The fallacy of accepting a claim as a workplace claim

Work place claims

Is the claim actually a workplace claim?

ACC legislation is strongly geared to the worker not the employer. Although not with any negative intent, the current legislation was updated in 2000, well before the current Experience Rating was introduced in 2011.

Why is this relevant?

Experience Rating penalises a business for injuries that are lodged as a workplace injury. It ignores whether the injury actually happened at work or not; whether it was a pre-existing injury; a repetitive strain injury; or wether the injury was actually managed properly. If the worker says it happened at work it will be a workplace claim.

The penalties increase the longer a worker is off on ACC compensation. Cynically you can deduct that if ACC is poor on managing a claim efficiently then it can charge the employer greater penalties.

What a lot of employers do not realise or know is that ACC isn’t 100% correct in the way it accepts a claim as a workplace claim.

We spend a fair bit of our time challenging claims on behalf of employers and we do so via the formal review process. Legally this sits below the District Court and all decisions are binding.

We have been successful on several occasions challenging ACC on not having done its due diligence on accepting a claim as a workplace claim.

The onus is on ACC to check

Sec 54 and Sec 56 of the legislation is key here. It states that ACC must, within 21 working days, do some kind of due diligence in confirming a claim is indeed a workplace claim.

To date, I have not yet met an employer who was proactively phoned by ACC asking them whether the claim actually happened at work. Not surprising as ACC receives over 2 million claims a year and well over 200,000 workplace claims.

That is still no excuse as the legislation is the legislation.

The following narrative is taken from a review hearing outcome. Please note there are court decisions supporting this position which is important as ACC cannot argue with this.

Did ACC have a reasonable basis to accept the claim?

…the first question to be determined is whether ACC had a reasonable basis for accepting the claim.

I [Reviewer] have no reservation in concluding that ACC did not. ACC has not discharged its obligation to establish that the claim was correctly accepted. At the time of making its decision, ACC had evidence that Mr X suffered a series of injuries. That is all.

The process under which claims for cover are considered is set out in the Act. Section 54 of the Act relates to the responsibility of ACC to make reasonable decisions in a timely manner. That provision confirms:

The Corporation must make every decision on a claim on reasonable grounds, and in a timely manner, having regard to the requirements of this Act, the nature of the decision, and all the circumstances.

Section 56 of the Act sets out the steps ACC must take when actioning claims for cover. Importantly, this provision requires that ACC "investigate the claim" ... to the extent reasonably necessary to enable it to make a decision. Furthermore, that provision confirms that ACC has up to four months in which to investigate and decide the claim.

In this case, the Corporation confirmed that no investigation has been undertaken in Mr X’s claim before it was accepted. The claim was “auto-accepted”.

The extent of any investigation must be balanced in terms of the particular circumstances of that claim. One of the obvious circumstances that arises with work injury claims, is that there is a third party involved who is legally impacted from claim acceptance - that is the employer. Once ACC accepts the claim, then the employer automatically becomes liable for paying the first week of weekly compensation to the claimant, and there is also a potential detriment in terms of ACC levies.

There is also an intangible impact for the employer, in that a State body has made a finding of fact, that a work accident has occurred in that workplace. It goes without saying that no reasonable employer wishes to have its employees injured at work. Finding that a work injury has occurred in a workplace, is a very significant finding for any employer.

In light of those circumstances, it is very surprising that the ACC elected not to undertake any investigation, at the very least contacting the employer to determine the employer's position in relation to the claim prior to accepting it.

The good news is that any claim accepted as a workplace claim can be challenged under Sec 54 and Sec 56.

How would ACC deal with 200,000 challenges?