To include or exclude Professional Sports Competitors from Workers' Compensation Coverage

Who should be covered by workers’ compensation?  In the beginning, coverage was limited to primarily industrial workers but most systems have expanded who is included within the scope of coverage.  In some cases, inclusions are accomplished by specifically identifying the industries (or occupations) to be covered in legislation.  In others, as in British Columbia, the legislation simply defines a principle (inclusion) and the specifics of any exemptions (exclusions) are defined by policy decision. 

Of jurisdictions with universal coverage, the rationale for inclusion is pretty straight forward.  From a prevention perspective, inclusion of all occupations provides an opportunity to strengthen the barriers, safeguards and defenses against personal injury and disease related to earning a living.  By engineering, substitution and administrative controls, the risks that would otherwise harm the worker can be minimized if not entirely eliminated... and the cost of workers' compensation premiums may provide an incentive to invest in these protections (or an added penalty for failing to).

Further, inclusion means all workers have equivalent protections. From a workers’ compensation perspective, insurance for (hopefully) rare events is provided and crystallizes the likely risk of a rare large financial claim or suit to the employer;  the premium and experience rating for a particular employer with workers in and about an industry serves as an added and (more or less) constant pressure to invest in prevention.  A further rationale is that mandatory inclusion prevents the costs of injury (and necessary healthcare) from being externalized to the public purse.

For jurisdictions with exclusions from universal coverage, the rationale may be more complex.  One rationale may be that the risks are very small and the costs of any actual injury or disease arising from the work very low so the benefits of insurance are negligible.  Other jurisdictions suggest that industries with ‘equivalent’ coverage may be exempted from the provision.  Sometimes, exclusion from some aspects of the workers’ compensation plan can be achieved by ‘carve outs’  and to a certain extent, self insurance with self administration, although this avenue is usually allowed only if the firm is large enough, financially stable enough, and ‘safe’ enough in the eyes of the jurisdictional regulator.  It may be necessary to include all firms under prevention standards but the workers’ compensation coverage by this logic would be optional.  On one hand, this should increase the firms motivation to protect workers since they will bear the costs of a suite or suitable settlement.  Unfortunately, this does not protect the taxpayer (in Canada at least) from the potential costs associated with health care and those who may not receive a speedy settlement (or never get the chance).   Exempting an industry or occupation, therefore, should intentionally consider these consequences. 

Professional sports competitors in hockey, football, winter sports like skiing are obviously poor candidates for inclusion.  The inherent risks and latent defects in the safeguards, barriers and defenses that would otherwise protect them from harm are numerous.  It is hard to think of regulating maximal exertion on razor-sharp blades while carrying long sticks  and making body checks safe without taking these essential elements out of professional hockey.  And on the insurance front,  who would you pool the risk of mixed martial arts competitors with?  In these sports, the economic model of what you can get ‘workers’ to do, is really an economic expected value one.  The pay and contracted benefits are going to have to convince the sports competitor (and his agent) that the residual risks of competing are being properly anticipated and compensated while the ownership (and those setting the rules) are going to have to make assurances sound enough to likely fend off potential suits.

Is there a case for their inclusion of sports competitors? Aside from the inherent externalization of necessary health care  costs to the public purse (or  a violation of the Canada Health Act principles if the sports team ownership pays for those services) and the principle of universality on its own,  I don’t think so.  That said, I don’t see any rationale for excluding coverage for the team coach, trainers, managers and other staff.  Their work and risks are not dissimilar from recreation facility staff, fitness instructors and equipment managers in many other sectors (schools, universities, private gyms, community recreation facilities). 

 I would be interested in your views.

Are all reported Injury Rates (IRs) equivalent?

I look at a lot of reports and see a wide variation in the reported injury rates among what should be similar jurisdictions. What accounts for these differences? In some cases, there are wide differences in the ‘mix’ of industries covered. You can expect a jurisdiction with a large service sector and small primary resources and construction sectors to have a lower injury rate than one dominated by construction, mining and forestry. That aside, variability can also have a lot to do with definitions.

The AWCBC reports an Injury Frequency statistic based on the following definition:

Number of new lost-time claims for assessable employers per 100 workers of assessable employers

Note the definition depends on what is counted in the numerator (lost-time claims) and what is used as the denominator (workers of assessable employers). AWCBC also defines Lost-time Claims in this way:

A lost-time claim is a claim where an employee is compensated for a loss of wages following a work-related injury (or exposure to noxious substance), or receives compensation for a permanent disability with or without any time lost in his or her employment (for example, if an employee is compensated for a loss of hearing resulting from excessive noise in the work place).

So, another source of variability is in what is reported as compensated. If a jurisdiction has a waiting period or actively promotes ‘stay at work’ programs, claims involving loss of wages will be lower in that jurisdiction than in a similar jurisdiction without a waiting period or significant stay-at-work program.

In a previous blog, I noted the difference in reporting requirements. In addition to those issues, the source of the statistic also needs to be considered. In the US and Europe, most published data is based on Occupational Safety and Health data. In the US, OSHA has specific definitions for what is reportable and these ultimately have an impact on the reported IR. Further, within the reportable cases, there is a distinction between ‘days away from work’ cases and those where ‘alternate duties’ are assigned. While most workers have workers’ compensation coverage in the US, most published IRs are not based on claims.

At WorkSafeBC we report a Provincial Injury Rate in accordance with the AWCBC definition. For BC, where 93% of the employed labour force is covered, this is a pretty reasonable estimate of the provincial IR. Note, however, that it reflects assessable employers only. It does not include, for example, the injuries that occur within the Provincial Government public service as the Provincial Government is not an assessable employer. In provinces with lower covered populations and higher proportions of non-assessed employers, what is reflected in the IR may be far less representative of the provincial injury rate.

Finally, the IR that is reported in some other jurisdictions excludes from the numerator claims (or work absences) of very short duration. WorkSafeBC’s Injury Rate is an IR0 (claims involving at least some wage loss) and the US generally uses IR0 (reportable cases involving days of work absence) although some reports use IR3. In Australia, where one week of work absence is the threshold for a claim in most jurisdictions, their reported claim rates would be equivalent to IR5 or IR7 (depending on the basis for compensation being 5 or 7 days).

So, when you are looking at injury rates in other jurisdictions, dig a little deeper and understand the inherent differences before drawing any conclusions. For the record, WorkSafeBC’s Injury Rates are as follows:

IR0: 2.34, IR3: 1.75, IR5: 1.50, IR7: 1.35 (In the 2009 Annual Report, the Provincial Injury Rate [IR0] is reported as 2.37, the best estimate available at the time of publication).

The Core of COR (Certificates of Recognition)

The Certificate of Recognition (COR)Program is a relatively new feature of some workers’ compensation / prevention systems. Designed primarily as an incentive for employers to implement and maintain a robust safety and health management system that meets a set of criteria established for the employer’s particular industry, these programs are generally voluntary, time-limited before having to ‘renew’, and involve external audits.

COR programs are offered by several jurisdictions in Canada but I can find little in the way of formal published research on the benefits and costs associated with COR. To complicate matters, there is no ‘standard’ for COR certifications (although some jurisdictions are recognizing CORs from other provinces).

A COR program is usually offered by the agency responsible for prevention and may carry benefits for the firm in terms of lower workers’ compensation premiums. In Alberta, COR is offered by Alberta Employment and Immigration. Firms must undergo an audit by a Certifying partner. Qualifying firms are expected to achieve a pass on every element in the audit and an overall score of 80% or better. The elements examined relate to the Health and Safety Management System.

The Yukon and Nova Scotia have introduced programs under the name COR. Many larger firms use COR as a pre-requisite for subcontractors and providers

In British Columbia, a COR program is offered by WorkSafeBC. Certifying Partners offer audits but the goal goes beyond meeting required OH&S primary prevention standards. The COR program in BC recognizes and rewards employers who go beyond the legal requirements of the Workers Compensation Act and the Occupational Health and Safety Regulation by taking a best practices approach to implementing health and safety management systems. Firms who also meet standards for return-to-work (RTW)/Disability Management programs can obtain an additional rebate. Achieving COR status for both area can net the employer a 15% rebate on premiums.

In WorkSafeBC’s case, the benefits to the employers who qualify for COR go beyond the rebate. Theoretically, these employers should have fewer defects in their safety programs, fewer violations of safe work procedures, and lower costs associated with work-related injuries. Workers in such firms theoretically benefit from safer workplaces, strong adherence to safe work procedures by co-workers and other persons in the workplace, and improved prospects for a safe and durable return to work. The COR certification may also give qualifying firms an advantage in competitive bid processes.

As I said, there is little in the way of formal peer-reviewed research on the benefits of any COR system currently in place. One administrative review was recently conducted by the Auditor General of Alberta. The AG found:

Half of those employers that persistently fail to comply with the OHS Act also continue to hold a valid Certificate of Recognition (COR), 4 and continue to have elevated injury rates among their workers. In short, although these employers do not comply with OHS orders, and their workers are much more likely to get injured on the job, these employers continue to receive Partners in Injury Reduction financial rebates and use their COR to bid on contracts with major companies in such industries as construction, and oil and gas.

As more COR programs are established and have had time to operate for several years, more independent formal research will tell us if these programs are yielding their planned benefits for workers and employers.

Does leadership really matter?

Does leadership really matter? I’ve always believed the commitment of an organization’s leadership to safety and health makes a difference. The more I look at the impact effective leadership has on safety and health in different organizations, the more certain I am of the answer to this question.

I think of leadership from a functional perspective. In this context, effective leadership is about achieving the leader’s desired outcomes through the actions of others because others share the leader’s vision. Autocratic, dictatorial leaders can and do achieve outcomes through others, but not because their followers share any common vision or commitment to the leader’s vision. Charismatic leaders can often achieve their desired results, too, but followers of such leaders tend to act out of loyalty or commitment to the charismatic leader rather than the ideal or outcome the leader desires.

Effective leadership in the health and safety context depends on something other than the charisma or dictates of the organizational leader. It depends on a real commitment—the understanding, internalization and action—of those at the top of the organization that is shared down to the operational front line. It depends on communication—the tangible and consistent message that safety and health priorities are the priorities of the leadership. It depends on vision—a clear articulation of the desired state.

I recently heard David Eherts- VP Chief Safety Officer Sikorsky Aircraft and Joe Grabinsky- Chief Union Environmental and Health Steward at Sikorsky speak about Sikorsky’s safety and health culture. Their corporate mission statement “We pioneer flight solutions that bring people home everywhere…every time” was put in context with their health and safety view. They described the culture on the shop floor as one where “we take care of each other”. They have “The Safety Dollar Program”, a safety and health reward program based on positive reinforcement and recognition for employees doing the right things when it comes to working safely and taking care of each other. The rewards are cash credits to items from a designated web store where the credits can be exchanged for safety-related items for the home, car, kids, and even pets. This culture has lead Sikorsky to reduce its lost time injury rate from 4.0 [per 100 FTEs] in 2004 to just 0.9 in 2010.

That talk was delivered at a two day event at Maersk North America’s President’s Safety Council meeting in Charlotte, NC. Maersk shares the view that safety and health culture is critically important to corporate success—including profitability. This was their ninth annual event that focuses Maersk leadership( the presidents of their group of companies, operational leaders, and some front line managers) on nothing but health, safety and the environment. In front of their chair, Russ Bruner, and their colleagues each president spoke of their operations’ progress and listened to presentations from others like Sikorsky on how to take their HSE performance to the next level. Maersk’s “Drive to Zero” campaign has seen their OSHA reportable injury rate fall from 9.53 [per 200,000 hours of employment] in 2003 to just 1.64 in 2009, and their time loss injury rate drop from 8.0 to 0.38 over the same time frame. It was amazing to see the commitment to safety from the top management to management at the shop floor level at Maersk. In that room, there was a palpable excitement about HSE and a sincere belief that attaining a zero reportable injury rate was both achievable and in the best interests of workers, shareholders and customers.

Firms like Sikorsky and Maersk demonstrate that leadership matters when it comes to health and safety. In Canada, a growing number of firms are putting health and safety at the top of their priority lists. The signatories to the CEO Health & Safety Leadership Charter are another group of employers who are giving life to these ideals.

“Leadership and learning are indispensable to each other” [from a speech John F. Kennedy was to deliver on the day he was assassinated]. If you know an organization that epitomizes safety and health leadership, share their success, post their story and help others to learn how leadership can make a difference.

Raising OSHA Penalties

I was at a Health, Safety and Environment conference in North Carolina this week and some of the side discussions centered around what motivates employers to more complete compliance with OH&S regulations and standards. As I noted in my post February 4 post, some firms have a very strong safety culture but others –particularly those who should know better—factor the perceived cost of compliance against the perceived probability of non-compliance being detected times the estimated costs (dollars, reputation…) of the sanction. It appears DAVID MICHAELS, US Department of Labor Assistant Secretary for Occupational Safety and Health has been thinking about this, too.

In testimony before the US House of Representatives Subcommittee on Workforce Protections on March 16, 2010, Dr. Michaels supported legislation [the Protecting America’s Workers Act or PAWA] that would, among other things, significantly increase the cost of sanctions. He noted:

Safe jobs exist only when employers have adequate incentives to comply with OSHA’s requirements. Those incentives are affected, in turn, by both the magnitude and the likelihood of penalties. Swift, certain and meaningful penalties provide an important incentive to “do the right thing.” However, OSHA’s current penalties are not large enough to provide adequate incentives. Currently, serious violations — those that pose a substantial probability of death or serious physical harm to workers — are subject to a maximum civil penalty of only $7,000. Let me emphasize that — a violation that causes a “substantial probability of death — or serious physical harm” brings a maximum penalty of only $7,000. Willful and repeated violations carry a maximum penalty of only $70,000 and willful violations a minimum of $5,000.
Currently, the average OSHA penalty is only around $1,000. The median initial penalty proposed for all investigations in cases where a worker was killed conducted in FY 2007 was just $5,900.

He went on to compare these penalties with those in other areas and violations.

The current penalties do not provide an adequate deterrent. This is apparent when compared to penalties that other agencies are allowed to assess.For example, the Department of Agriculture is authorized to impose a fine of up to $130,000 on milk processors for willful violations of the Fluid Milk Promotion Act, which include refusal to pay fees and assessments to help advertise and research fluid milk products. The Federal Communications Commission can fine a TV or radio station up to $325,000 for indecent content. The Environmental Protection Agency can impose a penalty of $270,000 for violations of the Clean Air Act and a penalty of $1 million for attempting to tamper with a public water system. Yet, the maximum civil penalty OSHA may impose when a hard-working man or woman is killed on the job — even when the death is caused by a willful violation of an OSHA requirement — is $70,000.
In 2001 a tank full of sulphuric acid exploded at a Motiva refinery. A worker was killed and his body literally dissolved. The OSHA penalty was only $175,000. Yet, in the same incident, thousands of dead fish and crabs were discovered, allowing an EPA Clean Water Act violation amounting to $10 million — 50 times higher.

If you have a few minutes, you might want to review the full text of his testimony. I found the testimony compelling. It will be interesting to watch the development of the PAWA.

The not-so-exclusive remedy

A recent Ohio Supreme Court decision prompted some thoughts about workers’ compensation as the ‘exclusive remedy’ for work-related injury, illness, disease and death.

In Canada and most of the US, we think of workers’ compensation as being the exclusive remedy, that is, compensation for work-related injury or disease is limited to the wage loss, permanent disability and medical compensation defined by the workers’ compensation law and policy in force in a particular jurisdiction. Injured workers (or their survivors in fatality cases) are not permitted to seek other remedies for the work-related losses; for example, a worker is prohibited by law (statute barred) from suing the accident employer or another worker. (Of course, if a third party is at fault, there may be a right of action that may be taken as an alternative to compensation or pursued by the workers’ compensation authority as a subrogated right). The Ohio case reminded me that some states allow for exceptions to the exclusive remedy rule.

In the Ohio case, legal precedent in that state and a change in the Ohio tort law five years ago defined an exception to the exclusivity of workers’ compensation. It allowed a worker to both collect workers’ compensation and pursue an action against an employer if, and only if, the worker could prove the employer acted with “deliberate intent” to harm. The statute reads (in part) as follows:

R.C. 2745.01, effective April 7, 2005,
(A) In an action brought against an employer by an employee, or by the dependent survivors of a deceased employee, for damages resulting from an intentional tort committed by the employer during the course of employment, the employer shall not be liable unless the plaintiff proves that the employer committed the tortious act with the intent to injure another or with the belief that the injury was substantially certain to occur.

(B) As used in this section, ‘substantially certain’ means that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death.

(C) Deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance creates a rebuttable resumption that the removal or misrepresentation was committed with intent to injure another if an injury or an occupational disease or condition occurs as a direct result.

The section clearly puts a high test on what would be an intentional act intended to or substantially certain to injure a worker. The examples in paragraph C anchor the intent of the provision to very plausible but likely very rare situations. And the Ohio Supreme Court certainly confirms a very narrow access to the exception.

Similar exceptions to the exclusive remedy exist in some other states for cases of reckless or wanton disregard for the safety of the worker. According to Larson’s, Ohio, Louisiana, North Carolina, Connecticut, Oklahoma, New Jersey, South Dakota, and Texas—now employ a “substantially certain” standard.

In Australia, access to common law remedies still exists in most states (but not in SA or NT and limited access in Victoria and ComCare). In Queensland there is an unrestricted worker right to seek common law damages against an employer for breach of duty or negligence. One report says common law claims represent just four percent of all claims, but 40 percent of claim costs. That state has a discussion paper proposing a narrowing of access to common law by adopting a 10%-15% threshold in whole body impairment.

Social justice reasons are sometimes given for allowing exceptions to the exclusive remedy rule. Some see access to common law remedies for serious harm resulting from intentionally or substantially certain harm as a mechanism to deter such behaviors and improve worker safety. On the other hand, many view exceptions to the exclusive remedy as an erosion of the Historic Compromise.

In isolation, each of these arguments may have merit, however, I am of the view that you cannot look at any single feature of a system—including exceptions to the exclusive remedy rule-- in isolation. This is less a form of cultural relativism and more a position that accepts more than one arrangement of public policy features can achieve similar if not exactly equivalent outcomes.

I am certain others will have strong views for or against exceptions to the exclusive remedy rule so feel free to post them.

Is Asbestos-related Disease a Pandemic?

Last week I attended a conference on Asbestos Surveillance and Compensation. On presentation by Dr. Leslie Stayner (Professor and Director of the Division of Epidemiology and Biostatistics at the School of Public Health, University of Illinois at Chicago) asked the provocative question, “Is there really a pandemic of Asbestos diseases?”

I suppose one way to answer this questions is to ask if Asbestos is causing the same sort of damage as other pandemics. Pandemic H1N1 influenza is a current and convenient comparator. The World Health Organization recently stated, “As of 28 February 2010, worldwide more than 213 countries and overseas territories or communities have reported laboratory confirmed cases of pandemic influenza H1N1 2009, including at least 16,455 deaths.” By comparison, Stayner pointed out that WHO estimates from 2006 placed the occupationally-related deaths from asbestos disease at approximately 90,000 per year:

• 43,000 Mesothelioma
• 39,000 Lung Cancer
• 7,000 Asbestosis
  

He points out that this estimate does not include other cancers such as Laryngeal and ovarian cancers that may be asbestos related.

The next way to evaluate his claim that asbestos disease is a pandemic is to see if it really is represented worldwide. Quoting from various research sources, professor Stayner showed the distribution of mesothelioma alone was covered much of the planet with the highest rates of disease in countries with the highest consumption of asbestos. While Australia had the greatest number of cases mesothelioma deaths per million per year, other countries such as Canada, the US and Great Britain were in similar territory. Countries from Asia, South America and Europe were also widely represented. Africa does not register highly in this analysis (but that may be changing).

So, on the face comparison with pandemic H1N1, asbestos-related disease has almost the same spread and actually a greater number of deaths.

Stayner’s point is that we need to think about asbestos-related disease as being an active disease of the present and not of the past. He notes that asbestos disease is on the rise in most of the world and that production and consumption of asbestos has remained relatively flat (although down in developed countries, increasing in the developing nations). He adds that we can expect the epidemic in the developed world to start to gradually decrease in 10 to 20 years; based on consumption, he expects to see increases in developing nations.

It is important to note that asbestos persists in our environment. The installed base of products with asbestos are going to be with us for a very long time.

As we saw with pandemic H1N1 influenza, once you attach the pandemic label, funds and resources as well as public attention may be brought to bear on prevention, treatment and control. Elimination of disease is the ultimate objective.

Stayner concluded his presentation with the following quote from the WHO 2006 Report on the Elimination of Asbestos-related diseases:

“The most efficient way to eliminate asbestos-related disease is to stop the use
of all types of asbestos.”

Perhaps he is right. Perhaps we should start thinking about asbestos-disease as a pandemic and bringing resources, education, and prevention efforts to eliminate asbestos-related disease.