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Blame, claims and the rise of litigation culture

Australian business has long had the millstone of workers’ compensation claims around its neck.

It is accepted now that to engage staff and do business, you have to take part in the government shambles that is workers’ compensation. It is a sort of tax really. In the wake of a claim, premiums grow by the same amount that the policy has just paid out, putting into question whether it is really a form of insurance at all. The risk certainly does not seem to be taken on by the insurer.

Although, this is not the worst aspect of workers’ compensation for employers. The fundamental problem is that a state mandated system creates a claims culture. For years, employees have been working the system, being encouraged to make claims on the belief that there is a bottomless pool of cash for them. There are genuine claims for which the insurance serves a purpose, but to catch those you need to use a big net which also scoops up the bogus claims which are becoming far too frequent in the workplace.

Employers regularly face the challenge of an illegitimate workers’ compensation claim. They are used as tactical moves in an employee’s game of chess with them: “I want to discipline you for a legitimate reason”, “Well, you can’t, because I am going on stress leave”. If I sound cynical, it’s because I am.

Just this week one of our clients received the most ridiculous workers’ compensation claim that I have yet heard of. They had met with an employee to inform them that they were being made redundant. The employee fell off their chair on being informed of this, such was the shock, and they are now claiming to have injured themselves in the process. The old Aussie mantra of “toughen up” seems to have been left at the door in this one.

At the heart of this claims culture are ‘no win, no fee’ lawyers whose cat-calls include gut-churning phrases like “maximise your compo”. These purveyors of justice are now finding their way into the workplace by another means: the Fair Work Act. This single piece of legislation has created over 40,000 claims against employers per year. Again, some of these are legitimate, but the big net attitude has been taken by the government here as well. In my experience, the number of legitimate claims is dwarfed by the chancers looking to blame others and hoping for some go-away money.

Just last month, Mel Greig, the 2DayFM DJ behind the royal prank call that went so wrong last year, brought a claim against her employers for failing to provide a safe workplace. The allegation appears to be that she was not told clearly enough where the line that she stepped over was, and that she was therefore not prevented from psychologically injuring herself in the way that she has.

If that is right, it is almost absurd. She is blaming her employer for the injury that she has suffered as a result of the actions she willingly took. The concept of personal responsibility has been left behind in favour of the blame and compensation culture.

Where this will stop, it is difficult to see. One in 5 employers now face a workplace action each year. Pretty soon, you will not be able to find an employer who has not been sued by at least one of their employees at some stage.

What do you think?

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Edward Mallett

Edward Mallett

Edward Mallett is MD of <a href="http://employsure.com.au/">Employsure</a>.

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