BLF - OHS - CHAPTER NINE: COMPENSATION

Chapter nine

COMPENSATION
14,130 words

Nineteenth century
A Sydney fatality in 1834 disclosed the protection that the law gave to a Master whose Servant had been injured. A roof-beam weighing a tonne crushed a workman in Pitt Street. The contractor paid a fine of five shillings under a legal relic known as a “Deodand”, meaning “a thing to be given to God”. Under this rite, any personal property that had been the “immediate occasion of the death of a person, was forfeited to the Crown”, and the cash from its sale “applied to pious purposes.”[1] To value that beam at only five shillings was fraudulent. Putting that price on the life of the labourer was typical. Indeed, until 1847, the Common Law denied the dependents of an employee killed at his work any claim against the employer.

Reforms to the legal protection for injured workers came in two stages. The Common Law had continued to protect the Master by reasoning that he could not be held responsible if one of his Servants injured another. A run of outrages encouraged the Chief Justice of England to overturn that doctrine during a case in 1880. Later that year, the United Kingdom parliament tried to repair the situation by introducing an Employers’ Liability Bill. After 1897, the inadequacies in that approach made unionists press for Workers’ Compensation Acts. The change in titles indicated that union pressure was tilting the onus of proof from worker to capitalist.

Employers’ Liability
No sooner did Britain’s Liability Act come into effect than employers “drove a coach and four through the law” by making employees sign contracts which waived their right to sue. No signature: no job. Masters who freed themselves from the costs of injuries could underbid on contracts.[2]

These faults had become obvious before NSW parliamentarians debated their Liability Bill in September 1882. The draft banned contracting out of responsibility, and held employers to account for faulty machines, materials and methods, even if they were not aware of the problem. Employers attacked these clauses as “class legislation of a most objectionable kind.” Tory Legislative Councillors declared themselves to be so kind-hearted that they were 100 per cent behind the original UK Act. Only their sense of fairness compelled them to denounce the removal of its failings as “the most one-sided and unreasonable measure ever devised.” An employer would have to pay ₤10,000 to his pantry-maid if one of his stable hands got her in the family way. The plutocrats had had enough of this “constant pandering to one class – the employees.” The Council not only drew the teeth from the Bill but limited the operation of its wreck to three years.[3] The renewal Act of 1886 redressed none of the failings. However, it imposed no time limit for the Act’s expiry and it extended coverage beyond manual labour. These concessions were not much use to workers who still had to prove negligence by their employer, and to show that they had in no way contributed to their injuries, a bias which remained in the NSW Statutes until 1926.[4]

South Australia had copied NSW in 1884 when its Act allowed an employer to avoid responsibility if he said he did not know about a fault in the machinery. The Adelaide employers resisted the Liability Bill by forming that colony’s Contractors and Builders’ Association, which made workers pay for their own insurance, in effect, a wage cut. [5]

During the 1880s, capitalists muttered against Employers’ Liability Acts as the biggest concession ever to workers. Before the end of that decade, the unions had dismissed the legislation as “an all-round failure” and “complete farce”. Its canker was the Common Law assumption that the employee accepted risk as part of the employment contract (volenti non fit injuria).[6] The injured worker, therefore, had to prove neglect, or worse. The unions also protested that the length of time in which a claim had to be lodged was too short because some workers were too ill to file their own paper work, or had no one to assist them. Not for the last time, the unions reported that the authorities were not enforcing minimum standards of care. For example, bricks were falling onto workmen’s heads when a sheet of iron would have protected them.[7]

Employers sought refuge in technicalities to escape payment. In one case from 1890, the Supreme Court in Victoria discovered that the Act had so many sub-clauses that the liability of an employer to an injured building worker had dissolved to nothing.[8] Lawyers busied themselves to prove that a ladder was not a scaffold, thereby depriving one widow of compensation. They also showed that painting a house was neither a repair nor a renovation, yet men had been killed doing so.[9] The insurance firms practiced every possible scam to avoid paying up. In 1893, a New South Wales labourer, Charles Brown, was hit on the head by a brick; the court dismissed his suit because he had not proved whether his employer had been the contractor or the sub-contractor.[10] Other insurers disputed whether there was a next of kin so as to deny payment to de facto spouses. If a labourer took action under the Employers’ Liability Act, the insurer cut off payment, although the man had paid the premium himself.[11]

Who paid for the insurance became a running sore. NSW employers took eight-pence out of wages each week for coverage. If a man asked the name of the company, or refused to pay, he was sacked.[12] From 18 January 1892, 70 stonemasons struck against the deduction of fees from their wages.[13] Summing up the year 1897, the Age editorialised against the refusal of employers to take responsibility for insuring

men engaged in the dangerous task of demolishing the wrecks of the recent fire. The manner in which the employers have insured men’s lives, while they are engaged in the dangerous sewerage operations, making the men themselves pay the premiums, shows how the toiler is ever to take the risk while, as a rule, the employer takes the profit. [14]

Employers tried all manner of dodges to avoid taking out insurance, even telling the men that deductions were illegal. (p. 310)

Irrespective of who paid, Employers’ Liability insurance had increased the dangers in workplaces. Because the employers paid neither the premiums nor the penalties out of their own pockets, they felt no financial pressure to spend on safety to avoid liability suits.[15] From the labourers’ point of the view, the solution was to rewrite the Liability Acts and to enforce scaffolding regulations. The Master Builders moaned that “the workmen had it all their own way.”[16]

Workers’ Compensation
In 1897, the British parliament passed a Workers’ Compensation Act which held an employer liable for injuries caused by his employees on each other. Nonetheless, the United Builders’ Labourers’ Association attacked the law as “an unsatisfactory and litigious measure … confusing, indefinite, and expensive.”[17]  In Victoria, a private member tried, in 1899, to bring his colony up to the new British standard. Opposing this measure in the Legislative Council, the industrialist Russell Grimwade denounced the UK law as “positively an injustice to the workmen” because it made them less careful. He deplored insurance as another tax, claiming that its costs would reach 70s on every ₤100 in wages, against the current maximum of 4s 6d. The UK Act, like its colonial copy, threatened “thrift, carefulness and good workmanship.” Swapping those virtues for the promise of safety must ruin British manufacturers.[18]

Merchant Robert Reid railed against the Bill as “socialistic”, “drastic” and “revolutionary”.[19] Councilor Sachse, an enterprising engineer, embodied malign reasoning:

I have had a great deal of experience in connection with dangerous works, and I say that in nine cases out of ten the accidents that have occurred to the workmen have been due to carelessness on their own part in not reporting weaknesses in tackle or machinery used for lifting heavy weights or in going into places where they had no right to be.

When a man knows that the welfare of his family depends upon himself and his freedom from accident, he is anxious, and he reports anything he sees that demands attention either to the foreman or to the employers.[20]

As men of property, Legislative Councillors had no fear of dismissal. By contrast, a workman knew that he risked the sack if he reported faults, defects or negligence as he was required to do in order to claim compensation. An ex-miner member of the NSW parliament had explained during the 1882 debates why this was so: “I have myself many a time been compelled to work with plant that I knew to be unsafe; but the necessity of supporting my wife and family compelled me to work, and I had no choice in the matter.”[21] Only organisation by workers could prevent that outcome. Warmed by his own righteousness, Councilor Sachse went on to allege that

when you provide an insurance for the men, a feeling of carelessness insidiously creeps over them. They treat accidents jocularly, and they say – “Oh! We are all right; if that thing smashes we shall get compensation.” That feeling will arise and it will grow.[22]

What grew was slander against workingmen from Councillors opposed to reform on every question.

Even employees who could prove neglect and thus gain some entitlement had a tough time living off whatever payments they managed to secure. A worker got half his wage during incapacity. In the event of a death, dependents got three years wages, perhaps ₤450. Returns from investing that sum might attract ₤60 a year for the widow and children to live on, which was 40% of their breadwinner’s wage.

Most compensation schemes paid three years income for death, and half the weekly earnings while unable to work. The 1905 Queensland Act provided ₤1 a week during a disability, with between £200 and ₤400 in case of a fatality and made some employers liable for £30 in funeral expenses.[23] Contractors there had to take out an insurance policy as a condition of tendering for government works. (p. 207) In a display of meanness, Tasmania’s Act denied entitlements to a victim who earned more than ₤3 in a week. Steamship owners took advantage of that exemption by making stokers work seven days to get ₤3; slave-driving at starvation wages freed the employer from paying a few pence. (p. 309)

The self-interest of the Masters contrasted with behaviour among workers. On Tuesday, 28 December 1897, five men died of poisoned air in the South Yarra section of the sewerage tunnel. The coroner found that their deaths had been no one’s fault. Two of the men had sacrificed their lives by going back to rescue their fellow navvies. One of those heroes, Jimmy Stevens, plunged into the poison gas, shouting: “Mick, mate, we must get them out.” Stevens was found with his arms around another corpse.[24]

Justice delayed
Before the ABLF’s 1913 hearings for a Federal Award, all States, except Victoria, had Compensation Acts. The Federal Labor Government passed its version in 1912, though the Constitution limited its coverage to Commonwealth employees. Victorian labourers were the most in need of compensation because they were still without a Scaffolding Act.

In NSW, fear of electoral defeat in 1910 had stimulated the non-Labor administration to pass a Compensation Act. The government had hoped to win back electors who had just given the Federal Labor Party a thundering success.  The attempt failed, but the State Labor administration did nothing on the subject until a few weeks before the next general election. By then, the Cabinet could be certain that its Bill would not get out of the Legislative Council. Despite criticism from the unions, the Labor ministers again did nothing until March 1916 when the Legislative Council delayed the Bill before hobbling its provisions; one of the few advances was to remove the provision that an employer was not liable for an injury caused by another of his employees, as Britain had done nineteen years earlier.[25]

Although the laws differed between jurisdictions, they shared key features which filled gaps in the Common Law that had prevented workers gaining “redress for injuries”. Henceforth, more employers had to insure their workers. That right could not be exchanged for any other benefit, such as shorter hours or higher rates of pay. The injured, or their surviving dependents, got compensation without having to prove neglect by the employer.

The sponsors of the 1897 UK Law had looked forward to its operating without the intervention of lawyers. Twenty years on, a Law Lord lamented that solicitors ferreted out precedents to serve which ever side had briefed them. By 1941, Reports of UK cases filled 34 volumes.[26] Workers’ Compensation had become a new province for ordering up lawyers who denounced a no-fault system of National Insurance proposed in 1911.[27]

Penny a day
Some employers had been deducting 3d or 6d a week from pay packets to cover insurance. A labourer had no guarantee that his money did not end up in his boss’s pocket. Even when the scheme was honest, its protection did not follow the worker from employer to employer. When Henry Hannah fell 3.2m from a ladder, he injured his elbow, and was off work for five weeks but received no compensation although his previous employer had been deducting fees for four months. His new boss paid neither premiums nor compensation: “I had to bear the brunt of it.” On another job, Hannah worked three days and had 3d deducted at the end of his time. When he objected, he got the money back from the contractor who told him never to apply for work with him again. (pp. 174-5 & 309)

Organiser Loughnan swore in 1913 that his members got “not a penny” in compensation: “We are insured but we pay for that insurance ourselves.” (p. 306) The men never knew with whom they were covered: “A man pays 6d a week as a rule and he sees no policy or receipt or anything else. The employer is supposed to insure you and in most instances he does. It is stopped out of our wages.” Loughnan had never seen a written policy: “I was asked by a solicitor for a receipt and I said, ‘I have none.’ And he said, ‘Does that include everyone else?’, and I said, ‘Yes, including the engine driver’.” (pp. 306 & 386) A spokesman for the MBA explained why the men could not get documentation:

The employer insures for only ₤2,000 or ₤3,000 on one general policy and he pays on the amount of wages he pays out during the year. It embraces all the trades … it would be impossible to get out policies for the different trades. We could not get out a separate policy for each branch. (p. 357)

If a man were injured, the contractor gave him a note to take to the insurance company to get his pound a week. (pp. 386-7) He bore no mark of entitlement, other than his scars.

Even where a labourer’s premium had found its way to an insurance company, the injured man had to battle for his money. The parliament in South Australia amended its Act in 1908 to stop employers from pocketing the payouts.[28] After Bro. Blair ran a nail into his arm, which became poisoned, he spent a week in a Melbourne hospital but got no benefit from the 6d a week deducted by his employer until the Federation took up his case. Then, the boss settled out of court, paying ₤7 4s. (p. 176) In the ABLF’s experience

[t]he insurance company fought the employer and he fought the claimant. At the present time we insure but the money we pay is utilised to fight us in a Court when we sue for damages or compensation for injuries received. (p. 356)

NSW unions contended that the employer should pay the premium in addition to the wage, which was small enough.

1913 Award
The Log that the ABLF developed between 1910 and 1913 to present to Commonwealth Conciliation and Arbitration Court included claims for insurance and compensation:

Employers shall, at their own cost, insure employees against accident sustained by them in connection with their work in the following manner: -

For death or permanent total disablement, a sum equal to three years’ earnings. For permanent partial disablement, one-half of the above-mentioned amount. For temporary disablement, the weekly earnings during the period of such disablement.[29]

The Federation aimed at sustaining labourers and their dependents while establishing uniformity across the continent. When Justice Higgins delivered the Award on 19 December 1913, he justified its compensation clauses on the grounds that they were in accordance with the “new and almost world-wide theory that industrial risks should be perceived by society to be inseparable accompaniments and expenses of industrial enterprises.”[30] Workers’ Compensation opened a “new province for law and order”, alongside industrial arbitration.[31]

Shocked to hear that an injured worker had no document to prove that he had paid for his insurance, Higgins ruled that the employers cover the cost of the premiums:

In the case of an accident, the worker loses in flesh and blood. The loss of the employer is a loss of money. In addition to their pain and loss of limb or life, I could not ask the employee to pay also the money for insurance.

Unless the employer chooses, the employer need not pay him a stiver. I think the man ought to have a right to something. (p. 359)

This passage hinted at why Higgins had overcome his reservations about the complexity of the ABLF’s proposal:

This claim is of special importance in the case of builders’ labourers; for the nature of the calling, involving the process of demolition, the movement of heavy materials on ladders and planks, the placing of girders, &c., is such as to make grave accidents rather frequent.[32]

The Award provided for Boards of Reference to make the compensation clauses workable and to decide on the amounts to be paid.[33] The MBA had argued that deductions for insurance were private arrangements beyond the constitutional remit of the Arbitration Court to “prevent or settle disputes”. The High Court agreed, striking down the compensation clauses. (p. 175)[34]

1920s-30s

Fear among Victorian employers of falling under the ABLF’s Award had driven their parliamentary apologists to enact a minimal scheme of workers’ compensation. The Act did little to make it easier for labourers to collect their entitlements.[35] When one insurance company refused to pay after the death of Bro. H. McLeod in September 1924, the membership decided that the case was a one of principle and voted to proceed, irrespective of cost.[36] A lad who died late in 1925 got nothing because he had no dependents; the union protested and took his mother’s claim up with the Trades Hall Council. The Branch had more success a few months later when it enforced sick pay of 30s a week for Bro. McBride after an accident on “Pop” Shillabeer’s job.[37] Another insurer was paying only 3s 6d per day to a man injured on the Melbourne High School when the Award wage was five times greater.[38]

Break-through - NSW 1926 
Between 1910 and 1920, two aspects of the compensation regime rankled with NSW workers. First, the rate of accident pay had not been pegged to the basic wage so that, by 1920, the support had lost at least a third of its buying power until a Labor administration increased the amount to £3. The other issue was coverage for “black lung” among the lead miners at Broken Hill. Here, the Labor government gave in only because the Industrial Socialist member for the mining community, Percy Brookfield, held the balance of power in the Assembly.[39]

An erstwhile Labor Party minister for Labour and Industry, Justice Beeby, recommended three reforms: the first was to lift the rate of accident pay from 50 to 66⅔ per cent of the Award wage; the second was to speed proceedings through the tribunals; and a third would compel all employers to pay premiums. The latter pair of proposals formed the basis of the 1926 Act introduced by the Lang Labor government. That law expanded benefits in several directions. It applied to all diseases, even if employment had been only a contributing factor. The injured worker could accept a scheduled sum of compensation and so avoid waiting for a judgement. The Act also covered travel to and from work, which accounted for one in ten work-related deaths. Accident pay provided £1 for a wife and 8s 6d for each child up to 14 years, placing the NSW rates towards the high end of the wide variation in benefits between the States. The maximum in Victoria was only £2. The advantages to NSW workers from the extended coverage in the Act were obvious from the doubling in the number of those receiving compensation payments. The increase in the building trade was even greater, rising from 700 to 2,400.[40] Of the sixteen workers killed on the Harbour Bridge, only the dependents of the two married men received compensation. The families of the other fourteen got £20 funeral expenses.[41]

How had the more generous provisions got through the NSW Legislative Council? At that time, its members were appointed for life by the Governor on the recommendation of his ministers. The Tory bloc had been spooked by Lang’s insistence that his Excellency select 25 Labor nominees. The reactionaries gave way out of fear of being swamped, or even abolished, as had happened in Queensland in 1922.[42]  Deprived of their redoubt in the Legislative Council, the employers turned to saboutage by getting the underwriters to announce rises of 150% in premiums. Lang broke this “lock-out” by following the Queensland example of setting up a Government Insurance Office. The Mayor of Singleton was not alone in reacting against half-way decent protections by declaring that “the sooner they had a Mussolini in this country the better.”[43]

John Keegan was the only labourer among Lang’s 25 nominees to the Council. Born in Victoria in 1875, he had been typical of the nomad tribe as he shifted between places, industries and unions to earn his crust. At the time of his appointment as Councillor, he was labouring in Sydney’s Botanic Gardens. One morning, the Minister for Agriculture strolled past as Keegan was stirring up his fellow employees after their starting time. The Labor Minister sacked the Labor Councillor on the spot.[44] Keegan supported the Compensation Bill from his experience as a bridge-builder for public authorities, which contracted out the work at so much a foot, and for which he employed off-siders. When one broke a leg, Keegan had tried to make the Department meet the compensation because he and his helpers were all “wage-slaves”. However, the courts ruled that, as the employer, Keenan had to pay out of his own pocket. He further proposed that share-farmers be given coverage because they too were merely “wage-slaves” paid by a percentage of the crop instead of in cash.[45]

Other States 
All jurisdictions had some form of employer-funded compensation after Tasmania passed a Bill in 1927.[46] West Australia’s Labor government in 1924 had introduced a three-part package of scaffolding inspectors, industrial arbitration and workers compensation through a Government Insurance Office. By excluding “outworker”, the Act discriminated against women. Every State but Queensland did the same to the “casual”, its definition being narrow but slippery. [47] A 1914 textbook on the Victorian Act had reported that, despite several test cases about casuals from the United Kingdom on casuals, “no definite rule can be laid down.”[48] The drafting difficulties pointed to the need for a system of national insurance which avoided such exceptions. Supporters of the 1926 NSW Bill stressed that “casual” applied to someone who performed tasks “not being work incidental to a trade or business, regularly carried on by the contractor.”[49] Thus, a member of the ABLF employed to dig out foundations for a porch step was not a “casual” because such work was in line with his normal way of earning a living. He therefore had to be insured. However, if the householder gave that odd job to a fitter-and-turner, insurance became necessary only if the contract was for more than £5. Any exemption for “casual” left nomadic labourers more liable that most employees to miss out on protection.

Caught in the Act
From the late 1920s, the Compensation Acts in every State almost eliminated disputes over the right to claim for injuries received at work and in the course of employment. Henceforth, insurers paid up –eventually - when a brick fell on a labourer’s head. However, the extension of coverage to an illness or injury where work had only contributed to disablement or death allowed for years of contention.

In the main, the appellant tribunals erred on the side of generosity in weighing up the impact of events at work. For instance, a 24-year Brisbane labourer, with three children, damaged his knee at a weekend football match. The hospital told him to continue working while he waited for surgery on his cartilage. A month after the game, he prepared to start one morning: “The ‘five to eight’ whistle had blown and I had got my sugar-bag apron on and I started to run back to my position and I slipped to the ground. I hurt my knee. It was paining. I could not walk.” The Industrial Magistrate accepted that the fall at work was “the immediate cause of his incapacity”, and that the sporting accident was incidental.[50]

Not even the most sympathetic adjudicators could ignore the technical requirements for securing payouts. An early case under the 1926 NSW Act delivered injustice under the law to a Randwick Council labourer who had injured his thumb while digging into “sand in which were hidden pieces of rock and roots.” He reported his injury to the leading hand before seeking medical help. The wound did not heal and he returned to the doctor for 29 consultations, two x-rays and two surgical procedures for a total cost of £23 12s 6d. The Council provided weekly accident pay but refused to cover the medical expenses because the labourer had not made a formal request for treatment. The Commission accepted “that the applicant honestly believed he did all that was necessary”, but regretted that he had not carried out the procedure laid down in the new Act. He lost his appeal.[51]

Not every labourer was so honest. In May 1938, a Public Works labourer on a school in Roma (Q,) injured his hip while lifting buckets of gravel and cement into a concrete mixer. He received accident pay for almost a year, becoming an out-patient at Brisbane General Hospital. An inspector from the State Government Insurance Office found him digging in his yard. That garden was his undoing since he had complained to the police about his neighbour’s fowls scratching up his plants. She dobbed him in.[52]

Medical experts diagnosed beyond their expertise, making their prognoses suspect when they declared labourers fit for work. X-rays showed that there was more than met the eye, as happened to a Brisbane labourer on the Commonwealth Bank in Fortitude Valley who strained his back while excavating stone for the foundations. After three weeks on compensation, he returned to work but stopped after 50 minutes. The doctors for the Insurance Commission declared him fit to resume. An orthopaedic surgeon certified him as suffering from sacro-iliac arthritis. The x-ray found no disability but “disclosed an abnormality which could cause pain, and pain could disable.” The Magistrate awarded compensation for partial incapacity.[53]

Three NSW examples from the late 1930s illustrate the range of risks faced by labourers and the variety of responses from the Compensation Commission. The first case involved the ABLF’s old rival in NSW, the United Labourers’ Protective Society (ULPS), which was being sued by its South Coast Secretary/Organiser, Bro. Flynn. Flynn worked for the Public Works Department at a quarry outside Wollongong for £4 14s 4d a week. The ULPS paid him £7 a quarter to organise the district. During his lunch-hour on 13 May 1938, he pedaled to a job in Port Kembla to recruit members. On his way back, he fell off his bike and was away from his PWD job for a month. The ULPS argued that it was not responsible for injuries incurred during travel. The Commission found for Flynn, awarding him £4 5s per week, medical expenses and costs.[54]

The 1938 death of a 39-year old brought out the tasks expected from a labourer. At dusk on 13 August, a supervisor sent the man 180m. up the street to mind his roadster. A few minutes later, another car ran over the labourer, killing him. The Commission awarded £950 to the widow with six children under 14 years.[55]

A year later, a labourer named Rodighiero started concreting for an Italian sub-contractor on a theatre in Darlinghurst. On 6 August, he was wheeling a barrow from the top of a hoist to a beam wall. At lunch time, he followed another labourer, the Italian foreman’s brother, onto the hoist to travel the 12m. to the ground. The hoist was almost 2m. square, with open sides and a single bar across the top to which the rope was connected. During the descent, Rodighiero held onto this bar but lost his balance, catching his right leg in the framework, which fractured his tibia and fibula. His workmates wheeled him to St Vincent’s Hospital in a barrow. In claiming compensation, Rodighiero said he could not understand the English notice forbidding workers to travel on the hoist. The Commission rejected his claim that he had been putting his barrow onto the lift when the other labourer signaled for it to descend. The foreman’s brother had shot through to North Queensland and so could not be cross-examined. The Commission denied Rodighiero compensation because traveling in the hoist was illegal and thus “outside the course of his employment.”[56]

Disputes through the courts were a long way from the experience of labourers in need of support. The ABLF bridged that gap by informing members of their rights and obligations, and by funding appeals. State Branches built up connections with solicitors who became expert in compensation and acquired influence in the Labor Party. Left-leaning and Communist-led unions directed their compensation cases to lawyers whose politics had put them outside the profession, such as the Sydney solicitor and Communist, Christian Jollie-Smith (1885-1963).[57]

At initial hearings, a union official or a union-appointed solicitor represented the applicant. The quality of the case depended on Branch finances and on the energy, probity and perhaps sobriety of the Secretary. In New South Wales, that combination was absent until the late 1960s. No one captured the failings of the Old Corruption in that State better than one of its peripheral yet perennial figures, the disbarred lawyer and self-styled “Lenin of Australia”, the Trotskyite Jack Wishart, whose energies were of an intellectual bent since his physical powers were impeded by the truss supporting his scrotal hernia. Imprisoned for misuse of a client’s money, Wishart had emerged to find employment as a clerk with a firm of solicitors who handled union business. Thus reunited with the proletariat, he bought a ticket in the ABLF and got himself elected to its State Executive which, in the 1950s, appointed him to conduct its compensation cases. An attempt to discontinue his services ended with the Court’s awarding him £615 in damages. A later bout of his wrecking cost the Federation it £1,426 in legal fees. When Wishart dropped dead in the Phillip hotel on 3 August 1965, his passing did not write “finis” under thirty years of chaos since the New South Wales Branch was still bankrupt.[58]

Even where the ABLF was dysfunctional, its members could be compensated in conformity with a Table of Maims, with so much for each body part, an instance of cost-cutting through standardisation. For instance, from 1953, Victoria paid £1,680 for total loss of hearing in both ears, but £560 for total loss on only one side. Twenty-five years later in New South Wales, the offers were $14,450 and $6,850 respectively.[59] No amount of money could erase the psychological agony from certain physical injuries. The courts awarded a massive pay-out to a young miner who lost both hands in an explosion on the Snowy. Unable to adjust, he managed to take his own life by hurling himself out a window.[60]

Eighty years elapsed between the passage of the first Workers’ Compensation Acts around 1900 and their recasting on fresh principles. In the interim, most States had not consolidated their amendments. The West Australian Act of 1912 was typical. Its intention had never been clear. After 65 years, High Court Justices deplored its ill-fitting scraps as “patchwork”.[61] In the meantime, forces beyond the compensation laws altered the significance of their provisions and schedules. On top of fiddling with the Acts, change came through interpretations by the courts. The biggest difference was the extension of welfare benefits.

Amendments 
Gaps in pensions and health care meant that any increment in compensation improved the lives of injured labourers. The most significant adjustment was in the treatment of industrial diseases. The number of deaths from those conditions has always been greater than from violent injuries at work. With a few exceptions, mostly in the mining industry, workers had less entitlement for chronic illnesses. Was a progressive disease an accident for the purposes of the Act? The 1942 NSW Act defined it so, opening the way for the Courts to view any disablement as an injury. A 1947 judgement treated a heart attack as the equivalent of a broken leg for a worker who died from a coronary occlusion while riding his bike to work.[62] The High Court decision in that case was possible because Labor in NSW had also restored compensation coverage to the hours of travel to and from work. The provision altered the link between compensation and employment. The source of entitlement became temporal, and no longer bound to the work itself.[63] A 1953 amendment to the Victorian Act went further by providing a boon to building workers who were covered while traveling to “a place of pick-up”, even if they were not selected.[64]

Judicial activism
Another road to reform wound through the courts. In 1956, Australia’s High Court heard a case where hot bitumen had been lifted over the head of a labourer; the bench decided that employers had to organise their workplaces to avoid “unreasonable risk”, which went beyond the requirement on them to obey regulations.[65] High Court extended coverage to all injuries while “at” work, and not only for those suffered while engaged “in” work, with the Chief Justice concluding in 1962 that even an injury during a lunch-time cricket match fell within the scope of the Act.[66] On a third matter, five judges concurred that an employer had to do more than “provide the necessary safety measures only at such places as he knows or might reasonably foresee would be used by an employee.”[67] The courts, here and in England, also got around to constraining employers who tried to escape the costs of compensation by passing that responsibility to sub-contractors.

Subbies
From the 1880s, sub-contracting had marred the effort to hold employers responsible for injuries to their workers because employees had to prove for whom they had been working. If the labourer identified a sub-contractor, the chances were that he then skipped town, or slipped into bankruptcy. The ill-effects from handing work over to “independent” contractors were worst under labour-only contracts, which were more common for labourers than for tradesmen.

In 1953, the English courts began a series of judgements specifying the liability of sub-contractors. The UK judges held that contractors retained liability if they kept control over the work of their sub-contractors. Lawyers then contested the definition of “control”. What did it mean to say that a contractor had “effectively delegated the execution of work to a sub-contractor”? The outcome turned on the extent of control that each sub-contractor retained over an operation, as was decided in a 1967-69 case where the tasks of several sub-contractors had overlapped. The Law Lords determined that the subbies could not have proceeded without supervision from the contractor. The liability for compensation, therefore, fell on him. Had there been only one sub-contractor, the liability would, more likely, have remained with that individual. Although Australian judges resisted British precedents, local building firms realised that these decisions were “of the greatest practical importance.”[68] In 1984, the High Court reiterated that employers could not delegate their duty of care.[69] Even when a decision benefited the claimants, the cases took years to decide. More time passed before the implications of a higher court ruling percolated through the system of claims. Meanwhile, labourers whistled for enough money to live.

Rates
Many of the legislative adjustments fiddled with the rates, which lagged behind prices and wages. Accident pay for a Victorian family in 1944 was £3 7s when the basic wage was £4 18s and compensation pay in NSW had reached £4 10s. After Victorian Labor won its first majority in the Legislative Assembly in December 1952, the government boosted the weekly maximum from ₤8 to ₤12 16s for a family. At that time, the basic wage was ₤11 13s.[70] The new rate was a boon for workers who had been in misery. Nonetheless, the higher maximum remained below the earnings of most labourers. Under non-Labor governments from 1955, Victorian rates again fell behind the basic wage and levels of compensation in other States. A worker or dependent who sued for damages waited for two or more years to get a hearing at the Compensation Board or in the Supreme Court.[71]

Welfare – ill-fare

Workers received compensation in three forms: accident pay, lump sums for lasting disabilities, and reimbursement of medical expenses. The significance that labourers attached to each depended on the availability of comparable benefits throughout society. Pensions were so niggardly that they did nothing to lessen the urgency of the other supports. Australians did not have a permanent, universal no-fee medical service until Medicare in 1985. To help labourers secure such welfare benefits as were available, the NSW Builder’s Laborer published articles on the TB allowance and the age pension during 1959-60.[72] Ten years later, the Victorians distributed a pamphlet “to inform people of their rights to various social services”, winding up with an attack on monopolising imperialists.

Builders’ labourers had a greater need for accident pay than most workers because of the nature of their tasks. The low levels of site safety pushed their rates of illness and injury above national averages. Yet, all workers needed to improve their compensation payments because other public supports were almost non-existent until the 1940s. Social security was critical for labourers because of the nomadic nature of their employment and the churn among their employers. In those circumstances, an individual’s pursuit of a remedy against a particular boss was less likely to succeed than in most other sectors. Indeed, the NSW reform team in the early 1960s had to deal with demolishers who insured only a fraction of their workforce to save on premiums. Should one of the unlisted labourers be injured, the boss told him to apply under a false name. Inevitably, some missed out on entitlements.[73]

The determination of the ABLF to extend compensation cover, to increase the rate of accident pay and to improve health and safety on sites was part of the effort by the labour movement to reach beyond wages as the workers’ sole support. They needed industrial legislation and welfare programmes to sustain them throughout their lifetimes. By pressuring politicians, the ABLF lifted the concerns of its members towards a class-wide struggle. The extent to which labourers were able to make governments respond depended on the strength of their class as a whole, organisationally and ideologically. Putting Labor parties into parliaments repositioned the contest between classes but only at the level of law-making and administration. Industrial action and social agitation pushed all governments towards strengthening safety regulations and to improving the terms of compensation. Weaknesses in the welfare system spurred unions to redress failings in compensation and OHS laws.

Because life for injured labourers and their dependents was decided at the intersection of various pensions, benefits and health care, the next section will consider three of these concerns across the first 70 years of last century. The first deals with invalid and Repatriation pensions. Attention then turns to the struggle for universal medical cover. Finally, we look at how the affluent society of the 1960s altered what it meant to be poor.

Invalid Pensions
From 1910 to 1913, Federal Labor used its first majority in both houses of parliament to keep faith with the majority of its supporters who looked forward to a socialism without doctrines. The previous non-Labor government had legislated for invalid pensions in 1908 but a shortage of funds delayed implementation until 1910. To qualify, an applicant had to be permanently and totally incapacitated, in effect, bed-ridden. The 100% disability rule excluded most labourers since their permanent injuries were usually partial. Those maims, however, reduced both their prospects of finding work, and lowered their rates of pay should they get a job. If a claim succeeded, the pensioner got 10s a week in 1912 when the Commonwealth Basic Wage for males was ₤2 8s, itself little enough to supply frugal comforts. In 1925, the pension increased to £1, less than a quarter of the Basic Wage. The payment could barely feed, house and clothe one person. Pensioners existed on charity or their families.[74] The blind were expected to contribute to their upkeep by weaving baskets; one blind worker detailed the sweatshop conditions at the Blind Institute in a talk to the Victorian Branch of the ABLF in 1939.[75]

In the depths of the depression, the Auditor-General denounced the old-age pension for its undermining of thrift and for its rewarding of “laziness, drink, gambling, extravagance and waste.”[76] Non-Labor governments insisted that families support their own infirm.[77] That attitude was relevant only if a family existed, if its members maintained contact, and if they were well off. Assistance was often not available. Poverty was “inherited”. Children could afford to contribute only until their own offspring came along. As children moved up the social scale, a few turned their backs of their parents.[78] Nomadic labourers were more likely to be isolated than many other categories of worker.

More than 30 years passed before a new welfare payment filled one of the gaps in compensation. Sickness benefit became available from 1944 for a temporary illness, or an injury sustained outside working hours. A family got £2 10s, which was just over half of the basic wage, or around a third of average weekly earnings. The bread-winner could earn another pound a week before the payment was reduced by an equivalent amount. To qualify for an invalid pension after 1945, the applicant needed to be only 85% incapacitated. The majority of recipients had suffered from polio or road accidents, though some were from workplace injuries. The invalid pensioner got the same fortnightly amount as an aged pensioner, but had greater calls for medicines, were less able to manage public transport, and had special housing needs. Hence, invalid pensioners remained among the Australians most in misery.

War service 
Injured labourers needed to look beyond invalid pensions and sickness benefits to supplement any compensation. Some found that extra in Repatriation schemes, flowing from their overseas military service. Ex-servicemen labourers argued that their injuries and illnesses at work had been made worse because they had been weakened during the war. Because the rates were set by rank, labourers got the smallest payments since so few of them had become NCOs, let alone officers. The labourers were thus doubly victims of class – first, as cannon fodder, and then by surviving on lower pensions. However, the War Service Homes Scheme rescued some from the rental market.[79] After 1935, a new form of war-service pension provided for four categories which included more labourers:

-        TB sufferers, whether or not caused by military service;
-        men over 60 who had served in a war zone;
-        the permanently unemployable of any age;
-        victims of “the indefinite effects of war”.

This last benefit became known as the Burnt-Out Digger’s Pension. All labourers had a claim for what could be called a Burnt-Out Navvy’s Pension.

Following the Second World War, the number of Repatriation recipients trebled until, by 1952, one in eight males over 30 years of age was getting some benefit. Perhaps the most welcome was outpatients care at Repatriation hospitals since there was no universal health service.

Health insurance
Doctors looked on health care as another commodity for sale to those who could afford to pay, not as a right for those in need. Professionals, in the late 1940s, protected their incomes at the expense of their patients when the Medical Associations saboutaged the Labor government’s Pharmaceutical Benefits Scheme and a National Health system. Federal Labor did manage to establish free hospital care from 1948.[80] After 1953, the Menzies government cut off the subsidies until that arrangement lingered only in Queensland. Instead, the Commonwealth underwrote the costs of health care for those with the money to buy insurance. Tax deductions meant that the wealthy paid less for their coverage than did most workers. Few families close to the Basic Wage could afford even the lowest level of cover. One Australian in five had no medical insurance. Immigrants did not always realise that they could join before they became citizens.[81] The unions, therefore, insisted that compensation cover medical expenses from work-related injuries and diseases.

Between 1955 and 1966, the price of health insurance rose by some 140%, while the basic wage grew by only a third. That spread between incomes and medical costs made it harder than ever for a low-income earner to maintain medical cover, so that health costs often busted household budgets even for those in regular employment. An Italian couple, in 1969, had three pre-school children. The labourer husband earned $48 a week. They were paying off a house at $14 a week, which left $34 for living. As well as contributing to a health fund, they spent $2 a week on medicines.[82]

Doctors intensified their obstruction in 1973 when the Whitlam government proposed Medibank. In response to the profession’s selfishness, the ABLF black-banned jobs for medical practitioners. The universal scheme became law in 1974, despite a barking-mad campaign from doctors and the corporate providers of insurance.[83] To reward those vested interests, the Fraser government trashed Medibank so thoroughly that the ALP started afresh with Medicare in 1985, once more in the face of loony tunes from medicos. Their high-minded objections to socialised medicine never stopped their rorting the system. Specialists over-serviced in pathology and radiography to tens of millions of dollars a year. Fee-for-service became fee-for-NO-service.

The hidden people
Even a brief loss of wages threw low-income families into turmoil because most of their earnings were ear-marked for food, fuel, rent and fares. If a labourer lost a week’s pay, he and his wife had to choose between the grocer and the landlord. In 1965, Les Hall was a builder’s labourer with 12 children, living in a Housing Commission home in Melbourne’s north. He earned $48 a week, which was good money when the basic wage was around $32; the Halls also received child endowment. Yet, Mrs Hall explained: “It is a constant struggle managing. By Wednesday you wish it was Thursday – that’s when Les gets paid. Then, by the time you get the groceries, there’s nothing left till the next week.” Les’s casual employment in the building industry added to the financial stress from the number of their dependent children: “He doesn’t get any holiday pay for his four days off at Easter – it takes us weeks to catch up on payments again even if we miss a day’s pay.” Les dared not take a day off sick: “Last week he worked for three days with a boil on his nose - he nearly went beserk.”[84]  His need to continue labouring in that state increased the likelihood of injury.

Family crises of this order were chronic disabilities because their recurrence across a working life deprived labourers of the prospect of a comfortable old age. Life expectancy for adult males rose slightly in the first half of the twentieth century. A man entering the workforce aged 20 in 1901 could expect to live another 45 years, which meant he died before getting the aged pension. His son, starting in 1921, could expect to live long enough to be on the pension for three years. The slight increase in longevity meant that, by the 1960s, more retired workers had to eke out an existence.[85] Because life expectancy was lower among labourers, death rescued many of them from this indignity. Those who did survive beyond 65 found that it was costing more to be poor. Chemists reported that pensioners pleaded to have their prescriptions filled to their monetary value with soap or toothpaste.[86]

Affluent society
While pensioners subsisted by cutting back, capital could survive only if it expanded. To realise a profit on that larger output, manufacturers had to sell ever more commodities. To drive that consumption, mass marketers induced needs. For example, in the 1930s, housewives had done their weekly wash with a bar of laundry soap in a tub. Twenty years later, more costly detergent went into a washing-machine. The reduction in labouriousness had been purchased by a higher-priced cleanser and through going into debt for that consumer durable.[87]

By 1963, the post-war trough in unemployment had erased fear of another Great Depression. However, memories of the 1930s continued to identify poverty with being out of work. That equation made it easier for authorities to ignore the working poor. The conventional ignorance was that jobs and a few benefits had done away with want.[88] Harvard economist John Kenneth Galbraith published The Affluent Society in 1958, protesting that the price of private affluence was public squalor. Eight years later, John Stubbs wrote The Hidden People (1966) which confirmed Galbraith’s assessment for Australia. Stubbs brought together information long known to the church and local government agencies sustaining the aged, the homeless, the jobless and the friendless. Apart from Aborigines, the worst-off were welfare recipients renting commercially. The most vulnerable were single mothers, the sick, and southern European immigrants. The last two groups included a higher than average proportion of builders’ labourers.

The Poverty Line
During the late 1960s, researchers redefined “poverty” for an Australian economy moving towards a superabundance of material goods. The consumer price index had failed to take account of the increase in both the durables and consumables that families now needed to live. In 1907, when Justice Higgins had calculated the needs for a family of five, he referred to that minimum as a “basic wage”. Sixty years later, what had been “frugal comfort” was a “poverty line”.

Between 1946 and 1972, the pension rate as a fraction of average weekly earnings had dropped from 25.5% to 19%.[89] Labourers in receipt of accident pay were better placed than pensioners, but they were still below the basic wage. In July 1970, an Australian survey set $43.40 as the minimum needed to support a family of four. At the time, the pension for an invalid male with three dependents was $29.50. Every week, his family was $15 short. Meanwhile, average earnings were going up by 8% a year.[90]

In opposition to other Master Builders, Civil & Civic developed a welfare system to as novel as its design for Australia Square. In responding to opposition from his building workers to incentive payments, the company’s managing-director, Dick Dusseldorp, accepted that any scheme to drive productivity had to protect older and partly incapacitated workers. In 1958, the NSW Building Trades Group signed an agreement that distributed two-thirds of productivity gains equally among the Civil & Civic workforce, lifting the daily rate for a labourer by 15 per cent. A rigger recalled: “A lot of us were migrants, and we were all short of money: trying to settle and get married and buy property.” Civil & Civic also provided its employees with 24-hour sickness and injury insurance, and, in 1963, introduced superannuation for its on-site workers. While other employers predicted bankruptcy for Civil & Civic, its welfare approach meant fewer interruptions to labour time, which contributed to turning $100 invested in 1958 into $100,000 thirty years later.[91]

The collapse of the Westgate Bridge on 15 October 1970 reminded labourers for the rest of Messrs Construction Capital that the holes in the welfare and compensation systems were as gaping as those in safety. To divert attention from the slaughter, the Victorian Government scurried to raise rates of accident pay from $31 for a family of four, or around a third of what a labourer earned most weeks. The Branch called for weekly payouts to match those taken home before the Westgate deaths or injuries, and for every Westgate widow to get $35,000 lump sum without chasing claims through the courts.[92] After Victorian unions demonstrated against the meanness of the new legislation, Branch officials criticised the small turnout of BLs but praised those who showed for their standing up to the police.[93]

The need that capital had to induce needs spurred all workers to keep their incomes up with the expansion in the socially necessary costs of reproducing their labour power.[94] One aspect of this dynamic was the battle by building workers to lift their accident pay to match their incomes while in work. Making that struggle more uphill, no State provided for automatic adjustments in accident pay to keep pace with the costs of living. Some pay-outs slipped to two-thirds of the Basic Wage, which was itself depressed under a freeze between 1953 and 1958. Australian workers endured a crack-down on wages and conditions because penal powers made strikes illegal. From 1967, the metal unions broke out of this iron cage to protect their over-Award payments.[95] Militancy ran free into the O’Shea strike of May 1969. Two years later, a global upsurge against the rule of capital encouraged building unions to strike for 100% accident pay.

Accident Pay - 1971

“How can Worker’s Compensation be more nearly equated to a man’s normal wages, so that the effect of an accident at work is less devastating to his wife and family?” That question had troubled the President of Victorian Council of Social Service in 1966.[96] Action on New South Wales jobs in 1971 supplied the answer when building workers insisted on more than survival money. Because the cost of reproducing their labour power exceeded the Award minimums, labourers kept their households going through overtime and penalty rates. They lost many of those extras once they went off injured. Accident pay was about half of their income while working. They demanded make-up money in order to take home as much spending power as they did when on the job. By 1971, NSW accident pay for a family of four was $49.50, $6 above the poverty line. Building unionists wanted the carpenter’s rate of $78.80 for everyone.[97] The accident-pay campaigners also went after more cash when they needed it most, and not after waiting years for a lump-sum.

A union approach to the Industrial Court early in 1971 led to weekly meetings with the MBA.[98] After a month, the employers endorsed the new formula - but only if 100% accident pay applied to all industries through amendments to the Act. That offer spelt indefinite delay. The BWIU’s Tom McDonald declared: “We have been led up the garden path.”[99] Most jobs then held short stoppages, the Opera House proving pivotal during April when 250 workers there struck to force Hornibrook to make up the earnings of three injured employees. The tradesmen’s unions secured a general stoppage from the third of May. Four days later, the ABLF Branch joined in. With 38,000 on strike, bigger numbers turned up at each meeting. Rallies across the State on Monday, 13 May, resulted in large majorities to stay out.

Back at the Arbitration Court on 14 May, Justice Sheehy heard from the MBA before asking: “Does any one else wish to speak on behalf of the employers?” Whereupon Mundey spoke up: “Yes, I would like to say a couple of things.” Sheehy retorted: “I said ‘on behalf of the employers’, Mr Mundey, … unless of course you would like to say something on behalf of the employers.” Unfazed by that twist in the proceedings, Mundey volunteered:

If I was speaking on behalf of the employers, I would say, well, if I make my profit out of building workers and I am prepared to pay them when they are well but I am not prepared to pay them in the highest accident-prone industry in Australia when they are injured, I would be a person who would not have much morals, and I think the employers have not got very much morals when they approach this very important question the way they do.

They pay lip service – they say ‘Yes, we believe it in principle, but then let our government introduce it’ – a good choice of words, it is ‘their’ government.[100]

Mundey’s cheekiness voiced differences in strategy and tactics between the BWIU and the ABLF.[101]

Officials in both unions had never known a dispute to attract so much enthusiasm from building workers and their families. A delegation of 43 wives turned on the MBA representatives in front of the cameras. An executive officer later told the BWIU’s Tom McDonald: “I can forgive you for just about everything, but there’s one thing I can never forgive you about, and that was for unleashing those women onto me during the Accident Pay strike.”[102]

When negotiations deadlocked on 17 May, the Building Trades Group referred the strike to the Labor Council’s Disputes Committee to block supplies to any jobs working without a permit, and to spread the action interstate and to the metals. Officials appealed to hire-purchase firms not to repossess furniture.

After BWIU Federal Secretary Pat Clancy returned from overseas, he recognised the depth of feeling but not the degree of militancy.[103] He found a soul-mate in Justice Sheehy. At first, Sheehy had suggested a loading onto the weekly wage to make up for time lost during accidents. The unions wanted nothing to do with a couple of dollars a week which workers would absorb into their spending. Accident pay had to be available when they were off work. Moreover, a loading offered little support to those labourers who spent short periods in the industry. Anyone injured on first day would get nothing.

Meanwhile, the employers repeated their 1913 objections to treating compensation as an industrial matter, and were implacable against the Courts’ altering an Award under strike pressure. Instead, parliament should amend the Workers’ Compensation Act. The Government talked about doing so during the August session. That prospect delivered no guarantee of any improvement, minimised the unions’ influence over the new rates, and involved the certainty of delay while draft legislation shuffled back and forth.

On a wink and a nod from Sheehy, the BWIU leaders steered mass meetings on Thursday 21 May into a return to work.[104] Next morning, his Honour altered the Awards to make employers pay 80c a week for each worker into an fund to cover the 100% accident pay. One insurance firm had offered to do so earlier, but withdrew under intimidation from the Insurance Council. The Employers’ Federation got a writ to block the advance, but the Full Bench upheld Sheehy.[105] 

Employers across the country and in every industry feared that the NSW victory would add compensation to the fire of industrial disputes. To head off strikes, the Victorian builders pressured their State government to legislate for accident pay at the minimum wage, plus $4.50 for each child. When that compromise did not satisfy the workers, the MBA offered more money to avoid stoppages and to sidetrack demands for the make-up scheme achieved in NSW. Once the Victorian BLs insisted on the NSW system, the MBAV offered 90% of the Award as an interim arrangement.[106] In South Australia, the 1973 Compensation Act provided “average weekly earnings” calculated over the previous 12 months, an improvement from the 85% previously.[107] West Australia’s Labor administration also increased payments.

National insurance
Winning 100% accident pay gave workers no protection for two-thirds of their week. If a labourer fractured his ankle by tripping at church on Sunday night, his family got nothing. If his wife were injured at home, the family faced multiple expenses for which no compensation was available. New Zealand had abolished the right to claim damages in accidents of any kind. Instead, a national insurance commission took responsibility for everyone, covering traffic cases and workers’ compensation. The Whitlam government proposed a comparable system, at only 85% of wages, but with round-the-clock cover for all Australians. The scheme also offered medical expenses and rehabilitation.[108] To protect their incomes, insurance firms and Labor lawyers bush-whacked the plan. The insurance firms clung to the returns from investing $880m of premiums. The AMP Society conspired with the Country Party in April 1975 to have insurance agents campaign in the electorate to make Labor to abandon the Australian Government Insurance Commission “or force it from office”.[109] Under a “no fault” process, lawyers stood to lose more than $70m. a year in fees. They dreamed up a comparison to justify their parasitism. An arbitration court judge who lost a leg suffered emotional stress but the amputation had no effect on his earnings. The same injury to a builders’ labourer was catastrophic financially. Hence, he needed common law remedies.[110]

The unions’ resistance to a national system was stronger than it might have been before the Accident Pay wins of 1971 for full make-up rates. Most unions wanted any National Scheme to pay 100% of the Award. “What we have, we hold”, declared Tasmanian T&L Secretary Brian Harradine, who attacked 85% as “inhumane and unjust”.[111] Equally intolerable were the delays in paying compensation. The ABLF next strove to get compensation payments to its members within days of their being off the job with an injury.

The way the law works

61 Chester Avenue
Maroubra
12^th November 1970

Dear Jack,

          A few lines to let you know how much I appreciate the way my compensation case was handled by the solicitors you chose to put the case before the Court, with very favourable results. The case was practically settled out of court, with an offer by the GIO which was accepted by me, leaving an amount of $46 to be paid and that may be wiped also if the solicitors can persuade the Hospital to take less for treatment. So all in all it was a very satisfying conclusion to a very shaky case, but that’s the way the Law works, sometimes, and I am sure glad it did, thanks to your concern for a Rank-and-file member, also special thanks to Barney Moore, who brought the situation to you, also the solicitor’s secretary who did a great job keeping me informed of proceedings. The QC Mr Downing was a good man to have on my side. I am glad he was for me and not against. Hoping you and your officers continue to keep up the good cause in the future. I am sure our union will go a long way

Yours faithfully

Bill Fuller[112]

Delay meant denial
The more decent became the schedule of entitlements, the more reason insurance firms had to delay, reduce or refuse payments. Three cases illustrate those difficulties for the victims. A firm of bricklayers, Pinkerton & O’Bryan, were doing a job in the far west of the NSW in June 1972. After several men had been injured on site, the ABLF had found that the firm carried no compensation coverage. Although the unions got the client to insure the men, the MBA refused to move against this law-breaker.[113]

In the second case, Ron Dumbrell had been concreting on 16 October 1974 at Mannering Park on the NSW Central Coast when he fell down a flight of steps. The labourers had been asking for a light because over-head formwork kept the stairwell in darkness, but the boss did nothing until after Dumbrell’s fall. When his back got worse, his doctors put him in traction for a week. After seven weeks, he had received only two weeks compo. The insurance company said the cheque was not in the mail because it was having problems with the post; in addition, it had switched to fortnightly payments. The company next claimed that Dumbrell had a back disease, and was not suffering from the accident. The insurer refused to pay him again until he saw one of its doctors.[114]

After the 18-year old Glaswegian Jock Canning immigrated to Melbourne in 1968, he continued to work as a builders’ labourer, joining the Federation because that is what you did when you had been raised in the Gorbals. Some 18 months later, he was planning to travel north until his left arm was ripped open from wrist to shoulder. For eleven weeks, he lived off his holiday savings. After his money ran out, Jock paid his first visit to the union office where an official asked, “Who’s the contractor?” When Jock named a subbie, the official shot back: ‘That’s no use. Who’s the contractor?” Jock overheard the official on the phone making it clear that if the compo money were not at the Federation by noon, the job would be stopped. Moreover, the payment had to be in cash, not one of those bouncing cheques. “Get yourself a coffee son, and be back here at twelve.” When Jock returned, the official handed over a wad of banknotes. “Come back every Friday and there’ll be more.”[115] Jock Canning had been through the tangle of the compensation system. He had witnessed the power of the ABLF to ride over its evasions and delays. He had also made the acquaintance of his Federal Secretary, Norm Gallagher.

Vital as such interventions were for each member, they were no solution to the burdens that delay placed on them. Wins on behalf of an individual sent warnings to employers as a class. Yet, those efforts were no substitute for upending the system. The 1971 victory over rates of accident pay left unanswered the matter of its prompt delivery.

Compo lotto
Several States eliminated the right of injured workers to sue under the Common Law. One argument was that lump sums for the permanently incapacitated left them impoverished a few years after their awards. For instance, in 1980, a 40-year old paraplegic needed $1.25m. to sustain himself for his rest of life in a nursing home, but the courts rarely granted sums of that magnitude.[116]

The union leaders who upheld their members’ right to chase damages all the way to the Privy Council were on stronger grounds in pointing to a double standard. Why remove those rights from injured workers while allowing employers to use Common Law remedies against unions for damages during industrial disputes?

Lawyers benefited the most from Common Law actions. For 1982-83, their fees in NSW amounted to $34m., or 6% of premiums.[117] By the early 1990s, lawyers were getting between a third and half of Common Law payouts.[118] Delay was as profitable to them as it was depressing to claimants. A therapist who dealt with the families of victims painted this portrait:

The injured worker, demoralised, uncertain and depressed is referred by his union to a legal firm. Here it is unusual for him to have his options spelled out in any way he can understand. He is generally advised not to return to work. The point, of course, of the legal consultation is to establish, not diminish his symptoms. He is left feeling kept in the dark by mystifying legal procedures.[119]

To conduct these cases, the lawyers relied on medical experts who subjected labourers batteries to “friendly” and “unfriendly” tests. Some labourers saw as many as 50 specialists, though the average was 20. The expert’s job was to evaluate the injury, not to treat it. In 1981, a psychiatrist reported on his work with immigrant labourers who were left

feeling helpless and paranoid in a complicated and foreign system he doesn’t understand, and experiencing rejection by a system which seems interested only in discrediting but not treating him. He feels betrayed and his depression alternates with anger and impotent rage ...

The pressure on the victim was to “hang on to legally valuable symptoms”, which “become his major point of communication.”[120] Cases took an average of two years to reach settlement, some dragging on for five. Only 1.6% of these disputes went to judgement, most being settled “at the door of the court” in deals between opposing solicitors. Without the option of “compo lotto” under the Common Law, many of those outcomes would have been achieved within weeks.[121] Locked up in this legal-medical madhouse, relief from pain represented “defeat”, rehabilitation appeared as failure.[122] Victims deserved compensation for the stress caused by the proceedings as much as from the injury.

When do we want it!
To speed up the delivery of accident pay, union protests erupted along Melbourne streets during May 1979. The demonstrations started after ABLF officials reported the “disgusting” treatment of one member at the hands of Mercantile Mutual. In response, 900 workers took over the firm’s offices. Gallagher warned that scams by the insurers were on the rise. One trick was to sneak a line onto the bottom of application forms to sign over access to the labourer’s medical records for use in combating the claim.[123]

Building workers occupied insurance offices on and off for six weeks, finding a sympathetic ear among clerical staff. The British multi-national C. E. Heath thought itself secure 33 floors up in BHP House when 4,500 building workers marched on them. Just to make sure, the managers stationed police downstairs and turned off the lifts. BLs knew the ins and outs of the place, having built it. Entering through the delivery dock, 300 of them bounded up the 600 steps, while the majority stormed the front entrance. Soon afterwards, all sixty insurers signed up to end delays in their delivery of accident pay on injuries “caused by violent visible external means.” Money had to be there each week, not fortnightly.[124]

As with the 1971 campaign in NSW, no one in the industry could recall an issue with wider or deeper support for militant action. The Melbourne struggle united the native-born and the immigrants. Unlike in NSW, the action also strengthened the alliance between tradesmen and labourers. The ABLF leadership rejoiced that the battle had not been diverted into another “Vote Labor” fiasco, like the one that had derailed opposition to the 1976 wind-back of Medibank.[125]   

Mass rank-and-file representations to the insurers jumped State borders. Early in 1980, the NSW Branch went after the Victorian deal by occupying company premises. Here too, the campaign had been triggered by a single case which resonated with labourers. Sun Alliance had cut off payments to a worker from the QANTAS job. The appearance of 600 unionists brought a change of mind and convinced other insurers to agree to the Victorian practice.[126] Direct action in July got a lump sum of $4,700 for a member who had been on sickness benefit of $56 week for 20 months.[127]

Much the same happened in August 1981 on behalf of Canberra scaffolder Bob Weslin who had got accident pay after falling onto his back at the National Gallery. When he returned to work, though with a different company, his back gave out and he had to go off again. This time, he saw no payments for four weeks. To get Weslin the money to support his twin daughters, thirty BLs sat in on the Canberra agent for the insurer. Once word reached Melbourne, ten jobs stopped and 1,000 labourers marched on the company. The manager accepted that Weslin was entitled to his accident pay; the hold-up, he explained, resulted from a tussle between his firm and City Mutual. He suggested that Weslin wait until the courts decided which insurer had to pay. No sooner did the Federation mention bans on a City Mutual project in Perth than the cash began to flow.[128] Next year, even whispers of a march on C. E. Heath in Hobart was enough to win a payment outside the Table of Maims.[129]

Globalise

Insurers at risk
Before the building unions had won either of these campaigns, the insurance companies were undermining entitlements as they struggled to remain solvent during the upheavals from the collapse of the post-war expansion. By June 1976, the Commonwealth’s 1973 Insurance Act had insulated the firms against competition by almost halving their number to 214. The big players welcomed the “socialistic” controls to eradicate the scamsters who had flocked to the sector in the late 1960s to skim profits from its cash flows.[130]

This rescue package foundered when capitalism spawned a sub-species of its disorderliness by combining inflation with stagnation. “Stagflation” hit insurance firms harder than other sectors. Throughout the 1960s, inflation had averaged around 2.5% before shooting up to 15% in the mid-1970s. Payouts exploded. The cost of motor repairs, for instance, grew faster than the Consumer Price Index.[131] Holders of life policies took flight before their nest-eggs lost even more value, pushing the surrender rate up by 50% during the early 1970s.[132] The insurers suffered a triple blow because their actuaries had failed to predict the risk of higher inflation, thus underestimating the premiums that their firms should have struck. On the supply side, stagnation meant that fewer new policies were written. The global downturn also cut into the returns from investing the premiums. These contractions contributed to the collapse of the construction sector where insurers had been major investors.

To compensate themselves for their own folly, the insurance firms increased premiums. In turn, the Master Builders leant on governments to reduce entitlements and thereby stabilise insurance costs. A 1978 report in West Australia advocated cutting lump-sums from $42,000 to $30,000, and weekly payments back to 85%. The investigator opposed 100% accident pay on principle because injured workers and their dependents had to endure hardship to discourage malingering by a few.[133] That an early return to work risked compounding the original injury did not cross his conscience. The swipe at compensation entitlements was part of a strategy to drive down labour costs. After the oil price shocks of 1973, the crisis in Japan’s economy disrupted Western Australia’s resources sector. During 1974, a new State government armed itself with an Emergency Services Act which undermined the rule of law. To back up this regime, the premier appointed a reactionary ideologue as police commissioner who equipped his force with armoured cars and trained them with the Army’s Special Air Services.[134]

In other States, the MBA urged similar changes.[135] The Victorian government met the hopes of the employers in October 1979 by proposing to amend the Act to compensate insurers for their mistakes. On the down side for workers, some amendments cut back on the range of medical conditions for which claims could be made. For instance, a labourer who suffered a heart attack at work had, henceforth, to prove that its onset resulted from “effort, strain or stress that is abnormal, excessive, or unusual.” Victims now had to convince a court that their work had been a “major” contributor to their illness.[136] The rewrite made it harder for labourers to be compensated for back injuries, hernias, bung knees, lung diseases, hypertension, heart attacks and strokes. Meanwhile, doctors and lawyers – known as “blood-and-bone men”[137] – coined money by disputing the definition of “major”. In another blow to labourers, injuries during travel to and from the job were transferred to the Motor Accident Act, which allowed less favourable rates of compensation.[138] The new regime was so hostile to injured workers that unions that had not struck for 75 years went out. Their concerted opposition forced the government to abandon its Bill and start over.[139]

Realising that appeals to politicians were a diversion of energies, the building workers directed their protests against employers and insurers. The unions told the builders to “Switch to State Insurance or else!” The day after the changes became law in November 1980, labourers took to the streets. Next, the private health insurers drove up their charges. During July 1981, 4,000 building workers marched against the prospect of paying $20 a week for the top private cover or 10% of the weekly base wage for a brickie’s labourer. The ABLF applauded the ALP’s promise to restore universal medical care under the Accord.[140]

From the late 1960s, the ABLF had applied industrial pressure to doctors, to employers and to insurance companies. Its extra-parliamentary politics subjected governments, Labor and non-Labor alike, to the forms of struggle that labourers had developed for industrial disputes. These guerilla tactics outraged the employers and their political agents onto a new round of deregistration and a Royal Commission into corruption during 1981. The Federation’s militancy around compensation had not, of itself, provoked those moves. The attack in Victoria had its origins in the Branch’s victories at Loy Yang Power station and the Omega Tower.[141] To sell their onslaught, the MBA and its government presented the ABLF’s direct action against insurers as corroboration of its “blackmail” and illegality.

Rehabilitation and retraining
For 100 years, the Employers’ Liability and Workers’ Compensation Acts had been about getting some money to injured workers: “how much?”, and “how soon?” In the mid-1980s, legislation inscribed new principles for care and responsibility. Henceforth, rehabilitation and retraining were to compensate for failures in OHS. In Victoria, an offer of rehabilitation became automatic after a four-week absence.

The social good and individual self-esteem from a labourer’s returning to paid employment are clear. The obstacles to making that transition vary with job experience, age and ethnicity. Rehabilitating labourers to perform their previous tasks is often as hard as retraining them for a different kind of work. Not every disabled labourer will be offered work as a nipper or first-aid officer. Even those who do find those positions have to cope with a loss of pride from no longer being able to display prowess and endurance while demonstrating skill as a scaffolder or steel-fixer. Disablements that put labourers outside the building game deprive them of three of its attractions: one, the pleasure from working outdoor; two, the sociability from being part of a team; and three, the self-worth from retaining more control over their tasks than do process workers. Retraining had to adjust the labourer’s expectations to an indoor job under a regime of rigid time controls, itself a form of disablement. In addition, both rehabilitation and retraining have to deal with limitations on off-work activities, such as sport and child-raising.

Cost shifting
Every dollar spent on retraining saved $17 in payments as one more contribution to reducing labour costs in the drive for international competitiveness. A transformation in global capital had been underway before a world recession from 1980 turned out to be more than another slump in the trade cycle, This restructure became known as Thatcherism, Reaganomics or the Accord, before being re-branded as globalisation. Its early outward signs were cuts to the manufacturing sector and the removal of controls over the flows of money capital. At its core, the recent round of globalisation is one more stage in equalising the unit costs of labour power across all nation-market-states.[142]

Although Messrs Construction Capital did not face competition from imports, their profitability was not immune from the pressure to earn the average rate of profit. Once the Hawke government floated the dollar in December 1983, institutional investors organised in the Building Owners & Managers Association, screwed down on contractors to contain the clients’ costs from a global competition for money capital.[143] That financial squeeze increased the determination of the Master Builders to eliminate the ABLF.

Factories felt the impact of globalisation first because of their exposure to imports and their difficulty in competing in foreign markets against lower-priced rivals. Because Victoria had been Australia’s manufacturing heartland, that State had most to lose from de-industrialisation. In response, the State ALP government gave “top priority” in its 1984 Economic Strategy to reducing the costs of workers’ compensation which were “strangling Victorian business”.[144] Employer groups backed the cutting of premiums from ten percent of wages to no more than four.

One ALP campaign promise to the unions had been to overhaul compensation and OHS. By the end of its first term, the Cain cabinet had made little headway on either against the hostile Legislative Council. The ALP was returned on 23 March 1985, with its first majority in both houses. Here was the chance to keep its promises on compensation. The government hurried through legislation in July. Opposition Councillors slowed its progress by calling eighteen procedural divisions but failed to prevent its passage before the government lost its upper-house majority at an August by-election.[145]

Victorian labourers did well out of the scheme’s immediate and medium-term accident pay. After 60 weeks, however, they lost almost all monetary support, leaving it to Medicare and Social Security to maintain many of the permanently disabled.[146] The reliance on the welfare system shifted some of the costs of injury from the premiums paid by employers across to taxpayers in general. That transfer was typical of the Federal ALP’s use of the Accord to reduce the direct costs of labour through a social wage. Disability pensions concealed unfunded compensation as well as an increase in those workers deemed to be no-longer employable.[147]

During 1986, NSW employers moaned that insurance premiums were driving them out of business, or interstate. Their complaint was fraudulent since many had been up to their old trick of cheating on payments. Those evasions drove up the cost for the firms that could not escape their obligations. In one case, the unions identified a window-fixer with fourteen staff on “individual contracts”, but who had paid premiums on an annual wage of only $1,000 for each employee, or about one-tenth of his obligations. An official investigation of sawmills and abattoirs eliminated rorts and thereby cut premiums by between 30 and 50%.[148] Evasion in Victoria was so rampant that the Payroll Office collected $2.5bn in missing premiums, or 5% of the total wages bill.[149]

Bending before employer pressure, the ALP in New South Wales moved to lower the costs on capital from premiums for compensation. Building and transport unions talked the Labor Council into opposing the plan. State cabinet then tried to slip its changes through at a meeting on 24 February 1987, until word leaked out. Within four hours, 10,000 building workers had surrounded the State Office Block. The ALP ministers and their mates at the Labor Council then crafted a compromise which reduced some entitlements but improved others. For example, accident pay for the second 26-weeks off work went down to 90% of the previous wage while limits on the Table of Maims went up from $31,000 to $80,000. Building workers welcomed an emphasis on rehabilitation.[150]

An openly anti-labour administration in Western Australia from early 1993 brought on a sequence of amendments which failed to contain costs. At first, the Coalition’s promise to reduce payouts encouraged insurers to lower their premiums. When the cuts did not eventuate, the insurers had to play catch-up by pushing up their rates. The attempts to reduce entitlements also encountered unanticipated consequences. For instance, the amendments ran into conflicts between the insurers and the mining industry. The mines had got their employees to sign individual agreements which tightened the companies’ control over labour-time in order to extract more surplus value. The inducement was to offer earnings above the wages set in the Awards. Once injured, a mine worker expected compensation at the higher rate whereas the new Act insisted on Award rates.[151] The cross-currents and confusions were reminders of how much workers had lost with the sinking of a National Insurance scheme in 1975. 

Early this century, the ebb and flow of money-capital across the globe again caused governments to shield corporate insurers from each other’s criminality (HIH Insurance), incompetence (United Medical Protection), or the madness of strangers (Bali bombing). The surviving insurers faced huge payouts from the coincidence of non-state terrorists with underemployed lawyers soliciting class actions on payment-by-results. In response, governments limited liabilities for negligence and capped pay-outs.[152] In 2008, South Australia became the last of the States to cut compensation payments on advice that reducing benefits was the only way to save WorkCover from bankruptcy.[153] What was wrong with eliminating the injuries on which compensation is paid? That alternative is obvious to anyone concerned with the health of workers rather than with boosting profits. The untried method for prevention is to prosecute every employer whose workers suffer compensated injuries. To contemplate doing so challenges the “legal reasoning” that industrial assaults are not real crimes.

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