Wednesday, March 4, 2015

Does Workers' Compensation need a new "Grand Bargain"?

In a recent blog post, Robert Wilson ( concluded that workers’ compensation needs a new “grand bargain”.  He supports this conclusion by arguing that the exclusive remedy that is the main underpinning of the workers’ compensation system is under attack.  He cites three trends as evidence that the current arrangement is broken.   Specifically, he notes increasing exceptions to the no-fault aspect of the system, the erosion of worker benefits, and the increasing scope of coverage for co-morbidities and social issues as three categories of threat to the current system. 

Whether you call it a “grand bargain”, “historic compromise”, or  “historic trade-off”,  the current system of workers’ compensation is a social contract and it is under attack.  One need look no further than the daily news to see Bob’s issues in the headlines.  This morning’s Pro-publica / NPR article, “The Demolition of Workers’ Comp”  certainly supports the contention that the current system isn’t working.  They underscore the erosion of benefits for workers, the declining costs for employers,  and externalization of the human and financial costs of workplace injuries to workers, the taxpayers and society at large.

Bob pointed out strains on the original grand bargain.  It was based on principles and designed to apply in an economic and social context that was changing--not static-- at the time.  The basic principles have remained the same but the context has continued to change.  Science has advanced, we use new materials and processes, we have different stressors in our environment.  We understand today that many factors in the work environment can cause or be of causative significance of injury and disease. Workplace stresses including bullying, harassment and work overload are now known to be factors in mental injuries.  We now understand that PTSD is a real and serious consequences of certain work exposures.  We know or suspect strongly that  shift work  that interferes with circadian rhythms is a probable human carcinogen.   This changed context does not mean that the principles should change. 

We also know that workers and work have changed. A century ago, the argument against including farm workers in the scope of workers’ compensation coverage could plausibly be sustained because farms were mainly family operations and most of the workers were family.  That is not the case today.  I don’t see this change as the basis for throwing out the old paradigm.  In fact, exclusion of farms from the scope of workers’ compensation coverage makes less sense in the present context.  Many temporary foreign and migrant workers would benefit greatly from bringing farms under workers’ compensation rules.  It works in some states and provinces; why not make that coverage universal?

Workers’ compensation has always operated on the principle that we take the worker as we find him or her.  That principle includes many conditions that may make recovery from any workplace injury more complex or protracted.  The fact that the condition did not prevent work prior to the injury is not a reason to decry the current scope of workers’ compensation coverage.  This is not coverage “creep”.  It is, in part, a consequence of medical science enabling more of us to work despite underlying conditions that may be managed.  

Rather than a new grand bargain, why not try living up to the original one?  The  NationalCommission on State Workmen’s  Compensation Laws (1972) defined what living up to the bargain would look like.  Looking only at the main National Commission recommendations on temporary disability compensation, I found only a handful of North American jurisdictions that came close meeting the recommended standard.  The Pro-publica/NPR article found only seven states follow at least 15 of the recommendations.

Clearly, the current system of workers’ compensation is not working in most jurisdictions.  The fact that there are some examples in the US and Canada where the systems do provide something close to the National Commission’s recommended standard demonstrates that the underlying principles of workers’ compensation can achieve the social policy objective:    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.  

The failures are not in the foundations or underlying principles of the original grand bargain but in the proliferation of legislative and policy “reforms” that depart from them.  The National Commission defined in exquisite terms the minimum standards workers’ compensation systems ought to achieve.  It is against that standard that each workers’ compensation system should be measured and held to account. 

With apologies to Chesterton, the grand bargain that is workers’ compensation has not been tried and found wanting;  it has been found difficult and not tried.  Before we abandon the grand bargain and strike some new compromise, we ought to try living up to the current one first.   

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