The WorkCover claims management contract was being urgently renegotiated to ensure claims manager Employers Mutual Limited (EML) could not get a windfall profit from recent legislative changes passed by the Parliament.
Evidence given today by WorkCover Chairman Philip Bentley to the Statutory Authorities Review Committee (SARC) confirmed there had been a “robust” discussion between WorkCover and EML before an agreement in principle had been reached, Liberal MLC Rob Lucas said today.
“WorkCover today indicated the Rann Government now had to introduce a new regulation to implement the changes,” Mr Lucas said.
“Mr Bentley said today that the contract had been renegotiated “so that they would be fully financially aligned with what was required and would not get any financial benefit from any windfalls that might arise as a result of the legislation, but which did not relate to any performance that they had achieved.”
“Mr Bentley’s evidence today contradicts previous evidence given to the SARC on 16 May 2008 by former Chairman Bruce Carter, who assured the Committee that the existing contract would not allow EML to make a “windfall” profit as a result of Parliament changing the legislation.”
Hon R Lucas: “Anyway, the bottom line is that you are giving the Committee the assurance that EML will not be rewarded financially for a legislative change. The contract caters for that.
Mr B Carter: “Yes.
Hon R Lucas: “It covers the circumstance so that they do not make a windfall gain out of a legislative change that the Parliament implements.
Mr B Carter: “Yes.”
“In my view there is a conflict between the evidence of Mr Carter and Mr Bentley and the SARC will need to resolve which evidence is correct,” he said.
“WorkCover has been asked to provide documents outlining the actual contract changes and the reasons for those changes.
“It will be completely unacceptable to me if the contract renegotiations lead to EML receiving higher revenue payments for the same level of service.
“Mr Bentley also today confirmed that WorkCover had increased revenue payments to EML in 2007-08 under the contract even though WorkCover’s own research had shown a significant increase in dissatisfaction from injured workers.
“This independent research by McGregor Tan surveyed 1500 injured workers in May 2008 and showed that almost half of workers surveyed (45 per cent) indicated they wanted to make a complaint about the service they received, which was a significant jump from 36 per cent 12 months earlier.
“On almost 20 separate measures of performance, injured workers gave lower ratings for services in 2008 compared to 2007.
“WorkCover have been asked to explain the reasons for increasing payments when satisfaction with services declined significantly.”