Industry voice
A WorkCover win with Corlia Roos, Director Construction Policy Master Builders recently received a commitment from the Minister for Employment and Industrial Relations, the Hon. Grace Grace, to fix WorkCover issues for principal contractors, even though new provisions void indemnity clauses. In June, the Queensland Government introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 into Parliament. In addition to enacting the National Injury Insurance Scheme for workplace injuries post 1 July 2016, the Bill set out to reverse the Byrne’s case decision, which would allow WorkCover to recover significant contributions of up to 75 per cent of common law damages claims from previously indemnified third parties, like host employers and principal contractors. A Parliamentary inquiry was conducted into the proposed Bill by the Education, Tourism, Innovation and Small Business Committee. Master Builders, in its submission to the Committee, reiterated that the underlying issue with indemnity clauses is that principal contractors and host employers are excluded from WorkCover coverage for common law damages claims arising from injuries to subcontractors’ workers. This is despite safety legislation creating
statutory duties for parties, such as PCBU’s and principal contractors for the safety of workers on their sites.
Bill, however, neglected to remove all of the clauses in the Bill aimed at voiding contractual indemnity clauses.
Master Builders contended that principal contractors should not be forced into the private insurance arena to cover the risk and ought to be brought back into the WorkCover fold.
The net result of this late development is that indemnity clauses where a subcontractor indemnifies a principal contractor against any damages arising from injuries to the subcontractors’ employees are now void.
This argument was accepted by the Parliamentary Committee, which made three unanimous recommendations, including giving “principal contractors and host employers the option of participating in the scheme, taking out a private insurance policy or both.” Master Builders welcomes this very positive outcome from the Parliamentary Committee hearings. In late September, the Bill returned to the Legislative Assembly for Parliamentary debate, with the LNP and Katter parties opposing the Bill’s intention to reverse the Byrne decision. They voted together to remove ‘Clause 5 Amendment of s10 (meaning of damages)’ from the proposed
Most concerning for Master Builders is the retrospective application for damages claims if settlement or a legal proceeding hasn't occurred. The unilateral shifting of liabilities through retrospective statute after contracts have been rendered and insurances purchased is significantly unsettling for contractors with unknown liabilities. This outcome is unsatisfactory to all and will require more legislative amendments to achieve a workable solution. Master Builders will continue to work with government and WorkCover to find an appropriate and cost-effective way to bring principal contractors and host employers back under WorkCover.
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[ 18 ] october / november 16
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