Labor unveils plans for sweeping reform to workers compensation scheme in NSW

Workplace health and safety laws are failing to prevent psychological injuries or to treat sufferers quickly, a state government has claimed.

Workplace health and safety laws are failing to prevent psychological injuries or treat sufferers quickly, the NSW government has claimed, following the release of plans for a sweeping overhaul of workers compensation.

Formal consultation began in March following a commitment by the state government to modernise the state’s workplace compensation system and ensure sustainability, with an Exposure Draft released on Friday.

Industrial Relations Minister Sophie Cotsis said the Labor state government was committed to “strengthening a culture of prevention, early intervention, and effective return to work through a series of reforms”.

“These include major reforms to SafeWork NSW, such as expanding the psychosocial inspectorate, and industrial relations reforms that establish a ‘stop bullying’ jurisdiction,” Ms Cotsis said on Friday.

“Additionally, we have amended the iCare Act to include a principal objective focused on promoting early and appropriate treatment and care for injury and illness.

Customer Service Minister Jihad Dib said the current workers compensation system was designed to support people who suffer physical injury. Picture: NewsWire / Max Mason-Hubers

Industrial Relations Minister Sophie Cotsis said the Labor state government was committed to “strengthening a culture of prevention”. Picture: NewsWire / John Appleyard

“This aims to optimise recovery, support return to work and daily activities, and ensure a sustainable compensation system.“

Customer Service Minister Jihad Dib said the current workers compensation system was designed to support people who suffer physical injury at work, but “doesn’t do enough to help people experiencing psychological injury to recover and return to work”.

Under the current system, only 50 per cent of workers with a psychological injury are returning to work within a year.

The state government claimed the system currently spends seven times more on keeping an injured worker away from the workplace that it does on does on “getting them healthy and back on the job”. Insurance premiums are also tipped to rise by 36 per cent over the next three years.

The NSW government will not adopt a final position on the proposed reform until after community feedback on the Exposure Draft, which it says is the “starting point for the next phase of conversations and to highlight the scale of the challenges the scheme is facing”.