The federal government and its workplace authority have trumped up the case against public servants accused of rorting and malingering while claiming workers' compensation, according to Labor.
In a clear signal that the party will fight the government's agenda for reform of the controversial scheme, ALP members of a Senate committee say the Coalition has not made its case of widespread or serious abuse of Comcare.
The Labor Senators said there was no "evidence of widespread misconduct or abuse of the system that would justify the changes outlined in this bill."
The Greens added their voice to the dissent, with the party's Senator on the committee describing the proposed changes to Comcare as an attack on workers' rights.
But the Public Service Commission said that many public servants see their workers' compensation scheme as a "soft touch" for dodgy claims and government workers are losing respect over public perceptions of rorting.
The commission says 95 per cent of the allegations from Commonwealth workplaces relate to shonky claims against Comcare including faked medical conditions and "injured" bureaucrats working second jobs while claiming compensation.
Line managers in the service are afraid in their jobs for fear of being branded as bullies by public servants claiming compensation for mental injuries, according to the Employment Department.
The Public Service Commission told a parliamentary inquiry into reform of the Comcare scheme that the Australian government could no longer afford the financial cost or reputational damage wrought by abuse of Comcare.
The cross-party committee's report, tabled late on Tuesday, has backed the sweeping changes to the scheme but both Labor and Greens members added dissent, indicating the Coalition will have to court the votes of cross-bench senator if it is to get its reforms through Parliament.
The Labor senators say the allegations of abuse and fraud against the scheme are being exaggerated while the Greens say the reform bill is an attack on workers' rights.
Law firms protested that the proposed changes would potentially leave public service bosses free to bully and harass their workers with impunity.
But in its majority report, the committee said there was a "unique" situation where all the senior leadership of the Australian Public Service were in agreement, backing the reform bill.
The committee's report gave prominence to the APSC's concerns about abuse of the workers' compensation scheme.
"Managers in the APS regularly report that some employees covered by the Commonwealth scheme see Comcare as a 'soft touch'," the report noted.
"The APSC stated that 'such an attitude is not healthy for the individual concerned, undermines the majority of hard working and ethical public servants and is not fair on agencies and taxpayers'.
"Furthermore, the APSC noted that fraud notifications had increased by 15 per cent during 2013-14 compared to the previous year, and that injured worker fraud accounted for more than 95 per cent of all allegation types.
"The two most significant fraud allegations were embellishment of an injury and injured workers earning an undisclosed income or working without notifying Comcare or their workplace."
The commission went on to insist that abuse of workers' compensation was doing serious harm to the service, not only financially but to its standing in the eyes of the public.
"The APS cannot afford to continue paying for a scheme that accepts claims that are unrelated to work, and provides treatment and services to employees that are not evidence-based," the commission's submission read.
"A prevalence of spurious claims invokes a broader impact of undermining respect for APS employees."