Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I rise to indicate that the opposition supports the second reading of the Seafarers Rehabilitation and Compensation and Other Legislation Amendment Bill. The government has circulated amendments that the opposition has had very little time to consider. However, I am able to indicate that, subject to satisfactory considerations of the amendments in the committee stage, the opposition will be in a position to support an amended bill.

In December last year, the Federal Court made a determination that the Seafarers Rehabilitation and Compensation Act 1992 not only covers registered ships trading interstate or overseas but also extends to cover all employees on all registered ships if they are owned by an Australian trading corporation, an Australian financial corporation or a foreign corporation. The decision applies no matter whether they are trading in Australia or what the business of the ship may be, and that includes ships engaged in intrastate work.

Labor acknowledges that the Federal Court's decision has created uncertainty in the sector and consequently we have engaged with the industry to find a solution. This is also why we worked cooperatively with the government to expedite a Senate committee process to investigate the government's original bill. What the Senate committee process evidenced was that the original government bill was not the solution. The government had clearly not conducted a proper consultative process in the drafting of the original legislation. Key employer bodies and unions were not adequately consulted.

Acknowledging that the Federal Court's decision had created uncertainty, and after engaging with stakeholders, the opposition asked the government to urgently convene industry talks to find a workable solution. I am pleased that the government heeded the advice of the opposition and convened those talks with the Australian Shipowners Association, the Maritime Union of Australia and other interested parties. Through those consultations, the industry has been able to arrive at a solution to address the immediate impact of the Federal Court decision, which is the amended bill.

This amended bill will provide certainty. However, it is incumbent upon the government to sit down once again with the industry stakeholders, including employers and unions, to work on a longer term solution. I also note that the government has given an undertaking to monitor the impact of this legislation. Finally, I would like to thank the industry stakeholders, including the Australian Shipowners Association and the Maritime Union of Australia, for their genuine and constructive efforts.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

As Chair of the Senate Education and Employment Legislation Committee, I too rise to speak to the Seafarers Rehabilitation and Compensation and Other Legislation Amendment Bill 2015. The Federal Court's decision in Sampson Maritime Pty Ltd and Aucote—know as the Aucote decision—has resulted in a profound shift in workers compensation and work health and safety arrangements in the Australian maritime industry under the Seacare workers compensation scheme. This bill protects the viability of the Commonwealth Seacare scheme by restoring certainty about the historical coverage of the scheme for all participants, including seafarers and their representatives, employers, insurers and regulators. Importantly, this bill seeks to ensure that all previous claims lodged under the scheme between 1993 and now continue to be valid. These claims are currently at risk as a result of the court decision.

Successive governments at both Commonwealth and state and territory levels, maritime regulators, employers and seafarers have operated on the basis that the Seacare scheme generally applies to ships and units engaged in interstate and international trade or commerce. It was also widely understood that state and territory workers compensation and work health and safety laws apply to employees on ships engaged in intrastate voyages. The court's decision has effectively expanded coverage of the Seacare scheme to intrastate voyages. Before the Aucote decision, the Seacare scheme was understood to apply to around 330 ships. Following the decision, the Seacare scheme could cover as many as 11,000 ships and maybe more, with potentially retrospective effect going back to 1993. Whereas the Commonwealth was responsible for regulating workers compensation and work health and safety for a small proportion of the maritime industry before the decision, it now has the responsibility for the vast majority of the industry. This responsibility cannot be supported from existing resources as the scheme and its funding were never designed to accommodate such costs. It represents a massive cost shift from the states to the Commonwealth and could require the recouping of insurance fees and moneys from formerly injured workers going back to 1993.

For historical purposes, the bill seeks to clarify the distinction between Commonwealth and state coverage of workers compensation and work health and safety for seafarers that was understood to exist since the commencement of the Seacare scheme. To effectively achieve this, the bill applies retrospectively to any injury, loss or damage suffered by any employee on or after the commencement of the Seafarers Rehabilitation and Compensation Act in 1993. Critically, this will ensure that past claims will not be distributed. This approach ensures that there is certainty as to what a seafarer's appropriate workers compensation rights are and have been. This bill does not seek to change pre-existing workers compensation entitlements and work health and safety protection for seafarers. This bill is about providing certainty regarding past actions for maritime industry employers and employees.

This bill will amend the Seafarers Rehabilitation and Compensation Act to address a recent Federal Court decision and expand the scope of the act from what it was understood to be, which could have had impact on historical claims under the scheme. To put this into perspective, as I mentioned, the scheme was never actually designed to cover the number of ships that this court decision obliges it to do, potentially expanding it to 11,000 ships. We do not have those resources. The states are very quick and comfortable to cost shift towards the Commonwealth, and it has been quite productive, I think, for both the opposition and the government to come to a position where we put the Commonwealth's future and the Commonwealth's perspective first. I congratulate all involved in coming up with that outcome. I also want to thank the unions, the employer groups and the Seacare authority for working with the government to reach a consensus approach on this bill. As you know, amendments to the bill are being circulated in the chamber.

The Seacare scheme is, effectively, relatively confined in scope, only applying to employers and employees in the defined part of the broader maritime industry. The Seacare scheme has been commonly understood to apply to ships and units engaged in interstate or international trade. Ships and units engaged in intrastate trade—that is, those operating solely or primarily within the coastal waters of a single state—were understood to be covered by state workers compensation and work health and safety laws. This approach to coverage was consistent with the coverage of the Seamen's Compensation Act 1911, which established Australia's first national workers compensation scheme for seafarers. Based on this understanding, the Seacare scheme applied to approximately 33 employers and 7,516 employees, or 4,721 full-time equivalent employees, in 2013-14—about 20 per cent of the Australian maritime industry. Submissions were received to the review of the Seacare scheme, and that review was undertaken by Mr Robin Stewart-Crompton and published in 2013. The submissions that were received provided evidence that industry participants had a narrow view of the coverage of the scheme.

I want to turn briefly to the decision which precipitated the construction of this bill. In the Aucote decision an alternative broad interpretation of the coverage provision of the Seacare scheme was upheld. The Full Court of the Federal Court held that the Seacare scheme applies to all seafarers employed by a trading, financial or foreign corporation on a prescribed ship and to operators of prescribed ships that are trading financial or foreign corporations.

The majority of employers and operators within the maritime industry are either trading or foreign corporations and, as such, the practical consequence of this broad interpretation is that the Seacare scheme extends to most of the Australian maritime industry, including ships and units that primarily operate within a single state. It was understood that these ships and units were covered by state workers' compensation and work health and safety laws. It is estimated that the Aucote decision's broad view of coverage could mean that the Seacare scheme would apply to 11,000 vessels and approximately 20,000 employees. As a short-term measure, the Seacare Authority has granted a broad exemption, under section 20A of the Seafarers Act, aimed at addressing the expanded coverage of the Seacare scheme resulting from the Aucote decision.

As stated by the Seacare Authority on its website, this exemption is intended as a transitional measure that aims to provide certainty to industry participants on their workers' compensation arrangements while the parliament considers the bill. Exemptions granted under section 20A have only a prospective application and there is no ability for the Seacare Authority to exempt ships from coverage of the Occupational Health and Safety (Maritime Industry) Act. We have also issued declarations under the Seafarers Act and Occupational Health and Safety (Maritime Industry) Act.

The government acknowledges that there are longstanding issues regarding the coverage of the Seacare scheme; however, these issues concern the application of the Navigation Act 1912 as it relates to the coverage under the Occupational Health and Safety (Maritime Industry) Act and not to the coverage matter dealt with by the Federal Court. The bill does not seek to address all issues with the coverage of the Seacare scheme. It only seeks to address issues raised by the Aucote decision.

It is important to consider the impact on employers and operators. Approximately 12,000 seafarers who were previously understood to have been covered by state workers' compensation and work health and safety laws are, in light of the Aucote decision, covered by the Seacare scheme. Under the Seafarers Act, employers are required to maintain an insurance policy to cover their liabilities under the act. Failure to comply with this obligation is a criminal offence of strict liability. Employers of seafarers on interstate voyages would have been acting in good faith on the basis that they were only covered by state workers' compensation laws and were fulfilling obligations under those laws.

As a consequence, they would have been—and most likely still are—maintaining insurance policies, whether private or from a relevant state-government authority under state schemes. In addition to expenses incurred in relation to moving between workers' compensation schemes, employers will also incur regulatory costs adjusting to rights and responsibilities under the OHS (MI) Act. We have expanded the coverage of the Seacare scheme's impact on the regulation of safety. Comcare and the AMSA are not funded or resourced to immediately take on the role of administering a substantially larger Seacare scheme—from approximately 4½ thousand seafarers to potentially 20,000. The resources simply are not there.

The government supports the bill—once amendments are circulated. It is important to note, for historical purposes, the bill restores the coverage of the Seacare scheme to how it is understood to have been prior to the Aucote decision. Having conducted an inquiry on the papers and having brought that before the chamber, I congratulate the unions, employers, employees and the opposition for coming to a suitable outcome that will ensure the Commonwealth is not overly exposed in this area. I commend the bill.

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Seafearers Rehabilitation and Compensation and Other Legislation Amendment Bill 2015. This bill concerns the compensation scheme for seafarers and the maritime sector, Seacare. It arises because of a full-court decision of the Federal Court. It said that someone was eligible for this scheme, upholding a decision of the Administrative Appeals Tribunal when, according to the government, players in the industry had assumed that such a person would not be eligible. In other words, the full-court decision said there are people covered by this scheme who, up until now, did not think they had been covered by it.

There are two things you can do if you are a government caught on the hop by a full Federal Court decision. One would be the sensible one, to say to everyone in the industry: 'No one unexpected this, so let's all sit down around the table and sort it out.' You could take the time and sort out what it would mean, for the various standards of compensation and care around the country, if the ruling were upheld. Doing it in this way and getting it right is critical, because compensation and care are not just theoretical concepts. It is people's lives we are legislating for. The compensation and care that people get are likely to determine their quality of life for the rest of their lives.

The alternative to spending the time sitting down and working it out sensibly, with all the stakeholders involved, is to do things on the hop so that people are scrambling to determine what the impacts of legislation are. When this bill was introduced in the other place we were highly critical of the process being followed to introduce it, because this is exactly what the government did. The government said: 'Here's a bill we want you to deal with—very quickly—that's going to introduce a uniform set of national standards; then attempt to get it through the parliament as quickly as possible without talking to the stakeholders.' Not surprisingly, the stakeholders were a bit concerned about this. We were concerned about it. The Labor Party was concerned about it.

It seems to be very much at the last minute that the government has come to its senses. It has sat down and had that round table, talking to all the stakeholders. They have agreed to a set of amendments to this legislation that properly address the issues, particularly the serious concerns that were raised in the Senate inquiry into this bill. At the last minute, we now do have some legislation that is going to properly address the issues that were raised and the quandary that we were put in with the result of that Full Court decision. I am pleased to say that the Greens are going to be able to support this legislation, subject to the passing of those amendments.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

I thank honourable senators for their contributions to this debate. This bill protects the viability of the Commonwealth's Seacare scheme by restoring certainty about the historical coverage of the scheme for all participants, including seafarers and their representatives, employers, insurers and regulators. Successive governments, both at Commonwealth, state and territory level, irrespective of political colour, maritime regulators, employers and seafarers have operated on the basis that the Seacare scheme generally applies to ships and units engaged in interstate and international trade or commerce, while state and territory workers compensation and work, health and safety laws apply to employees on ships engaged in intrastate voyages.

This jurisdictional boundary was established by the Seamen's Compensation Act 1911 and has been broadly understood to apply since, including from the commencement of the Seacare scheme in 1992. The Federal Court's decision in Samson Maritime Pty Ltd and Aucote puts this understanding in doubt from the commencement of the Seacare scheme in 1992. It represents a profound shift in workers compensation and work, health and safety regulation of the Australian maritime industry. Before the Aucote decision, the Seacare scheme was understood to apply to around 330 ships. Following the decision, the Seacare scheme could cover as many as 11,000 ships. Whereas the Commonwealth regulated workers compensation and work, health and safety for a small proportion of the maritime industry before the Aucote decision, the decision shifts responsibility for regulating the vast majority of the industry to the Commonwealth. The Aucote decision also puts in doubt the validity of workers compensation claims made by seafarers and work, health and safety enforcement actions taken against employers under state legislation. The bill seeks to restore certainty regarding past actions taken under the Seafarers' Safety, Rehabilitation and Compensation Act and Occupational Health and Safety (Maritime Industry) Act. It does not change what was believed to be the workers compensation entitlements and work, health and safety protection of seafarers.

The bill does not interfere with the ability for seafarers to make a workers compensation claim or to receive workers compensation entitlements. The bill expressly provides that it does not disturb claims made before it was introduced or potential claims from people who gave notice of injury to make a compensation claim under the seafarers act before the bill was introduced but had not made a claim by that time. With the passage of this bill, maritime industry regulators, employers and seafarers will have greater certainty that past actions undertaken in good faith, based on the prevailing understanding of Commonwealth, state and territory regulation of workers compensation and work, health and safety regulation, are valid.

The bill, as amended, is supported by Seacare scheme participants, including maritime industry employer associations and unions. I would like to thank all those participants for their willingness to work with the government to reach agreement on this bill, enabling it to be passed expediently. Finally, while I am confident that this bill will fully achieve its aims without any unintended consequences, I will be writing to the Seacare Authority, which is responsible for the oversight of the Seacare scheme, to ask that it monitor the impact of this bill and inform me of any unintended consequences so that the government can take action to address them. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.