WorkCover exit fees slammed

Businesses that leave WorkCover to run their own workers' compensation schemes are angry at being hit by huge exit fees.

The legality of WorkCover charging businesses up to $1.2 million to move to a private injured workers compensation scheme was questioned in a parliamentary committee today.

Self Insurers of South Australia manager Robin Shaw revealed trucking company Linfox was involved in a Supreme Court action against WorkCover.

He said the "exit fee" charged by WorkCover was a major hindrance to businesses and investment in SA.

He also accused the State Government of "ambushing" businesses by including compulsory exit fees in amendments tabled in Parliament.

"Linfox was hit up for about $1.2 million and declined to pay that and was summonsed by WorkCover," he said.

"That court action is probably going to find that the current administrative arrangements for these fees is an illegal use of these fees.

"I am not certain of that but I believe that is likely to be the outcome."

Mr Shaw said amendments to the Government's WorkCover Bill - which will slash entitlements for injured workers in a bid to rein in WorkCover's unfunded liabilities - will hurt business investment in SA.

"It seeks to put in to legislation what the courts might otherwise hold to be illegal," he said.

"We find the way in which this thing is being done is to my mind legislation by ambush.

"These exit fees will not doing anything to help rebalance the scheme's funding position yet it will be a major impost on business and investment in this state."

Source: Nick Henderson, State Political Reporter, The Advertiser