These two men want an extra hurdle for sexual harassment claims. It will cost millions

The push by the NSW Liberals and rogue MP Mark Latham to introduce an extra test for sexual harassment claims would remove all types of bullying from workers’ compensation and put more financial pressure on struggling schemes, an analysis for NSW Treasury shows.

Liberal upper house leader Damien Tudehope and Latham have jointly written amendments to the government’s workers’ compensation bill, proposing changes to the definition of sexual harassment as well as axing claims made for excessive work demands and vicarious trauma.

Liberal MLC Damien Tudehope and independent MP Mark Latham.Credit: Fairfax Media

The move has heaped pressure on the Liberals for teaming up with Latham, who has been accused of domestic violence against his ex-partner, which he emphatically denies, as well as inappropriate workplace behaviour, including taking photos of female MPs. He has apologised to the women.

Under the Tudehope-Latham amendments, a person who makes a sexual advance towards a colleague would need to have known, or should have known, that the advance was unwelcome.

Treasury secretary Michael Coutts-Trotter asked the state insurer icare, on behalf of Tudehope, to prepare costings for the amendments. Analysis shows that the private sector scheme, known as the nominal insurer, would be almost $800 million worse off under the pair’s proposed changes.

The costings, which have been provided to Tudehope, show that the government bill would save the nominal insurer between $4.31 billion and $4.41 billion over the four years to 2029, while the amendments would lead to smaller savings of between $3.53 billion and $3.63 billion.

Opposition Leader Mark Speakman has insisted that changes to the definition of sexual harassment would still protect workers from “ignorant bigots” but wouldn’t necessarily allow employees to claim compensation if a colleague “makes a pass” at them.

However, the analysis from icare said the “amendments will require intent of the perpetrator to harm to be established by an injured worker before compensation for a primary psychological injury caused by bullying, racial and sexual harassment may be paid”.

“The need to prove intent of the perpetrator to harm would effectively remove all types of bullying and harassment from the schemes,” the icare report says.

Speakman and Tudehope have taken public stances against Latham’s alleged conduct but both said working with him on workers’ compensation reforms or other issues is necessary while he remains an elected member of parliament.

NSW Treasurer Daniel Mookhey on budget day.Credit: Dominic Lorrimer

However, Vaucluse MP Kellie Sloane – one of the Liberals’ most senior women – said the party should not work closely with Latham, arguing she was not comfortable with his actions in parliament.

The state government introduced its workers’ compensation bill this year in a bid to reduce premiums for employers, which were rising by an average of 8 per cent a year.

Under the changes, workers would be cut off from regular compensation payments after 2½ years unless they can prove a whole-person impairment of at least 31 per cent.

With the number of psychological injury claims doubling in the past six years and return-to-work rates falling, the government in May introduced its new laws to parliament to reform compensation for injuries such as post-traumatic stress disorder.

The government was forced to significantly water down some aspects of its initial reforms, outlined in a draft exposure bill, after they were widely criticised by unions, medical experts and lawyers.

NSW Treasurer Daniel Mookhey has maintained that there is urgency in passing the reforms because of six-monthly revaluations of the liabilities of icare, and argues that without changes to the compensation scheme, subsequent business premium rises will be set from a higher liability base.

The government’s bill has passed the lower house but was blocked in the upper house before it was referred to a committee for further scrutiny.

Mookhey said Tudehope and Latham’s plan was the “worst of both worlds”.

“Workers get less protection. Businesses will have to pay higher premiums,” Mookhey said.

“Worse, the Tudehope-Latham amendments will force every victim of sexual harassment, racial harassment and bullying making a claim to prove their perpetrator deliberately wanted to hurt them.”

The analysis of the Tudehope-Latham amendments was prepared by icare’s chief actuary and underwent a technical review and internal peer review.

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