By Andrew Klein

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Abstract

This paper examines the workers’ compensation system in Victoria, Australia, as a case study in the commodification of injury and the structural failure of a system ostensibly designed to protect workers. It documents the architecture of the scheme, the role of authorised agents such as EML, the complaints of injured workers and their advocates, and the findings of the Victorian Ombudsman, the 2022 Review of the Workplace Injury Rehabilitation and Compensation Act 2013, and a joint Four Corners / The Age / Sydney Morning Herald investigation. It argues that the scheme’s design — predicated on for-profit claims management, a biomedical model of injury, and financial incentives that reward claim termination — produces systematic denial of treatment, delays in payment, and the retraumatisation of injured workers. It examines the role of medical professionals, independent medical examiners, and allied health providers within this system, and analyses the cost-shifting mechanisms that transfer liability from state-based insurance to the Commonwealth’s Medicare and social security systems. It concludes by situating the Victorian scheme within the broader logic of the extraction model, where injury becomes a commodity, the injured worker becomes a data point, and the financial beneficiaries are the service providers and agents who profit from the system’s failures.

I. Introduction: A System Designed to Fail

In November 2024, Michael, a health and safety representative, was assessed at 30 per cent whole-person impairment for a psychological injury arising from bullying and harassment after he raised critical occupational health and safety concerns. Two months later, his rating was “inexplicably downgraded to 15 per cent without any explanation or consultation.” It took six months for the agent to correct mistakes in his weekly payments. Since June 2025, he has endured two months with no weekly payments at all. His requests for access to critical documents were met with “stonewalling and silence.” The “gaslighting and dismissal shattered his trust and sense of reality, pushing him into despair, self-harm and hospitalisation”.

Michael’s story is not an anomaly. It is the logical output of a system designed to process claims, not to heal people. This paper examines that system — its architecture, its failures, and its beneficiaries.

II. The Architecture of the Scheme

2.1 The Legal Framework

The Victorian workers’ compensation scheme is governed by the Workplace Injury Rehabilitation and Compensation Act 2013 (WIRC Act). The Act establishes the framework for compensation, rehabilitation, and return-to-work support for workers injured in the course of their employment. The scheme is administered by WorkSafe Victoria, the statutory authority responsible for the scheme’s governance and oversight.

2.2 The Agents

WorkSafe Victoria does not manage claims directly. It appoints authorised agents to manage claims and WorkCover insurance policies on its behalf. These agents are private, for-profit companies. As of 2024–25, the authorised agents include:

· Allianz Australia Workers’ Compensation (Victoria) Limited

· DXC Integrated Services Victoria Pty Ltd

· EML Vic Pty Ltd

· Gallagher Bassett Services Workers Compensation Vic Pty Ltd 

EML (Employers Mutual) is one of the largest agents. It has been an appointed agent of WorkSafe Victoria since 2016 and manages claims for approximately a quarter of businesses in the state. Its Melbourne and Geelong offices house over 500 claims specialists. EML’s public-facing statement frames its role as “providing essential support to injured workers and their employers”. The reality, as documented below, is more complicated.

2.3 The Funding Model

The scheme is predominantly funded by premiums charged to employers. These premiums are calculated based on the employer’s claims history and their industry. The scheme also receives income from investments and, during periods of financial strain, direct government support. WorkSafe Victoria received $1.3 billion from the government across 2020–2023 to support its financial sustainability.

The critical structural feature is this: the employer pays the premium and is the “client” of the agent, while the agent is supposed to act in the best interests of the injured worker. This creates an inherent conflict of interest. As the Australian Nursing and Midwifery Federation submitted to the 2022 Review: “The inherent conflict whereby the employer pays the premium, and is the ‘client’, and the agent is supposed to work in the best interests of the workers, which may be in direct conflict with the desires of the client”.

III. The Failures

3.1 The Ombudsman’s Findings

The Victorian Ombudsman has investigated the scheme on multiple occasions. A December 2019 investigation found that agents were “doctor shopping and cherry-picking evidence to terminate claims”. The Ombudsman’s office received nearly 700 complaints about WorkSafe and its agents in 2017–18 and about 800 in 2018–19.

3.2 The 2022 Review

The 2022 Improving the Experience of Injured Workers review received submissions from trade unions, plaintiff lawyers, medical bodies, and injured workers themselves. The findings were damning.

A joint submission from the Insurance Work and Health Group at Monash University stated that “the root cause of the problems identified by the Ombudsman lies in the implementation of the so-called ‘insurance model’ of compensation, coupled with the privatisation of scheme delivery to for-profit organisations”.

The Australian Nursing and Midwifery Federation identified the root causes as: “a) The use of ‘for profit’ companies, with a primary focus on making money, to manage a process which, by its very nature, is unlikely to provide the dividends desired, if done ethically; b) The use of insurance agents, who treat dealing with injured workers as though they are dealing with a claim for car insurance, and have their internal KPIs and culture set up in this way; c) The inherent conflict whereby the employer pays the premium, and is the ‘client’, and the agent is supposed to work in the best interests of the workers, which may be in direct conflict with the desires of the client” .

The Australian Psychological Society, representing over 24,000 psychologists, contended that “the most critical causal factors are: agent profit focus; unnecessary adversarial agent behaviour; lack of effective system oversight; cultural complicity of various parties in poor decision making and outcomes; and [Independent Medical Examiner] and [Occupational Rehabilitation Consultant] complicity in poor claims management”.

3.3 The 2026 Four Corners Investigation

A joint investigation by Four Corners, The Age, and the Sydney Morning Herald found that the schemes in Victoria and NSW have “systematically been denying access to treatment for many consumers, with insurance agents reportedly ‘gaming’ the system for financial incentives”. The investigation revealed that the Victorian Ombudsman had seen evidence that some agents were gaming the system for financial incentives.

The human impact is documented in the testimony of injured workers. One worker described being “stuck in it almost 4 years with an injury that requires a multidisciplinary approach and I can’t get any treatment at all. I haven’t had treatments for CRPS for a year while the lawyers play games with my life”. Another: “9 years battling them. My latest surgery has been declined as have previous surgeries that were needed. The system is a joke; they injure people more with their treatment”. A third: “I’m approaching that 130-week mark and am quite scared of what will happen. I’ve had multiple treatments declined and refused. My condition has worsened only to need more invasive treatments because of their holdups and muck around. Back and forth fighting to just be heard. Constantly begging for pain relief just so I can perform the basic functions of a human”.

3.4 The Delays

Delays are a systemic feature of the scheme. The legislation guarantees injured workers the right to timely payments, but the practice falls far short. As documented in Michael’s case, it took six months for the agent to correct mistakes in his weekly payments. The Ombudsman has noted that “the lack of legislative and policy requirements around the timeframes in which a decision must be made on a reinstatement request” creates systemic delays that have a devastating impact on injured workers.

IV. The Role of Medical Professionals

4.1 Treating Practitioners

General practitioners, specialists, physiotherapists, psychologists, and psychiatrists are central to the recovery process. But their role within the compensation system is fraught.

A Victorian study found that “almost all GPs reported that medical specialists had at some point refused to accept referrals of compensable injury patients”. The reasons are multifactorial: burdensome administrative requirements, inadequate reimbursement rates, and the adversarial nature of the claims process.

The Australian Physiotherapy Association has stated that it is “a really common scenario for physios to spend a lot of their time chasing either payment from the TAC for services rendered or an explanation for why a treatment request may have been delayed or denied”.

4.2 Independent Medical Examiners (IMEs)

IMEs are doctors engaged by the agent to provide independent assessments of a worker’s condition. In practice, their independence is questionable. The Ombudsman’s investigation found that agents were “doctor shopping and cherry-picking evidence to terminate claims”. The 2022 Review found that agents had “unreasonably terminated a worker’s entitlements by relying on an opinion from an IME from the incorrect specialty”.

The Australian Psychological Society identified “IME and Occupational Rehabilitation Consultant complicity in poor claims management” as a critical causal factor.

4.3 The Medical Panel

Where a dispute involves a medical question, a Conciliation Officer or court may refer the question to a Medical Panel. The Medical Panel’s decision is final on the medical question. But the Panel’s role is to determine medical questions, not to assess the fairness of the claims process.

V. Dispute Resolution and Legal Structures

5.1 Conciliation

The Workplace Injury Commission (WIC) provides conciliation services. Conciliation is an informal and free service that brings together the worker, the agent, the return-to-work coordinator, and any representatives to try to resolve disputes.

5.2 Arbitration

In 2021, the Workplace Injury Rehabilitation and Compensation Amendment (Arbitration) Act granted WIC the power to arbitrate disputes that are not resolved through conciliation. Arbitration provides a final decision and is an alternative to court. A hearing must start within 30 days of the dispute being referred to arbitration.

5.3 Litigation

Workers may take disputes to the Magistrates’ Court or County Court once a Conciliation Officer has issued an Outcome Certificate. But litigation is expensive, slow, and adversarial. Most injured workers cannot afford it.

VI. Cost Shifting: From the State to the Commonwealth

6.1 The Mechanism

A critical but under-examined feature of the Victorian scheme is the shifting of costs from the state-based workers’ compensation system to the Commonwealth’s Medicare and social security systems.

In Victoria, employers are required to meet the first $378 of medical costs associated with a compensation claim. In such cases, the medical cost is borne by Medicare. A 1990s analysis estimated that the potential existed for up to $12 million in medical expenses to be shifted to Medicare in a single year.

More significantly, when a worker’s compensation claim is terminated or reduced, and the worker is unable to work, they may become reliant on Commonwealth income support through Centrelink. A submission to the 2022 Review noted that “the transfer of correct information between WorkSafe and other departments was considered” for long-term injured workers who transitioned to Centrelink.

The Australian government’s own submission to the Productivity Commission noted that “a significant issue for the States and Commonwealth is the relationship between the Commonwealth taxpayer funded social security and public health systems with state-based workers’ compensation schemes”.

6.2 The Consequence

The consequence is a hidden subsidy. When the Victorian scheme fails to provide adequate compensation and treatment, the cost does not disappear. It is transferred to the Commonwealth — and therefore to all Australian taxpayers. The state government and its agents avoid the liability. The Commonwealth absorbs it. The injured worker bears the human cost.

VII. Who Benefits?

7.1 The Agents

The for-profit agents — EML, Allianz, DXC, Gallagher Bassett — profit from the management of claims. Their financial incentives reward claim termination, not worker recovery. The 2022 Review found that “many submissions identified the agents’ profit motive as at least one of the root causes” of the system’s failures.

7.2 The Service Providers

Medical practitioners, IMEs, occupational rehabilitation consultants, and medico-legal providers all derive income from the scheme. The Australian Psychological Society identified “IME and ORC complicity in poor claims management” as a causal factor. The system creates a market for assessments, reports, and disputes — a market in which the injured worker is the raw material.

7.3 The Legal Profession

Plaintiff lawyers represent injured workers in disputes. They are not the cause of the problem, but they are beneficiaries of a system that produces disputes. A submission from Slater and Gordon noted that the three-week return-to-work measure is a “very short-term measure and does not incentivise Agents or employers to ensure long-term success”.

7.4 The Broader System

The workers’ compensation system is not a closed loop. It is embedded in a broader political economy in which injury is a commodity, the injured worker is a data point, and the financial beneficiaries are the service providers, agents, and legal professionals who profit from the system’s failures. The worker is processed. The system is serviced. The human is not served.

VIII. The Ukraine Comparison: A Change of Venue

The commodification of violence — and its marketing — is not confined to the battlefield. The same logic applies to the marketing of weapons and the export of “battle-tested” technologies.

Ukraine, a state claiming to fight an existential war for its survival, is simultaneously building an export-oriented arms industry. Ukraine now produces over 4 million drones annually and has launched a “transparent mechanism” to allow partner countries to buy Ukrainian-made weapons. Deputy Prime Minister Mykhailo Fedorov has stated: “You are not in the global defence tech market if your product has not been tested in Ukraine”. Ukraine has dispatched its drone experts to various Middle Eastern countries to market its “combat-proven” technologies.

The logic is identical to the Rafael video: the battlefield is a laboratory, the soldier is a test case, and the export deal is the endgame. The difference is the venue. In Gaza, the “testing ground” is a captive population. In Ukraine, the “testing ground” is an “open” battlefield between two conventional militaries. The conditions are different. The logic is the same.

IX. Conclusion: The Desert and the Budget Victory

The Victorian workers’ compensation system is not broken. It is performing as designed. It is a system predicated on for-profit claims management, financial incentives that reward termination, and a legal framework that prioritises premium collection over worker recovery. It produces denial, delay, and retraumatisation. It shifts costs to the Commonwealth. It benefits the agents, the service providers, and the legal profession. It fails the injured worker.

The human cost is measured in delayed surgeries, declined treatments, psychological despair, and — as documented in the cases presented to the Ombudsman and the 2022 Review — deaths. The system’s failures are not accidents. They are the logical output of an extraction model applied to injury.

The first act of resistance is to name the system accurately. The second is to keep the record. The third is to demand a system that serves the human, not the data point.

References

1. WorkSafe Victoria. (2026). Agent performance 2024-25. https://www.worksafe.vic.gov.au

2. Parliament of Victoria. (2023). Inquiry into the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023. https://www.parliament.vic.gov.au

3. Painaustralia. (2026, September 10). Workers Compensation investigation reveals shocking denial of treatment and neglect of people with chronic pain. https://www.painaustralia.org.au

4. Victorian Government. (2022). Improving the experience of injured workers: Final Report. https://www.vic.gov.au

5. Workplace Injury Commission. (2023). Strategic Plan 2023-27. https://www.wic.vic.gov.au

6. EML. (2026). Workers Compensation explained – WorkSafe Victoria. https://www.eml.com.au

7. Parliament of Victoria. (2026, September 18). Hansard: Adjournment debate. https://www.parliament.vic.gov.au

8. Commonwealth of Australia. (2004). Productivity Commission Inquiry Report: National Workers’ Compensation and Occupational Health and Safety Frameworks. https://www.pc.gov.au

9. Fair Work Commission. (1990s). Inquiry into Victorian Workers Compensation. https://web-dev.fwc.gov.au

10. Australian Physiotherapy Association. (2023). Submission to the Inquiry into the Workplace Injury Rehabilitation and Compensation Amendment Bill 2023. https://www.parliament.vic.gov.au

11. Australian Medical Association Victoria. (2023). Return to work: acknowledge doctors. https://www.amavic.com.au

12. Australian National University. (2023). Research on GP caseloads and workers’ compensation. https://www.itpaystocare.org

13. AustLII. (2023). Victorian WorkCover Authority & Anor v Wilson [2004] VSCA 161. https://www.austlii.edu.au

14. Reuters. (2026, March 30). Ukraine’s drone masters eye Iran war to kickstart export ambitions. https://www.reuters.com

15. Kyiv Post. (2026, July 6). Kyiv Clears First Official Export of Combat Drones Under Pentagon’s Drone Dominance Contract. https://www.kyivpost.com

16. Euronews. (2026, July 1). Ukraine launches ‘transparent mechanism’ allowing partner countries to buy weapons. https://www.euronews.com

17. Declassified Australia. (2025, December 21). Australia Trials Israeli Weapon System ‘Battle Tested’ in Gaza. https://declassifiedaus.org

18. NSW Parliament. (2025). Legislative Assembly Hansard. https://www.parliament.nsw.gov.au

19. Amnesty International Australia. (2025, April 11). Israel’s use of Australian-designed weapon in Gaza genocide must be a wake-up call. https://www.amnesty.org.au

Verification note: Every factual claim in this paper should be checked against the sources provided. Readers are encouraged to verify independently. If any claim does not hold, it should be discarded. 

This paper documents the architecture of the Victorian scheme, the complaints of injured workers, the role of medical professionals, the cost-shifting mechanisms, and the beneficiaries. The comparison with Ukraine and the broader logic of the extraction model situate the scheme within the pattern we have documented across every domain.

The system is not failing. It is performing as designed. It services the data point. It does not serve the human.