WorkCover premiums to rise on back of COVID-19 claims surge

Industry figures are tipping a surge in WorkCover claims due to COVID-19 infections in workplaces, coupled with a country now working from home.

Medical staff prepare to take a swab at a drive-through testing clinic in Melbourne. Picture: AFP

Victorian businesses face a surge of workers compensation claims as a result of the second wave of COVID-19 infections across the state, and many are likely to be slugged with higher WorkSafe premiums in the coming year.

NSW businesses will also be hit after the NSW government passed laws in the early days of the pandemic that places the responsibility on the employer to disprove an employee’s claims that they contracted COVID-19 while on the job.

State workers compensations schemes are already under serious pressure from the sharp sell-down in investment markets, while the slowing economy is expected to hit the collection of business premiums.

Workers compensation authorities have put employers on notice to minimise the spread of coronavirus. This includes stopping non-essential work activities that involve close personal contact as well as introducing controls, including barriers, to reduce direct contact with workers and customers.

It also involves implementing controls to reduce environmental exposure, including inspecting and reviewing air conditioning and ventilation systems

If an employee of a business dies as a result of contracting COVID-19 at the workplace their family may sue the employer if a case of negligence is established.

Victorian government data shows more than 1665 cases of COVID-19 have been linked to outbreaks in workplace settings.

However, there are thousands of cases of COVID-19 in Victoria where the source of the infection is unknown.

Abattoirs and warehouses remain the workplace hotspot when it comes to outbreaks, accounting for 990 cases between them, according to Victorian state government data.

WorkSafe Victoria has so far accepted 75 claims from workers who had contracted COVID-19 as well as another 98 claims related to COVID-19 mental health and physical injury.

While the issue for now is largely contained to Victoria, several other states have seen a rise in WorkCover claims by employees who were infected with the virus while on the job.

NSW’s State Insurance Regulatory Authority has seen 301 claims relating to COVID-19.

Slater and Gordon practice group leader James Carlson said in the past it was very difficult for employees to lodge WorkCover claims if they contracted the flu at work but the high levels of contact tracing allowed many to make claims for COVID-19 cases.

“Most people contract the virus and make a recovery and any WorkCover liability would be fairly minimal — a few weeks’ wages and some minimal medical costs. Among that there will be people who suffer long-term problems,” Mr Carlson told The Australian.

“The unknown is how many people at work places ultimately pass away because of the virus or suffer long-term health implications.”

A 51-year-old Victorian man who worked at the Golden Farms chicken processing plant in Geelong, where there had been a COVID-19 outbreak, died recently as a result of the virus.

Mr Carlson said there could be consequences for employers following COVID-19 infections that can be linked to the workplace.

“To sue an employer you’d have to show the employer was negligent around what systems were in place, what guidelines were followed and whether they were reasonable,” he said.

“Certainly, employers that were temperature testing, providing masks, gloves and ensuring social distancing for the most part would be considered reasonable.”

Ashurst partner Trent Sebbens said workers compensation premiums were likely to compound costs already hitting affected businesses.

“The broader cost, of course, is the impact on the workplace — more generally with the worker being off work (and) potentially with the business needing to cease operations for workplace cleaning,” he said.

“I think, apart from contraction of COVID-19, it’s possible we’ll see an increase in mental health claims as well, just in relation to the pandemic more generally that might be stem from the isolation due to working from home.”