Employers who do not meet their workers’ compensation obligations for their workers should be aware that there can be very serious consequences.
One recent prosecution highlights just how seriously failing to hold insurance is taken in Queensland.
Recent workers’ compensation prosecution
On 15 July 2021, an employer (a Brisbane-based auto wreckers) was found guilty on one charge of failing to insure regarding their failure to hold workers’ compensation insurance for their workers.
The employer was fined $94,500 and a conviction was recorded.
What does the law say?
The Workers’ Compensation and Rehabilitation Act 2003 (the Act) contains provisions around employers failing to hold adequate insurance.
These relate to all employers who employ workers. It an offence for an employer not to hold workers’ compensation insurance for each of their workers.
An employer has five days of employing workers to obtain a policy and must maintain the insurance by making periodic returns and paying a premium at the time and in the way required for the policy.
Failing to hold workers’ compensation insurance carries a maximum penalty of 275 penalty units (which currently equals $37,908.75) for individuals.
If the employer is a corporation the penalty is five times the prescribes maximum penalty for an individual, making the maximum penalty for a corporation $189,543.75.
Identifying a failure to insure
WorkCover can identify an employer failing to insure through a variety of methods.
While this may occur on the lodgement of a claim (without a corresponding policy), WorkCover also uses detailed data matching processes to check employer compliance and conducts a state-wide site visit program, where we visit employers to check their insurance coverage.
Using data from a variety of sources enables WorkCover to focus on educating Queensland businesses (especially new businesses) about their WorkCover obligations, before they are uninsured.
WorkCover may recover from the employer the amount of the unpaid premium together with a penalty equal to 100% of the unpaid premium.
If WorkCover has paid compensation or damages for an injury sustained by a worker when the employer did not hold insurance, we may recover the amount of the compensation paid, together with a penalty equal to 50% of this amount.
In 2020/21, WorkCover raised $5.5 million in premium and penalties against uninsured employers across the scheme.
Actions taken by Worker’s Compensation Regulatory Services
If further investigations from Worker’s Compensation Regulatory Services (WCRS) find there is sufficient evidence of failing to insure, it may also support a recommendation to the Workers’ Compensation Regulator for a prosecution.
In 2020-21, WCRS received four referrals for investigation against employers, two prosecutions were commenced and one of these was successfully prosecuted.
It’s important to note that in addition to a referral to WCRS, WorkCover may also take action to apply a penalty to the employer's account for failing to hold the adequate insurance.
Visit the workers' compensation prosecutions page for more information.