Tighter workers compensation rules could leave self-employed WA tradies high and dry

WA tradies have been warned they may be left high and dry after a workplace accident because of changes to workers’ compensation laws that came into effect on July 1. The definition of a “worker” has been tightened in the Workers Compensation and Injury Management Act 2023 and there are questions over whether self-employed tradies will be covered. The original 1981 Act had never intended to cover people who had established businesses to perform work in their own names, as many tradies do, but a series of legal precedents set under those laws effectively gave nearly all workers access to compensation if they were injured on site. The new act has been written to exclude sole traders because the State Government believes they should look after themselves through privately arranged income protection insurance. But in a bizarre twist, self-employed workers will be covered by workers’ compensation laws if they are injured on site while doing something not “in the course of or on by the individual in the individual’s own name or under a business or firm name”. The wording of the new act means a painter who hurts themselves while painting will probably not be covered but if they are injured while pushing a wheelbarrow they likely will be able to make a claim. Plaintiff insurance lawyer Daniel Brand said sole traders should be aware of the new act. “I think it would be fair to say that there has been a tightening of the wording such that many subcontractors who might have been covered under the ‘extended definition’ of a worker in previous legislation, may not be so covered under the new iteration,” the Brand Barristers & Solicitors principal said. “In essence, the new Act has modified the way contractors are covered. From July 1, a bricklayer operating under an ABN in his or her own name or under a business name, who is contracted to perform bricklaying work for a principal and who sustains injury during the course of that work, may not be covered under the principal’s workers’ compensation insurance.” Mr Brand said the new legislation would be tested in court in coming months. If judges adhere to a strict interpretation of the law then sole traders could be exposed. “Whether a contractor will fall within the definition of worker under the new Act will be determined by consideration of the totality of the relationship between contractor and principal,” he said. “Courts in other jurisdictions have considered, amongst other things, the contractor’s earnings including taxation deductions and assessments prior to the injury; how the contractors hold themselves out to the public; the contractor’s status at the time of the injury; and the period of work performed for the principal.” A spokesperson for the Cook Government said the new Act made no changes to workers considered “general employees and apprentices”. “The definition of ‘worker’ in the new Act as it applies to contractors is worded differently than the 1981 Act, but it is not the intention to exclude contractors who are currently covered under the 1981 Act,” the spokesperson said.