Everyone. Every workplace. · premium rates in the country. We have been able to do this while maintaining compensation and rehabilitation benefits to support injured workers in their

Everyone.Every workplace.

Annual Report 2018

ii

WorkSafe Annual Report 2018 WorkSafe Annual Report 2018

Safety is for everyone, in every workplace.

That is the message for the community in WorkSafe’s latest public awareness campaign and the theme at the centre of the organisation’s new long-term

strategy WorkSafe 2030.

It is about broadening the community’s awareness and understanding that safety is both physical and

mental wellbeing. It is about the community – no matter when, where or how people work – being able

to define what safety is so that every Victorian can share in WorkSafe’s vision for all workers to return

home safe.

Everyone. Every workplace.

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Contents

Letter to the Minister 2

2017/18 Overview 4

Report from the Chairman and Chief Executive 6

About WorkSafe 8

Healthy and Safe 12

Recovery 22

Value 28

Our People 38

Financial Report 42

Appendices 102 Appendix 1: Prosecutions 103 Appendix 2: Agent performance results 118 Appendix 3: Self-insurance report 126 Appendix 4: Governance and compliance 134 Appendix 5: Disclosure index 155

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WorkSafe Annual Report 2018

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Our vision is Victorian workers returning home safe every day.

Our mission is actively working with the community to deliver outstanding workplace safety and return to work, together with insurance protection.

Everyone can help shape a safe culture. I think you can make a difference just by calling out unsafe behaviours. For me, safety is about not coming to work anxious or worried. It’s not only physical, but mental wellbeing.”

Jessica WorkSafe Departmental Liaison Officer

Letter to the MinisterSeptember 2018

Robin Scott MP Minister for Finance 1 Macarthur Street East Melbourne Victoria 3002

Dear Minister

I am pleased to submit the 2017/18 WorkSafe Victoria Annual Report for presentation to Parliament, as required by section 46 of the Financial Management Act 1994.

Yours sincerely

Paul Barker Chairman

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90.3%record high client service result89.6% in 2016/17

77.74%injured workers back at work within six monthsabove target of 76.79%

Mental healthin Victorian workplaces prioritised through the development of $50m WorkWell program

700+WorkSafe employees now working from new Geelong headquarters

New website for easier community access to information

48,044workplace inspectionsexceeding target of 45,000

2017/18 Overview

268,810total workplaces

6.23 claims per million hours workeddown 0.8% on 2016/17

24lives lost in workplace incidents 21 in 2016/17

WorkSafe 2030work begins on long term strategy

$73mperformance from insurance operationscompared to $233 million in 2016/17

1.272%lowest average insurance premium rate maintained

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We have significantly increased our presence in the health care sector and re-aired our It’s Never Ok campaign as we continue to address the unacceptable level of violence and aggression against health workers. We are also partnering with our stakeholders in construction to educate and motivate the sector to reduce the risk of serious injury and death.

More broadly, our efforts are focused on growing the community’s understanding of what a workplace culture of health, safety and wellbeing looks like and the role everyone can play in achieving it. Our new Hearts and Minds campaign, featuring real Victorians, aims to encourage that conversation and support the shift towards shared community workplace safety goals.

Recovery

Until we realise our vision of all Victorians returning home safe every day, we will continue to deliver high quality care and treatment when workers are injured.

We know getting back to work is a critical milestone in the recovery process, so in 2017/18 we raised the bar to focus on a return to work that can be sustained. We acknowledge it is a more challenging goal but this is about achieving better outcomes for workers and their families.

The longer a person is off work with an injury, the less chance they have of ever going back. We want the best for our clients so, as a priority, our new Innovation Centre is investing time into identifying what we need to do better to assist people who have been off work for more than 26 weeks.

Value

We measure our success in many ways and it is extremely pleasing to report that our services continue to be rated well by workers and employers. The ratings for our inspectorate, inspectorate advice and guidance and insurance premium services were maintained through a period of significant change for the organisation.

Fundamental to our success is being able to maintain a financially sustainable scheme. Performance from insurance operations was $73 million. This result was influenced by the full year actuarial increase which increased our projected claims cost by $141 million.

WorkSafe faces the challenge of an increase in more complex injuries, including mental injuries, together with the continuing challenge of common law. However, our scheme remains financially sound. We have maintained consistently low premium rates, with one of the fairest and most affordable premium rates in the country. We have been able to do this while maintaining compensation and rehabilitation benefits to support injured workers in their recovery and return to work. The accounting funding ratio is 123% and is above the target range of 82.5% to 117.5%.

Our people

The past year has been a period of tremendous change. We began delivering on our commitments under WorkSafe 2030, while also completing the enormous task of moving our headquarters to Geelong, with more than 700 WorkSafe employees now in the new location.

We would like to acknowledge the warm welcome we have received from the Geelong community, the support of our stakeholders and our Minister Robin Scott, and the leadership of our Board.

Finally, we would like to take this opportunity to recognise the extraordinary efforts of our people, including those valued employees who left the organisation this year after deciding not to make the move to Geelong. They have shown remarkable resilience and agility and an unwavering commitment to the safety of the Victorian community.


Clare Amies Chief Executive

Report from the Chairman and Chief Executive

Safety and wellbeing for everyone, in every workplace, is at the heart of what drives WorkSafe to continually evolve and build on its strong history of supporting Victorians.

In 2017/18 we began work on our new long-term strategy WorkSafe 2030 – a guide to our transformation over the next decade. Workplaces are changing rapidly and community expectations are shifting. WorkSafe 2030 will ensure we are in a position to navigate the social, cultural and technological challenges that lie ahead.

WorkSafe 2030 marks a pivotal turning point for the organisation. More than ever before, we will be focusing on developing stronger partnerships with workers and employers so that together we can create a positive, prevention-led culture of health and wellbeing in every workplace across the state.

We are very pleased to be embarking on this journey with the Victorian community in an environment where our scheme remains financially sound and with one of the lowest premium rates in the country.

There will be challenges and we are committed to overcoming them. The growth in mental injury is of great concern to the community and this has again been a focus area for us over the past year.

In 2017/18, in partnership with the Department of Health and Human Services, we developed WorkWell, a five-year $50 million program that will empower employers to make mental health a priority in the workplace. The program provides access to research, information, tools and funding opportunities.

As part of WorkSafe 2030, we will continue to develop preventative programs and work collaboratively with workers and employers on how to make a positive difference in this complex area.

Adopting new technologies has been another focus area this year. We are working in partnership with some of the best in the field to ensure we move forward with platforms that will deliver the level of service Victorians expect and that will enable the delivery of WorkSafe 2030.

These technologies will allow us to simplify our services, cut red tape and make it easier for Victorians to interact with us. Work has begun with the development of a new user-friendly website where workers, employers – in fact all Victorians – can easily find the guidance and education materials they’re looking for.

We have also developed a roadmap to enhance our data and analytics capability. This will help us to better understand our clients and improve their experience and outcomes, while providing the insights we need for the delivery of more efficient operations, including better targeted inspections.

Healthy and safe

In 2017/18 we conducted 48,044 workplace inspections, exceeding our target by more than 3,000 visits.

We have focused on key areas, including the health care sector, construction, manufacturing and agriculture.

Tragically, 24 people lost their lives in workplace incidents in the 12 months to 30 June 2018 — 12 on Victorian farms, with quad bikes and tractors the leading causes.

In addition to the WorkSafe quad bike public awareness campaign and the government rebate scheme, direct engagement through farm walks and regional field days reflect our efforts to build closer ties with farmers.

To me, safety means freedom – freedom for me to focus on what I’m really here to do. We spend a lot of time at work and if we don’t have the freedom and the comfort to do what we need to do, then we’re really being deprived of something. Safety is critical.”

Rohit WorkSafe Program Manager

Our Values Constructive in the way we provide information, advice and serviceAccountable for what we do and what we say; we live up to our promisesTransparent in the way we work; our environment is open and honestEffective by working collaboratively to deliver high quality servicesCaring by showing empathy in our dealings with everyone

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About WorkSafeWorkSafe strives to prevent workplace injuries, illness and fatalities. It also oversees Victoria’s workers compensation scheme, which provides benefits to injured workers and helps them get back to safe and sustainable work. Benefits include weekly payments, medical and allied health treatment, ambulance transport, hospital treatment, personal and household help, lump sums for permanent impairment and common law damages.

WorkSafe is funded by Victorian employers who pay a WorkSafe insurance premium. In 2017/18 this totalled $2.336 billion. This was augmented by investment income totalling $1.606 billion.

WorkSafe enforces Victoria’s occupational health and safety and accident compensation laws. Its statutory obligations are covered in the following Acts of Parliament:

• Occupational Health and Safety Act 2004 – health, safety and welfare in the workplace

• Workplace Injury Rehabilitation and Compensation Act 2013 – workers compensation and the rehabilitation of injured workers

• Accident Compensation Act 1985 – workers compensation and the rehabilitation of injured workers

• Workers Compensation Act 1958 – workers compensation prior to 1985

• Dangerous Goods Act 1985 – storage, handling and transport of dangerous goods

• Equipment (Public Safety) Act 1994 – high-risk equipment used in non-work-related situations

WorkSafe’s stakeholders include employee and employer representatives, medical and allied health providers, legal practitioners and industry bodies. They inform strategy, policies, program development and other initiatives to help deliver the best outcomes for Victorians. Our Stakeholder Engagement Framework supports these important interactions.

Stakeholder committees mandated by legislation are the Occupational Health and Safety Advisory Committee and the WorkCover Advisory Committee.

Other working groups and committees include:

• Occupational Health and Safety (OHS) Stakeholder Reference Group

• Rehabilitation and Compensation Working Group

• Major Hazards Advisory Committee

• Legal Liaison Group

• Return to Work Working Group

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Our Organisational Structureas at 30 June 2018

Roger Arnold Chief,

Corporate Operations

Roger Arnold Chief

Financial Officer

Tim Gove Chief Risk Officer

Marnie Williams Chief,

Business Operations

Paul Fowler Acting

Executive Director Health & Safety

Shane O’Dea Executive Director

Insurance

Mikki Swindon Acting Executive Director People

& Culture

Ashley West Head of ITSS

Leanne Hughson Chief,

Transformation Operations

Marion Nagle Executive

Director Innovation

Susannah Palmer Acting

General Counsel

Linda Timothy Executive

Director External Affairs


Our Board

Paul Barker (Chairman) B.Bus, FCA, AGIA and ACIS, MAICD Appointed September 2015

Jane Brockington B. Eco, GradDip (Economics) Appointed August 2017

Ross McCann AM B.Eng (Chem) (Hons),

FIChemE, FRACI Appointed October 2013

Doug Kearsley B.Sc(Math) (Hons),

GradDip (Operations Research) Appointed April 2017

Clare Amies (Chief Executive) BA, BSW, MSW, Grad. Cert. Public Policy,

AMP (Harvard), MAICD Appointed March 2015

Peter McMullin B.Laws, B.Com Appointed February 2018

Dr Samantha Smith DBA, MA, B.Bus (Mktg), GAICD, FGIA Appointed October 2016

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2017/18 6.23

claims per million hours workeddown 0.8% on 2016/17

Four week claims

2.6%[off work four weeks]

24 lives lost

48,044 workplace inspectionsmore than 3,000 above target

26,5

88

26,7

57

26, 2

86

25,8

43

26,4

29*

13/14 14/15 15/16 16/17 17/18

26,429 total standard claims

12 lives lost on Victorian farms

* figure reflects exits to self-insurance from scheme-insured

Healthy and SafeWe work to prevent injury, disease and death in Victorian workplaces.

I view safety very much as a shared responsibility between the employer and the employee. Looking after your mate so to speak - that’s what safety is all about. I find myself saying this to employees regularly, if you don’t bring an issue to an employer’s attention, they cannot fix it. You can’t fix something that you don’t know exists. That’s why sharing the responsibility for safety is so important.”

Nick WorkSafe Health & Safety Inspector Western Region

We do this by raising public awareness, providing advice and information, fostering co-operative, consultative relationships, initiating and encouraging research and publishing information and findings. We enforce Victoria’s occupational health and safety and accident compensation laws and we inspect workplaces, grant licences and prosecute to enforce the law and deter non-compliance.

The world of work is changing and over the next decade many Victorians will be operating in very different workplace environments with changing hazards and risks. A key goal under our new strategy WorkSafe 2030 is to build stronger partnerships with workers and employers so that together we can create a positive, prevention-led culture of health and wellbeing in every workplace across the state.

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Up to 95% of health care workers have experienced occupational violence and aggression, which is significantly impacting their health, safety and wellbeing.

ConstructionWorkSafe’s dedicated construction industry program continues to target the causes of serious injury and death that construction industry workers face. More than 12,000 workplace visits have been conducted in 2017/18. The aim of the program is to inform, educate and motivate the construction industry to voluntarily improve behaviour, while maintaining a strong compliance and enforcement function.

The program includes an education component, with particular emphasis on achieving ‘generational’ change and improvement, by engaging with young workers via TAFEs, apprentice schemes, VCAL programs and other training providers and educational institutions.

Hazard focus areasOccupational disease WorkSafe’s Occupational Disease program 2015–2017 completed its planned schedule of activities covering cancers (including skin cancer), asthma, contact dermatitis and noise-induced hearing loss. This program was aligned with the Australian Work Health and Safety Strategy 2012–2022 from Safe Work Australia.

Crystalline silica will continue to be an area of focus for WorkSafe. WorkSafe has undertaken compliance and enforcement activities with the stonemason industry (kitchen and bathroom stone bench manufacturing) with the focus on employee exposure to silica. Guidance titled Dust Containing Crystalline Silica in Construction Work was developed and will be published shortly.

Asbestos WorkSafe has implemented several asbestos-related initiatives during 2017/18 including proactive on-site inspections targeting education institutions – from kindergartens through to universities. Initiatives have also involved response inspections addressing asbestos removal prior to renovations/refurbishments/demolitions as well as the approval and audit of licensed removalists, and the amendment of asbestos-related guidance.

At a national level, WorkSafe chaired and is an active member of the Heads of Workplace Safety Authorities (HWSA) Imported Materials with Asbestos Working Group, providing a nationally coordinated response to the detection of illegally imported asbestos. WorkSafe is also a member of the National Asbestos Safety and Eradication Council.

In addition, the Victorian Asbestos Eradication Agency (VAEA) developed a centralised register of the condition and location of identified asbestos in government-owned buildings in Victoria. The VAEA worked closely with Victorian government public sector bodies to gather the information needed for the centralised register.

The VAEA progressed work on the prioritised schedule for removal of asbestos-containing materials from those buildings. The VAEA will present a report to government in December 2018, outlining the plan for removing asbestos from Victorian government buildings.

An asbestos media campaign was also rolled out, targeting tradespeople, particularly carpenters, electricians and plumbers. The aim of the campaign was to increase awareness of asbestos and encourage workers to seek further information, including from the website, asbestos.vic.gov.au.

Dangerous goods As part of a five-year strategic program, which commenced in 2015, WorkSafe is addressing the risks associated with the storage, handling and transport of dangerous goods. In 2017/18 the program has used information shared between government agencies to focus on identifying priority workplaces throughout the state with storage quantities of up to 100,000 litres. This approach will continue throughout 2018/19.

Safe design WorkSafe collaborates with stakeholder working groups to promote change and improve the design of workplace structures, layouts and work processes to ensure healthy and safe working conditions for all Victorians. Areas of focus in 2017/18 were traffic management design, plant interaction and the supply chain referral project.

This has involved working with manufacturers and suppliers to ensure risks are controlled before equipment is purchased, distributed and used. WorkSafe will continue to work in these areas in consultation with industry partners and stakeholders.

Hazardous manual handling Musculoskeletal disorders are the leading cause of injury in Victorian workplaces and are most commonly attributed to hazardous manual handling; that is, work where a person has to lift, lower, push, pull, carry or move something. This might include lifting boxes, wheeling trolleys, moving patients out of beds and using heavy tools. A new program has been developed following significant research on key influencing factors. The program will target more than 5,000 workplaces in priority industries with a focus on the review of risk controls following a reported injury. New guidance materials have been developed to help Victorian employers comply with their statutory obligations. The inspectorate maintained a focus on manual handling in priority industries, along with other hazards.

Prioritising mental health and wellbeingWorkWell program

In partnership with the Department of Health and Human Services, WorkSafe has developed the WorkWell program, which aims to make mental health and wellbeing a priority in the workplace.

Mental health and wellbeing is a growing concern in Victorian workplaces, with mental injury claims on the rise.

The five-year $50 million program centres on the WorkWell toolkit, an online hub that provides Victorian workplaces with access to research, information and tools to help create a mentally healthy workplace.

Initially focused on small to medium businesses, the toolkit will continue to evolve, with new tools and functionality added over time, including resources suitable for large workplaces and tailored content for specific industries.

Employers and managers will be able to access information to meet the particular needs of their workplace. After completing a brief questionnaire about their current practices, policies and working environment, they are provided with simple actions and materials, including videos and tip sheets.

Almost half (45%) of the population will experience a mental illness at some point in their lifetime, and one in five (20%) Australians will experience a mental disorder in the next 12 months.

The workplace provides an ideal setting to promote mental health and wellbeing, ensuring all Victorian employees are supported to thrive at work, whether they are experiencing mental health issues or not.

Funding

Funding opportunities are available under the WorkWell Mental Health Improvement Fund. The fund supports large-scale programs that aim to promote mental health and wellbeing as well as prevent mental injury and illness among vulnerable Victorian workers. The focus is currently on young and older workers, frontline workers and industries in transition. A total of $17 million has been allocated to the fund over five years.

Public sector program

Mental health and wellbeing is also an ongoing focus for the Public Sector OHS Leadership Group. The Group has endorsed a Mental Health and Wellbeing Charter, which is supported by the Leading the Way framework. Mental heath and wellbeing performance indicators, minimum education and training requirements, and frameworks and resources on preventing and managing occupational violence and aggression have been developed.

Industry focus areasAgriculture

WorkSafe has sought to further improve farm safety in Victoria throughout 2017/18.

In addition to conducting 2,855 farm visits, we have engaged with farmers and the broader community through attending 12 regional field days and conducting eight farm safety walks. Workplace inspections have continued to focus on quad bikes and powered mobile plant, which are the leading causes of serious injury and death on farms.

In March 2018, following a review of enforcement and compliance activities, WorkSafe inspectors commenced the next phase of the quad bike strategy, which includes issuing improvement notices to employers where the risk of a quad bike roll-over is identified. During inspections, employers are asked to consider whether they are using the right vehicle for the tasks they are undertaking. Where employers continue to use a quad bike and where the risk of roll-over is present, improvement notices are being issued to control the hazard so far as is reasonably practicable. In addition to roll-over hazards, quad bike operators are being assessed to ensure other elements that form a safe system of work are present e.g. helmets supplied and used, the vehicle is maintained, the operator is trained and people under the age of 16 are not operating adult-sized quad bikes.

The WorkSafe quad bike public awareness campaign complements the inspections program and has resulted in many farmers moving away from quad bikes and taking up the option of a small utility vehicle, which may be a safer option for some workplaces. The number of farmers moving to an alternative vehicle is evidenced by the number of applications for small utility vehicles under the Victorian Government’s $6 million rebate scheme. The scheme assists farmers to purchase an alternative work vehicle or to fit an operator protection device to their quad bike.

Tragically 12 people lost their lives on Victorian farms in 2017/18.

Health care and social assistance

Over the past two years, WorkSafe has significantly increased its presence in hospitals, aged care facilities, disability, community support services and early learning centres, focusing on key hazards including manual handling, occupational violence and aggression and bullying. A number of strategic programs have been implemented to engage key stakeholders and peak bodies.

As part of a multi-faceted strategy to protect workers from occupational violence and aggression, WorkSafe has re-aired the It’s Never Ok campaign, which was developed in partnership with the Department of Health and Human Services, Ambulance Victoria and other stakeholders. The campaign encourages health care workers to report incidents, asks employers to do more to prevent harm, and reminds the community that It’s Never Ok to commit acts of violence or aggression against healthcare workers. Guidance videos and tools to assist in incident investigation have also been developed in partnership with health services and can be found at worksafe.vic.gov.au.

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DeterrenceIn applying its constructive compliance strategy, WorkSafe balances the use of positive motivators with deterrents to improve workplace health and safety across Victoria. WorkSafe deters poor performance in workplace safety and non-compliance using a range of approaches, including undertaking workplace inspections, enforcing remedial actions and undertaking prosecutions.

Prosecution results and OHS regulatory performance

During 2017/18, WorkSafe completed 127 prosecutions with a success rate of 91%. Five enforceable undertakings were entered into pursuant to the OHS Act and a total of $9,467,025¹ in fines were imposed, representing a significant increase of 268% in fines imposed, compared to 2016/17.

The following are some significant 2017/18 OHS prosecutions:

• A provider of emergency medical services was fined a total of $400,000 on two charges relating to an incident involving an employee’s death as a result of mixed drug toxicity (morphine and fentanyl). The emergency service purchases and stores morphine and fentanyl. The charges arose because there was a risk of improper access and consumption of morphine and fentanyl by the emergency service employees and volunteers due to the failure of the emergency service to maintain an adequate system for the recording and storage of morphine and fentanyl

• A company engaged to perform earthmoving and landscaping works at a residential property was fined $350,000 for an incident involving the operation of an unsafe skid steer. Work had finished for the day when the company’s site supervisor left the skid steer with keys in the residential owner’s garage. The residential owner’s 37-year-old son was observed operating the skid steer by his father. The son was later found slumped in the skid steer operator’s seat, bleeding from the head He was pronounced dead at the scene

There was a risk to health and safety as the skid steer was not periodically inspected and maintained. An expert who examined the skid steer said the condition of the skid steer was such that it was not safe to be used by even an experienced operator

• A company that provided high volume concrete pumping services to the construction industry was fined a total of $500,000 for an incident where an employee sustained fatal crush injuries. Employees were instructed to disassemble a concrete pumping component (tower tube) to enable it to be loaded by crane onto a truck. One employee took up position in the cabin of the forklift, while two others stood in front of the tower tube. The tynes were lifted and the tower tube slid off the tynes and struck one of the employees, trapping him against an adjacent brick wall

• The state government operator of a maximum-security remand prison was fined $300,000 following a full-scale riot that occurred as a result of the introduction of a smoking ban. The risk of harm to general duties staff could have been reduced by ensuring additional security members were deployed in the days leading up to the ban

• A company responsible for road maintenance in Victoria was fined $250,000 following an incident where a traffic management worker was struck and killed by a sweeper vehicle when it breached the exclusion zone and reversed into him without warning. The company had the authority to stop works at the workplace if there was imminent danger to safety. The contractor was fined $1,300,000 for the same incident

• A company contracted by a major poultry producer to catch and load live chickens was fined a total of $1,137,525 following an incident involving a collision between a forklift and an employee which resulted in death

• A company involved in carpentry works was fined $700,000 following an incident involving the collapse of the second floor trusses which resulted in injury to one employee and the death of a second employee (an apprentice)

Compliance measures 2014/15 2015/16 2016/17 2017/18

Annual workplace visits 40,711 46,259 45,751 48,044

Prosecution success rate 93% 94% 90% 91%

Investigations proceeding to prosecution charges within 12 months

83% 91% 82% 75%

Completed investigations proceeding to legal review outcome

66% 71% 68% 72%

Prosecutions commenced 114 119 138 148

1 In the 2016/17 Annual Report, the total fines imposed was incorrectly recorded as $3,460,000; the total fines imposed was $3,535,000.

Vulnerable workersVulnerable work ers are those at risk of ongoing exposure to occupational health and safety hazards or who are at increased risk of work-related injury or illness due to personal or work-related factors, and where the worker has limited capacity or means to be able to do anything to influence or improve this. A Vulnerable Workers’ Program was developed to ensure a strategic and comprehensive approach to assisting this cohort. Key outcomes of the program in 2017/18 included more information for employers and a website (worksafeinfo.com.au) focused on people with culturally and linguistically diverse (CALD) backgrounds, with information in nine languages.

Other focus areasMajor hazard facilities

In 2017/18, seven out of the 38 licensed major hazard facilities in Victoria submitted their safety cases for assessment by WorkSafe as part of their licence renewal applications. In January 2018, the government released its response to the Major Hazard Facilities Advisory Committee Report on how to better manage land surrounding major hazard facilities. WorkSafe continues to support the Department of Environment, Land, Water and Planning with the development of an improved process for land use planning around major hazard facilities and improved dissemination of information on major hazard facilities to councils and the community.

Earth resources program

In 2017/18, WorkSafe began implementing a strategy aimed at helping mining industry stakeholders to collectively own and drive occupational health and safety improvements.

Mines continue to be regulated by WorkSafe and the Department of Economic Development, Jobs, Transport and Resources (DEDJTR). Both have built strong working relationships through a Memorandum of Understanding and a Joint Activity Protocol. The Joint Activity Protocol ensures a proactive approach to areas of regulatory overlap including mine stability, mine fire prevention, mitigation and suppression, explosives and blasting, and the maintenance of well integrity.

Licensing

WorkSafe is responsible for the issuing and renewal of licences under the Occupational Health and Safety Act 2004 and the Dangerous Goods Act 1985. In 2017/18, the Licensing Branch processed 107,738 licences – 800 more than in 2016/17.

Key developmentsIndependent Review of OHS Compliance and Enforcement in Victoria

In consultation with stakeholders, WorkSafe has implemented, or is on track to implement, the Victorian Government’s response to the recommendations of the Independent Review of OHS Compliance and Enforcement in Victoria. The Review made 22 recommendations, which were supported in principle, in part or in full by the government.

Inquiry into the Labour Hire Industry and Insecure Work

The final report of the Victorian Inquiry into the Labour Hire Industry and Insecure Work, tabled in Parliament in October 2016, made three recommendations relating to the occupational health and safety of labour hire workers, which have been supported in principle by the Victorian Government. WorkSafe continues to work with government to ensure that labour hire workers have access to the same workplace safety standards as other workers and to improve occupational health and safety practices in the industry.

Compliance codes Eight new compliance codes have been made to reflect the Occupational Health and Safety Regulations 2017 and Equipment (Public Safety) Regulations 2017 and to take into account modern work practices.

The eight compliance codes are:

• Demolition

• Excavation

• Hazardous manual handling

• Facilities in construction

• Confined spaces

• Plant

• Noise

• Hazardous substances

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Raising awareness Public awareness campaigns

Hearts and Minds

The Hearts and Minds campaign, a cornerstone of WorkSafe 2030, carries the message that safety is for everyone, in every workplace. It aims to broaden the community’s understanding of what a workplace culture of health, safety and wellbeing looks like to ensure positive, proactive prevention is front and centre in Victorian workplaces. With a focus on both physical and mental wellbeing, the campaign is designed to support the shift towards shared community workplace safety goals. Hearts and Minds is a multi-phased behavioural change campaign, designed to shape and change community social norms on safety and prevention.

Occupational violence and aggression in healthcare campaign, It’s Never OK

This campaign reminds the community that it’s never OK to commit acts of violence or aggression against healthcare workers, while also encouraging and empowering workers to report incidents. The campaign was developed in partnership with the Department of Health and Human Services following the release of a 2015 Victorian Auditor-General’s Office report that found healthcare workers faced unnecessary levels of risk in relation to occupational violence. Healthcare workers are nearly five times more likely than other workers to lodge an occupational violence claim.

Culturally and Linguistically Diverse (CALD) workers

This campaign is focused on employees who do not speak English, or English isn’t their first or preferred language. WorkSafe recognises this group of employees is particularly vulnerable as the language and cultural barriers may prevent them from getting access to the right information about Australian OHS laws. Based on WorkSafe and Australian Bureau of Statistics data, we know CALD workers are highly represented in manufacturing and accommodation and food services, where many injuries occur. The campaign encourages employees to visit the campaign website, worksafeinfo.com.au, which explains the role of WorkSafe and houses simple translated animations explaining what to do if they get injured at work or see something unsafe.

Christmas safety campaign 2017

With the holiday season a traditionally dangerous time of year, this campaign pleads with workers and employers to ‘put safety first’ so everyone can enjoy Christmas with their loved ones. Over the past decade, nearly 25% of all workplace fatalities occurred in November and December. The campaign encourages employers to think about what systems they have in place to protect employees and encourages workers to maintain safe work practices in the lead up to the holidays.

Quad bike safety campaign

The quad bike safety campaign is the second phase of a longer-term communications and awareness program focusing on farm safety. Quad bikes are used on most Australian farms but they are also one of the main causes of serious injuries and fatalities among farmers and agricultural workers. The campaign focuses on quad bike safety and WorkSafe’s revised approach to risk management and prevention on farms.

Return to Work Getting Back campaign

This campaign, which was first launched in May 2015, aims to support injured workers to return to safe work and build an understanding that returning to work is a positive step in the recovery process. The campaign encourages injured workers, as well as their GPs and employers, to be proactive and engaged in the return to work process. It promotes early communication between all involved, with key messages including ‘work is good for you’ and ‘getting back to work after an injury is an important step on the road to recovery.’

Joint regulatory activityWorkSafe is committed to working collaboratively and efficiently with other regulators and government agencies to deliver better service and safety in Victoria.

OHS compliance and enforcement activity sometimes requires operating in partnership with other agencies, for example, those dedicated to emergency management. WorkSafe may also develop a formal Memorandum of Understanding (MOU) to establish protocols and remove duplication.

WorkSafe has a number of MOUs in place, including with the following government agencies:

• Australian Bureau of Statistics

• Convenor of Medical Panels

• Department of Economic Development, Jobs, Transport and Resources

• Department of Health and Human Services and the Transport Accident Commission

• Energy Safe Victoria

• Environment Protection Authority

• National Offshore Petroleum Safety and Environmental Management Authority

• Office of Public Prosecutions

• Return to Work Corporation South Australia

• Royal Australasian College of Surgeons

• Safe Work Australia

• State Revenue Office

• Transport Safety Victoria

• Victoria Police

• Victorian Building Authority

• Victorian Registration and Qualifications Authority

More information is available at worksafe.vic.gov.au.

Funding to improve workplace health and safety In 2017/18, WorkSafe continued to financially support a number of initiatives designed to improve workplace health and safety including:

Stakeholder support

• Funding to assist workplaces relying on quad bikes to upgrade the equipment with roll-over protection or to purchase alternative work vehicles

• Funding to assist the agricultural industry to design a farm safety campaign that effectively challenges the way farmers view and engage with farm health and safety

• Personnel to coordinate and engage on OHS issues on behalf of key employee and employer representative organisations

• Grant funding to the Gippsland Asbestos and Related Diseases Support/Asbestos Council of Victoria to provide support and advocacy for people in the Latrobe Valley affected by asbestos

• Grants to support programs to improve safety for workers with a focus on workplace bullying, young worker safety and women’s rights in the workplace particularly with respect to domestic violence and its impact on a woman’s ability to attend the workplace

• Grant funding to support the Arts Wellbeing Collective pilot program, an Arts Centre Melbourne initiative, delivered in partnership with Entertainment Assist. This initiative involves a consortium of Victorian arts and cultural organisations whose shared vision is better mental health and wellbeing for Victorian performing arts workers

Small-medium employer support

• The OHS Essentials Program provides free, independent OHS consultancy services to assist small and medium businesses (fewer than 200 employees) to improve safety and assist compliance with OHS legislation

Injury prevention funds

• WorkSafe provided funding to the Victorian Trades Hall Council for the OHSReps@Work website (ohsrep.org.au), which provides important guidance and support to OHS health and safety representatives

• WorkSafe provided funding to the Major Transport Infrastructure Program (MTIP) to undertake safety related research and deliver applied industry-relevant research to support the program’s safety vision and objectives

21


20


With a mental illness, if you don’t achieve even the minor things you start feeling worthless. For me returning to work was a no-brainer. Since coming back from injury my role with Victoria Police has changed. I’m not repaired. I still have PTSD [but] I’ve still got my wife, I’ve still got my life and I’ve still got my job, so I think I’ve come a long way.”

Richard Victoria Police WorkSafe Award Winner 2017

Raising awarenessSponsorships

In 2017/18, WorkSafe was a major sponsor and official community partner of the Melbourne Victory Football Club; a naming rights sponsor of the Victorian Country Football League and the Victorian Country Netball League; and a premier sponsor of the AFL Western Bulldogs Football Club. WorkSafe is proud of these associations, which provide an opportunity to make genuine connections with people, workplaces and communities across the state.

Health and Safety Month

Health and Safety Month 2017 featured a packed program of events across the state. The events, which took place from 4 October to 1 November, included more than 60 seminars, covering a range of topics including leadership in mental health, understanding young workers, workplace bullying and civility in the workplace. Well-known guests included award-winning stage and screen star Catherine McClements, former Geelong Football Club player Cameron Ling and former Federal MP Lindsay Tanner, as well as a diverse range of keynote speakers and subject matter experts from industry and government.

Recognising excellenceThe WorkSafe Awards are held annually to celebrate best practice and innovation in workplace health and safety.

In 2017, nine winners were selected from 13 finalists after more than 160 entries were received from Victorian businesses, health and safety representatives and individuals.

WorkSafe award winners

• Best Solution to a Specific Workplace Health and Safety Issue Melbourne Water – Virtual reality in design

• Best Solution to a Manual Handling Issue HIAB Australia and Miglas – Mechanical devices that eliminate manual handling

• OHS Achievement HALT- Hope Assistance Local Tradies

• Health and Safety Invention of the Year Eziloader- Ground Level Loading Trailers

• Health and Safety Representative of the Year Michael Muscat- Visy Board

• Commitment to Workplace Health and Wellbeing Fonterra Australia

• Leading Return to Work Practice by an Employer HORNER

• Return to Work Coordinator Excellence Lindsey Doolin – Salvation Army

• Worker Return to Work Achievement Richard Wallace – Victoria Police

22 23


77.74% Back at work within six months up on target of 76.79

Return to work inspectorate visits

1,9992,900 mobile case management visits to support return to work

Back at work within six months (mental injury)

Back at work within six months (physical injury)

1,901 visits in 2016/17

Dec 15

75.0%

76.0%

77.0%

78.0%

79.0%

80.0%

Mar 16

Jun 16

Sep 16

Dec 16

Mar 17

Jun17

Sep17

Dec17

Mar18

Jun18

Jun 18 77.74%

Target

81.16% 53.26%

2017/18

RecoveryWe support injured workers to access early and effective treatment and occupational rehabilitation.

We know how important it is for a person’s recovery to get back to safe work and we know the best outcome is achieved when workers and employers work together throughout the process.

The longer a person is off work with an injury, the less chance they have of ever going back. One of our aims under WorkSafe 2030 is to identify how we can better support these clients.

From my perspective as an employee and in my role as a Return to Work Inspector, safety is being able to go home to your family. I think people take safety for granted until something happens. Focusing on prevention means injuries can be avoided and people can return home safe to their families every day.”

Jenny WorkSafe Return to Work Inspector

In returning to work I had to overcome the inertia after not doing very much for three to four months. I had to believe that I could. I was brought up to be resilient and that’s the thing, you just don’t give up. I’m very glad to be back at work and I’m happy that Melbourne Pathology has supported me so much.”

Kate Medical Scientist Melbourne Pathology Finalist, WorkSafe Awards 2017

25


24


Supporting a return to workGetting back to work after an injury is a team effort. Employers, health practitioners and agents all play an important role in making sure that a person who is injured is supported through their recovery and return to work.

Returning to safe work is a critical milestone in the recovery process. It’s a triumph for everyone involved; a great outcome for the injured worker and a key measure of success for WorkSafe.

In 2017/18, WorkSafe set a new standard in this area. The focus is now not just on a return to work, but a return to work that can be sustained.

The change provides a more accurate picture of a worker’s recovery and transition back to work, but more importantly, it is a better outcome for workers and employers.

The range of new and enhanced approaches currently in place to assist injured workers to get back to work includes:

Mobile Case Management

With this initiative, the case manager is mobile, meeting face-to-face with the relevant parties to remove barriers to a return to work. More than 2,900 Mobile Case Management services have been delivered across the scheme during 2017/18. About 10% of Mobile Case Management services are delivered on mental injury claims and there will be an increased focus on this cohort in 2018/19. The Institute for Safety Compensation and Recovery Research (ISCRR) has been engaged to complete a review of the program.

Functional Assessments

We have expanded the questions we ask Independent Medical Examiners to focus on the functional capacity of an injured worker with a mental injury. Requests now focus on identifying what the injured worker can do within the limitations of their current symptoms. The assessment is used by the treating health practitioner to determine appropriate treatment pathways and certification, and in return to work planning. The program commenced in November 2017 and is currently undergoing its first evaluation.

Facilitated Discussions

These discussions are face-to-face meetings for injured workers and other workplace parties where interpersonal conflict has been identified as the key barrier to getting back to work. The program, launched in August 2017, aims to facilitate an agreement between the parties about future behaviours and actions, using a structured and consistent approach by experienced qualified occupational rehabilitation consultants. Early signs are positive.

Building industry capability around work-related mental injury

A new Mental Injury Mastery Skill Set, consisting of six eLearning assets, has been developed for agents to build knowledge and awareness of mental injury in conjunction with a best practice approach for holistic claims management. The Skill Set has been developed in association with the Australian Psychological Society and is benchmarked against a nationally accredited unit of competency for the Certificate IV in Personal Injury Management. WorkSafe and its agents have committed to adopting the Safe Work Australia framework for best practice claims management of psychological injuries.

26 27


Other developmentsOccupational rehabilitation

Occupational rehabilitation assists injured workers to remain at, or return to, safe and sustainable work. Every year more than 9,500 workers receive occupational rehabilitation, which is delivered by approved providers. During 2017/18, WorkSafe reviewed its approach to occupational rehabilitation services. A new arrangement, implemented from 1 July 2018, will see a move to more targeted and defined interventions, which more accurately meet the needs of injured workers and their workplaces.

Independent Medical Examination (IME) changes

Multidisciplinary approach

The multidisciplinary IME approach brings together a spinal surgeon and pain management specialist to jointly examine an injured worker and provide them and their treater with advice and guidance. The new approach offers injured workers alternative treatments when surgery might not be appropriate. Early indications from injured workers participating in a pilot program have been positive.

Recruitment

WorkSafe has revised its recruitment and on-boarding processes for independent medical examiners, with the aim of improving outcomes for injured workers and improving their experience with the IME process.

For people who have been off work with an injury for a prolonged period, there are often more complex issues involved. WorkSafe is exploring and addressing these issues on a number of fronts:

Victorian Injured Workers Outcome Study

Stages one and two of the Victorian Injured Worker Outcomes Study (VIWOS) have highlighted the impact administrative processes and practices are having on the experience and recovery of injured workers. Building on the research findings, WorkSafe has piloted a number of initiatives to better assist injured workers approaching 130 weeks off work and those who have been receiving workers compensation for more than 130 weeks. The pilots will continue to be tested and scaled to ensure the best outcomes for these clients.

The third and final stage of the study has involved a survey of 697 long-term injured workers, examining the personal, social, economic and psychological impacts of their injuries. A final report is expected in late 2018.

Focused pilots

As a priority, WorkSafe’s Innovation Centre is testing prevention, treatment and recovery pathways for injured workers who have been off work long term. Many of these workers have health and psychosocial issues and the pilot programs are providing insights into factors influencing health outcomes.

One of the pilots involves small interventions that provide extra support to the worker in their everyday life to help increase activity, mobility and engagement with the community. This is having a significant positive impact.

Implementation of the recommendations of the Victorian Ombudsman

In her report, Investigation into the Management of Complex Workers Compensation Claims and Worksafe Oversight, the Victorian Ombudsman made 15 recommendations to WorkSafe Victoria. WorkSafe has implemented all recommendations directed to it. WorkSafe is continuing to identify other ways as part of both short-term and long-term initiatives to improve the experiences of injured workers and the overall management of ‘complex’ claims.

The Victorian Ombudsman has commenced an investigation to follow up her 2016 investigation and is examining whether the implementation of the 2016 recommendations has changed agent practices and decision making, and improved the effectiveness of WorkSafe’s oversight.

Return to Work Inspectorate

The Return to Work Inspectorate ensures employers and workers are meeting their legal obligations. In 2017/18, the inspectorate intervened on 2,511 claims and conducted 1,999 workplace visits. The inspectorate also issued 133 improvement notices to employers for breaches of the law and achieved 396 voluntary compliances.

The Return to Work Inspectorate aims to strategically target new claims to ensure early interventions assist an injured worker back to work.

Measure 2015/16 2016/17 2017/18

Visits 1,866 1,901 1,999

Claim Interventions 1,964 2,906 2,511

Improvement Notices 271 229 133

Voluntary Compliances 466 367 396

28 29


90.3% Client service result

91.0% Employer service

89.6% Worker service

Performance from insurance operations

Breakeven premium

1.249%Accounting funding ratio

123%

$4

83m

$21

1m

$28

0m

$23

3m

$73

m

13/14 14/15 15/16 16/17 17/18

2017/18

ValueMaintaining a sustainable workers compensation scheme enables us to deliver the most appropriate services and support to injured workers as quickly as possible. Compensation entitlements include weekly payments, treatment costs and impairment lump sums. We must ensure workers compensation costs are managed to minimise the burden on Victorian businesses and deliver social and economic benefits to the Victorian community.

We know great service helps our clients to achieve health and return to work outcomes so we will always seek to improve in this area. Under WorkSafe 2030, we will be using new technologies to continue to streamline services, cut red tape and make it easier for the Victorian community to interact with us.

I think a safe workplace is an environment where people can be their best; where they can get the most out of their day for themselves but also give back to the business. This is how we want to be when interacting with our clients. We want the best for them. We want to take the time and show them that we really do care.”

Kelly WorkSafe Client Services Manager

30 31


Agent service

In 2017/18, our agents achieved strong results for their level of service to injured workers and employers. Injured worker satisfaction was 81.9%, compared to the previous year’s result of 81.3%. Employer satisfaction was 86.6%, compared to 86.4% in 2016/17.

2016/17 2017/18

Worker service agent

Allianz 80.0% 81.5%

CGU 79.4% 81.5%

EML 82.9% 81.4%

Gallagher Bassett Services 82.7% 81.9%

Xchanging 82.7% 83.4%

Scheme 81.3% 81.9%

Employer service agent

Allianz 87.8% 86.1%

CGU 85.2% 87.3%

EML 88.3% 88.2%

Gallagher Bassett Services 86.3% 83.2%

Xchanging 85.5% 88.1%

Scheme 86.4% 86.6%

Service Our service results measure the satisfaction of workers and employers with WorkSafe’s agents, the WorkSafe Advisory and our inspectorate.

We obtain these results by regularly asking workers and employers to rate the services they have received from us and our agents. We also track community perceptions of our education and enforcement activities.

In 2017/18, WorkSafe achieved a record high result of 90.3% for services to workers and employers.

The ratings for our inspectorate, inspectorate advice and guidance, insurance premium services and Advisory service mostly improved or remained steady when compared to last year.

Advisory service

WorkSafe strives for excellence in service to workers, employers and the wider community through its Advisory and client services. These services use multiple channels including phone, email and the WorkSafe website to provide information.

In 2017/18 this included:

• 2,909,206 website visits

• 10,945,236 visits to specific website pages

• 43,893 emails

• 213,578 phone calls for advice on OHS, rehabilitation and compensation

2016/17 2017/18

Client service 89.6% 90.3%

Employer service (50%) 90.6% 91.0%

Agent service to employers (50%) 86.4% 86.6%

Advisory service to employers (10%) 92.8% 92.4%

Inspector interaction with employers (15%) 98.0% 98.2%

Advice and guidance (15%) 96.4% 97.1%

Premium service to employers (10%) 89.8% 91.8%

Employee/worker service (50%) 88.5% 89.6%

Agent service to injured workers (50%) 81.3% 81.9%

Advisory service to workers (15%) 91.8% 95.9%

Inspector interaction with workers (17.5%) 97.6% 98.0%

Advice and guidance (17.5%) 97.1% 97.4%

32 33


The following table highlights the impact of external factors on WorkSafe’s result before short-term fluctuations and economic assumptions:

Financial Results2017/18

($m)2016/17

($m)2015/16

($m)2014/15

($m)2013/14

($m)

Impact on result from internal factors

Performance from Insurance Operations 73.5 233.0 280.4 210.5 483.4

Work Health and Research Institute initiatives - - - - 12.1

Result from internal factors 73.5 233.0 280.4 210.5 495.5

Impact on result from external factors

Difference between actual returns and long-term expected returns1 524.9 589.9 (621.4) 525.2 798.0

Change in inflation assumptions and discount rates2 60.6 582.2 (366.7) (156.5) (143.3)

Impact from legislative changes - (446.3) - - -

Tax (175.3) (264.7) 232.4 (125.3) (326.4)

Net Result 483.7 694.1 (475.3) 453.9 823.8

1. Favourable conditions experienced in the investment markets in 2017/18 resulted in the actual investment return being higher than the expected long-term rate of return.2. There was a favourable impact from changes in economic assumptions (i.e. lower future inflation rates partially offset by lower assumed discount rates) used

to determine claims liability in 2017/18.

Financial sustainabilityOur performance from insurance operations (PFIO) for the year was $73 million, which is $13 million above target. This result was impacted by our full year actuarial valuation, which increased our projected claims costs by $141 million. The net result of $484 million was $430 million above target after the impact of external factors. This was primarily due to higher than budget investment returns, as well as the favourable impact of lower inflation, partially offset by changes in discount rates on claims liabilities.

Core activity $000s

Occupational Health and Safety 191, 257

Insurance and Claims Management 124,606

Dispute Resolution 51,631

Total Operating Expenses 367,494

Operational expenditure by core activities

14%

52%

34%

Continuous improvementStreamlining and simplifying our processes

We are committed to streamlining and simplifying our processes to make it easier for our clients to interact with us. In 2017/18, this work involved a number of system changes and the ongoing digitisation of claims and premium documents.

As a result:

• All current claims and employer documents are now ‘electronic files’, allowing for quick and easy access to information and a more timely response to the needs of workers and employers

• Employers and providers will receive payments and reimbursements into their bank account sooner following refinements to electronic funds transfer (EFT) processing

• Employers and providers will receive an electronic remittance at the same time as a payment is made

This work has helped improve service delivery by reducing duplicate invoices and the number of telephone inquiries about payments.

WorkSafe will continue to simplify its business and deliver further efficiencies under WorkSafe 2030.

Improving capture of data and analytics

We recognise that an important step towards improving the efficiency of our operations and delivering better client outcomes is improving the way we capture and analyse data.

In 2017/18, we developed a roadmap and strategy to enhance our data and analytics capability. Implementation of the strategy will begin over the next year, initially focusing on inspections and licensing.

As capability matures, it’s expected insights will deliver an improved client experience, better outcomes for clients, a more sustainable scheme and more efficient operations.

Innovation Centre

An Innovation Centre has been established to respond to trends and market demands by testing new ideas, products and services, and, if successful, rolling them out to business areas.

The Innovation Centre will work with a range of partners, including workers, employers, government agencies and subject matter experts to ensure feasibility, viability and client-focused outcomes.

New website

WorkSafe has developed a new user-friendly website to make it simpler, faster and easier for people to find the guidance and education materials they’re looking for.

There will be ongoing testing and building to ensure new features meet the needs of all users, from employers and workers through to health and safety representatives, health professionals and safety experts.

WorkSafe stakeholders will continue to be involved at key points along the development journey.

34 35


Low cost insurance

Sound scheme management enabled us to maintain a record low average premium rate of 1.272% of payroll in 2017/18.This premium rate will continue in 2018/19. This is the lowest rate in the scheme’s history and has been maintained at this level since 2014/15. Competitive workplace injury insurance premiums reflect low injury rates and good claims management.

1.6

2%

1.4

6%

1.38

7%

1.38

7%

1.33

8%

1.33

8%

1.29

8%

1.29

8%

1.27

2%

1.27

2%

1.27

2%

1.27

2%

1.27

2%

06/07

07/08

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

18/19

Employers continue to be able to take advantage of discount options for early payment. In 2017/18, around 39% of employers took up the 5% discount by paying in August and around 12% took up the 3% discount by paying in October.

WorkSafe injury insurance average premium rates WorkSafe Scorecard 2008-2018

YearAverage

premium rate

Accounting funding

ratio Net result PFIO*Actuarial

release Dividend paid

2017/18 1.272% 123% $484m $73m ($141m)

2016/17 1.272% 119% $694m $233m ($169m)

2015/16 1.272% 112% ($475m) $280m ($135m)

2014/15 1.272% 120% $454m $211m ($60m) $242m

2013/14 1.298% 116% $824m $483m $303m $59m

2012/13 1.298% 108% $1,084m $119m $179m $193m

2011/12 1.338% 96% ($676m) $385m $182m $147m

2010/11 1.338% 108% $521m $294m $136m

2009/10 1.387% 100% $176m $654m $189m

2008/09 1.387% 97% ($1,254m) $277m $78m

2007/08 1.46% 120% ($587m) $958m $511m

*Performance from insurance operations

Assets and liabilities

As at 30 June 2018, WorkSafe’s total assets were $17.8 billion, compared to $16.5 billion at 30 June 2017. Our total liabilities were $14.5 billion, compared to $13.7 billion at 30 June 2017. The valuation determined that our accounting funding ratio was 123%, compared to 119% at 30 June 2017. This was above the target range of 82.5 to 117.5%.

36 37


Statement of Expectations

WorkSafe has implemented a range of red tape reduction initiatives in response to the Victorian Government’s Statement of Expectations for the period ending 31 December 2017.

The greatest benefits have been achieved in the Reducing Regulatory Burden area through reforms to the OHS Regulations 2017 and Equipment (Public Safety) Regulations 2017. Compliance costs for self-insurers have been reduced and premium interactions for employers have been streamlined.

In the area of Compliance Related Assistance and Advice, the digitisation of claim and premium documents was completed in November 2017 and will enable WorkSafe and its agents to provide better and faster services to injured workers, employers and health practitioners by instantly retrieving case information to respond to queries.

The experience for injured workers has also been improved through the Worker Claim App improvements, the introduction of face-to-face mobile claims management, integration of the role of GPs and physiotherapists in certificates of capacity and the health literacy program.

WorkSafe is currently working through the 2018/19 Statement of Expectations which identifies opportunities for WorkSafe to make improvements in key areas of government and operational performance, resulting in reduced costs for business and improved services to injured workers and employers.

Common law

Common law applications continue to pose a risk to the financial viability of the WorkSafe scheme, despite receiving lower than expected lodgements during 2017/18.

WorkSafe received 2,734 common law applications, representing an increase of 4.8% compared with 2016/17 (2,608). At 30 June 2018 common law accounted for 33% of WorkSafe’s total scheme liability (including recoveries, excluding claims handling expenses and risk margin), with damages payments accounting for 24% and legal costs 9%. In 2017/18, 64.5% of serious injury cases were settled without litigation with only 7.7% resulting from a court judgment. In the same period 81.4% of damages claims were settled without litigation with 1.3% resulting from a court judgment. WorkSafe continues to focus on delivering common law benefits efficiently and cost effectively where it is satisfied a worker has an entitlement to common law damages. During the year about 9% of common law applicants failed to establish a serious injury, and about 11% of workers with an accepted serious injury failed to establish an entitlement to damages from their employer’s fault.

Common Law Working Group

The Common Law Working Group reported to the WorkCover Advisory Committee in October 2017, with seven recommendations. WorkSafe is now working with legal stakeholders to further develop the recommendations into working models, with the aim of improving benefit delivery to eligible workers and reducing legal costs associated with common law claims. The Common Law Working Group was established to consider the long-term trend of increasing common law lodgements, the cost of delivering common law benefits and how the interests of workers and employers can be better served in relation to common law. The Working Group was made up of representatives from a range of organisations with an interest in the sustainability of common law.

Protecting scheme integrity

To maintain the integrity and sustainability of the WorkSafe scheme, it is important employers and workers comply with their legal obligations under the Workplace Injury Rehabilitation and Compensation Act (WIRC Act). WorkSafe ensures that employers pay their insurance premiums and detects fraud by health professionals and workers. In 2017/18, there were 28 prosecutions under the WIRC Act.

The following are some of the significant prosecutions under this Act:

• A worker was convicted and sentenced to a Community Corrections Order for a period of 24 months, with a condition to perform 250 hours of community work, for fraudulently obtaining compensation payments. The worker was also ordered to pay $33,361 in restitution

• A worker was in receipt of weekly payments as a result of a right shoulder and right wrist injury he received while working as a cleaner. The worker was convicted and sentenced to four months imprisonment, wholly suspended, and ordered to pay restitution of $66,049 for failing to disclose that he had worked for a number of employers while receiving compensation

• A worker was convicted and placed on a Community Corrections Order for a period of 24 months with a condition to perform 250 hours of unpaid community work for fraudulently receiving payments. He was also ordered to pay $17,997

• A worker, employed as a crowd controller, was shot and injured in the course of employment. During the period 4 June 2010 to 18 July 2015 the worker failed to disclose a return to work and continued to receive compensation payments totalling $188,680.80. Restitution of $190,680.80 was made. The offender pleaded guilty and was convicted and sentenced to six months imprisonment, wholly suspended for two years

• A worker, employed as a carpenter and joiner, made a claim for weekly compensation payments which was accepted. Whilst in receipt of compensation payments, the worker commenced employment with a third party. The worker was sentenced to three months imprisonment, wholly suspended for 12 months, and ordered to pay restitution of $59,976

Self-insurance

Self-insurers are approved by WorkSafe to manage their own workers compensation claims and WorkSafe continues to work with them to promote best practice in safety and return to work. As at 30 June 2018, there were 40 self-insurers operating in Victoria. This represents about 8% of total scheme remuneration.

In 2017/18, six organisations were granted approval to self-insure and three organisations ceased to be a self-insurer. The Injured Workers’ Survey service score was 69% for all self-insurers. Further information can be found in Appendix 3.

Compliance activity2016/17

result2017/18

target2017/18

result

Number of completed investigations 132 127 153

Number of prosecutions completed 20 n/a 28

Audits of bills submitted by medical practitioners and allied health providers 439 400 473

Investigations completed in 180 days 79% 90% 98%

38 39


700+ employees now working from new Geelong headquarters

New headquarters awarded platinum WELL rating and 6 star Green Star rating

13,000+GameChangers’ responses recorded

73% employee engagement score 75% in 2016/17

68% employees registered with new engagement platform GameChangers

2017/18

Our PeopleOur skilled and highly-valued employees are central to what we do and drive our success.

We aim to foster a dynamic and engaged workplace culture where our employees consistently demonstrate their commitment to our vision for Victorian workers to return home safe every day.

Physical wellbeing is intertwined with your psychological wellbeing. You need to put work into both to get the best out of yourself. In the workplace we know that when we’re psychologically well, we’re able to perform much better. We need to look after ourselves and each other to best support the Victorian community.”

Ben WorkSafe Health and Wellbeing Program Officer

41


40


An integrated safety and wellbeing focus

An integrated approach to the safety and wellbeing of WorkSafe employees has been a key focus for the 2017/18 period. Work has included:

Health and safety certification

Following the successful attainment in 2018 of SafetyMAP certification (Safety Management Achievement Program), work has commenced to transition WorkSafe in 2019/20 towards ISO 45001 certification, the new international standard for occupational health and safety. This aligns with WorkSafe’s holistic approach to health, safety and wellbeing (HSW) that recognises the relationship between the organisation, its people and the operational environment. The requirements of ISO 45001 and a redesigned heath, safety and wellbeing framework drive a high level of continual improvement, consultation and leadership engagement.

Duress systems implementation

WorkSafe has tested and implemented duress systems and safety technology for our employees working in the field. Mental health and trauma exposure management have been integrated into incident first response protocols to encourage an early intervention and supportive environment for employees. Mobile-enabled systems for reporting of incidents and gathering of trend data for process improvement have also been developed and implemented.

Mental Health and Wellbeing Charter

WorkSafe’s Health, Safety and Wellbeing Strategy recognises and aligns with the Victorian Public Sector Mental Health and Wellbeing Charter, promoting positive mental health and wellbeing for all of our people. Our activities in 2017/18 had a strong preventative focus with training centred on recognising mental health issues in the workplace. This was enhanced by the work of our peer support network and through encouraging employees to participate in team psychological strengths workshops. Our programs are well supported by online resources for individual wellbeing plans and professional psychological support through our Employee Assistance Program (EAP) partners. We are active participants on the Public Sector OHS IDC, sharing our expertise to improve OHS in the public sector.

Focused support programs

Our 50-strong Peer Support Program network is growing, as is the uptake of our Employee Assistance Programs for both employees and their families. Our Talking Health lunchtime program has had guest speakers presenting on a range of topics with excellent engagement and follow up from our employees.

OHS performance

OHS risks at WorkSafe include psychological risks, motor vehicle incidents, occupational violence and musculoskeletal injuries associated with ergonomics in cars as well as in the office environment.

Our safety management system ensures safety is embedded across the organisation through on-boarding, induction, training programs, safe work practices, consultative structures and processes for incident investigation and emergency management.

Our Health Safety and Wellbeing Strategy outlines our approach to risk reduction and management including:

• Analysis of incident data and research into technology-based controls to increase capacity to locate employees working alone and respond to distress alerts

• Refresher training for field-based employees in managing difficult people and conflict resolution

• Redesign of office spaces and early intervention to reduce the effect of musculoskeletal injuries and ergonomic risks

• Engaging leaders in training and development activities to assist in the management of psychological risk in the workplace

• Raising awareness of how to manage psychological risk and how to seek support

Please see Appendix 4 for further detail.

Geelong relocation

WorkSafe has relocated its headquarters to Geelong and it is now home to more than 700 WorkSafe employees.

The move from Exhibition Street in Melbourne was confirmed in 2015, with the construction of a new 14-storey building at 1 Malop Street in Geelong’s CBD commencing in 2016.

The $120 million building is the first in Victoria to be awarded WELL Platinum certification. WELL is a new international standard for healthy buildings and WorkSafe’s new Geelong headquarters is only the second building in the world to achieve platinum accreditation. The building also has a five-star NABERS and six-star Green Star rating.

In the past 12 months, 160 WorkSafe employees have left the organisation, choosing not to make the move to Geelong. These employees were provided with access to redeployment within the Victorian public sector or redundancy payments.

A small contingent of Melbourne-based employees will work from offices in Collins Street.

Our culture

WorkSafe is guided by five values: constructive, accountable, transparent, effective and caring. These values underpin the work we do and guide us in our day-to-day activities.

We are committed to creating a workplace that represents the diversity of the community and our stakeholders. We are also committed to providing our employees with a workplace that is free from discrimination, harassment and bullying.

Our Disability Action Plan is now in its second year, with a number of significant milestones achieved. The opening of the new WorkSafe building in Geelong has provided a fully accessible space for employees and visitors. We are working towards ensuring the new standard we have set in Geelong is created in WorkSafe’s offices across Victoria. WorkSafe has also prioritised the creation of employment opportunities for people with a disability through targeted recruitment initiatives and updates to procurement processes. Through delivery of initiatives under the Disability Action Plan, WorkSafe has continued its commitment to safe and inclusive workplace practices, both within our workforce and in partnership with stakeholders.

GameChangers

In 2017/18, WorkSafe employees were introduced to a new employee engagement platform called GameChangers.

The new platform will play an important role as we reposition the organisation’s values and prepare for the change under WorkSafe 2030. We are transitioning to a client-centred and prevention-led culture and our values will enable us to engage and interact with the Victorian community as we make the shift towards shared community workplace safety goals.

GameChangers has been embraced by employees, with 68% of the workforce registering in the first seven weeks of its launch. More than 13,000 responses to a range of questions, activities and conversation topics have been recorded.

The employee engagement score that emerged from input into GameChangers was 73% for 2017/18. This represents a small shift from the 75% figure for 2016/17, which is a very positive result in light of the significant change that WorkSafe has undergone this year.

42 43


Financial statements

Comprehensive Operating StatementBalance SheetStatement of Changes in EquityCash Flow Statement

Notes to the financial statements

1. About this report

The basis on which the financial statements have been prepared and compliance with reporting regulations.

2. Results from insurance operations Insurance related activities

2.1 Underwriting result2.2 Premiums2.2.1 Premium revenue2.2.2 Premium receivables

2.2.3 Premium creditors

2.3 Claims

2.3.1 Claims expense

2.3.2 Outstanding claims

2.3.3 Recoveries revenue

2.3.4 Recoveries receivable

2.3.5 Actuarial assumptions and methods

2.4 Authorised agent fees

2.5 Insurance contracts – risk management policies and procedures

3. Investment portfolio and performance Investment results and portfolio

3.1 Investment income and investment expenses

3.2 Investments

3.3 Cash and cash equivalents

3.4 Explanation of volatility of financial results

4. Cost of operations Operational activities

4.1 Other income

4.2 Other operating costs

4.3 Employee superannuation

4.4 Employee related provisions

5. Other assets and liabilities Other non-insurance assets and liabilities

5.1 Other receivables

5.2 Property, plant and equipment

5.3 Intangibles

5.4 Other payables

5.5 Other provision

5.6 Commitments and contingencies

6. Taxation and transactions with the State Items subject to taxation and transactions

with the State

6.1 Income tax

6.2 Deferred tax

6.3 Dividends

7. Financial instruments and valuation judgements Financial instruments and fair value determination

7.1 Financial instruments

7.2 Off-setting of financial assets and financial liabilities

7.3 Fair values

8. Other disclosures

8.1 Responsible persons

8.2 Remuneration of executives

8.3 Related parties

8.4 Entity consolidated pursuant to section 53(1)(b) of the FMA

8.5 Remuneration of auditors

8.6 Events after reporting date

8.7 Australian Accounting Standards issued that are not yet effective

9. Statement by Chairman, Chief Executive and Chief Financial Officer

Financial ReportHow this report is structuredThe Victorian WorkCover Authority has presented its audited general purpose financial statements for the financial year ended 30 June 2018 in the following structure to provide users with the information about WorkSafe’s stewardship of resources entrusted to it.

44 45


Balance SheetAt 30 June 2018

2018 2017

Note $000s $000s

Current assets

Cash in hand and at bank 3.3 42,425 40,325

Premium receivables 2.2.2 103,357 75,882

Investment assets 3.2 2,558,608 2,682,312

Recoveries receivable 2.3.4 48,786 49,080

Prepayments 6,822 8,199

Other receivables 5.1 6,299 5,759

Total current assets 2,766,297 2,861,557

Non-current assets

Investment assets 3.2 14,639,416 13,093,466

Recoveries receivable 2.3.4 226,804 232,740

Property, plant and equipment 5.2 42,499 18,220

Intangibles 5.3 40,122 49,612

Deferred tax assets 6.2 118,661 262,338

Total non-current assets 15,067,502 13,656,376

Total assets 17,833,799 16,517,933

Current liabilities

Premium creditors 2.2.3 72,372 65,992

Other payables 5.4 138,492 99,478

Outstanding claims 2.3.2 2,245,123 1,940,747

Investment related liabilities 3.2 598,286 553,729

Tax liabilities 6.1 31,632 -

Employee related provisions 4.4 31,264 36,075

Other provision 5.5 2,373 67

Total current liabilities 3,119,542 2,696,088

Non-current liabilities

Outstanding claims 2.3.2 11,452,106 11,039,682

Investment related liabilities 3.2 2 105

Employee related provisions 4.4 2,982 3,729

Other provision 5.5 836 3,644

Total non-current liabilities 11,455,926 11,047,160

Total liabilities 14,575,468 13,743,248

Net assets 3,258,331 2,774,685

Equity

Accumulated surplus 3,258,331 2,774,685

Total equity 3,258,331 2,774,685

The above balance sheet should be read in conjunction with the accompanying notes to the financial statements.

Financial StatementsComprehensive Operating Statement For the financial year ended 30 June 2018

2018 2017

Note $000s $000s

Revenue and Income

Premium revenue 2.2.1 2,336,040 2,213,806

Investment income 3.1 1,606,140 1,660,600

Recoveries revenue 2.3.3 144,295 132,328

Other income 4.1 24,028 21,268

Total revenue and income 4,110,503 4,028,002

Expenses

Claims expense 2.3.1 (2,788,910) (2,512,048)

Authorised agent fees 2.4 (275,734) (227,953)

Investment expenses 3.1 (52,106) (48,733)

Other operating costs 4.2 (334,798) (280,453)

Total expenses (3,451,548) (3,069,187)

Result before income tax 658,955 958,815

Tax expense 6.1 (175,309) (264,666)

Net result for the year 483,646 694,149

Other comprehensive income - -

Other comprehensive income, net of income tax - -

Total comprehensive income for the year 483,646 694,149

The above comprehensive operating statement should be read in conjunction with the accompanying notes to the financial statements.

46 47


Cash Flow StatementFor the financial year ended 30 June 2018

2018 2017

Note $000s $000s

Cash flows from operating activities

Premium received 2,540,146 2,419,035

Claims paid (1,990,928) (1,864,700)

Self insurer re-entry settlement (65,956) 1,393

Claim recoveries received 141,136 127,927

Authorised and management agent fees (332,559) (309,987)

Dividends and distributions received 627,279 428,276

Interest received 32,152 56,989

Health and safety licence fees received 7,091 4,910

Contribution to DTF Consolidated Fund for court use - (4,293)

Sundry receipts 22,775 20,335

Goods and services tax paid to the ATO (160,450) (155,396)

Income tax paid - -

Payments to suppliers and employees (351,329) (288,337)

Net cash flows from operating activities 3.3 469,357 436,152

Cash flows from investing activities

Sale of investments 4,890,191 4,642,857

Purchase of investments (5,602,721) (4,986,011)

Purchase of property, plant and equipment (32,775) (8,996)

Proceeds from disposal of plant and equipment 2 61

Payments for intangibles (5,988) (6,425)

Net cash flows (used in) investing activities (751,291) (358,514)

Net increase in cash and cash equivalents (281,934) 77,638

Cash and cash equivalents at beginning of the year 1,672,215 1,621,083

Effects of exchange rate changes on cash held in foreign currencies 3,752 (26,506)

Cash and cash equivalents at end of the year 3.3 1,394,033 1,672,215

The above cash flow statement should be read in conjunction with the accompanying notes to the financial statements.

Statement of Changes in EquityFor the financial year ended 30 June 2018

Total

$000s

Balance at 1 July 2016 2,080,536

Net result for the year 694,149

Other comprehensive income -

Total comprehensive income for the year 694,149

Balance at 30 June 2017 2,774,685

Net result for the year 483,646

Other comprehensive income -

Total comprehensive income for the year 483,646

Balance at 30 June 2018 3,258,331

The above statement of changes in equity should be read in conjunction with the accompanying notes to the financial statements.

48 49


Compliance information

These general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards which include Interpretations, issued by the Australian Accounting Standards Board. For the purposes of preparing the financial statements, the Victorian State Government has determined that WorkSafe is a not-for-profit entity. Where appropriate, those paragraphs in the Australian Accounting Standards applicable to not-for-profit entities have been applied.

The audited annual financial statements were authorised for issue in accordance with a resolution of the Board on 23 August 2018.

Regulatory Context

WorkSafe administers the following legislation:

• Occupational Health and Safety Act 2004 – health, safety and welfare in the workplace

• Workplace Injury Rehabilitation and Compensation Act 2013 – workers compensation and the rehabilitation of injured workers, where the injury occurred after 1 July 2014

• Accident Compensation Act 1985 – workers compensation and the rehabilitation of injured workers, where the injury occurred prior to 1 July 2014

• Workers Compensation Act 1958 – workers compensation prior to 1985.

• Dangerous Goods Act 1985 – explosives and other dangerous goods

• Equipment (Public Safety) Act 1994 – high-risk equipment used in non-work-related situations

WorkSafe also administers regulations made under these Acts.

1. About this reportWorkCover Authority Fund

The WorkCover Authority Fund was established on 1 December 1992 under the Accident Compensation Act 1985 and is maintained by the Victorian WorkCover Authority. The Victorian WorkCover Authority is a statutory authority established by statute enacted by the Victorian State Parliament and domiciled in Australia. The Victorian WorkCover Authority trades under the name of WorkSafe Victoria (WorkSafe).

WorkCover Authority Fund

The WorkCover Authority Fund was established on 1 December 1992 under the Accident Compensation Act 1985 and is maintained by the Victorian WorkCover Authority. The Victorian WorkCover Authority is a statutory authority established by statute enacted by the Victorian State Parliament and domiciled in Australia. The Victorian WorkCover Authority trades under the name of WorkSafe Victoria (WorkSafe).

Basis of preparation

These financial statements cover WorkSafe as an individual reporting entity and include the Victorian Asbestos Eradication Agency (VAEA), which has been consolidated into WorkSafe’s financial statements pursuant to a determination made by the Minister for Finance under section 53(1)(b) of the Financial Management Act 1994. The VAEA is not controlled by WorkSafe. All transactions and balances between consolidated entities are eliminated.

The financial statements have been prepared on an accrual basis, and are based on historical costs and do not take into account changing money values, except for outstanding claims liabilities, recoveries receivable, employee benefits liabilities and leasehold restoration provision which are included at present value, and investments and property, plant and equipment which are included at fair value. Historical cost is based on the fair value of the consideration given in exchange for assets.

Amounts have been rounded to the nearest thousand dollars, unless otherwise stated. The presentation currency of WorkSafe is the Australian dollar, which is also its functional currency.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. Unless otherwise stated, accounting policies selected have been consistently applied to all periods presented in the financial statements.

Judgements, estimates and assumptions are required to be made about financial information being presented. The significant judgements in the preparation of these financial statements are disclosed in the notes where amounts affected by those judgements are disclosed. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revisions affect only that period, or in the period of the revision and future periods if the revisions affect both current and future periods. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements have been disclosed in Notes 2.3.4, 2.3.5 and 7.3.

50 51


2.2 Premiums

2.2.1 Premium revenue

2018 2017

$000s $000s

Gross premium 2,388,959 2,230,804

Reassessment of prior years’ premium 15,239 47,010

Premium discount allowed (66,235) (63,270)

Premium fines and penalties 10,794 10,290

(Increase) decrease in provision for impairment of premium debts (2,146) 157

Premium bad debts written-off (10,571) (11,185)

2,336,040 2,213,806

Premium revenue comprises amounts charged to employers by WorkSafe for WorkCover insurance. The earned portion of premiums received and receivable is recognised as revenue. Premium is treated as earned from the effective registration date and is recognised as revenue over the period.

Included above is an estimated increase of $44.9 million (2017: $27.8 million) in relation to confirmed premium. Confirmed premium estimate makes allowance for employers who have not yet certified their remuneration. The premium increase or decrease that may result from the reassessment of prior year’s premium estimate (i.e. the difference between the actuarial estimation and actual certification) is taken up as a part of current year’s premium.

The rateable remuneration estimate on which the confirmed premium estimate is based, is obtained through an independent actuary.

Bad debts written-off during the year include unpaid premium for prior years.

2.2.2 Premium receivables

2018 2017

$000s $000s

Premium receivables 105,692 93,251

Provision for impairment (47,315) (45,169)

58,377 48,082

Confirmed premium estimate 44,980 27,800

103,357 75,882

Premium receivable amounts due from employers (being the amounts due excluding the provision for confirmed premium) are initially recognised at fair value. They are subsequently measured at fair value which is approximated to by taking the initially recognised amounts and reducing them for impairment as appropriate. The confirmed premium estimate at 30 June 2018 represents an increase in premium receivables of $44.9 million (2017: $27.8 million) based on the actuarial assessment. The average credit period for premium receivables is 30 days.

Included within premium receivables at the reporting date are $50.98 million (2017: $50.36 million) of past due receivables and WorkSafe has provided provision for impairment for these receivables. WorkSafe does not hold any collateral over these

2. Results from insurance operationsIntroduction to this section

WorkSafe has two important functions being prevention of workplace injuries and helping injured workers back into the workforce.

WorkSafe provides workplace injury insurance for employers and manage the workers compensation scheme in Victoria.

The funding required to support WorkSafe’s functions are sourced from insurance premiums collected from employers within Victoria, and investment income (Section 3).

This sections provides details of premium collected by WorkSafe and expenditure incurred to perform its functions.

This section is structured as follows:

2.1 Underwriting result

2.2 Premiums2.2.1 Premium revenue2.2.2 Premium receivables2.2.3 Premium creditors

2.3 Claims2.3.1 Claims expense2.3.2 Outstanding claims2.3.3 Recoveries revenue2.3.4 Recoveries receivable2.3.5 Actuarial assumptions and methods


2.5 Insurance contacts – risk management policies and procedures

2.1 Underwriting result

2018 2017

Note $000s $000s

Premium revenue 2.2.1 2,336,040 2,213,806

Underwriting expenses

Gross claims incurred 2.3.1 (2,756,539) (2,480,979)

Recoveries revenue 2.3.3 144,295 132,328

Net claims incurred (2,612,244) (2,348,651)

Dispute resolution expenses 2.3.1 (32,371) (31,069)

Authorised agent fees 2.4 (275,734) (227,953)

Total underwriting expenses (2,920,349) (2,607,673)

Underwriting result (584,309) (393,867)

52 53


2.3 Claims

2.3.1 Claims expense

2018 2017

Current Year $000s

Prior Years$000s

Total$000s

Current Year$000s

Prior Years$000s

Total$000s

Gross claims paid 211,724 1,828,016 2,039,740 205,868 1,634,473 1,840,341

Movement in outstanding claims

2,998,401 (2,137,860) 860,541 2,823,360 (1,681,420) 1,141,940

Gross claims incurred - undiscounted

3,210,125 (309,844) 2,900,281 3,029,228 (46,947) 2,982,281

Discount and discount movement

(476,122) 332,380 (143,742) (440,960) (60,342) (501,302)

Gross claims incurred 2,734,003 22,536 2,756,539 2,588,268 (107,289) 2,480,979

Current year claims relate to risks borne in the current financial year. Prior year claims relate to a reassessment of the expense for risks borne in all previous financial years.

The claim payments and movement in outstanding claims liability during the year by payment type are as follows:

2018 2017

Claims Paid$000s

Liability Movement

$000sTotal

$000sClaims Paid

$000s

LiabilityMovement

$000sTotal

$000s

Weekly compensation 714,015 423,373 1,137,388 669,448 587,187 1,256,635

Medical including medico-legal 415,623 197,428 613,051 404,556 5,757 410,313

Impairment benefits 92,806 (29,661) 63,145 87,360 (31,212) 56,148

Common law 596,923 54,099 651,022 522,767 87,966 610,733

Other payment types 154,417 (17,077) 137,340 157,603 (47,717) 109,886

Claims handling expenses - 34,978 34,978 - (9,702) (9,702)

Risk margin - 53,660 53,660 - 48,359 48,359

Self-insurer re-entry settlement 65,956 - 65,956 (1,393) - (1,393)

Gross claims incurred 2,039,740 716,800 2,756,540 1,840,341 640,638 2,480,979

Claims handling expenses are an allowance made for the expenses to be incurred in settling claims. The risk margin provides for the inherent uncertainty in the central estimate of the outstanding claims.

balances. The average age of those receivables that are past due but not impaired is 71 days (2017: 71 days).

2018 2017

$000s $000s

Ageing of past due premium receivable

30 days past due 4,650 3,928

31 - 60 days past due 2,342 1,883

61 - 90 days past due 585 686

91 - 180 days past due 2,391 1,899

More than 180 days past due 41,022 41,964

50,989 50,360

A provision for impairment of receivables is established when there is objective evidence that WorkSafe will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows. The impairment charge is recognised in the comprehensive operating statement.

WorkSafe provides fully for uncollected debts of the employers who are in administration, receivership, liquidation or bankruptcy, and those debts where events have occurred and/or historical experience exists, which indicates that recovery of the debt is considered unlikely. A provision is also made for other past due debts based on historical loss experience.

2018 2017

$000s $000s

Movement in provision for impairment

Balance at beginning of the year 45,169 45,326

Amounts written-back during the year (876) (773)

Increase in allowance recognised in comprehensive operating statement 3,022 616

Balance at end of the year 47,315 45,169

Unexpired risk liability

All WorkCover insurance expires on 30 June and hence no unearned premium exists at the year end reporting date.

Given no unearned premium exists at the year end reporting date a liability adequacy test is not undertaken at 30 June. A liability adequacy test assesses whether the unearned premium liability is sufficient to cover all expected future cash flows relating to future claims against current insurance contracts.

2.2.3 Premium creditors

Premium creditors represent amounts owing to employers as a result of premium being in credit at the reporting date.

54 55


Reconciliation of movement in discounted net outstanding claims liability

2018 2017

Gross$000s

Recoveries $000s

Net $000s

Gross $000s

Recoveries $000s

Net $000s

Balance at beginning of the year

12,980,429 (281,820) 12,698,609 12,339,792 (281,804) 12,057,988

Effect of change in economic assumptions

(65,455) 6,894 (58,561) (600,411) 5,272 (595,139)

Effect of past inflation rate different to assumptions

(2,686) 725 (1,961) 12,919 - 12,919

Effect of changes in other assumptions

154,030 3,083 157,113 645,324 6,471 651,795

Increase in claims incurred in current accident year

2,931,870 (137,432) 2,794,438 2,768,463 (128,813) 2,639,650

Release of risk margin and claims handling expenses

(525,480) - (525,480) (483,809) - (483,809)

Cost of prior period claims moving closer to payment

264,261 (17,567) 246,694 138,493 (15,258) 123,235

Incurred claims recognised in the comprehensive operating statement

2,756,540 (144,297) 2,612,243 2,480,979 (132,328) 2,348,651

Claim (payments) recoveries during the year

(2,039,740) 150,527 (1,889,213) (1,840,341) 132,311 (1,708,030)

Balance at end of the year 13,697,229 (275,590) 13,421,639 12,980,429 (281,820) 12,698,609

2018 2017

$000s $000s

Gross claims incurred 2,756,539 2,480,979

Dispute resolution expenses

Certified payments to Accident Compensation Conciliation Service (ACCS) 16,496 14,966

Contribution to DTF Consolidated Fund for court use 8,473 8,587

Medical Panels costs 4,043 4,194

WorkCover Assist costs 2,261 2,232

Union Assist costs 1,098 1,090

32,371 31,069

Total claims expense recognised in the comprehensive operating statement

2,788,910 2,512,048

The estimated cost of claims includes expenses to be incurred in settling claims gross of the expected value of recoveries. Claims expense which includes the movement in the liability for outstanding claims, is recognised in respect of insurance business and uninsured employers.

2.3.2 Outstanding claims

2018 2017

$000s $000s

Summary of valuation

Expected future claim payments (undiscounted) 14,265,981 13,504,135

Discount to present value (2,846,918) (2,713,234)

11,419,063 10,790,901

Claims handling expenses 1,255,956 1,220,978

12,675,019 12,011,879

Risk margin 1,022,210 968,550

Liability for outstanding claims 13,697,229 12,980,429

Current 2,245,123 1,940,747

Non-current 11,452,106 11,039,682

13,697,229 12,980,429

Refer to Note 2.3.5 for detailed disclosures of how the claim liability is estimated and actuarial assumptions applied.

2018 2018 2017 2017 2016

Liability $000s

Movement $000s

Liability $000s

Movement $000s

Liability $000s

Movement in outstanding claims liability

Weekly compensation 3,808,712 423,373 3,385,339 587,186 2,798,153

Medical including medico-legal 2,753,205 197,428 2,555,777 5,757 2,550,020

Impairment benefits 412,736 (29,661) 442,397 (31,212) 473,609

Common law 3,662,994 54,099 3,608,895 87,966 3,520,929

Other payment types 781,416 (17,077) 798,493 (47,717) 846,210

Claims handling expenses 1,255,956 34,978 1,220,978 (9,702) 1,230,680

Risk margin 1,022,210 53,660 968,550 48,359 920,191

13,697,229 716,800 12,980,429 640,637 12,339,792

56 57


Net

Accident year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total

$000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

− At end of

accident

year

1,578,047 1,724,918 1,912,564 1,969,438 2,052,636 1,982,997 2,086,879 2,166,413 2,375,647 2,549,701

− One year

later

1,626,949 1,774,606 1,896,357 1,970,647 1,883,439 1,970,041 2,081,595 2,260,372 2,422,012

− Two years

later

1,608,655 1,729,784 1,849,733 1,930,696 1,855,861 1,919,025 2,140,070 2,296,213

− Three years

later

1,570,928 1,699,844 1,833,695 1,905,956 1,831,630 1,945,403 2,181,619

− Four years

later

1,538,342 1,695,400 1,815,331 1,914,384 1,810,339 1,939,257

− Five years

later

1,556,909 1,690,995 1,855,172 1,987,630 1,849,943

− Six years

later

1,528,977 1,676,042 1,833,646 1,968,034

− Seven years

later

1,548,322 1,682,277 1,782,409

− Eight years

later

1,549,044 1,655,822

− Nine years

later

1,520,006

Current

estimate of

cumulative

claims cost

1,520,006 1,655,822 1,782,409 1,968,034 1,849,943 1,939,257 2,181,619 2,296,213 2,422,012 2,549,701 20,165,015

Cumulative

payments

(1,201,568) (1,254,310) (1,324,031) (1,277,354) (1,069,707) (947,195) (847,450) (644,081) (431,935) (123,594) (9,121,226)

Outstanding

claims -

undiscounted

318,437 401,512 458,378 690,680 780,236 992,062 1,334,169 1,652,132 1,990,077 2,426,106 11,043,789

2008 and

prior years

2,922,208

Total

outstanding

claims -

undiscounted

13,965,997

Discount (2,822,525)

Claims

handling

expenses

1,255,956

Risk margin 1,022,210

Total outstanding claims net of recoveries per balance sheet 13,421,639

Note: The development table has been updated to allow for the exit of the Municipal Association of Victoria (MAV) from the scheme during the year.

The following tables show the development of gross and net undiscounted outstanding claims relative to the ultimate expectedclaims for the ten most recent accident years.

Gross

Accident year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total

$000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

− At end of

accident

year

1,655,804 1,812,507 2,016,583 2,088,919 2,171,166 2,105,325 2,220,406 2,298,765 2,511,356 2,698,267

− One year

later

1,712,256 1,873,937 2,000,119 2,087,436 2,000,824 2,094,596 2,213,565 2,392,543 2,554,784

− Two years

later

1,698,567 1,828,707 1,951,668 2,047,479 1,976,266 2,043,718 2,271,630 2,426,400

− Three years

later

1,662,678 1,795,588 1,935,963 2,024,430 1,952,715 2,071,589 2,309,455

− Four years

later

1,629,026 1,792,511 1,923,715 2,033,784 1,929,350 2,062,883

− Five years

later

1,648,122 1,793,105 1,964,172 2,106,998 1,965,360

− Six years

later

1,623,086 1,776,244 1,942,846 2,083,736

− Seven years

later

1,642,423 1,779,662 1,895,597

− Eight years

later

1,641,479 1,757,293

− Nine years

later

1,612,428

Current

estimate of

cumulative

claims cost

1,612,428 1,757,293 1,895,597 2,083,736 1,965,360 2,062,883 2,309,455 2,426,400 2,554,784 2,698,267 21,361,202

Cumulative

payments

(1,290,225) (1,349,616) (1,427,182) (1,376,843) (1,161,235) (1,038,202) (933,145) (726,376) (513,515) (211,546) (10,027,884)

Outstanding

claims -

undiscounted

322,203 407,678 468,415 706,892 804,125 1,024,682 1,376,310 1,700,023 2,041,269 2,481,722 11,333,318

2008 and

prior years

2,932,663

Total

outstanding

claims -

undiscounted

14,265,981

Discount (2,846,918)

Claims

handling

expenses

1,255,956

Risk margin 1,022,210

Total gross outstanding claims per balance sheet 13,697,229

58 59


2.3.5 Actuarial assumptions and methods

WorkSafe provides WorkCover insurance which is long-tail in nature, meaning that claims may not be reported until many years after the injury and are typically settled more than one year after being reported.

Significant estimates and judgements are made by WorkSafe’s independent valuation actuary in respect of outstanding claims liability amounts disclosed in the financial statements. These estimates and judgements are continually being evaluated and are based on historical experience, as well as enhancements to actuarial modelling techniques.The key areas of significant estimates and judgements and the methodologies used to determine key assumptions are set out below.

Provision is made for the estimated cost of claims incurred but not settled at the reporting date, including the cost of claims incurred but not reported to WorkSafe. WorkSafe takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established.

The estimation of outstanding claims liabilities is based largely on the assumption that past developments are an appropriate predictor of the future and involves a variety of actuarial techniques that analyse experience, trends and other relevant factors. Various types of payments made by WorkSafe are grouped into a number of benefit categories and are analysed separately. It is then followed by calculations that take into account of inflation, discount rates and various assumptions, etc.

This is illustrated below:

Modelling

Results

• Various actuarial models are applied to estimate future claim payments and claims handling expense payments (can be a combination of methods depending on the benefit type and extent of development of past incident period). Actuarial modelling technique include:

− payments per claim incurred model

− payments per active claim model

− payments per claim settled model

− annuity based individual claim model.

• Prior claims experience is analysed and this provides a basis for assumptions to be used in the actuarial models.

• Assumptions selected include allowances for uncertainties which may create distortions in the experience including:

− changes in WorkSafe processes which might accelerate or slow down the development and/or recording of paid or incurred claims, compared with the statistics from previous periods

− changes in the legal environment

− the effects of inflation

− medical and technological developments.

• Assumptions are selected to produce actuarial projections that are unbiased and central.

• The actuarial projections are converted to inflated values, taking into account assumptions about future inflation.

• The inflated estimated liability is discounted to its present value. Discount rates are based on the risk free rates. This is the net central estimate of the outstanding claims liability.

• A risk margin is applied to achieve a 75% probability of adequacy. This is the provision.

Assumptions

2.3.3 Recoveries revenue

2018 2017

Current Year $000s

Prior Years $000s

Total $000s

Current Year $000s

Prior Years $000s

Total $000s

Recoveries received 88,492 62,035 150,527 79,628 52,683 132,311

Movement in recoveries receivable

55,615 (60,990) (5,375) 55,645 (50,992) 4,653

Recoveries revenue - undiscounted

144,107 1,045 145,152 135,273 1,691 136,964

Discount and discount movement

(6,674) 5,817 (857) (6,459) 1,823 (4,636)

Recoveries revenue 137,433 6,862 144,295 128,814 3,514 132,328

Recoveries from the Transport Accident Commission, prior insurers and other third parties are recognised as revenue.

2.3.4 Recoveries receivable

2018 2017

$000s $000s

Expected future recoveries (undiscounted) 299,983 305,356

Discount to present value (24,393) (23,536)

Recoveries receivable on incurred claims 275,590 281,820

Current 48,786 49,080

Non-current 226,804 232,740

275,590 281,820

Recoveries receivable are reported as assets and measured as the present value of the expected future receipts. The actuarial assessment of the recoveries receivable is in a manner similar to the assessment of outstanding claims (see Note 2.3.2). A provision for impairment is established when there is objective evidence that WorkSafe will not be able to collect all the recovery amounts.

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Inflation rate

Short term economic inflation assumptions are set by reference to DTF forecasts. The long term CPI inflation rate assumption is based on the Reserve Bank target. The long term AWE inflation rate assumption has been set by maintaining a fixed gap with the CPI, based on the historic gap between CPI and AWE.

Average weighted term to settlement

The average weighted term to settlement is calculated separately by benefit type based on historical settlement patterns. It is an outworking of the models rather than an explicit assumption and represents the average inflated and discounted term of payments in the outstanding liability from the balance date to payment.

Risk margin

The risk margin provides for the inherent uncertainty in the central estimate of the outstanding claims.

An overall risk margin is determined allowing for the relative uncertainty of the outstanding claims estimate. Uncertainty is analysed for each benefit type taking into account potential uncertainties relating to the actuarial models and assumptions, the quality of the underlying data used in the models, the general insurance environment, and the impact of legislative reform.

The estimate of uncertainty is greater for long-tail business when compared to short-tail business due to the longer time until settlement of outstanding claims. The assumptions regarding uncertainty are applied to the net central estimates in order to arrive at an overall provision which is intended to have a 75% probability of adequacy.

Sensitivity analysis – insurance contracts

WorkSafe’s valuation actuary conducts sensitivity analyses to quantify the exposure to risk of changes in the key underlying variables. The valuations included in the reported results are calculated using certain assumptions about these variables as disclosed above. The movement in any key variable will impact the financial performance and equity of WorkSafe. The table below describes how a change in each assumption will affect the insurance liabilities and shows an analysis of the sensitivity of the net result and equity to changes in these assumptions.

Variable impact of movement in variable

Average weekly size The average weekly size per claim will vary with the number of injured workers receiving weekly compensation and the amount of that compensation. The amount of compensation depends not only on the amount paid per week but more significantly on the durations for which injured workers receive this compensation. Increases or decreases in any of these components will result in a corresponding impact on claims expense. The ± 1% movement shown in the impact table below represents a 1% increase or decrease in all future estimated weekly payments included in the outstanding claims liability.

Average common law size

The average common law size per claim will vary with the number of injured workers receiving common law compensation and the amount of that compensation (including legal costs). Increases or decreases in any of these components will result in a corresponding impact on claims expense. The ± 1% movement shown in the impact table below represents a 1% increase or decrease in all future estimated common law payments included in the outstanding claims liability.

Expense rate An estimate for the internal costs of handling claims is included in the outstanding claims liability. An increase or decrease in the expense rate assumption would have a corresponding impact on claims expense.

Discount rates The outstanding claims liability is calculated by reference to expected future payments. These payments are discounted to adjust for the time value of money. An increase or decrease in the assumed discount rate will have an opposing impact on claims expense.

Inflation rates Expected future payments are inflated to take account of expected future cost increases. An increase or decrease in the assumed levels of future inflation would have a corresponding impact on claims expense.

Actuarial assumptions

The following assumptions have been made in determining the outstanding claims liabilities:

2018 2017

Average claim frequency (claims per worker) 0.87% 0.91%

Average claim size $77,741 $73,438

• Average weekly size $29,891 $26,538

• Average common law size $24,405 $23,770

• Average all other payments size $23,445 $23,130

Expense rate 11.0% 11.3%

Discount rate

• Weighted average discount rate (0 – 20 years) 2.68% 2.73%

• Long-term discount rate (21+ years) 3.87% 4.58%

Inflation rate

• Weighted average AWE inflation rate (0 – 20 years) 2.96% 3.43%

• Long-term AWE inflation rate (21+ years) 3.27% 3.29%

• Weighted average CPI inflation rate (0 – 20 years) 2.17% 2.12%

• Long-term CPI inflation rate (21+ years) 2.01% 2.03%

Average weighted term to settlement from balance date 6.5 years 6.1 years

Risk margin 8.0% 8.0%

Process used to determine assumptions

A description of the processes used to determine these assumptions is provided below:

Average claim frequency

Claim frequency for the current underwriting year is estimated by projecting the number of claims incurred and dividing this by the number of workers for the year. The average claim frequency is not used directly in the valuation models but provides a high level indicator of claim experience.

Average claim size

The average claim size is in respect of the current underwriting year and takes into account the expected payments for each payment type (e.g. weekly, medical, impairment benefits, common law, other), as well as the proportion of total injured workers who receive each benefit. The figures shown in the above table are in current values, i.e. in dollars at the respective balance date before the impact of inflation to the time of payment and discounting the resultant payments back to the valuation date.

The average claim size is further broken down into two key components; the costs of weekly compensation and common law compensation (including legal costs) per claim. This takes into account the number of injured workers expected to access the particular compensation as well as the amount of compensation expected to be paid. For completeness, the average sizes of other compensations are also shown.

Expense rate

The claims handling expense allowance is calculated as a proportion of total projected claim payments of the scheme at the balance date based on recent historical experience.

Discount rate

Discount rates are based on observed bond yields where these are available (the longest duration Australian Government bond is 30 years). Beyond this point, an extrapolation approach is used to blend to the long term discount rate assumption.

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2.5 Insurance contracts – risk management policies and procedures

The financial condition and operation of WorkSafe is affected by a number of key risks including insurance, interest rate, credit, market, liquidity, financial and operational risks. WorkSafe’s policies and procedures in respect of managing these risks are set out below.

Objectives in managing risks arising from insurance contracts and policies mitigating those risks

WorkSafe has an objective to manage insurance risk thus reducing the volatility of insurance premiums and performance from insurance operations. In addition to the inherent uncertainty of insurance risk, which can lead to significant variability in the loss experience, the net result for WorkSafe is significantly affected by short-term market and economic factors external to the organisation as explained in Note 3.4.

WorkSafe has developed, implemented and maintained a sound and prudent risk management strategy that encompasses all aspects of its operations.

The strategy sets out WorkSafe’s policies and procedures, processes and controls in relation to the management of likely financial and non-financial risks.

Key aspects of the processes in place to mitigate risks include:

• the use of sophisticated management information systems, which provide reliable and up-to-date data on the risks to which the business is exposed at any point in time

• the use of detailed internal monitoring tools which link actuarial valuation projections with the management information systems to monitor claim patterns

• adherence to reliable procedures for pricing risk

• an investment allocation strategy which seeks to optimise returns within the balance sheet risk parameters adopted by WorkSafe.

Terms and conditions of insurance business

The terms and conditions of the WorkCover insurance scheme administered by WorkSafe were established under the Accident Compensation Act 1985 and have continued operation under the Workplace Injury Rehabilitation and Compensation Act 2013 . Cover is for annual periods ending 30 June each year. The terms and conditions of the scheme are the same for all insured employers.

Concentration of insurance risk

WorkSafe underwrites WorkCover insurance for Victorian employers. The employers are diversified by sector, industry, size and geographic location. Concentration of insurance risk principally arises from major sites or centres of employment such as the Melbourne CBD. Such issues are considered when determining scheme financing strategies.

Interest rate risk

Assets and liabilities arising from insurance contracts entered into are directly exposed to interest rate risk. Changes in interest rates affect the valuation of WorkSafe’s assets and liabilities.

Credit risk

Assets and liabilities arising from insurance contracts are stated in the balance sheet at the amounts that best represent the maximum credit risk exposure at the reporting date. There are no significant concentrations of credit risk.

The impact on net result and equity, had changes in the key variables occurred at the end of the reporting period, is summarised in the table below:

2018 2017

Net Result$000s

Equity$000s

Net Result$000s

Equity$000s

Recognised amounts per the financial statements 483,646 3,258,331 694,149 2,774,685

Variable Movement

Average weekly size +1% 454,852 3,229,537 668,556 2,749,092

-1% 512,440 3,287,125 719,742 2,800,278

Average common law size +1% 455,954 3,230,639 666,866 2,747,402

-1% 511,338 3,286,023 721,432 2,801,968

Expense rate +1% 397,973 3,172,658 613,222 2,693,758

-1% 569,319 3,344,004 775,076 2,855,612

Weighted average discountrate (0-20 years)

+0.5% 745,233 3,519,918 931,729 3,012,265

-0.5% 205,590 2,980,275 442,086 2,522,622

Long-term discount rate (21+years) +0.5% 506,528 3,281,213 712,026 2,792,562

-0.5% 458,803 3,233,488 674,735 2,755,271

Weighted average AWE & CPI inflation rate (0-20 years)

+0.5% 209,040 2,983,725 447,287 2,527,823

-0.5% 744,519 3,519,204 929,106 3,009,642

Long-term AWE & CPI inflation rate (21+ years)

+0.5% 458,263 3,232,948 674,335 2,754,871

-0.5% 507,211 3,281,896 712,527 2,793,063

The impact of changes in the key variables on net result and equity represents the impact on the net outstanding claims liability inclusive of risk margin.


2018 2017

$000s $000s

Authorised agent fees 273,437 225,740

Management agent fees 2,297 2,213

275,734 227,953

Authorised agents operating under an instrument of appointment issued pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013 are paid fees for acting on behalf of WorkSafe in the issuing of WorkCover insurance, collection of premiums and the administration of claims. The agent remuneration includes performance based components.

Under section 494 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is empowered to administer the Workers Compensation Act 1958 . Management agent fees represent amounts paid for managing liabilities under the 1958 Act, and the payments made to the TAC for the management of WorkSafe claims of injured workers with catastrophic injuries.

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The investment approach that is determined by the VFMC for WorkSafe is documented in a detailed Investment Risk Management Plan (IRMP) which is approved by the Treasurer. The IRMP is prepared by the VFMC and addresses issues concerning strategy, portfolio construction, benchmarks and risk management.

Investment performance, including comparisons to market benchmarks, is reported to the WorkSafe Board. The Board’s standing Risk and Audit Committees review strategic financial risks and balance sheet matters, including the examination of investment objectives and portfolio performance. Each six months, the VFMC Board certifies that the investment portfolio has been managed in accordance with the approved IRMP and WorkSafe’s investment objectives. A certification is also provided to the DTF annually.

The investment portfolio consists of a range of asset exposures including: cash and nominal bonds to cover short-term risk and liquidity needs; inflation linked assets that more closely match WorkSafe’s liability characteristics; equities to provide for long-term growth; and other assets that provide diversification benefits across the general portfolio.

As a part of the VFMC’s investment strategy, contracts are entered into which require WorkSafe to contribute additional future capital. These future investment commitments are not recognised in the balance sheet and amount to $1,296.95 million (2017: $1,215.79 million). WorkSafe’s investments at the reporting date comprises:

2018 2017

$000s $000s

Investment assets

Cash and cash equivalents 1,351,609 1,631,890

Cash collateral and margin accounts 28,907 7,269

Receivables 961,769 768,387

Derivative assets 201,397 372,461

Equity and managed investment schemes 14,273,691 12,768,385

Debt securities 380,651 227,386

17,198,024 15,775,778

Investment related liabilities

Cash collateral and margin accounts (151,073) (263,485)

Payables (281,731) (233,136)

Derivative liabilities (165,484) (57,213)

(598,288) (553,834)

16,599,736 15,221,944

2018 2017

$000s $000s

Current

Investment assets 2,558,608 2,682,312

Investment related liabilities (598,286) (553,729)

1,960,322 2,128,583

Non-current

Investment assets 14,639,416 13,093,466

Investment related liabilities (2) (105)

14,639,414 13,093,361

16,599,736 15,221,944

3. Investment portfolio and performance

Introduction to this section

This section includes the investments that are held by WorkSafe, as well as the associated returns outlined in Section 2, that are utilised to fund its functions.

This section is structured as follows:


3.2 Investments




2018 2017

$000s $000s

Gross investment income

Dividends and distributions 629,686 425,652

Interest 32,214 49,347

Change in fair value of investments at fair value through the comprehensive operating statement:

944,240 1,185,601

Total investment income 1,606,140 1,660,600

Investment expenses (52,106) (48,733)

Net investment income 1,554,034 1,611,867

Change in fair value of investments is the difference between the fair value of the investments at 30 June 2017 or the cost of acquisition (for investments purchased during the year), and sales proceeds or their fair value at 30 June 2018.

Dividend income is recognised when WorkSafe’s right to receive payment has been established, whilst interest revenue is recognised on an accrual basis. Trust distribution income is recognised when the market prices are quoted ex-distribution for listed trusts. Unlisted trust distribution income is recognised when the trustee declares distributions.

Interest represents interest earned on deposits and money market securities, together with coupon interest.

Investment expenses are fees paid to the Victorian Funds Management Corporation (VFMC) under the Client Funds Management Service Agreement and other sundry professional fees incurred by WorkSafe in relation to management of the investment portfolio.

The net return on the investment portfolio for the year was 9.89% (2017: 11.57%).

3.2 Investments

Summary of investments integral to general insurance activities carried at fair value through the comprehensive operating statement

WorkSafe’s investment activity is undertaken pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013, the Borrowing and Investment Powers Act 1987 and formal approvals issued by the Treasurer of Victoria.

WorkSafe’s investment portfolio is managed by the VFMC in accordance with the Prudential Standard covering Victorian insurance agencies. All WorkSafe investments must be placed with the VFMC.

WorkSafe’s responsibility is to set investment objectives for the VFMC after considering such matters as WorkSafe’s capital needs, pricing and the Government’s risk preferences. The WorkSafe Board is not responsible for the management or prudential supervision of the investments – the management responsibility rests with the VFMC and the prudential supervision responsibility rests with the Department of Treasury and Finance (DTF).

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2018 2017

$000s $000s

Reconciliation of net result to net cash flows from operating activities

Net result for the year 483,646 694,149

Change in fair value of investments at fair value through the comprehensive operating statement

(944,240) (1,185,601)

Depreciation on property, plant and equipment 6,513 4,731

Amortisation on intangibles 15,552 15,946

Loss on disposal of plant and equipment 3 59

Write-down of intangibles - -

Movements in provisions due to changes in discount rates 331 (681)

Changes in assets and liabilities:

(Increase) in premiums receivable (27,419) (23,121)

Decrease in investment income receivable (2,469) 10,622

(Increase) in recoveries receivable 6,230 (17)

Decrease in sundry receivable (598) 78

(Increase) in prepayments 1,377 (1,789)

Decrease (increase) in net deferred tax assets 143,677 264,667

Increase (decrease) in premium creditors 6,380 10,144

Increase (decrease) in other payables 39,014 6,603

Increase in outstanding claims 716,800 640,637

(Decrease) in tax liabilities 31,632 -

(Decrease) increase in provisions (7,072) (275)

Total adjustments (14,289) (257,997)

Net cash flows from operating activities 469,357 436,152

WorkSafe has determined that all investments are held to back WorkCover insurance liabilities.

Investments are designated at fair value through the comprehensive operating statement on the basis that the investments are managed as a portfolio based on their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies. Initial recognition is at cost in the balance sheet, with attributable transaction costs expensed as incurred. Subsequent measurement is at fair value with any resultant realised and unrealised gains or losses recognised in the comprehensive operating statement.

The details of categories of financial instruments and the methods and assumptions used to estimate fair value are included in Note 7.3.

Investments that are due to mature, expire or be realised within twelve months of reporting date are classified as current investments for the purposes of classification in the balance sheet. While this classification policy may result in a reported working capital deficit, included in non-current investments is a large proportion of liquid securities which the VFMC can use to ensure sufficient liquidity is available to meet WorkSafe’s operating requirements.

Investments are derecognised when the rights to receive future cash flows from the assets have expired, or have been transferred, and WorkSafe has transferred substantially all the risks and rewards of ownership.

The details on how WorkSafe manages its exposure to financial risks are included in Note 7.1.


Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents include cash in hand and highly liquid investments that have short periods to maturity and are readily convertible to cash at the option of WorkSafe. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement are reconciled to the related items in the balance sheet as follows:

2018 2017

$000s $000s

Cash in hand and at bank 42,425 40,325

Investments - Cash and cash equivalents1 1,351,609 1,631,890

1,394,034 1,672,215

Note:

1. Included in cash and cash equivalents at 30 June 2018 is the net amount of $134.23 million (2017: $256.22 million), representing cash received as collateral and cash held with brokers against future repayment obligations under derivative contracts.

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4. Cost of operations


This section provides details of other non-insurance income and cost earned/incurred by WorkSafe in its day-to-day operating activities.

This section contains the disclosures:

4.1 Other income




4.1 Other income

2018 2017

$000s $000s

Self-insurer receipts 13,568 12,348

Health & safety licensing income 7,091 4,910

Fines and penalties 1,809 2,781

Asset rental income - ACCS 231 572

Sundry receipts 1,329 657

24,028 21,268

Fines and penalties income is recognised upon receipt of the payment.

WorkSafe receives rental income from ACCS for the use of its plant and equipment.


2018 2017

$000s $000s

Employee and related1 179,728 155,881

Information technology 27,836 23,374

Professional services 30,554 15,545

Marketing and communication 15,452 14,085

Occupancy and utilities 25,708 20,540

Research and external funding 12,835 14,376

Bad and doubtful debts written (back) off 56 (1)

Movements in provisions due to changes in discount rates 331 (681)

Depreciation 6,513 4,731

Amortisation 15,552 15,946

Loss on disposal of plant and equipment 3 59

Other expenses2 20,230 16,598

334,798 280,453

Note:

1. Employee and related costs include $12.83 million (2017: $2.21 million) of termination benefits.2. Other expenses include $19.02 million (2017: $14.80 million) of operating lease rentals.

Other operating costs include $45.39 million (2017: $23.69 million) associated with the implementation of Geelong relocation program, and $22.28 million (2017: $nil) relating to the WorkSafe 2030 program.


This note provides additional analysis of the result before income tax of $658.96 million (2017: $958.82 million).

Given the long-term nature of the WorkSafe scheme both from investment and outstanding claims perspectives, the net result for WorkSafe is significantly affected by short-term market and economic factors external to the organisation. External factors contribute to the difference between actual returns and the long-term estimated returns established by management, and also include major changes in economic assumptions and legislative changes.

External factors can cause significant variations in reported results from year to year as illustrated below.

Accordingly for internal management reporting purposes, WorkSafe monitors and measures its financial performance based on performance from insurance operations (PFIO) without the impact of external factors. This approach is considered a more appropriate indicator for measuring financial performance and is adopted for reporting to the Victorian State Government.

The impact of external factors on the financial result is explained below:

2018 2017

$000s $000s

Impact on result from internal factors

Performance from insurance operations 73,415 233,049

Impact on result from external factors

Difference between actual investment returns and long-term expected returns 524,934 589,918

Changes in inflation assumptions and discount rates 60,606 582,220

Legislative changes - (446,372)

Result before income tax 658,955 958,815

Favourable conditions experienced in the investment markets in the 12 months to 30 June 2018 resulted in the actual investment return being higher than the expected long-term rate of return. The net return on the investment portfolio for the year was 9.89% (2017: 11.57%), compared to the long-term estimated return established by management of 6.80% (2017: 7.50%) per annum based on its investment strategy.

There was a decrease of $58.56 million in the net outstanding claims liability at 30 June 2018 due to the impact of lower expected future inflation rates partially offset by lower assumed discount rates. There was also a decrease in claims liability of $1.96 million due to actual inflation in the 12 months to 30 June 2018 being lower than expected. At 30 June 2017 there was a decrease of $595.14 million in the net outstanding claims liability at 30 June 2017 due to the higher assumed discount rates and lower expected future inflation rates. This decrease was partially off-set by an increase in claims liability of $12.92 million due to actual inflation in the 12 months to 30 June 2017 being higher than expected. There was an increase of $446.37 million in claims liability at 30 June 2017 resulting from legislative changes relating to the Compensation Legislation Amendment Act 2016.

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2018 2017

$000s $000s

Current

Annual leave

Unconditional and expected to be settled wholly within 12 months 4,666 5,117

Unconditional and expected to be settled wholly after 12 months 4,900 5,292

9,566 10,409

Long service leave



16,850 20,047

Termination benefits

Unconditional and expected to be settled wholly within 12 months 832 808

27,248 31,264

On-costs



4,016 4,811

Total current provisions 31,264 36,075

Non-current

Long service leave 2,574 3,210

On-costs 408 519

Total non-current provisions 2,982 3,729

Total provisions 34,246 39,804

2018

$000s

Reconciliation of movement in on-cost provisions

Balance at beginning of the year 5,330

Additional provisions recognised 1,096

Reductions arising from payments (2,137)

Unwinding of discount and effect of changes in discount rates 135

Balance at end of the year 4,424


Superannuation is provided for employees via the following schemes:

2018 2017

$000s $000s

Defined contribution plans

VicSuper 6,232 5,143

Other 5,384 5,255

11,616 10,398

Defined benefit plans

Emergency Services Superannuation Scheme 886 1,062

12,502 11,461

WorkSafe does not recognise any defined benefit liability under the Emergency Services Superannuation Scheme, as WorkSafe has no legal or constructive obligation to pay future benefits relating to its employees. WorkSafe’s only obligation is to pay superannuation contributions as they fall due and this is expensed when incurred. The Department of Treasury and Finance discloses the State’s defined benefit liabilities in its financial report.

The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plan represents the contributions made by WorkSafe to the superannuation plans in respect of the current services of current WorkSafe employees. Employee superannuation excludes contributions paid under salary sacrifice arrangements and the 2017 comparatives have been restated accordingly. At 30 June 2018, contributions outstanding were $nil (2017: $nil).

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5. Other assets and liabilitiesIntroduction to this section

This section includes other assets and liabilities that are employed by WorkSafe to support its day-to-day operating activities.

This section contains the following disclosures:



5.3 Intangibles

5.4 Other payables

5.5 Other provisions



2018 2017

$000s $000s

Contractual

Sundry receivables 6,360 5,764

Provision for impairment (61) (5)

6,299 5,759

The average credit period for sundry receivables is 28 days. Included within sundry receivables at 30 June 2018 are $0.27 million (2017: $0.34 million) of past due receivables. WorkSafe provides fully for all receivables over 360 days because historical experience indicates that sundry receivables that are past due beyond 360 days are generally not recoverable. WorkSafe does not charge interest on overdue receivables nor hold collateral over these balances. The average age of those receivables that are past due but not impaired was 119 days (2017: 132 days).

2018 2017

$000s $000s

Movement in provision for impairment

Balance at beginning of the year 5 6

Increase in allowance recognised in the comprehensive operating statement (66) (1)

Balance at end of the year (61) 5

Wages, salaries and annual leave

Liabilities for wages, salaries and annual leave are recognised in payables and provision for employee benefits as current liabilities, because WorkSafe does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages, salaries and annual leave are measured at:

• undiscounted value – if WorkSafe expects to wholly settle within 12 months

• present value – if WorkSafe does not expect to wholly settle within 12 months.

Long service leave

Unconditional long service leave (LSL) is disclosed as a current liability, even where WorkSafe does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months. The components of this current LSL liability are measured at:

• undiscounted value – if WorkSafe expects to wholly settle within 12 months

• present value – if WorkSafe does not expect to wholly settle within 12 months.

Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non-current LSL liability is measured at present value.

Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee decides to accept an offer of benefits in exchange for the termination of employment. WorkSafe recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

On-costs

Provisions for superannuation, payroll tax and WorkCover insurance premium are recognised separately from the provision for employee benefits.

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Property, plant and equipment are measured initially at cost and subsequently at fair value less accumulated depreciation and impairment. Fair value is determined based on management’s assessment and for property, external valuations every 5 years.

The cost of leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease. This includes the fair value of any dismantling, removal or restoration costs, where an obligation existed at the time of entering the contract for the premises to be returned to their original state upon vacation of the premises.

Depreciation

Depreciation is provided on a straight-line basis on plant and equipment to write off those assets over their estimated useful lives to WorkSafe to the assets’ estimated residual value. The depreciation rate applied to computer equipment is 33 1/3 % (2017: 33 1/3 %) and the rate applied to furniture and equipment is 20% (2017: 20%).

Leasehold improvements to buildings are written-off over their estimated useful lives to WorkSafe or the remaining lease term, whichever is the lesser, using the straight-line method. The remaining lease terms range from 1 to 15 years (2017: 1 to 15 years).

The estimated useful lives, residual values and depreciation methods are reviewed at the year end reporting date and adjusted if appropriate.

Freehold land is not depreciated. Buildings have an estimated useful life of 40 years.

Any gain or loss on disposal is recognised in the comprehensive operating statement.

Impairment of assets

Assets are assessed annually for indications of impairment except for:

• financial instrument assets

• deferred tax assets.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off by a charge to the comprehensive operating statement.

The recoverable amount is measured at the higher of depreciated replacement cost and fair value less costs to sell. It is deemed that, in the event of a loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made.


2018 2017

$000s $000s

Gross carrying amounts and accumulated depreciation

Freehold land and buildings 4,853 4,940

Accumulated depreciation (201) (15)

4,652 4,925

Leasehold improvements 58,661 37,217

Accumulated depreciation (31,276) (29,019)

27,384 8,197

Computer equipment 19,596 18,282


5,497 3,926

Furniture and equipment 14,528 10,277


4,964 1,170

Total property, plant and equipment 97,638 70,716

Total accumulated depreciation (55,139) (52,496)

Balance at end of the year, at fair value 42,499 18,220

Movements in carrying amounts

Freehold Land and Buildings

Leasehold Improvements

Computer Equipment

Furniture and Equipment Total

$000s $000s $000s $000s $000s

30 June 2018


4,925 8,198 3,926 1,171 18,220

Additions - 22,132 4,362 4,388 30,883

Disposals/reclassifications (87) (3) (2) - (91)

Depreciation expense (186) (2,941) (2,791) (595) (6,513)

Balance at end of the year 4,652 27,386 5,496 4,964 42,499

30 June 2017


51 7,473 4,274 628 12,426

Additions 4,889 3,435 1,442 880 10,646

Disposals/reclassifications - (52) (37) (32) (121)

Depreciation expense (15) (2,658) (1,753) (305) (4,731)

Balance at end of the year 4,925 8,198 3,926 1,171 18,220

76 77


5.4 Other payables

2018 2017

$000s $000s

Contractual

Other payables for supplies and services 136,183 96,733

Statutory

Goods & services and fringe benefits taxes payable 2,309 2,745

138,492 99,478

The normal settlement terms of WorkSafe’s payables are 30 days.

Payables consist of:

• contractual payables, such as accounts payable, which represent liabilities for goods and services provided to WorkSafe prior to the end of the financial year that are unpaid, and arise when WorkSafe becomes obliged to make future payments in respect of the purchase of those goods and services

• statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are classified as financial instruments and measured at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments because they do not arise from a contract.

Goods and services tax

Income, expenses and assets are recognised net of the amount of associated goods and services tax (GST), unless the GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included as part of the receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the ATO are classified as operating cash flows.

5.3 Intangibles

2018 2017

$000s $000s

Computer software

Cost

Balance at beginning of the period 157,541 150,370

Additions 6,062 7,171


Accumulated amortisation and impairment losses

Balance at beginning of the year (107,929) (91,983)

Amortisation expense (15,552) (15,946)

Balance at end of the year (123,481) (107,929)

Carrying amounts

Balance at beginning of the year 49,612 58,387


Intangible assets represent identifiable non-monetary assets without physical substance. Intangible assets are recognised at cost. Costs incurred subsequent to initial recognition are capitalised when it is expected that additional future economic benefits will flow to WorkSafe.

Amortisation is allocated to intangible assets with finite useful lives on a systematic basis over the assets’ useful lives. The amortisation period and the amortisation method for intangible assets with a finite useful life are reviewed at least at each year end. In addition an assessment is made at each year end reporting date to determine whether there are indicators that the intangible assets concerned are impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

All intangible assets of WorkSafe have definite useful lives. The useful lives range from 2 to 10 years (2017: 2 to 10 years).

Internally-generated intangible assets representing internally developed software are recognised only from the point that it is probable that the expected future economic benefits attributable to the asset will flow to WorkSafe and that the cost of the item can be measured reliably. Where no internally-generated intangible asset can be recognised, development expenditure is expensed in the period as incurred.

Internally-generated intangible assets are stated at cost less accumulated amortisation and impairment, and are amortised on a straight-line basis over their useful lives from the date the assets are available for use. Impairment losses are included in the comprehensive operating statement.

Included in intangibles is the cost of software development in progress of $3.58 million (2017: $5.81 million). No amortisation has been allocated to software development in progress as the related software was not yet available for use at the reporting date.

78 79



2018 2017

$000s $000s

Operating lease commitments

Future minimum lease payments under non-cancellable operating lease arrangements

Due within one year 29,114 28,671

Due later than one year and less than five years 66,828 63,188

Due later than five years 148,682 136,798

Total operating lease commitments (inclusive of GST) 244,624 228,657

GST recoverable from the ATO (22,239) (20,787)

Total operating lease commitments (exclusive of GST) 222,385 207,870

Operating leases relate to leasehold premises, vehicles and office equipment with lease terms between 1 and 15 years (2017: 1 and 15 years). Operating lease payments are charged as an expense in the comprehensive operating statement on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Some operating lease contracts contain market review clauses in the event that WorkSafe exercises its option to renew. WorkSafe does not have an option to purchase the leased assets at the expiry of the lease periods.

2018 2017

$000s $000s

Other operating commitments

Amounts payable under non-cancellable other operational contractual arrangements

Due within one year 6,011 13,850

Due later than one year and less than five years 3,542 5,003

Total other operating commitments (inclusive of GST) 9,553 18,853

GST recoverable from the ATO (868) (1,714)

Total other operating commitments (exclusive of GST) 8,685 17,139

Other operating commitments include those operating and capital commitments arising from non-cancellable contractual sources and are disclosed at their nominal value, inclusive of GST.

Contingent assets and contingent liabilities

WorkSafe had no contingent assets at the reporting date (2017: nil).

WorkSafe relocated its head office to Geelong on 2 July 2018. As a part of this transition, eligible employees whose roles have relocated to Geelong are entitled to relocation benefits in accordance with a relocation deed. While the ultimate relocation benefits to which the employees are entitled will be contingent on the specific relocation decisions made by the individual employees, WorkSafe could incur a liability of up to $21 million (2017: $9 million) in respect of these benefits over the next 2 years.

A matter relating to the assessment of impairment for workers that have undergone spinal fusion surgery was heard in the Supreme Court on 6 August. While the outcome of the hearing is not yet known, should the court rule against WorkSafe’s defense, the estimated impact on the 30 June 2018 outstanding claims liability would be an increase ranging between $60 and $140 million.

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of a note and, if quantifiable, are measured at nominal value, inclusive of GST.

5.5 Other provision

2018

$000s

Leasehold restoration provision

Balance at beginning of the year 3,711

Reductions resulting from re-measurement or settlement without cost (603)

Unwinding of discount and effect of changes in discount rates 101

Balance at end of the year 3,209

Current 2,373

Non-current 836

3,209

The provision for leasehold restoration represents the fair value of the dismantling, removal or restoration costs estimated to be required to be paid upon vacating the leased premises, where the obligation under these lease contracts for the premises to be returned to its original state existed at the time of entering into the lease.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using a discount rate that reflects the time value of money and risks specific to the provision.

80 81


6.2 Deferred tax

2018 2017

$000s $000s

Deferred tax assets

Claims handling expense included in outstanding claims 408,487 395,655

Provisions not currently deductible 25,584 26,683

Accruals not currently deductible 1,169 924

- 107,038

435,240 530,300

Deferred tax liabilities

Unrealised gains on investments (310,692) (259,412)

Difference in depreciation of plant and equipment and amortisation of intangibles (5,887) (8,550)

(316,579) (267,962)

Net deferred tax assets 118,661 262,338

Deferred tax is accounted for in respect of temporary differences between the carrying amount of assets and liabilities in the financial statements for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates that are expected to apply when the assets and liabilities are realised or settled, based on tax rates that have been enacted or substantially enacted by the reporting date.

Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax off-sets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities which affect neither taxable income nor accounting result.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are off-set as WorkSafe settles its current tax assets and liabilities on a net basis.

6.3 Dividends

Pursuant to section 516 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is required to pay to the State Government a dividend determined by the Treasurer. In determining the dividend policy applicable to WorkSafe, the Treasurer must have regard to the solvency margin determined to maintain the long-term financial viability of the scheme.

An obligation to pay a dividend only arises after a formal determination is made by the Treasurer following consultation between WorkSafe, the Minister and the Treasurer.

No dividends was paid during the year (2017: nil).

6. Taxation and transactions with the stateIntroduction to this section

WorkSafe is required to pay income tax equivalent under the National Tax Equivalent Regime in accordance with Section 88 (3D) of the State Owned Enterprise Act 1992. This section provides tax related information and transactions with the State.


6.1 Income tax

6.2 Deferred tax

6.3 Dividendss

6.1 Income tax

2018 2017

$000s $000s

Current income tax

Current tax (expense) income (126,778) (40,719)

Adjustments in respect of current income tax of prior years (3,587) (3,001)

Deferred income tax

Relating to origination and reversal of temporary differences (44,944) (220,946)

Tax expense reported in the comprehensive operating statement (175,309) (264,666)

The tax expenses or income represents the tax payable on the current year’s taxable income or tax loss based on the prevailing income tax rate, adjusted for changes in deferred tax assets and liabilities.

2018 2017

$000s $000s

Reconciliation of accounting result to tax (expense) income Result before income tax 658,955 958,815

At the statutory income tax rate of 30% (2017: 30%) (197,688) (287,645)

Adjustments in respect of current income tax of prior years (3,587) (3,001)

Franking credits and withholding tax on dividends received 36,708 32,197

Imputation gross-up on dividends received (11,012) (9,659)

Other 270 3,442

Tax expense reported in the comprehensive operating statement (175,309) (264,666)

2018 2017

$000s $000s

Tax liabilities

Balance at beginning of the year - -

Movements during the year:

Income tax for current year (31,632) -

Balance at end of the year (31,632) -

82 83


30 June 2017Investment

GradeNon-investment

Grade Total

Financial assets

Cash in hand & at bank 40,325 - 40,325

Investments - Cash and cash equivalents 1,631,890 - 1,631,890

Debt securities 227,386 - 227,386

Derivative assets - 372,461 372,461

Investments - Receivables - 768,387 768,387

1,899,601 1,140,848 3,040,449

Assets classified with Standard and Poor’s credit ratings of AAA to BBB- (long-term) or A-1+ to A-3 (short-term) are classified as investment grade.

Non-investment grade assets include assets that fall outside the range of Standard and Poor’s investment grade credit ratings as well as non-rated assets that are within the risk parameters outlined in the Investment Risk Management Plan.

Liquidity risk

Liquidity risk arises from WorkSafe being unable to meet financial obligations as they fall due. WorkSafe has a payment policy of settling financial obligations within 30 days.

The VFMC uses a combination of cash and futures portfolios plus a large proportion of listed securities to ensure sufficient liquidity is available at all times to meet WorkSafe’s operating requirements.

The following table summarises the maturity profiles of WorkSafe’s financial liabilities. The table includes the liquidity analysis in relation to contractual (as opposed to statutory) financial liabilities. While the liability for outstanding claims is the most significant liability for which payments will need to be made in the future, they are excluded from the definition of a financial instruments under AASB 139 Financial Instruments: Recognition and Measurement.

Details on the average term to settlement for the claims liabilities portfolio are included in Note 2.3.5.

30 June 2018

Less than

3 Months 4-12 Months 1-5 Years 5+ Years Total

$000s $000s $000s $000s $000s

Non-statutory payables 140,519 68,036 - - 208,555

Derivative liabilities 154,323 11,159 2 - 165,484

Investments - Payables 281,731 - - - 281,731

576,573 79,195 2 - 655,770

30 June 2017

$000s $000s $000s $000s $000s

Non-statutory payables 115,190 47,535 - - 162,725

Derivative liabilities 51,549 5,559 105 - 57,213

Investments - Payables 233,136 - - - 233,136

399,875 53,094 105 - 453,074

7. Financial instruments and valuation judgements


This section sets out WorkSafe’s financial instrument specific information, including exposures to financial risks, and disclsoures of those items that require a higher level of judgement to be applied in their fair value determination.




7.3 Fair values


WorkSafe’s financial assets and liabilities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk.

Credit risk

Credit risk refers to the risk that an issuer or a counterparty will default on its contractual obligations resulting in financial loss to WorkSafe. The VFMC manages counterparty credit risk by conducting due diligence on counterparties and will only deal with counterparties of high quality with substantial balance sheets. Agreements also contain provisions for the agreements to be reviewed or rescinded upon the occurrence of specified events relating to counterparty credit and liquidity.

The following analysis excludes trade receivables and non-trade receivables. The details of trade receivables that are past their due dates are included in Note 2.2.2.

WorkSafe’s maximum exposure to credit risk at the reporting date in relation to each class of financial asset is the carrying amount of those assets as indicated in the balance sheet.

Concentrations of credit risk

The VFMC manages credit risk by diversifying the exposure amounts with particular issuers and counterparties and operating in liquid markets. WorkSafe does not have any significant concentration of credit risk on an industry, regional or country basis. The investment strategy for WorkSafe is to ensure a diversified portfolio.

The table below provides information regarding the credit risk exposure of WorkSafe by classifying assets according to the VFMC’s credit ratings of counterparties.

30 June 2018Investment

GradeNon-investment

Grade Total

$000s $000s $000s

Financial assets

Cash in hand & at bank 42,425 - 42,425

Investments - Cash and cash equivalents 1,351,609 - 1,351,609

Debt securities 380,651 - 380,651

Derivative assets - 201,397 201,397

Investments - Receivables - 961,769 961,769

1,774,685 1,163,166 2,937,851

84 85


Interest rate sensitivity

A 0.5% movement in interest rates (or discount rates) is used by WorkSafe’s actuaries to present the sensitivities of the actuarial claims liabilities to management to allow them to monitor interest rate risk on liabilities. This percentage has been used to present the impact on interest sensitive investments. These movements are attributable to WorkSafe’s exposure to interest rates on its variable rate investments and its fair value movement on its fixed rate investments.

At the reporting date, if interest rates had moved 0.5% up or down and all other variables were held constant, WorkSafe’s net result and equity would change as follows:

2018 2017

$000s $000s

Impact on net result and equity from a movement in interest rates

Increase of 0.5% (1,707) (5,476)

Decrease of 0.5% 1,707 5,476

Foreign currency risk

All foreign currency transactions are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Investments held at reporting date in foreign currencies are converted to Australian currency using the exchange rate at balance sheet date. Gains or losses arising on foreign currency transactions are included in investment income in the period in which they arise.

Foreign currency risk is the risk that the fair value of a financial instrument will fluctuate because of changes in foreign exchange rates. WorkSafe is exposed to foreign exchange risk through its investments which are denominated in foreign currency, and anticipated future transactions.

The VFMC manages foreign exchange risk in accordance with the approved IRMP and uses financial derivatives to control exposures. The proportion of foreign exchange risk which is hedged is reviewed regularly to ensure that the net exposure is maintained at a level which is consistent with the overall investment objectives.

WorkSafe’s exposure is mainly via the major currencies such as United States dollar, Japanese yen, the Euro and British pound.

Foreign currency sensitivity

The foreign exchange sensitivity has been prepared on the basis of WorkSafe’s direct investments and not on a look-through basis for investments held indirectly through unit trusts. Consequently the disclosure of currency risk may not represent the true currency risk profiles of WorkSafe where the unit trust has significant investments which have exposure to the currency markets.

The following table details the WorkSafe’s sensitivity to a 10% increase or decrease in the Australian Dollar against the relevant foreign currencies with all other variables held constant.

2018 2017

$000s $000s

Impact on net result and equity from a movement in foreign exchange rates

Increase of 10% 151,211 111,544

Decrease of 10% (184,814) (136,333)

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: market interest rates (interest rate risk), foreign exchange (currency risk) and market prices (price risk).

When establishing the investment asset allocation, the VFMC considers input from actuaries to ensure that the investment mix is appropriate to service future WorkSafe liabilities and that projected outcomes are in line with the overall investment objectives and remain within the risk parameters approved by the Treasurer.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The VFMC seeks to manage the interest rate risk through an asset allocation strategy for the investment portfolio, which acts as an economic hedge against the insurance liabilities of WorkSafe. To the extent that these assets and liabilities can be matched, unrealised gains and losses on the remeasurement of liabilities resulting from interest rate movements will be off-set by unrealised losses or gains on the remeasurement of investment assets.

The VFMC may use financial derivatives to manage the interest rate risk associated with the portfolio.

A summary of WorkSafe’s exposure to interest rate risk on financial instruments is as follows:

30 June 2018 30 June 2017

Variable Rate

$000s

Fixed Rate

$000s

Non-interest Bearing

$000sTotal

$000s

VariableRate

$000s

Fixed Rate

$000s

Non-interestBearing

$000sTotal

$000s

Financial assets

Cash in hand and at bank

42,425 - - 42,425 40,325 - - 40,325

Premium receivables

- - 58,377 58,377 - - 48,082 48,082

Investments

− Derivative assets

- 98 201,299 201,397 - - 372,461 372,461

− Other investments

1,317,721 280,296 14,965,806 16,563,823 1,370,601 227,386 13,308,709 14,906,696

Sundry receivables

- - 6,299 6,299 - - 5,759 5,759

1,360,146 280,394 15,231,781 16,872,321 1,410,926 227,386 13,735,011 15,373,323

Financial liabilities

Non-statutory payables

- - 208,555 208,555 - - 162,725 162,725

Derivative liabilities

- 1,781 163,703 165,484 - 761 56,452 57,213

- 1,781 372,258 374,039 - 761 219,177 219,938

Net financial assets

1,360,146 278,613 14,859,523 16,498,282 1,410,926 226,625 13,515,834 15,153,385

86 87



The following table identifies financial assets and liabilities which have been off-set in the balance sheet in accordance with AASB 132 Financial Instruments: Presentation and those which have not been off-set in the balance sheet but are subject to enforceable master netting agreements with trading counterparties or similar agreements (i.e. offsetting agreements and any related financial collateral in accordance with AASB 7 Financial Instruments).

Amount not Set-off in the Balance Sheet

30 June 2018

Net Amounts Presented in the

Balance Sheet

Amounts Subject to Master Netting

AgreementsCollateralised

Obligation Net Amount

$000s $000s $000s $000s

Derivative assets 201,397 (52,470) (146,077) 2,850

Derivative liabilities (165,484) 52,470 16,140 (96,874)

Total 35,913 - (129,937) (94,024)

30 June 2017

Derivative assets 372,461 (55,109) (255,378) 61,974

Derivative liabilities (57,213) 55,109 942 (1,162)

Total 315,248 - (254,436) 60,812

7.3 Fair values

This section sets out information on how WorkSafe determined fair value for financial reporting purposes. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 – Valuation techniques for which the input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 – Valuation techniques for which the input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, WorkSafe has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. In addition, WorkSafe determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.

Price risk

Price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. Such factors may include changes in the performance of the economies, markets and securities in which the VFMC invests.

WorkSafe is exposed to price risk through its investments in listed and unlisted shares and managed investment schemes. The VFMC manages price risk through diversification and careful selection of securities within the strategic asset allocation for each class of asset.

WorkSafe’s sensitivity to equity price risk is set out below.

Price risk sensitivity

At reporting date, if the value of WorkSafe’s investment had been 10% higher or lower and all other variable held constant year end, WorkSafe’s net result and equity would change as follows:

2018 2017

$000s $000s

Impact on net result and equity from a movement in listed and unlisted investment prices

Listed investment prices

Increase of 10% - 1

Decrease of 10% - (1)

Unlisted investment prices

Increase of 10% 994,123 899,770

Decrease of 10% (994,123) (899,770)

88 89


30 June 2017 Level 1 Level 2 Level 3 Total

$000s $000s $000s $000s

Financial assets

Cash in hand and at bank 40,325 - - 40,325

Premium receivables - 48,082 - 48,082

Investment assets

Cash and cash equivalents 1,631,890 - - 1,631,890

Cash collateral and margin accounts

7,269 - - 7,269

Receivables 768,387 - - 768,387

Derivative assets 184 372,277 - 372,461

Equity and managed investment schemes

Cash - - - -

Australian equities 21 1,859,170 - 1,859,191

International equities 65,632 4,408,351 - 4,473,983

Private equity - - 65,930 65,930

Inflation linked bonds - 1,677,061 - 1,677,061

Infrastructure - 495 961,244 961,739

Property - - 1,145,662 1,145,662

Diversified fixed income - 1,436,284 134,565 1,570,849

Non traditional strategies - 223,925 790,045 1,013,970

65,653 9,605,286 3,097,446 12,768,385

Debt securities - 227,386 - 227,386

Sundry receivables - 5,759 - 5,759

2,513,708 10,258,790 3,097,446 15,869,944


Non-statutory payables - 162,725 - 162,725



263,485 - - 263,485

Payables 233,136 - - 233,136

Derivative liabilities 1,068 56,145 - 57,213

497,689 218,870 - 716,559

Net financial assets 2,016,019 10,039,920 3,097,446 15,153,385

The following table shows the fair values of financial assets and financial liabilities, including their fair value hierarchy:

30 June 2018 Level 1 Level 2 Level 3 Total

$000s $000s $000s $000s

Financial assets

Cash in hand and at bank 42,425 - - 42,425

Premium receivables - 58,377 - 58,377

Investment assets

Cash and cash equivalents 1,351,609 - - 1,351,609


28,907 - - 28,907

Receivables 961,769 - - 961,769

Derivative assets 367 201,030 - 201,397

Equity and managed investment schemes

Cash - - - -

Australian equities - 2,049,840 - 2,049,840

International equities - 5,096,792 - 5,096,792

Private equity - - 51,380 51,380

Inflation linked bonds - 1,808,085 - 1,808,085

Infrastructure - 515 1,129,502 1,130,017

Property - - 1,218,029 1,218,029

Diversified fixed income - 1,671,311 157,111 1,828,422

Non traditional strategies - 194,399 896,727 1,091,126

- 10,820,942 3,452,749 14,273,691

Debt securities - 380,651 - 380,651

Sundry receivables - 6,299 - 6,299

2,385,077 11,467,299 3,452,749 17,305,125


Non-statutory payables - 208,555 - 208,555



151,073 - - 151,073

Payables 281,731 - - 281,731

Derivative liabilities 2,394 163,090 - 165,484

435,198 371,645 - 806,843

Net financial assets 1,949,879 11,095,654 3,452,749 16,498,282

90 91


Estimation uncertainty

The Level 3 financial assets relate to private equities and managed investment schemes that are managed by the VFMC on behalf of WorkSafe.

A majority of these investments are held via third party pooled investment vehicles, and as such WorkSafe is not privy to the detailed assumptions or valuation techniques used to value the underlying investment assets. WorkSafe is reliant on third parties for these valuations and the quantitative information regarding significant unobservable inputs used in the fair value measurement cannot be assessed.

An example of the key inputs and assumptions typically considered is shown below.

Key inputs and assumptions subject to estimation uncertainty

Asset Class Valuation Techniques Key Inputs and Assumptions

Infrastructure investments Discounted cash flows. • risk free discount rates• risk premium• asset utilisation rates• capital expenditure forecasts• operating costs• other estimated future cash flows

Private Equity investments Multiples of earnings, discounted cashflow, market equivalents and othermarket accepted methodologies.

• identification of appropriate comparables• estimated future profits• risk free rate, risk premium• estimated future cash flows• future economic and regulatory

conditionsProperty investments Discounted cash flow, capitalisation and

direct comparison methodologies.

Fixed interestinvestments

and

Non-traditionalstrategiesinvestments

Diversified fixed interest investments-Third party pricing servicers, which source prices from brokers and market makers.

Non-traditional strategies investments ‐Prices quoted on an exchange or traded in a dealer market.

Less liquid fixed interest and non-traditional strategies investments -Discounted cash flow, amortised cost,direct comparison and others.

• appropriate credit spread and other risk premium

• future risk free rate• estimated future cash flows• identification of appropriate comparable

assets• life expectancy estimates and mortality

probabilities• future economic and regulatory

conditions

Transfer between categories

No amounts were transferred between Level 1 and Level 2 during the year ended 30 June 2018 (2017: $nil).

Fair value determination

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate fair value.

Cash and cash equivalents (including discount securities): Cash and cash equivalents consist primarily of deposits with banks and highly liquid financial assets with maturity dates less than three months, together with units held in cash funds/trusts. Cash equivalents are assets that are subject to an insignificant risk in the change in fair value and are used to manage short term commitments. Amounts classified as cash and cash equivalents are recorded at face value, except for discount securities which are recorded at market value. WorkSafe categorises these instruments as Level 1.

Cash collateral and margin accounts: Cash collateral refers to amounts held as security against future counterparty performance. These assets are recorded at face value and categorised as Level 1. Margin accounts represent cash held with a broker or central counterparties against open futures contracts and/or other derivatives.

Receivables/payables: Miscellaneous receivables/payables include interest income, GST obligations, investment expenses, etc. and are carried at the full value of the entitlement. Amounts due to/from brokers represent outstanding settlement amounts arising from the purchase/sale of securities and are carried at the settlement amount pending. This is deemed fair value given the short term nature of these balances and the items are categorised as Level 1.

Derivative assets and liabilities: Derivatives are originally recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date with gain or loss recognised in the comprehensive operating statement.

Fair value is derived from the prices published by recognised exchanges or, for over-the-counter instruments, generally accepted valuation techniques. WorkSafe classifies these instruments as either Level 1 or Level 2.

Equity and managed investment schemes: Holdings in unlisted funds/trusts are recorded at fair value as determined by the fund manager or valuations by other skilled independent third parties. WorkSafe reviews the level of valuation uncertainty typically associated with the assets managed by the fund/trust, whether there are redemption restrictions, the pricing frequency and whether there is an active market. Depending on the outcome of these reviews, the assets may be classified as either Level 2 or Level 3.

Debt securities: The fair value of debt securities is established by using observable inputs such as recently executed transaction prices in securities of the issuer or comparable issuers and yield curves. Adjustments are made to the valuations when necessary to recognise differences in a particular instrument’s terms or credit worthiness. To the extent that the significant inputs are observable, WorkSafe categorises these investments as Level 2.

Reconciliation of Level 3 fair value movements

The following table presents the changes in Level 3 instruments (financial assets) for the year ended 30 June 2018 and 30 June 2017:

2018 2017

Investments $000s $000s

Balance at beginning of the year 3,097,446 2,568,775

Gains recognised in the comprehensive operating statement 131,383 110,354

Purchases 393,423 681,562

Sales (169,503) (263,245)

Balance at end of the year 3,452,749 3,097,446

Total gains (losses) for the year included in gains for assets held at end of the year

9,096 (18,964)

92 93



Remuneration of executives

The number of executive officers, other than the responsible minister and Board members, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalents provides a measure of full time equivalent executive officers over the reporting period.

The number of executives may vary from year to year due to the timing of appointments, resignations and the composition of executives.

The remuneration of executives (including key management personnel of the VAEA in 8.3 below) is as follows:

2018 2017

$000s $000s

Short-term employee benefits 2,981 2,457

Post-employment benefits 244 226

Other long-term benefits 79 77

Termination benefits 136 -

Total remuneration 3,439 2,760

Total number of executives 16 11

Total annualised employee equivalents1 10.5 8.4

Note:

1. Annualised employee equivalent is based on the time fraction worked over the reporting period.

8.3 Related parties

WorkSafe is a controlled entity of the State of Victoria.

The Victorian Asbestos Eradication Agency (VAEA) has been consolidated into WorkSafe’s financial statements pursuant to the determination made by the Minister for Finance under section 53(1)(b) of the FMA.

Key management personnel of WorkSafe comprise the responsible minister, Board members and members of the executive leadership team. Key management personnel of the VAEA comprise the responsible minster and its Board members.

The remuneration of key management personnel is as follows:

2018 2017

$000s $000s

Short-term employee benefits 3,845 3,269

Post-employment benefits 298 291

Other long-term benefits 101 95

Termination benefits 136 -

Total remuneration 4,380 3,656

The compensation detailed above excludes the salaries and benefits the Portfolio Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within the Department of Parliamentary Services’ financial report.

8. Other disclosuresIntroduction to this section

This section includes additional material disclosures required by accounting standards or otherwise, for the understanding of this financial report.




8.3 Related parties






In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 (FMA), the responsible persons who held office during the financial year were:

Responsible Minister

Robin Scott MP, Minister for Finance

Board members

• Mr Paul Barker (Chairman)

• Ms Clare Amies (Chief Executive)

• Ms Jane Brockington (appointed 15 August 2017)

• Mr Doug Kearsley

• Mr Neil Lucas (until 25 August 2017)

• Mr Ross McCann AM

• Mr Peter McMullin (appointed 6 February 2018)

• Dr Samantha Smith

The number of responsible persons of WorkSafe whose remuneration falls within the following bands was:

Income Band 2018 2017

$

0 - 9,999 - 1

10,000 - 19,999 1 2

20,000 - 29,999 1 -

30,000 - 39,999 - 1

40,000 - 49,999 1 1

50,000 - 59,999 3 2

130,000 - 139,999 1 1

540,000 - 549,999 1 1

The compensation detailed above excludes the salaries and benefits the Portfolio Minister receives. The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation Act 1968 and is reported within the Department of Parliamentary Services’ financial report.

The remuneration includes accrued leave entitlements and the 2017 comparatives have been restated accordingly.

94 95


Name of Counterparty

Nature of Relationship

Details of Transactions

Total Value of Transactions

Outstanding Balances at

30 June 2018

Committed Amount at

30 June 2018Terms and Conditions

$000s $000s $000s

Executives

Personal Injury Education Foundation (PIEF)

Mr Shane O’Dea is a PIEF Board member

Membership fees (42) - - Standard

Funding contribution

(250) - - Standard

Sponsorship and training

(3) - - Standard

Service charges 245 61 - Standard

Cost reimbursement receivable

1,249 316 - Standard

Institute for Safety, Compensation and Recovery Research (ISCRR)

Mr David Watson was and Ms Marion Nagle is an ISCRR Board member

Funding (2,705) - (446) Standard

Office accommodation

169 - - Standard

Mr Ashley West is an executive of the TAC, and the transactions with the TAC are included in the above table for Board members.

Related parties of WorkSafe and the VAEA include all key management personnel and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over).

Transactions with key management personnel and other related parties

There were no transactions with key management personnel during the year (2017: none), other than those disclosed above.

Transactions with other related parties

Transactions with other related parties are entered into on an arm’s length basis. Conflicts of interest are overcome where warranted, by the key management personnel declaring their interests and abstaining from final decision making.

30 June 2018






30 June 2018

Committed Amount at


$000s $000s $000s

Board members

Victorian Arts Centre

Mr Paul Barker is a Victorian Arts Centre Trust member

Grant funding (36) - - Standard

Venue hire (9) - - Standard

Leadership Victoria

Ms Clare Amies is a Leadership Victoria Council member

Training and conferences

90 - - Standard

Partnership (30) - - Standard

Transport Accident Commission (TAC)

Dr Samantha Smith and Ms Jane Brockington are TAC Board members

Recovery of compensation paid

87,100 - - Based on independent actuarial valuation

Management of catastrophic claims

(1,947) - - Standard



Cost reimbursement payable

(3,649) (1,142) - Standard

Victorian Asbestos Eradication Agency (VAEA)

Mr Ross McCann is a VAEA Board member

Funding (1,912) - - Standard

96 97







30 June 2017

Committed Amount at


$000s $000s $000s

Executives

Personal Injury Education Foundation (PIEF)

Mr Shane O’Dea is a PIEF Board member

Membership fees (42) - - Standard

Sponsorship and training

(17) - - Standard

Service charges 248 62 - Standard



Institute for Safety, Compensation and Recovery Research (ISCRR)

Mr David Watson was an ISCRR Board member

Funding 3,155 - 3,151 Standard

Office accommodation

168 - - Standard

30 June 2017






30 June 2017

Committed Amount at


$000s $000s $000s

Board members

Victorian Arts Centre

Mr Paul Barker was a Victorian Arts Centre Trust member

Grant funding - - (36) Standard

Leadership Victoria

Ms Clare Amies was a Leadership Victoria Council member

Training and conferences

(56) - - Standard

Transport Accident Commison (TAC)

Mr John Walter and Mr Paul Kirk were TAC Board members Dr Samantha Smith was a TAC Board member

Recovery of compensation paid

79,500 - - Based on independent actuarial valuation

Management of catastrophic claims

(1,861) - - Standard



Cost reimbursement payable

(5,357) (923) - Standard

Corrs Chambers Westgarth

Mr John Walter was a partner of Corrs Chambers Westgarth

Legal services (359) - - Standard

Victorian Funds Management Corporation (VFMC)

Mr John Walter’s spouse was a VFMC Board member

Investment management fees

(30,598) - - Standard

Victorian Asbestos Eradication Agency (VAEA)

Mr Ross McCann is a VAEA Board member

Funding (477) - - Standard

98 99


9. Statement by Chairman, Chief Executive and Chief Financial Officer

The attached financial statements of the Victorian WorkCover Authority have been prepared in accordance with Direction 5.2 of Standing Directions of the Minster for Finance under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards including Interpretations, and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the comprehensive operating statement, balance sheet, statement of changes in equity, cash flow statement and accompanying notes, presents fairly the financial transactions during the year ended 30 June 2018 and the financial position of the Victorian WorkCover Authority at 30 June 2018.

At the time of signing, we are not aware of any circumstances which would render any particulars included in the financial statements to be misleading or inaccurate.

We authorise the attached financial statements for issue on 23 August 2018.



Roger Arnold Chief Financial Officer

Dated at Geelong this 23rd day of August 2018


The financial effects of the VAEA, which has been consolidated into WorkSafe’s financial statements, are as follows.

WorkSafe VAEA Eliminations Consolidated

2018 2017 2018 2017 2018 2017 2018 2017

$000s $000s $000s $000s $000s $000s $000s $000s

Total income from transactions

4,110,828 4,028,002 1,912 477 (2,237) (477) 4,110,503 4,028,002

Net result from transactions

483,646 694,149 - - - - 483,646 694,149

Total assets 17,833,799 16,517,933 - - - - 17,833,799 16,517,933

Total liabilities 14,575,468 13,743,248 - - - - 14,575,468 13,743,248


2018 2017

$000s $000s

Victorian Auditor-General’s Office - Audit of WorkSafe’s financial statements 322 315

322 315


No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of WorkSafe, the results of those operations, or the state of affairs of WorkSafe in future financial years.


The Australian Accounting Standards Board (AASB) has issued the following new or revised Australian Accounting Standards, which are applicable to WorkSafe:

AASB Title Operative Date

9 Financial Instruments 1 January 2018

2010–7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)

1 January 2018

16 Leases 1 January 2019

17 Insurance Contracts 1 January 2021

The preliminary assessment has not identified any material impact arising from the adoption of AASB 9 and AASB 2010-7, and these standards will continue to be monitored and assessed. The key changes introduced by AASB 16 include the recognition of most operating leases on balance sheet. Rather than expensing the lease payments, depreciation of right-of-use assets and interest on lease liabilities will be recognised in the income statement with marginal impact on the operating result. AASB 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It replaces AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts. The impact of adopting AASB 17 has not been fully assessed.

WorkSafe will apply these standards for the annual reporting periods beginning on or after the operative date set out above.

100 101


2

Auditor’s responsibilities for the audit of the financial report

As required by the Audit Act 1994, my responsibility is to express an opinion on the financial report based on the audit. My objectives for the audit are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board

• conclude on the appropriateness of the Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Authority’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Authority to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

MELBOURNE 28 August 2018

Andrew Greaves Auditor-General

Independent Auditor’s Report To the Board of the Victorian WorkCover Authority

Opinion I have audited the financial report of the Victorian WorkCover Authority (the Authority) which comprises the:

• balance sheet as at 30 June 2018 • comprehensive operating statement for the year then ended • statement of changes in equity for the year then ended • cash flow statement for the year then ended • notes to the financial statements, including significant accounting policies • Statement by the Chairman, Chief Executive and Chief Financial Officer.

In my opinion the financial report presents fairly, in all material respects, the financial position of the Authority as at 30 June 2018 and its financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of Part 7 of the Financial Management Act 1994 and applicable Australian Accounting Standards.

Basis for opinion

I have conducted my audit in accordance with the Audit Act 1994 which incorporates the Australian Auditing Standards. I further describe my responsibilities under that Act and those standards in the Auditor’s responsibilities for the audit of the financial report section of my report.

My independence is established by the Constitution Act 1975. My staff and I are independent of the Authority in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Victoria. My staff and I have also fulfilled our other ethical responsibilities in accordance with the Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Board’s responsibilities for the financial report

The Board of the Authority is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and the Financial Management Act 1994, and for such internal control as the Board determines is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Board is responsible for assessing the Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.

102 103


Appendix 1:Prosecutions

Compensation Prosecution Outcomes 2017/18

Defendant Name A.C.N. Result Fine RestitutionDate of

outcome

Bruce E Bartrop Pty Ltd 004 411 634

Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour with a special condition to donate $500 to the Children's Cancer Foundation and ordered to pay costs in the amount of $1,960.

$0 $0 04-Jul-17

Cameron Atkins N/A Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour and ordered to pay the amount of $13,650 in restitution.

$0 $13,650 10-Jul-17

Christopher Peat N/A Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour with a special condition to pay $750 to the Salvation Army.

$0 $0 09-Aug-17

Shaun Paszyna N/A Pleaded Guilty - Convicted and sentenced to 3 months imprisonment, wholly suspended for a period of 12 months. Ordered to pay restitution in the amount of $59,976 and costs in the amount of $2,200.

$0 $59,976 18-Sep-17

Cedar Ferry N/A Pleaded Guilty - Convicted and sentenced to 6 months imprisonment wholly suspended for a period of 2 years. Ordered to pay restitution in the amount of $188,548 and costs in the amount of $2,000.

$0 $188,548 21-Sep-17

Paul Weiser N/A Pleaded Guilty - Convicted and sentenced to 4 months imprisonment and ordered to pay restitution in the amount of $66,048 and costs in the amount of $11,619.

$0 $66,048 02-Oct-17

Smash Masters Geelong Pty Ltd

155 850 614

Pleaded Guilty - Convicted and fined fined $10,000 and ordered to pay costs in the amount of $1,981.

$10,000 $0 10-Oct-17

Rajiv Kumar N/A Pleaded Guilty - Convicted and fined $1,200 and ordered to pay the amount of $2,558 in restitution the amount of $1,468 in costs.

$1,200 $2,558 11-Oct-17

Appendices

104 105




outcome

Lester Aloiai N/A Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour with a special condition to take part in the WorkSafe OHS Essentials Program and pay the amount of $2000 to the Court Fund and costs in the amount of $1,748.

$0 $0 21-Jun-18

Tyson King N/A Pleaded Guilty - Without conviction sentenced to an undertaking to be of good behaviour for a period of 12 months with a special conditions to pay $500 to the Court Fund and ordered to pay restitution in the amount of $5,000 and costs in the amount of $500.

$0 $5,000 26-Jun-18

Travis Smith N/A Pleaded Guilty - Without conviction fined $1,000 and sentenced to pay restitution in the amount of $14,560 and ordered to pay costs in the amount of $2,143.

$1,000 $14,560 25-Jun-18

Carol Anne Leslie N/A Pleaded Guilty - Convicted and placed on a Community Correction Order for a period of 24 months with a special condition to perform 250 hours of community work and ordered to pay the amount of $59,006 in restitution.

$0 $59,006 27-Jun-18

Vaisima Liu N/A Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour for a period of 12 months and ordered to pay restitution in the amoun of $10,948 and costs in the amount of $500.

$0 $10,948 28-Jun-18



outcome

Bahtiyar Aktepe N/A Pleaded Guilty - Fined $1,000 without conviction.

$1,000 $0 02-Nov-17

Dale Kilpatrick N/A Pleaded Guilty - Convicted and fined $1,000 and ordered to pay restitution in the amount of $906.

$1,000 $906 27-Nov-17

Roadhouse Burgers Pty Ltd

600 767 913

No Plea Taken - Convicted and fined $8,500 and ordered to pay costs in the amount of $1,663.

$8,500 $0 10-Jan-18

Robert Smith N/A Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour with a speacial condition to pay $5,000 to a Court fund.

$0 $5,000 24-Jan-18

Craig Parkinson N/A Pleaded Guilty - With conviction placed on a Community Corrections Order for a period of 24 months with a special condition to perform 250 hours of unpaid community work and ordered to pay the amount of $17,997 in restitution.

$0 $17,977 29-Jan-18

Gary Stewart N/A Pleaded Guilty - Convicted and fined $1,500 and ordered to pay costs in the amount of $757.

$1,500 $0 13-Feb-18

Robert Sortino N/A Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour for a period of 12 months with a special condition to pay $500 to the Court Fund, the amount of $500 in costs and the amount of $1,049 in restitution.

$0 $1,049 13-Feb-18

Benjamin Dunmall N/A Pleaded Guilty - Without conviction fined $1,200 and ordered to pay the amount of $5,500 in restitution and the amount of $2,000 in costs.

$1,200 $5,500 15-Feb-18

David Jackson-Grose N/A Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour for a period of 6 months and ordered to pay the amount of $2,728 in restitution.

$0 $2,728 19-Apr-18

Jarrod Brewer N/A Pleaded Guilty - Convicted and placed on a Community Correction Order for a period of 24 months with a special condition to perform 250 hours of community work and ordered to pay the amount of $33,361 in restitution.

$0 $33,361 26-Apr-18

Australia Cenvic Constructions Pty Ltd

608 196 747

Pleaded Guilty - Convicted and fined $10,000 and ordered to pay costs in the amount of $1,425

$10,000 $0 05-Jun-18

106 107


OHS Prosecution Outcomes 2017/18

Defendant Name A.C.N. Result FineDate of

outcome

L. Arthur Pty Ltd 004 264 706 Pleaded Guilty - Convicted and fined $20,000 and ordered to pay costs in the amount of $5,818.

$20,000 15-Aug-17

Industrial Lining Pty Ltd 065 225 096 Pleaded Guilty - Convicted and fined $30,000 and ordered to pay costs in the amount of $4,096. On Appeal: convicted and fined $55,000 and ordered to pay costs in the amount of $11,246.

$55,000 25-Aug-17

Phil McDonald Plumbing Pty Ltd

159 325 265 Pleaded Guilty - Convicted and placed on an undertaking to be of good behaviour for a period of 12 months with a special condition to make a donation to the Ballarat Base Hospital of $3,000 by 27 November 2017 and to pay costs in the amount of $3,430.

$0 28-Aug-17

Jacbe Builder Pty Ltd 098 693 979 Pleaded Guilty - Convicted and fined $700,000.

$700,000 05-Sep-17

David Shane Fergusson N/A Pleaded Guilty - Convicted and fined $180,000.

$180,000 05-Sep-17

CK Crouch Pty Ltd 138 273 266 No Plea Taken (ex parte) - Convicted and fined $379,175 on each charge making a total effective sentence of $1,137,525.

$1,137,525 11-Sep-17

IVE Group Australia Pty Ltd 000 205 210 Enforceable Undertaking with conditions

$0 12-Sep-17

Masbuild (Vic) Pty Ltd 117 430 261 Pleaded Guilty - Convicted and fined an aggregate of $15,000 and ordered to pay costs in the amount of $3,000.

$7,500 19-Sep-17

Masbuild (Vic) Pty Ltd 117 430 261 Pleaded Guilty - Convicted and fined an aggregate $15,000 and ordered to pay costs in the amount of $3,000 (refer to incident # 189904)

$7,500 19-Sep-17

Aveo Homes Pty Ltd 168 747 279 Pleaded Guilty - Convicted and fined $30,000 and ordered to pay costs in the amount of $4,624.

$30,000 20-Sep-17

Paper Australia Pty Ltd 061 583 533 Pleaded Guilty - Convicted and fined $40,000 and ordered to pay costs in the amount of $4,027.

$40,000 27-Sep-17

C.M.D HOME WORKS PTY LTD 007 260 460 Pleaded Guilty - Convicted and fined $10,000 with costs in the anount of $3,283.

$10,000 03-Oct-17

McFees Pty Ltd 604 990 374 Pleaded Guilty - Convicted and fined $100,000.

$100,000 03-Oct-17



outcome

Pro Wall Retaining Walls & Excavations Pty Ltd

159 246 714 Pleaded Guilty - Without conviction fined $35,000 and ordered to pay costs in the amount of $3,728.

$35,000 03-Jul-17

SPTC Services Pty Ltd 158 692 963 Pleaded Guilty - Without conviction fined $20,000 and ordered to pay costs in the amount of $4,116.

$20,000 06-Jul-17

Prolay Roofing Pty Ltd 132 787 136 Pleaded Guilty - Without conviction placed on an undertaking to be of good behaviour for a period of 12 months with a special condition to pay $3,000 to the Court Fund and ordered to pay costs of $2,000.

$0 07-Jul-17

SKM Services Pty Ltd 130 867 220 "Pleaded not Guilty - Convicted and fined Charge 1: Convicted and fined $75,000 Charge 2: Convicted and fined $25,000 Charge 3: Convicted and fined $50,000and ordered to pay costs in the amount of $45,000."

$150,000 19-Jul-17

The JMAL Group Pty Ltd 165 661 414 Pleaded Guilty - Convicted and fined an aggregate fine of $275,000 and ordered to pay costs in the amount of $12,000.

$275,000 25-Jul-17

R & J Todio Car Parts Pty Ltd 151 212 672 Pleaded Guilty - Convicted and fined an aggregate fine of $10,000 and ordered to pay costs in the amount of $4,000.

$10,000 27-Jul-17

Damian Ruth Plumbing Pty Ltd 080 310 309 Pleaded Guilty - Without conviction, fined $10,000 and ordered to pay costs in the amount of $2,500. On Appeal: convicted and fined $25,000 and ordered to pay costs in the amount of $2,500.

$25,000 27-Jul-17

Stadelmann Enterprises Pty Ltd 006 250 228 Pleaded Guilty - Convicted and fined $40,000 and ordered to pay costs of $2,349. On Appeal: convicted and fined $175,000 and ordered to pay costs in the amount of $2,349.

$175,000 28-Jul-17

Supreme Caravans Pty Ltd 006 939 322 Pleaded Guilty - Convicted and fined $15,000 and ordered to pay costs in the amount of $4,624.

$15,000 28-Jul-17

Conductix-Wampfler Pty Ltd 004 612 533 Pleaded Guilty - Without conviction fined $10,000 and ordered to pay costs in the amount of $4,000.

$10,000 03-Aug-17

108 109




outcome

The Greater Geelong City Council N/A Enforceable Undertaking with conditions

$0 30-Oct-17

DFC Packaging (Sleeves) Pty Ltd 088 253 212 Pleaded Guilty - Without conviction fined $25,000 and ordered to pay costs in the amount of $5,221.

$25,000 30-Oct-17

Recoat Smash Repairs Pty Ltd 104 089 554 Pleaded Guilty - Convicted and fined $25,000 and ordered to pay costs in the amount of $3,430.

$25,000 01-Nov-17

Redback Tree Services Pty Ltd 142 559 340 Pleaded Guilty - Convicted and fined $150,000.

$150,000 03-Nov-17

Brad Perryman Builders Pty Ltd 138 066 172 Pleaded Guilty - Without conviction fined $18,000 and ordered to pay costs in the amount of $3,430.

$18,000 06-Nov-17

Garrhon Pty Ltd 098 140 446 No Plea Taken (ex parte) - Convicted and fined $85,000 and ordered to pay costs in the amount of $4,027.

$85,000 17-Nov-17

Digga Excavations Pty Ltd 080 006 364 Pleaded Guilty - Without conviction, fined $27,000 and ordered to pay costs in the amount of $3,880.

$27,000 23-Nov-17

Australian Blending Company Pty Ltd

074 485 591 Pleaded Guilty - Without conviction, fined $30,000 and ordered to pay costs in the amount of $4,624.

$30,000 27-Nov-17

ALYFAB Pty Ltd 124 909 673 Pleaded Guilty - Convicted and fined $20,000 and ordered to pay costs in the amount of $4,027.

$20,000 30-Nov-17

Downer EDI Works Pty Ltd 008 709 608 Pleaded Guilty - Convicted and fined $1,300,000.

$1,300,000 01-Dec-17

VicRoads N/A Pleaded Guilty - Convicted and fined $250,000.

$250,000 01-Dec-17

Sanikleen Pty Ltd 098 037 819 Pleaded Guilty - Convicted and fined $30,000 and ordered to pay costs in the amount of $9,000.

$30,000 06-Dec-17

Airstep Australia Pty Ltd 144 967 215 Pleaded Guilty - Without conviction, fined $50,000 and ordered to pay costs in the amount of $7,012.

$50,000 08-Dec-17

City Circle Demolition & Excavation Pty Ltd


$30,000 12-Dec-17

Lindsay F Nelson Manufacturing Pty Ltd


$30,000 14-Dec-17

The Crown in the Right of the State of Victoria, Department of Justice and Regulation (Corrections Victoria)

N/A Pleaded Guilty - Convicted and fined $300,000.and ordered to pay costs in the amount of $14,215.

$300,000 15-Dec-17



outcome

Bakers & Co. Australia Pty Ltd 154 056 158 Pleaded Guilty - Convicted and fined $30,000 and ordered to pay costs in the amount of $3,430.

$30,000 05-Oct-17

Retmar Pty Ltd 109 131 580 Pleaded Guilty - Convicted and fined $175,000 and ordered to pay costs in the amount of $3,580.

$175,000 06-Oct-17

Mitec Group Pty Ltd 134 492 658 Pleaded Guilty - Convicted and fined $20,000 and ordered to pay costs in the amount of $2,836.

$20,000 06-Oct-17

Adrian Padoin N/A Pleaded Guilty - without conviction fined $10,000 and ordered to pay costs in the amount of $1,000.

$10,000 10-Oct-17

Skyrider Tower Hire Pty Ltd 005 829 434 Pleaded Guilty - Convicted and fined $20,000 and ordered to pay costs in the amoun of $15,000.

$20,000 11-Oct-17

Imagebuild Pty Ltd 142 525 924 Pleaded Guilty - Convicted and fined $24,000 and ordered to pay costs in the amount of $6,387.

$24,000 11-Oct-17

WK Marble and Granite Pty Ltd 074 331 981 Pleaded Guilty - Convicted and fined $90,000 and ordered to pay costs in the amount of $13,728.

$90,000 17-Oct-17

Project Group Construction Pty Ltd


$25,000 18-Oct-17

Lojac Civil Pty Ltd 137 526 348 Pleaded Guilty - Fined $35,000 without conviction and ordered to pay costs in the amount of $4,000.

$35,000 19-Oct-17

J.R. D'Herville Pty Ltd 082 961 895 Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour for a period of 12 months with a special condition to pay $17,500 to the Ballarat Base Hospital and ordered to pay costs of $2,441.

$0 23-Oct-17

Australia Electric Group Pty Ltd 605 602 686 Pleaded Guilty - Without conviction fined $24,000 and ordered to pay costs in the amount of $2,441.

$24,000 24-Oct-17

Pinnacle Bakery & Integrated Ingredients Pty Ltd


$30,000 24-Oct-17

S.V.C. Products Pty Ltd 004 279 458 Pleaded Guilty - Without conviction fined $4,000 and ordered to pay costs in the amount of $4,624.

$4,000 25-Oct-17

Wodonga Rendering Pty Ltd 074 885 457 Pleaded Guilty - Convicted and fined $85,000 and ordered to pay costs in the amount of $5,221.

$85,000 25-Oct-17

110 111




outcome

Michael O'Sullivan N/A Pleaded Guilty - Without conviction, fined $16,000 and ordered to pay costs in the amount of $1,000.

$16,000 22-Feb-18

Martyn Nicholls Electrics Pty Ltd 120 490 128 Pleaded Guilty - Without conviction, fined $12,000 and ordered to pay costs in the amount of $1,000.

$12,000 22-Feb-18

Villa Lipari Pty Ltd & Villante Investments (Queensland) A partnership trading as Extrusion Profiles Australia

105 295 038 010 656 881

Pleaded guilty - Convicted and fined $25,000 and ordered to pay costs in the amount of $5,924.

$25,000 01-Mar-18

B.E. Timber Pty Ltd 106 689 409 Pleaded Guilty - Without conviction, fined $10,000 and ordered to pay costs in the amount of $6,277.

$10,000 02-Mar-18

Ramabo Pty Ltd 081 921 931 Pleaded Guilty - Without conviction, fined $42,000 and ordered to pay costs in the amount of $5,867.

$42,000 06-Mar-18

JBS Australia Pty Ltd 011 062 338 Pleaded Guilty - Convicted and fined $20,000 and ordered to pay costs in the amount of $6,556.

$20,000 06-Mar-18

Ambulance Victoria N/A Pleaded Guilty - Convicted and fined $400,000.

$400,000 08-Mar-18

AM Design & Construction Pty Ltd

055 903 181 Pleaded Guilty - Convicted and fined $380,000.

$380,000 23-Mar-18

Aldo DiTonto N/A Pleaded Guilty - Convicted and fined $100,000.

$100,000 23-Mar-18

Australian Lamb (Colac) Pty Ltd 087 919 944 Pleaded Guilty - Without conviction, fined $27,500 and ordered to pay costs in the amount of $2,000.

$27,500 26-Mar-18

Melbourne Tree Stump Removal Pty Ltd

087 792 943 Pleaded Guilty - Convicted and fined $7,500 with conviction and ordered to pay costs in the amount of $3,000.

$0 27-Mar-18

B Central Constructions Pty Ltd 117 641 460 Pleaded Guilty - Without conviction, fined $17,500 and ordered to pay costs in the amount of $4,089.

$17,500 04-Apr-18

Whineray Consulting Pty Ltd 156 471 715 No Plea Taken (ex parte) - Convicted and fined $45,000 and ordered to pay costs in the amount of $4,699.

$45,000 04-Apr-18

AAD Services Australia Pty Ltd 605 532 849 Pleaded guilty - Convicted and fined $120,000.

$120,000 09-Apr-18

Shalik Pty Ltd 103 514 530 Pleaded guilty - Convicted and fined $3,000 and ordered to pay costs in the amount of $4,115.

$3,000 10-Apr-18

Hobson Engineering Co Pty Ltd 000 289 958 Pleaded Guilty - Without conviction, fined $20,000 and ordered to pay costs in the amount of $4,115.

$20,000 12-Apr-18



outcome

Dhillon Scaffolding Pty Ltd 144 611 227 Pleaded Guilty - Convicted and fined $100,000 and ordered to pay costs in the amount of $3,503.

$100,000 11-Jan-18

Ardex Australia Pty Ltd

000 550 005 Enforceable Undertaking with conditions

$0 12-Jan-18

Birch Automotive Pty Ltd 131 759 781 Pleaded Guilty - Convicted and fined $40,000 and ordered to pay costs in the amount of $3,500.

$40,000 25-Jan-18

Myrti Pty Ltd 162 476 753 No Plea Taken (ex parte) - Convicted and fined $25,000 and ordered to pay costs in the amount of $2,897

$25,000 25-Jan-18

Park Street Child Care & Kindergarten Co-Operative Limited

N/A Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour with a special condition to donate $15,000 to the Alfred Hospital Burns Unit and ordered to pay costs in the amount of $1,000.

$0 31-Jan-18

Defor Pty Ltd 005 844 860 Pleaded Guilty - Without conviction, fined $25,000 and ordere to pay costs in the amount of $3,505.

$25,000 31-Jan-18

Bozweld Fabrications Pty Ltd 167 781 151 Pleaded Guilty - Convicted and fined $25,000 and ordered to pay costs in the amount of $3,500.

$25,000 01-Feb-18

Kintestsu World Express (Australia) Pty Ltd


$30,000 08-Feb-18

RTL Mining and Earthworks Pty Ltd 152 855 135 Pleaded Guilty - Without conviction, fined $25,000 and ordered to pay costs in the amount of $3,505.

$25,000 08-Feb-18

Michael Semmens N/A Pleaded guilty - Without conviction, fined $10,000 and ordered to pay costs in the amount of $2,512.

$10,000 13-Feb-18

Specialised Concrete Pumping Pty Ltd

153 660 827 Pleaded Guilty - Convicted and fined $500,000.

$500,000 15-Feb-18

Menzies Aviation (Australia) Pty Ltd


$40,000 15-Feb-18

Phelpsys Constructions Pty Ltd 601 655 869 Pleaded Guilty - Convicted and fined $350,000.

$350,000 21-Feb-18

Strategy One Human Resources Pty Ltd

130 466 732 Pleaded Guilty - Convicted and placed on an undertaking to be of good behaviour with a special condition. Fined $3,500 and ordered to pay costs in the amount of $4,725.

$3,500 22-Feb-18

112 113




outcome

Earthwerx Pty Ltd 098 216 801 Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour. Adjourned undertaking for a period of 24 months with a special condition to pay $15,000 into the Court Fund. The company was ordered to pay costs in the sum of $4,083.

$0 23-May-18

Deepcore Australia Pty Ltd 115 967 809 Enforceable Undertaking with conditions

$0 24-May-18

Mainfreight Distribution Pty Ltd 003 840 319 Pleaded Guilty - Without conviction, fined $25,000 and ordered to pay costs in the amount of $4,699.

$25,000 24-May-18

Reborn Projects Pty Ltd 605 007 225 Pleaded Guilty - Without conviction, fined $10,000 and ordered to pay costs in the amount of $3,505.

$10,000 28-May-18

Francesco Taraborrelli N/A Pleaded Guilty - Without conviction, fined $20,000 and ordered to pay costs in the amount of $15,064.

$20,000 28-May-18

Mask Rentals Pty Ltd 130 718 311 Pleaded Guilty - Convicted and fined $80,000 and ordered to pay costs in the amount of $10,000.

$80,000 04-Jun-18

Ballarat Construction Management Pty Ltd


$20,000 06-Jun-18

Campbell Niblett N/A Pleaded Guilty - Without conviction, placed on an undertaking to be of good behaviour with a special condition to pay $3,300 to the Court Fund and ordered to pay costs in the amount of $2,200.

$0 07-Jun-18

Creel Manufacturing Pty Ltd 004 800 088 Pleaded Guilty - Convicted and fined $30,000 and ordered to pay costs in the amount of $2,412.

$30,000 07-Jun-18

Kwikserv Formwork & Scaffolding Pty Ltd


$20,000 07-Jun-18



outcome

VicRig Pty Ltd 114 869 591 Pleaded Guilty - Convicted and fined $35,000.

$35,000 17-Apr-18

PJL Building Group Pty Ltd 606 368 012 Pleaded Guilty - Convicted and fined $25,000 and ordered to pay costs in the amount of $4,725.

$25,000 17-Apr-18

Cornerstone HR Pty Ltd 145 074 102 Pleaded Guilty - Without conviction, fined $15,000 and ordered to pay costs in the amount of $15,000.

$15,000 18-Apr-18

Australian Precast Pty Ltd 053 770 200 Pleaded Guilty - Without conviction, fined $15,000 plus $5,335 costs

$15,000 19-Apr-18

Ricegrowers Limited 007 481 156 No Plea Taken - Convicted and fined $260,000.

$260,000 23-Apr-18

KDR Victoria Pty Ltd 138 066 074 Enforceable Undertaking with conditions.

$0 30-Apr-18

Charalambos Maheras N/A Pleaded Guilty - Without conviction, fined $5,000 and ordered to pay costs in the amount of $3,000.

$5,000 01-May-18

Nautical Training Australia Pty Ltd 156 039 824 No Plea Taken (ex parte) - Convicted and fined $20,000 and ordered to pay costs in the amount of $8,779.

$20,000 03-May-18

Olive Construction Pty Ltd 130 676 078 Pleaded Guilty - Convicted and fined $80,000 and ordered to pay costs in the amount of $3,505.

$80,000 03-May-18

Kalafatis Packing Pty Ltd 144 731 733 Pleaded Guilty - Convicted and fined. On Appeal: penalty increased $150,000 and ordered to pay costs in the amount of $22,000.

$150,000 04-May-18

Jeld-Wen Glass Australia Pty Ltd 116 051 391 Pleaded Guilty - Without conviction, fined $40,000 and ordered to pay costs in the amount of $4,725.

$40,000 10-May-18

H&A Majestic Plumbing Pty Ltd 133 087 760 Pleaded Guilty - Convicted and fined $40,000 and ordered to pay costs in the amount of $11,973.

$40,000 15-May-18

Baron Forge Contractors Pty Ltd 160 547 035 Pleaded not Guilty - Without conviction, fined $50,000 plus $29,000 costs.

$50,000 18-May-18

Lexon Group Pty Ltd 081 822 059 Pleaded Guilty - Without conviction, fined $8,000 and ordered to pay costs in the amount of $1,000.

$8,000 21-May-18

Coates Hire Operations Pty Ltd 117 641 460 Pleaded Guilty - Convicted and fined $15,000 and ordered to pay costs in the amount of $3,479.

$15,000 22-May-18

TJKJ PTY LTD 6126341452 Pleaded Guilty - Convicted and fined $25,000 and ordered to pay costs in the amount of $2,500.

$25,000 22-May-18

114 115


Enforceable Undertakings 2017/18

Ardex Australia Pty Ltd On 12 January 2018, Ardex Australia Pty Ltd entered into an Enforceable Undertaking with WorkSafe Victoria in relation to incident where employees from the engineering company attended the workplace and commenced welding work. During the work a piece of hot metal fell into the mixer and an orange glow appeared. An Ardex employee went to assist, assessed the situation as safe, and attempted to put the fire out by turning on the mixer. As he did so a combustible dust cloud was created and a fireball came out of the mixer’s open door. This resulted in burns to the Ardex employee and employee of the engineering company.

KDR Victoria Pty Ltd On 30 April 2018, KDR Victoria Pty Ltd entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident in January 2016 when an electrical apprentice employee suffered electrical burns after coming into contact with live power lines.

Deepcore Australia Pty Ltd On 24 May 2018, Deepcore Australia Pty Ltd entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident where Deepcore was operating a drill rig at the Fosterville Gold Mine, when there was a problem with the drilling. Hours were spent removing and re-inserting casings to fix the problem, until eventually it was decided to modify and insert a casing.

There was a risk of serious injury by crushing, entrapment or amputation to persons required to hold the modified casing. When the rod landed a worker had his thumb over the top lip of the casing and his entire right thumb was amputated.

2017/18 Statistics

OHS Prosecution success rate 91%

Completed OHS investigations proceeding to legal review outcome

72%

OHS Investigations proceeding to prosecution within 12 months

75%

Number of OHS prosecutions commenced (counted by defendant)

148

Number of compensation prosecutions commenced (counted by defendant)

31



outcome

The Crown in the Right of the State of Victoria (Department of Health and Human Services)

N/A "Pleaded Guilty - With conviction, placed on a s137 undertaking with a special condition. The Undertaking is subject to the following conditions: - To be of good behaviour during the period of the adjournment. - To attend before the Court if you get a notice telling you to do so during the period of the adjournment. Special conditions: The Department of Health & Human Services is to make a contribution in the sum of $50,000 to Djirra and provide a receipt to the Registrar of this court by 18/07/18."

$0 18-Jun-18

A-Line Partitions Pty Ltd 005 511 035 Pleaded Guilty - Convicted and fined $15,000 and ordered to pay costs in the amount of $5,393.

$15,000 21-Jun-18

Vision Precast Pty Ltd 142 354 256 Pleaded Guilty - Without conviction, fined $30,000 and ordered to pay costs in the amount of $5,945.

$30,000 22-Jun-18

Edge Deck Melbourne North West Pty Ltd

613 398 717 Pleaded Guilty - Without conviction, fined $10,000.

$10,000 22-Jun-18

Park Lane Investment Nominees Pty Ltd

062 275 030 Pleaded Guilty - Convicted and fined $5,000 and ordered to pay costs in the amount of $2,000.

$5,000 26-Jun-18

Campbellfield Bin Hire Pty Ltd 108 419 807 Pleaded Guilty - Convicted and fined $16,000 and ordered to pay costs in the amount of $4,500.

$16,000 28-Jun-18

Transplumb Maintenance Pty Ltd 148 002 957 Pleaded Guilty - Without conviction, fined $25,000 and ordered to pay costs in the amount of $5,238.

$25,000 29-Jun-18

Enforceable Undertakings 2017/18

IVE Group Australia Pty Ltd On 12 September 2017, IVE Group Australia Pty Ltd entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident where a worker at the workplace was operating an item of plant known as the Plastic Wrap Machine (“the plant”) which wraps books using ply sheets. The rear hopper covers on the plant did not have an interlocked switch and there was no safe system of work to ensure the safe setting, maintenance and repair of the plant. There was a risk of serious injury as workers could access the area where the rotating cams and belts were located (“the danger point”) and their hand(s) or finger(s) could become entangled.

The Greater Geelong City Council On 30 October 2017, The Greater Geelong City Council entered into an Enforceable Undertaking with WorkSafe Victoria in relation to an incident on 23 March 2016 when a first year apprentice working without fall protection on the roof of the Lara Community Centre fell through an uncovered skylight 3.1 metres to the floor below. The employee was taken by ambulance to hospital and suffered bruised ribs.

116 117


Requests to WorkSafe for prosecutions to be brought pursuant to section 131 of the Occupational Health and Safety Act 2004 (OHS Act)

In 2017/18, WorkSafe received 15 requests for a prosecution to be brought for an alleged offence against the OHS Act under section 131(1). Three of these requests were deemed invalid.

Pursuant to section 131(2), within three months of the request being made, WorkSafe must advise the person in writing whether prosecution proceedings will be brought.

In 2017/18, 12 valid requests were made:

• Four decisions were made within three months.

• One decision was made within 113 days. This investigation related to a significant serious injury where a 12-year-old girl at a school swimming lesson dived into the water, hit the bottom of the pool and suffered a crush injury to vertebrae in L5 spine and loss of feelings in her legs. The investigation was complex, requiring evidence from numerous witnesses. The matter resulted in charges being laid.

• One decision was made within 96 days. This investigation related to an allegation of discriminatory conduct. The investigation was complex. WorkSafe did not commence a prosecution. Following a request from the applicant, the matter is currently under review by the Director of Public Prosecution (DPP).

• One decision was made within 93 days. The matter related to an allegation of improper conduct directed towards an employee. WorkSafe did not commence a prosecution.

• Three investigations are continuing.

• Two investigations are currently being legally reviewed.

Pursuant to section 131(3), where WorkSafe advises a person that prosecution will not be brought, the person may request that WorkSafe refer the matter to the DPP for advice on whether a prosecution should be brought (section 131(4)): two matters were referred to the DPP in 2017/18. The DPP recommended not to prosecute in one matter. One is still under consideration by the DPP.

Requests to WorkSafe for prosecutions to be brought pursuant to sections 242AC and 252AA of the Accident Compensation Act 1985 (AC Act) and sections 577 and 607 of the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act)

Where WorkSafe has not brought prosecution proceedings within six months of an alleged offence against the AC Act or the WIRC Act, a person may request that WorkSafe bring a prosecution pursuant to sections 242AC or 252AA of the AC Act or pursuant to sections 577 or 607 of the WIRC Act.

In 2017/18, WorkSafe received one request to bring a prosecution pursuant to section 607 of the WIRC Act. This request was deemed invalid.

One section 242AC matter was referred to the DPP in 2017/18. The request is still under consideration by the DPP.

2017/18 Statistics

Number of completed OHS prosecutions (counted by defendant)

127 Excludes Committal outcomes

Includes successful and unsuccessful prosecutions

Number of completed ACA and WIRCA prosecutions (counted by defendant)

28 Excludes Committal outcomes

Number of OHS Cautions 22

Number of Compensation Cautions 17

Number of PI Code of Conduct Cautions 3

Total Cautions 42

118 119


Agent Duration - % of workers on weekly payments at:

13 weeks 26 weeks 52 weeks 134 weeks

Result Trend Result Trend Result Trend Result Trend

Allianz 42.14% Steady 25.50% Steady 9.86% Steady 2.23% Deteriorated

CGU 41.36% Steady 24.96% Deteriorated 9.59% Steady 1.95% Deteriorated

EML 41.97% Deteriorated 25.49% Steady 9.90% Improved 3.09% Improved

GBS 39.60% Steady 23.34% Improved 9.64% Steady 2.58% Deteriorated

Xchanging 41.42% Deteriorated 24.21% Steady 9.64% Deteriorated 2.04% Deteriorated

Scheme 41.24% Steady 24.66% Steady 9.72% Steady 2.33% Deteriorated

Note: a lower percentage represents higher performance

Duration Trend information

Improved Performance in current year has improved by more than 4% of that in the previous year

Steady Performance in current year is within +/- 4% of the previous year

Deteriorated Performance in current year has deteriorated by more than 4% of that in the previous year

Service and processing

AgentWorker levels of service

Employer levels of service

Valid conciliation – non-compliance complaints

Service attribute scoreNumber of valid complaints result

Number of valid complaints per $10m billed premium

Result Trend Result Trend

Allianz 81.5% Steady 86.1% Steady 4 0.1

CGU 81.5% Steady 87.3% Steady 7 0.1

EML 81.4% Steady 88.2% Steady 2 0.1

GB 81.9% Steady 83.2% Steady 8 0.1

Xchanging 83.4% Steady 88.1% Steady 4 0.1

Scheme 81.9% Steady 86.6% Steady 25 0.1

Worker and employer service Trend information




Appendix 2:Agent performance results Agent performance 2017/18

This appendix includes data on agent performance which WorkSafe Victoria uses to assess the performance of its authorised agents for remuneration purposes and management. The information is provided to inform employers and the public on aspects of the performance of WorkSafe’s authorised agents.

The information does not purport to be all-inclusive or contain all information which employers may require to make an informed assessment as to the selection of an agent. Employers should make their own independent assessment of the capabilities of each agent and, where appropriate, seek professional advice.

Note that the market allocation of agents may differ between years due to employers transferring agents and/or from entries or exits to self-insurance or other schemes. These movements can impact the trend performance indicated in this appendix.

Authorised agents

Agent name Full description

Allianz Allianz Australia Worker’s Compensation (Victoria) Limited

CGU CGU Workers Compensation (Vic) Limited

EML EML Vic Pty Ltd

GB Gallagher Bassett Services Workers Compensation Vic Pty Ltd

Xchanging Xchanging Integrated Services Victoria Pty Ltd trading as Xchanging

Claims management and return to work

Agent Timeliness of employer notifications to agent Back@Work

% received within 12 days % returned to work within 6 months


Allianz 94.46% Steady 78.15% Steady

CGU 93.71% Steady 77.83% Improved

EML 94.11% Steady 76.07% Improved

GBS 94.99% Steady 77.72% Improved

Xchanging 96.04% Steady 78.36% Steady

Scheme 94.73% Steady 77.74% Improved

Back@Work Trend information




120 121


2017/2018 Definitions

Measure Definition

26 Week Back @ Work

Assesses an agent’s performance on the proportion of workers working six months after the claims were received by the agent utilising data recorded on ACCtion and where that work is sustained for a minimum period of three weeks

104 Week Back @ Work

Assesses an agent’s performance on the proportion of workers working at 104 weeks after the claims were received by the agent, where the worker was not working at the 26 week RTW Index point utilising data recorded on ACCtion

52 Weekly Assesses the number weekly payment claims reported during the relevant report period (report period 1) under which weekly payments of compensation have been paid greater than 52 weeks of incapacity as at 30 June each year as a proportion of the number of greater than 10 days’ time lost claims reported in the relevant report period (report period 2).*

Impairment Benefits

Assesses an agent on their ability to manage impairment benefit claims with a focus on quality, sustainability and service.The Impairment Benefits (IB) Measures include:

1. Sustainability Measure This measure encourages adherence to an upper limit of both the percentage of injured workers to receive an Impairment Benefit and the Average Whole Person Impairment of the benefit payable for High and Low risk IB claims.

2. Timeliness Measure This measure is designed to encourage timely management of all IB claims in High and Low Risk.

3. Unresolved Days Measure This measure is designed to encourage timely management and good customer service for all Low risk claims.

Long Tail Claims Management

Assesses agent performance in reducing the number of active weekly payments claims from mature accident years relative to WorkSafe’s independent actuary’s projections as defined in a separate document issued by WorkSafe as APA Business Rules. The measure includes claims from the 1985 to 2012 accident years for the 2017/18 APA

Second Entitlement Review

Assesses an agent’s performance on the number of weekly payment claims reported during the relevant report period 1 for which weekly payments of compensation have been paid in respect of 134 weeks of incapacity as at 30 June each year and as a proportion of the number of time lost claims reported in the relevant report period 2^.

Mobile Case Management Measure

Assesses agents on the volume of cases where face to face engagement occurs with any combination of parties (worker, employer and Treating Health Practitioner). The selection method is at agent discretion up to 26 weeks post ARD and the program will be supported by WorkSafe led service and RTW reporting and a monthly QA process.

Treatment Measure Assesses agents on their ability to pay for the right treatment at the right time on the right claims at a reasonable cost.

Premium Collection Assesses an agent’s performance on the timely collection of premium

Processing Sustainability Measure

Assesses an agent’s performance on the service aspects of key claims management processes.

Information Gathering Impairment Benefits

A measure which aims to improve the quality and consistency of information gathering on Impairment Benefit claims, in order to support quality decision making taking into account factors such as the history of the injury, treatment, prognosis, stability, clinical examination findings and apportionment. The aim of the measure is achieved by ensuring that:• All information available is gathered at the outset of an impairment benefit claim.• The need for any additional information is identified and the information actively sourced.• All information is provided to the Independent Impairment Assessor (IIA).

Injured Worker Survey (Events)

Assesses an agent’s performance in an injured worker survey which measures the perception of an agent’s service delivery based on key events.

Quality Decisions Measure

Assesses the agent’s performance on the quality of decisions made for initial eligibility, medical and like entitlements, and adverse decisions including the second entitlement decision (134week)

Notes*”Report period 1” refers to any claim reported on or after 1 April 2014 exceeding 52 weeks during 2017/18. “Report period 2” refers to 1 April 2015 and 31 March 2017 inclusive.^”Report period 1” refers to any claim with a Date of Injury after 1 July 2012 exceeding 134 weeks during 2017/18. “Report period 2” refers to 1 September 2013 and 31 August 2015 inclusive.

Agent Timeliness % of payments direct to injured workersTimeliness of employer reimbursements

Weekly payments - % paid within 7 days

Medical reimbursements - % paid within 11 Days

Calendar days to pay 75% of employer reimbursements

Result Trend Result Trend Result Trend

Allianz 99.25% Steady 87.76% Improved 8 Steady

CGU 98.84% Steady 90.27% Steady 9 Steady

EML 94.89% Deteriorated 83.35% Steady 10 Steady

GBS 98.92% Steady 87.53% Deteriorated 9 Steady

Xchanging 98.82% Steady 86.24% Deteriorated 8 Steady

Scheme 98.20% Steady 87.31% Steady 8 Steady

Agent Timeliness of processing provider accounts

% Paid within 30 days of receipt of invoice % Paid within 70 days of service


Allianz 96.7% Improved 85.0% Improved

CGU 98.7% Steady 84.4% Steady

EML 97.4% Steady 84.3% Steady

GBS 96.1% Steady 81.6% Steady

Xchanging 97.2% Steady 82.4% Steady

Scheme 97.2% Steady 83.5% Steady

Timeliness of processing (excluding employer reimbursements) Trend information




Timeliness of employer reimbursements Trend information

Improved Performance in current year has improved by more than 2 calendar day of that in the previous year

Steady Performance in current year is within +/- 2 calendar days of the previous year

Deteriorated Performance in current year has deteriorated by more than 2 calendar days of that in the previous year

Agent fees

The authorised agents operate under an Instrument of Appointment issued by WorkSafe pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013 and are remunerated for acting on behalf of WorkSafe in the issuing of WorkCover insurance, collection of premium and the administration of claims. The agent remuneration model includes performance based components and also allows for the reduction of an agent’s remuneration upon the occurrence of an event such as a failure to meet performance criteria.

Reductions applicable to 2017/18

Due to a conciliation non-compliance event, Xchanging were issued with a Minimum Performance Non-Compliance Adjustment and incurred a remuneration reduction of $5,000.

122 123


Agent Performance Metrics 2018/19

Each year, WorkSafe sets a number of performance measures for the agent panel. These measures are intended to align agent performance with WorkSafe’s goals of delivering improvements in return to work and service, while driving quality case management and ensuring the overall sustainability of the Scheme.

Table 1 provides a comparison of measures from 2017/18 vs 2018/19. Table 2 summarises the package of metrics that have been set for the 2018/19 year. Table 3 provides a brief description of these measures.

Agents can earn payments capped at a specified level for achieving the targets for the defined measures. The payments are measured as a percentage of the agent Premium Fee Base which agents are paid for the portfolio of WorkCover registrations they manage for the year. Where an agent does not meet the set targets they may incur a remuneration reduction. Conversely, where an agent exceeds the targets, they may receive an incentive payment. As a guide, a one percent payment equates to approximately $1.6 million. The amount that agents will either earn in incentives or repay in remuneration reductions will depend on their agent Premium Fee Base and their performance.

Table 1: Comparison of allocation of weighting proposed for 2018/19 compared to prior year

RTW

18.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%Sustainability Service /

QualityVariable

2018/19

2017/18

*Measures are designed to work together as a package and many measures impact both quality and sustainability

Market share as at 30 June 2018

AgentPercentage of

PoliciesPercentage of Remuneration

Percentage of Premium

Allianz 34% 25% 25%

CGU 26% 23% 21%

EML 11% 14% 13%

GBS 14% 20% 22%

Xchanging 16% 18% 19%

Scheme 100% 100% 100%

Notes“Policies” refers to the employers with WorkCover Insurance managed by each agent. “Remuneration” refers to the salaries and wages (including superannuation) paid by employers managed by each agent. “Premium” refers to the premium payable for the 2017/18 year for employers managed by each agent.Due to rounding, market share may not equate to 100%.

124 125


Table 3: Definitions of Agent Performance Metrics for 2018/19

Measure Definition

Back @ Work 26 Weeks Assesses an agent’s performance on the proportion of workers working six months after the claims were received by the agent utilising data recorded on ACCtion and where that work is sustained for a minimum period of three weeks.

For 2018/19 the Back @ Work measure will be calculated as a composite measure for all injuries or via three separate measures comprising: physical injuries, mental injuries and all injuries, with the agent being remunerated based on “best” performance for either.

104 Week Back @ Work Assesses an agent’s performance on the proportion of workers working at 104 weeks after the claims were received by the agent, utilising data recorded on ACCtion. This measure aims to ensure there is an ongoing focus on RTW after the first six months.

Injured Worker Survey (Events)

Assesses an agent’s performance in an injured worker survey which measures the perception of an agent’s service delivery based on key events.

Agents are assessed against six separate survey sections known as the Key Events Surveys.

Second Entitlement Review (134 Weekly)

Assesses an agent’s performance on the number of weekly payment claims reported during the relevant report period 1 for which weekly payments of compensation have been paid in respect of 134 weeks of incapacity as at 30 June each year and as a proportion of the number of time lost claims reported in the relevant report period 2.

A critical legislative test to ensure the viability of the scheme for the community over the long term by ensuring that only those who continue to have no capacity continue to receive weekly compensation as the Act requires.

SER (report period 1) Any claim with a Date of Injury after 1 July 2013 exceeding 134 weeks during 2018/19

SER (report period 2) 1 September 2014 and 31 August 2016 inclusive.

Long Tail Claims Management (Active Claims)

Assesses agent performance in reducing the number of active weekly payments claims from mature accident years relative to WorkSafe’s independent actuary’s projections. For the 2018/19 APA the measure includes claims from the 1985 to 2013 accident years.

Premium Collection Assesses an agent’s performance on the timely collection of premium.

Impairment Benefits Resolution Measure

Assesses an agent’s performance in resolving an Impairment Benefit claim. The focus of the measure is on quality and throughput.

‘Co funding: Mobile Case Management Measure’

Assesses agents on the volume of cases where face to face engagement occurs with any combination of parties (worker, employer and Treating Health Practitioner). The selection method is at agent discretion up to 26 weeks post ARD and the program will be supported by WorkSafe led service and RTW reporting and a monthly QA process.

‘Co funding: other’ A flexible measure to be agreed between an individual agent and WorkSafe throughout the year

Table 2: Agent Performance Metrics Package for 2018/19

Measure IncentiveRemuneration

reduction

Return to Work Measures

26 Week Back @ Work* 8.50% -4.25%

* The 26 Week Back @ Work measure is measured over a number of ways assessing the different mix of claims e.g. mental vs physical.

Service / Quality Measure

Worker Survey – Events Index 8.50% -4.25%

Sustainability Measures

Second Entitlement Review (134W CR) 4.00% -2.00%

Long Tail Claims Management (Active Claims) 4.50% -1.00%

Premium Collection Measure 2.00% 0.00%

Total 10.50% -3.00%

Variable Measures

RTW - Back @ Work 104 weeks 3.00% -1.50%

Service - IB Resolution Timeliness Measure 3.50% -1.50%

Co funded Measures (MCM combined) 2.25% -1.00%

Co funded Measures (Agent Other) 2.25% -1.00%

Total 11.00% -5.00%

Total 2018/19 Incentive Pool

Return to work measures 8.50% -4.25%

Service / quality measure 8.50% -4.25%

Sustainability measures 10.5% -3.00%

Variable measures 11.00% -5.00%

Total 38.50% -16.50%

126 127


Service

WorkSafe’s Injured Workers Survey includes injured workers covered by self-insurers. In 2017/18, the service score was 69 per cent for all self-insurers. This result was the same as in the previous year and was lower than the equivalent service score for WorkSafe agents, which was 76 per cent.1

List of Self-insurers as at 30 June 2018

Self-insurer in 2017/18 Employer

ALCOA OF AUSTRALIA LIMITED ALCOA OF AUSTRALIA LIMITED

AMCOR LTD AMCOR FLEXIBLES (AUSTRALIA) PTY LTD

AMCOR FLEXIBLES (PORT MELBOURNE) PTY LTD

AMCOR LTD

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

ANZ ILP PTY LTD

BHP BILLITON LIMITED BHP BILLITON LIMITED

BLUESCOPE STEEL LIMITED BLUESCOPE DISTRIBUTION PTY LTD

BLUESCOPE STEEL (AIS) PTY. LTD.

BLUESCOPE STEEL LIMITED

FIELDERS MANUFACTURING PTY LTD

LYSAGHT BUILDING SOLUTIONS PTY LTD

ORRCON DISTRIBUTION PTY LTD

BP AUSTRALIA GROUP PTY LTD AIR REFUEL PTY LTD

B P AUSTRALIA PTY LTD

CENTREL PTY LTD

ELITE CUSTOMER SOLUTIONS PTY LTD

NO. 1 RIVERSIDE QUAY PROPRIETARY LIMITED

BRAMBLES LIMITED BRAMBLES INDUSTRIES LIMITED

CHEP AUSTRALIA LIMITED

CHEP PALLECON SOLUTIONS PTY LTD

KEGSTAR PTY LIMITED

BRICKWORKS LTD AUSTRAL PRECAST (VIC) PTY LTD

AUSWEST TIMBERS PTY. LTD.

BRICKWORKS LTD

BRISTILE ROOFING (EAST COAST) PTY LTD

DANIEL ROBERTSON PTY. LTD.

NUBRIK CONCRETE MASONRY PTY. LTD.

NUBRIK PTY LTD

URBAN STONE P/L

1. Due to the differences between the self-insurers survey methodology and that of WorkSafe agents, it is not possible to make a direct comparison between the respective 2017/18 service results. This average has been calculated to provide an approximate comparison only.

Appendix 3:Self-insurance reportOverviewSelf-insurers form part of the WorkSafe workers compensation scheme. Their status is derived from the Workplace Injury Rehabilitation and Compensation Act 2013.

Employers are eligible to apply for self-insurance in Victoria if they satisfy prescribed minimum requirements of financial strength and viability.

As at 30 June 2018, there were 40 self-insurers operating in Victoria. This represents approximately 8.0 per cent of total Scheme remuneration (forecast using 2016/17 remuneration).

Applications and approvals during 2017/18Applications for self-insurance are made to WorkSafe. WorkSafe has the power to approve or refuse any application.

In determining whether an applicant is suitable, WorkSafe must be satisfied that the applicant is ‘fit and proper’ to be a self-insurer. In this regard, WorkSafe examines the applicant’s:

• financial viability

• capacity to administer claims for compensation

• incidence of injuries to workers and the cost of claims in respect of such injuries

• safety of working conditions

• compliance with the Act and Regulations

• compliance with any terms and conditions (where the application is for re-approval)

• any other matters that WorkSafe thinks fit

Approval as a self-insurer is then subject to certain prescribed terms and conditions specified in Ministerial Orders, as well as any terms and conditions determined by WorkSafe.

Initial approval takes effect for a period of three years. Renewal of approval can be for a period of four or six years depending on overall performance in the areas of health and safety, injury management and return to work.

In 2017/18, the following organisations were granted approval to self-insure:

• Liberty OneSteel Manufacturing Pty Ltd for three years effective from 1 May 2018

• OneSteel Recycling Pty Ltd for three years effective from 1 May 2018

• OneSteel Manufacturing Pty Ltd for three years effective from 1 May 2018

• Municipal Association of Victoria (‘MAV’) for three years effective from 1 November 2017

• Viva Energy Holding Pty Ltd commenced effective 21 October 2017 following a joint application to transfer the approval from Viva Energy Australia Group Pty Ltd

• Ferrovial Services Australia Pty Ltd for three years effective 1 March 2018

In 2017/18, the following organisations ceased to be a self-insurer:

• ACN 004 410 833 (formerly Arrium Limited)

• Viva Energy Australia Group Pty Ltd

• Broadspectrum Pty Ltd

In 2017/18, the following organisations were successful in their application for renewal of approval to self-insure:

• The University of Melbourne - for six years effective from 30 September 2017

• Philip Morris (Australia) Limited - for six years effective from 14 October 2017

• Mondelez Australia Holdings Pty Ltd - for six years effective from 4 November 2017

• Carter Holt Harvey Building Products Limited - for six years effective from 5 November 2017

• Brambles Limited - for six years effective from 5 November 2017

• Royal Automobile Club of Victoria (RACV) Limited - for four years effective from 16 December 2017

128 129



MUNICIPAL ASSOCIATION OF VICTORIA

BASS COAST SHIRE COUNCIL

BAYSIDE CITY COUNCIL

CARDINIA SHIRE COUNCIL

CASEY CITY COUNCIL

CORANGAMITE REGIONAL LIBRARY SERVICE

CITY OF GREATER DANDNEONG

EAST GIPPSLAND SHIRE COUNCIL

GLENELG SHIRE COUNCIL

GOLDEN PLAINS SHIRE COUNCIL

HEPBURN SHIRE COUNCIL

HINDMARSH SHIRE COUNCIL

HORSHAM RURAL CITY COUNCIL

INDIGO SHIRE COUNCIL

MELTON CITY COUNCIL

MILDURA RURAL CITY COUNCIL

MOYNE SHIRE COUNCIL

MUNICIPAL ASSOCIATION OF VICTORIA

MURRINDINDI SHIRE COUNCIL

NORTHERN GRAMPIANS SHIRE COUNCIL

PORT PHILLIP CITY COUNCIL

PYRENEES SHIRE COUNCIL

QUEENSCLIFFE SHIRE COUNCIL

SOUTH GIPPSLAND SHIRE COUNCIL

SOUTHERN GRAMPIANS SHIRE COUNCIL

STONNINGTON CITY COUNCIL

STRATHBOGIE SHIRE COUNCIL

SWAN HILL RURAL CITY COUNCIL

WANGARATTA RURAL CITY COUNCIL

WARRNAMBOOOL CITY COUNCIL

WEST WIMMERA SHIRE COUNCIL

WODONGA CITY COUNCIL


BROADSPECTRUM LIMITED APP CORPORATION PTY LIMITED

BROADSPECTRUM (AUSTRALIA) PTY LTD

BROADSPECTRUM SERVICES PTY LTD

ICD (ASIA PACIFIC) PTY LIMITED

O.G.C. SERVICES PTY LTD

TEN RIVERS PTY LTD

CARTER HOLT HARVEY BUILDING PRODUCTS PTY LIMITED

CARTER HOLT HARVEY WOODPRODUCTS (CENTRAL AND NORTHERN REGIONS) PTY LIMITED

CARTER HOLT HARVEY WOODPRODUCTS AUSTRALIA PTY LIMITED

BETFAIR PTY LIMITED

CROWN RESORTS LIMITED

CAPITAL CLUB PTY. LTD.

CROWN MELBOURNE LIMITED

CROWN RESORTS LIMITED

CSR LIMITED

AFS SYSTEMS PTY LTD

BRICKS AUSTRALIA SERVICES PTY LIMITED

CSR LIMITED

EXXONMOBIL AUSTRALIA PTY LTD ESSO AUSTRALIA PTY LTD

MOBIL EXPLORATION & PRODUCING AUSTRALIA PTY LTD

MOBIL OIL AUSTRALIA PTY LTD

MOBIL REFINING AUSTRALIA PTY. LTD.

FOOD INVESTMENTS PTY LIMITED

FORD MOTOR COMPANY OF AUSTRALIA LIMITED

FORD MOTOR COMPANY OF AUSTRALIA LIMITED

HANSON AUSTRALIA (HOLDINGS) PROPRIETARY LIMITED

HANSON CONSTRUCTION MATERIALS PTY LTD

HANSON LANDFILL SERVICES PTY LTD

HYMIX AUSTRALIA PTY LIMITED

INGHAMS GROUP LIMITED INGHAMS ENTERPRISES PTY. LIMITED

LIBERTY ONESTEEL MANUFACTURING

ONESTEEL WIRE

SSX SERVICES

MARS AUSTRALIA PTY LTD MARS AUSTRALIA PTY LTD

MELBOURNE WATER CORPORATION

MELBOURNE WATER CORPORATION

MONDELEZ AUSTRALIA HOLDINGS PTY LIMITED

MONDELEZ AUSTRALIA PTY LIMITED

130 131



ROYAL AUTOMOBILE CLUB OF VICTORIA (RACV) LIMITED

R.A.C.V. FINANCE LIMITED

RACV INSURANCE SERVICES PTY LTD

ROYAL AUTOMOBILE CLUB OF VICTORIA (RACV) LIMITED

INTELEMATICS AUSTRALIA PTY LTD

SPICERS LIMITED PAPERLINX SERVICES PTY LTD

SPICERS AUSTRALIA PTY LTD

TOLL HOLDINGS LIMITED TOLL HOLDINGS LIMITED

TOLL IPEC PTY LTD

TOLL NORTH PTY LTD

TOLL TRANSPORT PTY. LIMITED

TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED

TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED

UNILEVER AUSTRALIA (HOLDINGS) PROPRIETARY LIMITED

TEA TOO PTY. LTD.

UNILEVER AUSTRALIA (HOLDINGS) PROPRIETARY LIMITED

UNILEVER AUSTRALIA LIMITED

UNILEVER AUSTRALIA SUPPLY SERVICES LIMITED

UNILEVER AUSTRALIA TRADING LIMITED

UNIVERSITY OF MELBOURNE AUSTRALIAN MUSIC EXAMINATIONS BOARD (VIC) LIMITED

MELBOURNE DENTAL CLINIC LTD

MELBOURNE UNIVERSITY PUBLISHING LIMITED

MU STUDENT UNION LIMITED

NOSSAL INSTITUTE LIMITED

UNIVERSITY OF MELBOURNE

UOM COMMERCIAL LTD

GOULBURN VALLEY EQUINE HOSPITAL PTY LTD

VIVA ENERGY AUSTRALIA GROUP PTY LTD

VIVA ENERGY AUSTRALIA PTY LTD

VIVA ENERGY REFINING PTY LTD

ZIP AIRPORT SERVICES PTY LTD


MYER HOLDINGS LIMITED MARCS DAVID LAWRENCE PTY LTD (FORMERLY FSS RETAIL PTY LTD)

MYER PTY LTD

SASS & BIDE PTY LTD

WAREHOUSE SOLUTIONS PTY LTD

ONESTEEL RECYCLING

ONESTEEL TRADING

PAPER AUSTRALIA PTY LTD

ONESTEEL REINFORCING PAPER AUSTRALIA PTY LTD

PHILIP MORRIS (AUSTRALIA) LIMITED

PHILIP MORRIS LIMITED

PRIMARY HEALTH CARE LIMITED HEALTHCARE IMAGING SERVICES (VICTORIA) PTY LIMITED

IDAMENEO (NO 125) PTY LTD

IDAMENEO (NO.789) LTD

SIDAMENEO (NO. 456) PTY LTD

SPECIALIST DIAGNOSTIC SERVICES PTY LTD

SPECIALIST VETERINARY SERVICES PTY LTD

THE TRUSTEE FOR ARTLU UNIT TRUST

QANTAS AIRWAYS LIMITED ACCUMULATE LOYALTY SERVICES LIMITED

EASTERN AUSTRALIA AIRLINES PTY. LIMITED

EXPRESS FREIGHTERS AUSTRALIA (OPERATIONS) PTY LIMITED

JETSTAR AIRWAYS PTY LIMITED

JETSTAR GROUP PTY LTD

JETSTAR SERVICES PTY LIMITED

Q CATERING LIMITED

QANTAS AIRWAYS LIMITED

QANTAS DOMESTIC PTY LIMITED

QANTAS GROUND SERVICES PTY LIMITED

QANTAS INFORMATION TECHNOLOGY LTD

QANTAS ROAD EXPRESS PTY LIMITED

QF CABIN CREW AUSTRALIA PTY LIMITED

SUNSTATE PTY LTD

ROBERT BOSCH (AUSTRALIA) PROPRIETARY LIMITED

ROBERT BOSCH (AUSTRALIA) PROPRIETARY LIMITED

132 133



WESTPAC BANKING CORPORATION ASGARD WEALTH SOLUTIONS LTD

BT FINANCIAL GROUP PTY LIMITED

HASTINGS MANAGEMENT PTY LIMITED

WESTPAC BANKING CORPORATION

WESTPAC FINANCIAL CONSULTANTS LIMITED

WOOLWORTHS LTD LANGTONS PTY. LTD.

PHILIP LEONG STORES PTY LIMITED

QUEENSLAND PROPERTY INVESTMENTS PTY LTD

WOOLSTAR PTY. LIMITED

WOOLWORTHS LTD


WESFARMERS LIMITED AUSTRALIAN VINYLS CORPORATION PTY LTD

BLACKWOODS TRAINING PTY LTD

BULLIVANTS PTY LIMITED

BUNNINGS GROUP LIMITED

CHEF FRESH PTY LTD

COLES FINANCIAL SERVICES PTY LTD

COLES GROUP LIMITED

COLES SUPERMARKETS AUSTRALIA PTY LTD

COREGAS PTY LTD

CSBP LIMITED

EUREKA OPERATIONS PTY LTD

GREENCAP PTY LTD

J. BLACKWOOD & SON PTY LTD

KMART AUSTRALIA LIMITED

LAWVALE PTY LTD

LIQUORLAND (AUSTRALIA) PTY. LTD.

MODWOOD TECHNOLOGIES PTY LTD

OFFICEWORKS BUSINESSDIRECT PTY LTD

OFFICEWORKS LTD

PROTECTOR ALSAFE PTY LTD

TARGET AUSTRALIA PTY. LTD.

THE WORKWEAR GROUP PTY LTD

TRIMEVAC PTY LTD

TYRE AND AUTO PTY LTD

WESFARMERS CHEMICALS ENERGY & FERTILISERS LIMITED

WESFARMERS FINANCE PTY LTD

WESFARMERS LIMITED

134 135


Directors’ access to independent legal advice

WorkSafe provides a budget for Directors to obtain independent legal advice in respect of their individual obligations as Directors.

Conflict of interest

Directors are governed in respect of conflicts of interest by the relevant provisions of the Public Administration Act 2004 and binding codes issued by the Victorian Public Sector Commission.

The Directors are also required by section 31 of the Accident Compensation Act 1985 (section 511 of the Workplace Injury Rehabilitation and Compensation Act 2013) to declare any pecuniary interest in any matter being considered by the Board or in any other matter in which WorkSafe is concerned.

The Board is provided at each of its meetings with a consolidated list of the personal interests disclosed by Directors. Directors are required to complete a declaration of private interests upon appointment and annually whilst remaining a director and from 1 July 2016 were required to provide a declaration of related party transactions.

Board committees

The Board is supported by three committees chaired by independent non-executive Directors.

Audit Committee

WorkSafe Board members of the Audit Committee as at 30 June 2018: Doug Kearsley (Chair), Paul Barker, Ross McCann AM and Jane Brockington. The Chief Executive also attends.

The Audit Committee assists the Board to fulfil its oversight responsibilities relating to:

• the integrity, effectiveness and quality of WorkSafe’s financial reporting and disclosures

• the effectiveness of WorkSafe’s risk management framework

• the independence, work plan, and effectiveness of WorkSafe’s External Auditor

• the External Auditor’s annual audit of WorkSafe’s financial statements

• the qualifications, engagement, fees, scope of work and effectiveness of WorkSafe’s Internal Audit function

• WorkSafe’s compliance with relevant laws, regulations, standards and codes including the Financial Management Act 1994 (Vic), Standing Directions of the Minister for Finance under the Financial Management Act 1994 and audit requirements under the Prudential Standard for Victorian Government Insurance Agencies 2015

Risk Committee

WorkSafe Board members of the Risk Committee as at 30 June 2018: Jane Brockington (Chair), Doug Kearsley, Paul Barker and Ross McCann AM. The Chief Executive also attends.

The Risk Committee assists the Board to fulfil its oversight responsibilities relating to:

• the implementation, operation and adequacy of the risk management and internal control framework that WorkSafe uses to identify and manage key business, financial, fraud and regulatory risks

• WorkSafe compliance with relevant laws, regulations, standards and codes including the Prudential Insurance Standard for Victorian Government Insurance Agencies (with the exclusion of audit requirements which are overseen by the Audit Committee), the Victorian Funds Management Corporation (VFMC) and Centralised Investment Model, and the Victorian Government Risk Management Framework (with the exclusion of the attestation requirements which are overseen by the Audit Committee)

Remuneration Committee

WorkSafe Board members of the Remuneration Committee as at 30 June 2018: Paul Barker (Chair), Jane Brockington and Dr Samantha Smith.

The WorkSafe Board Remuneration Committee assists the Board to fulfil its oversight responsibilities by ensuring that WorkSafe has executive remuneration policies, guidelines and practices that are consistent with Government policy.

Appendix 4:Governance and complianceBoard of Management

The WorkSafe Board of Management is established under section 24 of the Accident Compensation Act 1985 and continued under section 502 of the Workplace Injury Rehabilitation and Compensation Act 2013. The Board presently consists of seven Directors, each of whom is appointed by the Governor in Council. One of the Directors is also the appointed Chief Executive. The Board sets the framework for the achievement of WorkSafe’s objectives and the execution of its functions. The Board does this by overseeing strategic planning, policy development, auditing and compliance, prudent financial management, fostering stakeholder relationships and reviewing management performance. Management of the operations and administration of WorkSafe is delegated by the Board to the Chief Executive who manages and controls the affairs of WorkSafe in accordance with the policies and practices set by the Board.

Directors

The Directors serving on the Board at 30 June 2018 are:

Paul Barker (Chairman) B.Bus, FCA, AGIA and ACIS, MAICD Appointed September 2015

Clare Amies (Chief Executive) BA, BSW, MSW, Grad. Cert. Public Policy, AMP (Harvard), MAICD Appointed March 2015

Jane Brockington B. Eco, GradDip (Economics) Appointed August 2017

Peter McMullin B.Laws, B.Com Appointed February 2018

Ross McCann AM B.Eng (Chem) (Hons), FIChemE, FRACI Appointed October 2013

Doug Kearsley B.Sc(Math) (Hons), GradDip (Operations Research) Appointed April 2017

Dr Samantha Smith DBA, MA, B.Bus (Mktg), GAICD, FGIA Appointed October 2016

Directors whose term expired or who resigned during 2017/18 were: Neil Lucas (August 2014 – August 2017)

Further information relating to Board members can be found at worksafe.vic.gov.au.

136 137


Occupational Health and Safety Advisory Committee

The Occupational Health and Safety Advisory Committee (OHSAC) is established under the Occupational Health and Safety Act 2004 (OHS Act) to advise the WorkSafe Board about promoting healthy and safe working environments and the operation and administration of the OHS Act and regulations. The purpose of the OHSAC is to focus on strategic issues, providing an important interface between WorkSafe’s operational activity and the Board.

In 2017/18 matters considered by the Committee in achieving its purpose included:

• Recommendations from the Independent Review of WorkSafe’s Compliance and Enforcement Framework Report commissioned by the Responsible Minister

• Stakeholder input into the planning and development of WorkSafe’s 2030 strategy

• Quarterly performance reporting on health and safety e.g. claims, Inspectorate visits and notices and enforcement

• Review of the existing definition of bullying

• Increasing incidence of mental injury claims

• Cumulative trauma exposure

• Gendered violence strategy

• WorkSafe’s website redevelopment

• WorkSafe’s targeted campaigns e.g. occupational violence

• Legislative and regulatory changes to the operation of the OHS Act and regulations

Occupational Health and Safety Advisory Committee – Meeting attendance

Member Representing Meetings attended/Eligible to attend

Paul Barker (Chair) WorkSafe 4/4

Clare Amies (Chief Executive) WorkSafe 4/4

Marnie Williams (Chief, Business Operations)

WorkSafe 4/4

Gerry Ayres (CFMEU) Employees 4/4

Ben Davis (AWU) Employees 2/4

Luke Hilakari (VTHC) Employees 2/4

Michael Donovan (SDAEA) Employees 0/4

Gary Maas (NUW) Employees 0/4

Karen Batt (CPSU) Employees 4/4

Fiona Nield (HIA) Employers 4/4

Samantha Read (Chemistry Aust.) Employers 4/4

Tim Piper (AIG) Employers 0/4

Heath Michael (ARA) Employers 2/4

Professor Malcolm Sim Independent 2/4

Bill Coleby Independent 3/4

John Ragg Independent 1/4

Jeremy Nott (DTF) Crown 1/1

Board and committee meetings

Number of meetings attended/eligible to attend

Directors Board Audit Risk Remuneration

Paul Barker 8/8 4/4 3/3 2/2

Ross McCann AM 8/8 3/4 2/3

Doug Kearsley 8/8 4/4 3/3

Dr Samantha Smith 8/8 2/2

Jane Brockington 6/7 2/2 1/1 1/1

Peter McMullin 3/4

Clare Amies 8/8

Neil Lucas 2/2 1/1 1/1 1/1

Note: Neil Lucas’s term ended 25 August 17.

138 139


Financial Management Compliance Attestation

WorkSafe Victoria

I, Paul Barker, on behalf of the Board, certify that the Victorian WorkCover Authority has complied with the applicable Standing Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.

Paul Barker Chairman Victorian WorkCover Authority

Date signed: 23 August 2018

Victorian WorkCover Authority trading as WorkSafe Victoria.

Victorian Asbestos Eradication Agency

I, Dianne Foggo, on behalf of the Board, certify that the Victorian Asbestos Eradication Authority has complied with the

applicable Standing Directions of the Minister for Finance under the Financial Management Act 1994 and Instructions.

Dianne Foggo Chair Victorian Asbestos Eradication Agency

Date signed: 8 August 2018

WorkCover Advisory Committee

The WorkCover Advisory Committee (WAC) is established under the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act) to advise the WorkSafe Board about a worker’s entitlement to compensation, return to work, rehabilitation, and the operation and administration of the WIRC Act and relevant regulations. The purpose of the WAC is to focus on strategic issues, providing an important interface between WorkSafe’s operational activity and the Board.

In 2017/18 matters considered by the Committee in achieving its purpose included:

• Review of Common Law

• Long term injured worker pilots

• Stakeholder input into the planning and development of WorkSafe’s 2030 strategy

• Increasing incidence of mental injury claims

• Independent Medical Examinations

• WorkSafe’s targeted campaigns e.g. occupational violence

• Recommendations from the Ombudsman’s report into the management of complex claims

• Quarterly performance reporting on claims, return to work, disputation and agent service to workers and employers

• Legislative and regulatory changes to the operation of the WIRC Act

• Literacy issues for non-English speaking workers

WorkCover Advisory Committee – Meeting attendance

Member Representing Meetings attended/Eligible to attend

Paul Barker (Chair) WorkSafe 3/3

Clare Amies (Chief Executive) WorkSafe 3/3

Gwynnyth Evans (AMIE) Employees 3/3

David Cragg (VTHC) Employees 1/3

Ben Davis (AWU) Employees 3/3

Tim Piper (AIG) Employers 3/3

Mark Stone (VCCI) Employers 2/3

John McNamara Employers 2/3

Meaghan Hoare Knowledge of applicable law 2/3

Robyn Horsley Provision of hospital or medical services 2/3

Shaun Marcus Knowledge of applicable law 1/3

140 141


Access to information

WorkSafe discloses a large volume of information online, via printed publications and through its metropolitan and regional offices. It also provides information services in person and/or by phone, through it Advisory Services, annual report, website, library at 1 Malop Street, Geelong and any of its own or its authorised agents’ offices across Victoria.

Freedom of Information Act 1982

In addition to organisational structure, governance and compliance, this section shows how WorkSafe makes information readily available to workers and the public in accordance with Part II of the Freedom of Information Act 1982 (FOI Act).

The FOI Act gives members of the public the right, subject to certain exemptions, to apply for access to information held by WorkSafe and/or to correct their personal information if it is incomplete, incorrect or out of date.

The FOI Act applies to documents created by WorkSafe, as well as those created by other organisations, which are in the possession of WorkSafe and its authorised agents.

For requests under the FOI Act, applicants may use the online form provided at www.foi.vic.gov.au.

In 2017/18, WorkSafe and its agents received 1,331 FOI requests. The Office of the Victorian Information Commissioner (OVIC) received 16 applications for review and complaints and the Victorian Civil and Administrative Tribunal received two applications for review, all of which are current and carried over into the next financial year.

Details on the outcome of reviews by OVIC and the Victorian Civil and Administrative Tribunal are available on the OVIC website and its annual report.

FOI is just one of the processes available to the public to access WorkSafe documents or information. WorkSafe has processes in place to provide information to workers and the public outside the formal FOI process. Most communications or exchange of information with third parties occurs in the normal course of our business and with injured workers directly, or through our authorised agents, or under the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act).

As part of normal claim management and administration, injured workers may access information in relation to their claim under Section 9 of the WIRC Act directly from agents or their employer (including a self-insurer) or in accordance with other provisions of the WIRC Act.

In 2017/18, 17,219 requests for information in relation to workers’ injury claims were received by agents under the Workplace Injury Rehabilitation and Compensation Act 2013.

Organisation and functions

Information about WorkSafe and its structure, business units, authorised agents, objectives, functions, powers, the legislation it administers and requests for access to information made under the Freedom of Information Act 1982 or the Workplace Injury Rehabilitation and Compensation Act 2013 can be found in the annual report and/or at worksafe.vic.gov.au.

Publications including policies, manuals, guidelines, codes of practice, brochures and other materials are available at worksafe.vic.gov.au, which also includes legislation administered by WorkSafe.

Compliance

This section includes disclosures required by the Financial Management Act 1994, the Accident Compensation Act 1985, the Workplace Injury Rehabilitation and Compensation Act 2013, the Protected Disclosure Act 2012, the Carers Recognition Act 2012 and the Freedom of Information Act 1982. It also includes voluntary disclosure of additional regulatory compliance information.

Manner of establishment and relevant Minister

WorkSafe was established by section 18 of the Accident Compensation Act 1985 as in force immediately before 1 July 2014 as a body corporate with perpetual succession.

Robin Scott MP was appointed the Minister for Finance in December 2014, with responsibility to manage Victoria’s occupational health and safety laws, and the accident compensation scheme.

Accountability of WorkSafe

Pursuant to section 492 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is required to exercise its powers and perform its functions under the Workplace Injury Rehabilitation and Compensation Act 2013, the Accident Compensation Act 1985, the Workers Compensation Act 1958, the Occupational Health and Safety Act 2004, the Equipment (Public Safety) Act 1994 and the Dangerous Goods Act 1985. Pursuant to section 495 of the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is subject to the general direction and control of the Minister and any specific written directions given by the Minister. The Minister cannot give a direction in relation to a specific person.

Ministerial Directions

No Ministerial Directions were given under section 495 of the WIRC Act during the financial year 2017/18.

WorkSafe’s objectives, functions and powers

WorkSafe’s primary objectives, functions and powers are found in sections 492, 493 and 494 of the Workplace Injury Rehabilitation and Compensation Act 2013 and sections 2, 7 and 8 of the Occupational Health and Safety Act 2004. These Acts are available from worksafe.vic.gov.au.

WorkSafe’s role in the community

WorkSafe is the regulator of occupational health and safety and the accident compensation scheme in Victoria and its objectives and functions include (amongst others):

• providing insurance to employers

• receiving, assessing and determining claims for payment of compensation to injured workers

• conducting and defending legal proceedings before courts and tribunals

• assisting employers and workers in achieving healthy and safe working environments

• promoting the effective occupational rehabilitation of injured workers and their early return to work

• developing and implementing programs to provide incentives for employers to implement measures to eliminate or reduce risks to health and safety and to otherwise improve occupational health, safety and welfare

• promoting public awareness and discussion of occupational health and safety and providing information services to workers, employers and the Victorian community

142 143


Insurance

WorkSafe is responsible for the compensation and rehabilitation of injured workers and managing employer workplace injury insurance and premiums under the Workplace Injury Rehabilitation and Compensation Act 2013.

The rehabilitation and compensation scheme is administered by a number of authorised agents on behalf of WorkSafe. These agents are currently responsible for a range of functions including premium collection, claim lodgement and the delivery of benefits to, and rehabilitation of, workers. Therefore, personal or case files of workers are held by the agents who manage their claims. Other operational and policy files are stored at WorkSafe’s offices at 1 Malop Street, Geelong.

Examples of the types of documents to which members of the public usually apply for access are:

• documents relating to their personal information, for example a particular worker’s injury claim, or a workplace complaint made against an individual or company

• documents of a non-personal nature, for example details on WorkSafe’s processes or decisions, or information on an incident at a workplace.

Not all documents are automatically made available in response to a request. A concerned person may check WorkSafe’s website or contact the Advisory Service to enquire as to whether the information they require is available for inspection or whether the person should apply for it under the provisions of the Freedom of Information Act 1982.

Making a request

Workers’ injury claim files

If you are a worker who has claimed compensation and wish to access documents in relation to your injury claim file you can contact the agent managing your claim to apply for documents under section 9 of the Workplace Injury Rehabilitation and Compensation Act 2013. Under this Act agents are required to process and respond to a request within 28 days from the date they receive the request. Information in relation to the injury claim access to information process is available at worksafe.vic.gov.au.

Workplace Injury Insurance Premium

Information documents relating to employer premiums are held by the agents. Certain documents can be released by the agents without the need to use the Freedom of Information Act 1982 process. Employers should contact the agent managing their WorkCover insurance to request access to particular documents.

Other Information

For information not related to a worker’s injury claim file or an employer’s premium, requests must be made in writing and should be addressed to:

Freedom of Information WorkSafe Victoria PO Box 279 Geelong Victoria 3220

Requests under the Freedom of Information Act 1982 (FOI Act) must be made in writing, or using the online form provided at www.ovic.vic.gov.au. A statutory fee of $28.40 from 1 July 2017 is payable for each request and must be paid by credit card online, or enclosed with the letter of request (cheques should be made payable to WorkSafe Victoria).

The fee may be waived if the applicant requests and provides evidence as to why payment of the fee would cause them financial hardship. Additional costs for access to documents may also be incurred, such as for photocopying (eg 20 cents per each A4 size black and white paper) and search time.

Decisions are made under the FOI Act by the Principal Officer of authorised FOI Officers in accordance with the requirements of section 26 of the FOI Act. The FOI team may be contacted for general queries on (03) 9641 1555.

Online publications and library

WorkSafe produces a wide range of publications, many of which can be accessed at worksafe.vic.gov.au or by attending its library. Members of the public are welcome to use the collection but must first make an appointment by phoning (03) 4243 7008 or 1800 671004.

The library operates from our head office at 1 Malop Street, Geelong.

Categories of documents

Records are managed using a cataloguing system called HPE Records Manager and are organised by subject and type (form, policy, guidance, etc.) and filed by business area and subject matter.

Injury claims are filed by name and managed by authorised agents in accordance with WorkSafe’s record management policy and authorities and standards issued by the Public Record Office Victoria under the Public Records Act 1973.

Categories of records/files include:

• Actuarial

• Annual reports

• Complaints

• Compliance

• Compliance Codes

• Contracts

• Correspondence, including ministerial

• Dangerous goods

• Dispute management

• Enforcement Group

• Financial

• Freedom of Information requests

• Health and Disability Services, including clinical and Independent Medical Examiner services

• Health and safety

• Human Resources (employee records)

• Information Technology Shared Solutions

• Injury claims (managed by authorised agents)

• Insurance, including self-insurance, and premium

• Internal review

• Investigations

• Legislation and policy

• Legal and litigation

• Licensing applications and renewals

• Policies, procedures and manuals, including the Online Claims Manual

• Programs or events (e.g. WorkSafe Awards)

• Prosecution

• Return to work

• Risk

• Service requests

• Scheme Performance, including data and statistics

• Strategic and operational planning

• Workplace visit entry reports, improvement and prohibition notices

Health and safety

WorkSafe is responsible for improving health, safety and welfare in Victorian workplaces under the Occupational Health and Safety Act 2004 and associated legislation.

Information held by WorkSafe is separated into the categories of personal or case files, operational and policy files (on legislation or particular aspects of legislation) and correspondence files. Current files are stored electronically at WorkSafe’s head office at 1 Malop Street, Geelong or at one of its regional offices.

144 145


Environmental performance

WorkSafe is committed to reducing its environmental footprint and consistently manages sustainability through resource conservation, pollution prevention and promoting awareness among employees and stakeholders.

WorkSafe proactively manages its environmental footprint through employee participation.

The use of recycled paper has now increased from 95.01% in 2016/17 to 98.75% in 2017/18, while the gradual introduction of electronic document management is reducing paper and storage. Our recycle and compost programs are also proving successful.

Bicycle and end of trip facilities (e.g. showers and lockers) are encouraging employees to ride to work and sensory lighting throughout the building is reducing electricity consumption.

Both electricity and paper usage will continue to be monitored and minimised.

All redundant mobile phones, IT and camera equipment are donated to a range of charitable entities for recycling if they cannot be re-used within our offices. WorkSafe also recycles batteries, CDs, DVDs and other media.

Energy consumption has increased primarily as a result of WorkSafe occupying 1 Malop St (January to June 2018) while continuing our operations at 222 Exhibition St.

2016/17 2017/18

Electricity (kWh) 2,697,871 2,823,758

Paper consumption (reams) 19,751 17,300

Paper consumption (reams) per FTE 15.50 16.62

Recycled paper (reams) 18,766 17,083

Recycled paper (%) 95.01 98.75%

Local Jobs First – Victorian Industry Participation Policy

The Victorian Industry Participation Policy Act 2003 requires departments and public sector bodies to report on the implementation of the Local Jobs First - Victorian Industry Participation Policy (Local Jobs First - VIPP). Departments and other public sector bodies are required to apply the Local Jobs First - VIPP for all procurement activities valued at $3 million or more in metropolitan Melbourne and for state-wide projects, and $1 million or more for procurement activities based in regional Victoria.

During 2017-18, WorkSafe commenced six Local Jobs First - VIPP or Local Industry Development Plan (LIDP) applicable procurements totalling $104 million. Three projects were assessed as having no contestable products or services. Three projects were assessed as contestable, requiring the completion of a VIPP plan.

The committed outcomes from the Local Jobs First – VIPP include:

• an average of 81 per cent of local content commitment was made per project

• a total commitment of 259 jobs (Annualised Employee Equivalent (AEE)) was made, which includes the creation of 41 new jobs and the retention of 218 existing jobs (AEE)

• a total commitment of 40 positions for apprentices/trainees was made, which includes the creation of 10 new apprenticeships/traineeships, and the retention of 30 existing apprenticeships/traineeships

Protected disclosures

WorkSafe has established procedures under Part 9 of the Protected Disclosure Act 2012. The purpose of these procedures is to facilitate the making of disclosures and the protection of people who make disclosures from reprisals. The procedures are available at worksafe.vic.gov.au.

Application for internal review

Internal review outcomes 2016/17 2017/18

Health and safety

Inspector’s decision affirmed (no change) 44 35

Inspector’s decision set aside 74 86

Inspector’s decision varied (other than compliance date) 59 59

Compliance date only changed 1,000 1,186

Extension refused 22 9

Application refused 5 5

Application withdrawn 81 109

Application ineligible/not reviewable 11 4

Total health and safety 1,296 1,493


Licensing

Decision affirmed 3 8

Decision set aside 0 3

Application invalid 0 4

Application withdrawn 0 0

Total licensing 3 15


Return to work

Decisions set aside 1 1

Compliance date only changed 1 2

Decision affirmed 4 4

Varied 0 1

Invalid 0 2

Withdrawn 3 0

Total return to work 9 10

Victorian Civil and Administrative Tribunal applications

During 2017/18 there were nine applications to VCAT for review of Internal Review Unit decisions. Of these, two were dismissed and one was struck out. There are six matters currently at VCAT: four have administrative mention dates scheduled, one has a compulsory conference scheduled and one has a directions hearing scheduled.

146 147


Merit and equity, and employment and conduct principles

WorkSafe is committed to the application of principles of merit and equity in the employment process. These principles ensure applicants are assessed and evaluated fairly and equitably on the basis of key selection criteria and required competencies. All decision making recognises WorkSafe’s code of conduct, organisation values and relevant policies and processes. All WorkSafe employees have access and support available to them via the Equal Employment Opportunity Contact Officers.

WorkSafe Workforce data 30 June 2017 30 June 2018

Total number of employees 1,074 1,085

Full time equivalent 1,040 1,056

Males 521 524

Females 553 561

Full time 960 989

Part time 114 96

Average age 46 45

National Competition Policy

Review of legislative restrictions

In accordance with its National Competition Policy commitments, the Victorian Government commissioned a review of Victoria’s accident compensation legislation in 1998. The review identified three main restrictions on competition; the mandatory nature of the insurance, monopoly provision and centralised premium setting.

Pursuant to section 490 of the Workplace Injury Rehabilitation and Compensation Act 2013, the Minister must before 1 July 2015 and once every five years after that, cause a review on any matter relating to the setting of premiums. The review is to be undertaken by an independent expert review body.

An independent review of premium setting was started prior to 1 July 2015 by the Department of Treasury and Finance. Overall the actuaries found that WorkSafe’s current premium system is fair, performing well and is financially sustainable.

WorkSafe agrees in principle with the majority of the review recommendations, particularly around simplification, transparency and enhancing the means in which the broader scheme objectives for Occupational Health and Safety (OHS) and Return to Work (RTW) are supported within the premium model.

WorkSafe will consider the recommendations as part of WorkSafe 2030 which is focused on delivering greater social and economic value to the Victorian community through the regulation of workplace health and safety and delivery of the workers compensation scheme.

Competitive neutrality

Under the Victorian Government’s Competitive Neutrality Policy, WorkSafe is listed as a Public Financial Enterprise. Therefore, in accordance with the obligations set out in the Competition Principles Agreement, WorkSafe pays the full suite of Commonwealth and State taxes or tax equivalents where applicable. WorkSafe is not a borrower in its own right and therefore is not subject to the Financial Accommodation Levy.

The Building Act 1993

WorkSafe’s policy with respect to new building works, and alterations to existing buildings, is to comply with the Building Act 1993 as if WorkSafe is not exempt from compliance as a public authority (as provided in section 217(3) of the Building Act 1993).

Some buildings occupied by WorkSafe may have been constructed or altered under exemptions for public bodies which applied at the time. WorkSafe is unaware of any material non-compliance with the current building standards for buildings of their nature and age.

The Carers Recognition Act 2012

WorkSafe has taken all practical measures to comply with its obligations under the Carers Recognition Act 2012. These include considering the carer relationships principles set out in the Act when setting policies which affect employees in care relationships. WorkSafe has employment policies including the provision of carers leave, flexible working hours, purchased leave and the ability to work from home which comply with the statement of principles in the Act.

Additional information available on request

To the extent applicable, the information listed in Financial Reporting Direction 22, issued by the Minister for Finance, is available on request subject to provisions of the Freedom of Information Act 1982.

148 149


Early intervention case management

Case management

Cases open at

1 July 2017

Cases closed

1 July 2017 to 30 June 2018

Cases open at

1 July 2018

Work-related 24 85 15

Non-work related 29 73 14

Total 53 158 29

Exceptional sick leave 2017/18

Number of employees 1

Days 36

Exceptional sick leave is granted in the event of a serious or terminal illness of an employee, which results in the employee being absent from work for an extended period of time, and where the employee has exhausted their personal leave balance.

Mental wellbeing support Total participants 2017/18

Critical incident follow up 32

Employee assistance program 426

Peer support officer support 15 individual support and planning sessions

Our commitment to Health, Safety and Wellbeing

We are committed to the implementation of our Health, Safety and Wellbeing Strategy and active risk assessment and control. We acknowledge our responsibility to audit processes and are committed to the analysis and reporting of results.

Proactive wellbeing services

We are committed to the implementation of our Health, Safety and Wellbeing Strategy, and active risk assessment and control. We acknowledge that the health, safety and wellbeing of our employees is the foundation for our success as an organisation. Our integrated approach also includes a strong focus on maintaining our safety systems and supporting our employees through our early intervention support program for both work related and non-work related injuries and health issues.

2017/18 (Total pax.)

People leader training attendance

Leading through times of change*

Building your leadership capital 148

Finding your leadership edge 126

Leading through the PROSCI methodology 61

Switching your growth mindset 63

Unconscious bias 184

* The ‘Leading through times of change’ program is a series of five individual programs captured as part of a leadership curriculum focusing on the development of change leadership capabilities.

Psychological wellbeing training participation

Team strengths workshops and people leader induction participation 145

Supporting through transition 30

Building your leadership capital 148

Growth mindset participation 61

Mental health workshops for executive 90% participation

Specialist mental health related group sessions 65

Individual wellbeing ‘tune ups’: 60

Peer support training participation 57

Physical wellbeing attendance

Fitness squads 923

Swim passes 1101

Gym subsidy reimbursements 144

Walking group 133

Flu vaccination 466

Financial wellbeing attendance

On-site health insurance 61

On-site superannuation 62

Retirement planning (Changing Gears) 17

150 151


The following reports our performance against lead safety performance indicators

2017/18

Induction/training completed in three months

New employees 227

Representation

Designated Work Groups 42

Health and Safety Representatives 30

Deputy Health and Safety Representatives 12

First Aid Officers (Level 2) 38

First Aid Officers (Level 3) 13

Emergency Wardens 68

Peer Support Officers 52

Equal Employment Opportunity Contact Officers 15

Designated Work Groups Management Representatives 25

Safety systems

Committee meetings in total 36

Ergonomic assessments completed

Initial workstation set-up support sessions 41

Office ergonomic assessments 32

Vehicle ergonomic assessments 18

Our Occupational Health and Safety (OHS) performance

The following reports our performance against key OHS performance indicators.

2016/17 2017/18

Hazards

Total hazards 52 35

Hazards per 100 FTE 5.0 3.04

Number of incidents 121 177

Incidents per 100 11.63 15.4

Inspections

Number of inspections 60 53

Resolution close out of inspections 100% 100%

Number of Provisional Improvement Notices - -

Number of Improvement and Prohibition Notices - -

Scheduled OHS Committee meetings completed 100% 93%

Claims and return to work

Number of claims (standardised) 10 23

Claims – rate per 100 FTEs 0.96 2.04

Estimated average cost per claim $81,768 $106,503

Number of time-loss claims 6 9

Time-loss claims – rate per 100 FTEs 0.58 0.80

Number of 13-week claims 1 6

13-week claims – rate per 100 FTEs 0.096 0.53

Number of fatality claims - -

Number of claims with return to work plans initiated 6 7

Percentage of 13-week claims with return to work plans initiated 100% 33%

152 153


Consultant Purpose of consultancy

Total approved

expenditureExpenditure

2017/18Future

expenditure

$000s $000s $000s

Other

Australian National University

Development of framework for better understanding on uplifting organisational health and performance

20 20 -

Business Olympian Pty Ltd Development of Business Continuity and Crisis Framework

20 20 -

Catherine Anne Marshall Review of ISCRR to evaluate the current performance and the manner in which it aids WorkSafe Strategy

98 45 -

Darcy Associates Development of a competency framework for medical panels

62 24 -

Deloitte Access Economics Regulatory impact analysis for the Dangerous Goods (Transport by Road or Rail) Regulations

99 99 -

Greg Bailey Consulting Review of Advisory and Licensing functions

49 49 -

Instinct And Reason Pty Ltd Advice on tools and resources focusing on creating a workplace that positively impacts mental health and wellbeing

40 40 -

Noetic Solutions Pty Ltd Review of Regulatory Approach to the Major Hazards Facilities

65 65 -

PricewaterhouseCoopers Review use of Hazardous Industries data sources for improved analytics outcomes

74 55 19

RMIT University Research to explore opportunities to apply restorative justice processes and principles in the enforcement and claims processes

186 186 -

RTK People Strategies Advice on improving workplace mental health and wellbeing, and reducing incidence and serverity of work-related injury and disease

72 39 33

The Clinic Group Pty Ltd Advice on creative and advertising agencies 55 19 -

Consultancy expenditure under $10,000 In 2017/18, there were five consultancies engaged where the total fees payable to the consultant was less than $10,000 (excluding GST).

Consultancy expenditure

Consultancy expenditure over $10,000 During the year, WorkSafe engaged consultants to assist in the planning and delivery of the WorkSafe 2030 Strategy and Geelong Relocation Programs, in addition to its ongoing operations.

In 2017/18, there were twenty six consultancies where the total fees payable to the consultants were $10,000 or greater (excluding GST). The total expenditure during the 2017/18 financial year in relation to these consultancies was $15.21 million (excluding GST). Details of individual consultancies are outlined below.

Consultant Purpose of consultancy

Total approved

expenditureExpenditure

2017/18Future

expenditure

$000s $000s $000s

WorkSafe 2030 Strategy Program

Capgemini Australia Pty Ltd Establishment of strategic direction and operating model of the innovation centre

878 838 -

Deloitte Touche Tohmatsu Advice for strategic policy review, reform and project development, and development of preliminary business case for WorkSafe 2030

3,793 1,227 -

Deloitte Touche Tohmatsu Development of Business Design and Technology Solution for WorkSafe 2030

7,511 7,511 -

Deloitte Touche Tohmatsu Development of Business Case for WorkSafe 2030 and Market Sounding

1,926 1,405 521

Isobar Communications Pty Ltd

Research and future state design of customer experience blueprint

248 172 76

IT Newcom Pty Ltd Advice on development and implementation of Data Analytics Strategy

27 27 -

KPMG Lean scoping exercise on claims process 37 37 -

KPMG Develop Change Strategy and Roadmap for WorkSafe 2030

1,801 1,801 -

The Quantium Group Pty Ltd

Development of analytics roadmap including gap analysis and implementation

1,400 1,400 -

Geelong Relocation Program

Australian National University

Research Studies On Prioritising Wellbeing During Organisational Change

45 45 -

Bellrock Partners Pty Ltd Review of Head Office Security System 12 12 -

Gordian Global Solutions Pty Ltd

Review of Onboarding and Induction process

37 37 -

Kienco Pty Ltd Labour Market Analysis 16 16 -

SenateSHJ Development of ‘Dynamic City Strategy’ for Geelong

40 20 -

154 155


Appendix 5:Disclosure indexThe Annual Report of WorkSafe Victoria is prepared in accordance with all relevant Victorian legislations and pronouncements. This index has been prepared to facilitate identification of WorkSafe’s compliance with statutory disclosure requirements.

Legislation Requirement Page ref

Ministerial Directions and Financial Reporting Directions

Report of operations

Charter and purpose

FRD 22H Manner of establishment and the relevant Ministers 140

FRD 22H Purpose, functions, powers and duties 140

FRD 22H Key initiatives and projects 6-7

FRD 22H Nature and range of services provided 8, 12-32

Management and structure

FRD 22H Organisational structure 11

Financial and other information

FRD 10A Disclosure index 155-156

FRD 22H Employment and conduct principles 147

FRD 22H Occupational health and safety policy 41, 148-151

FRD 22H Summary of the financial results for the year 33-34

FRD 22H Significant changes in financial position during the year 45

FRD 22H Major changes or factors affecting performance *

FRD 22H Subsequent events 98

FRD 22H Application and operation of Freedom of Information Act 1982 141

FRD 22H Compliance with building and maintenance provisions of Building Act 1993 146

FRD 22H Statement on National Competition Policy 146

FRD 22H Application and operation of the Protected Disclosure Act 2012 144

FRD 22H Application and operation of the Carers Recognition Act 2012 146

FRD 22H Details of consultancies over $10 000 152-153

FRD 22H Details of consultancies under $10 000 153

FRD 22H Disclosure of government advertising expenditure 154

FRD 22H Disclosure of ICT expenditure 154

FRD 22H Statement of availability of other information 146

FRD 25C Victorian Industry Participation Policy disclosures 145

Information and Communication Technology (ICT) Expenditure

For the 2017/18 reporting period, WorkSafe had a total ICT expenditure of $51.91 million, with the details shown below:

Business As Usual ICT expenditure Non-Business As Usual ICT expenditure

Total $000s

Total $000s

Operational expenditure $000s

Capital expenditure $000s

35,386 16,527 9,268 7,259

Advertising

Details of advertising and communications expenditure (for campaigns with a media spend of $100,000 or greater) in 2017/18:

Name of campaign

Campaign summary

Start/end dates

Advertising (media)

expenditure

Creative and campaign

development expenditure

Research and evaluation

expenditure

Other campaign

expenditure

$000s $000s $000s $000s

Return to Work (Getting Back)

TV, press, radio, outdoor, digital

Oct – Jun 826 936 - -

Enforcement (Bad Days)

TV, press, radio, cinema, outdoor, digital

Dec – Jun 1,787 219 - -

Hearts and Minds (New)

TV, radio, digital, outdoor

Jun 2018 646 1,289 104 -

Advertising(media)expenditure

TV, outdoor, digital Jun – Jul 2017 & May – Jun 2018

919 17 15 -

Creative and campaign development expenditure

Radio, outdoor, digital

Mar – Jun 398 36 29 -

Farm Safety- Quad Bikes

TV, press, radio, outdoor, digital

Nov – Feb 441 8 - 1

Other campaign expenditure

TV, radio, digital, outdoor

Dec – Jun 121 22 - -

156 157


Legislation Requirement Page ref

SD 5.2 Specific requirements under Standing Direction 5.2 7

Ministerial Directions and Financial Reporting Directions

Compliance attestation and declaration

SD 5.1.4 Attestation for compliance with Ministerial Standing Direction 139

SD 5.2.3 Declaration in report of operations 7

Financial statements

Declaration

SD 5.2.2 Declaration in financial statements 99

Other requirements under Standing Directions 5.2

SD 5.2.1(a) Compliance with Australian accounting standards and other authoritative pronouncements 49

SD 5.2.1(a) Compliance with Ministerial Directions 99

Other disclosures as required by FRDs in notes to the financial statements

FRD 11A Disclosure of ex gratia expenses N/A

FRD 21C Disclosures of responsible persons and executive officers in the financial report 92-93

FRD 103G Non-financial physical assets 76

FRD 110A Cash flow statements 47

FRD 112D Defined benefit superannuation obligations 70

Legislation

Freedom of Information Act 1982 141

Building Act 1993 146

Protected Disclosure Act 2012 144

Carers Recognition Act 2012 146

Victorian Industry Participation Policy Act 2003 145

Financial Management Act 1994 49

*Throughout

158


Documents

Everyone. Every workplace. · premium rates in the country. We have been able to do this while maintaining compensation and rehabilitation benefits to support injured workers in their