On 8 September, 2016 the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill received Royal Assent.
While the Bill enacted a number of changes to the WorkCover regime, the focus of this article relates to the changes that potentially affect third parties that contract with an employing entity, such as host employers and principals.
In short, if a worker brings a common law claim for damages against an employer and the employer makes a claim for contribution or indemnity against a third party for the worker’s claim, the third party is unable to rely on any indemnity clauses that might have been written into a contract with the employer to deny the employer’s claim. The effect is that businesses that may have drafted contracts with employing entities in the belief that they have passed on the risk to the employer may find themselves unable to rely on any contractual indemnity clauses when an employer makes a claim against them.
It is worth noting though that the effect of the Supreme Court judgment of Byrne v People Resourcing (Qld) Pty Ltd & Anor  QSC 269 survived the proposed changes put forward in the Bill. Consequently, and at odds with the above changes, if a worker makes a claim for damages directly against a third party then the third party can potentially rely on the contractual indemnity clauses in the contract with the employer in its pursuit of a claim for indemnity against the employer.
Finally, the changes will also apply retrospectively to claims made by workers that pre-dated 8 September 2016 and have not settled or been determined in court proceedings prior to this date. It is recommended that businesses that have these types of indemnity clauses in their contracts review their insurance to ensure there is adequate cover for the risk transferred back by the employer.