Cultural Rights sets out the essential elements of the right to social security, including that ‘States parties should … ensure the protection of workers who are injured in the course of employment or other productive work’.[1]
Workers’ compensation legislation ensures the protection of injured workers by way of compensation payments, payment of medical expenses, permanent impairment benefits and other benefits, such as access to rehabilitation support. Workers’ compensation is generally available instead of the right of employees to sue their employer for these costs. In Australia, there are separate but largely comparable workers’ compensation jurisdictions in the Commonwealth, State and Territory jurisdictions.
The effect of this declaration is that Virgin Australia Airlines is eligible to make an application to the Commission to be granted a licence.
Once this declaration is made, if Virgin Australia Airlines makes an application for the grant of a licence to the Commission under section 102 of the Act, the Commission may grant the licence. In order to grant Virgin Australia Airlines a licence, the Commission will be required to consider if it is appropriate to grant Virgin Australia Airlines a licence. To be satisfied that it is appropriate to grant Virgin Australia Airlines a licence, the Commission must be satisfied, among other things, that Virgin Australia Airlines has sufficient resources to fulfil the responsibilities imposed on it under the licence, has the capacity to meet the Commission’s standards for the rehabilitation and work health and safety of Virgin Australia Airlines employees, and that the grant of the licence will not be contrary to the interests of Virgin Australia Airlines employees (section 104 of the Act).
This declaration engages but does not limit human rights. Its effect is that it allows Virgin Australia Airlines to make an application for the grant of a licence, to be considered by the Commission. As a result, making the declaration does not affect the workers’ compensation rights of Virgin Australia Airlines employees and so does not limit the right to social security.
Conclusion
The Legislative Instrument is compatible with human rights because it does not negatively impact on human rights.
Senator the Hon Michaelia Cash
Minister for Employment
[1] Committee on Economic, Social and Cultural Rights, General Comment 19: The Right to Social Security (art. 9), U.N. Doc E/C.12/GC/19 (2008), [17].