Gaming The Injury System: Australian Postal Services Gets Called Out

The famous actress Mae West said, “Too much of a good thing can be wonderful.”   Maybe so, but news from Australia indicates that putting too much emphasis on reducing lost time injury statistics is producing some less-than-wonderful unintended consequences.

Executives with the Australian Post, their version of the U.S. Postal Service,are under investigation for allegedly manipulating injury reporting and loopholes to secure bonuses.   According to reports, execs could earn up to $60,000 (AUD) for meeting lost time injury reduction targets.  The charge is that, unable to really reduce injuries, they played with the numbers.

The claim is “senior staff postponed processing injury claims and recorded workers as on sick leave instead of absent with injury… The allegations included claims of paying for employees medical expenses on the company credit card instead of workers filing compensation claims.”   

How deep does the problem run?  The investigation says perhaps as many as 20% of the injury cases were either hidden until  after the bonuses were awarded or managed through some other loophole.   Separate reports have claimed that roughly 10 percent of Australia’s postal workers were on some sort of light duty work, which also happens to keep them off the country’s workers comp books.  Additionally, there are claims that there is widespread fraud among the employees who are on workers comp.

What does that mean to U.S. companies?  Two things:

  1. Don’t get caught up in making the numbers look good.  Focus on measures that actually reduce injuries and minimize the impact when injuries happen.  Statistics like Total Recordable Injury Rates (TRIR) and Lost Time Injuries Rates (LTIR) are valuable, but they are just statistics.  They don’t really tell you much about the underlying safety program and they can be manipulated.
  2. Tying executive bonuses to company safety is important, but be careful how “safety” is defined.  A quick google search on executive bonuses show a lot of companies use TRIR and LTIR as a part of the bonus package.  In one case, failure to meet certain benchmarks for those two numbers could cost the executive a quarter of his bonus and making the numbers go down could add more than 10% to the bonus.    The character of the executive and the culture of the company may determine how that is accomplished.
  3. There are right ways and wrong ways to use restricted duty.   Understand the difference.

That is not to say companies should not work to reduce OSHA recordables and use case management to hold down workers comp costs. Our experience in interpreting OSHA’s reporting rules shows very clearly that many incidents are incorrectly identified as recordables, either by mistake or because medical providers didn’t understand OSHA’s guidance.

On workers comp, cost control is essential.  So is using restricted duty to get workers back on the job as soon as is safe and practicable.  Studies show that intervention to get workers back on the job quickly after an injury reduces the duration and extent of the overall injury.   Judicious use of restricted duty also builds trust and employee engagement because it sends a strong signal that the company will take care of its employees.

But the scandal that appears to be unfolding in Australia is a cautionary that you can’t obsess over the metrics and lose sight of the real goal of worker health.

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