Authors: Anam Bilgrami1, Henry Cutler1, Kompal Sinha2

Affiliations:

Macquarie University Centre for the Health Economy (MUCHE), Australian Institute of Health Innovation/Macquarie Business School, Macquarie University, New South Wales, Australia

Department of Economics, Macquarie Business School, Macquarie University, New South Wales, Australia

Summary:

In 2008, Australia decided to make its workplace health and safety (WHS) laws more consistent across all regions, aiming for “harmonisation”. A standard ‘model’ set of laws was developed in 2011, which most regions adopted by 2013, except for Victoria and Western Australia. While not fundamentally changing the way WHS achieves safety outcomes, harmonisation instead revolved around making WHS laws clearer, giving regulators more tools for enforcement and providing a more consistent approach to WHS nationwide.
The laws contained some elements reflecting a move away from a ‘deterrence’ style of enforcement to one ‘encouraging’ compliance (e.g. introducing enforceable undertakings in place of prosecution). Other changes included broadening the definitions of ‘workers’ and ‘the workplace’ and increasing union rights of entry to workplaces. Some ‘stricter’ changes included introducing criminal penalties and substantially raising maximum penalties for violations.
One stated aim of harmonisation was to reduce work-related death, injury, and illness. In a recent study, Bilgrami and co-authors investigated whether harmonisation achieved this aim by analysing data on 9,000 Australian workers, before and after harmonisation. The authors looked at one measure of work-related injury and illness, the probability of receiving workers’ compensation. After excluding New South Wales (which introduced another reform at the same time that substantially cut compensation benefits), the authors found no significant decrease in workers’ compensation receipt in regions that adopted the harmonised laws, compared to those that didn't.
To understand why harmonisation didn't lead to noticeable reductions in the probability of receiving workers’ compensation, it is important to consider whether harmonisation improved clarity and consistency, as intended. A review in 2018 highlighted stakeholder concerns about the length and complexity of the regulations, and how consistently they were applied across different regions.
While the new laws allowed for harsher penalties, these may not have been enforced. Moreover, regulators may have opted for a ‘lighter touch’ approach to enforcement in the initial years after the reform to help companies adjust to the harmonised laws.
Lastly, while harmonisation gave regulators more tools for enforcement, the resources available for workplace inspections generally remained the same. National monitoring data show that total inspectorate resources per worker remained constant across the largest jurisdictions in Australia before and after harmonisation (Figure 1). Additional data show that only New South Wales substituted ‘reactive’ workplace inspections for more ‘proactive’ workplace inspections after harmonisation, with the latter finding that they were more effective in reducing workplace injuries and claims.
The study did find significant reductions in workers’ compensation receipt probability for workers in ‘high risk’ industries (construction, transport and agriculture), which may relate to a greater potential for reducing physical injuries, and for workers within single-location employers, who could have potentially implemented the laws more easily.
Overall, this study suggests that introducing consistent WHS laws across regions may not necessarily lead to fewer injuries and claims if perceived complexity is not reduced if available inspectorate resources are not increased, and if laws aren’t implemented consistently across regions.

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