W.A. Eshuisi
Workers' compensation and prevention within organizations
Keywords: workers’compensation, prevention, occupational accidents, occupational diseases, labour
organizations.
Summary
In most countries workers who have financial damage from occupational accidents and occupational
diseases can rely on a workers ' compensationsystem such as a compensationfund for occupational
diseases or an industrial accident insurance. It is not clear to what extent these systems facilitate the
emergence of this damage and compensate the damage or contribute to prevention, the improvement
of working conditions and labour relations, so the number of victims of occupational accidents and
diseases will reduce.
In the research project “Worker's compensation and prevention under construction” the preventive
effect of four compensation systems in Netherlands and Belgium is examined. The research consisted
of a legal analysis, a questionnaire survey and case studies. The study shows that compensation
systems hardly affect the working conditions nor the industrial relations. Two organizational
characteristics are responsible for the lack of necessary improvements. Firstly, the limited
responsiveness of the organization for signals from outside. The second characteristic is the inadequate
communicative relationships within the organization: in this study the organizations show an apparent
abuse of power and selective dissemination of information, while the workers affected are confronted
with multiple forms of social exclusion.
This study makes clear that the current approach to the prevention of industrial accidents and
occupational diseases is not capable to influence organizational characteristics. That prevention
approach is dominated by three paradigms: the incentive paradigm, which assumes the positive effects
of financial incentives, the rational scientific paradigm in which the importance of ‘objective '
knowledge is stipulated, and the paradigm of reflexive labour law, which emphasizes the selfregulation of organizations.
A compensation system can have a preventive effect, when it contributes to the improvement of the
responsiveness of the actors and the improvement of communicative relations. This may not be on the
basis of the existing three prevention paradigms. Two new prevention paradigms are proposed. The
first is the intervention paradigm which implies the possibility to intervene ‘behind the front door’ of
the sick organization, through dialogue, interference, and if necessary formal urge. The second is the
pragmatic prevention paradigm, which pays attention to the improvement of the communicative
relations in the direction of shared learning. These paradigms legitimate an inclusive social policy that
facilitates involvement of both society and victims of occupational diseases and occupational accidents
into organizations that produce illness and injury.
1
1. Introduction
Workers' compensation of damage from occupational accidents (abbreviation: OA) and occupational
diseases (abbreviation: OD) is a form of social security which has its legal basis in international
arrangements (ILO Convention 121) and, in most countries, is included in national legislation. So
most countries know a compensation fund for occupational diseases and an industrial accident
insurance. In some countries workers’ compensation is based on employers liability. Worldwide
millions of workers make use of this compensation. In Holland and Belgium, the two countries that
were central in this researchproject, 200.000 workers get compensated each year.
There is little empirical research available to the functioning of the various systems of
workers’compensation. So it is not clear to what extent these systems facilitate the emergence of this
damage or contribute to the improvement of working conditions i.e. the prevention of OD and OA at
the workplace.
In this study the preventive effect of four compensation systems are examined. Two systems originate
from Belgium: the statutory occupational accident insurance, carried by private insurers (abbreviation:
AOV BE), and the public fund for occupational diseases (abbreviation FBZ BE). The other two
originate from the Netherlands: the - voluntary - liability insurance for businesses, which also covers
the employers' liability (abbreviation: AVB NL), and a collective accident insurance (abbreviation:
COV NL) in the framework of the collective labour agreement (CLA) in the construction sector.
2. Research questions
The following questions are central in this study:
1. What is the relationship between workers compensation and prevention in organizations?
a. Do compensation systems contribute to the prevention of occupational diseases and
occupational accidents at the workplace?
b. Do the four different compensation systems have a different impact on prevention of
occupational accidents and occupational diseases?
2. How can workers compensation be designed in such way that it contributes to an optimal
prevention of occupational disease and occupational accidents at the workplace?
3. Theoretical framework: how to create prevention of OA & OD?
3.1 Prevention
What is prevention of OA and OD and how can we establish that prevention in organizations? The
scientific answer to this question is based on three paradigms and four types of prevention.
3.1.1 Rational scientific paradigm
In this paradigm scientific knowledge about the risk-factors underlying OA and OD and about
evidence based interventions to influence those factors, is crucial. Based on this knowledge,
Occupational Health and safety (OH&S)-experts (for example doctors or safety experts) advise about
the preferable preventive interventions in organizations and about individual interventions. These
interventions focus on three types of prevention; Bonita et. al. (2006). Primary prevention is about
influencing the risk factors responsible for the emergence of illness. For example safety equipment to
prevent falling from roofs, exclusion of organic solvent to prevent the occupational disease CTE
(chronic toxic encephalopathy caused by occupational solvent exposure) or job rotation to prevent RSI
2
(repetitive strain injury). Secondary prevention contains the surveillance (and intervention) of early
health complaints by an OA or OD. Tertiary prevention is focused on prevention of aggravation of
already existing illness and injury by an OA or OD, for example by giving occupational therapy or
work modification. The goal of these three types of prevention is to improve the working conditions
and protect the workers from illness and injury.
3.1.2
Reflexive labour law and self-regulation
The paradigm of reflexive labour law, emphasizes the self-regulation of organizations; Rogowski &
Wilthagen (1994). This paradigm has become dominant as an alternative to external regulation by the
Government. Employers and employees are considered to be competent to give shape to the working
conditions within the legal framework. The concept of the self-regulation has implications for the role
of external parties. External prevention experts have an advisory role. The labour inspection has a
modest role and intervenes only in emergencies (severe accidents) or via at random inspection. Labour
unions are not expected to play a decisive role in the design of the prevention within the organization.
3.1.3
Incentive paradigma
This incentive paradigm assumes the positive effects of financial incentives; van den Hauten (2003).
Financial incentives for example on behalf of insurers can achieve the desired preventive behaviour by
other parties, the employer and the employee because these actors are meant to act cost-rational. To
this is the fourth form of prevention derived: quaternary prevention. This form of prevention covers
the cost of OA and OD, the distribution of those costs and the effects of that division. As discussed
later in this article, in economic science there is the assumption that quaternary prevention can have
influence on the other three types of prevention.
4.
Research on workers’compensation and prevention
The subject of the preventive effect of workers' compensation belongs, to date, to the domain of Law
and Economics (abbreviation L&E). This approach is based on the incentive paradigm: workers'
compensation can incite, ex ante, prevention when the distribution of damage is such that it incites the
parties to avoid damage and to stimulate careful behaviour; Klosse and Hartlief (2007); Faure (2007).
In the L&E perspective employer’s liability will have the best prevention results because the polluter
pays for the pollution and will take maximal care.
Workers’ compensation based on insurances offers the employer the chance to offload the cost of
liability to the (insurance) collective. So insurance is not necessarily conducive to prevention. If
insurance wants to have a preventive effect then measures must be taken to ensure a preventive effect.
That may include, among other things, higher premiums, via the introduction of deductibles, or
through various forms of premium differentiation, or so-called experience rating (ER). This includes
rewards for insured persons who take preventive measures. So L&E attaches strongly to the impact of
financial incentives for prevention: the party that affects the damage must be encouraged through
financial incentives to come to an optimal tradeoff of preventive measures and costs.
4.1
Empirical research into employees' compensation and prevention, an overview
For the overview of the empirical research three studies have been used that provide a review of
international empirical research into compensation and prevention; Tompa et. al. (2007); Philipsen
(2007); Wright and Marsden (2002). That empirical research is limited mainly to the Anglo-Saxon
countries (Canada, UK, USA). On the basis of the three outline studies the conclusion can be drawn
3
that there is little empirical support for the relationship between workers' compensation and
prevention:
1. The results of the studies on the relationship between employer's liability and prevention only offer
an indication that the transition of liability to direct insurance may lead to positive or negative changes
in the number of fatal accidents.
2. The studies on the employers' liability insurance hardly give any indications for the preventive
functioning of these compensation systems.
3. A few studies provide some insight in the relationship between direct insurance and prevention.
Those studies deliver the following results:
- There are indications, from six studies, that the introduction of risk differentiation via
experience rating goes hand in hand with a decline in the frequency of workplace accidents .
However, some of those studies show that the introduction of experience rating could lead to
an increase in the severity of occupational accidents .
- Two studies show mixed (positive and negative) results as regards to the impact of the
introduction of risk differentiation in claims management and health and safety in work
organizations.
- Five studies show that variation in risk differentiation may have both a positive and negative
influence on the prevention of industrial accidents.
4. There is no empirical study of the preventive effect of compensation funds and contractual
compensation.
There is only limited empirical evidence for the relationship between workers' compensation and
prevention. Furthermore, that evidence is not all in the same direction. This supports the observation
of Philipsen (2007), that there are 'mixed and contradicting results'. For every study which
demonstrates a correlation between a given system of workers' compensation and a certain form of
prevention, there are studies that don’t. show such a correlation Moreover, there is hardly any study
carried out into the situation of compensation and prevention of occupational diseases.
4.2
Methodological observations
The results of the empirical studies are not only limited, but also come with a number of
methodological caveats; Boden and Ruser (2003); Tompa et al. (2007):
-
-
-
The majority of the empirical research has been done in other contexts than those of Western
Europe. It is possible that those different contexts, including, in particular, the higher level of
social security benefits and medical facilities in Western Europe in comparison with the
countries investigated, affect the relationship between workers' compensation and prevention;
In the empirical research one partly makes use of 'crude' proxies, because often the correct
data are not available.
In addition, prevention, barring a few exceptions, is associated with incidence of serious injury
or fatal accidents. The relationship with primary, secondary and tertiary forms of prevention
remains largely out of the picture.
In the L&E approach the organization remains a 'black box': what happens ín the organization
continues to be disregarded. Also the L&E approach offers no insight into what happens (or
4
not) in organizations after such a financial incentive. Implicitly it assumes the 'invisible hand'
effect of this financial incentives.
Thus the existing research offers only a limited and little meaningful answer to one of the two main
questions of thisstudy, namely the impact of different systems of workers' compensation on prevention
in organizations.
5.
Research design
As the overview of the empirical research shows, the issue of compensation and prevention proofs to
be a largely undeveloped scientific area. In such a situation explorative empirical research is obvious.
In this study explorative research has been carried out into the four specific systems of workers'
compensation, two in the Netherlands (AVB NL, COV NL) and two in Belgium (AOV BE, FBZ BE).
This explorative research includes three separate studies with the application of different research
methods. First, an analysis is made of the four compensation systems, including an analysis of the
preventive instruments associated with each of them. The analysis is based on interviews with
insurers, analysis of four claim files and on desk research. Secondly a questionnaire survey is
conducted among employers and employees. Thirdly case studies are conducted in 7 organizations.
The case studies are based on interviews with employers, employees, insurers, legal advisors, on
analysis of documents about the claim file and on documents concerning the occupational health and
safety situation of the organization. Per case at least three different stakeholders were interviewed; in
most cases 5 to 10 stakeholders. In two cases 20 stakeholders were willing to give an interview.
With this research design, extensive research, i.e. a broad overview of the extent to which preventive
changes occur in connection with workers' compensation, is combined with intensive research, i.e.
deeper insight into the precise characteristics of workers' compensation systems and how they affect
the prevention in organizations. This triangulation of data and research methods strengthens the
validity of the study; Yin (2011).
6.
Findings
6.1
Results analysis compensation systems (part research 1)
The first separate research contains an analysis of the preventive instruments of the four distinguished
compensation systems and of the socioeconomic context. It shows that the systems have different
characteristics and operate in different contexts. In addition they contain many preventive instruments
(which are, however, little used). The emphasis in these instruments is on quaternary prevention..
6.1.1
Different characteristics
The main characteristics of the four systems (see table 1) are as follows:
1. AVB NL is a system of liability insurance. Employers in the Netherlands are liable for the damage
of workers who suffer from an OA or OD. Private insurers offer insurances to cover this risk. About
90% of the Dutch employers are covered by such an insurance. The premium is based on experience
rating (ER) and partly on own risk. Every year about 600 employees file an occupational disease
claim. 500 of them have success with their claim. The average amount of a successful claim is about €
45.000 and varies between € 5000 and € 200.000. The claim settlement takes about five years. In
contrast with the other three systems AVB NL is a fault compensation system, which means that the
employers fault is decisive for the allowance of a claim.
5
2. COV NL is a collective insurance as part of the collective bargaining agreements (CLA) in the
Dutch construction sector. About 30% of the Dutch CLA’s contain a form of collective insurance to
compensate a part of the personal injury through OA. The premium is not payed by the individual
employer but by a collective fund in the construction sector. It’s estimated that every year about 700
construction workers have a severe injury through an OA. 400 of them file a claim, 150 of them get a
compensation. The average amount is about €5.000 with a maximum of € 40.000. The duration of this
assessment is 1 to 3 years.
3. AOV BE is the statutory occupational accident insurance, carried by private insurers. The
premium, payed by individual employers, is partly based on experience rating. Every worker in
Belgium is covered by this insurance. 165.000 workers a year get a compensation via this system. The
compensation varies from a few thousand euros to hundreds of thousands euros. The duration of this
assessment is only a few months.
4. FBZ BE is the public fund for occupational diseases. This collective fund is financed by the
employers by an equal percentage of wage. Every worker in Belgium is covered by this fund. Each
year 3000 workers get a compensation via FBZ BE. The duration of the claim assessment is similar to
AOV BE.
Table 1: Main characteristics of the four systems
Compensation
system
AVB NL
Private insurance
against employers'
liability
Fault system
Financing
Private/public
Individual premium
by the employer (a.o.
ER)
Private insurance
COV NL
Contractual compensation
of occupational accidents
for workers in CLA
construction sector.
No fault system
AOV BE
Public/private legal
obliged direct insurance
of occupational
accidents
No fault system
FBZ BE
Public Fund of
occupational disease.
Collective financing by
employers
Individual premium by
the employer (a. o. ER)
Equal contribution by
the employer
Private regulation:
employer/ employee
contract
Compensation on the base
of percentage permanent
impairment.
Public regulation;
private insurers
Public regulation,
public ‘insurer’
Compensation on the
basis of percentage
permanent impairment +
economic damage
Compensation on the
basis of percentage
permanent
impairment +
economic damage
3.000 compensations
OD
few months
Type of
compensation
‘Full’ compensation
Claims
settlement:
number of
claims; duration.
Preventive
instruments
500 compensations
OD
5 years
150 compensations OA
1-3 years
165.000 compensations
OA
few months
11 financial; 9
expertise
6 financial; 3 expertise
17 financial; 9 expertise
6.1.2
No fault system
12 financial; 6
expertise
Different context
The analysis of the socioeconomic context reveals the difference in position of the workers'
compensation relative to social security in Belgium and the Netherlands. In the Netherlands all
workers who are sick or incapacitated, regardless of the cause of the sickness or incapacity, get a
compensation from social security. This compensation is related, during the first two years of sick
leave, to the previously earned wages. The employer pays 70% during the first two years of sick leave.
After this period the compensation varies with the chances that the worker has to return to work, fully
or partly. Most Dutch employers have an insurance policy for this general risk. Most policies are based
on experience rating. It is estimated that in Holland, on a yearly basis, 25.000 workers with an OD or
6
OA have extra financial damage that is not compensated in the (general) social security system. This
group can try to get workers’ compensation for the extra financial damage via the contractual
compensation on the basis of the CLA or on the basis of the system of liability insurance (AVB NL). It
is estimated that 4.000 workers get such a workers’ compensation. In Belgium both systems of
workers' compensation are an integral part of social security. From the first day of their sick leave
workers with an OD or OA, yearly about 170.000, get compensated by AOV BE or FBZ BE.
6.1.3
Many preventive instruments, limited use
All four compensation systems have two kinds of preventive instruments, not only financial
instruments, as suggested by the L&E approach, but also instruments based on expertise.
The four systems vary widely in the amount and the type of instruments. AOV BE is equipped with
most preventive instruments (26: 17 financial and 9 expertise). Important financial instruments for the
employer are the experience based premium and the costs for the replacement of the worker. Example
of an expert-based instrument is the support for the employer of an prevention advisor on behalf of the
insurer. 20 preventive instruments (11 financial and 9 expertise) are part of AVB NL. Examples of
financial instruments are the experience based premium and the no- claim rebate. Examples of expert
based preventive instruments are the analysis of the cause of an injury by an expert and re-integration
of the employee. FBZ BE contains 18 instruments (12 financial and 6 expertise). FBZ BE has no
experience based premium, so it gives less financial incentives to the employer than AOV BE,
although the employer has some financial burden such as the costs for the replacement of the worker
and the costs of paying social security premiums of the injured worker. An important expert-based
instrument is the possibility to remove, on a temporary base, the injured worker from the workplace.
COV NL has the least number of instruments (9: 6 financial and 3 expertise). The financial
instruments are only directed to the worker (for example by a limitation of the amount of
compensation) and not to promote preventive behaviour of the employer. That counts also for the
expert based instruments, such as the claim assessment by an medical expert.
6.1.4
Limited use
In compensation system AVB NL use of preventive instruments is limited. Insurers name market
conditions as the main reason for this. The competition on the insurance market doesn’t allow them to
bother their customers too much with prevention issues. Insurers also hesitate to intervene on behalf of
a customer because of the consequences for the rest of the insurance portfolio at the same customer.
Finally, insurers mention the costs that they should make in deploying preventive instruments as a
reason to show restraint. In the implementation of COV NL these considerations play no role since
COV NL doesn’t depend on such market mechanisms, but on a CLA. Private insurers of AOV BE
deal in different ways with the various prevention opportunities at their disposal. Some spend
relatively much attention to prevention, for others it is more afterthought. Again, the (different) market
position is the most important reason to intervene or not. FBZ BE is not familiar with such obstacles,
since it is a public fund from which employees and employers can derive narrowly defined rights.
6.1.5
Emphasis on quaternary prevention
The analysis also shows what types of prevention are pursued. With AVB NL quaternary prevention
(control of the cost of claims) of the insurer is the primary goal, though the respondents also deem
effects of the compensation system on other forms of prevention possible. Quartenary prevention is
also the only explicit prevention purpose of COV NL, although some attention is paid to tertiary
prevention. AOV BE- insurers are primarily focused on quaternary prevention for both the insurer and
7
the insured. In addition, in some cases, activities have been undertaken on behalf of the insurer for the
primary prevention and for the benefit of recovery and reintegration of the affected employee (tertiary
prevention). FBZ BE pays attention to all types of prevention for the benefit of the individual
employee, the organization, and for the benefit of the limitation of claims FBZ BE itself. For this
purpose FBZ BE has a broad range of preventive instruments available.
6.2
Results questionnaire research (research part 2): little preventive changes
The second separate research consists of a questionnaire survey among 365 employees whose
submitted claims were settled, and a portion (102) of the employers concerned. Of these 467
respondents, 313 workers and employers were involved in an occupational disease (OD) and 154 in an
occupational accident (OA).
The questionnaire contains items relating to measuring the preventive effect and items relating to a
number of background data of the respondent and the cause of the OA or OD. The questionnaire was
send after a claim was settled. To measure the preventive changes 7 prevention indicators are
developed. Five of these prevention indicators relate to primary prevention:
Indicator 1: repetition? This indicator should answer whether there is repetition of a similar OA or
OD.
Indicator 2: measures? This indicator should answer the question whether measures have been
taken after the OA or OD.
Indicator 3: better attitude colleagues? This indicator should answer the question if colleagues
work safer or healthier.
Indicator 4: better worker attitude? This indicator should answer the question whether the
employee himself works safer or healthier.
Indicator 7: better working conditions? This indicator should answer the question whether the
working conditions are improved.
The following two indicators relate to tertiary prevention:
Indicator 5: complete recovery? This indicator should answer the question whether there is
complete recovery of the worker.
Indicator 6: work? This indicator should answer the question whether the respondent has work or
is unemployed.
The questionnaire survey indicates that for all systems (see table 2: row total score), after settling a
claim, as such little positive preventive changes occur. The affected employee changes the most after a
claims settlement: 48% of employees work safer or healthier. The changes within the rest of the
organization are much smaller: in only 33% of the organizations measurements are taken, in 28% of
the cases colleagues work safer or healthier, in 28% of the cases repetition occurs of a similar OA or
OD, and in 20% of the cases working conditions improve. Full recovery of the affected employee also
occurs in a limited amount of cases: 18% fully recovers. 51% still has work after settlement of the
claim. In most organizations little to nothing changed in terms of primary or tertiary prevention: in
22% of the organizations no positive changes were noticed; in 62% of the organizations 1-2 positive
changes occurred.
8
Table 2: Relations between 4 compensation systems and 7 prevention-indicators (in %)
AOV (BE)
N= 97
COV (NL)
N= 58
FBZ (BE)
N=184
AVB (NL)
N=128
Total score
N= 467
Significance
response
YES
No
Don’t know
response
YES
No
Don’t know
response
YES
No
Don’t know
response
YES
No
Don’t know
response
YES
No
Don’t know
1. repetition? 2. measures?
3. better
attitude
colleagues?
4. better
worker
attitude?
5. complete
recovery?
6. work?
7. better
working
conditions?
N= 94
12
70
18
N= 55
9
62
29
N= 177
42
13
45
N= 124
28
21
51
N=450
28
33
39
***
N= 90
39
13
48
N= 54
48
9
43
N= 175
16
23
61
N= 105
27
8
65
N= 424
28
15
57
***
N= 89
80
8
12
N= 49
74
14
12
N= 179
40
15
45
N= 102
23
4
73
N=419
48
11
41
***
N= 95
23
77
0
N= 55
36
64
0
N=182
19
74
7
N= 120
4
78
18
N= 452
18
75
7
***
N= 93
75
25
0
N= 56
59
41
0
N=182
55
37
8
N=115
24
60
16
N=446
51
42
7
***
N= 94
34
28
38
N= 56
18
46
36
N= 174
14
44
42
N=100
17
13
70
N=424
20
33
47
***
N=95
47
23
30
N= 54
59
15
26
N= 179
20
47
33
N= 112
28
13
59
N=440
33
29
38
***
On the basis of the L&E assumption that the financial instruments within the compensation system
contribute to preventive changes, one should expect that AOV BE results in the most preventive
changes, followed by AVB NL, FBZ BE and finally COV NL. However, there is no question to that.
There are significant differences between the compensation systems, but those differences exist mainly
between the two systems that compensate damage caused by OA on the one hand, and the two systems
that compensate damage caused by OD (FBZ BE and AVB NL) on the other. As table 2 shows, the
first two compensation systems, score significantly less bad than the two systems for compensation of
OD.
The results of the questionnaire survey don’t support the L&E logic. In particular, the relatively good
score of COV (NL) and bad score from AVB (NL) are remarkable. Therefore, on the basis of the
questionnaire survey it can be concluded that there are significant differences in coherence between
the 4 compensation systems and prevention. But the ranking is different than hitherto assumed. There
are no indications of a direct causal link between the number of available (financial) prevention
instruments and preventive changes.
Based on the questionnaire survey, there are indications that developments within the organization
affect the presence or absence of prevention:
- The first clue is that the organizations concerned have a weak prevention structure, in terms of
presence of risk assessment, worker participation, occupational health and safety expertise. This
applies to a greater extent for organizations with OD’s .
- Comparison of their scores shows that employers and workers from the same organization rarely
have the same score on the prevention indicators: employers are generally more positive about these
changes than workers. It is also remarkable that in the organizations with an OD more than 50% of the
employer-respondents replied that the OD didn’t occur within the organization.
The questionnaire survey indicates that the compensation system has little influence on the preventive
changes within the organization or the lack thereof. The questionnaire survey leaves the impression
9
that especially developments within organizations determine the appearance of preventive changes.
External developments and external incentives, including incentives from the compensation system,
seem to have less effect than generally assumed.
6.3
Case studies results: dominant influence organization on prevention
6.3.1
Characteristics of the 7 casestudies
The objective of the case study research - in total 7 casestudies were performed- was to obtain a
picture of the various preventive changes that occur after the settlement of a claim and to obtain
insight in the factors that affect these preventive changes. Three case studies on OA were performed:
- Case study Ground BE was performed in a medium-sized construction company where a
construction worker was first injured by a ladder and two years later injured by a cave-in and
compensated afterwards by AOV BE. After the second accident the worker couldn’t re-integrate again.
- Case study Roof NL was at a small roofing company where a construction worker got injured by a
fall of the roof. After two years the worker re-integrated again, although he still had physical
problems, i.e. disturbance of equilibrium. As a consequence a few years later he had another fall, with
three months of sickleave. Five years later he was dismissed.
- The third case was at Chemical NL, a location of a chemical multinational, with a construction
worker who, as working for a subcontractor to clean polluted soil, got lung problems after exposition
to chemical substances. After this accident the worker got disabled.
Four different cases of the OD were performed:
- The first case was RSI with a violist of a large orchestra (Orchestra BE). As a result of long working
days and working pressure she developed tendinitis in her shoulder. After two years she re-integrated
again. In the period after this sick leave Orchestra appointed an occupational therapist to care for a
better treatment of the musicians.
- The second case was CTE of a carpet layer at a small carpet firm in Belgium (Carpet BE). After the
diagnosis of CTE the employee tried to reintegrate with better protective equipment, but that wasn’t
successful. After two years he had to stop working.
- The third case was also the occupational disease CTE at a small carpet firm, but then in the
Netherlands (Carpet NL). In this case the disease was discovered four years after the carpet layer had
to stop working because of work incapacity.
- Case number 7 was at an assembly company in the Netherlands (Assembly NL) where 7
collaborators developed RSI, because of chronicle overload of repetitive work. During the research
period this company only realized some minor improvements in working conditions (better chairs and
working tables). At the same time it outsourced the production to Eastern Europe.
Table 3 gives an overview of the costs of the claims, the distribution of the costs and of the preventive
changes that were found. In most cases few positive preventive changes occurred. In the same period
negative preventive changes occurred, such as repetition of the injuries and weakening of the position
of the OH&S experts. As table 3 shows, there isn’t any relationship between the distribution of the
costs and those preventive changes.
10
What table 3 doesn’t show is that in most cases the preventive changes were marginal and the
problems underlying the OD or OA weren’t solved. For example after the claims settlement working
pressure still existed, organic solvents were still in use, or the roof worker still worked with little
safety features. In some case the risks were outsourced.
6.3.2
Dominant role organization
The case studies reinforce the impression from the questionnaire survey about the dominant influence
of the organization, and of developments within the organization, on whether or not preventive
changes within that organization occur. The influence of the organization can be of a positive and
negative nature and may relate to all forms of prevention, albeit that changes in secondary prevention
hardly occur. Whether the organization has a positive or negative influence on prevention depends on
two characteristics of this organization, the degree of responsiveness and the communicative
relationships within the organization.
Degree of responsiveness
The first characteristic is the degree of responsiveness of the actors within the organization to
incentives from outside the organization. In most cases actors weren’t responsive at all to the
incentives from external actors, such as insurers, occupational medicins or labour unions, but self
centered or not informed about external incentives. For example in two cases (Carpet BE and NL) no
one of the actors was interested in (external) information about prevention of the OD. In fact they
doubted the existence of this disease (CTE at Carpet BE) or doubted that the former employee
developed CTE at their workplace (Carpet NL). The same occurred at Assembly NL where the
management didn’t allow the use of the term RSI anymore, although 50% of the workers had
symptoms of RSI. In Chemical NL the responsiveness was restricted because of the internal
procedures, that not include appropriate care for workers for subcontractors.
In four cases it is also found that the employer hadn’t enough knowledge of the insurance policy. For
example the local management of Chemcial NL was not informed about the own risk they had to bear.
In some cases there was active exclusion of external actors. For example Ground BE had already for
many years success in excluding union representatives in the dialogue about prevention.
Only a few examples of a responsive attitude were found. The prevention adviser of Ground BE was
very interested in co-operating with the prevention adviser of the insurance company. The
management and musicians of Orchestra BE were open for advice of a prevention expert who had
new ideas about coping with RSI complaints. In most cases prevention barely seems influenced by
external actors whatsoever.
Communicative relationships
The second characteristic is the communicative relationships within the organization. In the examined
cases various (inadequate) communicative ratios were signalled that may negatively affect prevention.
In some cases there was abuse of power (such as the pressure from the management of Assembly NL
on the occupational medical service to return workers with severe health complaints back to work) and
impotence (the management of Ground BE had no influence on a principal, which has much impact on
the working conditions of the worker). In some cases there is manipulation in the provision of
information, for example the insurance department of Chemical NL (successfully) tried to misinform
the management of the subcontractor and his insurance company in order to avoid liability. In all cases
the various actors had different perspectives on the cause of an OA or OD and the measures to be
11
taken. Finally, in most cases a deterioration of the relationship is experienced between the affected
employee and the other actors within the organisation after the OA or OD and after the settlement of
the claim. In the four cases where the worker wasn’t employed anymore, the management wasn’t
interested in the situation of the worker or in his opinion about the preventive measures to be taken.
Table 4: Distribution of costs, number of positive and negative preventive changes, examples of
positive and negative changes
Case
Ground BE
(AOV BE)
Roof NL
(COV NL)
Chemical NL
(AVB NL)
Orchestra BE
(FBZ BE)
Carpet BE
(FBZ BE)
Carpet NL
(AVB NL)
Assembly NL
(AVB NL)
Costs:
(a)employer
(b)insurer
a: € 4.000
b: €300.000
a: € 38.000
b: € 2.000
a: €300.000
b: € 80.000
a: € 4.000
b: € 27.000
a: € 4.000
b: €308.000
a: € 23.000
b: € 40.000
a: €140.000
b: €225.000
Number of positive
preventive changes
Number of negative
preventive changes
8
3
0
6
6
5
11
2
1
1
2
2
5
6
Both organization characteristics not only determine the extent and the nature of the influence of the
organization, but also determine the influence of the other (external) factors. In other words: external
incentives don’t affect - more or less automatically- the organization; it is especially the degree of
responsiveness of the internal actors that determine whether the external incentives, of a financial
nature or based on expertise, may influence the prevention situation within the organization. Incentives
from outside the organization, including incentives from the compensation system, never lead to
preventive changes (of primary, secondary and tertiary nature) directly. Next the quality of the
communicative relations influence the quality of the preventive changes.
6.3.3
Modest role of workers' compensation systems
The four workers' compensation systems have no direct influence on positive or negative preventive
changes in primary-, secondary and tertiary prevention within organizations. The compensation
systems can only directly influence the quaternary prevention of an organization.
The modest role of workers' compensation systems is most of all explained by the dominance of the
organization. At the same time, the limited power of the prevention instruments themselves are visible.
Of the actors within the organization the insurer is barely visible. The relevant insurers do not or not
directly translate the costs borne by them in (financial or other) incentives to the organization.
Commercial arguments play an important role in this decision: the insurer doesn’t want to lose the
customer (the employer); after the claims settlement, sometimes, the policy came in the hands of
another insurer, so that there can’t be financial feedback. Also financial motives play a role. When the
financial damage caused by the specific claim remains within the cost benefit analysis of the policy,
most insurers take no action. The prevention expertise of the insurer, if available, is rarely used to
improve primary prevention. Typically, its expertise is used for claim assessment. Moreover, during
that assessment things regularly go wrong, which is not conducive to the recovery of the worker.
12
7.
Summary of the findings
This study has two central questions. The first question is about the relation between workers’
compensation and prevention and the (potential) differences between workers compensation systems.
No direct link was found between workers’ compensation and prevention in organizations. After a
settled claim only in 20- 30% of the organizations some positive preventive changes were found. Two
organization characteristics are responsible for this: the lack of responsiveness of the organizations and
the bad quality of communicative relations in the organization.
Differences are found in the relation between workers’ compensationsystems and prevention, but
those differences can hardly be linked to differences between the preventive instruments of each
compensationsystem: systems with many (financial) preventive instruments don’t result in more
prevention than compensationsystems with less preventive instruments. The differences can be linked
to the two organization characteristics (responsiveness and communicative relations) and to the kind
of event: organizations seem to be more able to cope with prevention of OA than with prevention of
OD.
The second question to be answered is: how can workers’ compensation be designed in such way that
it contributes to an optimal prevention of OD and OA at the workplace? This study makes clear that,
in order to have effect on prevention of OA and OD, systems of workers’ compensation must have
influence on the two organization characteristics. The present three paradigm’s are not appropriate in
this context, since it is not their objective to have effect on these organization characteristics:
organizations, and the actors within the organization, are not influenced by (more) financial incentives;
they are not interested in (more) evidence based knowledge, but prefer to deny the problems; in this
cases self-regulation didn’t lead to better prevention of OA and OD, but to deterioration of the
occupational health and safety situation.
8. Future implications on policy of compensation and prevention
A compensation system can have a preventive effect, when it contributes to the improvement of the
responsiveness of the actors and the improvement of communicative relations. This may not be on the
basis of the existing prevention paradigms. We must say goodbye to the idea that financial incentives
or objective knowledge without saying leads to the desired prevention. At the same time it is clear that
in this context the paradigm of reflexive labour law, including the ideology of self-regulation, doesn’t
lead to adequate preventive changes. These paradigms legitimate the exclusion of the victim and limit
the influence of society on what is going on within the walls of organizations.
New paradigms are needed that influence the two organization characteristics. Two new prevention
paradigms are proposed, the intervention paradigm and the pragmatic prevention paradigm. These
paradigms legitimate an inclusive social policy that facilitates involvement of both society and victims
of occupational diseases and occupational accidents in organizations that produce illness and injury.
8.1
Intervention paradigm
This paradigm implies the possibility to intervene ‘behind the front door’ of organizations. It
legitimates external interventions, at all times, in organizations that don’t respond adequately to
13
damage through OD or OA. Three methods of intervention are proposed to contribute to the design of
this paradigm: intervention through dialogue, interference, and if necessary formal urge.
Intervention through dialogue is appropriate in situations where the relevant actors are prepared to
introduce preventive changes, but don’t know how to change the situation.
At interfering care the insurer, after damage has occurred, and no one has adequately intervened, is
seeking contact with the stakeholders in order to motivate them to solve the existing problems of
prevention of occupational accidents and diseases.
At formal urge the actors have a choice whether or not to be supported, although the freedom of choice
is constrained by consequences appropriate to the nature of the choice. One chooses not to participate,
or not the conditions, then follows a negative penalty.
Application of these methods depends on the assessment by the insurer of the degree of
responsiveness of the organization. It’s important that the insurer has an independent role, and has the
freedom to intervene in the organization.
8.2
Pragmatic prevention paradigm
This paradigm is an answer to the inadequate communicative relations within the organization (the
abuse of power, manipulation of information, the lack of communication between the different actors).
It pays attention to the improvement of the communicative relations in the direction of shared learning,
which is a relevant condition for prevention of OA and OD. This paradigm implies the involvement of
many stakeholders. Not only the management but also the victim, the employees and other
stakeholders have to participate, so the different perspectives on the prevention of OA and OD are
covered. This paradigm implies another approach of knowledge: practice based knowledge is needed
instead of evidence based knowledge.
Finally, on the basis of the empirical research, the method of reconstruction can be proposed to
contribute to the design of this paradigm. Through this method a reconstruction can be made of the
incident, the injury, the causes of the injury and the prevention measures to be taken. Through the
method of reconstruction the different perspectives, knowledge and experience of the relevant actors
(a.o. worker, employer, occupational medicine, union representative, labour inspection) can be brought
together to an effective approach within the specific context. This method can activate all relevant
actors to communicate their solutions in order to solve the resulting problems. At the same time it
activates them to contribute themselves to the improvement of the working conditions.
In order to make this method of reconstruction a success, at least two conditions must be met. The first
is free participation, so each stakeholder should have the freedom to participate and are free to
communicate without negative consequences for their own position. A second condition is free
accessible information. In general the information about the origins of OA and OD, the injury and its
prevention, is not available for all stakeholders. The same is true of the information (such as the risk
assessment) on which the working conditions policy of the employer is based. For a joint learning
process it is necessary that this information should be available to all stakeholders.
8.3
Role of the insurer
In the L&E approach it is believed that workers' compensation can incite, ex ante, prevention when the
distribution of damage is such that it incites the parties to avoid damage and to stimulate careful
behaviour. This empirical research can’t confirm this opinion.
14
This study indicates that workers’compensation can have an ex post preventive role. The insurer can
play a meaningful role in the application of the two paradigms in the period of aftercare, the period
after the occurrence of the injury, in case the relevant actors are not capable to perform adequate
interventions. At that moment an external actor, the insurer, has to intervene ‘behind the front door’ of
organizations to launch the process of reconstruction. The insurer has to take his responsibility when
other actors fail in the performance of their preventive tasks. In order to play his role the insurer has to
have an independent position to the employer and the employee.
9.
Future research
In what way scientific research can contribute to the improvement of the relationship between
employee compensation and prevention?
First of all this contribution must include research on the external validity of the results of this study. It
is important to check if also in other organizations, with workers who have damage of an injury from
an OD or OA, communicative relationships and responsiveness play a decisive role in whether or not
actions of preventive changes occur. Such research can also provide information on the value of the
proposed role of insurers and other stakeholders.
This study doesn’t indicate (more) research to evidence based interventions or research on the effect of
various financial incentives, because those types of interventions don’t seem to be appropriate in this
situations. A different scientific approach is needed. Because the field of workers’ compensation and
prevention for various reasons can be referred to as a complex field of interaction (e.g. influence of
different actors; the actors have differences in perspective, power and information, different
stakeholder need to contribute to the solutions of the OH&S problems) action research is called for in
which all relevant actors participate. Such research among other things should focus on:
-
the development of effective intervention methods to increase the responsiveness of
organizations;
the development of methods of reconstruction that contribute to an effective approach to
prevention of OD and OA;
evaluation research in which the ingredients of different successful or less successful practices
of prevention are examined.
Literature
Boden, L. and Ruser, J. (2003). ‘Workers’compensation reforms’, The review of Economics and
Statistics, 85 (4): 923-929.
Bonita, R., Beaglehole, R., Kjellström, T. (2006) Basic Epidemiology. Geneva: WHO.
Faure, M.G. (2007). ‘Compensation for Occupational Diseases and the Importance of Prevention: A
Law and Economics Perspective’, European Journal of Social Security, vol. 9, 2007: 127-168.
Hauten, M. van den (2003). De werking van incentives, de reacties van werkgevers op de privatisering
van de Ziektewet. The Hague: Reed Business Information.
Klosse, S. and Hartlief T. (eds.) (2007) Shifts in compensating work-related injuries and diseases.
Wien/New York: Springer.
15
Philipsen, N.J. (2007) ‘Prevention and compensation of work injury in the United States, an overview
of existing empirical evidence’ in: Klosse, S. and Hartlief T. (eds.) (2007) Shifts in compensating
work-related injuries and diseases. Wien/New York: Springer.
Rogowski, R. and Wilthagen, T. (eds) Reflexive labour law. Deventer, Boston: Kluwer Law and
Taxatation Pubishers.
Tompa E, Trevithick S, McLeod C. (2007) ‘Systematic review of the prevention incentives of
insurance and regulatory mechanisms for occupational health and safety’ in Scand. J. Work Environ
Health 33 (2): 85–95;
Wright, M. and Marsden, S. (2002) Changing business behaviour- would bearing the true cost of
poor health and safety performance make a difference? Norwich: HSE contract research report
436/2002.
Yin, R.K. (2011) Qualitative research from start to finish. New York: Guilford Press.
i
W.A. Eshuis is researcher with AIAS (Amsterdam Institute of Advanced Labor studies, University of
Amsterdam) and ‘de Burcht’ (scientific bureau for Dutch labour unions). Recently he finished a thesis on
workers’compensation and prevention (to be published in 2013). E mail: w.a.eshuis@uva.nl.
16