Business NSW voices support for workers’ compensation reform

Employees and employers are currently under sufficient strain based on the downfalls of the NSW compensation system, which needs immediate reform.

Business NSW shared its negative view towards the current system and welcomed the proposed reform announcement delivered by the state government which would aim to reform the way psychological claims were dealt with in the compensation scheme.

Business NSW CEO, Daniel Hunter, said he wanted to ensure psychological workers’ compensation claims didn’t lead to an unsustainable compensation system where businesses carried the cost.

“Many employers with perfect safety records have been seeing huge increases in their workers’ compensation premiums. Without significant changes, the weight of the scheme will crush businesses and leave workers needlessly suffering,” he said.

“Many employers have shared stories of immense frustration, with injured workers left waiting for months without resolution and businesses facing sky rocketing premiums as a result of systemic inefficiencies.”

According to the business advocate, NSW Treasurer Daniel Mookhey had briefly mentioned changing the definition of psychological injury, aligning whole person impairment thresholds to interstate standards and giving the NSW Industrial Relation Commission a bullying and harassment jurisdiction to triage matters before a compensation claim could be pursued.

It was also noted by the NSW government that without reform, premiums for businesses facing no claims against them were forecast to rise by 36 per cent by 2027–28, an unsustainable figure for any business.

In 2023–24 there were 11,464 psychological injury claims, with claims taking longer to process and being more complex and costly than other types of workplace injury.

The State Regulatory Authority also showed that while the total number of workers’ compensation claims had remained steady, psychological injury claims had blown out by 65 per cent between 2021–22 and 2023–24.

Hunter said claims involving a psychological component generally resulted in 20 weeks off work compared to six weeks off for non-psychological claims.

“These real-world stories not only illustrate the deep flaws within the scheme but also highlight the urgent need for reform to protect both businesses and their employees,” he said.

“Member businesses have told us more than half of all workers with psychological injuries never return to their employer. We look forward to formal consultation with the NSW government to ensure that the scheme is sustainable.”