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Australia – High Court Turns Off The Light: Motel Room Romp Is Not ‘On The Job’.

4 November, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

Comcare v PVYW [2013] HCA 41 (30 October 2013)


WHAT YOU NEED TO KNOW

 

  • The High Court’s decision has narrowed the circumstances in which an employee will be entitled to workers’ compensation for an injury suffered at a place away from their usual place of employment.
  • An employee will only be entitled to compensation for an injury occurring while a worker is away from the workplace if the injury is suffered because of a feature of the place itself, or in the course of an activity which the employer has induced or encouraged the employee to do while at that place.
  • The decision may provide some comfort to employers in the lead up to the festive season where there is a risk of employees being injured at functions outside the workplace. However, employers should be careful not to overextend the application of this decision, as it only relates to workers’ compensation.
  • This decision is not binding in relation to other areas of the law which apply to the employment relationship, such as work health and safety, or an employer’s liability for the conduct of employees. These other areas regulating employee conduct outside the workplace are governed by separate legislation, such as the Fair Work Act 2009, safety and anti-discrimination legislation, or the common law. Each area has its own body of case law interpreting concepts similar to ‘in the course of employment’. Although the High Court’s view on the scope of ‘in the course of employment’ in this case will be of interest in these other jurisdictions, it will not be binding.

The High Court has handed down its much anticipated decision about whether an employee’s injuries suffered during a motel room romp while on a work-related trip are compensable because they were suffered ‘in the course of employment’.


Background


The employee, PVYW worked for a Commonwealth government agency (Agency). The Agency required  her to work from a regional office for two days and booked her into a local motel for her stay.


While at the motel, the employee had sex with an acquaintance, during which a glass light fitting fixed above the bed was pulled from its mount. The light struck the employee on the nose and mouth, leading her to suffer physical and, later, psychological injuries.
The employee made a claim for workers’ compensation from Comcare (as insurer for the Agency) pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) for her injuries, which she said arose ‘in the course’ of her employment with the Agency.


The SRC Act provides that Comcare is liable to pay compensation in respect of an ‘injury’ suffered by an employee. An injury for which compensation is payable includes a physical or mental injury suffered by an employee ‘arising out of, or in the course of, the employee’s employment.’ This test is mirrored in workers compensation legislation across all Australian jurisdictions.


The Administrative Appeals Tribunal held that the employee’s injuries were unrelated to her employment. On appeal to the Federal Court and then to the Full Bench of the Federal Court, Comcare was found to be liable in respect of the employee’s injuries on the basis that the Agency had induced or encouraged her to spend the night at the motel.
Comcare appealed the decision to the High Court.

 

High Court Decision


The High Court upheld Comcare’s appeal, and as a result, found it was not liable to pay compensation in relation to the employee’s injuries.


Liability Limited To Two Situations


By majority (4:2), the High Court clarified the position at law in relation to the circumstances in which an employer will be found to be liable to compensate an employee for an injury sustained in an ‘interval or interlude’ during an overall period of work, such as lunch breaks or breaks on work-related trips.


A joint majority judgment (French CJ, Hayne, Crennan and Kiefel JJ) restated the earlier High Court decision of Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473, and held that an employer will be liable to pay compensation in relation to an injury suffered outside of the employee’s ordinary place of work in two circumstances, specifically:

 

  • Where an injury is suffered while an employee is engaged in an activity in which the employer has induced or encouraged the employee to engage; or
  • Where an injury is suffered at, and by reference to, a place where the employer has induced or encouraged the employee to be (in the sense that the injury has ‘something to do’ with the place).

While the employee’s injuries were suffered at the motel (a place where the Agency had induced or encouraged her to be), the injuries were not referable to the motel itself. The majority held that the injuries would have been referable to the motel, if, for example, the light fell on the employee because the light fitting was insecurely fastened into place.


Rather, the injuries suffered by the employee were not in any way associated with an activity which the Agency encouraged or induced the employee to undertake, and so the majority found that they did not occur ‘in the course of employment’, which meant that the employee was not entitled to compensation. In doing so, the majority expressly rejected an approach which would mean that the employer effectively becomes an insurer for the employee for all activities undertaken while at a place at the direction of the employer. The majority made it clear that merely because an employer requires an employee to be at a particular location, an injury that occurs at that location will not attract workers’ compensation unless there is a further factor connecting the injury to the employment.


Implications For Employers


The decision may provide some comfort to employers in the lead up to the upcoming festive season where there is a greater risk of employees being injured at functions outside the workplace.


However, employers should be careful not to overextend the application of this decision, as it only relates to workers’ compensation. It is not binding in relation to other areas of the law which apply to the employment relationship, such as work health and safety, or an employer’s liability for the conduct of employees.


These other matters relating to the regulation of employee conduct outside the workplace are governed by separate legislation, such as the Fair Work Act 2009, safety and anti-discrimination legislation, or the common law. Each area has its own body of case law interpreting concepts similar to ‘in the course of employment’. Although the High Court’s view on the scope of ‘in the course of employment’ in this case will be of interest in other jurisdictions, it will not be binding.

 

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For further information, please contact:

 

Vince Rogers, Partner, Ashurst
[email protected]


Matt Baillie, Ashurst
[email protected]


Jacqui Young, Ashurst
[email protected]

 

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