Slash workers' comp costs with pre-hire tests, but beware discrimination

01 October 2009 8:49am

Injury compensation costs employers an average $1100 per employee per year, but organisations can significantly reduce injuries - and hefty compo bills - with "inexpensive" pre-employment assessments and a "dedicated medical network", says occupational therapist Waqar Malik.

Malik, the founder of Pre-Employment Australia, says workers' compensation expenses "can be meaningfully reduced by introducing strategies to minimise a worker's exposure to harm".

"Pre-employment functional assessments are a must," he told HR Daily. Employers must also have comprehensive OHS policies, and a "dedicated medical network" to deal with injuries once they occur.

This involves identifying the best workers' compensation doctors in the area, and then promoting them to employees. Employers, he says, should also organise a "GP network" to ensure that managers, injured workers and treating practitioners are in regular contact.

Manage risks and match workers to jobs

Malik says that physical and functional assessments, which cost as little as $70 per candidate or employee, are an "easy to administer and inexpensive" way of ensuring people are "physically capable of managing job requirements".

"Effective screening will help employers recognise and manage workplace risks, and identify suitable tasks to match a worker's physical capabilities," he says.

"This will further help to prevent or minimise the impact of workplace injuries or musculoskeletal disorders and, where necessary, assist organisations to manage a worker's safe return to work from injury."

Malik says assessments that review a candidate's job-specific strength and endurance; manual handling and ergonomic proficiency; postural tolerance; and cardiovascular fitness are particularly important in blue-collar industries where workers' compensation costs tend to be "significantly higher" than the national average.

But even in more sedentary jobs, he says, where repetitive strain injuries and stress claims are on the rise, a basic functional assessment can help save money on recruitment, sick leave, overtime and insurance premiums.

Functional assessors are starting to "take a lot of work from GPs", whose assessments are often cursory and rarely tailored to specific tasks, Malik notes.

"There are medicals, and then there are medicals," he says.

Take steps to avoid discrimination claims

According to the NSW Anti-Discrimination Board, many employers routinely use pre-employment functional assessments as part of their selection processes, but they must take steps to ensure they aren't exposed to discrimination claims.

In a recent South Australian case, for instance, a candidate whose job application was rejected because he failed a functional assessment was awarded $29,000 in damages after the Equal Opportunity Tribunal found, among other things, that the assessment was poorly designed. (See related article.)

"Where it is necessary to test for specific attributes it is best to only test people who meet all the other requirements of the job," the Anti-Discrimination Board advises.

"This is not a legal requirement but it is more cost effective and protects employers from allegations of discrimination on the ground of disability."

In more physical jobs, regular medical testing might be needed to ensure employees continue to meet requirements and aren't at risk of injury, the Board says, but "it is important that all employees in this type of job are tested and that age is not a factor in determining who is tested".

Employers could also be liable for discrimination if they:

use pre-employment functional assessments as part of the pre-interview culling process; and

ask questions at the interview stage about previous injuries or workers' compensation claims.

They could also be liable under privacy laws if they disclose assessment results to other people, including employees.

The main features of a non-discriminatory medical test, the Board says, are:

the test relates specifically to the particular duties/responsibilities of the job;

the required attributes are accurately identified and reasonable in all circumstances;

all avenues for accommodating people without these attributes have been considered;

facilities or services required by applicants with disabilities are provided if possible, with inherent-requirements tests conducted after such facilities are put in place; and

the test only assesses current ability and does not attempt to predict any future deterioration.

Injury prevention guides

Proactive injury-prevention strategies are also critical in reducing workers' compensation costs.

Commonwealth OHS agency Comcare publishes guides on injury prevention and building a case to invest in OHS and organisational health.

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