Industrial Injuries Disablement Benefit scheme consultation
Response by Thompsons Solicitors – April 2007
Thompsons is the UK's most experienced trade union and personal injury law firm. It has a network of offices across the UK, including the separate legal jurisdictions of Scotland and Northern Ireland.
The firm participates regularly in government consultations on legislative issues.
Q1. What is the case for a “no fault” occupational injuries and diseases scheme?
There is a compelling case for a “no fault” scheme, separate to the tort system for claiming compensation. It should not be anything other than “no fault”, free for all, and payable regardless of financial status.
People who have been injured or made ill due to their employment and who are unable to work as effectively as in the past, or are unable to work at all, are entitled to financial support.
Workers have little or no control over their work environment. Their health at work is in their employer’s hands. It is a fact that the majority of people injured at or made ill through their work are doing lower paid, usually (but not exclusively) manual jobs. They are therefore likely to be more economically vulnerable than other categories of workers.
While any injured or ill worker able to establish negligence on the part of their employer will be able to claim compensation from their employer / insurers, many will not, either because it is not possible to establish negligence, or because it is not possible to trace former employers or their insurer. This is especially so in asbestos and other occupational disease claims. We estimate that at least 10% of mesothelioma claims are unsuccessful because it is not possible to trace an employer or insurer.
It is therefore vital that those whose health and ability to work has been seriously compromised or ended but who cannot claim damages from an employer have access to the safety net of a “no fault” benefits scheme.
Although there is benefits recovery in successful personal injury claims (through the Compensation Recovery Unit), any benefits scheme must be kept separate from the tort system, ensuring that those that can sue an employer or former employer or insurer for compensation continue to have the right to do so. The two are not mutually exclusive. Indeed the two systems complement each other.
The scheme is also, importantly, more than just a financial crutch. It provides evidence to vulnerable injured or ill people that society cares and is genuinely committed to helping them to cope better with the circumstances they are in.
Individuals pay National Insurance contributions because they are required to do so but also as a form of insurance; they should have the reasonable expectation that it will result in a return when a genuine need arises.
Rehabilitation should be a key part of the scheme. However, while rehabilitation aims to encourage people back into appropriate work, it must not be a stick to punish or force people into returning to work too early or into inappropriate work. Rehabilitation should be used appropriately and money for it should be ring-fenced within the scheme.
There will however be cases where rehabilitation is inappropriate or unsuitable and where that occurs individuals must not be penalised for failing to take up the option of rehabilitation. If it fails they must not be penalised in terms of the benefits they receive.
The scheme should not aim to provide full financial restitution. That is the purpose of the tort system. But the scheme must be a safety net for those who have suffered work related injury or illness regardless of whether they can prove negligence.
Financial incentive to improve workplace health and safety
The scheme should include a financial incentive to employers to improve health and safety procedures and to protect their workers’ from ill health and injury. This would reflect the social responsibility that employers have. They should be compelled to make a contribution to the social costs of caring for those too ill to return to work or of assisting people to return to work and to cope with their circumstances.
Employers should have responsibility, if they are negligent, to pay part of an injured worker’s benefits. Their contributions to the scheme should reflect the injuries they have caused. Rather than just paying in cases where negligence is established, they could be required to pay to the DWP all or a proportion of the IIDB paid to employees injured by them. Alternatively their contributions should be based on the percentage of their workforce which is in receipt of IIDB over a certain period.
Q3 Should it be a compensation scheme, a benefit scheme or both?
The scheme must be a benefit scheme that provides meaningful financial support. It should not be seen as serving the same objectives as the tort system which awards compensation where there is fault.
Q4 What support should the scheme offer and how should any support be provided?
We refer back to our comments about rehabilitation in Q2. The scheme should provide financial benefits, in the form of a lump sum or periodic payments and it should be the method by which rehabilitation is provided.
Q5 How should a new scheme be integrated with measures for the prevention of work-related accidents and illnesses, rehabilitation, retention, retraining and return to work?
There is a serious social cost arising from workplace accidents and illnesses which should be reflected in the scheme. Employers can be incentivised to prevent accidents and hazards by paying to DWP all or a proportion of the IIDB for employees they have injured or via a contribution to the scheme based on the percentage of the workforce on IIDB at any one time. They should also be required to report all accidents to the HSE (and its successor body).
The rights of union safety reps
The TUC recently highlighted the problem faced by union safety reps who are being denied their legal entitlement to time off for training and to undertake their duties of inspection and investigation. Union safety reps also report that their work is being undermined by employers not acting on their safety concerns.
The evidence is that unionised workplaces are safer workplaces and that health and safety reps play a crucial role in this. The new scheme should enhance the role of the safety rep, by confirming their role and rights in law as has been done with union learning reps.
Q6 How can we ensure that the principles of equity, transparency and simplicity are met?
Thompsons sees many clients where they have been forced to undergo regular and repeated interviews and medical examinations in order to claim and to continue to receive IIDB.
While this demonstrates a flexibility that some benefits lack, there is a lack of information that often leaves vulnerable people confused. They are often unable to understand why one day they might be judged to have a certain level of disability, and yet only weeks later, a much lower level when they themselves feel no discernable difference in their condition.
There must be increased transparency in all decisions regarding eligibility for IIDB and greater simplicity in the process. This should include a simple plain English letter and leaflets explaining the process, and a helpline for claimants to be able to speak to a DWP benefits advice worker.
While the IIAC keeps track of those conditions that should be considered for inclusion in the scheme, it is not always possible to translate the existence of that condition into eligibility for IIDB. In cases where causation is not prescribed, the test for inclusion should be simple and logical, based on the balance of probabilities i.e. is it more likely than not that the condition was caused, aggravated and / or accelerated by the employment? Clearly this would be regardless of whether there is negligence on the part of the employer.
This means, in simple terms, that the question that should be asked is being asked is:
“But for the event – the job they are doing - would the condition exist?”
Q8 How should the decision on entitlement be decided?
Decisions on entitlement should be done as quickly and informally as possible, based on medical evidence and the simple balance of probabilities test described in the answer to Q7.
Q9 How should the scheme best meet the needs of individuals affected by injury or disease caused through work?
The scheme must develop an objective test for who should be eligible for benefits and the level of benefits they should receive. Above all, it should provide a combination of meaningful financial support and rehabilitation measures.
Meaningful financial support may be a combination of a lump sum and weekly payments along with access to rehabilitation and / or retraining to enable the injured person to achieve a significantly improved quality of life and if possible return to suitable employment.
Q10 Who should be covered by the new scheme?
All workers, including some self-employed and agency workers, should be covered by the scheme. The self-employed may pay reduced NI contributions in recognition that they may not be entitled to certain benefits, including IIDB, but many have no more control over their working environment than an employee.
A freelance or contract worker may be working in exactly the same conditions as an employee. Indeed contract and agency workers increasingly make up the bulk of workers in many organisations and where it is in fact the case that they have no more control over the conditions they work in than an employee does neither their employment rights or entitlement to work-related ill health benefits should be less than those of employees.
Too many employers are hiding the true relationship between them and a worker to avoid the obligations of being an employer. It is a scam that should not prevent the worker receiving benefits.
Thompsons would support a strict control test, as per the definitions given in existing legislation including the Employment Relations Act 1996 and the Minimum Wage Act 1999 and testable in a Court of Law, of the relationship between the worker and the employer to establish eligibility for the scheme. Agency workers should have the same rights as all other categories of worker.
Q11 How should the scheme be funded?
The scheme should continue to be funded on the basis of a social contract between the individual and the state whereby the individual pays contributions, which are levied across the piece, and the state pays out when the need arises. This principle avoids any profit motive for the insurance industry which, if responsible for funding the scheme, might avoid paying out in order to guard its profits.
There must however also be funding by employers. As stated in our answer to Q2, an employer contribution in the form of a levy or full / partial repayment would provide a financial incentive to employers to protect their workers’ health and safety and would reflect the social responsibility that employers have.
Q12 Who would administer the scheme?
The Department of Work and Pensions should administer the scheme, with an independent, tripartite body such as IIAC responsible for making decisions on prescription of injuries and diseases.
Q13 How could any new scheme be made simpler, and more cost effective, to administer?
The current scheme is already cost effective and saving money must not be the motivation for any revised scheme. We do not see any element of the current scheme that could be done cheaper.
Q14 How should any future scheme relate to other forms of compensation or benefits and ensure that any benefits in the scheme do not conflict with any existing benefit?
Any future scheme must provide meaningful financial support, payable in addition to other state benefits. It should not be reduced by the receipt of means-tested benefits.
Q15 What can we learn from international comparison?
The government should avoid looking to international comparisons. The generous nature of the benefits systems in northern European states are well known and as such do not provide a meaningful comparison when considering reform of IIDB.