Would I need to pay Workers Compensation if my Employee Contracts COVID-19? A case summary of Sara v G&S Sara Pty ltd’
February 19, 2026
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COVID-19 has drastically impacted on employers management practices in relation to their employees. The Western Australian Government recently mandated vaccinations for particular industries, creating uncertainties for employers in those industries as well as in areas where the COVID-19 vaccination is not yet mandated as compulsory. Whilst the WA Government is largely deferring the mandatory vaccination requirement to the employer – a recent case in NSW may provide an insight for employers when considering their options.
In the recent case of Sara v G & S Sara Pty Ltd
[2021] NSWPIC 286 (‘the Sara Case’), the Court determined that an employee who contracted the COVID-19 virus during the course of the employment was entitled to workers compensation payments
The Sara Case
In the Sara Case, Mr Sara, a director of G & S Sara Pty Ltd (‘the employer’), passed away after contracting the COVID-19 virus whilst travelling on a trip to New York from Sydney to sell and promote the employer’s products. While in the United States, Mr Sara tested positive to COVID-19 and was admitted to a New York Hospital, where he suffered heart attacks and strokes, before dying from COVID-19 complications. Mr Sara’s wife applied for compensation for her husband’s hospitalisation, medical and funeral expenses in addition to a lump sum death benefit pursuant to the NSW Workers Compensation Act 1987
(‘the Act’).
In the application made under the Act, the NSW Personal Injury Commission (‘the Commission’) was required to determine two contentious issues.
- Whether Mr Sara was considered to be an employee of the employer whilst on travel; and
- Whether Mr Sara contracted the COVID-19 virus during the course of his employment.
Interestingly, the question of whether COVID-19 fell within the definition of ‘injury’ under the Act, was not put in issue.
The Commission’s Findings
Although the employer argued that Mr Sara contracted the COVID-19 virus during social functions outside the course of his employment in New York, the Commission held that Mr Sara was very likely to have contracted COVID-19 during his travel to New York from Sydney, which included his transit from San Francisco to New York. The Commission made this determination by analysing the following factors:
- Mr Sara’s length of travel from Sydney to New York, which exposed Mr Sara to many environments and potential close contacts, making Mr Sara likely to contract COVID-19;
- Mr Sara’s unwillingness to wear a mask during his travel from Sydney; and
- The medical evidence provided to the Commission as to the likely incubation period of the virus.
Secondly, the Commission found that Mr Sara’s contraction of the COVID-19 virus was within the course of Mr Sara’s employment with the employer, citing the following reasons:
- Mr Sara was a paid employee with the employer under a contract of service;
- the employer paid workers compensation insurance including for Mr Sara;
- the work trip was induced and encouraged by the employer, to produce outcomes for the benefit of the employer; and
- Mr Sara was continually receiving his ordinary wage from the employer while he was in the United States (and was not on annual leave during his travel to the United States).
As a result, the employer was ordered to pay Mr Sara’s wife a lump sum death benefit and weekly compensation of $834,000 to compensate for the period of Mr Sara’s hospitalisation and resulting death due to COVID-19.
Relevance to Western Australian Employers
Section 4 of the Western Australian Workers Compensation and Injury Management Act 1981 (‘the WA Act’) defines ‘injury’ to mean the following:
(a) a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer’s instructions; or
(b) a disease because of which an injury occurs under section 32 or 33; or
(c) a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree; or
(d) the recurrence, aggravation, or acceleration of any pre-existing disease where the employment was a contributing factor to that recurrence, aggravation, or acceleration and contributed to a significant degree; or
(e) a loss of function that occurs in the circumstances mentioned in section 49,
but does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of the employer
In light of the Sara Case, and given that the dominant literature provides that COVID-19 is a disease, employers in WA may find themselves liable under Section 4(c) of the WA Act in the event that an employee contracts COVID-19 during the course of the employment of the employee, or at a location whereby the employment was a contributing factor to contracting COVID-19.
Conclusion
Overall, the Sara Case underscores the importance for employers to be mindful of the propensity for employees to contract diseases, such as COVID-19 during the course of the employment of an employee, or at a location whereby the employment was a contributing factor to contracting the disease, and to implement measures to minimise that risk. A minimisation measure may be to introduce a mandatory vaccination policy.
If you would like further information in relation to how the above matters may affect your business or assistance in drafting a mandatory vaccination/proof of vaccination policy, please contact us on (08) 9321 5451 or by email at office@bailiwicklegal.com.au.
By Mikhail Safarudin (Law Graduate)
For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au/
The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on this information.
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