By Luke Voogt
A “crippling” $53,804 WorkCover bill for a family-owned bakery at Torquay has exposed WorkSafe’s “out-of-step” premiums, according to the business owner.
Joel Farnan, who owns the bakery with parents John and Jan, described the 19.2 per cent fee hike as a “handbrake on our growth”.
“It’s more than the equivalent position of a full-time baker,” he said.
“We feel the premiums are totally out of step with the normal indices that determine these things.
“They really need to be a little more customer-focused and more nuanced about how they apply the premiums.”
WorkSafe had “lumped” Zeally Bay Sourdough in with large bread factories that had lots of machinery, Mr Farnan said.
But his artisan bakery had a “hand-made environment” and used minimal machinery, he said.
The premium had risen $8670 since 2016/2017, an increase of $45,134.
“We’ve not grown at that rate that rate, I can tell you,” Mr Farnan said.
“Revenue-wise we’ve probably grown at 10 or 11 per cent each year but there has been increased employment as a result of that.”
The company employed 40 people, with almost a third working in administration, Mr Farnan said.
But WorkSafe had applied the same premium to admin staff, bakers, packers and machinery operators alike, he said.
“We’ve got people here who don’t touch the machinery who would be included in that premium.”
Mr Farnan wrote to WorkSafe several times but received “glib formal letters” in response, he said.
“It’s not in their interests to look at this because it would reduce the premiums.“
Mr Farnan said WorkSafe’s premiums were harming local businesses and called for a restructure of its calculations.
“This is kind of going beneath the radar.
“We felt someone needed to bring it to attention. If we tried to impose those sorts of increases on our customers we wouldn’t be in business.”
The premium increases “far outweighed” the benefit of the State Government’s recent regional payroll tax reduction for his bakery, he added.
Mr Farnan’s father John described the premium as a “gouge”.
The bakery was a “safe workplace“ with no WorkCover claims in a decade and none since 2000 before that, he said.
WorkSafe declined to comment on insurance policies of individual employers for privacy reasons, a spokesperson said.
The insurer calculated the premiums on payroll and an industry rate based on the respective industry’s claims, the spokesperson explained.
“In larger organisations, claims history is also taken into account.
“The amount owing may also include an adjustment – either up or down – that might arise from a change in the organisation in the previous year.”
The 19 per cent rise takes into account $3,247 that WorkSafe charged Zeally Bay Sourdough this year on top of an estimate last financial year.
The company owes nothing further to WorkSafe according to its financial records.