WorkSafe Victoria Annual Report 2015€¦ · WorkSafe Victoria Annual Report 2015 3. Report from...

Safe every dayWorkSafe Victoria Annual Report 2015

WorkS

afe Victoria A

nnual Report 2015

Letter to MinisterRobin Scott MP Minister for Finance

1 Macarthur Street East Melbourne Victoria 3002

Dear Minister

I am pleased to submit the 2014/15 WorkSafe Victoria Annual Report for presentation to the Parliament, as required by section 46 of the Financial Management Act 1994.

Yours sincerely

John Walter Acting Chair

ContentsAbout WorkSafe 1

Vision and mission 1

Strategy 2017 2

Report from the Acting Chair and Chief Executive 4

Board 6

Our organisation 7

Safety 8

Return to work 16

Service 22

Sustainability 30

Culture and place 38

Financial report 44

Appendices 105

Appendix 1 Prosecutions 105

Appendix 2 Agent performance 112

Appendix 3 Self-insurance report 117

Appendix 4 Governance and compliance 123

Appendix 5 Disclosure index 136

Our visionVictorian workers returning home safe every day.

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

WorkSafe:• strives to prevent workplace injuries,

illness and fatalities• provides benefits to injured workers

and helps them return to work• enforces Victoria’s occupational

health and safety and accident compensation laws (including relevant Commonwealth laws)

• provides reasonably priced workplace injury insurance for employers

• manages the Victorian workers compensation scheme by ensuring the prompt delivery of appropriate services and adopting prudent financial practices

• provides an emergency response service that operates 24 hours a day every day across Victoria.

Our 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 – explosives and other dangerous goods

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

• Mines Act 1958 – mines and quarries.

WorkSafe provides a range of compensation and entitlements to injured workers, including:

• weekly payments• medical and allied health treatment• ambulance transport• hospital treatment• personal and household help• impairment lump sums• common law damages (where

certain criteria are met).

FundingWe are funded by WorkSafe insurance premiums paid by Victorian employers. In 2014/15 this totalled $1.942 billion.

Our stakeholdersStrong engagement with our stakeholders enables us to achieve our vision and mission. Collaboration with our stakeholders takes many forms and occurs in many different contexts. Stakeholders contribute as experts in their field to WorkSafe’s strategy, policies and program development.

We partner with employee and employer representatives, medical and allied health providers and legal practitioners to ensure the best outcomes are achieved for Victorians.

Two stakeholder committees are mandated by legislation: the WorkCover Advisory Committee and the Occupational Health and Safety Advisory Committee. These committees are supported by specific WorkSafe resources and are complemented by a number of other working groups and committees, including the:

• OHS Stakeholder Reference Group• Rehabilitation and Compensation

Working Group • Major Hazards Advisory Committee • Legal Liaison Group • Return to Work Working Group.

About WorkSafe

1WorkSafe Victoria Annual Report 2015

At the end of the third year of Strategy 2017 we have delivered outstanding results in service and return to work, and our performance in safety and sustainability remains sound.

We are determined to keep working towards our 2017 goals. The achievement of these targets will see Victoria set national and international benchmarks for safer workplaces, strong return to work, service, and low cost insurance.

SafetyStrategy 2017 measures 2012/13 Result 2013/14 Result 2014/15 Target 2014/15 Result

Claims per million hours worked 7.53 7.37 7.15 7.34

4-week claims per million hours worked 3.17 3.10 3.01 3.16

Performance highlight

Victoria’s injury rate continues to fall

1,000,000hours

Claims

7.37

7.15

7.34

4-week claims

3.10

3.01

3.16

In the past 12 months we introduced the new strategic theme of culture and place. This will ensure we maintain a vibrant and engaged culture to meet future challenges. Our move to Geelong is a major opportunity to position the organisation at the cutting edge of injury prevention, injury insurance and rehabilitation, for the benefit of the Victorian community.

Strategy 2017

Return to workStrategy 2017 measures 2012/13 Result 2013/14 Result 2014/15 Target 2014/15 Result

Not yet at work six months after injury 21.4% 19.96% 19.56% 19.39%


Best result on record

Not yet at work six months after injury

19.39%

19.56%

6 months

19.96%

2 WorkSafe Victoria Annual Report 2015

Strategy 2017

SustainabilityStrategy 2017 measures 2012/13 Result 2013/14 Result 2014/15 Target 2014/15 Result

Performance from insurance operations $119m $483m $363m $211m

Actuarial release $179m $303m $50m -$60m

Break even premium 1.266% 1.205% 1.193% 1.228%


Strong PFIO and net position

Break even premium

1.205%

1.193%

1.228%

-$

+$

ServiceStrategy 2017 measures 2012/13 Result 2013/14 Result 2014/15 Target 2014/15 Result

Employer service 87.1% 89.2% 89.2 90.0%

Worker service 83.3% 83.9% 83.9 86.2%1

Community service 70.3% 70.3% 71.9 71.7%


Record worker service

Employer service 89

.2%

90.0

%

89.2

%

Worker service 83

.9%

86.2

%

83.9

%

Community service 71

.9%

71.7

%

70.3

%

-60m50m303m

$0

Actuarial releasePerformance from insurance operations

363m 211m483m

$$

$

We are determined to keep working towards our 2017 goals.

Culture and placeStrategy 2017 measures 2012/13 Result 2013/14 Result 2014/15 Target 2014/15 Result

Sustainable engagement index 77% 69% 74% 75%


Strong improvement in staff engagement

74%

75%

69% Sustainable

engagement index

1 For 2014/15, the agent component of the employee/worker score moved from biannual to monthly surveying to improve the service focus by our agents to injured workers and to bring it in line with our other surveys. Our analysis shows this has increased the employee/worker service score by 1 percentage point in 2014/15 in addition to actual service improvements. This increase has been factored into future target setting.


Report from the Acting Chair and Chief Executive

In a year of change and challenges for our organisation we maintained our strategic focus and continued to achieve excellent results. Victoria remains the safest state in Australia to work. Due to strong financial management the workers compensation scheme is in a solid position. These results are not possible without the efforts of our employees, stakeholders and the Victorian community.

Strategy 2017 provides us with a path towards achieving our vision and mission. This year we added a new strategic theme: culture and place. The aim is to foster a positive workplace culture to ensure we are well positioned for the future. In particular, we want to seize the opportunities presented by our move to Geelong and deliver profound improvements in injury rehabilitation and disability care to the Victorian community.

We know we cannot achieve our goals alone. Strong and meaningful collaboration with our stakeholders is a crucial part of our approach. This year we were determined to improve the way we engage with our stakeholders in order to drive continued and sustained results for the community.

Our performance in each of our strategic areas of focus is set out below.

SafetyWe aim to ensure that Victorian workplaces are safe every day. We have significantly improved workplace safety over time. Changes in the Victorian economy, such as the growing importance of the service sector, have affected the types of injuries occurring. This affected our four-week claims per million hours worked result. We strive constantly to address these emerging issues. Overall, we continued to reduce the number of new injuries. Claims per million hours worked were 7.34 per cent, which was 0.4 per cent lower than 2013/14.

Tragically, this year 20 people died at work and this was 20 too many. A well-resourced Inspectorate is one of the ways we prevent workplace deaths and injuries. During the year we bolstered the capacity of our Inspectorate.

Our strategy aims to achieve community awareness and behaviour change in relation to safety at work. The return to the WorkSafe brand, which is well known in the community, helps reinforce our workplace safety message.

Return to workThis year 80.61 per cent of injured workers were able to return to work within six months, up from 80.04 per cent in the previous year. This is a record result for Victoria.


Report from the Acting Chair and Chief Executive

We have modified our arrangements with our agents to drive better return to work outcomes. Our agents partnered with occupational rehabilitation providers to deliver innovative new programs.

We also broadened the influence and reach of the Return to Work Inspectorate by increasing inspector numbers and workplace visits. In addition, our Getting Back campaign highlighted the important role that employers and general practitioners play in helping injured workers return to work.

ServiceOverall satisfaction among employers and workers with our agents, our advisory service and our Inspectorate were at record levels this year. This is extremely pleasing after many years of concerted effort, particularly in relation to injured worker satisfaction with our agents. The overall worker service result was 86.2 per cent and employer service result stands at 90 per cent.

Throughout the year we have been implementing the recommendations of a review of the agency model, with a focus on providing incentives for agents to innovate. While these results are positive, there is still room for improvement. The current agent panel expires on 30 June 2016 and WorkSafe has invited expressions of interest for the new agent panel.

We also continued to seek improved service delivery by collaborating with a number of organisations. We worked with the TAC on health and disability services and information

technology, and with academic organisations on research.

SustainabilityThis year the underlying health of the scheme remained sound with a performance from insurance operations result of $211 million.

Common law continues to place pressure on our projected liabilities and as a result we experienced an actuarial increase this year. We are committed to ensuring that common law benefits are sustainable and continue to closely manage their delivery.

Our net result was $454 million, which was adversely impacted by external factors of $369 million.

The funding ratio was 120 per cent. A capital management plan has been developed which reflects the strong funding ratio result. Given continuing investment market volatility, a conservative approach has been adopted to protect scheme integrity.

The Victorian Government announced that WorkSafe will not pay a dividend in the coming years. Instead, dividends that would have been paid to the State will be used to improve benefits for injured workers, maintain competitive premiums for Victorian businesses and fund programs to improve workplace safety.

WorkSafe maintained its record low average premium rate of 1.272 per cent. This is the second lowest rate in Australia. This is a sign of a well-managed scheme, which also provides fair benefits to injured workers.

Culture and placeOur employee satisfaction results improved over the last year. This is a good outcome during a time of change for the organisation. We aim to build on this result in the coming years.

Our move to Geelong is an important step in the evolution of WorkSafe. It will place us at the heart of personal injury prevention and insurance expertise and knowledge, providing significant benefits to the Geelong community and professional development opportunities for our employees.

We are supporting our people through the relocation process with a dedicated team and strong engagement, including with our union partners.

Thank youWe would like to thank the Board, senior management team and all our employees for their work throughout the year. We also thank the Minister for Finance, our agents, and stakeholders. Together we have sought superior outcomes for the Victorian community and look forward to enhanced results in the future.

John Walter Acting Chair

Clare Amies Chief Executive


Board

John Walter (Acting Chair)LLB (Hons), MBAAppointed 2014

Clare Amies, Chief ExecutiveBA, BSW, MSW, Grad. Cert. Public Policy, APM (Harvard), MAICD Appointed 2015

Ross McCannB.Eng (Chem) (Hons)Appointed 2013

Paul KirkBEcAppointed 2013

Neil LucasAppointed 2014


Board / Our organisation

Our organisation

Joint TAC/WorkSafe Collaboration As at 30 June 2015

Health & Safety Leanne Hughson

A/c Executive Director

Insurance Simon Bailey


Finance & Administration Ian Sargent

Chief Financial Officer

Information Technology Shared Solutions (ITSS)

Doug Main

Head of ITSS

Human Resources & Change Management Cheryl Woollard

Executive Director

External Affairs Linda Timothy


Risk & Strategy Roger Arnold

Chief Risk & Strategy Officer

Legal Services Leanne Hughson

General Counsel

Chief Executive Clare Amies

Heath and Disability Strategy Group Marion Nagle

Executive Lead


Victoria’s injury ratecontinues to fall

Strategy 2017 results 2013/14 Result 2014/15 Target 2014/15 Result

Claims per million hours worked 7.37 7.15 7.34

4-week claims per million hours worked 3.10 3.01 3.16

Claims per million hours worked in 2014/15

1,000,000hours 7.34

Claims

7.37

7.15

7.34

3.164-week claims

3.10

3.01

3.16

2014/15 Result2014/15 Target 2013/14 Result


Safety

SafetyVictorian remains the safest state in which to work. In collaboration with workers and employers, we continued a strong and effective focus on safety throughout the year.

Our approach We work to prevent injury, disease and death in Victorian workplaces. We do this by supporting employers and workers to improve workplace health and safety and by changing attitudes and behaviours through a constructive compliance approach.

This involves encouraging behaviour change, engaging with the community and deterrence. We continue to look for new and innovative ways to make Victorian workplaces safe. We maintain a large WorkSafe Inspectorate to ensure effective regulation across the state. In February 2015 we welcomed a new intake of inspectors to the team, with a further intake commencing in September 2015.

ResultsWhile WorkSafe did not meet its safety target, the number of claims per million hours worked reduced by 0.4 per cent. The number of more serious injuries increased in 2014/15. We are investing significant strategic resources to reverse this result in the last two years of Strategy 2017.

Victoria’s injury trends reflect the changing nature of our economy, such as growth in the service sector. We have to ensure that our prevention programs keep pace with the emerging challenges of the labour market.

Tragically, there were 20 fatalities in 2014/15. This is a major concern for WorkSafe. Every workplace fatality is unacceptable and preventable.

Total annual standard claims

08/09

28,4

12

28,5

61

29,3

14

29,2

61

28,0

03

26,5

88

26,7

57

09/10

10/11

11/12

13/14

12/13

14/15


Practical supportWorkSafe provides practical support to Victorian workplaces. For example:

• The OHS Essentials Program, assisting small and medium organisations by providing free and independent safety consultation services

• Injury Hotspots, information sheets that give an industry-wide snapshot of how people get injured and what can be done to prevent these injuries

• Safe Towns, a program where local employers are invited to attend an information session to prepare for a visit from an Inspector

• Safe Work Method Statements, work continues in developing a new Safe Work Method Statements template that is consistent with the SafeWork Australia model for workers undertaking high risk construction work

• New guidance, A Guide for Employers: preventing and responding to work-related violence, was released during the year

• 13 construction industry specific guidance documents were released in 2014/15.

IncentivesOur premium system encourages employers to improve their OHS and return to work performance, while maintaining the sustainability of the WorkSafe scheme.

Public awareness campaignsOur public awareness campaigns and sponsorships are designed to foster a culture of safety. They seek to bring about positive behaviour change by raising awareness and informing the community. Major campaigns and sponsorships this year included:

• Every 12 minutes – a campaign about Inspectorate visits to workplaces.

• Homecomings – a campaign to reinforce the message that the most important reason for making your workplace safe is not at work at all.

• WorkSafe Week – promoting safety to thousands of people across the state and giving people the skills and practical tools they need.

• Sponsorship of the Victorian Country Football League, the Victorian Country Netball League and the AFL Western Bulldogs Football Club.

• Mother’s Day and Father’s Day – to celebrate families and to generate discussion about the reasons for being safe at work.

• Jobs at Home Day – encouraging Victorian workers to think about one of their most important reasons for being safe at work – their jobs at home.

• WorkSafe Awards – celebrating and sharing best practice and innovation in workplace health and safety across Victoria.

Recognising excellenceWe celebrate best practice and innovative solutions to improve health, safety and return to work at the annual WorkSafe Awards. Congratulations to all the 2014 winners.

Best solution to a specific workplace health and safety issue: A.G. Coombs Group

Health and Safety invention of the Year: Safescape

Health and Safety Representative of the Year: Sue Smith – Hepburn Health Service

Commitment to Workplace Health and Wellbeing: St John of God Health Care Inc.

Employer Excellence in Return to Work: Chandler Macleod Group Ltd

Return to Work Coordinator Excellence: Fanol Isai – Catholic Homes

Worker Return to Work Achievement: Zoe Welsh – Ambulance Victoria.


Safety

Health care and social assistance – We have commenced action to establish a Health Practice Team to oversee work in this area. The Hospital Intervention Program is designed to work with hospital boards to improve safety outcomes, particularly in relation to work-related violence.

Manufacturing – The manufacturing industry employs a significant number of workers in Victoria. The sector has the largest number of claims within the scheme with the largest claims costs. In 2014/15, WorkSafe conducted over 6,000 inspections in the manufacturing industry. As a result of these visits, more than one in five of all notices written by inspectors were issued to workplaces in the manufacturing industry – the most of any industry. During the year WorkSafe focused on those workplaces in the industry that have the highest risks, including food product manufacturers, metal fabricators, and those in the industry that have had a consistently poor safety record over a period of time. Many of the 6,000 visits undertaken were the direct result of serious incidents that were caused by hazardous manual handling, slips trips and falls, and from the use of plant and equipment.

Industry-based focusWorkSafe uses sophisticated and tailored interventions to improve health and safety outcomes in industries that experience higher than average injury rates. The following are highlights from our industry programs this year.

Construction – We have focussed on the main causes of death and serious injury, such as structural collapse, electrocution, falls and being struck by mobile plant. The Inspectorate continued to place emphasis on housekeeping and safety planning to reduce the incidence of slips, trips and falls.

Education and training – Over the last year we updated our guidance OHS in Schools – A practical guide for school leaders. There has also been a continued focus on the management of asbestos in schools.

Agriculture – In 2014/15, our education and enforcement campaigns included a greater emphasis on safe use of plant and machinery, particularly tractors and quad bikes, as well as dairy and cattle farms and livestock transport. WorkSafe conducted over 1,000 inspector visits across Victoria and undertook a range of education and awareness activities including attendance at eight field days, hosting on-farm workshops and working with stakeholders to issue written guidance and safety alerts to assist industry to meet its safety obligations.

Wholesale and retail trade –The retail sector received seasonal activity from the inspectorate, focussed on housekeeping, ladder safety, stock management and manual handling. WorkSafe inspectors conducted over 1,300 visits and our retail focused social media campaign received over 20,000 hits in 2014/15.


Compliance measures 2013/14 2014/15

Annual workplace visits 41,566 39,998

Prosecution success rate 88% 93%

Investigations proceeding to prosecution charges within 12 months

75% 83%

Investigation conversion rate (investigation to prosecution)

67% 66%

Prosecutions commenced 107 114

DeterrenceAs a regulator we invest heavily in workplace health and safety law enforcement. We strive to ensure our enforcement and prosecution activities are appropriately targeted, proportionate, consistent and fair. Once again, WorkSafe has completed over 100 prosecutions this year and maintained a strong prosecution success rate.

The following are the results of a number of significant prosecutions.

• A company was convicted and fined $250,000 after an incident when a brick masonry wall with a timber hoarding attached collapsed on to Swanston Street, Melbourne killing three people who were walking past. The company pleaded guilty to the charge on the basis of its involvement in the attachment of the timber hoarding to the wall which increased the risk of the wall collapsing.

• A company that operates a recycling plant was convicted and fined $425,000 following a workplace fatality at its workplace where a worker was walking through the tipping area and was run over by a front end loader.

• Two food manufacturing companies were convicted and fined $50,000 and $60,000 respectively where workers were injured whilst working on unguarded items of machinery.

• A plumbing company was convicted and fined $96,683 when a worker fell through an uncovered pit.


Safety

Safe worker case study: Sue Smith

Health and Safety Representative of the year, Sue Smith, works at the Creswick Campus of the Hepburn Health Service. She has been an elected Health and Safety Representative for the last 12 years.

Sue has a passion to ensure a safe working environment for staff, as well as for patients, residents and clients.

Sue promotes OHS as a team responsibility, identifies issues, investigates all of the implications and involves management and all relevant staff in the solution. She uses her good working relationship with management to consider issues cooperatively and quickly.

Sue creates fantastic displays for WorkSafe Week. She decides on a topic, sources information and materials and puts the display together in the staff room. The displays have included: preventing musculoskeletal injuries, being proactive during summer heat, promoting a stress free workplace and the OHS responsibilities of employers and employees. These displays are bright, informative, fun and get staff talking about the topic.


HazelwoodThe Hazelwood Mine Fire Inquiry made 12 recommendations in August 2014, which were accepted by the Victorian Government. The Board of Inquiry has been reconvened to focus on the health impacts of the fire and to consider options for mine rehabilitation.

WorkSafe has recruited safety system specialists to increase its capacity to assess, verify and monitor the safety management systems of hazardous industries, including open cut coal mines.

Healthcare workers and occupational violence In May 2015 the Victorian Auditor-General’s Office tabled its performance audit of occupational violence against healthcare workers. It found that healthcare workers face unnecessary levels of risk in regard to occupational violence.

In light of the findings, WorkSafe has:

• increased inspection visibility in health services

• participated in whole-of-industry forums

• increased our intervention activities.

The Government has formed an Occupational Violence Taskforce. It will be chaired by Clare Amies, WorkSafe Chief Executive, and include representatives from the Department of Health and Human Services, Australian Nursing and Midwifery Federation, the Australian Medical Association and other health stakeholders.

Key developmentsWorkHealth In April, Todd Harper, CEO of Cancer Council of Victoria, was appointed to lead a new Ministerial WorkHealth Advisory Committee. It will develop a strategy to improve the health of Victorian workers and identify ways the WorkHealth program can be enhanced and expanded.


Safety

Regulations and codesDuring 2014/15 we worked on a number of codes and regulations in collaboration with our stakeholders. A review of the Occupational Health and Safety Regulations 2007 and the Equipment (Public Safety) Regulations 2007 is underway as these regulations expire in 2017.

This work aims to improve health and safety outcomes for workers and identify and deliver savings to business without reducing safety standards.

AsbestosThe dangers associated with asbestos are well known. The Occupational Health and Safety Regulations 2007 require duty holders to take a risk management approach to asbestos. This year we continued to work with other agencies, government departments, industry, and local councils to minimise the risk of exposure to asbestos in the community. We:

• conducted 1,464 asbestos related workplace visits

• received 22,584 asbestos removal notifications for consideration, assessment and response

• continued a pilot program with local government, distributing domestic asbestos removal kits for the renovation sector.



Strategy 2017 results 2013/14 Result* 2014/15 Target 2014/15 Result

Workers not yet at work six months after injury 19.96% 19.56% 19.39%

In 2014/15 WorkSafe achieved its best ever return to work result

80.61%of workers returned to work within six months of injury

6months 19

.96%

19.5

6%19

.39%

Not yet at work six months after injury

* 2013/14 results included some claims where RTW had not occurred. This had no impact on achieving the corporate target.


Return to work

Return to workSafe and sustainable return to work provides benefits for workers, employers and the Victorian community. This area has been a priority for WorkSafe for some time and this year we delivered a record result.

ResultsWe are on track to reach the ambitious return to work targets set in Strategy 2017. This has been achieved through new and multi-faceted approaches. In particular, we have significantly changed the way agents tackle return to work.

WorkSafe realigned agent incentives to focus on areas where performance was not improving and agents have responded by partnering with occupational rehabilitation providers to deliver innovative programs.

Early and sustainable return to safe work is achieved through the successful efforts of the injured worker and employer, with timely support from treating health practitioners, agent case managers and occupational rehabilitation providers.

In 2014/15 WorkSafe achieved its best ever return to work result.

80.61 per cent of injured workers were able to return to work within six months, up from 80.04 per cent on last year’s result.

Our approachWorkSafe’s approach to return to work is underpinned by a legislative framework that places obligations on employers and workers. We provide information to assist all parties in their roles. We have implemented a number of initiatives that are expected to deliver results over the coming years. These include:

• broadening the influence and reach of the Return to Work Inspectorate

• better use of early intervention• improved agent capability and

occupational rehabilitation support• using research to better understand

the barriers to returning to work.


Return to Work InspectorateThe Return to Work Inspectorate adopts a constructive compliance approach to ensure employers and workers meet their obligations. They provide information and advice to employers and workers through workplace visits, over the phone or online. Where employers breach their return to work obligations, the Inspectorate investigates and, if appropriate, pursues further action.

This year the Return To Work Inspectorate conducted 1,758 visits, and intervened on 1,694 claims. This was a significant increase in activity from the previous year. Over the period the Return to Work Inspectorate also issued 118 improvement notices, and achieved 385 voluntary compliances.

Measure 2013/14 Result 2014/15 Result

Visits 1,273 1,758

Claims interventions 889 1,694

Improvement notices 59 118

Voluntary compliances 204 385


Return to work

Key developmentsHealth Benefits of Safe Work program This program engages with general practitioners about their central role in helping injured workers get back to safe work. We redesigned our certificate of capacity to encourage general practitioners to focus on what an injured worker can do at work. The new certificate was supported by an awareness campaign that reached over 5,000 general practitioners and 74 per cent of WorkSafe providers are using the new certificate.

Diversity Field Officers WorkSafe has entered into a collaborative research project with Deakin University and the Australian Federation of Disability Organisations. The project will evaluate efforts to improve employment outcomes for people living with a disability, including those disabled through work injuries. Diversity Field Officers in the Geelong region will work with up to 200 small businesses who have expressed interest in employing a person with a disability.

Early Intervention StrategyIn February 2015, a new phone based Return to Work Inspectorate service was introduced. In its first five months the strategy resulted in 67 referrals to a Return to Work Inspector. Early indications show very positive results with 54 per cent of workers returning to work four weeks after the initial contact from this program.

Getting Back campaignThe Minister for Finance, Robin Scott MP, launched a major public awareness campaign to highlight the key roles many Victorians play in helping injured workers get back to work.

WorkSafe data shows that:

• 40 per cent of injured workers who are off work for more than six months return to work within a year of being injured

• 17 per cent of injured workers that are off work for more than four weeks will be off work for more than a year.

The campaign included TV, radio, online, cinema and newspapers, as well as information in general practitioner clinics, health centres and pharmacies. A website was launched that focusses on the theme that getting back to work is an important part of the recovery process.


Health Benefits of Safe WorkHealth Benefits of Safe Work is a three year, phased program designed to influence general practitioner certification behaviour. This program is a leader in Australia, winning the 2014 Excellence in Personal Injury Management Award for Innovation in Personal Injury Management. The program recognises that behaviour change requires a long-term multi-pronged approach. This involves a public awareness campaign, a new Certificate of Capacity including incorporation into 12 clinical software packages, and general practitioner education and engagement.

RTW research programThe Institute for Safety Compensation and Recovery Research has been commissioned to provide information into outcomes for injured workers. The research has two components. The first is a return to work sustainability survey to gain an understanding of the key issues surrounding the process.

The second is a longitudinal study to better understand the experiences of injured workers, depending on their type of injury or age. The results will be used to further develop return to work programs.

Better@WorkIn early 2015 a new occupational rehabilitation service, Better@Work, was launched. Better@Work focusses on supporting small and medium employers whose injured workers are most at risk of remaining off work at six months.

The Better@Work approach involves early intervention, education and face-to-face communication. This approach encourages collaboration between the agent, the occupational rehabilitation provider, the worker and the employer.


Return to work

Returned worker case study: Evange Tsangas

After Evange Tsangas tore the tendons in both arms at work, his surgeon advised that they had to move quickly to get the best results.

The surgery was approved by the WorkSafe agent and once it had been successfully completed the agent worked with Evange and his employer to start planning to go back to work.

“After the surgery I wasn’t allowed to move my arm at all, not to lift a coffee cup or a newspaper. So I was stuck at home doing nothing. There is only so much TV you can watch, they just end up repeating the same shows.”

Evange had access to physiotherapy and hydrotherapy to help him recover.

“When I was a bit better, I arranged with work to go back three days a week, just paperwork, and we built that up. Three months after my injury I was back on full duties.”

“No-one wants to get hurt at work. I was just glad to get the help I needed, when I needed it, so I could get on with life.”



Strategy 2017 results* 2013/14 Result 2014/15 Target 2014/15 Result

Employer service 89.2% 89.2% 90.0%

Worker service 83.9% 83.9% 86.2%

Community service 70.3% 71.9% 71.7%

This year we delivered our best service results on record

90%Employer service

89.2

%

90.0

%

89.2

%

86.2%Worker service

83.9

%

86.2

%

83.9

%

71.7%Community service

71.9

%

71.7

%

70.3

%

* Aggregate of all service results, detail opposite


Service

ServiceGreat service enables us to achieve better outcomes in health and safety and return to work. That is why improving our service is a major part of Strategy 2017. We want the client experience to be just, fair, consistent and transparent.

WorkSafe service

Worker service 2013/14 Result 2014/15 Target 2014/15 Result

Advisory 94.1% 92.5% 93.8%

Inspectorate 96.9% 95.0% 97.5%

Advice and guidance 96.8% 95.0% 97.1%

Employer service 2013/14 Result 2014/15 Target 2014/15 Result

Advisory 92.7% 92.5% 92.8%

Inspectorate 97.6% 95.0% 97.4%

Advice and guidance 97.1% 97.0% 96.6%

Premium 88.9% 91.5% 88.8%

Community service 2013/14 Result 2014/15 Target 2014/15 Result

Balance education and enforcement

68.1% 70.4% 66.5%

Catch law breakers 82.6% 83.7% 82.2%

Inspection expectation 59.7% 61.5% 61.0%

Charges laid 12 months Inspectorate

74.8% 75.0% 83.3%

Percentage of successful prosecutions

87.7% 90.0% 92.6%

This year we delivered our best service results on record. We will continue to strive for further gains in service delivery to meet our ambitious Strategy 2017 targets.

ResultsOur service results measure the satisfaction of employers and workers with WorkSafe’s agents, WorkSafe Advisory and our Inspectorate. This year we met or exceeded most of our targets across these measures.

WorkSafe service resultsFor over a decade the Health and Safety Inspectorate has achieved outstanding service results in the field. Once again, the Inspectorate delivered excellent service across a range of measures.

Advisory serviceWe aim to run a best practice advisory service to provide workers, employers and members of the public with access to the information they need. During the year our advisory service maintained service scores of over 90 per cent among workers and employers. This work involved:

• 2,700,672 visits to the website and 9,931,285 visits to specific pages

• 28,700 emails answering queries• 183,450 telephone calls for advice

about OHS, rehabilitation and compensation.


Throughout the year we have been implementing the recommendations of a review into the agency model, with a focus on providing incentives for agents to innovate. WorkSafe has reformed agent incentives by:

• increasing weighting towards outcome measures (from process measures)

• placing greater weight on service performance and return to work outcomes

• enabling less prescriptive processes • using an event-based approach to

service measurement to focus on the actual service delivered

• allowing flexibility in agent structures.

Our results show that we are on the right track, but we know that there is more work to be done.

The current agent panel expires on 30 June 2016 and WorkSafe has invited expressions of interest for the new agent panel.

Agent service resultsThis year our agents achieved significant improvement in the level of satisfaction with their services. Injured worker satisfaction was 76.2 per cent after the previous year’s result of 71.8 per cent and employer service was also high. These are our best ever agent service results.

We have improved the way we monitor levels of satisfaction with our agents. We have changed from biannual to monthly surveying. This allows us to give agents monthly feedback, which creates more responsive tracking of service interventions.


Service

Worker service

Agent 2013/14 Result 2014/15 Result

Allianz 69.3% 76.4%

CGU 74.3% 76.6%

Gallagher Bassett Services 69.3% 73.0%

QBE 69.7% 75.7%

Xchanging 76.2% 79.5%

Scheme average 71.8% 76.21%

Employer service

Agent 2013/14 Result 2014/15 Result

Allianz 83.1% 83.3%

CGU 82.3% 85.0%

Gallagher Bassett Services 79.7% 82.4%

QBE 79.1% 83.3%

Xchanging 88.4% 86.3%

Scheme average 82.3% 84.1%

1 For 2014/15, the agent component of the employee/worker score moved from biannual to monthly surveying to improve the service focus by our agents to injured workers and to bring it in line with our other surveys. Our analysis shows this has increased the injured worker service score by 2 percentage point in 2014/15 in addition to actual service improvements. This increase has been factored into future target setting.


Streamlined treatmentLast year we streamlined the request and approval process for five of the most common treatments: magnetic resonance imaging, elective surgery, gym/swim programs, equipment and household help. Faster treatment processes support early and safe return to work. Our review of the program showed that it has had positive results, particularly in relation to worker satisfaction.

VicClaim AppWe have developed the Victorian Injury and Claim Support app, or VicClaim, for use on mobile phones or tablets. The app helps injured workers and their employers to navigate the compensation claims process.

Collaboration We collaborate with many organisations to drive better service delivery for our clients. This includes working with the TAC, health providers, state government departments and academic institutions.

The Health and Disability Strategy Group is a joint initiative with the TAC. It aims to ensure that injured workers receive timely and quality health care that helps them return to safe work. During the year the Health and Disability Strategy Group:

• encouraged health practitioners to use the improved certificate of capacity

• worked with attendant care and shared supported accommodation providers to introduce a more robust registration process, requiring providers to be audited against industry quality standards

• developed a targeted approach for mental health and persistent pain screening to provide tailored interventions for return to work and client self-management.

The Institute for Safety, Compensation and Recovery Research is a joint venture between WorkSafe, the TAC and Monash University. Its goals are to create a model of excellence for industry-led research, have a high impact on compensation scheme performance, and lead compensation scheme research.

Key developmentsOnline premium servicesThis was the first year that employers could take advantage of a more user friendly premium cycle. Employers received their premium notices in early July and were then able to update their remuneration estimate online if necessary. Employers could also obtain an estimate of their revised premium online as well as access a new five per cent discount by paying their annual premium by 1 August. We also provided an online payment gateway, making it easier and more convenient for employers to pay their premium.

Uptake of these services was encouraging with 52,739 online premium estimate calculations and 35.66 per cent of employers taking up the five per cent discount option, saving Victorian employers $51 million.


Service

Building capabilityWorkSafe has continued to develop and strengthen skills in the personal injury management sector. We have partnered with our agents and DeakinPrime to ensure that every employee who completes an agent induction training program obtains a nationally recognised Certificate III in Personal Injury Management.

In 2014/15, 117 people in the Victorian industry pursued further qualifications and 14 staff from WorkSafe agents undertook Personal Injury Education Foundation (PIEF) postgraduate qualifications. The PIEF is Australia’s pre-eminent developer and provider of training and education in the personal injury industry. This year the PIEF hosted the International Forum on Disability Management with over 460 delegates attending from 18 countries.

Our Postgraduate Scholarship Program is designed to encourage and support people working in the Victorian workers compensation industry to undertake industry specific studies. This year the scholarships, to a maximum value of $10,000, were awarded to seven people. This will help further professionalise the injury management industry in Victoria.

Service excellenceThe WorkSafe Agent Awards were held in October 2014 to celebrate and recognise excellence and outstanding achievements by agents and their employees in return to work, claims and premium management.

We congratulate the winners listed below.

Outstanding contribution by an individual: Andrew Watt – Allianz Australia Limited

Excellence in personal injury management: Kerrie Shepherd – Xchanging

Excellence in service delivery: CGU First Team – CGU Workers Compensation

Excellence in return to work: Dominic Morrison – QBE Workers Compensation

Improving client performance: Andrea Moffat – Gallagher Bassett Services

Outstanding contribution by a team: Regional Business Unit – CGU Workers Compensation

Excellence in premium management: Christina Ianno – CGU Workers Compensation

Excellence in innovation: Customer Service Strategy – Xchanging

Outstanding new starter: Danica Nadalin – Allianz Australia Limited

One example of the Institute’s work is a survey of nearly 5,000 members of the Australian Nursing and Midwifery Federation (Victorian Branch) about OHS incidents.

Information Technology Shared Solutions is our information technology partnership with the TAC. ITSS is working to simplify the way it operates in order to be more responsive to business change, and to be able to take advantage of industry capabilities to co-design, co-produce and co-deliver solutions. Program highlights in 2014/15 include:

• key systems availability was 99.86 per cent against a target of 99.5 per cent

• the Early Premium Calculation project was completed

• the IT Infrastructure program continued to be rolled out with 12 projects completed

• the new Enterprise Database platform was delivered

• the extensive IT General Controls Audit again achieved a strong result

• upgrades occurred to core applications across the insurance, health and safety and business services divisions.


Internal review outcomes 2013/14 2014/15

Health and safety

Inspector’s decision affirmed (no change) 51 72

Inspector’s decision set aside 90 65

Inspector’s decision varied (other than compliance date)

32 45

Compliance date only changed 1,185 881

Extension refused 43 48

Application refused 3 0

Application withdrawn 69 63

Application ineligible/not reviewable 13 9

Total health and safety 1,486 1,183

Licensing

Decision affirmed 6 5

Decision set aside 0 0

Application invalid 0 0


Total licensing 7 5

Return to work


Compliance date only changed 2 2


Invalid 0 4

Total return to work 5 12

TOTAL 1,498 1,200

Transparent regulationWorkSafe Inspectors make thousands of decisions every year and anyone who is directly affected by a decision can request a review. The review process helps WorkSafe to ensure transparent and consistent regulatory decision making, and natural justice. During the year 1,198 requests for review were received and 1,200 were concluded.


Service

Service worker case study:Vicki Schultz

In January 2015, Xchanging developed a video card for workers with a newly accepted claim for weekly benefits. This is a new channel for communicating with injured workers.

The video provides information about workers compensation, including what the worker can claim, returning to work, and how the agent can support the worker through this process. Information is narrated by a voiceover, and supported through the use of graphs, pictures, and examples.

Feedback has been positive, with workers commenting they have found the video informative, and have welcomed the provision of information in a visual form.

“I absolutely loved it and thought it was over and above what was expected”.

“The timeliness of getting information to me was fantastic – it has clearly explained everything. I work in marketing and think the product is fantastic”.

“I found the video explained processes step by step. I watched it twice. It’s a good initiative and helped me understand the process”.




Performance from insurance operations (PFIO) $483m $363m $211m

Actuarial release $303m $50m -$60m

Break even premium 1.205% 1.193% 1.228%

WorkSafe is in asolid financial position

$211mPerformance from insurance operations in 2014/15

-$60mActuarial release in 2014/15

-60m50m303m

$0363m 211m483m

$$

$

1.228%Break even premium in 2014/15

1.205%

1.193%

1.228%

-$

+$


Sustainability

SustainabilitySound financial management and a robust workers compensation scheme enables us to deliver the best support for injured workers now and in the future.

Our approachMaintaining a sustainable scheme demands vigilance and robust management. Our actuarial valuations are undertaken twice a year. The long-term nature of our liabilities means small changes in claim trends can have a significant impact on our balance sheet.

Our monitoring processes enable us to identify and manage cost pressures. This year, we experienced an increase in common law liabilities, due to increased lodgements, entitlement rates and average damages. We are committed to maintaining common law benefits and further management strategies will be implemented to ensure this is sustainable for the scheme.

We also continued to experience increases in health costs and a volatile global investment market. WorkSafe maintained a focus on administrative costs, striving to ensure our operations are efficient.

Our average premium rates are set on the basis that a four per cent real investment return will be achieved over five years, which is the average duration of our claims liabilities. The Victorian Funds Management Corporation manages our investments with a strategy that aims to achieve this return within established risk parameters. The Victorian Funds Management Corporation continues to maintain an allocation of 70 per cent to growth assets.

Assets and liabilities are valued in accordance with The Australian Accounting Standards. This valuation is affected by inflation and bond yields with small market and economic shifts significantly impacting on our annual results. While the organisation has no control over these external factors, we do control internal factors, such as our operational and claims management performance. Our financial reporting framework identifies these internal and external factors in order to provide a clear and transparent picture of our operations, as well as the overall health of the scheme. This measure is our performance from insurance operations (PFIO).

A further measure of the scheme’s performance is an actuarial release, or write down in liabilities. This is achieved when projected claims costs are reduced due to improvements in actual claims experience. This calculation does not include the impact of external factors such as inflation, investment returns or legislative change.

The scheme also provides the resources to perform our role as the health and safety regulator.

WorkSafe is in a solid financial position, which reflects the combined efforts of employers, workers and the Victorian community, together with our employees and agents.


Our net result was $454 million, compared with $824 million in 2013/14. This result was impacted by external factors of $369 million. Investment returns of 11.77 per cent had a positive impact of $525 million. This compared with a return of 14.61 per cent in the previous year. Changes to economic assumptions and the discount rate resulted in an unfavourable impact of $156 million.

ResultsThis year our PFIO result was $211 million, which was $152 million below budget. We did not achieve an actuarial release this year, our full-year valuation found that projected claims costs increased by $60 million.

Operating expenditure by core activities

OccupationalHealth & Safety 124,581

19%

46%

35%

Core Activity $’000

Insurance & Claims Management 93,864

Dispute Resolution 49,883

Total Operating Expense 268,328


Sustainability

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

Financial results 2014/15 ($m)

2013/14 ($m)

2012/13 ($m)

2011/12 ($m)

2010/11 ($m)

Impact on results from internal factors

Performance from insurance operations 210.5 483.4 118.7 385.0 293.9

WorkHealth and Research Institute Initiatives

– 12.1 5.6 24.0 23.6

Result from internal factors 210.5 495.5 124.3 409.0 317.5

Impact on result from external factors

Difference between actual returns and long-term expected returns1

525.2 798.0 883.6 (318.3) 410.1

Change in inflation assumptions and discount rates2

(156.5) (143.3) 532.5 (1,070.2) 8.5

Impact from legislative changes – – – – (9.4)

Tax (125.3) (326.4) (456.8) 303.9 (205.9)

Net result 453.9 823.8 1,083.6 (675.6) 520.8

1 Favourable conditions experienced in the investment markets in 2014/15 resulted in the actual investment return being above the expected long-term rate of return.

2 There was an unfavourable impact from changes in economic assumptions (i.e. lower assumed discount rates partially offset by lower than expected actual inflation) used to determine claims liability in 2014/15.


Capital Management Plan During the year, WorkSafe developed a capital management plan for consideration by the Government in light of the strong funding ratio result. Given continuing investment market volatility, a conservative approach has been adopted to protect scheme integrity.

WorkSafe dividendIn 2014/15 WorkSafe paid a dividend of $242 million from its 2013/14 PFIO result. The May 2015 State Budget announced that WorkSafe will not pay a dividend under the Workplace Injury Rehabilitation and Compensation Act 2013 in the coming years. Instead, dividends that would have been paid to the State will be used to improve benefits for injured workers, maintain competitive premiums for Victorian businesses and fund programs to improve workplace safety.

Assets and liabilitiesAs at 30 June 2015, WorkSafe’s total assets were $14.3 billion, compared with $13.3 billion at 30 June 2014. Our total liabilities were $11.7 billion, compared with $10.9 billion at 30 June 2014. The valuation determined that our funding ratio was 120 per cent (compared with 116 per cent at 30 June 2014). This was above the target range of 82.5 to 117.5 per cent.

WorkSafe Scorecard 2005–2015

Year Average premium rate

Funding ratio %

Net result PFIO* Actuarial release

Dividend paid

2004/05 1.998% 113% $775m $747m $439m

2005/06 1.8% 119% $1.003B $476m $260m

2006/07 1.62% 134% $1.17B $729m $394m

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

2008/09 1.387% 97% ($1.254B) $277m $78m

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

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

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

2012/13 1.298% 108% $1.08B $119m $179m $193m

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

2014/15 1.272% 120% $454m $211m ($60m) $242m*Performance from insurance operations


Sustainability

Key developmentsLow cost insuranceSound scheme management has enabled us to maintain a record low average premium rate of 1.272 per cent. Our premium system also provides incentives for sound OHS and good return to work practices.

WorkSafe Insurance premium chargeThe average premium rate was 1.272 per cent of payroll. This rate will be maintained in 2015/16.

WorkSafe injury insurance average premium rates

08/09

07/08

06/07

05/06

09/10

10/11

11/12

12/13

13/14

14/15

1.80%

1.62%

1.46%

1.387%

1.387%

1.338%

1.338%

1.298%

1.298%

1.272%


Protecting scheme integrityEnsuring compliance with legal obligations under the Workplace Injury Rehabilitation and Compensation Act 2013, including the payment of workplace insurance premiums, helps to underpin the integrity and sustainability of the scheme. Our regulatory program aims to detect fraud, either by healthcare providers or workers. We also continued to refer healthcare providers to the relevant regulatory body where appropriate.

During the year there were 16 prosecutions. The following are some significant prosecutions.

• A retail clothing company was convicted and fined $5,000 and ordered to pay costs of $1,000 for failing to forward a claim for compensation and make weekly payments of compensation in accordance with its obligations.

• An injured worker was convicted and sentenced to six months imprisonment wholly suspended for 12 months for fraudulently obtaining payments of compensation. He was also placed upon an adjourned undertaking for 12 months with a special condition that he do all things necessary to enable WorkSafe to lodge a caveat over a property in which he has an interest to secure the restitution order for $97,113.

• A man was convicted and sentenced to six months’ imprisonment wholly suspended and ordered to pay restitution of $49,787 and costs of $7,457 for fraudulently obtaining payments of compensation.

Compliance Activity 2014/15 Target 2014/15 Result

Number of completed investigations 150 133

Number of prosecutions N/A 16

Audits of bills submitted by medical practitioners and allied health providers

400 466

Average time from investigation commenced to prosecution commenced (charges issued)

270 275


Sustainability

Self-insurance

Self-insurers are some of the largest employers in Victoria. They are approved by WorkSafe to manage their own workers compensation claims. Our oversight of self-insurers is another way WorkSafe promotes sound safety and return to work outcomes in the Victorian community.

There are 38 self-insurers in Victoria who represent about eight per cent of the Victorian WorkSafe scheme, based on remuneration. During the year we continued initiatives that promote efficiency and reduce employer compliance costs, while driving improvements in health and safety and return to work.

In 2014/15, 63.7 per cent of injured workers expressed satisfaction with the service they received from their self-insurer. A sustained return to work rate of 82.7 per cent was also achieved, which represents a slight deterioration on the 2013/14 result of 85.3 per cent. We will continue to work with self-insurers to improve their performance in these areas.



Sustainable engagement index 69% 74% 75%

Strong improvement in staff engagement

75%Sustainable engagement index in 2014/1574

%

75%

69%



Culture and place

Culture and place

ResultsThis year our sustainable engagement index result was 75 per cent and the survey response rate was 78 per cent. This was a significant achievement in the current context. We remain committed to achieving a result in the top quartile when compared with other Australian organisations.

GeelongOur move to Geelong is an important step in the evolution of WorkSafe. By relocating there, we will support the local community, work to enhance professional development opportunities for our employees and continue to deliver significant outcomes for Victorians.

Geelong is fast becoming a centre of personal injury and disability insurance expertise and knowledge. Our move provides the opportunity for WorkSafe to enhance interaction with the TAC and the National Disability Insurance Agency through proximity; strengthening the Australian Injury and Disability Insurance Network, and providing professional development opportunities for our people in partnership with Deakin University and the Gordon Institute of TAFE.

Continuing collaboration across WorkSafe’s internal business areas has been imperative in developing the relocation approach for Geelong. With the Insurance and the Health and Safety business units based at the new headquarters along with support functions, this close interaction across the organisation will support WorkSafe to maintain a strong focus and commitment to safety, return to work and service.

We are supporting our people through the relocation process and have commenced engagement on the relocation approach.

The relocation of our headquarters is expected to be complete by June 2018.

WorkSafe’s vision is Victorian workers returning home safe everyday. Our employees continue to demonstrate their commitment to achieving this vision on a daily basis.

Culture and place aims to foster a dynamic and engaged workplace culture during a period of significant change, including our move to Geelong.

Our people are central to what we do and they have driven our success over a sustained period of time.


• Senior Leaders Culture and Change Program in partnership with the Nous Group to support and build our senior leaders’ capability through our organisational transformation.

• Our Career Mentoring Program focused on growth and ongoing career development.

• Our Adaptive Leaders Community Mentoring Program, with 13 WorkSafe mentors and three from external organisations. All mentors received training and support and were then paired with a protégé who is a disadvantaged person within the community that has been unemployed for an extended period of time.

• Individual skill programs such as Influence in the workplace, Presenting with Impact and Business Writing.

• WorkSafe commenced an Indigenous Cadetship Pilot Program for two Indigenous law students. The students will undertake a six-week placement in the Dispute Management Division.

Our cultureOur values – constructive, accountable, transparent, effective and caring – guide us in everything we do. Social responsibility is also incorporated into our day-to-day work.

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.

As part of our focus on culture and place, a number of initiatives occurred during the year. These initiatives included:

WorkStar AwardsCongratulations to our six WorkStar Award category winners for 2014.

Our values: Michael Lawrence – IT Shared Solutions

Leadership: Jilly Charlwood – External Affairs

Collaboration: Jean Bailey, David Clavarino, Ephraim Dahne, Doreen Wilby, Liana Fraser, Magdaline Theodoropolous and Randall Thain – Insurance/IT Shared Solutions/ Legislation, Policy and Information Services

Health, safety and wellbeing: Jocelyn Cole, Sarah Cortier and Peter McNally – Legal Services/HSBU/Insurance

Innovation: Genevieve Quick, Christian Thorn and Stephen Wardle – Insurance/External Affairs

Service: Troy Levett – Corporate Administration


Culture and place

WorkSafe worker case study: Liz Moore

According to Liz Moore, Group Leader of a team of inspectors in Geelong “… it is a good feeling to walk away from a workplace knowing you have made a difference.”

With an eye on the future, Liz is getting ready for some of the big changes ahead.

“There are lots of positive developments at the moment. We have a new team member who will start with the next intake and I am also really excited about WorkSafe’s move to Geelong. It is such a fantastic place to live and to work.”

“Balancing that, our community is still dealing with the closures at Ford and Alcoa. For our team, this has meant staying on top of emerging trends in the local labour market. As Barwon Health is our biggest employer, we look forward to working with the new Health Practice team in developing strategies to deal with occupational violence.”

Most of all, Liz is focussed on helping her team achieve their goals. “It is great to be surrounded by people with such high levels of dedication and expertise. We have team members with backgrounds in construction, manufacturing – we even have an inspector who was a physio. As a collective, we feel we can make a real difference to the safety of workplaces in our community.”

Our OHS performanceWe are passionate about workplace health and safety and adopt a best practice approach to our employees’ safety.

The WorkSafe Board drives our culture of health and safety. WorkSafe’s OHS Committee meets bi-monthly and is chaired by the Chief Executive. Strong engagement with our employees is central to our approach. We consult with our employees during the development of OHS policies and procedures and we ensure they have access to policies and procedures at all times.

Employees are encouraged to report all hazards and incidents, and our systems ensure Health and Safety Representatives are involved in responses to these reports. Employees, including managers, receive OHS refresher training at least once every three years, including on how to identify and eliminate or control risks. Our Health and Safety Representatives are also offered training, including five-day and refresher courses.

We are accredited under the SafetyMap certification system. This year our Warrnambool, Essendon Fields and Exhibition Street sites participated in the annual surveillance audit. The audit covers key aspects of our safety management system. The auditor found our systems to be effective and compliant.


Our feelingood@work program aims to foster employee wellbeing and a resilient and connected workforce. It includes a physical wellbeing program, development workshops and efforts to link employees to the community through volunteering and other initiatives. We believe effective employee engagement reduces the risk of stress and improves productivity.

Our approach to OHS is underpinned by a strong evidence base and WorkSafe employees participate in research projects with health and educational institutions.

During the year 38 injury reports were received, which was below our target of 50. Claims costs remain stable.

The following reports our performance against key OHS performance indicators.

Incidents/Hazards 2012/13 2013/14 2014/15

Number of hazards reported 99 71 104

Hazard – rate per 100 full-time employees (FTEs) 8.56 7.30 10.35

Number of incidents 122 160 143

Incident – rate per 100 FTEs 10.54 16.46 14.23

Injury – non-compensable 43 20 27

Inspections

Percentage of scheduled workplace inspections conducted 100% 80% 85%

Resolution of OHS issues arising from inspections/audits 100% 100% 100%

Number of Provisional Improvement Notices 0 1 0

Number of improvement and prohibition notices 0 0 0

Scheduled OHS Committee meetings completed 100% 90% 100%


Culture and place

Claims and return to work 2012/13 2013/14 2014/15

Number of claims (standardised) 16 25 16

Claims – rate per 100 FTEs 1.38 2.57 1.59

Number of time-loss claims 5 9 3

Time-loss claims – rate per 100 FTEs 0.43 0.92 0.30

Number of 13-week claims 1 4 1

13-week claims – rate per 100 FTEs 0.086 0.41 0.099

Number of fatality claims 0 0 0

Average cost per claim $28,870 $36,196 $12,946

Number of claims with RTW plans initiated 8 16 11

Percentage of 13-week claims with RTW plans initiated 100% 100% 100%

Employee OHS Appraisal

(% positive response) 2012/13 2013/14 2014/15

My work area is a safe place to work 96 92 94

Is adequate OHS training provided? 85 78 80

Is WorkSafe proactive on OHS matters? 79 71 70

Is reporting of incidents and injuries encouraged? 93 88 90

Is corrective action taken by management? 82 72 74

Is there meaningful consultation on OHS relevant matters? 77 67 69

Do work instructions, procedures etc address OHS issues? 83 78 82

My manager is committed to OHS improvements 86 81 78

Senior management cares about OHS and employee wellbeing – – 72

Environmental performanceWorkSafe has a long-standing framework to ensure our operations are environmentally sustainable. We have developed an environmental policy to guide us. Highlights for the year include:

• 5.19 per cent reduction in paper use (since 2005 paper consumption has reduced by 52.08 per cent)

• 4.61 per cent reduction in water use• 0.76 per cent increase in energy use• 25–75 per cent green power used.


Contents

Comprehensive Operating Statement 45

Notes to and forming part of the Financial Statements 49

Statement by the Chair, Chief Executive and Chief Financial Officer 101

Victorian Auditor-General’s Report 102

Financial Report


Financial Report

Financial Report

Comprehensive Operating StatementFor the financial year ended 30 June 2015

2015 2014

Notes $000s $000s

Revenue and Income

Premium revenue 8 1,941,994 1,920,182

Investment income 9 1,493,987 1,663,003

Recoveries revenue 11 (a) 177,872 141,295

Other income 10 24,036 23,873

Total revenue and income 3,637,889 3,748,353

Expenses

Claims expense 11 (b) (2,529,975) (2,053,831)

Authorised agent fees 12 (247,252) (247,830)

Investment expenses 9 (43,765) (36,982)

Other operating costs 13 (237,674) (259,495)

Total expenses (3,058,666) (2,598,138)

Result before income tax 579,223 1,150,215

Tax expense 16 (a) (125,364) (326,401)

Net result for the year 453,859 823,814

Other comprehensive income – –

Other comprehensive income, net of income tax – –

Total comprehensive income for the year 453,859 823,814

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


Balance Sheet As at 30 June 2015

2015 2014

Notes $000s $000s

Current assets

Cash and cash equivalents 27 (a) – 9,151

Receivables 17 44,868 55,302

Investments 18 1,912,692 2,580,384

Recoveries receivable 19 46,995 43,085

Tax recoveries 16 (b) – 139

Other assets 20 11,837 11,061

Total current assets 2,016,392 2,699,122

Non-current assets

Investments 18 11,741,328 10,025,531

Recoveries receivable 19 224,622 203,412

Plant and equipment 21 12,910 17,158

Intangibles 22 68,206 73,514

Deferred tax assets 16 (c) 285,058 296,602

Total non-current assets 12,332,124 10,616,217

Total assets 14,348,516 13,315,339

Current liabilities

Cash and cash equivalents 27 (a) 10,824 –

Payables 23 163,648 146,518

Outstanding claims 24 (a) 1,995,252 1,928,087

Derivative liabilities 18 100,484 28,029

Tax liabilities 16 (b) 113,681 –

Provisions 25 29,791 30,440

Total current liabilities 2,413,680 2,133,074

Non-current liabilities

Outstanding claims 24 (a) 9,366,295 8,823,150

Derivative liabilities 18 5,011 7,959

Provisions 25 7,723 7,509

Total non-current liabilities 9,379,029 8,838,618

Total liabilities 11,792,709 10,971,692

Net assets 2,555,807 2,343,647

Equity

Reserves 26 – 129,537

Accumulated surplus 26 2,555,807 2,214,110

Total equity 2,555,807 2,343,647

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


Financial Report

Statement of Changes in Equity For the financial year ended 30 June 2015

WorkHealth Reserve

Research Reserve

Accumulated Surplus

Total Equity

Notes $000s $000s $000s $000s

Balance at 1 July 2013 489,394 116,099 973,673 1,579,166

Total comprehensive income for the year

Net result for the year – – 823,814 823,814

Other comprehensive income – – – –

Total comprehensive income for the year – – 823,814 823,814

Transactions with owners, recorded directly in equity

Transfer from reserves during the year 26 (525,851) – 525,851 –

Transfer of initiatives’ net results for the year 26 36,457 13,438 (49,895) –

Dividend paid – – (59,333) (59,333)

Total transactions with owners (489,394) 13,438 416,623 (59,333)

Balance at 30 June 2014 – 129,537 2,214,110 2,343,647

Total comprehensive income for the year

Net result for the year – – 453,859 453,859

Other comprehensive income – – – –

Total comprehensive income for the year – – 453,859 453,859

Transactions with owners, recorded directly in equity

Transfer from reserves during the year 26 – (129,537) 129,537 –

Transfer of initiatives’ net results for the year 26 – – – –

Dividend paid – – (241,699) (241,699)

Total transactions with owners – (129,537) (112,162) (241,699)

Balance at 30 June 2015 – – 2,555,807 2,555,807

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


Cash Flow Statement For the financial year ended 30 June 2015

2015 2014

Notes $000s $000s

Cash flows from operating activities

Premium received 2,164,796 2,126,274

Claims paid (1,900,631) (1,733,420)

Self insurers (re-entry) exit settlements (6,631) 183

Claim recoveries received 149,240 141,738

Authorised and management agent fees (317,403) (306,147)

Dividends received 357,419 425,744

Interest received 223,816 170,221

Health and Safety licence registration fees received 5,496 5,879

Contribution to DTF Consolidated Fund for court use (8,153) (15,714)

Distributions from prior insurers under liquidation 1,376 18

Sundry receipts 20,215 24,436

Goods and services tax paid to the ATO (132,503) (132,096)

Payments to suppliers and employees (257,669) (276,936)

Net cash flows from operating activities 27 (b) 299,368 430,180

Cash flows from investing activities

Sale of investments 10,644,224 5,321,760

Purchase of investments (11,498,439) (5,100,703)

Purchase of plant and equipment (729) (1,602)

Payments for intangibles (9,580) (12,822)

Net cash flows (used in) from investing activities (864,524) 206,633

Cash flows from financing activities

Dividend paid (241,699) (59,333)

Net cash flows (used in) financing activities (241,699) (59,333)

Net (decrease) increase in cash and cash equivalents (806,855) 577,480

Cash and cash equivalents at beginning of the year 2,118,524 1,541,557

Effects of exchange rate changes on cash held in foreign currencies

18,530 (513)

Cash and cash equivalents at end of the year 27 (a) 1,330,199 2,118,524

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


Financial Report

Notes to the Financial Statements For the financial year ended 30 June 2015

1. 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 uses the trading name of WorkSafe Victoria (WorkSafe).

2. Workplace Injury Rehabilitation and Compensation Act 2013

The Accident Compensation Act 1985 and the Accident Compensation (WorkCover Insurance) Act 1993 were recast into a single act, the Workplace Injury Rehabilitation and Compensation Act 2013, which became operational on 1 July 2014. The new act has had no impact on WorkSafe’s financial statements.

3. Summary of Significant Accounting Policies

Statement of complianceThese general purpose financial statements have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AAS) which include Interpretations, issued by the Australian Accounting Standards Board (AASB). 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 AAS paragraphs 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 28 August 2015.

Basis of accounting preparation and measurementThe financial statements cover WorkSafe as an individual reporting entity. WorkSafe is a statutory authority established by statute enacted by the Victorian State Parliament and domiciled in Australia.

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 leave liabilities and leasehold restoration provisions which are included at present value, and investments and 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.

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 reassessing categorisation (based on the input that is significant to the fair value measurement as a whole) at the end of each reporting period.

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.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2015 and the comparative information for the year ended 30 June 2014.


The preparation of financial statements in conformity with AAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying WorkSafe’s accounting policies. 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 3(c), 3(f), 3(g), 4 and 33(f). 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.

The estimates and underlying assumptions are reviewed on an ongoing basis. 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.

New and amended Australian Accounting StandardsAASB 2012–3 Off-setting Financial Assets and Financial Liabilities applies to annual reporting periods beginning on or after 1 January 2014 with retrospective application. This standard makes amendments to AASB 132 Financial Instruments: Presentation by clarifying the off-setting rules and explaining when off-setting can be applied. In particular, it clarifies that the right of set-off must be available today (i.e. not contingent on a future event) and must be legally enforceable in the normal course of business as well as in the event of default, insolvency or bankruptcy.

In accordance with AASB 132 Financial Instruments: Presentation, financial assets and financial liabilities have been presented on a net basis at the reporting date where WorkSafe has a legally enforceable right to set-off and to receive or pay a single net amount and it intends to do so. Where such off-set conditions are not satisfied, the financial assets and financial liabilities have been presented separately from each other consistently with their characteristics as WorkSafe’s resources or obligations.

As a result, derivative liabilities have been disclosed separately from the overall investments (including derivative assets) on the balance sheet at 30 June 2015 and as at 2014. Notes 18 and 33 have also been changed accordingly to provide additional disclosures pertaining to the off-setting of financial assets and financial liabilities.

Australian Accounting Standards issued but not yet effectiveThe AASB has issued the following new or revised Australian Accounting Standards, which are applicable to WorkSafe:

AASB Title Operative Date

2015–6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities

1 January 2016

9 Financial Instruments 1 January 2018

These standards are not effective for the reporting period ended 30 June 2015 and have not been applied in preparing WorkSafe’s financial statements. AASB 2015–6 may result in additional disclosure of WorkSafe’s key management personnel and related party transactions. While the preliminary assessment has not identified any material impact arising from the adoption of AASB 9, it will continue to be monitored and assessed. WorkSafe will apply these standards for the annual reporting periods beginning on or after the operative date set out above.


Financial Report

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

(a) Insurance premiumPremium 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.

At year end, a provision is made for confirmed premium based on certification of employer remuneration and is assessed by an independent actuary. The actuary uses historical data at points in time and the most recent certified remuneration for the current year in assessing the final remuneration estimate. 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.

(b) Unexpired risk liabilityAll 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.

(c) Assets backing general insurance liabilitiesWith the exception of plant and equipment and intangibles, WorkSafe has determined that all assets are held to back WorkCover insurance liabilities and their accounting treatments are described below.

InvestmentsWorkSafe’s investment portfolio is managed by the Victorian Funds Management Corporation (VFMC) through internal management, fund managers and a Master Custodian. The Master Custodian holds the investments and conducts settlements pursuant to instructions from the VFMC’s internal management and the fund managers.

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 (see Note 18). 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 following methods and assumptions are used to determine the fair value of investments:

• financial instruments traded in an organised financial market (traded securities) – current quoted market price for the instrument. Quoted market prices are used to value listed shares, options, debentures and other equity and debt securities

• financial instruments not readily traded in an organised financial market – the present value of contractual future cash flows. Cash flows are discounted using standard valuation techniques at the applicable market yield having regard to the timing of the cash flows.

Details of fair value for the different types of investment assets are listed below:

• cash assets and deposits held at call with banks are carried at face value, which approximates to their fair value• investments in discounted money market instruments are valued at their quoted mid price at the reporting date, as

with fine trading spreads in this market, there is an ability to transact at mid price• shares, fixed interest securities, options and units in trusts listed on stock exchanges or traded in an open market are

stated at their quoted bid price at the reporting date• futures contracts listed on recognised exchanges are valued using the quoted settlement price• units in unlisted trusts are recorded at fair value as determined by the fund manager or valuations by other skilled

independent third parties. In determining fair value, observable market transactions of the units and the underlying assets are used where available and applicable; some of the underlying assets of the trusts are valued using valuation models that include inputs which are not based on observable market data.


All purchases and sales of investments that require delivery of the asset within the time frame established by regulation or market convention (‘regular way’ transactions) are recognised at trade date, being the date on which the commitment is made to buy or sell the asset. In cases where the period between trade and settlement exceeds this time frame, the transaction is recognised at settlement date.

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.

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 also uses to ensure sufficient funds are available at all times to meet WorkSafe’s operating requirements.

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.

Changes in fair value of investments at reporting date, as compared with their fair value at the previous reporting date, or fair value at acquisition if acquired during the financial year, are recognised as investment income or loss. Realised gains or losses on the termination of derivative positions and unrealised gains or losses on changes in fair value are included in investment income or loss.

ReceivablesPremium 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 amount and reducing it for impairment as appropriate.

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.

Amounts owing to employers as a result of premium being in credit at reporting date are shown as premium creditors (Note 23).

(d) Foreign currency transactions and balancesForeign 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 rates of exchange ruling at that date. Gains or losses arising on foreign currency transactions are included in investment income in the period in which they arise.

(e) Derivative financial instruments The VFMC and its managers use derivative financial instruments such as foreign exchange contracts, futures, swaps and options to more effectively manage the risks associated with investing in large institutional portfolios. 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.

The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for similar instruments.

(f) ClaimsClaims expense which includes the movement in the liability for outstanding claims, is recognised in respect of insurance business and uninsured employers.

The liability for outstanding claims is measured as the central estimate of the present value of expected future payments against claims incurred at the reporting date under WorkCover insurance contracts issued by WorkSafe, with an additional risk margin to allow for the inherent uncertainty in the central estimate.

The ultimate liability arising from claims made under insurance contractsProvision is made for the estimated cost of claims incurred but not settled at the reporting date, including the cost of claims incurred but not yet reported to WorkSafe.


Financial Report

The estimated cost of claims includes direct expenses to be incurred in settling claims gross of the expected value of recoveries. 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 claims incurred but not reported (IBNR) is generally subject to a greater degree of uncertainty than the estimation of the cost of settling claims already notified to WorkSafe, where more information about the claim event is generally available. IBNR claims may often not be apparent to the insured until many years after the event giving rise to the claims has happened. In calculating the estimated cost of unpaid claims WorkSafe’s valuation actuary uses a variety of estimation techniques, generally based upon statistical analyses of historical experience, which assume that the development pattern of the current claims will be consistent with past experience. Allowance is made, however, for changes or uncertainties which may create distortions in the underlying statistics or which might cause the cost of unsettled claims to increase or reduce when compared with the cost of previously settled claims 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.

Where possible, WorkSafe’s valuation actuary adopts multiple techniques to estimate the required level of provisions. This assists in giving greater understanding of the trends inherent in the data being projected. The projections given by the various methodologies also assist in setting the range of possible outcomes. The most appropriate estimation technique is selected taking into account the characteristics of the benefit type and the extent of the development of each accident year.

Specific assumptions used in deriving the outstanding claims liability are detailed in Note 4.

(g) Recoveries receivableRecoveries from the Transport Accident Commission, prior insurers and other third parties are recognised as revenue. 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 3 (f)). A provision for impairment is established when there is objective evidence that WorkSafe will not be able to collect all the recovery amounts.

(h) Dispute resolution expensesClaims expense also includes the cost associated with resolving disputes with claimants. Dispute resolution expenses comprise payments made to the Department of Treasury and Finance for courts management functions, the Accident Compensation Conciliation Service for conciliation matters arising out of WorkCover insurance claims, and the cost relating to Medical Panels, Union Assist and WorkCover Assist.

(i) Operating leasesWorkSafe has continuing obligations under operating lease agreements for certain buildings, motor vehicles and office equipment. 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.

(j) Income taxIn accordance with Section 88 (3D) of the State Owned Enterprises Act 1992 WorkSafe is required to pay income tax equivalent under the National Tax Equivalent Regime.

The tax expense or income represents the tax payable or recoverable 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.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items. 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.

(k) DividendsPursuant 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.

(l) Other incomeFines and penalties income is recognised upon receipt of the payment.

(m) Plant and equipmentPlant and equipment assets are measured initially at cost and subsequently at fair value. Fair value is determined by reference to the asset’s depreciated cost, less impairment.

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.

(n) DepreciationDepreciation 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 rates applied to each of the asset classes are as follows:

2015 2014

Computer equipment 331/3% 331/3%

Furniture and equipment 20% 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 6 years (2014: 1 to 7 years).

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

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

(o) Impairment of assetsAssets 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.


Financial Report

(p) Intangible assetsIntangible 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 1 to 10 years (2014: 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.

(q) Other assetsOther assets are stated at amounts due less any provision for impairment.

(r) PayablesPayables 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.

(s) Employee benefitsAccrual and provision are made for benefits accruing to employees in relation to wages and salaries, annual leave and long service leave for services rendered to the reporting date.

Wages and salaries, annual leaveLiabilities for wages and 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 and 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 Liability for long service leave (LSL) is recognised in the provision for employee benefits. Unconditional LSL is disclosed in the financial statements 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 benefitsTermination 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-costsProvisions for on-costs such as superannuation, payroll tax and WorkCover insurance premium are recognised separately from the provision for employee benefits.

Defined contribution superannuation plansContributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit superannuation plansThe 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. Superannuation contributions are made to the plans based on the relevant rules of each plan.

WorkSafe does not recognise any defined benefit liability in respect of the superannuation schemes because it has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its annual financial statements.

(t) Other provisionsOther provisions are recognised when WorkSafe has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at 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 discount rate that reflects the time value of money and risks specific to the provision.

(u) Goods and services taxIncome, 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.

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

(w) Contingent assets and contingent liabilitiesContingent 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.


Financial Report

(x) Events after reporting dateAssets, liabilities, income or expenses arise from past transactions or other past events. Where the transactions result from an agreement between WorkSafe and other parties, the transactions are only recognised when the agreement is irrevocable at or before the reporting date. Adjustments are made to amounts recognised in the financial statements for events which occur after the reporting date and before the date the statements are authorised for issue, where those events provide information about conditions which existed at the reporting date. Note disclosure is made about events between the reporting date and the date the statements are authorised for issue where the events relate to conditions which arose after the reporting date and which may have a material impact on the results of subsequent periods.

(y) Rounding of amountsAmounts have been rounded to the nearest thousand dollars, unless otherwise stated.

(z) Presentation and functional currenciesThe presentation currency of WorkSafe is the Australian dollar, which is also its functional currency.

4. Actuarial Assumptions and Methods

WorkSafe provides WorkCover insurance which is long-tail in nature, meaning that claims are typically settled more than one year after being reported.

Significant estimates and judgements are made by WorkSafe’s valuation actuary in respect of certain key asset and 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.

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. The process commences with the actuarial projection of the future claim payments and claims handling costs incurred to the reporting date. Various types of payments made by WorkSafe are grouped into a number of benefit categories and analysed separately.

The modelling approaches that are used to analyse and project the various benefit types fall into four broad categories:

• payments per claim incurred model• payments per active claim model• payments per claim settled model• annuity based individual claim model.

Estimated future claim payments and associated claims handling costs are obtained by examining the results from the above methods. Where possible and appropriate, multiple actuarial methods will be applied to estimate future claim payments. This assists in providing a greater understanding of the trends inherent in the past data. The projections obtained from various methods also assist in setting the range of possible outcomes. The most appropriate method, or even a combination of methods, is selected taking into account the characteristics of each benefit type and the extent of the development of each past accident period.

This resulting selected estimate is made without bias toward over or under estimation and as such, is considered to be a net central estimate of outstanding claims liabilities that has an approximately equal chance of proving adequate as not. The estimated liability is converted to inflated values, taking into account assumptions about future inflation. The present value of this liability is then calculated, by discounting the inflated cash flows to allow for future returns on the underlying assets using appropriate risk-free discount rates (i.e. rates set with reference to Commonwealth Government securities). An estimate of future claim payments is undertaken separately for both gross claim payments and recoveries.


(a) Actuarial assumptionsThe following assumptions have been made in determining the outstanding claims liabilities:

2015 2014

Average claim frequency (claims per worker) 0.98% 1.00%

Average claim size $60,967 $59,083

• Average weekly size $20,489 $20,795

• Average common law size $19,850 $18,377

• Average all other payments size $20,628 $19,911

Expense rate 12.3% 12.3%

Weighted average discount rate (0 – 20 years)1 3.05% 3.62%

Long-term discount rate (21+ years) 5.50% 5.50%

Weighted average AWE inflation rate (0 – 20 years) 3.70% 3.75%

Long-term AWE inflation rate (21+ years) 3.75% 3.75%

Weighted average CPI inflation rate (0 – 20 years) 2.50% 2.50%

Long-term CPI inflation rate (21+ years) 2.50% 2.50%

Average weighted term to settlement from balance date 5.9 years 5.7 years

Risk Margin 8.0% 8.0%

1 Since June 2014, the Commonwealth Government has issued additional and new bonds maturing in more than 15 years. As a result the discount rates used in the outstanding claims provision now use the observed market yields for 20 years, rather than 15, and adopt the long term discount rate assumption for projections more than 20 years after the balance date. Consequently, the sensitivities have been revised to reflect this change in how discount rates are selected.

(b) Process used to determine assumptionsA description of the processes used to determine these assumptions is provided below:

Average claim frequencyClaim 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 sizeThe 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 no fault 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 size of all other compensation is also shown.

Expense rateThe 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 rateDiscount rates adopted are “risk-free” rates, set by reference to traded Commonwealth Government securities. For years 21 onwards there are few risk-free securities on issue with term to maturity beyond this point. Therefore, the long-term discount rates are set with reference to historical observed discount rates, as well as the real rate of return above inflation.


Financial Report

InflationEconomic inflation assumptions are set by reference to current bank and other economic forecasters.

Average weighted term to settlementThe 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 marginThe overall risk margin was determined allowing for the relative uncertainty of the outstanding claims estimate. Uncertainty was 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.

(c) Sensitivity analysis – insurance contractsSummaryWorkSafe’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 no fault 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 no fault 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.


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:

Net Result Equity Net Result Equity

2015 2015 2014 2014

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

Recognised amounts per the financial statements 453,859 2,555,807 823,814 2,343,647

Variable Movement

Average weekly size +1% 435,019 2,536,967 804,325 2,324,158

–1% 472,699 2,574,647 843,303 2,363,136

Average common law size +1% 431,994 2,533,942 803,844 2,323,677

–1% 475,724 2,577,672 843,784 2,363,617

Expense rate +1% 388,899 2,490,847 762,339 2,282,172

–1% 518,819 2,620,767 885,289 2,405,122

Weighted average discount rate (0 – 20 years)1

+0.5% 638,154 2,740,102 983,512 2,503,345

–0.5% 258,572 2,360,520 656,075 2,175,908

Long-term discount rate (21+ years)1 +0.5% 468,005 2,569,953 845,799 2,365,632

–0.5% 438,520 2,540,468 799,997 2,319,830

Weighted average AWE and CPI inflation rates (0 – 20 years)1

+0.5% 264,499 2,366,447 662,605 2,182,438

–0.5% 634,316 2,736,264 978,800 2,498,633

Long-term AWE and CPI inflation rates (21+ years)1

+0.5% 438,187 2,540,135 800,362 2,320,195

–0.5% 468,409 2,570,357 845,613 2,365,446

1 Since June 2014, the Commonwealth Government has issued additional and new bonds maturing in more than 15 years. As a result the discount rates used in the outstanding claims provision now use the observed market yields for 20 years, rather than 15, and adopt the long term discount rate assumption for projections more than 20 years after the balance date. Consequently, the sensitivities have been revised to reflect this change in how discount rates are selected.

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.

(a) Objectives in managing risks arising from insurance contracts and policies mitigating those risksWorkSafe 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 7.

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.


Financial Report

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.

(b) Terms and conditions of insurance businessThe 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.

(c) Concentration of insurance riskWorkSafe 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.

(d) Interest rate riskAssets 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.

(e) Credit riskAssets 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.

6. Underwriting Result

2015 2014

Notes $000s $000s

The underwriting result is extracted from the comprehensive operating statement and is as follows:

Premium revenue 8 1,941,994 1,920,182

Underwriting expenses

Net claims incurred 11(a) (2,321,450) (1,882,319)

Dispute resolution expenses 11(b) (30,653) (30,217)

Authorised agent fees 12 (247,252) (247,830)

Total underwriting expenses (2,599,355) (2,160,366)

Underwriting result (657,361) (240,184)


7. Explanation of Volatility of Financial Results

This note provides additional analysis of the result before income tax of $579.22 million (2014: $1,150.22 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 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.

2015 2014

$000s $000s

Impact on result from internal factors:

– Performance from insurance operations 210,536 483,397

– WorkHealth and Research Institute initiatives (i) – 12,079

Impact on result from external factors:

– Difference between actual investment returns and long-term expected returns (ii) 525,163 798,042

– Changes in inflation assumptions and discount rates (iii) (156,476) (143,303)


Notes:(i) The WorkHealth and Research Institute initiative reserves were transferred to accumulated surplus following their

closures on 1 January 2014 and 1 July 2014 respectively. (ii) Favourable conditions experienced in the investment markets in the 12 months to 30 June 2015 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 period was 11.77% (2014: 14.61%), compared to the long-term estimated return established by management of 7.50% (2014: 7.50%) per annum based on its investment strategy.

(iii) There was an increase of $331.94 million in the net outstanding claims liability at 30 June 2015 due to the lower assumed discount rates. This increase was partially off-set by a reduction in claims liability of $175.46 million due to actual inflation in the 12 months to 30 June 2015 being lower than expected. At 30 June 2014 there was an increase of $112.53 million in the net outstanding claims liability due to the lower assumed discount rates in the first 15 projection years. In addition, the claims liability increased by $30.77 million due to actual inflation in the 12 months to 30 June 2014 being higher than expected.


Financial Report

8. Premium Revenue

2015 2014

$000s $000s

Gross premium (i) 1,982,177 1,968,811

Reassessment of prior years' premium 10,886 (17,232)

Premium discount allowed (52,448) (28,336)

Premium fines and penalties 10,037 9,761

Decrease in provision for impairment of premium debts 4,604 2,955

Premium bad debts written-off (ii) (13,262) (15,777)

1,941,994 1,920,182

Notes:(i) Gross premium revenue includes an estimated decrease of $3.6 million (2014: increase of $0.2 million) in relation

to confirmed premium. Confirmed premium estimate makes allowance for employers who have not yet certified their remuneration (see Notes 3 (a) and 17). The rateable remuneration estimate on which the confirmed premium estimate is based, is obtained through an independent actuary PricewaterhouseCoopers Actuarial Limited.

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

9. Investment Income

2015 2014

$000s $000s

Gross investment income

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

– Realised gain 576,463 354,434

– Unrealised gain 337,440 717,243

Total change in fair value of investments (i) 913,903 1,071,677

Dividends 352,055 423,974

Interest (ii) 228,029 167,352

Gross investment income 1,493,987 1,663,003

Investment expenses (iii) (43,765) (36,982)

Net investment income (iv) 1,450,222 1,626,021

Notes:(i) This is the difference between the fair value of the investments at 30 June 2014 or the cost of acquisition (for

investments purchased during the year), and sales proceeds (realised) or their fair value at 30 June 2015 (unrealised).

(ii) Interest represents coupon interest earned and net settlements on swap contracts.(iii) Fees paid to the VFMC under the Client Funds Management Service Agreement and other sundry professional

fees incurred by WorkSafe in relation to management of the investment portfolio.(iv) The net return on the investment portfolio for the period was 11.77% (2014: 14.61%).


10. Other Income

2015 2014

$000s $000s

Self-insurer receipts 13,106 12,671

Occupational Health & Safety licensing income 5,496 5,879

Fines and penalties 2,906 3,748

Distributions from prior insurers under liquidation 1,376 18

Asset rental income – ACCS (i) 653 667

Sundry receipts 499 890

24,036 23,873

Note:(i) WorkSafe receives rental income from Accident Compensation Conciliation Service (ACCS) for the use of its

plant and equipment.

11. Claims Costs

2015 2014

Current Year

Prior Years Total

Current Year

Prior Years Total

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

(a) Net claims incurred

Gross claims incurred

Gross claims paid 184,106 1,704,906 1,889,012 166,404 1,542,861 1,709,265

Movement in outstanding claims 2,504,819 (2,146,569) 358,250 2,384,169 (2,009,976) 374,193

Gross claims incurred – undiscounted

2,688,925 (441,663) 2,247,262 2,550,573 (467,115) 2,083,458

Discount and discount movement (433,369) 685,429 252,060 (466,444) 406,600 (59,844)

Gross claims incurred (Note 11(b)) 2,255,556 243,766 2,499,322 2,084,129 (60,515) 2,023,614

Recoveries revenue

Recoveries received (79,740) (73,012) (152,752) (74,252) (70,502) (144,754)

Movement in recoveries receivable (54,082) 32,494 (21,588) (48,117) 53,567 5,450

Recoveries revenue – undiscounted

(133,822) (40,518) (174,340) (122,369) (16,935) (139,304)

Discount and discount movement 7,019 (10,551) (3,532) 7,502 (9,493) (1,991)

Recoveries revenue (126,803) (51,069) (177,872) (114,867) (26,428) (141,295)

Net claims incurred 2,128,753 192,697 2,321,450 1,969,262 (86,943) 1,882,319

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.


Financial Report

The net claims incurred of $2,321.45 million (2014: $1,882.32 million) is impacted by both internal and external factors as noted below:

2015 2014

$000s $000s

Claims incurred – internal (i) 2,164,974 1,739,016

Claims incurred – external (ii) 156,476 143,303

Net claims incurred 2,321,450 1,882,319

Notes:(i) The 30 June 2015 “claims incurred – internal” is $425.96 million (2014: $153.29 million) higher than the prior year

due mainly to the changes in claims costs assumptions to reflect the unfavourable claims experience.

(ii) As outlined in Note 7 (iii), the “claims incurred – external” reflects the combined impact of changes in assumed rates of inflation and discount on the claims liability.

The claim payments and movement in outstanding claims liability (Note 24 (b)) during the year by payment type are as follows:

2015 2014

Claims Paid

Liability Movement Total

Claims Paid

Liability Movement Total

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

Weekly compensation 631,766 (92,770) 538,996 624,148 1,126 625,274

Medical including medico-legal 362,475 210,223 572,698 346,970 64,583 411,553

Impairment benefits 95,665 25,364 121,029 88,431 (22,502) 65,929

Common law 622,310 270,679 892,989 503,803 99,542 603,345

Other payment types 170,165 92,213 262,378 146,096 86,719 232,815

Claims handling expenses (i) – 58,910 58,910 – 66,962 66,962

Risk margin (ii) – 45,691 45,691 – 17,919 17,919

Self-insurer (re-entry) exit settlements

6,631 – 6,631 (183) – (183)

Gross claims incurred 1,889,012 610,310 2,499,322 1,709,265 314,349 2,023,614

Notes:

(i) Claims handling expenses is an allowance made for the direct expenses to be incurred in settling claims.

(ii) The prudential risk margin provides for the inherent uncertainty in the central estimate of the outstanding claims.


2015 2014

$000s $000s

(b) Claims expense

Gross claims incurred (Note 11 (a)) 2,499,322 2,023,614

Certified payments to ACCS 15,140 15,515

Contribution to DTF Consolidated Fund for court use 8,153 7,916

Medical Panels costs 4,181 3,813

WorkCover Assist costs 2,183 1,999

Union Assist costs 996 974

Dispute resolution expenses 30,653 30,217

Total claims expense recognised in the comprehensive operating statement

2,529,975 2,053,831

12. Authorised Agent Fees

2015 2014

$000s $000s

Authorised agent fees (i) 245,253 245,960

Management agent fees (ii) 1,999 1,870

247,252 247,830

Notes:

(i) Authorised agents operating under an instrument of appointment issued pursuant to the Accident Compensation Act 1985 or 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.

(ii) 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.


Financial Report

13. Other Operating Costs

2015 2014

$000s $000s

Employee and related 123,203 138,072

Information technology 23,999 23,157

Professional services 11,522 11,596

Marketing and communication 14,011 13,206

Occupancy and utilities 20,027 20,013

Research and external funding 8,949 16,857

Bad and doubtful debts written-off (back) 1 (5)

Discount and discount movement in provisions 647 (812)

Depreciation 5,744 6,257

Amortisation 15,613 15,651

Loss on disposal of plant and equipment – 14

Other expenses 13,958 15,489

237,674 259,495

Note:

Other operating costs includes $2.13 million (2014: nil) associated with the implementation of Geelong relocation program.

14. Total Expenses

2015 2014

$000s $000s

Total expenses include:

Depreciation on plant and equipment 5,744 6,257

Amortisation on intangibles 15,613 15,651

21,357 21,908

Operating lease rentals

– Premises 10,172 10,257

– Motor vehicles 3,869 4,173

– Office equipment 305 294

14,346 14,724

Employee benefit expense

– Post employment benefits:

Defined contribution plans 12,961 12,075

Defined benefit plans 1,673 1,962

14,634 14,037

– Termination benefits (598) 7,573

– Other employee benefits 106,225 114,264

105,627 121,837


15. Remuneration of Auditors

2015 2014

$000s $000s

Auditor of the entity:

Audit of the financial statements – Victorian Auditor-General’s Office 321 313

321 313

16. Income Tax

2015 2014

$000s $000s

(a) Tax expense

Major components of tax expense for the financial years ended 30 June 2015 and 2014 are:

Current income tax

– Current tax expense 310,807 136,893

– Adjustments in respect of current income tax of prior years (10,532) (8,589)

Deferred income tax

– Relating to origination and reversal of temporary differences (174,911) 198,097

Tax expense reported in the comprehensive operating statement 125,364 326,401

A reconciliation of tax expense applicable to accounting result before income tax at the statutory income tax rate, to tax expense calculated at WorkSafe’s effective income tax rate for the financial years ended 30 June 2015 and 2014 is as follows:

2015 2014

$000s $000s


At the statutory income tax rate of 30% (2014: 30%) 173,767 345,065

– Adjustments in respect of current income tax of prior years (10,532) (8,589)

– Adjustment in respect of securities sold during the year (23,840) –

– Franking credits and withholding tax on dividends received (19,915) (16,725)

– Imputation gross-up on dividends received 5,974 5,017

– Other (90) 1,633

Tax expense reported in the comprehensive operating statement 125,364 326,401


Financial Report

2015 2014

$000s $000s

(b) Tax (liabilities) recoveries

Balance at beginning of the year 139 139

Movements during the year:

– Income tax for current year (i) (113,820) –

– Income tax paid – –

Balance at end of the year (113,681) 139

Note:(i) Income tax for current year is stated after utilisation of brought forward tax losses.

2015 2014

$000s $000s

(c) Deferred tax

Deferred tax at 30 June 2015 and 30 June 2014 relate to the following:

Deferred tax assets

– Claims handling expense included in outstanding claims 371,724 352,641

– Provisions not currently deductible 24,923 26,385

– Accruals not currently deductible 2,010 3,909

– Unutilised tax losses – 251,359

398,657 634,294

Deferred tax liabilities

– Unrealised gain on investments (101,959) (326,422)

– Difference in depreciation of plant and equipment and amortisation of intangibles (11,640) (11,270)

(113,599) (337,692)

Net deferred tax assets 285,058 296,602

17. Receivables

2015 2014

$000s $000s

Premium receivable 93,640 104,878

Provision for impairment (45,172) (49,776)

48,468 55,102

Confirmed premium estimate (3,600) 200

44,868 55,302

Of the total receivables balance, premium receivable of $48.47 million (2014: $55.10 million) have known counterparties, while the confirmed premium estimate is actuarially assessed. The confirmed premium estimate at 30 June 2015 represents a decrease in premium billed of $3.6 million (2014: increase of $0.2 million) based on the actuarial assessment.

The average credit period for premium receivable is 30 days.


Included within premium receivable at the reporting date are $54.95 million (30 June 2014: $59.96 million) of past due receivables. WorkSafe has provided for $45.17 million (30 June 2014: $49.78 million) of these debts. WorkSafe does not hold any collateral over these balances. The average age of those receivables that are past due but not impaired is 71 days (30 June 2014: 73 days).

2015 2014

$000s $000s

Ageing of past due premium receivable

30 days past due 3,367 4,625

31 – 60 days past due 1,808 1,714

61 – 90 days past due 414 501

91 – 180 days past due 2,560 4,029

More than 180 days past due 46,800 49,089

54,949 59,958

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.

2015 2014

$000s $000s

Movement in provision for impairment

Balance at beginning of the year 49,776 52,731

Amounts written-off during the year (192) (2,172)

(Decrease) in allowance recognised in comprehensive operating statement (4,412) (783)

Balance at end of the period/year 45,172 49,776

18. Investments

Summary of investments integral to general insurance activities carried at fair value through the comprehen-sive 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 a Prudential Standard issued by the Treasurer of Victoria.

Under this arrangement, 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). All WorkSafe investments must be placed with the VFMC.

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 Financial and Investment Strategies Committee also convenes to 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 accepted IRMP and WorkSafe’s investment objectives. A certification is also provided to the DTF annually.


Financial Report

The investment portfolio consists of a range of assets that broadly resemble: 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.

During the financial year, the VFMC undertook a significant structural change to WorkSafe’s investment portfolio where investments in Australian and international equities and inflation linked bonds were consolidated into VFMC trusts.

As a part of the VFMC’s investment strategy, contracts are entered into which require WorkSafe to contribute additional future capital (partly paid shares and units). While these future obligations amounted to $796.52 million at 30 June 2015 (2014: $639.13 million), no calls to subscribe were outstanding at the reporting date (2014: nil).

2015 2014

$000s $000s

Investments

Cash 504,725 829,930

Australian equities 1,527,236 1,424,406

International equities 4,901,252 4,501,231

Private equity 272,526 259,264

Inflation linked bonds 1,578,900 1,547,429

Infrastructure 691,931 549,683

Property 978,134 777,255

Diversified fixed income 1,647,469 1,513,408

Insurance 271,248 218,674

Non traditional strategies 1,165,998 941,423

Overlays (i) 9,106 7,224

13,548,525 12,569,927

Note:

(i) The VFMC uses derivatives and other investments, including share price and bond futures, swaps and forward currency contracts, to manage exposures resulting from changes in interest rates, foreign currencies, equity price risks, and exposures arising from forecast transactions. Overlays represent the unrealised gains or losses on various derivative and swap positions in interest rate, foreign currency and equity markets.

Current

Investments 1,912,692 2,580,384

Derivative liabilities (100,484) (28,029)

1,812,208 2,552,355

Non-current

Investments 11,741,328 10,025,531

Derivative liabilities (5,011) (7,959)

11,736,317 10,017,572

13,548,525 12,569,927

Cash and cash equivalents

Cash and deposits at call 1,341,023 2,109,373

Other investments and derivative liabilities 12,207,502 10,460,554

13,548,525 12,569,927


Where fund managers use derivative contracts for efficient portfolio management, such positions are backed by holdings in equivalent securities, cash and discount securities. Included in cash and discount securities are the fund managers’ aggregate liquid positions.

The investments, both current and non-current, except those in the unlisted equities, unlisted trusts and certain derivative contracts, are readily convertible to cash assets.

19. Recoveries Receivable

2015 2014

$000s $000s

The recoveries receivable contained in the financial statements is obtained through independent actuarial valuation by PricewaterhouseCoopers Actuarial Limited.

Expected future recoveries (undiscounted) 297,460 275,872

Discount to present value (25,843) (29,375)

Recoveries receivable on incurred claims 271,617 246,497

Current 46,995 43,085

Non-current 224,622 203,412

271,617 246,497

20. Other Assets

2015 2014

$000s $000s

Contractual

Sundry receivables (i) 5,960 6,589

Provision for impairment (ii) (1) –

5,959 6,589

Prepayments 5,878 4,472

11,837 11,061

Notes:

(i) The average credit period for sundry receivables is 28 days. Included within sundry receivables at 30 June 2015 are $0.04 million (30 June 2014: $0.20 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 83 days (30 June 2014: 144 days).

(ii) Movement in provision for impairment

2015 2014

$000s $000s

Balance at beginning of the period/year – 5

Increase (decrease) in allowance recognised in operating statement 1 (5)

Balance at end of the period/year 1 –


Financial Report

21. Plant and Equipment

2015 2014

$000s $000s

Gross carrying amounts and accumulated depreciation

Leasehold improvements 35,698 35,510

Accumulated depreciation (26,774) (23,643)

8,924 11,867

Computer equipment 14,370 14,096


3,101 3,883

Furniture and equipment 9,924 9,642


885 1,408

Total plant and equipment 59,992 59,248


Balance at end of the year, at fair value 12,910 17,158

Leasehold Improvements

Computer Equipment

Furniture and Equipment Total

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

Movements in carrying amounts

30 June 2015

Carrying amount at beginning of the year 11,867 3,883 1,408 17,158

Additions 361 800 335 1,496

Disposals – – – –

Depreciation expense (3,304) (1,582) (858) (5,744)

Carrying amount at end of the year 8,924 3,101 885 12,910

30 June 2014

Carrying amount at beginning of the year 15,084 4,287 2,924 22,295

Additions 138 873 123 1,134

Disposals – – (14) (14)

Depreciation expense (3,355) (1,277) (1,625) (6,257)

Carrying amount at end of the year 11,867 3,883 1,408 17,158


22. Intangibles

2015 2014

$000s $000s

Computer software

– At cost 144,400 135,830

– Accumulated amortisation (76,194) (62,316)

Balance at end of the period/year 68,206 73,514

Included in intangibles is the cost of software development in progress of $20.18 million (30 June 2014: $16.42 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.

Computer Software

$000s

Movements in carrying amounts

30 June 2015

Carrying amount at beginning of the year 73,514

Additions 10,305

Amortisation expense (15,613)

Carrying amount at end of the year 68,206

30 June 2014

Carrying amount at beginning of the year 77,819

Additions 11,346

Amortisation expense (15,651)

Carrying amount at end of the year 73,514

23. Payables

2015 2014

$000s $000s

Contractual

– Premium creditors 56,276 37,508

– Other creditors and accruals for supplies and services 105,373 105,697

161,649 143,205

Statutory

– Goods & Services and Fringe Benefits Taxes payable 1,999 3,313

163,648 146,518

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


Financial Report

24. Outstanding Claims

2015 2014

$000s $000s

(a) Summary of valuation

The outstanding claims liability contained in the financial statements is obtained through independent actuarial valuation by PricewaterhouseCoopers Actuarial Limited.

Expected future claim payments (undiscounted) 12,064,372 11,763,463

Discount to present value (2,699,102) (2,903,902)

9,365,270 8,859,561

Claims handling expenses 1,147,220 1,088,310

10,512,490 9,947,871

Risk margin 849,057 803,366

Liability for outstanding claims 11,361,547 10,751,237

Current 1,995,252 1,928,087

Non-current 9,366,295 8,823,150

11,361,547 10,751,237

2015 2015 2014 2014 2013

Liability $000s

Movement $000s

Liability $000s

Movement $000s

Liability $000s

(b) Movement in outstanding claims liability

Weekly compensation 2,691,434 (92,770) 2,784,204 1,126 2,783,078

Medical including medico-legal 2,267,721 210,223 2,057,498 64,583 1,992,915

Impairment benefits 472,459 25,364 447,095 (22,502) 469,597

Common law 3,123,589 270,679 2,852,910 99,542 2,753,368

Other payment types 810,067 92,213 717,854 86,719 631,135

Claims handling expenses (i) 1,147,220 58,910 1,088,310 66,962 1,021,348

Risk margin (ii) 849,057 45,691 803,366 17,919 785,447

11,361,547 610,310 10,751,237 314,349 10,436,888

Notes:

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


(c) Reconciliation of movement in discounted net outstanding claims liability

2015 2014

Gross $000s

Recoveries $000s

Net $000s

Gross $000s

Recoveries $000s

Net $000s

Brought forward at beginning of the year

10,751,237 (246,497) 10,504,740 10,436,888 (249,955) 10,186,933

Effect of change in economic assumptions

337,016 (5,075) 331,941 113,717 (1,185) 112,532

Effect of past inflation rate different to assumptions

(176,098) 634 (175,464) 31,937 (1,166) 30,771

Effect of changes in other assumptions

135,805 (34,681) 101,124 (369,830) (1,034) (370,864)

Increase in claims incurred in current accident year

2,255,789 (126,803) 2,128,986 2,084,387 (114,867) 1,969,520

Release of risk margin and claims handling expenses

(476,591) – (476,591) (444,225) – (444,225)

Cost of prior year claims moving closer to payment

423,401 (11,947) 411,454 607,628 (23,044) 584,584

Incurred claims recognised in the comprehensive operating statement

2,499,322 (177,872) 2,321,450 2,023,614 (141,296) 1,882,318

Claim (payments) recoveries during the year

(1,889,012) 152,752 (1,736,260) (1,709,265) 144,754 (1,564,511)

Carried forward at end of the year

11,361,547 (271,617) 11,089,930 10,751,237 (246,497) 10,504,740


Financial Report

(d) Claims development tableThe following tables show the development of gross and net undiscounted outstanding claims relative to the ultimate expected claims for the ten most recent accident years.

(i) Gross

Accident year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total$000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

– At end of accident year

1,667,314 1,657,693 1,662,551 1,664,184 1,820,572 2,023,875 2,106,262 2,179,643 2,070,068 2,181,286

– One year later 1,592,120 1,594,356 1,624,733 1,720,922 1,882,276 2,007,352 2,104,767 1,960,525 2,057,044

– Two years later 1,511,933 1,555,131 1,631,119 1,707,164 1,836,844 1,958,725 2,015,750 1,932,842

– Three years later 1,428,761 1,579,787 1,605,039 1,671,093 1,803,577 1,894,976 1,990,810

– Four years later 1,417,887 1,555,099 1,597,988 1,637,270 1,756,418 1,876,489

– Five years later 1,390,176 1,568,361 1,572,369 1,612,333 1,752,006

– Six years later 1,361,560 1,557,755 1,517,538 1,584,264

– Seven years later 1,329,708 1,525,692 1,512,161

– Eight years later 1,304,443 1,530,229

– Nine years later 1,293,536

Current estimate of cumulative claims cost

1,293,536 1,530,229 1,512,161 1,584,264 1,752,006 1,876,489 1,990,810 1,932,842 2,057,044 2,181,286 17,710,667

Cumulative payments (1,052,143) (1,107,434) (1,143,159) (1,089,186) (1,082,874) (1,025,779) (880,475) (614,821) (429,477) (183,802) (8,609,150)

Outstanding claims – undiscounted

241,393 422,795 369,002 495,078 669,132 850,710 1,110,335 1,318,021 1,627,567 1,997,484 9,101,517

2005 and prior years 2,962,855

Total outstanding claims – undiscounted 12,064,372

Discount (2,699,102)

Claims handling expenses 1,147,220

Risk margin 849,057

Total gross outstanding claims per balance sheet (Note 24 (c)) 11,361,547

(ii) Net

Accident year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total$000s $000s $000s $000s $000s $000s $000s $000s $000s $000s $000s

Estimate of ultimate claims cost:

– At end of accident year

1,587,194 1,566,845 1,589,516 1,586,157 1,732,804 1,918,524 1,986,223 2,060,784 1,947,705 2,047,465

– One year later 1,503,543 1,518,226 1,550,542 1,635,318 1,782,741 1,902,261 1,987,432 1,842,814 1,932,453

– Two years later 1,438,408 1,478,738 1,548,512 1,616,939 1,737,719 1,855,485 1,898,422 1,812,103

– Three years later 1,357,408 1,493,532 1,517,241 1,579,024 1,707,638 1,791,398 1,871,783

– Four years later 1,340,717 1,464,500 1,508,310 1,546,271 1,659,109 1,766,716

– Five years later 1,305,352 1,476,952 1,484,389 1,520,802 1,649,688

– Six years later 1,279,945 1,466,825 1,428,796 1,489,828

– Seven years later 1,247,189 1,430,513 1,422,697

– Eight years later 1,221,916 1,433,685

– Nine years later 1,210,189

Current estimate of cumulative claims cost

1,210,189 1,433,685 1,422,697 1,489,828 1,649,688 1,766,716 1,871,783 1,812,103 1,932,453 2,047,465 16,636,607

Cumulative payments (972,550) (1,016,901) (1,063,503) (1,009,966) (1,004,558) (950,032) (804,635) (541,444) (354,223) (104,064) (7,821,876)

Outstanding claims – undiscounted

237,639 416,784 359,194 479,862 645,130 816,684 1,067,148 1,270,659 1,578,230 1,943,401 8,814,731

2005 and prior years 2,952,181

Total outstanding claims – undiscounted 11,766,912

Discount (2,673,259)

Claims handling expenses 1,147,220

Risk margin 849,057

Total outstanding claims net of recoveries per balance sheet (Note 24 (c)) 11,089,930


25. Provisions

2015 2014

$000s $000s

Current

Employee benefits (Note 25 (a))

Annual leave

– Unconditional and expected to be settled wholly within 12 months 4,137 4,048

– Unconditional and expected to be settled wholly after 12 months 4,535 4,424

Long service leave



Termination benefits

– Unconditional and expected to be settled wholly within 12 months – 2,289

25,830 26,670

On-costs (Notes 25 (a) and (b))



3,961 3,770

Total current provisions 29,791 30,440

Non-current

Employee benefits (Note 25 (a)) 3,009 2,923

On-costs (Notes 25 (a) and (b)) 467 455

3,476 3,378

Leasehold restoration (i) 4,247 4,131

Total non-current provisions 7,723 7,509

Total provisions 37,514 37,949

Note:

(i) 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 leases.


Financial Report

2015 2014

$000s $000s

(a) Employee benefits and on-costs

Current

Annual leave 8,672 8,472

Long service leave 17,158 15,909

Termination benefits – 2,289

25,830 26,670

Non-current

Long service leave 3,009 2,923

Total employee benefits 28,839 29,593

Current on-costs 3,961 3,770

Non-current on-costs 467 455

Total on-costs 4,428 4,225

Total employee benefits and on-costs 33,267 33,818

Employee Benefits On-costs

Leasehold Restoration Total

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

(b) Movement in provisions

30 June 2015

Balance at beginning of the year 29,593 4,225 4,131 37,949

Additional provisions recognised 11,668 1,736 – 13,404

Reductions arising from payments (12,134) (1,583) (100) (13,817)

Reductions resulting from re-measurement or settlement without cost

(661) (8) – (669)

Unwinding of discount and effect of changes in discount rates

373 58 216 647

Balance at end of the year 28,839 4,428 4,247 37,514


26. Reserves and Accumulated Surplus

Reserves

WorkHealth Initiative (i)

Research Initiative (i) Total

Accumulated Surplus

Total Equity

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

Balance at 1 July 2013 489,394 116,099 605,493 973,673 1,579,166

Transfer from reserves during the year

(525,851) – (525,851) 525,851 –

Net result for the year – – – 823,814 823,814

Transfer of initiatives' net result for the year

36,457 13,438 49,895 (49,895) –

Dividend paid – – – (59,333) (59,333)

Balance at 30 June 2014 – 129,537 129,537 2,214,110 2,343,647

Transfer from reserves during the year

– (129,537) (129,537) 129,537 –

Net result for the year – – – 453,859 453,859

Transfer of initiatives' net result for the year

– – – – –

Dividend paid – – – (241,699) (241,699)

Balance at 30 June 2015 – – – 2,555,807 2,555,807

Note:

(i) WorkHealth was an initiative to support Victorian workplaces by offering voluntary programs to promote the health and wellbeing of workers to reduce workplace injury and improve return to work. The WorkHealth programs were scaled back with effect from 1 January 2014.

The Institute for Safety, Compensation, and Recovery Research is a collaborative initiative with the Transport Accident Commission and the Monash University to facilitate research and best practice in injury prevention, rehabilitation and compensation practice and to improve outcomes in those areas.

The WorkHealth and Research Institute initiative reserves were transferred to accumulated surplus following their closures on 1 January 2014 and 1 July 2014 respectively.

27. Notes to the Cash Flow Statement

(a) Reconciliation of cash and cash equivalentsFor the purposes of the cash flow statement, cash and cash equivalents include cash on 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:

2015 2014

Note $000s $000s

Cash and cash equivalents (i) (10,824) 9,151

Cash and deposits at call 18 1,341,023 2,109,373

1,330,199 2,118,524

Note:

(i) The cash and cash equivalents credit balance at 30 June 2015 represents unpresented or uncleared cheques net of the bank balance at reporting date.


Financial Report

2015 2014

$000s $000s

(b) Reconciliation of Net Result to Net Cash Flows from Operating Activities

Net result for the year 453,859 823,814

Changes in fair values of investments at fair value through the comprehensive operating statement

(913,903) (1,071,677)

Depreciation on plant and equipment 5,744 6,257

Amortisation on intangibles 15,613 15,651

Loss on disposal of plant and equipment – 14

Discount and discount movement in provisions 647 (812)

Changes in assets and liabilities:

Decrease in premiums receivable 10,434 13,839

Decrease in investment income receivable 1,148 4,641

(Increase) decrease in recoveries receivable (25,120) 3,458

Decrease in sundry receivable 630 4,761

(Increase) in prepayments (1,406) (1,723)

Decrease in net deferred tax assets 11,544 326,401

Increase (decrease) in premium creditors 18,768 (94)

(Decrease) in other creditors and accruals (1,638) (5,576)

Increase in outstanding claims 610,310 314,349

Increase in tax liabilities 113,820 –

(Decrease) in provisions (1,082) (3,123)

Total adjustments (154,491) (393,634)

Net cash flows from operating activities 299,368 430,180

28. Commitments

2015 2014

$000s $000s

(a) Operating leases (i)

Future minimum lease payments under non-cancellable operating lease arrangements:

Due within one year 23,866 23,438

Due later than one year and less than five years 50,773 70,869

Due later than five years 1,621 1,844

76,260 96,151


2015 2014

$000s $000s

(b) Other operating commitments

Amounts payable under non-cancellable other operational contractual arrangements:

Due within one year 8,373 9,591

Due later than one year and less than five years 10,247 13,850

Due later than five years – 320

18,620 23,761

Note:

(i) Operating leases relate to leasehold premises, vehicles and office equipment with lease terms between 1 and 10 years. 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.

29. Responsible Person-Related Disclosures

(a) Responsible personsIn accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the responsible persons who held office during the financial year were:

(i) Responsible Ministers– Honourable Robin Scott MP, Minister for Finance (appointed effective 4 December 2014)– Honourable Gordon Rich-Phillips MLC, Assistant Treasurer (ceased on 3 December 2014)

(ii) Directors – Mr John Walter (appointed as Acting Chair effective 17 March 2015)– Mr David Krasnostein (ceased as Chair and director on 3 March 2015)– Ms Clare Amies (appointed as Acting Chief Executive effective 17 March 2015 and as Chief Executive effective 12

June 2015)– Ms Denise Cosgrove (ceased as Chief Executive on 3 March 2015)– Mr Paul Kirk– Mr Ross McCann– Mr Neil Lucas (appointed as director effective 26 August 2014)– Ms Jane Bell (ceased as director on 24 April 2015)– Dr Geoff Brooke (ceased as director on 17 June 2015)


Financial Report

(b) Transactions with responsible person-related entitiesMr John Walter is a partner of Corrs Chambers Westgarth. The aggregate amount of legal services provided by the firm to WorkSafe were as follows:

2015 2014

$000s $000s

Legal services (1,091) (110)

The spouse of Mr John Walter is a Board member of the Victorian Funds Management Corporation (VFMC). It is the Victorian Government’s policy that all the investment assets of WorkSafe be managed by the VFMC to which WorkSafe agrees to pay a base and performance fee which is endorsed by the DTF for all VFMC mandated clients. The aggregate amount of investment fees incurred were as follows:

2015 2014

$000s $000s

Investment fees (43,001) (36,561)

Ms Denise Cosgrove was a director of the Personal Injury Education Foundation (PIEF) and Multiple Sclerosis Limited (MSL). WorkSafe is a founding member of PIEF and is committed to contributing towards its operating costs. Australian Home Care, a wholly owned subsidiary of MSL is a provider of attendant care services to injured workers.

The aggregate amounts in respect of the above transactions with responsible person-related entities were:

2015 2014

$000s $000s

Administrative Support and Services Revenue 562 979

Membership and training (61) (76)

Attendant care services (2,902) (2,288)

Dr Geoff Brooke and Ms Denise Cosgrove were Board members of the Institute for Safety, Compensation, and Recovery Research (ISCRR). WorkSafe is committed to contributing towards funding the research activities of ISCRR.


2015 2014

$000s $000s

Fundings (3,315) (3,233)

Project evaluation services – (126)


Mr John Walter and Paul Kirk are, and Mr David Krasnostein was, a director of the TAC. Under the Workplace Injury Rehabilitation and Compensation Act 2013, WorkSafe is entitled to recover from the TAC, all compensation payable under WorkSafe scheme for injury in a transport accident during the course of work. WorkSafe also receives annual Workplace Injury Insurance premium from the TAC.

WorkSafe and the TAC reimbursed each other for the cost of external services acquired jointly, and internal services provided to each other, in relation to collaborative initiatives between WorkSafe and the TAC. In addition, WorkSafe made payments to the TAC for the management of WorkSafe claims of injured workers with catastrophic injuries.


2015 2014

$000s $000s

Recovery of compensation paid 79,340 73,700

Workplace Injury Insurance premium 578 554

Cost reimbursement received and receivable 7,386 11,796

Cost reimbursement paid and payable (5,558) (6,097)

Management of catastrophic claims (1,767) (1,528)

Ross McCann is a member of the advisory Board of Monash Sustainability Institute and Mr Paul Kirk is a member on the governance and advisory committees of Monash University. Ms Jane Bell was a Board member of Melbourne Health. During the year, WorkSafe participated in research conducted by Monash Sustainability Institute. In the prior year, WorkSafe employees participated in educational sessions provided by Monash University and Melbourne Health, and WorkSafe hired venues from Monash University.

The aggregate amounts in respect of these transactions with responsible person-related entities were:

2015 2014

$000s $000s

Fundings (84) –

Training and seminars – (2)

Venue hiring – (2)

Transactions with responsible person-related entities are made on normal commercial terms and conditions. Conflicts of interest are overcome where warranted, by directors declaring their interests and abstaining from voting at WorkSafe’s Board meetings.

30. Remuneration of Responsible Persons

2015 2014

$000s $000s

Total remuneration of all responsible persons received or receivable in connection with their employment (i)

1,071 789


Financial Report

The number of responsible persons of WorkSafe whose remuneration falls within the following bands was:

Income Band

2015 2014

$

10,000 – 19,999 – 1

30,000 – 39,999 – 2

40,000 – 49,999 2 1

50,000 – 59,999 3 1

70,000 – 79,999 1 –

90,000 – 99,999 1 –

110,000 – 119,999 1 –

120,000 – 129,999 – 1

470,000 – 479,999 – 1

520,000 – 529,999 1 –

Note:

(i) Amounts relating to ministers are reported in the financial statements of the Department of Premier and Cabinet.


31. Remuneration of Executive Officers and Payments to Other Personnel

(a) Remuneration of Executive Officers The number of executive officers of WorkSafe, excluding the Chief Executive, whose total remuneration exceeded $100,000 is shown in the table below. Base remuneration is exclusive of bonus, long-service leave and termination benefits.

The number of executives varies from year to year due to the timing of appointments, resignations, and the composition of the executives.

Income Band Base Remuneration Total Remuneration

2015 2014ii 2015 2014ii

$

Less than 99,999 4 5 4 3

100,000 – 109,999 – – – 1

120,000 – 129,999 – 1 – –

130,000 – 139,999 1 – 1 –

140,000 – 149,999 – 1 – 2

180,000 – 189,999 – 2 – –

190,000 – 199,999 1 1 – –

200,000 – 209,999 – 2 – 1

210,000 – 219,999 2 – 1 1

220,000 – 229,999 – – 1 –

230,000 – 239,999 1 – – –

240,000 – 249,999 – – – 1

250,000 – 259,999 1 1 1 –

270,000 – 279,999 – – 2 1

290,000 – 299,999 – 1 – 1

300,000 – 309,999 1 – – 2

310,000 – 319,999 1 – – –

340,000 – 349,999 – – – 1

360,000 – 369,999 – – 1 –

470,000 – 479,999 – – 1 –

Total number of executives 12 14 12 14

Total annualised employee equivalent (i) 8.0 8.0 8.0 8.0

Total amount ($000s) 2,075 2,023 2,434 2,695

Notes:

(i) Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period.

(ii) Executives within the collaborative initiatives of the WorkSafe and the TAC are shared between the two organisations. WorkSafe’s share of executives employed by the TAC in the collaborative initiatives is included in Note 31(b).


Financial Report

(b) Payments to Other Personnel with Significant Management ResponsibilitiesThe number of contractors charged with significant management responsibilities is disclosed in the table below, within the $10,000 expense band. These contractors are responsible for planning, directing or controlling, directly or indirectly, the WorkSafe’s activities.

Expense Band

2015 2014

$

Less than 99,999 1 4

190,000 – 199,999 – 1

Total expenses ($000s) 56 335

(c) Ex-gratia Expenses

2015 2014

$000s $000s

Payments relating to the cessation of employment contracts – 124

32. Employee Superannuation Expense

2015 2014

$000s $000s

Superannuation is provided for employees via the following schemes:

Defined contribution schemes

VicSuper Pty Ltd – VicSuper Scheme 8,237 8,078

Other 4,724 3,997

12,961 12,075

Defined benefit schemes

Emergency Services Superannuation Scheme

– Revised Scheme 431 641

– New Scheme 1,200 1,282

– State Employees Retirement Benefit Scheme 18 18

– Transport Scheme 24 21

1,673 1,962

14,634 14,037

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. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its financial report.

The basis of superannuation contributions is based on the relevant rules of each plan. At 30 June 2015, contributions outstanding were $nil (2014: $nil).

Employees have the option of contributing exclusively to private sector complying funds or contributing to a state fund or both.

Employee superannuation includes contributions paid under salary sacrifice arrangements.


33. Financial Instruments

WorkSafe’s financial assets and liabilities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk. The VFMC uses different methods to measure different types of risk to which WorkSafe’s investment portfolio is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, and credit ratings for credit risk.

(a) Credit riskCredit 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 agreement to be reviewed or rescinded upon the occurrence of specified events relating to counterparty credit and liquidity.

Assessment processes also ensure that well-defined documentation underpins each transaction; that clear rules exist for completing single transactions with a particular counterparty; and that appropriate credit limits exist to accommodate the transaction. Exposure is measured according to the individual transaction, counterparty total, credit rating total and other bases, and is monitored by personnel separated from the dealing function. When conducting over-the-counter derivative transactions, bilateral legal contracts must be signed with the counterparty prior to execution of the transaction.

The establishment of appropriate policies and multi-tiered limits ensures that WorkSafe maintains a diversified portfolio without any significant concentration of credit risk on an industry, regional or country basis.

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

(ii) 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.


Financial Report

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

Investment grade (i)

Non-investment grade (ii) Total

30 June 2015

$000s $000s $000s

Financial assets at fair value through the comprehensive operating statement

Cash and cash equivalents – – –

Investments – cash and deposits at call 1,341,023 – 1,341,023

Debt securities 1,083,065 106,109 1,189,174

Derivative assets – 149,102 149,102

Investment settlements outstanding – 440,832 440,832

2,424,088 696,043 3,120,131

30 June 2014

Financial assets at fair value through the comprehensive operating statement

Cash and cash equivalents 9,151 – 9,151

Investments – cash and deposits at call 2,109,373 – 2,109,373

Debt securities 2,498,222 126,241 2,624,463

Derivative assets – 88,334 88,334

Investment settlements outstanding – 363,828 363,828

4,616,746 578,403 5,195,149

Notes

(i) Assets classified with Standard and Poor’s credit ratings of AAA to BBB– are classified as investment grade.(ii) The non-investment grade assets include assets that fall outside the range of AAA to BBB– Standard and Poor’s

credit ratings as well as non-rated assets that are within the risk parameters outlined in the Investment Risk Management Plan.


(b) Liquidity riskLiquidity risk arises from WorkSafe being unable to meet financial obligations as they fall due.

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 profile 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 liability under AASB 4 ‘Insurance Contracts’.

Details on the average term to settlement for the claims liabilities portfolio are included in Note 4 (a).

Less than 3 months 4–12 months 1–5 years 5+ years Total

30 June 2015

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

Financial liabilities


10,824 – – – 10,824

Non-statutory payables

85,408 76,241 161,649

Derivative liabilities 81,555 18,929 4,926 85 105,495

177,787 95,170 4,926 85 277,968

Less than 3 months 4–12 months 1–5 years 5+ years Total

30 June 2014

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



– – – – –


61,653 81,552 – – 143,205

Derivative liabilities 26,565 1,464 4,426 3,533 35,988

88,218 83,016 4,426 3,533 179,193


Financial Report

(c) Market riskMarket 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 (equity 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.

For the sensitivity analysis of each type of market risk, the percentage change used for each of the variables has been determined by WorkSafe at 30 June 2015 and 30 June 2014, in consultation with the VFMC.

(i) Interest rate riskInterest 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 significant accounting policies (Note 3) describe the policies used to measure and report the assets and liabilities of WorkSafe. Where the applicable fair value is determined by discounting future cash flows, movements in interest rates will result in a reported unrealised gain or loss in the comprehensive operating statement.

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 uses derivatives to manage the interest rate risk on the interest rate sensitive assets. Interest rate swap contracts and forward rate agreements are used to either change the interest rate risk between fixed and floating rates of interest or between different floating rates of interest. A summary of WorkSafe’s exposure to interest rate risk on financial instruments is as follows:


Variable Interest

Rate

Fixed Interest Rate Period to maturity or re-pricing Non

Interest Bearing

Total Carrying

Valueless than 3 months

4–12 months 1–5 years

over 5 years

30 June 2015

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

Financial assets

Premium receivables – – – – – 48,468 48,468

Investments

– Derivative assets 118,436 – – – – 30,666 149,102

– Other investments 472,623 1,188,842 55,349 389,810 398,441 10,999,853 13,504,918

Sundry receivables – – – – – 5,959 5,959

591,059 1,188,842 55,349 389,810 398,441 11,084,946 13,708,447



– – – – – 10,824 10,824


– – – – – 161,649 161,649

Derivative liabilities 38,571 – – – – 66,924 105,495

38,571 – – – – 239,397 277,968

Net financial assets 552,488 1,188,842 55,349 389,810 398,441 10,845,549 13,430,479

Variable Interest

Rate

Fixed Interest Rate Period to maturity or re-pricing Non

Interest Bearing

Total Carrying

Valueless than 3 months

4–12 months 1–5 years

over 5 years

30 June 2014

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

Financial assets


9,151 – – – – – 9,151

Premium receivables – – – – – 55,102 55,102

Investments

– Derivative assets 41,678 – – – – 46,656 88,334

– Other investments 1,886,238 1,670,054 222,134 434,315 424,669 7,880,171 12,517,581

Sundry receivables – – – – – 6,589 6,589

1,937,067 1,670,054 222,134 434,315 424,669 7,988,518 12,676,757



– – – – – 143,205 143,205

Derivative liabilities 8,088 27,900 35,988

8,088 – – – – 171,105 179,193

Net financial assets 1,928,979 1,670,054 222,134 434,315 424,669 7,817,413 12,497,564


Financial Report

2015 2014

$000s $000s

Reconciliation of net financial assets to net assets:

Net financial assets as above 13,430,479 12,497,564

Non-financial assets and liabilities:

– Recoveries receivable 271,617 246,497

– Prepayments 5,878 4,472

– Confirmed premium estimate (3,600) 200

– Plant and equipment 12,910 17,158

– Intangibles 68,206 73,514

– Net deferred tax assets 285,058 296,602

– Tax (liabilities) recoveries (113,681) 139

– Statutory payables (1,999) (3,313)

– Outstanding claims (11,361,547) (10,751,237)

– Provisions (37,514) (37,949)

Net assets per balance sheet 2,555,807 2,343,647

Interest rate sensitivityA sensitivity analysis has been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial period/year and held constant throughout the reporting period. A 0.5% increase or decrease in interest rates (or discount rates) is used by actuaries to present the sensitivities of the actuarial clams liabilities (Note 4 (c)). This percentage has been used to present the impact on interest bearing 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 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:

2015 2014

Impact on net result and equity of a 0.5% increase in interest rates:

– before impact of interest rate derivatives (14,903) (58,457)

– impact of interest rate derivatives (3,134) (1,498)

– after impact of interest rate derivatives (18,037) (59,955)

Impact on net result and equity of a 0.5% decrease in interest rates

– before impact of interest rate derivatives 14,913 58,492

– impact of interest rate derivatives 3,136 1,500

– after impact of interest rate derivatives 18,049 59,992


(ii) Foreign currency riskForeign currency risk is the risk that the fair value of future cash flows 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.

Forward foreign exchange contracts The VFMC limits foreign exchange risk through the use of forward contracts where it agrees to sell specified amounts of foreign currencies in the future at a predetermined exchange rate. 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.

The foreign exchange risk disclosures have 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 profile of WorkSafe where the unit trust has significant investments in other trusts which also have exposure to the currency markets. On this basis, the table below summarises WorkSafe’s exposure to foreign currency risk and the management of that exposure using forward exchange contracts outstanding at the reporting date in Australian dollar equivalents.

Investment in Foreign Currency Forward Contract Cover Net exposure

2015 2014 2015 2014 2015 2014

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

Australian Dollar 11,805,138 9,364,083 3,072,590 2,421,927 14,877,728 11,786,010

British Pound (125) 142,453 (183,350) (325,668) (183,475) (183,215)

Euro Dollar 29,512 286,901 (391,309) (354,803) (361,797) (67,902)

Japanese Yen 144 80,710 (204,285) (178,983) (204,141) (98,273)

United States Dollar 1,733,252 2,473,453 (2,031,823) (1,231,841) (298,571) 1,241,612

Other 14,241 209,586 (295,460) (317,891) (281,219) (108,305)

Total investments (Note 18) 13,582,162 12,557,186 (33,637) 12,741 13,548,525 12,569,927

Foreign currency sensitivityThe sensitivity analysis below has been determined based on the exposure to foreign exchange rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting year.

The following table details WorkSafe’s sensitivity to a 10% increase and decrease in the Australian Dollar against the relevant foreign currencies.

The sensitivity analysis includes foreign currency denominated investment items and adjusts their translation at the period/year end for a 10% change in the value of the Australian dollar relative to foreign currency. A positive number indicates an increase in the net result where the Australian Dollar strengthens against the respective currency.


Financial Report

2015 2014

$000s $000s

Impact on net result and equity of a 10% increase in foreign exchange rates

– before impact of foreign exchange derivatives (113,094) (202,462)

– impact of foreign exchange derivatives 197,669 153,312

– after impact of foreign exchange derivatives 84,575 (49,150)

Impact on net result and equity of a 10% decrease in foreign exchange rates

– before impact of foreign exchange derivatives 138,226 247,454

– impact of foreign exchange derivatives (241,595) (187,381)

– after impact of foreign exchange derivatives (103,369) 60,073

(iii) Other price riskWorkSafe is exposed to equity price risk arising from investments in Australia and overseas (Note 18). The equity investments are held to back general insurance activities and the portfolio is actively managed. The VFMC limits price risk through diversification of the equity investment portfolio.

Equity price sensitivityThe sensitivity analysis below has been determined based on the exposure to equity prices both within Australia and overseas markets at the reporting date and the stipulated change taking place at the beginning of the financial period/year and held constant throughout the reporting period.

The following table details WorkSafe’s sensitivity to a 10% increase and decrease in the Australian equities market and a 10% increase and decrease in overseas equities markets.

If Australian and overseas equity prices had been 10% higher or lower and all other variables held constant at the period/year end, WorkSafe’s net result and equity would change as follows:

2015 2014

$000s $000s

Impact on net result and equity of a 10% increase in:

– listed equity prices 23,403 217,117

– unlisted Australian equity prices 665,017 250,825

– unlisted Overseas equity prices 74,116 79,658

762,536 547,600

Impact on net result and equity of a 10% decrease in:

– listed equity prices (10,350) (217,117)

– unlisted Australian equity prices (665,017) (250,825)

– unlisted Overseas equity prices (74,116) (79,658)

(749,483) (547,600)


(d) Off-setting of financial assets and financial liabilitiesThe 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 (or similar arrangements) with trading counterparties.

Gross and net amounts

included in balance sheet

Related amount not set-off in

balance sheet Net amount

30 June 2015

$000s $000s $000s

Derivative assets 149,102 (42,806) 106,296

Derivative liabilities (105,495) 42,806 (62,689)

Total 43,607 – 43,607

30 June 2014

$000s $000s $000s

Derivative assets 88,334 (29,152) 59,182

Derivative liabilities (35,988) 29,152 (6,836)

Total 52,346 – 52,346

(e) Fair valueWorkSafe uses various methods in estimating the fair value of a financial instrument. The fair value of the financial assets and liabilities reflects the amount at which the instrument could be exchanged in an orderly transaction between market participants at the measurement date.

The fair value measurement for WorkSafe’s financial instruments is categorised into the fair value hierarchy as follows:

(i) Level 1 – Fair value is calculated based on quoted prices in active markets for identical assets or liabilities. These inputs are readily available in the market and are normally obtainable from multiple sources.

(ii) Level 2 – Fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or the liability, either directly (as prices) or indirectly (derived from prices).

(iii) Level 3 – Fair value is estimated using inputs for the asset or liability that are not based on observable market data.


Financial Report

Level 1 Level 2 Level 3 Total

30 June 2015

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

Financial assets

Premium receivables – 48,468 – 48,468

Investments

– Cash 401,251 103,474 – 504,725

– Australian equities 42,943 1,484,273 20 1,527,236

– International equities 713,910 4,187,342 – 4,901,252

– Private equity 54,088 124,446 93,992 272,526

– Inflation linked bonds 39,373 1,539,527 – 1,578,900

– Infrastructure – 46,351 645,580 691,931

– Property 9,421 (865) 969,578 978,134

– Diversified fixed income (9,768) 1,579,731 77,506 1,647,469

– Insurance 2 (2,819) 274,065 271,248

– Non traditional strategies 504,870 170,684 490,444 1,165,998

– Overlays 5,090 4,016 – 9,106

Sundry receivables – 5,959 – 5,959

1,761,180 9,290,587 2,551,185 13,602,952


Cash and cash equivalents 10,824 – – 10,824

Non-statutory payables – 161,649 – 161,649

10,824 161,649 – 172,473

Net financial assets 1,750,356 9,128,938 2,551,185 13,430,479


Level 1 Level 2 Level 3 Total

30 June 2014

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

Financial assets

Cash and cash equivalents 9,151 – – 9,151

Premium receivables – 55,102 – 55,102

Investments

– Cash 763,844 66,086 – 829,930

– Australian equities 585,367 839,016 23 1,424,406

– International equities 2,539,533 1,961,698 – 4,501,231

– Private equity (19,407) 1,971 276,700 259,264

– Inflation linked bonds 65,496 1,481,933 – 1,547,429

– Infrastructure 2,821 50,897 495,965 549,683

– Property 6,638 724 769,893 777,255

– Diversified fixed income 80,019 1,433,389 – 1,513,408

– Insurance – 1,710 216,964 218,674

– Non traditional strategies 351,902 169,842 419,679 941,423

– Overlays – 7,224 – 7,224

Sundry receivables – 6,589 – 6,589

4,385,364 6,076,181 2,179,224 12,640,769


Non-statutory payables – 143,205 – 143,205

Net financial assets 4,385,364 5,932,976 2,179,224 12,497,564

Transfer between categories No amounts were transferred between Level 1 and Level 2 during the year ended 30 June 2015 (30 June 2014: $nil).

Reconciliation of Level 3 fair value movementsThe following table presents the changes in Level 3 instruments (financial assets) for the year ended 30 June 2015 and 30 June 2014:

2015 2014

$000s $000s

Investments

Balance at beginning of the year 2,179,224 2,204,963

Transfers from Level 1 to Level 3 20 –

Transfers from Level 3 to Level 2 (929) –

Gains (losses) recognised in the comprehensive operating statement 97,436 (181,951)

Purchases 573,966 343,732

Sales (298,532) (187,520)

Balance at end of the year 2,551,185 2,179,224

Total gains (losses) for the year included in gains (losses) for assets held at end of the year

126,082 (134,492)


Financial Report

(e) Estimation UncertaintyThe investments managed by the VFMC on behalf of WorkSafe include the following unlisted investments which are inherently subject to estimation uncertainty.

2015 2014

$000s $000s

Investments Classes

Infrastructure 645,580 495,965

Private equity 93,992 276,700

Property 969,578 769,893

Insurance 274,065 216,964

Diversified fixed income 77,506 –

Non-traditional strategies 490,444 419,679

Australian equities 20 23

Balance at end of the year 2,551,185 2,179,224

These unlisted investments are not traded in an active market, and hence their fair value at reporting date is based on the price advised by external fund managers or valuations determined by appropriately skilled independent third parties. Where valuation techniques including discounted cash flows, multiples based analysis, comparison with similar transactions and other techniques considered appropriate in the circumstances have been employed in pricing or valuing investments, the valuations are inherently subject to estimation uncertainty. Given this inherent subjectivity, the underlying inputs and assumptions are reviewed on an on-going basis to ensure the valuations reflect the best estimates of the economic conditions at reporting date.

It is reasonably possible that outcomes within the next financial period would be different from the assumptions used in the current valuation models and a material adjustment to the carrying amounts of the related investments could be required.

The disclosures below provide details of the inputs and assumptions used in the current valuation models. 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.

(i) Infrastructure investmentsInfrastructure investments comprise both domestic and international exposure to transport, social, energy and other infrastructure assets through unlisted pooled vehicles and unlisted trusts.

The valuations of unlisted infrastructure investments are primarily based on a discounted cash flow methodology. Assumptions which may be subject to estimation uncertainty include the risk-free discount rates, risk premium, asset utilisation rates (e.g. airline passenger volume and mix at a foreign airport, renewal of existing gas transmission contracts upon expiry at forecast volume and pricing), capital expenditure forecasts, operating costs and other estimated future cash flows dependent on the longer term general economic forecasts and the forecast performance of the applicable underlying assets (e.g. gearing forecasts, expected foreign tax rates, long-term retail price index, counter party risks, group tax relief).

(ii) Private equity investmentsPrivate equity investments comprise both domestic and international exposure to venture capital, buyout, special situations and expansion capital sectors. These investments include externally managed unlisted pooled vehicles and trusts.

The valuation of unlisted private equity investments are primarily based on multiples of earnings, discounted cash flow, market equivalents and other market accepted methodologies. Assumptions which may be subject to estimation uncertainty include the identification of appropriate comparables, estimated future profits, risk-free rate, risk premium, estimated future cash flows and future economic and regulatory conditions.


(iii) Property investmentsProperty investments include externally managed unlisted property trusts with exposure to domestic and international commercial, industrial, retail and development property market. The valuations of unlisted property investments are primarily based on discounted cash flow, capitalisation and direct comparison methodologies. Assumptions which may be subject to estimation uncertainty include the identification of appropriate comparables, estimated future profits, risk-free rate, risk premium, estimated future cash flows and future economic and regulatory conditions.

(iv) Insurance investmentsThe valuation of insurance investments is primarily based on a discounted cash flow methodology. The portfolio of United States life insurance policies is valued by an independent valuer using the actuarial asset share method. The actuarial asset share method is based on the assumptions of probabilities of insured’s mortality and premium payments on the valuation date. Other assumptions and interdependencies in the valuation model include weighted average discount rate applied to the portfolio, life expectancy estimates obtained from qualified providers and expected premium payments based on “back solving” premiums’ optimisation method.

An increase in the weighted average discount rate would decrease the value of the insurance investments. A reduction would result in an increase to the fair value.

An increase in the life expectancy estimates would decrease the value of the insurance investments. A reduction would result in an increase to the fair value.

(v) Fixed interest investmentsFixed interest investments comprise investments in government, government-related, corporate and securitised bonds, loans and other debt instruments, primarily from Australian issuers but with some limited exposure to international issuers, and fixed interest and currency instruments through externally managed unlisted pooled vehicles and segregated portfolios.

The valuations of fixed interest investments are primarily based on third party pricing services, which source prices from brokers and market makers. For less liquid securities, valuation methodologies determined to be appropriate by the managers or their independent valuation agent. Such methodologies applied may include discounted cash flow, amortised cost, direct comparison and others. Assumptions which may be subject to estimation uncertainty include appropriate credit spread and other risk premium, risk-free rate, estimated future cash flows, identification of appropriate comparables, future economic and regulatory conditions.

(vi) Non-traditional strategies investmentsNon-traditional strategies investments comprise investments in hedge funds and other non-traditional investments that do not fit within the definition of other asset classes but which provide diversification benefits to the total portfolio. These investments are made through externally managed unlisted pooled vehicles.

The valuations of non-traditional strategies investments are primarily based on prices quoted on an exchange or traded in a dealer market. For less liquid securities, valuation methodologies are set out by each manager. Depending on the investment, the methodologies applied include discounted cash flow, amortised cost, direct comparison and other market accepted methodologies. The investment manager may choose to appoint independent valuation agents to seek independent price verification. Assumptions which may be subject to estimation uncertainty include appropriate credit spread and other risk premium, future risk free rate, future cash flows, identification of appropriate comparables, future economic and regulatory conditions.


Financial Report

34. Events after Reporting date

As disclosed in Note 7, WorkSafe’s investments and net claims liabilities are impacted by external market and economic factors which result in short-term volatility in WorkSafe’s net result and financial position.

Subsequent to the reporting date, a number of global events have led to significant uncertainties in both the Australian and international financial markets and adversely impacted on the valuation of WorkSafe’s investment portfolio and net claims liabilities.

Based on the latest estimates provided by the VFMC, the unfavourable market conditions prevailing between the reporting date and the date of signing the financial statements have reduced the value of WorkSafe’s investments by approximately $189.7 million. In addition, WorkSafe’s valuation actuary has estimated that post reporting date movements in discount rates have increased WorkSafe’s net claims liabilities by approximately $193.6 million between the reporting date and the date of signing the financial statements.

The effects of the above post reporting date events have not been recognised in the financial statements for the year ended 30 June 2015.

Statement by Acting Chair, Chief Executive and Chief Financial Officer

The attached financial statements of the Victorian WorkCover Authority have been prepared in accordance with Standing Direction 4.2 of 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 2015 and the financial position of the Victorian WorkCover Authority at 30 June 2015.

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 28 August 2015.

John Walter Clare Amies Ian SargentActing Chair Chief Executive Chief Financial Officer

Dated at Melbourne this 28th day of August 2015



Financial Report

OHS Prosecution Outcomes 2014/15

Defendant A.C.N. Result Fine

Tambo Ash Pty Ltd 067 404 602 Pleaded Guilty – Fined without conviction $750.00

VIP Steel Packaging Pty Ltd 095 314 195 Charges Withdrawn $0.00

ACR Roofing Pty Ltd 104 549 966 Pleaded Guilty – Convicted and fined $15,000.00

SPC Ardmona Operations Limited 004 077 105 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Bill Bourchier Pty Ltd 092 162 108 Pleaded Guilty – Fined without conviction $5,000.00

CPK Cabinets Pty Ltd 062 615 347 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

ACN 113 253 946 (formerly Demolition Depot Pty Ltd)

113 253 946 Pleaded Guilty – Convicted and fined $40,000.00

South Eastern Plumbing Services Pty Ltd


Davcom Communications Pty Ltd 153 970 837 No Plea Entered – Convicted and fined $20,000.00

Dotmar EPP Pty Ltd 065 473 681 Pleaded Guilty – Convicted and fined $300,000.00

Dotmar EPP Pty Ltd 065 473 681 Pleaded Guilty – Convicted and fined $75,000.00

Dotmar EPP Pty Ltd 065 473 681 Pleaded Guilty – Convicted and fined $0.00

Yahl Skin & Hide Pty Ltd 064 659 650 Pleaded Guilty – Fined without conviction $5,000.00

Pasta Al Dente (Aust) Pty. Ltd 102 691 743 Pleaded Guilty – Convicted and fined $50,000.00

Pickering Joinery Pty Ltd 164 159 433 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition & Pleaded Guilty – Convicted and fined

$3,000.00

Bruno Engineering Pty Ltd 061 999 040 Pleaded Guilty – Convicted and placed on an undertaking to be of good behaviour with a special condition.

$0.00

Asaleo Care Australia Pty Ltd formerly SCA Hygiene Australasia Pty Limited

004 191 324 Pleaded Guilty – Fined without conviction $7,000.00

BVCI Pty Ltd 108 718 350 Pleaded Guilty – Fined without conviction $62,000.00

Inmode Constructions Pty Ltd 146 680 471 No Plea Entered – Convicted and fined $35,000.00

Andre Calvin John Stephens n/a Pleaded Guilty – Fined without conviction $3,000.00

City Circle Recycling Pty Ltd 088 608 833 Pleaded Guilty – Convicted and fined $425,000.00

Diversion 1 of 2014–15 099 482 961 No Plea Entered – Diversion $0.00

PMP Print Pty Ltd 051 706 499 Pleaded Guilty – Convicted and fined $80,000.00

George Rydell Constructions Pty Ltd 005 338 616 Pleaded Guilty – Fined without conviction $40,000.00

Tooradin Excavations Pty Ltd formerly known as TGS Sand and Soil Pty Ltd


Australian Sustainable Hardwoods Pty Ltd

151 841 431 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Hofmann Engineering Pty Ltd 114 806 969 Enforceable Undertaking with conditions $0.00

Ronisa Giselle Nominees Pty Ltd 005 421 312 Pleaded Guilty – Fined without conviction $7,500.00

Unibond Plumbing Services Pty Ltd 068 697 834 Pleaded Guilty – Fined without conviction $7,500.00

Ivan Deak n/a No Plea Entered (ex parte) – Fined without conviction $2,000.00

Yahgold Pty Limited 007 212 866 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Francis Penhalluriak n/a Pleaded Guilty – Fined without conviction $3,000.00

Appendix 1 Prosecutions




Martin Bourke n/a Pleaded Guilty – Fined without conviction $800.00

Diversion 2 of 2014–15 n/a No Plea Entered – Diversion $0.00

Diversion 3 of 2014–15 n/a No Plea Entered – Diversion $0.00

Pickles Auctions Pty Limited 003 417 650 Pleaded Guilty – Fined without conviction $1,000.00

Glenwood Partners Pty Ltd 110 977 289 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Marvin Engineering (VIC) Pty Ltd 117 267 866 Pleaded Guilty – Fined without conviction $45,000.00

Pacific Materials Handling Pty Ltd 121 189 044 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Megara (Australia) Pty Ltd 006 853 998 Charges Struckout $0.00

BPW Transpec Pty Ltd 006 645 272 Enforceable Undertaking with conditions $0.00

VCON Pty Ltd 054 559 429 Pleaded Guilty – Without conviction, fined and placed on an undertaking to be of good behaviour with a special condition

$0.00

Bestbar (Vic) Pty Ltd 086 622 273 Charges Struckout $0.00

Fraser & Mountain Pty Ltd 092 784 882 Pleaded Guilty – Fined without conviction $40,000.00

Fresh Cheese Co (Aust) Pty Ltd 082 019 387 Pleaded Guilty – Convicted and fined $10,000.00

Grocon Builders (Vic) Pty Ltd 133 299 162 Charges Withdrawn $0.00

Grocon Pty. Limited 006 772 238 Charges Withdrawn $0.00

Red & Blue Scaffolding (Aust) Pty Ltd 006 853 256 Pleaded Guilty – Fined without conviction $15,000.00

Red & Blue Scaffolding (Aust) Pty Ltd 006 853 256 Pleaded Guilty – Fined without conviction $15,000.00

The Scout Association of Australia, Victoria Branch

n/a Enforceable Undertaking with conditions $0.00

Colbrico Pty Ltd 080 097 276 Pleaded Guilty – Convicted, fined and placed on an undertaking to be of good behaviour with a special condition

$0.00

Grocon (Victoria Street) Pty Ltd 120 542 707 Pleaded Guilty – Convicted and fined $250,000.00

Wheelhouse Group Pty Ltd 120 266 006 Pleaded Guilty – Without conviction, fined and placed on an undertaking to be of good behaviour with a special condition

$0.00

Ashton Pty Limited 007 206 680 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Bernie Leen & Sons Pty Ltd 126 062 431 Pleaded Guilty – Without conviction, fined and placed on an undertaking to be of good behaviour with a special condition

$0.00

Sanikleen Pty Ltd 098 037 819 Pleaded Guilty – Convicted and fined $100,000.00

Turi Foods Pty Ltd 057 142 971 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Mountfords Shoes Pty Ltd 005 172 663 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

A .G. & F. Italiano Nominees Pty Ltd 006 404 404 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Makmur Enterprises Pty Ltd 005 380 450 Pleaded Guilty – Fined without conviction $50,000.00





Buildcorp Commercial Pty Ltd 069 558 407 Charges Struckout $0.00

TCB Trans Pty Ltd 096 762 908 Pleaded Guilty – Convicted and fined $100,000.00

Australian Vanlines (Vic) Pty Ltd 080 739 108 Pleaded Guilty – Convicted and fined $15,000.00

Branagan Pty Ltd 086 116 725 Pleaded Guilty – Fined without conviction $7,500.00

A&S Wholesale Fruit & Vegetables Pty Ltd


Loving Earth Pty Ltd 163 488 462 Pleaded Guilty – Convicted and fined $20,000.00

Christopher Anthony Dwyer N/A Pleaded Guilty – Fined without conviction $2,000.00

Greensite Constructions Pty Ltd 099 405 991 Pleaded Guilty – Fined without conviction $7,500.00

Dynamic Possibilities Pty Ltd 145 629 045 Pleaded Guilty – Fined without conviction $12,000.00

Martin De Tours Fretal Lay N/A Pleaded Guilty – Fined without conviction $15,000.00

Visual Exposure Pty Ltd 158 183 076 Pleaded Guilty – Fined without conviction $50,000.00

Colonial Leisure Group Pty Ltd 132 266 061 Pleaded Guilty – Fined without conviction $15,000.00

Frankipile Australia Pty Ltd 000 842 240 Pleaded not Guilty – Convicted and fined $350,000.00

Vibro-Pile (Aust.) Pty Ltd 006 103 135 Pleaded not Guilty – Convicted and fined $100,000.00

Rapidcrete Pty Ltd 104 620 322 Enforceable Undertaking with conditions $0.00

Designer Built Homes Pty Ltd 052 432 274 Pleaded Guilty – Convicted and fined $12,000.00

Freeney Fabrications Pty Ltd 142 642 180 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Lance Darren Robertson n/a Pleaded not Guilty – Convicted and fined $50,000.00

Shangri–La Construction Pty Ltd 130 534 244 Pleaded Guilty – Fined without conviction $20,000.00

BKD Precast Pty Ltd 124 633 021 Pleaded Guilty – Fined without conviction $30,000.00

Now Services Pty Ltd 146 204 382 No Plea Entered – Convicted and fined $60,000.00

American Homes Pty Ltd 074 159 989 No Plea Entered – Convicted and fined $60,000.00

Crawford Containers Pty Ltd 118 558 231 Pleaded Guilty – Convicted and fined $35,000.00

Caruso Creations Pty Ltd 165 173 286 Enforceable Undertaking with conditions $0.00

Lotus Folding Walls and Doors Pty Ltd 007 087 523 Charges Withdrawn $0.00

Bilal El-Mir n/a Pleaded Guilty – Fined without conviction $7,000.00

Robert W Gill & Sons Pty Ltd 123 307 193 Pleaded Guilty – Fined without conviction $96,683.00

Rosalino's Food Manufacturing Pty Ltd 084 451 329 Pleaded Guilty – Convicted and fined $20,000.00

Giuseppe Sarlo N/A Pleaded not Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Nature's Gift Australia Pty Ltd 065 998 414 Enforceable Undertaking with conditions $0.00

Prem Anil Chand N/A Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00


MSMJ Pty Ltd 125 491 081 Pleaded Guilty – Convicted and fined $13,750.00

MSMJ Pty Ltd 125 491 081 Pleaded Guilty – Fined without conviction $2,000.00

Glen Binyon n/a Pleaded Guilty – Fined without conviction $0.00

Travis John Lindorff n/a Pleaded Guilty – Fined without conviction $7,000.00




Mertikas Holdings Pty Ltd 059 433 859 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00


Laurent Boulangerie Pty. Ltd. 084 334 752 Pleaded Guilty – Convicted and fined $60,000.00

Resource Recovery Victoria Pty Ltd 103 816 146 Pleaded Guilty – Convicted and fined $450,000.00

Geotech Pty Ltd 114 336 515 Enforceable Undertaking with conditions $0.00

Hansen Yuncken Pty Ltd 063 384 056 Enforceable Undertaking with conditions $0.00

Kinross Farm Services Pty Ltd 133 380 819 Pleaded Guilty – Fined without conviction $15,000.00

D.J. Baker & Son Pty. Ltd. 006 104 427 Pleaded Guilty – Convicted and fined $20,000.00

Wilken Storage Pty Ltd 075 028 509 Pleaded not Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Complete Metal Works Pty Ltd 144 654 802 Pleaded Guilty – Convicted and fined $20,000.00

Hacer Group Pty Ltd 091 032 530 Charges Withdrawn $0.00

Associated Rigging Australia Pty Ltd 068 877 752 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00


Image Linemarking Pty Ltd 082 074 708 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Airlinx Heating & Cooling Supply Pty Ltd


Frewstal Pty Ltd 004 967 800 Pleaded Guilty – Convicted and fined $250,000.00

Kingsway Caravans Pty Ltd 072 600 205 Pleaded Guilty – Fined without conviction $3,000.00

Time to Start Pty Ltd 061 928 390 Pleaded Guilty – Fined without conviction $5,000.00

Total Homes (Vic) Pty Ltd 060 718 041 Pleaded Guilty – Fined without conviction $5,000.00

Denpak Pty Ltd 007 149 046 Pleaded Guilty – Fined without conviction $23,000.00

Zacem Investments Pty Ltd 106 333 108 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Calco Timbers Pty Ltd 114 450 841 Pleaded Guilty – Without conviction, placed on an undertaking to be of good behaviour with a special condition

$0.00

Star Track Express Pty Limited 001 227 890 Pleaded Guilty – Convicted and fined $70,000.00

Brooklands Motel Mornington Pty. Ltd. 106 095 970 Pleaded Guilty – Fined without conviction $500.00

Australian Commercial Doors Pty Ltd 096 630 296 Charges Withdrawn $0.00



Compensation Prosecution Outcomes 2014/15

Defendant A.C.N. Result Fine Restitution

Diversion 4 of 2014–15 n/a Diversion Order to pay the VWA $10,000 $0.00 $10,000.00

GOVENDER, Shanitha n/a Convicted, 2 year adjourned undertaking with condition to make restitution, costs & court fund ($1,000) payments

$0.00 $15,336.20

PRYDE, Dianne n/a Without conviction, a CCO for 12 months and perform 75 hours of unpaid community work (no order made to pay restitution & costs as Accused made payment prior to entering her plea of guilty)

$0.00 $21,984.00

HOSNY, Joseph n/a Convicted and sentenced to a term of imprisonment of 6 months, wholly suspended for 24 months, and ordered to pay restitution and costs

$0.00 $49,787.20

JENKINS, Daniel n/a Convicted, 2 year adjourned undertaking with condition to make restitution, costs & court fund ($2,000) payments

$0.00 $3,930.89

DAVEY, Patrick n/a Convicted and sentenced him to 7 months imprisonment, wholly suspended for 12 months and ordered to pay restitution of $95,727.

$0.00 $95,727.00

VICK, Kimberley Ann n/a Warrant to Arrest cancelled. Charges struck out/withdrawn

$0.00 $0.00

WOOD, John Trevor n/a On charge 1, he was convicted and placed upon an adjourned undertaking for 12 months with a special condition that he do all things necessary to enable VWA to lodge a caveat over a property in which he has an interest, to secure the restitution payment. charges 2,3 & 4 was sentenced to six months imprisonment wholly suspended for 12 months

$0.00 $97,113.60

MAZUMDAR, Pralay n/a Convicted and sentenced to a term of imprisonment of 6 months, wholly suspended for 9 months and fined $5,000. (Resolved between parties to pay $44,539.78 restitution and costs of $3,677.)

$5,000.00 $44,539.78

NAGI, Fayez n/a Convicted and sentenced to a term of imprisonment of 6 months wholly suspended for 18 months, imposed a fine of $3,000 and ordered restitution of $36,761.96

$3,000.00 $36,761.96

BRENNAN, Sean n/a Charges struckout – withdrawn – paid in full $0.00 $0.00

MTL Transport & Removals Pty Ltd 150 072 101 Convicted and fined $500 and ordered to pay restitution of $4595.40 plus statutory costs

$500.00 $4,595.40

CASSON, James n/a Charges dismissed and costs ordered against WorkSafe

$0.00 $0.00

Verge Corp Pty Ltd 095 813 817 Convicted and fined $5000 and ordered to pay $1000 costs

$5,000.00 $0.00

ROTUNDO, Joseph n/a Convicted and fined $3,000 $3,000.00 $10,000.00

WILLIAMS, William n/a Convicted and sentenced to 3 months imprisonment, wholly suspended for 12 months. Ordered to pay restitution of $21,509 plus costs

$0.00 $21,509.00


Enforceable Undertakings 2014/15

BPW Transpec Pty Ltd On 12 September 2014 BPW Transpec Pty Ltd entered into an Enforceable Undertaking with WorkSafe in relation to an incident which occurred at BPW’s Laverton North workplace on 14 October 2013.

Caruso Creations Pty Ltd On 25 February 2015 Caruso Creations Pty Ltd entered into an Enforceable Undertaking with WorkSafe in relation to an incident on 23 April 2014 where a person on trial employment suffered injuries as a result of being struck by a stump grinder.

Geotech Pty Ltd On 23 April 2015 Geotech Pty Ltd ACN: 114 336 151 entered into an Enforceable Undertaking with WorkSafe in relation to an incident that occurred on 30 January 2013 when a shotcreter employed by Geotech Pty Ltd was injured when an earth and rock wall collapsed at a construction site in Hawthorn.

Hansen Yuncken Pty Ltd On 23 April 2015 Hansen Yuncken Pty Ltd ACN: 063 384 056 entered into an Enforceable Undertaking with WorkSafe in relation to an incident that occurred on 4 June 2013 at a construction site at Deakin University when a 3.9 metre rod, installed as a temporary handrail, fell 12 metres into an exclusion zone. below.

Hofmann Engineering Pty Ltd On 15 September 2014 Hofmann Engineering Pty Ltd entered into an Enforceable Undertaking with WorkSafe in relation to an incident which occurred at Hofmann’s Cheltenham workplace on 9 July 2013.

Nature’s Gift Australia Pty Ltd On 27 March 2015 Nature’s Gift (ACN 065 998 414) entered into an Enforceable Undertaking with WorkSafe in relation to an incident that occurred on 16 November 2012 where an employee sustained injuries to her hand whilst operating a machine referred to as a tray unloader.

Rapidcrete Pty Ltd The accused company provides concrete pumping services. On 19 June 2012 an employee was injured when he was pinned between the side of a mobile concrete pump vehicle and a retracting rear outrigger which had been activated by another employee, who was unaware that the employee was in the trapping space. The employee suffered serious leg injuries. The accused company entered into an enforceable undertaking pursuant to section 16 of the OHS Act.

The Scout Associate of Australia, Victoria Branch

On 19 November 2014 The Scout Association of Australia, Victorian Branch entered into an Enforceable Undertaking with WorkSafe in relation to an incident which occurred on 12 June 2013, when a volunteer had his thumb and forefinger severed whilst using the wood splitter.

2014/15 Statistics

OHS Prosecution success rate 93%

OHS Investigations proceeding to legal review 66%

OHS Investigations proceeding to prosecution within 12 months 83%

Number of OHS prosecutions commenced (counted by defendant) 114

Number of compensation prosecutions commenced (counted by defendant)

9

Number of completed OHS prosecutions (counted by defendant) 121 Excludes Committal outcomes Includes successful and unsuccessful prosecutions

Number of completed ACA and WIRCA prosecutions (counted by defendant)

16 Excludes Committal outcomes

Number of OHS Cautions 42

Number of Compensation Cautions 30

Number of PI Code of Conduct Cautions 3

Total Cautions 75



Requests to WorkSafe for a prosecution to be brought pursuant to section 131 of the Occupational Health and Safety Act 2004 (OHS Act)Where WorkSafe has not brought prosecution proceedings within six months of an alleged offence against the OHS Act, a person may request that WorkSafe bring a prosecution pursuant to section 131(1) of the OHS Act.

In 2014/15, WorkSafe received 11 requests for a prosecution to be brought for an alleged offence against the OHS Act.

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.

• WorkSafe determined to commence a prosecution in relation to one of these matters• WorkSafe determined not to commence a prosecution in relation to seven of these matters• Decision is pending in three matter

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 Director of Public Prosecutions (DPP) for advice on whether a prosecution should be brought (section 131(4)):

Ten matters were referred to the DPP in 2014/15. Of the ten matters:

• The DPP recommended not to prosecute in five matters• The DPP recommended a prosecution in one matter• Advice is pending in four matters

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 2014/15, WorkSafe received one request for prosecution under section 242AC of the AC Act. WorkSafe received no requests to bring a prosecution pursuant to section 252AA of the AC Act or pursuant to sections 577 or 607 of the WIRC Act.


Appendix 2 Agent Performance Results

This appendix includes data on Agent performance which WorkSafe uses to assess the performance of its Authorised Agents for remuneration purposes and for general performance management. The information is provided to inform employers and the public on aspects of the performance of WorkSafe 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.

As 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 the trend performance in this Appendix has been modified to reflect the market share allocation as at 30 June 2015.

Claims Management and Return to Work

Duration – % of workers on weekly payments at1:

Return to Work 13 weeks 26 weeks 52 weeks 134 weeks

Agent

% not returning to work within 6 months2 Result Trend Result Trend Result Trend Result Trend

Allianz 18.70% 49.40% Deteriorated 28.00% Deteriorated 15.60% Improved 2.80% Steady

CGU 20.09% 44.60% Steady 26.40% Steady 15.50% Steady 2.50% Improved

GBS 19.80% 44.80% Steady 24.90% Steady 15.10% Steady 2.50% Steady

QBE 18.44% 47.70% Improved 26.90% Improved 17.60% Steady 3.00% Steady

Xchanging 19.80% 48.10% Deteriorated 26.50% Deteriorated 14.20% Improved 2.10% Improved

Scheme 19.39% 46.80% Steady 26.60% Steady 15.60% Improved 2.60% Improved

1 a lower percentage represents higher performance.

2 In 2014/15 WorkSafe identified a small number of claims were included as workers returning to work, where workers had ceased benefits without a recorded return to work. Our 2014/15 results now exclude these records. This is likely to impact previously published results for 2012/13 and 2013/14 for this measure. Up to 48 claims for 2012/13 and up to 55 claims for 2013/14 have been included as a return to work, overstating the published results. The error is assessed as not having a material impact on the results.

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

Worker Levels of Service Employer Levels of ServiceValid Conciliation

Non Compliance Complaints

AgentService

attribute score TrendService

attribute score Trend

Number of valid

complaints

Number of valid complaints per

$10m billed premium

Allianz 76.4% Improved 83.3% Steady 7 0.1

CGU 76.6% Steady 85.0% Steady 5 0.1

GBS 73.0% Improved 82.4% Steady 5 0.1

QBE 75.7% Improved 83.3% Improved 3 0.1

Xchanging 79.5% Improved 86.3% Steady 4 0.1

Scheme 76.2% Improved 84.1% Steady 24 0.1

For 2014/15, the Agent component of the employee/worker score moved from biannual to monthly surveying to improve the service focus by our agents to injured workers and to bring it in line with our other surveys. Our analysis shows this has increased the agent employee/worker service score by up to 2 agent percentage points in 2014/15 in addition to actual service improvements. This increase has been factored into future target setting.

Worker and employer service Trend information




Timelines % 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

Agent Result Trend Result Trend Result Trend

Allianz 99.2% Steady 96.3% Improved 7 Improved

CGU 99.3% Steady 96.3% Steady 7 Improved

GBS 98.1% Steady 94.3% Steady 7 Improved

QBE 97.8% Steady 95.2% Improved 8 Improved

Xchanging 98.6% Steady 96.0% Improved 8 Improved

Scheme 98.7% Steady 95.7% Improved 7 Improved

Timeliness of Processing Provider AccountsTimeliness of Employer

Notification to Agent

% paid within 30 days of receipt of invoice % paid within 70 days of service % received within 12 days

Agent Result Trend Result Trend Result

Allianz 98.7% Steady 85.2% Steady 92.2%

CGU 99.2% Steady 85.5% Steady 93.8%

GBS 98.7% Steady 85.8% Improved 94.5%

QBE 98.4% Steady 86.0% Steady 94.9%

Xchanging 99.2% Steady 87.4% Steady 93.7%

Scheme 98.9% Steady 85.9% Steady 93.8%


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 days 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

Agents operating under an instrument of appointment which WorkSafe issues 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 insurance and the administration of claims. The Agent remuneration includes performance based components. It also allows for the reduction of an Agent’s fees upon the occurrence of an event such as a failure to meet performance criteria.



Definitions

Measure Definition

Return to Work Index The proportion of injured workers recorded as not working on the date six months after lodgement of their claim (Insurer Received date). Measure only includes claims received between 1 December 2013 to 30 November 2014 (inclusive), with greater than 10 days of weekly compensation paid.

Duration on weekly payments at 13, 26 and 52 weeks

Duration is measured as the number of workers receiving 13/ 26/ 52 weeks of compensation expressed as a proportion of workers who have received at least 20 days of compensation. See note (1).

Duration on weekly payments at 134 weeks

Duration is measured as the number of workers who have exceeded 134 weeks of compensation for claims received on or after 1 September 2009 expressed as a proportion of workers who have received at least 20 days of compensation for claims reported between 1st September 2010 and 31 August 2012 inclusive. See note (1).

Injured Worker Levels of Service from the Agent

The Injured Worker Survey is measured against service attributes, that is, the average performance across nine service dimensions. These figures are based on an independent survey of approximately 417 workers a month (i.e. 5,000 a year) who received weekly benefits within the three month period leading up to the survey month. See note (2)

Employer Levels of Service from the Agent

The Employer Survey is measured against service attributes, that is, the average performance across 12 service dimensions. These figures are based on an independent survey of 1,200 employers who had at least one claim that received any type of payment or that was entitled to weekly compensation in the three months prior to the survey (which is conducted on a monthly basis throughout the year). See note (3).

Valid Conciliation Non Compliance Complaints

This measure shows the number of valid complaints which were made against the Agent and have been registered on the WorkSafe Conciliation Compliance Database between 1 July 2014 and 30 June 2015.

The measure is also expressed as the number of complaints per $10 million of billed premium to allow for Agent market share.

The total number of disputes referred for conciliation between 1 July 2014 and 30 June 2015 as recorded on the WorkSafe computer system is 15,137.

Timeliness of weekly payments direct to injured workers

The timeliness of payment of weekly payments direct to injured workers is assessed as the percentage of payments made within 7 calendar days from a notification of payment requirement being received by the Agent. See note (4).

Timeliness of medical reimbursements direct to injured workers

The timeliness of payment of medical reimbursements direct to injured workers is assessed as the percentage of payments made within 11 calendar days of a request for payment being received by the Agent from the injured worker. See note (4).

Timeliness of Employer reimbursements

The timeliness of reimbursements of weekly payments to employers is assessed as the number of days it takes to make 75% of payments. See note (4).

Timeliness of processing provider accounts – % paid within 30 days of invoice

The timeliness of payment to providers for treatment provided to injured workers is assessed as the percentage of accounts paid within 30 calendar days of receipt by the Agent. See note (4)

Timeliness of processing provider accounts – % paid within 70 days of service

The timeliness of payment to providers for treatment provided to injured workers is assessed as the percentage of accounts paid within 70 calendar days of service provided to the injured worker. See note (4)

Timeliness of employer notification to Agent

The proportion of claims, with 20 days lost time duration or more, received by the Agent from the employer with remuneration greater than $1 million and within 12 days of the employer receiving the claim from an injured worker. Measure includes claims received between 1 July 2013 and 30 April 2014.

Notes

(1) This assessment takes into account the differing mix of claims that Agents manage.

(2) The survey is accurate to within +/-3% at 95% confidence level for each Agent.

(3) The survey is accurate to within +/-5% at 95% confidence level for each Agent.

(4) There may be instances where the Agent is reliant on further information from third parties to make a payment.

Other than the Injured Worker and Employer surveys, audits and timeliness of employer notification to Agent, all assessments were made at 30 June 2015.


Market Share as at 30 June 2015

Agent % of Policies % of Remuneration % of Premium

Allianz 29.5% 24.1% 22.4%

CGU 26.6% 28.5% 27.4%

GBS 14.2% 16.1% 19.0%

QBE 17.6% 17.8% 17.4%

Xchanging 12.2% 13.5% 13.7%

Scheme 100.0% 100.0% 100.0%

Notes

Number of 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 2014/15 year for employers managed by each agent.

Due to rounding, market share may not equate to 100%.

Agent name Full description

Allianz Allianz Australia Workers' Compensation (Victoria) Limited

CGU CGU Workers Compensation (Vic) Limited

GBS Gallagher Bassett Services Workers Compensation Vic Pty Ltd

QBE QBE Workers Compensation (VIC) Limited

Xchanging Xchanging Integrated Services Victoria Pty Ltd trading as Xchanging



Overview

Self-insurers are part of the WorkSafe 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. The applicant must be a body corporate and not a subsidiary of another body corporate, other than a foreign company.

As at 30 June 2015, there were 38 self-insurers operating in Victoria, representing approximately 8 per cent of total scheme remuneration.

Applications and approvals during 2014/15

Applications 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); and • any other matters that WorkSafe thinks fit.

Approval as a self-insurer is subject to certain prescribed terms and conditions specified in Ministerial Orders, as well as any terms and conditions determined by WorkSafe.

Initial approval has effect for a period of three years. Renewal of approval is for a period of four years, unless WorkSafe, in its discretion, determines that approval has effect for six years. This longer period of approval is designed to reward good performance in the area of health and safety, injury management and return to work.

No new self-insurers commenced during 2014/15.

The following corporations were successful in their application for renewal of approval to self-insure in Victoria during 2014/15:

(i) Toyota Motor Corporation of Australia Limited effective from 30 September 2014 for a period of four years.

(ii) Qantas Airways Ltd effective from 1 December 2014 for a period of four years.

(iii) Crown Resorts Limited effective from 10 December 2014 for a period of four years.

(iv) Mars Australia Pty Ltd effective from 31 December 2014 for a period of six years.

(v) Wesfarmers Limited effective from 31 January 2015 for a period of four years.

(vi) Toll Holdings Limited effective from 13 February 2015 for a period of four years.

(vii) PaperlinX Ltd effective from 17 April 2015 for a period of six years.

(viii) Brickworks Limited effective from 30 April 2015 for a period of four years.

(ix) Paper Australia Limited effective from 31 May 2015 for a period of four years.

(x) Alcoa of Australia Limited effective from 30 June 2015 for a period of four years.

(xi) Amcor Ltd effective from 30 June 2015 for a period of four years.

(xii) Primary Health Care Limited effective from 31 August 2015 for a period of six years.

Appendix 3 Self-Insurance Report


Return to Work Rate

In 2014/15, self-insurers achieved a sustained return to work rate of 82.7 per cent, which represents a slight deterioration on the 2013/14 result of 85.3 per cent.

Service

WorkSafe’s Injured Workers Survey includes injured workers covered by self-insurers. In 2014/15, the overall score, which is the average of prompted satisfaction and service score, was 63.7 per cent for all self-insurers. While this is consistent with the prior year, the score is lower than the equivalent satisfaction and service average for WorkSafe agents (70 per cent1).

1 As self-insurers use a different measure of service to that of WorkSafe agents, it is not possible to make a direct comparison between the respective 2014/15 service results. This average has been calculated to provide an approximate comparison only.

List of self-insurers as at 30 June 2015

1. Alcoa Australian Holdings Pty Ltd ALCOA AUSTRALIA ROLLED PRODUCTS PTY LIMITED

2. Alcoa of Australia Limited ALCOA OF AUSTRALIA LIMITED

3. Amcor Limited AMCOR FLEXIBLES (AUSTRALIA) PTY LTD

AMCOR FLEXIBLES (DANDENONG) PTY LTD

AMCOR FLEXIBLES (PORT MELBOURNE) PTY LTD

AMCOR LTD

PACKSYS PTY LTD

4. Arrium Limited AUSTUBE MILLS PTY LTD

ONESTEEL RECYCLING PTY LIMITED

ONESTEEL REINFORCING PTY LIMITED

ONESTEEL TRADING PTY LIMITED

ONESTEEL WIRE PTY LIMITED

SSX SERVICES PTY LIMITED

5. Australia and New Zealand Banking Group Ltd AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

6. BHP Billiton Limited BHP BILLITON LIMITED

7. 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

8. BP Australia Group Pty Ltd B P AUSTRALIA PTY LTD

CENTREL PTY LTD

ELITE CUSTOMER SOLUTIONS PTY LTD

NO. 1 RIVERSIDE QUAY PROPRIETARY LIMITED

9. Brambles Limited BRAMBLES INDUSTRIES LIMITED

CHEP AEROSPACE PTY LTD

CHEP AUSTRALIA LIMITED

CHEP PALLECON SOLUTIONS PTY LTD




10. Brickworks Limited 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

11. Carter Holt Harvey Building Products Pty Limited

CARTER HOLT HARVEY LVL PTY LIMITED

CARTER HOLT HARVEY PINEPANELS PTY LIMITED

CARTER HOLT HARVEY WOODPRODUCTS (CENTRAL AND NORTHERN REGIONS) PTY LIMITED

CARTER HOLT HARVEY WOODPRODUCTS AUSTRALIA PTY LIMITED

12. Crown Resorts Limited BETFAIR PTY LIMITED

CAPITAL CLUB PTY. LTD.

CROWN MELBOURNE LIMITED

CROWN RESORTS LIMITED

13. CSR Limited BRICKS AUSTRALIA SERVICES PTY LIMITED

CSR LIMITED

14. ExxonMobil Australia Pty Ltd ESSO AUSTRALIA PTY LTD

MOBIL EXPLORATION & PRODUCING AUSTRALIA PTY LTD

MOBIL OIL AUSTRALIA PTY LTD

MOBIL REFINING AUSTRALIA PTY. LTD.

15. Ford Motor Company of Australia Limited FORD MOTOR COMPANY OF AUSTRALIA LIMITED

16. Goodman Fielder Pty Limited GOODMAN FIELDER CONSUMER FOODS PTY LIMITED

QUALITY BAKERS AUSTRALIA PTY LIMITED

17. Hanson Australia (Holdings) Proprietary Limited HANSON CONSTRUCTION MATERIALS PTY LTD

HANSON LANDFILL SERVICES PTY LTD

HYMIX AUSTRALIA PTY LIMITED

18. Inghams Enterprises Pty Limited INGHAMS ENTERPRISES PTY. LIMITED

19. Mars Australia Pty Ltd MARS AUSTRALIA PTY LTD

20. Melbourne Water Corporation MELBOURNE WATER CORPORATION

21. Mondelez Australia Holdings Pty Limited MONDELEZ AUSTRALIA PTY LTD

22. Myer Holdings Limited FSS RETAIL PTY LTD

MYER PTY LTD

SASS & BIDE PTY LTD

SASS & BIDE RETAIL PTY LTD

WAREHOUSE SOLUTIONS PTY LTD

23. Paper Australia Pty Ltd PAPER AUSTRALIA PTY LTD

24. PaperlinX Limited PAPERLINX AUSTRALIA PTY LTD

25. Philip Morris (Australia) Limited PHILIP MORRIS LIMITED



26. Primary Health Care Limited HEALTH COMMUNICATION NETWORK 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

IDAMENEO (NO. 123) PTY LTD*

27. 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

28. Robert Bosch (Australia) Proprietary Ltd ROBERT BOSCH (AUSTRALIA) PROPRIETARY LIMITED

29. Royal Automobile Club of Victoria (RACV) Limited

EPAC SALARY SOLUTIONS PTY LTD

INTELEMATICS AUSTRALIA PTY LIMITED

R.A.C.V. FINANCE LIMITED

RACV GROUP SERVICES PTY LTD

RACV INSURANCE SERVICES PTY LTD

RACV ROAD SERVICE PTY LTD

RACV SALES AND MARKETING PTY LTD

RACV SERVICES PTY. LTD.

ROYAL AUTOMOBILE CLUB OF VICTORIA (RACV) LIMITED

30. The 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

31. Toll Holdings Limited TOLL HOLDINGS LIMITED

TOLL IPEC PTY LTD

TOLL NORTH PTY LTD

TOLL TRANSPORT PTY. LIMITED




32. Toyota Motor Corporation Australia Limited TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED

33. Transfield Services Limited APP CORPORATION PTY LIMITED

BROADSPECTRUM AUSTRALIA PTY LTD

ICD (ASIA PACIFIC) PTY LIMITED

O.G.C. SERVICES PTY LTD

TRANSFIELD SERVICES (AUSTRALIA) PTY LIMITED

34. Unilever Australia (Holdings) Pty Ltd TEA TOO PTY. LTD.

UNILEVER AUSTRALIA (HOLDINGS) PROPRIETARY LIMITED

UNILEVER AUSTRALIA LIMITED

UNILEVER AUSTRALIA SUPPLY SERVICES LIMITED

UNILEVER AUSTRALIA TRADING LIMITED

35. Viva Energy Australia Group Ltd VIVA ENERGY AUSTRALIA LTD

VIVA ENERGY REFINING PTY LTD

36. Wesfarmers Limited AUSTRALIAN VINYLS CORPORATION 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 – NAA PTY LTD

INTEGRATED SAFETY TRAINING 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

TYRE AND AUTO PTY LTD

WESFARMERS CHEMICALS ENERGY & FERTILISERS LIMITED

WESFARMERS FINANCE PTY LTD

WESFARMERS INSURANCE INVESTMENTS PTY LTD

WESFARMERS KLEENHEAT GAS PTY LTD

WESFARMERS LIMITED



37. Westpac Banking Corporation ASGARD WEALTH SOLUTIONS LTD

BT FINANCIAL GROUP PTY LIMITED

HASTINGS MANAGEMENT PTY LIMITED

RAMS FINANCIAL GROUP PTY LIMITED

WESTPAC BANKING CORPORATION

WESTPAC FINANCIAL CONSULTANTS LIMITED

38. Woolworths Ltd LANGTONS PTY. LTD.

PHILIP LEONG STORES PTY LIMITED

QUEENSLAND PROPERTY INVESTMENTS PTY LTD

RETAIL FM PTY LTD

SARA APPAREL LIMITED

WOOLSTAR PTY. LIMITED

WOOLWORTHS LTD

* does not have an ABN as trustee for ARTLU UNIT TRUST



Board 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 five Directors, each of whom is appointed by the Governor in Council. One of the Directors is also the 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 exercises, 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 set by the Board.

Directors

The Directors currently serving on the Board are:

John Walter (Acting Chair) LLB (Hons), MBA

Mr Paul Kirk BEc

Mr Ross McCann BEng (Chem) (Hons) Mr Neil Lucas PSM

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

Directors whose term expired or resigned during 2014/15:

Dr Geoff Brooke

Ms Jane Bell

Mr David Krasnostein

Ms Denise Cosgrove

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

The Directors are 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.

Directors are required to complete a declaration of private interests upon appointment and in July of each year that they are a director.

Conflicts of interest are overcome, where warranted, by Directors declaring their interests and abstaining from voting at WorkSafe Board meetings.

Appendix 4 Governance and Compliance


Board Committees

The Board is supported by three committees chaired by non-executive Directors.

Audit Committee*WorkSafe Board Members of the Audit Committee as at 28 August 2015: Paul Kirk (Chair), John Walter, Neil Lucas and Ross McCann. Paul Shannon is appointed as an independent external member. Clare Amies 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; and• WorkSafe’s compliance with relevant laws, regulations, standards and codes including the Financial Management Act

1994, Standing Directions of the Minister for Finance under the Financial Management Act 1994.

Risk Committee* WorkSafe Board Members of the Risk Committee as at 28 August 2015: Paul Kirk (Chair), John Walter, Neil Lucas and Ross McCann. Clare Amies 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; and

• WorkSafe compliance with relevant laws, regulations, standards and codes including the Prudential Insurance Standard for Victorian Government Insurance Agencies, the VFMC and Centralised Investment Model, the Victorian Government Risk Management Framework and Insurance Attestation.

* The previously convened Audit and Risk Management Committee was dissolved on 30 June 2015, separating into two committees, an Audit Committee and a Risk Committee.

Remuneration CommitteeWorkSafe Board Members of the Remuneration Committee as at 28 August 2015: John Walter (Chair), Paul Kirk, Neil Lucas and Ross McCann. Clare Amies attends.

The WorkSafe Board Remuneration Committee considers relevant remuneration matters.

Talent Committee (TalentCo)The TalentCo was a joint WorkSafe/TAC Committee and provided assistance and governance on senior leadership development, and executive succession planning and development for WorkSafe and TAC.

TalentCo was dissolved on 26 June 2015. Talent management strategies developed by TalentCo are now incorporated in the WorkSafe Board forward plan.

Financial and Investment Strategies Committee (FISCO)FISCO was a joint WorkSafe/TAC Committee.

FISCO was responsible for:

• making recommendations at least annually to the Boards on TAC and WorkSafe’s investment objectives and consistent with the Risk Preference Statements issued by the Minister

• monitoring compliance and makes recommendations to the Boards regarding balance sheet management, pricing and other policies required under the Prudential Insurance Standard

• reviewing the operational performance of the VFMC and monitors compliance with the Prudential Investment Standard

• monitoring the success of the VFMC investment strategy by reviewing fund performances compared to objectives, long-term targets and peer benchmarks

• monitoring the ongoing health of WorkSafe’s and TAC’s balance sheets and the long term financial sustainability of the schemes.

FISCO was dissolved on 26 June 2015, and its responsibilities were transferred to the Risk Committee.



Business Information Systems Committee (BISCO)BISCO was a joint WorkSafe/TAC Committee and provided stewardship and governance of the combined business systems applications and information technology infrastructure portfolios for TAC and WorkSafe.

BISCO was dissolved on 26 June 2015. Its responsibilities are being transferred to the IT Governance Committee and will be jointly chaired by the TAC Chief Executive Officer and the WorkSafe Chief Executive commencing in September 2015.

The Board will retain oversight of information technology governance by the incorporation of key milestone and outcomes delivery into the WorkSafe Board forward plan.

Risk Management

Compliance with the Victorian Government Risk Management Framework and ProcessesStanding Direction 4.5.5 of the Financial Management Act 1994 requires public sector agencies to provide an annual attestation of compliance with the risk management process requirements set out in the Victorian Government Risk Management Framework.

The Audit Committee of WorkSafe has considered the Statement by the Chief Executive on compliance with the Victorian Government Risk Management Framework and the Executive Team’s internal risk attestation.

On this basis, I certify on behalf of the Board of WorkSafe that WorkSafe has complied with the Ministerial Standing Direction 4.5.5 – Risk Management Framework and processes; and:

• has risk management processes in place consistent with the Australia/New Zealand Risk Management Standard: AS/NZ 31000:2009

• has an internal control system in place that enables the executive to understand, manage and satisfactorily control risk exposure

• the Audit and Risk Management Committee and the Executive Team have critically reviewed the risk profile of WorkSafe during the period 1 July 2014 to 30 June 2015

• has complied with the Victorian Government Insurance Management Policy.

John Walter Acting Chair WorkSafe

Date signed: 28 August 2015


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 Act 2012 and the Freedom of Information Act 1982. It also includes voluntary disclosure of additional regulatory compliance information.

Manner of Establishment and Relevant MinisterWorkSafe 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 November 2014, with responsibility to manage Victoria’s workplace health and safety laws, and the accident compensation scheme.

Accountability of WorkSafePursuant 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 DirectionsNo Ministerial Directions were given under section 495 during the financial year 2014/15.

WorkSafe’s Objectives, Functions and PowersWorkSafe’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 the Occupational Health and Safety Act 2004.

These Acts are available from WorkSafe’s website located at worksafe.vic.gov.au.

WorkSafe’s Role in the CommunityWorkSafe is the regulator of occupational health and safety and the accident compensation scheme in Victoria and its objectives and functions include:

• providing insurance to employers • paying 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 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.

Access to InformationWorkSafe discloses a large volume of information online, by print publishing, and through its metropolitan and regional offices. It also provides information services in person and/or by phone, through its Advisory Services, annual report, website, library at 222 Exhibition Street, and any of its or its authorised agents’ offices across Victoria.



The Freedom of Information Act 1982In addition to organisational structure, governance and compliance, this Appendix shows how WorkSafe makes information readily available to workers and the public in accordance with Part II of the Freedom of Information Act 1982.

The Freedom of Information Act 1982 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 Freedom of Information Act 1982 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 Freedom of Information Act 1982, applicants may use the online form provided at www.foi.vic.gov.au.

In 2014/15 WorkSafe received 2,705 requests. The Freedom of Information Commissioner received 14 applications for review and complaints and the Victorian Civil and Administrative Tribunal received nine appeals, while another was carried over from the previous year. Of these appeals four were affirmed or dismissed and one withdrawn. The remaining five are current and carried over into the next financial year.

Details on the outcome of reviews by the FOI Commissioner and the Victorian Civil and Administrative Tribunal are available on the FOI Commissioner’s website and annual report.

The Freedom of Information Act 1982 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.

Injured workers may access information in relation to their claim under section 9 of the Workplace Injury Rehabilitation and Compensation Act 2013, as part of the normal claim management and administration directly from the agents or their employer, including a self-insurer, or in accordance with other provisions of the Workplace Injury Rehabilitation and Compensation Act 2013.

In 2014/15 18,875 requests for information in relation to workers’ injury claims were received by agents under the Workplace Injury Rehabilitation and Compensation Act 2013.

Organisation and functionsInformation about WorkSafe, its structure, business units, authorised agents, functions, legislation administered by the WorkSafe scheme 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 on the WorkSafe website.

Material or publications, including policies, manuals, guidelines, codes of practice, brochures and other materials are available on the website at the relevant section (e.g. injury claims management related guidelines and information under injury and claims) or the publications section by using key words on specific topic or document. Legislation administered by WorkSafe is also available on its website.


Categories of DocumentsRecords are managed using a cataloguing system called TRIM, 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 Records 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 Services• Injury claims (managed by authorised agents)• Insurance, including Self Insurance, and Premium• Investigations• Legislation, and policy• Legal and litigation• Licensing application, renewals• Policies, procedures, manuals, including the Online Claims Manual• Programs or events (e.g. WorkSafe Week 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 SafetyWorkSafe is responsible for improving health, safety and welfare in the workplace 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 at WorkSafe’s office in Exhibition Street or at one of its regional offices.



InsuranceWorkSafe 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 in Exhibition Street, Melbourne.

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; or

• 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 RequestWorkers’ injury claim filesIf 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 on the WorkSafe website – Online Claims Manual.

Workplace Injury Insurance Premium InformationDocuments 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 claims to request access to particular documents.

Other InformationFor 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 GPO Box 4306 MELBOURNE VIC 3001

Requests under the Freedom of Information Act 1982 must be made in writing, or using the online form provided at www.foi.vic.gov.au. A statutory fee (of $27.20 from 1 July 2015) 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 be also incurred, such as for photocopying (e.g. 20 cents per each A4 size black and white paper) and search time.

Decisions are made under the Freedom of Information Act 1982 by the Principal Officer or authorised Freedom of Information Officers in accordance with the requirements of sections 26 and 51 of the Freedom of Information Act 1982. The Freedom of Information team may be contacted for general queries on (03) 9641 1555.


Further InformationFurther information and forms are available online at www.worksafe.vic.gov.au.

Online publications and LibraryWorkSafe produces a wide range of publications, many of which can be accessed on its website or by attending its library. The library has an extensive collection of publications. Members of the public are welcome to use the collection, but must first make an appointment by telephone on (03) 9641 1548 or 1800 671 004.

The library operates from:

Ground Floor 222 Exhibition Street MELBOURNE

Protected disclosuresWorkSafe 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 on WorkSafe’s website at www.worksafe.vic.gov.au

Application for Internal Review

Internal Review Outcomes 2013/14 2014/15

$000s $000s

Health and safety

Inspector’s decision affirmed (no change) 51 72

Inspector’s decision set aside 90 65

Inspector’s decision varied (other than compliance date) 32 45

Compliance date only changed 1,185 881

Extension refused 43 48

Application refused 3 0


Application ineligible/not reviewable 13 9

Total health and safety 1,486 1,183

Licensing



Application invalid 0 0


Total licensing 7 5

Return to work


Compliance date only changed 2 2


Invalid 0 4

Total return to work 5 12

Total 1,498 1,200



Victorian Civil and Administrative Applications

During the year there were fifteen applications to the Victorian Civil and Administrative Tribunal for review of Internal Review Unit decisions. Seven were withdrawn, four were struck out, one was affirmed, one was varied and two were set aside.

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 our environmental footprint through employee participation. Initially this began with an official Green Office Program but has, over the years, been adopted by all simply as the way WorkSafe operate and has led to continuous improvements.

The provision of bicycle and end of trip facilities promotes riding to work as an everyday event, sensor lighting throughout the tenancy means Earth Hour is a daily reality, the gradual introduction of electronic document management is reducing paper and storage, and our recycle and compost programs are highly successful. Our water, electricity and paper usage continues to be contained.

87 per cent of our copy paper purchased is 100 per cent recycled (back in 2005 only 29 per cent of our copy paper was 100 per cent recycled) and 35 per cent of all office supplies and consumables products purchased are environmentally friendly.

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 recycle batteries, CDs, DVDs and other media.

Travel to and from other offices for meetings continue to reduce through the use of video and teleconferencing technology.

Victorian Industry Participation Policy

Details of contracts commenced to which the Victorian Industry Participation Policy Act 2003 applied are as follows:

• During 2014/15 WorkSafe commenced one contract with a total of 100 per cent estimated to be of local content to which a Victorian Industry Participation Plan was not required as the procurement activity was local by nature.

• During 2014/15 WorkSafe completed nil contracts to which Victorian Industry Participation Plan applied to.

National Competition Policy

Review of Legislative RestrictionsIn 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. The Minister may also cause a review on any matter relating to self-insurer contributions to be undertaken by an independent expert body.

Competitive NeutralityUnder 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.



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 15 30 June 14*

Total number of employees 1000 986

Full time equivalent 964 946

Males 507 499

Females 493 487

Full time 891 869

Part time 109 117

Average age 45 45

* Note: Due to an administrative error workforce data reported in 2014 was incorrect. The table above contains the corrected workforce data for 2014.

Workforce by WorkSafe classification band

Band 1 Band 2 Band 3 Band 4 Band 5 Band 6 Other

30 June 2015 5 52 109 318 354 84 78

30 June 2014 (restated) 5 63 105 315 339 81 78

Data is as at 30 June 2015. Data is exclusive of Conciliation Services, Board Members and Casuals (TAC and Workers Compensation recipients who are ex-employees).


Consultants

The following table listed the consultants engaged in 2014/15 where the total costs of each individual engagement was in excess of $10,000

Consultancy DescriptionTotal

Approved Fee2014/15

ExpenditureFuture

Expenditure

$000s $000s $000s

Beaton Capital Pty Ltd Analysis and Review of the Personal Injury Litigation Management

82 49 33

Callscan Australia Pty Ltd Review of Call Routing Framework 60 60 –

Certitude Pty Ltd Review of IT Infrastructure Lifecycle Maintenance Framework

31 31 –

CHSC Consulting Inc. Development of Research Strategy 10 10 –

Deloitte Access Economics Medical Practitioner Fee Review 239 239 –

Deloitte Actuaries & Consultants Trust

Development of Agent Contract Optionality

75 38 37

Deloitte Touche Tohmatsu Regulation Impact Statement for Proposed OHS Regulations 2017 and Equipment (Public Safety) Regulations 2017

693 69 624

Enterprise Accelerators Insurance Centre Of Excellence Strategy Establishment and Initiation Plan

62 31 –

Entity Solutions Services Pty Ltd

Disability Strategy Review and Environmental Scan

42 22 20

KPMG Geelong Relocation Project Advice on Accommodation Options

22 22 –

KPMG Review Of Medical Panels Victoria 60 60 –

Pricewaterhouse Coopers Implication Analysis on the Proposed Amendments to the National Model Regulations for the Transport of Dangerous Goods

39 24 –

Pricewaterhouse Coopers Agent Incentives Design and Structure Review

45 45 –

Pricewaterhousecoopers Actuarial Pty Ltd

Community Integration Program Benchmarking Review

82 76 –

Resonance Communications Pty Ltd

Geelong Relocation Program Staff Engagement Strategy

96 79 17

ShineWing Australia Pty Ltd Geelong Relocation Program Peer Review

86 86 –

SMS Consulting Medical Panels Victoria IT System Review and Option Analysis

36 36 –

Stratica International Pty Ltd Independent Review of Enterprise Database Rationalisation Project

25 25 –

Webplace Pty Ltd Development of Digital Roadmap 43 43 –

Total 1,829 1,045 731

During 2014/15, there were no consultants engaged where the cost of each individual engagement was below $10,000.

The total approved fees and expenditure for 2014/15 excludes GST.



Advertising

Details of advertising and communications expenditure (for campaigns with a media spend of $150,000 or greater)

Campaign Name

Campaign Summary

Start/End Dates Advertising Media

Expenditure

Advertising Production

Expenditure

Research and Evaluation

expenditure

Other Campaign

Expenditure

Total Campaign

Expenditure

Insurance Protection

TV, Radio, Press, Outdoor, Digital

5 October – 29 December

2,265,823 266,836 45,928 58,504 2,637,091

Homecomings TV, Radio, Press, Outdoor, Digital

23 November – 6 December

483,812 52,940 0 0 536,752

Enforcement (Every 12 Minutes)

TV, Radio, Press, Digital

5 April – 25 April

805,929 90,223 0 0 896,152

Return to Work (Getting Back)

TV, Cinema, Press, Outdoor, Digital

31 May – 30 June

1,619,236 813,865 40,480 29,008 2,502,589

Total 5,396,985 1,597,871 86,408 87,512 7,168,776


Disclosure Index

The 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.

Ministerial Directions

Legislation Requirement Page reference

Report of Operations

Charter and purposeFRD 22F Manner of establishment and the relevant

Ministers126

FRD 22F Purpose, functions, powers and duties 126

FRD 22F Initiatives and key achievements Throughout

FRD 22F Nature and range of services provided 126

Management and structureFRD 22F Organisational structure 7

Financial and other informationFRD 22F Statement of workforce data and merit and

equity133

FRD 22F Summary of the financial results for the year

32–34

FRD 22F Significant changes in financial position during the year

46

FRD 22F Operational and budgetary objectives and performance against objectives

Throughout

FRD 22F Major changes or factors affecting performance

Throughout

FRD 22F Subsequent events 101

FRD 22F Details of consultancies over $10 000 134

FRD 22F Details of consultancies under $10 000 134

FRD 22F Advertising and communications disclosure 135

FRD 22F Application and operation of Freedom of Information Act 1982

127

FRD 22F Compliance with building and maintenance provisions of Building Act 1993

132

FRD 22F Application and operation of the Protected Disclosure Act 2012

130

FRD 22F Application and operation of the Carers Recognition Act 2012

132

FRD 22F Statement on National Competition Policy 131

FRD 22F Statement of availability of other information 132

FRD 22F Occupational health and safety policy 41–43

FRD 22F Employment and conduct principles 133

FRD 10 Disclosure index 136

FRD 25B Victorian Industry Participation Policy disclosures

131

SD 4.5.5 Risk management compliance attestation 125

SD 4.2(g) Specific information requirements Throughout

SD 4.2(j) Sign-off requirements Inside cover

Ministerial Directions

Legislation Requirement Page reference

Financial Report

Financial statements required under Part 7 of the FMASD 4.2(b) Operating statement 45

SD 4.2(b) Balance sheet 46

SD 4.2(a) Statement of changes in equity 47

SD 4.2(b) Cash flow statement 48

SD 4.2(b) Notes to the financial statements 49–101

Other requirements under Standing Directions 4.2SD 4.2(a) Compliance with Australian Accounting

Standards and other authoritative pronouncements

49

SD 4.2(c) Compliance with Ministerial Directions 126

SD 4.2(c) Accountable officer’s declaration 101

SD 4.2(d) Rounding of amounts 57

Other disclosures as required by FRDs in notes to the financial statementsFRD 3A Accounting for Dividends 54

FRD 11A Disclosure of ex-gratia payments 87

FRD 17B Wage inflation and discount rates for employee benefits

55

FRD 21B Disclosures of Responsible Persons, Executive Officers and other Personnel (Contractors with Significant Management Responsibilities) in the Financial Report

82–87

FRD 103F Non-current physical assets 54

FRD 104 Foreign currency 52

FRD 106 Impairment of assets 54

FRD 109 Intangible assets 55

FRD 110 Cash flow statement 48

FRD 112D Defined benefit superannuation obligations 56

FRD 116 Financial instruments – Public Financial Corporations

88–100

FRD 120I Accounting and reporting pronouncements applicable to the 2014-15 reporting period

50

LegislationFreedom of Information Act 1982 127

Building Act 1993 132

Protected Disclosure Act 2012 130

Carers Recognition Act 2012 132

Victorian Industry Participation Policy Act 2003 131

Financial Management Act 1994 49

Appendix 5 Disclosure Index


Appendix 5 Disclosure Index

Head Office222 Exhibition Street Melbourne VIC 3000

Phone 03 9641 1555

Toll-free 1800 136 089

Website worksafe.vic.gov.au

Twitter @WorkSafe_Vic

Facebook facebook.com/worksafevictoria

Local OfficesNorth

Essendon Fields 03 9223 6888

Shepparton 03 5831 8260

Wangaratta 03 5721 8588

West

Ballarat 03 5338 4444

Bendigo 03 5443 8866

Geelong 03 5226 1200

Mildura 03 5021 4001

Warrnambool 03 5564 3200

East

Dandenong 03 8792 9000

Mulgrave 03 9565 9444

Traralgon 03 5174 8900

Advisory ServicePhone 03 9641 1444

Toll-free 1800 136 089

Email [email protected]

WorkS

afe Victoria A

nnual Report 2015

WorkSafe Victoria Annual Report 2015€¦ · WorkSafe Victoria Annual Report 2015 3. Report from...

Documents

Transcript of WorkSafe Victoria Annual Report 2015€¦ · WorkSafe Victoria Annual Report 2015 3. Report from...