Saturday 23 June 2012

Risk - and injury compensation !

For five hours yesterday, the city of Sydney was without fire protection.    The fire appliances and the crews that operate them were gathered in front of state parliament objecting to changes to their injury compensation scheme.   This was the first time in fifty-six years that the fire brigade has been on strike !

Inevitably, there was a house fire and instead of a response measured in minutes, it took under an hour for the first fire appliance to arrive.  During this strike the city was being serviced by rural bushfire brigades, backed up by one of the appliances from Sydney airport.   There was no loss of life, but the building received extensive damage because of the delay.

 The problem that caused this strike is an attempt by the state government to reign in a disastrous deficit in the compensation scheme that applies to police, paramedics and fire crews.   It is billions of dollars in the red - and rapidly spinning out of control.    The government seeks to legislate changes that would limit injury compensation from the present 100% of normal pay for twenty-six weeks, to a reduced figure after just thirteen weeks.

What infuriates the Fire Brigade Employees union ( FBEU) is that this change only applies to fire employees and paramedics.   The police have been exempted, no doubt because the government fears a police strike and the total chaos that would bring.

One of the problems with all forms of compensation schemes is the tendency for " cover creep " to advance the cost.   This usually takes the form of a finding by a judicial official that something rejected should be included, and an example of that is :" travelling to work cover ".    Initially, work cover commenced when the employee clocked on and ceased at the end of the shift.    Now that cover seems to include everything between when that person slams the home  front door shut in the morning, and reopens it later in the day.  Of course, the extended cover comes at a cost to those paying for the scheme.

The decision to retain the existing scheme for police and substitute a lesser scheme for fire crews and paramedics is untenable.   All three services lay their lives on the line for the good of the general public and to offer a lesser form of compensation is an insult.

At the same time, the government can not let stand a ever enlarging black financial hole.  The solution will inevitably be the result of negotiations and " give and take " bargaining to arrive at something that is mutually acceptable - and fair !

It also sounds a warning, illustrated by the situation that has evolved in several European countries which are virtually bankrupt  - and being forced to accept humiliating terms in exchange for bailouts.   In most cases this dire situation arose because they lacked the courage to come to terms with difficult decisions when they needed to be made.   We would not want a similar fate to happen here !

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