Workers’ compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue their employer for the tort of negligence. The trade-off between assured, limited coverage and lack of recourse workers compensation fund the worker compensation system is known as “the compensation bargain”. General damage for pain and suffering, and punitive damages for employer negligence, are generally not available in workers’ compensation plans, and negligence is generally not an issue in the case. These laws were first enacted in Europe and Oceania, with the United States following shortly thereafter.
The Fellow Servant Doctrine is that employer can be held harmless to the extent that injury was caused in whole or in part by a peer of the injured worker. Contributory negligence allows an employer to be held harmless to the extent that the injured employee failed to use adequate precautions required by ordinary prudence. Assumption of risk allows an employer to be held harmless to the extent the injured employee voluntarily accepted the risks associated with the work. The laws also provide benefits for dependents of those workers who are killed in work-related accidents or illnesses. Some laws also protect employers and fellow workers by limiting the amount an injured employee can recover from an employer and by eliminating the liability of co-workers in most accidents. US state statutes establish this framework for most employment.
As Australia experienced a relatively influential labour movement in the late 19th and early 20th century, statutory compensation was implemented very early in Australia. Each territory has its own legislation and its own governing body. A typical example is Work Safe Victoria, which manages Victoria’s workplace safety system. It is a public institution that aims to recognize and grant rights to its policyholders.