Boom Economy? The FiFo & Occupational Health
By Vidal Hockless
Posted: 25th February 2013 09:16According to most reports, Australia is indeed “The Lucky Country”, awash with money, particularly in the iron ore and coal mining hotspots of WA and Queensland; and whilst the prices of many goods and services have increased significantly during the course of the “boom”, it has also produced wealth in distant communities.
A sign of the times triggering recognition of this state of affairs is the army of “FiFo” workers – the “fly in – fly out” resource industry workers, whose “high vis” attire is instantly recognisable at the airports servicing our mining regions.
However, the less welcome corollary of these supercharged industries is the effect on local economies that have been thrown off balance by the avalanche of money and the demands that it produces. For every individual to benefit, we are left to question how many have not, being left to cope with higher prices, higher housing and general living costs, reduced services availability, such as local and interstate transport and accommodation, and in some areas serious damage to towns and communities where much of what is desirable is now beyond the reach of long-term residents.(1)
In response to these concerns, a senior independent politician has recently advocated a change to the fringe benefit tax laws in order to offset what is perceived to be the detriment suffered by local communities servicing the mining industry. Instead of effectively subsidising the employment of FiFo workers as currently happens, it is proposed that funds should instead be directed to regional towns and communities suffering from the impact of these industries.
But it is not just the health of communities that may bear the unintended effects of this industry and its rapid growth. Such now is the importance of the FiFo workforce in any discussion of the rampant mining economies, that it has become the subject of much learned commentary made particularly in the context of occupational safety and health. The FiFo worker is thought to be at increased risk of a range of general health and personal problems, including marital stress caused by lengthy separation, leading to frustration and poor mental health.(2) He (or she) may also struggle to maintain a healthy lifestyle with the sudden acquisition of a very high income likely to be spent on a narrow and not always beneficial range of goods and services.
And if we are to believe the observations made in the many commentaries in the fields of education, health and science on the potentially negative consequences of the extent of the FiFo phenomenon, there will also be hidden costs relating to occupational health issues, associated with compensation and other claims, the evidence of which may appear in the legal system.
Take for example employers’ indemnity insurance. Without descending into technical detail, the typical coverage for such employees is 24 hours per day while working on site. The nature and scope of the industry is such that new forms of coverage and insurance products have been offered in order to respond to the complexities of multi-principal, multi-contractor operations – such as so-called “principal controlled” insurance schemes. Hence, there are issues of product development and not just claims that are testing the ingenuity of business.
But on the subject of claims, many of these workers cross state and international borders. Despite the enactment in Australia of complementary legislation with a view to reducing the scope for disputes, there remains a good deal of jurisdictional uncertainty when dealing with injury claims from such workers. This has been evident for some time but is simply a more ever-present issue in the current commercial environment. A recognised weakness in the national system for management of jurisdictional disputes arising from workplace injuries is therefore likely to experience greater exposure as a result of both the numerical and territorial increase in FiFo employment.
But perhaps the main discrete health concern relating to FiFo employment is that of mental health. In Western Australia, compensation claims arising from work-related mental health problems and stress-related diseases have been increasing for years. In law, these problems are treated in much the same way as any other injury and as a practitioner working in this area, I do not consider the health care system or the Western Australian workers’ compensation dispute resolution system to be well equipped to deal most effectively with these problems.
Most Australian compensation statutes allow workers with mental health disorders to claim benefits where the employment has contributed to a significant degree to the disorder.(3) But what is the nature and extent of the contribution that is to be required to be proven? It was never the intention of Parliament to compensate for mental health effects caused by the general wear and tear of employment. Rather, the condition compensated needed to be an “injury"(4) and implicit in this is the notion that it must be caused by an event or events beyond the scope of normal work activities.
This dilemma is highlighted in FiFo employment where it is the essential nature, rather than exceptional features, of the employment that has led to significant health concerns, including mental health effects.(5) Both the personal and commercial dimensions of this style of employment merit close attention.
An added difficulty, well recognised by workplace health and injury management professionals, is the limited regional health care infrastructure which is required to cope with needs that have simply outgrown it, in particular in relation to patient care, injury assessment and injury management services.(6) This makes an eloquent argument for the need for the right kind of industry, and/or government support for these regions and the services they provide.
To quote a recent popular film – it’s complicated – and very much a work in progress if “the boom” continues to any meaningful extent. It may be fair to say, however, that the use of the term “boom" in connection with Australia’s more recent resources industry successes, tells only part of the story. The story isn’t a bad one, but there is a need to take care of business on a number of fronts to get the right ending.
Vidal Hockless has been a partner at Kott Gunning since 1985 and was managing partner from 1997 to 2005. After a period in general litigation practice, Vidal focussed on damages litigation and developed, and remains partner in charge of the firm’s insurance practice, which is now one of Kott Gunning’s leading practice areas. Vidal is a member of the Australian Insurance Law Association and serves on a WA Law Society's personal injuries committee.
Vidal can be contacted by phone on +08 9321 3755 or alternatively via email at firstname.lastname@example.org
(1)Mark Cassidy, FIFO woes: the risk of fly in, fly out workforces, (15 May 2012), Insurance Business Online ,http://www.insurancebusinessonline.com.au/cri/article/fifo-woes-the-risks-of-flyin-flyout-workforces-128950.aspx>
(3)Workers’ Compensation and Injury Management Act 1981 (WA) s5; Workers’ Compensation and Rehabilitation Act 2003 (QLD) s 32(3)(a)
(4)Workers’ Compensation and Injury Management Act 1981 (WA) s5; Workers’ Compensation and Rehabilitation Act 2003 (QLD) s 32(3)
(5)Samara McPhedran, Mining, fly in, fly out workers and the risk of suicide (17 January 2013) < http://theconversation.edu.au/mining-fly-in-fly-out-workers-and-the-risk-of-suicide-9998>
(6)Cassidy, above n 1