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Guest column: Tear down our antique workers’ compensation system and build one for the 21st century

Canadian Federation of Independent Business
Canadian Federation of Independent Business

The workers’ compensation system in the province is woefully broken. It doesn’t work for employers or workers. It needs to be torn down and built for the 21st century.

Some time in the next year, the provincial government will announce another statutory review of the workers’ compensation system. The last one was conducted in 2013 and it won’t come as much of a surprise that very few of the recommendations have been implemented. In spite of immense time and effort creating the final reports, they simply “gather dust.”

So, rather than announcing the statutory review, the Canadian Federation of Independent Business (CFIB) would like the minister responsible for WorkplaceNL to do something bold — create an independent review commission charged with fundamentally re-structuring how the workers’ compensation system would operate for Newfoundlanders and Labradorians.

It’s no secret employers aren’t happy with the way the system works now. Premiums are high, the system is riddled with red tape, and tinkering at the edges has done little to help. For the most part, small business owners don’t hold WorkplaceNL in high esteem, whether deserved or not.

Over a century ago, workers’ compensation was built on what are known as the Meredith Principles. These are: no fault compensation, security of benefits, collective liability, independent administration, and exclusive jurisdiction. Employers accept the funding of a no-fault system in return for workers giving up their right to sue. The principles are strong, but the concerns lies with how workers’ compensation is administered in Newfoundland and Labrador.

At the top of the list is the independence of WorkplaceNL to make appropriate decisions. As it stands, policies affecting employers are governed by the Board of Directors, while policies related to workers are decided by the government. This is important because it allows politics into the mix which has implications for WorkplaceNL, financially and otherwise.

As well, CFIB has been advocating for WorkplaceNL to adopt a fund surplus rebate for employers. In 2017, this rebate would have meant $248 million for employers, money that could be used to stimulate the economy. Yet, the Board of Directors have yet to adopt the necessary policy changes. On the other hand, labour groups have successfully advocated to the government for an increase in the income replacement rate from 80 per cent to 85 per cent, at a cost of $68 million to the system.

Many small-business owners look at this decision with skepticism especially considering the lack of transparency and accountability around getting workers back to work as quickly as possible.

Everyone involved in the workers’ compensation system has a role to play in making sure it works well. But it seems the onus is always on the employer.

An independent commission, with binding powers and guided by the Meredith Principles, is the best solution to getting a fair system for employers and workers, while ensuring safe and healthy workplaces.

Vaughn Hammond is Director of Provincial Affairs for the Canadian Federation of Independent Business in Newfoundland and Labrador.

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