Amendments to the Workers Compensation Regulation 2016
We are seeking feedback on proposed amendments to the Workers Compensation Regulation 2016 to increase penalty notice amounts.
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The Issue
Consultation period: 20/01/2023 10:00 am to 10/02/2023 11:59 pm
What is it about?
SIRA has reviewed penalty notice amounts to consider if they are proportionate to the harm involved in the offending, consistent for comparable offences, and provide an effective deterrent to committing the offences and re-offending.
Penalty notice amounts are fixed dollar amounts for offences in the Workers Compensation Act 1987, the Workplace Injury Management and Workers Compensation Act 1998 and Workers Compensation Regulation 2016 (the Regulation). The penalty notice amounts are specified in Schedule 5 of the Regulation. These amounts have largely remained unchanged.
The current review has considered the NSW Law Reform Commission’s (LRC) Report on Penalty Notices (Report 132) (2012). From the Law Reform Commission guidance, SIRA is proposing increases to penalty notices in accordance with the following principles:
- Amounts should not exceed 25 per cent of the maximum penalty unless for exceptional circumstances in the public interest
- Amounts should be consistent for comparable penalty notice offences in the same legislation
- Consider level of harm involved in the offending
- Consider necessary deterrent levels.
The addition of new offences for which penalty notices can be issued was out of scope for the current review.
A more detailed review of penalty notices is anticipated as part of the next remake of the Regulation. This will include consideration of new penalty notice offences and the penalty notice amounts.
What are the changes?
The proposed Regulation provides an increase to all current penalty notice amounts.
The proposed penalty notice amounts include a maximum penalty notice amount of $2,200 for insurers and $1,250 for employers. Overall, the increases include proposed penalty notice amounts of between $1,100 and $2,200 for insurers and $50 to $1,250 for employers. The proposed penalty notice increases range from 2% to 25 % of the maximum penalty that can be issued for each offence. This is consistent with the guidance from the Law Reform Commission that penalty amounts not exceed 25% of the maximum penalty.
The review has considered comparable penalty notice amounts issued for corporations, for example by SafeWork NSW and the proposed increases are in line with these amounts.
Table 1 Summary - Current and proposed penalty notice amounts provides a comparison of current and proposed penalty notice amounts
Next steps
Feedback and submissions on the draft amendment regulation should be submitted online using the form below, or via email to [email protected].
The closing date for submissions is 11:59pm, Friday 10 February 2023.
Please send any enquiries about the consultation process to [email protected].
SIRA may publish submissions on its website unless accompanied by a request for confidentiality.
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Milestones
The consultation period commences on Friday, 20 January 2023 at 10am and ends Friday, 10 February at 11:59pm.
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Outcomes
SIRA received five submissions on the proposed amendments to the regulation. Submissions have been made publicly available.
SIRA carefully considered all submissions received. The submissions did not result in changes being made to the draft regulation.
The feedback provided in the submissions will be further considered as part of the remake of the workers compensation regulation which will include the review of penalty notice offences and amounts.
Summary of feedback
A summary of key issues raised in submissions is provided below:
- One submission supported increases to penalty notice amounts, however suggested the amounts should be higher to be more representative of the harm to workers. The guidance provided by the NSW Law Reform Commission’s (LRC) Report on Penalty Notices (Report 132) (2012) was considered in setting the increases, including the level of harm involved in the offence whilst not exceeding 25% of the court imposed maximum amount for the offence.
- Three submissions did not support the proposed increases. The submissions were concerned that there was no substantiated evidence or justification for the ‘substantial’ increases, such as increased levels of offending; suggested they were doubtful that increases to amounts would act as an effective deterrent to offending. The review of penalty notice amounts considered penalty notice amounts have largely remain unchanged, comparable penalty notice amounts issued for Corporations in NSW and that penalty notices continue to provide a deterrent for an offence.
- Two submissions suggested that education, training and assistance is preferable as a compliance tool, rather than increases to penalty notice amounts. SIRA notes penalty notices are one of the tools which form a compliance and enforcement approach, other approaches include information, education, advice and guidance.
- One submission recommended that there be a transitional period before the penalty notice amounts come into effect, ensuring clarity and sufficient notice and communication about the proposed increases. The increases to penalty notice amounts shall be communicated as soon as practicable.
- Two submissions raised concerns about the consideration provided to the negative effects of penalty notices, including one submission suggesting the increase may lead to matters being taken to court. In increasing the penalty notice amounts, consideration was provided to the guidance in the NSW Law Reform Commission’s (LRC) Report on Penalty Notices (Report 132) (2012) including not exceeding 25% of the court imposed maximum amount for an offence.
Further information
The Workers Compensation Amendment (Penalty Notice Offences) Regulation 2023 commences on 2 March 2023.
Note - The penalty notice for Section 43(2A) of the Workers Compensation Act 1987 was re-introduced as this had been omitted from the Draft Regulation provided for consultation. For this offence, the penalty notice amount will not be increased.
Submissions
The following submissions were lodged and agreement to publish received.