The question of whether a body corporate must hold workers’ compensation insurance depends on the specific activities of the body corporate and whether it employs any workers as defined by law.
What is workers’ compensation insurance?
Workers’ compensation insurance in Queensland is regulated by WorkCover Queensland under the Workers’ Compensation and Rehabilitation Act 2003. It provides protection for employees in case of work-related injury or illness. Any employer who engages workers, either paid or unpaid, is required to have a WorkCover accident insurance policy.
What is a body corporate?
A body corporate is a legal entity automatically created when land is subdivided and registered under the Body Corporate and Community Management Act 1997 (Qld). Its primary role is to manage common property and body corporate affairs on behalf of all lot owners.
While a body corporate typically engages third parties, such as building managers or contractors, to carry out maintenance or administration work, the way it engages these people has implications – especially around workers’ compensation insurance.
Requirement for workers’ compensation insurance
A body corporate must take out a workers’ compensation insurance policy if it employs a “worker” within the meaning of the Workers’ Compensation and Rehabilitation Act.
A worker under Queensland law includes:
- An individual who works under a contract of service (i.e., an employee)
- Some contractors who work under contracts for labour only, or substantially for labour, even if they invoice through an ABN
This means a person could be considered a worker even if not formally an employee, such as a cleaner or caretaker who is regularly being paid by the body corporate.
A body corporate may require workers’ compensation insurance if they:
- directly employ an on-site manager, cleaner, gardener, or caretaker, or
- pay a contractor who is deemed a worker under WorkCover’s definitions, especially if the contractor is an individual rather than a company or trust.
A body corporate may not require workers’ compensation insurance if they:
- engage companies or contractors with their own staff and insurance, not individuals, or
- arrange services through a management company or external strata manager, which holds the employment contracts.
What are the risks of not having workers’ compensation insurance?
If a body corporate is found to be employing a worker but does not hold appropriate insurance, it may:
- be liable for uninsured workers compensation claim costs if the worker sustains an injury,
- face fines and penalties from WorkCover Queensland, and
- be exposed to legal risks and financial costs in the event of a workplace injury or illness.
How can Business Chamber Queensland help?
While many bodies corporate in Queensland do not need workers’ compensation insurance, particularly those that engage only companies or external managers, some do – especially if they engage individuals directly.
Failing to secure the right insurance can result in serious consequences. It’s essential that every body corporate assesses their arrangements carefully and obtains insurance if there is any employment relationship, even an informal one.
For specific advice tailored to your situation, we recommended you contact WorkCover Queensland or the Workers’ Compensation Information and Advisory Service on 1300 365 855 or email [email protected].
In addition to this, Business Chamber Queensland’s Workplace Advisory team offer a broad range of training, resources and consulting services to help businesses navigate the complex and ever-evolving world of workplace relations, HR and people management.
