to protect workers from work-related injury, disability, illness and death in a compassionate and sustainable way that still allows the economic activity and innovation necessary for societies to operate and thrive.
Monday, June 23, 2014
How does the workers' compensation scope of coverage influence the OH&S mandate?
Governments implement legislation to fulfill a specific societal desire or “social policy objective”. One social policy objective is:
The statutes created by legislators to achieve that objective vary. There is, however, a set of “levers” that can be used to achieve the objective . Governments create “statutory agencies” to control the levers. Where the percentage of “employed labour-force” covered by workers’ compensation approaches 100%, it makes sense to place all the levers of control in the hands of a single statutory body that can set, adjust, and fine-tune the levers to achieve the social policy objective. This is exactly what we find in practice in Canada.
The following table is based on data from the Association of Workers’ Compensation Boards of Canada (AWCBC.org):
For the statutory agencies near the top of the list, the workers ’ compensation board of commission generally controls all the levers (workers’ compensation and OH&S). In jurisdictions towards the bottom of the list, workers’ compensation levers can have no impact on those outside the scope of coverage. The ability of one statutory agency to fine tune or set the full range of levers for the part of the labour force not covered is lost.
In order to achieve consistency across the economy, jurisdictions with low percentages of employed labour force covered must struggle to achieve the social policy objective with only half the tool set for those outside the scope of coverage. The need for consistency across all workplaces, however, requires the enforcement, regulation, education/training and prevention levers that influence the health and safety outcomes in the workplace be applied (largely) independently from what happens in workplaces within the scope of workers’ compensation coverage. The tool set that can be used by the statutory agency responsible for OH&S is restricted. To achieve the social policy objective, the incentives tend to be more “stick” oriented (including increased use of prosecution and fines).
The statutory agencies responsible for workers’ compensation in these low-coverage jurisdictions have a limited tool set as well. Often, this spawns more aggressive use of the levers within its exclusive control like experience rating, classifications, surcharges, discounts and other incentives (including retrospective rating systems and rebates). This dichotomy—even in the presence of extensive consultation—can result in perverse outcomes including claim suppression.
There may be other social policy reasons to decide to exclude significant portions of the employed labour force from workers’ compensation coverage. It is up to each jurisdiction to determine if some other objective is of greater importance to justify that exclusion. There is nothing inherently wrong with doing so. It is up to the constituency of each jurisdiction to determine its own priorities. My point is simply that decisions on the scope of coverage for workers’ compensation systems have consequences for workers and employers both inside and outside the scope of coverage. It also has consequences for the range and precision of the levers that can be applied and coordinated to achieve safe and healthy workplaces in a thriving economy.