Would I need to pay Workers Compensation if my Employee Contracts COVID-19? A case summary of Sara v G&S Sara Pty ltd’

Mikhail Safarudin • Nov 04, 2021
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.
  1. Whether Mr Sara was considered to be an employee of the employer whilst on travel; and
  2. 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.
05 Mar, 2024
Find out what we have been up to and recent events in our March 2024 newsletter .
20 Feb, 2024
The Human Rights Commission may take action against employers who fail to actively eliminate sexual harassment, discrimination and victimisation in the workplace, as part of a positive duty reform. While the reform itself was introduced under the Sex Discrimination Act in 2022, a change was put in place last December - and every employer, including those in the agricultural sector, is affected. This change has provided the commission with new powers to investigate and enforce compliance with positive duty and investigate organisations or businesses where it "reasonably suspects" non-compliance. What does this mean for shearing contractors, sheep producers and other primary producers? Speaking at the WA Shearing Industry Association (WASIA) general meeting last month, Bailiwick Legal solicitor Matilda Lloyd said the enforcement power involved inquiries and investigations similar to WorkSafe. She said a complaint did not have to be made for an inspector from the commission to visit and look over a workplace, and see if there is any kind of sexual harassment occurring. "The commission looks at policies and procedures, and essentially you need to be able to demonstrate that you're compliant with this positive duty. "When you think about it in the context of a shearing shed, it is the safety checklist you have in place for when people enter the shed. "Those are the things you need to consider with sexual harassment as well." Ms Lloyd said the commissioner never had the power to conduct an investigation before and, as such, practically how it was going to work was an unknown. "We don't know whether they're going to be coming out and doing regular inspections, what those inspections are going to look like in terms of time or how thorough they are going to be, " sh e said. "They need to be thought of the same way as a WorkSafe investigation, whereby it could happen at any point whether a complaint is made or not. "Investigators will expect employers to show that they are actively trying to eliminate this form of unlawful conduct." If an inquiry occurs, what will happen? If an employer wasn't taking the correct measures to stop sexual harassment, discrimination and victimisation from occurring, they could be issued a compliance notice. Ms Lloyd said if the notice wasn't adhered to and an inspector returned, they could apply to the Federal Court to have that positive duty enforced. What is positive duty? Ms Lloyd said a positive duty was a legal obligation on an employer or person conducting a business or undertaking to take reasonable and proportionate measures to eliminate unlawful behaviours in the context of work, workplaces and working relationships. In the case of shearing contractors, sheep producers and other primary producers, she said that obligation was on the employer and applied to all staff, workers, contractors, customers and people entering, for example, a shearing shed. She said the obligation was "very broad" and applied right across the board. "Enforcing positive duty is pretty straightforward in terms of the employer, but when we look at the other parties involved it is extensive, " Ms Lloyd said. "When we are talking about sexual harassment in the workplace we are talking in the shed and in a vehicle on the way to work or another shed. "It is also offsite, so if you are having work drinks at the quarters or wherever afterwards - that's also a workplace within the definitions of the act. "The obligation applies across the board in all of these circumstances. "And also applies to visitors, so if you have farmers and they bring their wives, it is anyone coming into that shed or environment." In the context of positive duty, what do contractors need to do? Firstly, employers need to understand what sexual harassment, sex-based harassment, discrimination and victimisation is. Ms Lloyd said employers were responsible for leading their team, so it was important to understand what the laws were and how they affected not only them, but their employees. "When we talk about sexual harassment we talk about unwelcome conduct that is of a sexual nature or requests for sexual favours, touching, requesting dates and so forth," she said. "Whereas sex-based harassment is harassment that is targeted at a particular sex. "This could be making sexist comments about a woman because she's a woman or making sexist comments about a man because he's a man. "Then victimisation is about targeting someone because they've made a complaint." Ms Lloyd said a conversation then needed to be had to educate employees, whether that be face-to-face, by Whatsapp or having it displayed in the shed. She said there were resources and guidelines available through the Human Rights Commission, which helped with this. "Have that conversation - as an employer understand what sexual harassment is but then talk to your employees and be serious about educating your employees, " Ms Lloyd said. "It is about actually having that conversation and then thinking about what material can be given to them. "The whole point is to make it easy, so people understand. "Then it goes into training and support - is there someone in your team people can talk to?" The seven standards The commission has released guidelines for complying with the positive duty under the Sex Discrimination Act 1984. The guidelines are centred around seven standards - leadership, culture, knowledge, risk management, support, reporting and response, and monitoring, evaluation and transparency. Examples of practical actions that organisations or businesses can take to meet each of the standards are set out in the guidelines. Ms Lloyd said, as each business is different, it depended on how big a team was, what was going to be practical and cost-effective in the workplace. She said the commission would look at the different standards if there was an investigation or inquiry. How often do employers need to talk to their team about this? Ms Lloyd said it should be looked at similarly to safety or work related issues, whether that be a toolbox or regular meeting once a week or every couple of days. She said if a contractor was starting a new job or visiting a place they hadn't been to before, it was about having that conversation upon arrival. "When everyone's preparing for their first break, sit down and have a chat about general safety as well, " Ms Lloyd said. "That's the first step, and then follow it up a month later when you start a new shed. "It is about consistently and actively taking measures to create a safe space. "It seems obvious that once you've gone through your checklist you then talk to the people coming into that environment, who are your workers, and alert them to what you have found. "Similarly, with positive duty, a checklist is proof that you are doing the right thing if you are audited." Does insurance cover sexual discrimination cases? Having insurance does not diminish positive duty, it just safeguards employers against potential damage and loss against their business if they are sued. Ms Lloyd said sexual discrimination cases, which travelled through the Federal Court, were not cheap and often have adverse outcomes from an award of damages perspective. "If we talk about Work Health and Safety, as you know, that is a serious issue you have to take onboard and consider, " she said, "And that's the way I think employers need to frame their conduct when talking about and implementing measures to prevent sexual harassment, discrimination and victimisation." Is an employer covered if they have put everything in place, but those rules are still broken? Ms Lloyd said an employer would be protected if they have been able to eliminate as much as they can with the resources available to them. She said it was important to remember sexual harassment and discrimination is unlawful conduct. "In terms of positive duty, by taking all reasonable steps and measures given the resources available to you, you will be able to mount a solid defence against any claim. "If you've done your duty positively and it can be demonstrated that you've exercised your role in appropriate fashion, then that will be solid defence." For more information on the positive duty reform and seven standards, go to humanrights.gov.au
14 Dec, 2023
See what's been happening and current topics of interest in our December 2023 newsletter .
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