Work injury insurance scheme to be amended

In June 2001, after several years of debate and with the number of reported occupational diseases steadily rising, the Swedish government announced a proposal to reform the work injury insurance scheme, making it easier to have compensation claims accepted. A bill is expected in late 2001. The social partners are divided over the possible relaxation of the rules.

The Swedish Employment Injury Insurance Act was replaced in 1977 by the Work Injury Insurance Act (Lagen om arbetsskadeförsäkring1976:380). Under the Act, all economically active persons – employees, employers and self-employed – regardless of nationality are compulsory insured against occupational injuries. Workers undergoing training are also included if their training involves occupational risks. The legislation, amended in 1993, is now to be altered again, after the government distributed a proposal for consideration to concerned parties at the beginning of June 2001. Public opinion has been opposed to the stricter rules on the definition of work injuries adapted in 1993, and the new reform may lead to a relaxation.

After the 1977 work injury legislation came into effect, the number of reported injuries and diseases increased quite sharply. This was especially the case in the 1980s, when the total reached a record of 250,000 reported cases per year, according to an official report presented to the government in 1998 (SOU 1998:37). The costs of insurance increased drastically as well.

This was one reason why, following a report to the government in 1992, the rules governing the recognition of an injury or a disease as having been caused by work and compensated as such were made much stricter in 1993 (SFS 1993:357). The number of reported injuries and diseases fell sharply, and a deficit in the financing of the insurance system turned into a surplus.

Defining work injuries

The stricter rules introduced in 1993 are, like the previous ones, based on the fact that the work injury insurance scheme provides only a general description of what is to be considered as an occupational injury. The concept is taken to comprise injuries resulting from accidents or other harmful influences at work: there are no lists of what specific diseases or disorders might be considered as occupational injuries. However, since 1993 a much higher degree of "probability" of a link between the injury/illness and the work has been demanded. Before, it had been presumed that if a person had been exposed to a harmful factor in his or her work environment, the disease or injury would be considered to have been caused by that factor, unless strong arguments would suggest otherwise. For example, repetitive work might have been considered as such a harmful factor, leading to musculo-skeletal disorders. Today, it is very rare that such disorders are recognised as work injuries and, accordingly, compensation claims are very seldom accepted.

As the stricter requirements were introduced, the special work injury benefit scheme that compensated people financially for their whole loss of income was abolished. Instead, those suffering from work injuries receive sickness benefit in line with the general health insurance scheme, which is financially less advantageous. Once it has been established that the persons concerned will not be able to work again, they receive an annuity.

The measures introduced in 1993 were effective insofar as work injury insurance costs declined drastically. The number of reported cases fell from 250,000 a year to about 108,000 in 10 years. The number of injuries and diseases that were recognised as such by the social insurance service also fell - from 67,000 in 1992 to 7,300 in 1997.

Several factors

It might be somewhat inaccurate to single out a single factor behind this decline in work injury costs and claims. During some of the period since 1993, unemployment rose dramatically in Sweden, making fewer people exposed to occupational hazards. Changes in the work environment may also have had a positive effect.

It is clear, however, that during the past few years, the number of reported cases has started to rise again. Between 1997 and 1999 the number of work-related diseases that women reported increased by 60%. For men, the increase was 40%. The number of reported work-related accidents rose by 10% during the same period, and the increase continued in 2000.

More than two-thirds of the reported cases of work-related diseases are musculo-skeletal disorders. The second largest group consists of diseases caused by chemical substances or products, and the third largest group is diseases caused by organisational or social factors, usually involving stress and high workload. This third group is the one that is growing most rapidly.

The stricter rules adopted in 1993 have been criticised for several reasons. One point often made is that those who have fallen ill or have been injured at work often have to wait for quite a long time - sometimes several years - before their case is ruled on. Thus a long time passes before it may be established if the injury or disease has been caused by work and is permanent, entitling the worker to an annuity.

The handling of cases can also vary considerably between different offices of the social insurance service – a fact admitted by the National Insurance Board (Riksförsäkringsverket). In a 2001 report, it calls on the government to consider the possibility of centralising the handling of work injuries. The current decentralised model makes it difficult to arrive at a homogeneous conception of work injuries, according to the Board.

Biased against women

Another criticism is that the work injury insurance rules are said to be biased against women. For example, women suffer more often than men from musculo-skeletal disorders, and, as pointed out above, it is now very difficult to have such disorders recognised as being caused by work. Consequently, more men than women have their claims accepted. Furthermore, if a woman works part time when she has small children, the presumption on which any work injury compensation is based is that she would have continued to work less than full time for the rest of her life – thus receiving less money than she would have otherwise. The Swedish Confederation of Salaried Employees, (Tjänstemännens Centralorganisation,TCO) claims that these factors – the stricter rules and the presumption that part-time work is the norm for women – are against European Union sex equality legislation, and have referred the matter to the European Commission, though no decision has yet been made.

Another problem is that, since the motivation for workers to report accidents and diseases is reduced when the chances of obtaining financial compensation is quite slim, preventive work in the field of occupational safety and health is being hampered. Research might also focus on less relevant issues, if it is based on misleading statistics.

This was the background to the 1997 decision of the government to commission a new report on the work injury insurance scheme. However, the report, presented in 1998 (SE9803174F), recommended neither changes in the definition of work injuries, nor less strict rules, although it did advocate a simplification of the rules. It also proposed a new model - an additional insurance administrated by the social partners - but that idea was discarded.

Nevertheless, it seems that the work injury insurance scheme is now going to be changed again. In its presentation of the spring national budget in 2001, the government promised a bill with the aim of improving the scheme (SE0105198N). Increased funding of SEK 500 million is already set aside for this purpose in 2002, rising to SEK 1 billion per year for 2003 and onwards. The bill will probably be presented to parliament in December 2001, and it will very likely propose making it less difficult to have diseases and injuries recognised as having been caused by work. It is, however, doubtful that the former specific work injury benefit will be reintroduced, but the fact that a waiting period for receipt of benefit is not compatible with International Labour Organisation rules on work injuries will probably need to be addressed.

The social partners are divided on the issue of the work injury insurance. The Swedish Confederation of Trade Unions (Landsorganisationen, LO), is in favor of relaxed rules and the reintroduction of the work injury benefit. The employers would like to keep the stricter rules, fearing the economic consequences of relaxation.

Commentary

Many people welcome changes in the work injury scheme, which in practice currently leaves many disorders and injuries outside of its scope. The social partners are among those unsatisfied with the present scheme, although for different reasons. The trade unions want less strict rules and better financial compensation, while the employers dislike the fact that the work injury scheme operates with large surpluses. The latter think that their insurance contributions are set too high, so that the surplus may be used to meet other costs in the state's budget.

It will be interesting to see how the new scheme will be constructed, considering the rising number of work-related diseases and the request for less stringent rules. (Lena Skiöld, Arbetslivsinstitutet)