KEY POINTS:
New Zealand's ACC scheme is a no-fault, no liability scheme and the best in the world for employees. The same cannot be said for employers faced with millions of dollars of new ACC costs if a list of 25 extra medical conditions is introduced.
The review in question
of the ACC's Second Schedule of Occupational Diseases has been rushed. It was announced on October 3 with consultation ending yesterday and it will be implemented by the end of the year.
The issues involved are highly complex - allowing employers only four weeks to read, seek advice, understand the effect on their business and respond - raising questions over the consultation process.
Within the next 10 years one of the new conditions listed, hearing loss, is expected to lift employer levy costs by $60 million to around $90 million each year.
Schedule Two of the ACC Act lists 17 diseases that, if suffered by an employee, automatically make them work-related and thus covered by the ACC Act for compensation.
Any disease or condition not presently on the schedule must undergo a three-tier challenge test to verify the extent of its work relatedness. To date this system has worked well.
The consultation paper seeks to add a further 25 conditions to the list of conditions covered. If one of them arises it will automatically be deemed a work-related condition.
The employee will be covered by the Act and entitled to full compensation. No challenge process is proposed to test whether a condition is work-related, or due to some other cause.
Employers are justifiably concerned because some of the proposed additions may not be connected with workplace causes, including:
* Asthma, suffered by thousands of people outside the workplace.
* Hearing loss caused by loud noise outside the workplace, from rock concerts through to motor racing.
* Throat, lung and bronchial cancer associated with smoking outside work.
* Solvent-induced encephalopathy which is indistinguishable from encephalopathy caused by alcohol.
These conditions are also already covered by ACC if an employee can demonstrate they were contracted in a workplace.
But adding them to Schedule Two will reverse the burden of proof. Employers will have to prove they were not contracted in the workplace. In many cases that will be impossible.
Employers say they will end up paying for treatment that should be met by taxpayers through the health system, since a clear link between a medical condition and where it was contracted is often hard to establish.
The flaws in the ACC proposals are even more fundamental than that. If an employer is already complying with the Health and Safety in Employment Act, and more specifically, the Hazardous Substances and New Organisms Act, clean working environments will ensure the exposures employees face are always well below Workplace Exposure Standard (WES) levels. These levels are deemed safe for most people for 40 hours per week.
The Department of Labour routinely requests workplace levels below 50 per cent of the WES figures, so it becomes difficult to argue a cause-and-effect exposure level when an employer is complying.
Noise-induced hearing loss is a classic example. The workplace may be well beneath accepted standards for the period of work, but what employees do after work is neither the employer's responsibility nor liability. A hearing loss detected at work does not mean it was caused at work.
The ACC consultation document identifies many conditions that may, or may not, be caused by work.
Where clear and demonstrable cause and effect is established, and substantiated objectively, obviously it is work-related. But in the absence of a clear cause-and-effect relationship, a ruling that a medical condition was caused at work can only be arbitrary.
It's not good science, and will create another grey battleline for lawyers to debate at great expense for everyone. We do not want our ACC scheme ending up like the litigious Australian system.
Employers are worried that other conditions may be entered on the list. The ministerial report suggests stress should be one.
Where will it end?
Already, costs have been added to the Residual Claims account where most of the claims under discussion will end up, along with additional costs for employers in the Partnership Programme.
Employers will, I suggest, consider challenging all ACC's deemed decisions as a matter of principle through the review process.
* Paul Jarvie is the manager occupational health and safety for the Employers & Manufacturers Association (Northern).
