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Province Taking Action on Review of Workers’ Compensation System
Friday, April 25, 2008


Human Resources, Labour and Employment

April 25, 2008 

The Provincial Government, along with the Workplace Health, Safety and Compensation Commission (WHSCC), is undertaking a series of actions to address the needs of the province’s workplace insurance and compensation system.  The Provincial Government believes that the action plan announced today will strengthen client services, reduce claim duration, support early and safe return to work, and strengthen the role of the WHSCC in injury prevention and occupational disease.  These actions provide for an accountable and sustainable insurance and compensation system that balances the interests of employers and workers.  

“We are firmly committed to seeing measures put in place that further strengthen the financial position of the workers’ compensation system, that enable it to improve and adapt to changing needs, while respecting the needs and expectations of workers and employers,” said the Honourable Shawn Skinner, Minister of Human Resources, Labour and Employment.  

Finding the Balance: The Report of the 2006 Statutory Review Committee on the Workplace Health, Safety and Compensation Act provided a extensive review of the workers’ compensation system in the province.  It identified a number of areas for government’s consideration.  

“The committee indicated that while the system has moved from crisis to stability, further efforts can be made to maintain a high quality system that is sustainable over the long-term,” said Minister Skinner. “Following a comprehensive assessment of the report’s findings, including further input provided by stakeholders and an actuary, we have decided on a series of balanced actions designed to move the system forward.” 

The Provincial Government and the WHSCC will advance a series of measures to address claim duration, early and safe return to work practices, client services, injury prevention, and occupational disease, while ensuring an accountable and sustainable system is preserved.  

Accountability and Long-term Sustainability  

Actuarial advice provided to the Provincial Government confirms that, when viewed as a package, the benefits available to injured workers in Newfoundland and Labrador are either better or comparable to other Atlantic Canada jurisdictions, and are similar to those available in other Canadian provinces.  Benefit levels will be maintained at their current level.  The advice also supports continued vigilance on costs to ensure the sustainability of the benefit system over the longer-term. 

“Government is of the view that the benefit increases recommended by the committee are not sustainable as it will increase the cost of claims, employer assessments and contribute to the unfunded liability of the WHSCC,” said Minister Skinner.  “This government will not oversee a return to the 2001 era and see the system revert to a state of financial crisis. The Provincial Government supports the establishment of a realistic and achievable funding policy that accounts for market volatility and unforeseen liabilities.”  

The Provincial Government asks the WHSCC to:

  • Consider benefit levels on an annual basis in a manner similar to the way in which assessment levels for employers are determined; and,
  • Finalize a funding policy that establishes a suitable funding target, and that considers the input of employers and workers to further ensure a financially sustainable insurance and compensation system over the long-term.
Claim Duration and Early and Safe Return to Work  

Claim duration, or the length of time an individual is in receipt of benefits, is a significant cost for the workers’ compensation system. Claim duration in Newfoundland and Labrador is the highest in Canada. The Provincial Government supports the adoption of a strategic and focused approach to address the issues surrounding claim duration. The Provincial Government asks the WHSCC to:
  • Adopt a strategic approach to address claim duration and the Early and Safe Return to Work Program (ESRTW); and,
  • Complete an evaluation of the entire ESRTW program in support of the development of a comprehensive claim duration strategy. 

Client Services 

While improvements have been made, it is important that enhancements are continually made to the quality of client services. The Provincial Government will introduce legislative amendments to support this objective.  Further, the Provincial Government will undertake an evaluation, in conjunction with stakeholders, including the WHSCC, of the external review, internal appeals and the worker and employer adviser systems to identify further options for enhancing the quality of a client’s experience.  As well, the WHSCC is asked to establish a protocol to enhance client services and training for front-line staff.  

Injury Prevention  

The promotion of workplace health and safety practices helps to prevent and reduce workplace injuries.  Recent figures show that safe work practices and an injury free culture are becoming firmly established in provincial workplaces.  This is reflected in the lost time incident rate, which, between 2000 and 2006, has fallen by 34 per cent.  In the area of injury prevention, the committee highlighted the value of industry-led sector committees. As demonstrated in the construction sector, this approach has enhanced safety awareness and practices on the job.  

The Provincial Government asks the WHSCC to:

  • Support the further establishment of sector committees by engaging key sectors such as manufacturing, health care, fisheries, and the mining sector. 

Occupational Disease 

Occupational disease is one of the most complex and emerging issues in the area of workers’ compensation. The best scientific and medical advice and evidence is required to support the effective and timely management of occupational disease claims.  It is also recognized that the WHSCC does not have a contingency reserve to address potential liabilities associated with occupational disease.  

The Provincial Government asks the WHSCC to:

  • Move forward with the creation of an Occupational Disease Advisory Panel to build expert capacity in the province to address existing and future occupational disease matters; and,
  • Determine the appropriate value of a reserve fund necessary to address the liabilities associated with occupational disease in the province.

“Our government is also moving forward with governance changes by strengthening the representation of the Newfoundland and Labrador Employers’ Council, the Newfoundland and Labrador Federation of Labour and injured workers on the WHSCC Board of Directors,” said Minister Skinner. “Stakeholders need to be assured that their voice and input at that board level are absolutely required as we move forward with these measures to improve the insurance and compensation system in the province.”     

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Media contact:
Ed Moriarity
Director of Communications
Department of Human Resources, Labour and Employment
709-729-4062, 728-9623
edmoriarity@gov.nl.ca

BACKGROUNDER 

Government’s Action Plan in Response to the Report of the Statutory Review Committee on the Workplace Health, Safety And Compensation Act 

The Provincial Government accepted Finding the Balance:  The Report of the 2006 Statutory Review Committee on the Workplace Health, Safety and Compensation Act.  In the development of this action plan, government conducted a review of the findings with further input from stakeholders and with advice provided by an independent actuary. 

Action Plan  

Accountability and Long Term Sustainability 
Action Statutory Review Committee Report Said 
The Commission will implement a practice to review potential changes to the level of income replacement benefits on an annual basis.

 

Government asks the Commission to finalize a long term funding policy reflecting the input of employers and workers
The Commission should maintain wage loss benefits at their current level and consider changes to wage loss benefits on an annual basis similar to the manner in which it considers changes to assessment rates.
To complement the Auditor General’s existing authority to audit the Commission, the Commission will enhance its existing operational and “value for money” audit processes, with particular emphasis on communicating the results to stakeholders.  The Auditor General should include the operations of the Commission as part of his or her regularly scheduled routine of audits.
Government will bring forward an amendment to the Act to allow for future representation on the Board to include a minimum of one board member recommended by the Newfoundland and Labrador Employers’ Council and one board member recommended by the Newfoundland and Labrador Federation of Labour and one board member representing injured workers. The composition of the Board of Directors should consist of four employer representatives, four labour representatives, and an independent Chairperson and appointments to the Board be selected from nominees submitted by employer and labour stakeholders.
The Commission will work with Government to implement a new system to ensure that all required workers’ compensation premiums are paid by out-of-province fish buyers. The Commission should ensure that workers’ compensation premiums are collected from out-of province fish buyers operating in NL.

Client Service 

Action

Statutory Review Committee Report Said  
The Commission will establish a protocol to enhance client services and provide front-line staff with needed training and decision-making support to serve clients. The Commission should establish a protocol for improving client service, recruitment, training and decision-making support for front-line staff
Government will undertake an evaluation of the elements of the workers’ compensation internal appeal and external review structures to identify options for enhancing the quality of the client’s experience. The internal appeal, external review and the worker and employer advisor offices require change in order to ensure a seamless, efficient and client-centered service is provided to workers and employers. 
The Commission will build on recent policy improvements by working with stakeholders in the development of a plan to implement quality improvements to the Labour Market Re-entry program.  This plan will include improved staff training, education, and performance measurement.  The Commission should improve Labour Market Re-entry practices by ensuring the program is flexible, that staff conduct a holistic assessment of labour market re-entry options with a view to restoring pre-injury earnings, and that a framework to monitor the program and its service providers is implemented. 
Government will bring forward an amendment to Section 89.1(2) of the Act to ensure that all injured workers are ensured full access to a two year re-employment obligation.  Government should amend Section 89.1 (2) of the Act to state from date of disability rather than from date of injury.
The Commission will develop a policy to manage employer/worker requested independent medical examinations. The Commission, in consultation with the stakeholders, should develop a policy for Commission managed, employer and employee requested, independent medical examinations of injured workers.
Government will bring forward an amendment to Section 89.1 of the Act to delete references to the term “medically” from the phrase “medically able” to clarify that the return to work decisions of the Commission are based upon an assessment of the functional abilities of injured workers.  Government should amend Section 89.1 of the Act to delete references to the term “medically” from the phrase “medically able.”
The Commission has implemented changes in its application of proportionment and will continue to ensure a fair application of this practice.  The Commission should not proportionately factor in pre-existing health conditions that did not previously impair a worker’s previous earning capacity when calculating workers’ compensation benefits.
Claim Duration and Early and Safe Return to Work 
Action Statutory Review Committee Report Said  
The Commission will develop a comprehensive claim duration strategy, including the public reporting of key performance indicators. The Commission should develop, through stakeholder consultation, an enhanced system of performance indicators to allow it to more effectively manage and measure the various components of claim duration.
The Commission will evaluate the existing legislated early and safe return to work practices and report back to Government with a plan for enhancing the program’s effectiveness.  Implementation of mandatory Early and Safe Return to Work committee with a minimum 50 per cent worker representation, mandatory training, and greater support to workplace parties to build capacity within their workplace to better manage return to work programs.   
The Commission will develop performance indicators to measure management of early and safe return to work practices as a part of their comprehensive claim duration strategy. The Commission should develop detailed performance indicators to enhance the management of early and safe return to work and improve claim duration.
Injury Prevention and Occupational Disease  
Action Statutory Review Committee Report Said  
The Commission will proceed with the establishment of an Occupational Disease Advisory Panel.

 

Government is also asking the Commission to determine the appropriate value of a proposed Occupational Disease Reserve Fund to address costs associated with occupational disease in the workplace.
The Commission should immediately establish an Occupational Disease Advisory Panel consisting of representatives from workers, employers, health care providers, and a representative from the Commission to review and advise on the issue of occupational disease.
The Commission has made progress towards the establishment of new industry led Sector Committees and will work in partnership with industry to build on these efforts.  The Commission should facilitate the development of Sector Committees in key industrial sectors as a means to emphasize injury prevention in the workplace.
The Commission will continue their collaboration with the United Steelworkers of America to address issues relating to Baie Verte Miners. The former miners of Baie Verte should be the subject of a comprehensive health study.

 
The Commission and government will continue with existing strategies to address shellfish asthma and will consult further with the proposed Occupational Disease Advisory Panel on this issue.  The Commission should continue initiatives aimed at addressing shellfish asthma and refer the matter to the proposed Occupational Disease Advisory Panel for further analysis.  
The Commission will work in collaboration with Government and industry partners to enhance existing health and safety training for fish harvesters.   The Commission and the proposed Fishery Sector Committee should collaborate with the Professional Fish Harvesters Certification Board to establish safety-training programs for fish harvesters. 
Government will continue to work with the Commission to ensure that workplace safety education is integrated into existing mandatory high school curriculum and that post-secondary institutions identify opportunities to enhance occupational health and safety information within current curriculum. Workplace safety programming should be a mandatory part of high school and post-secondary programming in NL.


 

 


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