High Court Greenlights Federal Licences

By CCH

There is no constitutional reason why employers cannot hold a federal workers compensation licence and opt out of the state schemes.

The source of the Federal Government's power to grant licences comes from s100 of the Safety, Rehabilitation and Compensation Act 1988 and must be ratified by the Safety, Rehabilitation and Compensation Commission (SRCC). The provisions of that section (which was made law in 2004) allow the Minister for Workplace relations to declare a company eligible to apply for a licence if that company:

• is, but will soon cease to be, a Commonwealth authority;

• was formerly a Commonwealth authority, or

• is carrying on business in competition with a Commonwealth authority or a former Commonwealth authority

The third category was supposed hlp deal with situations where Telstra, for example, was competing against Optus (forexample) and one must adhere to one workers comp. scheme for all staff, whilst the other had to deal with 7 jurisdictions. One company clearly had a competitive advantage.

So Optus became the first to take advantage of the new scheme in 2004.

WorkCover Victoria challenged the ability of Optus to get the licence in the Federal Court, saying that s51(xiv) of the constituition granted the Commonwealth government the power regulate insurance except state insurance and thus could not make laws that touched on and concerned state insurance. The Victorian WorkCover Authority said it would reduce revenues so it did touch on state insurance. The Court did not agree with the broad interpretation used by WorkCover. The Vic. Attorney-General and WorkCover then took it to the High Court. The Federal government argued that the Corporations Power as for WorkChoices gave then the authority to enact such a law and the High Court agreed. They also said that any state law that required Opus to meet state-based workers comp. schemes would alter, impair or detract from the federal system and thus be invalid under s109 of the Constitution.

The article notes that the states are starting to work towards harmonising workers comp. schemes and probably must do so o their systems will disappear under the weight of corporate use of the Commonwealth approach.

(CCH Work Alert; issue 3, 23 April 2007; p2-4)