20.1 Chapter overview

This chapter sets out a range of ACC and return-to-work topics. Many references are identified but the intention is to provide options and opportunities for students to explore the subject. As far as possible the references are digital but a few are either out of print (eg, Munkman (1975)) or only available in hard copy.

See clause A9.1.1 (c) (4) in ISO45001.
Check the library of webinars, interviews, and videos for complementary resources.
Definitions of italicised terms are in the Glossary.

Useful management techniques

The following may help identify how to improve use of the ACC scheme, general insurance and risk finance generally:

Risk financing is a “form of risk treatment involving contingent arrangements for the provision of funds to meet modify the financial consequences should they occur (ISO31073 Risk management – vocabulary).

• engagement (section 21.3.9)
• interviews (section 21.3.19)
• literature or document review (section 21.3.22)
• Porter’s Five Forces (section 21.3.28)
• Porter’s Value Chain (section 21.3.29).

20.2 Historical perspectives

The UK from 1850 to now

Munkman (1975, pp. 27-50) described the “general principles of negligence as applied to injuries at work” in the UK, starting with the legal duty to take care. Then, as now, an employer owes a duty of care to workers and to other people who might be affected by work activities. If the employer (as the duty-holder) can be shown to have negligently breached that duty of care, and that the breach led to the injuries suffered by a person, the injured person may be able to claim damages. However, such legal action may or may not be successful, leaving an injured person uncertain about their costs and future income. Newman & Walters (2010) give a more recent overview of compensation for workplace injuries in the UK.

The UK system (and similar systems in other countries with a common law system) can help push the boundaries of what the duty of care covers. The courts in the UK have progressively extended boundaries to include, for example, emotional harm to a person who witnessed an event.

Wright & Marsden (2002) wrote a research report for the UK HSE discussing whether businesses would change their behaviour if they had to bear the full costs of workplace injuries. Another HSE research report (Peebles et al., 2003) analyses claims for injuries and gives something of a picture for workplaces covered by statutory employers liability insurance in the UK.

However, it is possible for an employer in the UK to avoid the legally required Employers’ Liability insurance (which is not to be confused with insurance with the same name in New Zealand). This can leave workers and others with no access to compensation if they are injured; see for example, Lamy (2022a) when a small business owner was convicted for lack of insurance and the owner sentenced to four months in prison. The injured worker received no compensation.

Despite the progressive report from Lord Robens (1972) and subsequent British Health and Safety at Work Act (1974) setting out statutory duties, the UK has not moved beyond negligence-based compensation for injuries. Conversely, in an interview with Peace (2020), Hazel Armstrong argued strongly that introduction of the ACC scheme was supposed to be accompanied by a strong regulatory system enforced by a well-resourced agency.

New Zealand 1850-1974

An article (Peace et al., 2019, pp. 256-257) summarising the development of the occupational health and safety profession also identified some key dates in the development of workers’ compensation insurance and the accident compensation scheme in New Zealand. The Workers’ Compensation Act 1900 was a response to some of the early disasters and daily injuries and introduced an insurance scheme for people while “at work” (a fertile area for legal argument), which, despite many amendments, often left workers without adequate compensation.

A chapter in Campbell (1996, pp. 14-41), supported by Armstrong (2008), elaborates why the Workers’ Compensation for Accidents Act (1900) was no longer adequate and the need for the Woodhouse report. The Royal Commission report (Woodhouse et al., 1967) led to the accident compensation scheme more or less as we have it today (Armstrong, 2008; Campbell, 1996, pp. 42-47).

The scheme introduced 24-hour cover for New Zealand citizens and residents on a no-fault basis regardless of where injury occurred: this was quite radical and can be contrasted with other countries where fault must be proved, and an insurer providing cover.

Completion of a ACC claim form allows funding of treatment, regardless of cause, and subsequent determination of compensation. This may be in the form of weekly compensation for up to 80% of wages and cover for other specified costs. The scheme was, and remains, funded by levies on employers, workers, vehicle registration, etc.

New Zealand 1974 to 2001: a political football

As implemented, the accident compensation scheme in New Zealand has been the subject of controversy. It has been claimed it fails to adequately compensate for injury yet is over-generous when compared to social welfare for chronic disease and degenerative conditions. Such conditions can cause similar disabilities to work injuries, a social equity issue.

In 1999, despite widespread opposition to private sector involvement in workers’ compensation, the National Government introduced competition to the workers’ compensation market. Reasons for opposition to such competition included that:

• it was unethical to insure the health and safety of workers (the ACC scheme was seen by its supporters to be a form of social welfare)
• insurers might fail, leaving injured people with no continuation of compensation (a young person injured at work might require care and support for 60-70 years)
• introducing competition was based on political dogma, not considered apolitical discussion.

The National Government was defeated in the general election and the incoming Labour Government returned all aspects of workers’ compensation in New Zealand to the ACC. Shortly after, an Australian insurer, HIH collapsed leaving some aspects of workers’ compensation in New Zealand unfunded (Allan, 2006).

2001 to now: Settled times?

The 1999 change in government has apparently led to cross-party agreement that the ACC scheme provides benefits that outweigh its disadvantages and controversy has died down, leading to the suggestion that UK occupational health and safety practitioners should consider the benefits of a no-fault scheme (Peace, 2008).

Workers’ compensation does not cover all workplace injuries or all costs due to such injuries (Pezzullo & Crook, 2006) and so claims statistics are not a reliable source of sector-wide or national data (Cox & Lippel, 2008). Data on workplace injuries published by the Commonwealth of Australia (2009, 2022) includes some data from ACC for New Zealand. Since 2001 the incidence rates of serious injury and disease claims by jurisdiction have shown a steady increase in New Zealand while Australian data shows a steady decrease overall. The scheme also can provide compensation perceived to be unfair depending on the status and income of claimants (Mandow, 2020).

Efforts have been made internationally to improve understanding and use of experience rating as an incentive for employers to improve worker safety (Mansfield et al., 2012; Purse, 2012; Seabury et al., 2012; Tompa et al., 2012) but access to reliable data in New Zealand remains difficult.

Data summarised graphically by Butchard (2019) shows that in New Zealand a worker is 15 times more likely to die from occupational disease than from workplace trauma. This shows the time between exposure to a hazardous substance and subsequent development of occupational disease further complicates attempts to apply experience rating in New Zealand (Armstrong & Bunn, 2012), while the many small and medium enterprises means savings may be negligible and only of value to the largest employers.

20.3 Return to work: some issues

The Handbook of return to work: From research to practice (Schultz, I. & Gatchel, 2016) is a substantial book covering much of relevance to helping injured workers (and others) return to work. Workplace injuries can have other effects on employees than the obvious physical harm (Cormack et al., 2006). An early return to work can help avoid long-term depression but will require a rehabilitation plan (AFOEM, 2022; Burton, A. et al., 2006; Hanson et al., 2006; Wyatt, 2022a, 2022b).

Sickness absence from work due to occupational disease or psychosocial harm including bullying (Nice & Thornton, 2004; Reetoo et al., 2009; Spurgeon, 2002) may also require a return-to-work plan.

20.4 Other issues

One cause of major claims

Quad bikes or all-terrain vehicles are widely used in agriculture and are a major factor in injuries, with an average of seven fatalities per year costing $3.6 million in claims (Moore, 2007).

Multiple casualties in a major disaster

ACC is a monopoly insurance scheme that relies on sufficient reserves and reinsurance to cover predictable claims. Such claims are mostly single claims with a few multiple injuries. However, a major disaster could result in multiple casualties, leading to large numbers of claims, including claims with a long tail that could exhaust the fund, requiring the government to act as insurer of last resort (Bruggeman et al., 2010). Such concerns were based on a foreseeable major earthquake in Wellington and led to work by Spence et al. (1994), updated by Cousins et al. (2006), showing estimated casualties from a workday 11am event and night time 2am event (see extract in Table 35).

Table 35. Estimated casualties for an earthquake on the Wellington fault

This estimate enabled effective reinsurance and can be contrasted with the 185 fatalities in the February 2011 Christchurch earthquake.

The earthquake casualty estimates (Cousins et al., 2006; Spence et al., 1994) mentioned apartment buildings but gave no estimates of potential casualties. Since the earthquake estimates were published there have been several fires in high-rise buildings including the Loafers Lodge fire in Wellington, Lacrosse Building in Melbourne in 2014 (Kool, 2001) and Grenfell Tower in London in 2017 when “72 people died, including two who later died in hospital, with more than 70 others being injured and 223 people escaping” (source: Wikipedia).

Effects on families and colleagues

Workplace fatalities can also affect colleagues and families of the deceased worker in the long term and often result in a coronial enquiry that families of the deceased may not understand or may feel excluded from (Flux et al., 2019; Matthews et al., 2019; Ngo et al., 2019). Damages may be awarded to the families of victims if WorkSafe prosecutes a PCBU and secures a conviction, but only a small fraction of reported injuries result in District Court cases and some are dismissed. This makes such compensation a lottery.

Despite the statutory bar on claims for negligence in ACC legislation, a number of claims alleging gross negligence have been heard by the courts, including for nervous shock (McLay, 2022).

Precarious employment

Changing patterns of work may result in employers of people who are “at work” but who are in precarious employment (eg, agency workers) failing to pay all or part of their ACC premiums, resulting in such workers lacking cover (Johnstone & Quinlan, 2005; Quinlan, 2004).

Litigation culture?

In the UK in the early 1990s it was claimed that some workers suffered from a “glass back” – a susceptibility to easily suffer back injuries (and musculo-skeletal disorders more generally) requiring time off work and compensation. Similar issues were subsequently reported with slips, trips and falls (Snodgrass et al., 2007). Anecdotal evidence has indicated such vulnerabilities may occur in New Zealand, sometimes with workers then moving to an area where there were few jobs, so avoiding having to find work. It seems that such issues are now better managed in New Zealand.

20.5 Chapter summary

It is more than 180 years since Te Tiriti o Waitangi was signed. It took 80 years for the Workers Compensation Act to become law and then a further 77 years for the Accident Compensation Act to replace it. In the last 50 years treatment and compensation for physical harm or occupational disease seems to have become accepted as a unique part of New Zealand law and culture. However, changes in ACC law and practice are often in response to changes in New Zealand society.

In a 50-years retrospective review of the ACC scheme Palmer (2019) concluded that the original aspirations of Woodhouse had not been fully met, including injury and disease prevention.

Does the ACC scheme work at least better than common law systems?

20.6 References used in this chapter

AFOEM. (2022). It Pays to Care – Key Messages Aotearoa New Zealand [Report summary]. Australasian Faculty of Occupational and Environmental Medicine, https://www.racp.edu.au/advocacy/division-faculty-and-chapter-priorities/faculty-of-occupational-environmental-medicine/it-pays-to-care?elq_mid=18826&elq_cid=480365&elq_ename=L_NSL_SGInsiderNZMay22_AEM_em1_20220530&chl=Em&utm_campaign=L_NSL_SGInsiderNZMay22_AEM_em1_20220530&utm_medium=email&utm_source=Eloqua&cid=&sfdccampaignid=70113000002VgjF

Allan, G. (2006). The HIH collapse: A costly catalyst for reform. Deakin Law Review, 11(2), 137-159. https://doi.org/10.21153/dlr2006vol11no2art239

Armstrong, H. (2008). Blood on the coal: The origins and future of New Zealand’s Accident Compensation scheme (2nd ed.). Trade Union History Project.

Armstrong, H., & Bunn, K. (2012). Experience rating and occupational disease: a New Zealand case study. Policy and Practice in Health and Safety, 10(1), 63-76. https://doi.org/10.1080/14774003.2012.11667769

Bruggeman, V., Faure, M. G., & Fiore, K. (2010). The Government as Reinsurer of Catastrophe Risks? Geneva Papers on Risk & Insurance – Issues & Practice, 35(3), 369-390. https://doi.org/10.1057/gpp.2010.10

Burton, A., Kendall, N., Pearce, B., et al. (2006). Management of upper limb disorders and the biopsychosocial model [Research Report RR0596]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Butchard, M. (2019). Work-related health estimates [Infographic]. WorkSafe NZ, Wellington. https://www.worksafe.govt.nz/topic-and-industry/work-related-health/work-related-health-estimates-and-burden-of-harm/

Campbell, I. (1996). Compensation for Personal Injury in New Zealand: its rise and fall. Auckland University Press.

Commonwealth of Australia. (2009). Comparative Performance Monitoring Report: Comparison of occupational health and safety and workers’ compensation schemes in Australia and New Zealand (11th ed.). Author. https://www.safeworkaustralia.gov.au/collection/comparative-performance-monitoring-reports

Commonwealth of Australia. (2022). Comparative Performance Monitoring Report: Comparison of occupational health and safety and workers’ compensation schemes in Australia and New Zealand (22nd ed.). Author. https://www.safeworkaustralia.gov.au/collection/comparative-performance-monitoring-reports

Cormack, H., Cross, S., & Whittington, C. (2006). Identifying and evaluating the social and psychological impact of workplace accidents and ill-health incidents on employees [Research Report RR0464]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Cousins, J., Spence, R., & So, E. (2006). Wellington Area Casualty Estimation: 2006 update [Research Report 2006/88]. GNS Science, Wellington.

Cox, R., & Lippel, K. (2008). Falling through the legal cracks: the pitfalls of using workers’ compensation data as indicators of work-related injuries and illnesses. Policy and practice in health and safety, 6(2), 9-30. https://doi.org/10.1080/14774003.2008.11667721

Flux, L., Hassett, A., & Callanan, M. (2019). How do employers respond to employees who return to the workplace after experiencing the death of a loved one? A review of the literature. Policy and Practice in Health and Safety, 1-13. https://doi.org/10.1080/14773996.2019.1590764

Hanson, M., Burton, K., Kendall, N., et al. (2006). The costs and benefits of active case management and rehabilitation for musculoskeletal disorders [Research Report RR0493]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Health and Safety at Work etc Act (1974). Great Britain http://www.legislation.gov.uk/ukpga/1974/37

Johnstone, R., & Quinlan, M. (2005). The OHS Regulatory Challenges Posed by Agency Workers: Evidence From Australia [Working Paper wp38]. Australian National University, Canberra. www.http://ohs.anu.edu.au/

Kool, B. (2001). Work-related Fatal and Non-fatal Fire Injuries in New Zealand 1985-1999 [Research Report 65]. NZ Fire Service Commission, Wellington. https://www.fireandemergency.nz/research-and-reports/research-reports/

Lamy, M. (2022a). Four months in jail for roofing boss after worker fall. IOSH Magazine. Retrieved 8 August, from https://www.ioshmagazine.com/2022/08/04/four-months-jail-roofing-boss-after-worker-fall

Lord Robens, A., Beeby, G., Pike, M., et al. (1972). Safety and Health at Work: Report of the Committee, 1970-72 [Report Cmnd 5034]. HMSO, London. http://www.mineaccidents.com.au/uploads/robens-report-original.pdf

Mandow, N. (2020). The beauty and unfairness of ACC [Website]. Stuff. https://www.newsroom.co.nz/podcast-the-detail/the-beauty-and-unfairness-of-acc

Mansfield, E., MacEachen, E., Tompa, E., et al. (2012). A critical review of literature on experience rating in workers’ compensation systems. Policy and Practice in Health and Safety, 10(1), 3-26. https://doi.org/10.1080/14774003.2012.11667766

Matthews, L., Johnstone, R., Quinlan, M., et al. (2019). Work fatalities, bereaved families and the enforcement of OHS legislation. Journal of industrial relations, 61(5), 637-656. https://doi.org/10.1177/0022185619829181

McLay, G. (2022). Nervous Shock, Tort and Accident Compensation: Tort Regained? SSRN eLibrary. https://ssrn.com/abstract=3483267

Moore, D. (2007). A systems analysis of quadbike loss of control events on New Zealand farms [PhD, Massey University]. Palmerston North. https://mro.massey.ac.nz/handle/10179/624

Munkman, J. (1975). Employer’s liability at common law (8th ed.). Butterworths.

Newman, A., & Walters, D. (2010). Compensation schemes. In P. Baxter, T.-C. Aw, A. Cockcroft, A. Durrington, & J. M. Harrington (Eds.), Hunter’s diseases of occupations (10th ed., pp. 96-109). Hodder Arnold.

Ngo, M., Matthews, L. R., Quinlan, M., et al. (2019). Information needs of bereaved families following fatal work incidents. Death Studies, 1-12. https://doi.org/10.1080/07481187.2019.1586792

Nice, K., & Thornton, P. (2004). Job Retention and Rehabilitation Pilot: Employers’ management of long-term sickness absence [Research Report]. Social Policy Research Unit, University of York, London.

Palmer, G. (2019). A retrospective on the Woodhouse report: The vision, the performance and the future. Victoria University Law Reports, 50, 402-420.

Peace, C. (2008). A fresh approach to compensation. Safety & Health Practitioner, 26(5), 50-54.

Peace, C. (2020). In conversation with Hazel Armstrong [Video].

Peace, C., Lamm, F., Dearsly, G., et al. (2019). The evolution of the OHS profession in New Zealand. Safety Science, 120, 254-262. https://doi.org/10.1016/j.ssci.2019.07.005

Peebles, L., Heasman, T., & Robertson, V. (2003). Analysis of compensation claims related to health and safety issues [Research Report RR0070]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Pezzullo, L., & Crook, A. (2006). The Economic and Social Costs of Occupational Disease and Injury [Technical Publication 4]. National Occupational Health and Safety Advisory Committee, Wellington. https://cohsr.aut.ac.nz/resources

Purse, K. (2012). Experience rating: an Australian post mortem. Policy and Practice in Health and Safety, 10(1), 45-62. https://doi.org/10.1080/14774003.2012.11667768

Quinlan, M. (2004). Workers’ compensation and the challenges posed by changing patterns of work: evidence from Australia. Policy and practice in health and safety, 2(1).

Reetoo, N., Burrows, J., & Macdonald, E. (2009). Managing sickness absence and return to work: Trial and assessment of a sickness absence recording tool [Research Report RR0690]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Schultz, I., & Gatchel, R. (2016). Handbook of return to work: From research to practice (I. Schultz & R. Gatchel, Eds.). Springer. www.springer.com

Seabury, S., McLaren, C., Reville, R., et al. (2012). Workers’ compensation experience rating and return to work. Policy and Practice in Health and Safety, 10(1), 97-116.

Snodgrass, R., Corbett, E., & Carter, L. (2007). Exploration of the affect of litigation culture on the attribution and reporting of slip and trip accidents [Research Report RR0552]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Spence, R., Pomonis, A., Coburn, A., et al. (1994). Wellington Areas Casualty Estimation 1994 [Research Report 31392110]. Cambridge Architectural Research and Institute of Geological and Nuclear Sciences, Wellington.

Spurgeon, A. (2002). Managing Attendance at Work: An Evidence-Based Review [Research Report]. British Occupational Health Research Foundation, https://bohrf.org.uk/downloads/index.html

Tompa, E., Cullen, K., & McLeod, C. (2012). Update on a systematic literature review on the effectiveness of experience rating. Policy and Practice in Health and Safety, 10(2), 47-66.

Woodhouse, O., Bockett, H., & Parsons, G. (1967). Compensation for Personal Injury New Zealand. Government printer, Wellington. http://www.library.auckland.ac.nz/data/woodhouse/

Workers’ Compensation for Accidents Act (1900). Wellington http://www.nzlii.org/nz/legis/hist_bill/

Wright, M., & Marsden, S. (2002). Changing business behaviour – would bearing the true cost of poor health and safety performance make a difference? [Contract Research Report CRR436]. Health and Safety Executive, Buxton. https://www.hse.gov.uk/research/publish.htm

Wyatt, M. (2022a). It Pays to Care – Bringing evidence-informed practice to work injury schemes helps workers and their workplaces: A values and principles based approach [Research Report]. Australasian Faculty of Occupational and Environmental Medicine, Sydney. https://www.racp.edu.au/

Wyatt, M. (2022b). It Pays to Care – Bringing evidence-informed practice to work injury schemes helps workers and their workplaces: An imperative for change and call to action [Research Report]. Australasian Faculty of Occupational and Environmental Medicine, Sydney. https://www.racp.edu.au/