The scandal-ridden icare was in turmoil on Friday as it scrambled to announce the sudden departure of its second most senior executive amid mounting pressure for a radical overhaul and cleanout.
The country’s biggest workers compensation scheme is also battling low staff morale after a leaked survey revealed a massive drop in a key measure of employee satisfaction.
It raises the question, how many more people need to start screaming before real change happens?
Next week there will be another round of parliamentary hearings with NSW Labor pushing for key state government officials including the Treasury Secretary Michael Pratt to answer questions about whether they had any knowledge or role in the icare disaster.
Icare, treasury and the regulator are also set to return another set of documents to the upper house next week. They are expected to shed more light on the role of Ed Yap, the senior policy advisor at Treasurer Dominic Perrottet’s office who was paid by icare, against regulations. The revelation of this situation led to the resignation of Perrottet’s chief of staff and an audit of his office.
Yap had not worked a day for icare when Perrottet’s office arranged for him to be “seconded” from the organisation so he could remain as a senior policy adviser. He resigned a couple of weeks ago.
But on Friday the focus was on Beth Uehling’s departure. Uehling was group executive of personal injury and was one of the key supporters of icare’s world first claims management model and IT system, which suffered massive cost blowouts, delivered plunging return to work rates and contributed to the insurance entity’s disastrous financial performance. Ms Uehling had not been implicated earlier in any of the issues at icare.
icare published a short, sharp statement on its website saying she was leaving to “take up the next opportunity in her career.”
The departure comes a month after chief executive John Nagle quit after a parliamentary inquiry learned he had been stripped of a bonus for failing to properly declare his wife had been given an $800,000 contract with the agency.
But as Greens politician and former workers compensation barrister David Shoebridge said, “We need a lot more fundamental change at icare than just flipping a few senior executive positions.”
Last week NSW Labor finance spokesman Daniel Mookhey tried to accelerate change by leading a no confidence motion in the icare board and Treasurer Dominic Perrottet in the state’s upper house.
He lost by one vote, allowing the board and Treasurer to hang on by a thread. “icare’s leaders turned the NSW workers compensation system into a smouldering ruin,” he said.
For now, Rob Craig will take over Uehling’s role, while another long term executive, Don Ferguson, is acting CEO.
Given most of the board, including chairman Michael Carapiet, is up for renewal next year speculation is mounting that an early cleanout is on the cards.
The brutal reality is icare was a mess well before COVID-19 hit. Return to work rates are unacceptable, which means workers are getting sicker and it has underpaid up to 52,000 injured workers an estimated $80 million. None have been remediated.
These revelations were exposed in a joint investigation by the Herald, The Age and ABC’s Four Corners program into the nation’s $60 billion workers’ compensation system, which uncovered mismanagement in icare and “unethical and immoral conduct” in Victoria’s scheme, WorkSafe. It also revealed that the NSW workers compensation regulator had referred some matters to ICAC for investigation. Nagle, at the time, said he was not aware of any ICAC investigation.
Despite this, the board has paid bonuses and big salaries to the executive team.
Little wonder staff morale is so low.
A recent staff survey shows a significant fall in icare’s employee Net Promoter Score, which measures how likely a staff member is to recommend their company as a place to work. In April it scored 40 on the measure, compared with just 3.7 in August. “While we knew the results were likely to be impacted by recent events, we felt it was important to go ahead with the survey to hear your honest feedback,” Ferguson told staff.
Ferguson said 74 per cent of staff had participated in the survey. He tried to put a positive spin on the results, including listing some of icare’s strengths, but this is not the time for spin and hollow words.
Staff in the survey didn’t hold back on what needed to be done. “Acknowledge mistakes, accept accountability and focus on remediation.”
Staff also called for greater transparency around decision making, to communicate more openly and change the culture. This included creating a culture safe to speak up.
Chris McCann, a former compliance manager, spoke up in 2017 and 2018 about other examples of contracts awarded to mates and trips paid for by vendors and not declared but he was bullied and intimidated and finally was forced out of the organisation with a gag order and pay off. The company has never apologised for its behaviour.
Other areas highlighted for change included the removal of silos and more fairness and equity of fixed and variable remuneration.
In what was a clear understatement, Ferguson wrote to staff, “It is clear from the comments you shared in the NPS survey that we have some issues to address. You want to see change and a clear roadmap for the future.”
His short term solution? To hold some small group listening sessions with members of the group executive and for those who want to speak up, the creation of a new email address, firstname.lastname@example.org, where staff can confidentially report issues and raise concerns.
“As I’ve said before, actions speak louder than words, and its through our actions that we can all demonstrate the icare values and build a stronger organisation,” Ferguson said.
So far icare’s actions have given little cause for confidence. Its media team continue to obfuscate, ignore or dodge questions and take more than a week to answer some questions.
This is an organisation that needs not just radical change but a special commission of inquiry to clean it up. It also needs to be removed from the Treasurer’s control.
Adele Ferguson is a Gold Walkley Award winning investigative journalist. She reports and comments on companies, markets and the economy.