Business and labor interests vowed to work together next legislative session to reform Hawai'i's workers' compensation system after the Legislature yesterday essentially killed new workers' compensation rules.

During the last session, the Legislature passed a so-called "handcuff bill" that prevented Nelson Befitel, the director of the state Department of Labor and Industrial Relations, from imposing administrative rules that Befitel said would save Hawai'i businesses $98 million a year by streamlining the system and getting treatment for injured workers much faster.

Legislators said the administrative rule changes usurped their authority and were a thinly veiled attempt to get around similar bills that died before in the Legislature.

At the end of the last session, Gov. Linda Lingle vetoed the handcuff bill, which put the administrative rules into effect in May. But yesterday, the Legislature overrode Lingle's veto.

"I am so, so disillusioned, absolutely disillusioned," said Bev Harbin, president of the Employers' Chamber of Commerce, who supported Befitel's efforts to get the administrative rule changes into effect. "It's a black hole of doom. There's just no hope for the business community. There's no hope for digging us out of this hole."

Harbin lobbied legislators against overriding Lingle's veto and said many of them refused to meet with her.

"Those who did open their doors said that it wasn't a matter of workers' compensation reform," she said. "They said it's a matter of separation of powers: 'We don't like the way the director of labor did it. He didn't come down here on his hands and knees so we could kick him out.' "

Chris Pablo, director of government and community affairs for Kaiser Permanente, worked on workers' compensation efforts this session as chairman of the Chamber of Commerce of Hawai'i's health issues committee. Pablo felt that the work helped "find common ground toward making meaningful reform in workers' compensation," he said.

Despite the death of the administrative rule changes, "We will continue to work — Kaiser and the Chamber of Commerce and with our colleagues from labor — for developing changes in workers' compensation," Pablo said.

Said Harold J. Dias Jr., president of the Hawai'i State AFL-CIO: "We have kept the door open as far as our discussions with the Chamber of Commerce.

"From labor's standpoint, we're not against trying to improve the workers' compensation system. You just have to bring together all sides to look at the issue from everyone's standpoint and make the recommendations to improve the system in a way that everyone can benefit."

Dawn Pasco of Ha'iku, Maui, has trouble finding a doctor on Maui who will treat her workers' compensation injuries. So Pasco worries that she'll have to start flying to Honolulu for treatment, "which is just going to cost insurance companies even more money."

And she knows that there are probably some employees filing bogus claims.

But Pasco yesterday was relieved that the Legislature and Lingle administration are essentially "back to square one" — as she put it — with the Legislature overriding Lingle's veto.