Revised workers compensation Bill to be tabled in NSW after push back from unions

A revised plan to up-end the workers compensation scheme will be tabled in state parliament following widespread opposition from unions.

Unions, workers and families have campaigned against the Minns government’s mental health support for injured workers following a damning parliamentary inquiry. Photo: NewsWire/ Gaye Gerard

A revised plan to up-end the NSW state workers compensation scheme will be tabled in parliament on Tuesday following widespread opposition from the state’s unions.

Multiple unions representing teachers, nurses and a range of other fields rallied outside parliament on Monday morning in opposition to a draft proposal.

Following that backlash and a hearing into the proposal, the Labor government will introduce an updated Bill on Tuesday to reform the scheme.

Treasurer Daniel Mookhey told the inquiry he would not authorise any further cash injections to the Treasury Managed Fund, the state self-insurer.

On Tuesday, Mr Mookhey said the Minns government wanted to create “a modern system that will better protect workers from psychological injury and provide better help when they need it”.

“I want to ensure that future generations of workers across NSW have a workers compensation system they can rely on,” he said.

“As the workplace evolves, our capacity to support people in it must adapt accordingly.”

Industrial Relations Minister Sophie Cotsis said the reforms would help strengthen a “culture of prevention”, as well as early intervention and recovery.

“These include major reforms to SafeWork NSW, including investing in more inspectors to focus on psychosocial harm prevention and industrial relations reforms that establish a ‘stop bullying’ jurisdiction,” she said.

Hundreds of essential workers from across NSW rallied outside government offices to oppose the government’s proposed cuts to workers compensation. Photo: NewsWire/ Gaye Gerard

“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.

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

She thanked all who contributed submissions to the consultative process “for their practical and considered responses”.

Unions NSW and a number of other powerful unions in the state had spoken out against the reform and some of its provisions, namely a 31 per cent threshold for damages for permanent impairment due to psychological injury.

They had also opposed plans to require anyone psychologically injured because of racial or sexual harassment, or bullying to receive a determination by a court or the Industrial Relations Commission Tribunal.

Among the changes since the bill was first made public was a plan to scrap that requirement that workers obtain a finding from the IRC, as well as an expedited system for those types of claims – just eight weeks.

Treasurer Daniel Mookhey said he would not authorise any further cash injections to the Treasury Managed Fund: Picture: NewsWire / John Appleyard

The definition of vicarious trauma will also be clarified to include psychological injury arising from “repeated exposure to the traumatic experiences of others”.

Other proposed changes, many of which were raised during the hearing, include reducing legal costs, greater powers to IRC to hear workplace health and safety complaints, and adding “excessive work demands” as a new compensable cause of psychological injury.

Commutations to allow psychologically injured workers with a Whole Person Impairment (WPI) of 30 per cent or below to access a lump sum before their weekly payments

cease, will also be introduced, as will a gradual increase to the WPI measure to determine weekly payments for life, rising to 25 per cent from October 2025 and greater than 30 per cent from 1 July 2026.

The state government is also rolling out a $44m Workplace Mental Health package, including to SafeWork NSW for injury prevention – with 50 new inspectors specialising in psychological injury – and wraparound psychological support services for people navigating the claims process.

Originally published as Revised workers compensation Bill to be tabled in NSW after push back from unions