Would I need to pay Workers Compensation if my Employee Contracts COVID-19? A case summary of Sara v G&S Sara Pty ltd’
April 19, 2023
Author name
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.
Our June 2024 newsletter is now available. Have a read to find out what we have been up to in the first half of the year!
The International Sustainability and Carbon Certification (ISCC) System has come to the attention of many Western Australian farmers recently, as the scheme has changed one of its policies regarding aerial spraying. What is the ISCC? The ISCC is one of the world’s largest voluntary sustainability certification schemes enabling participants to demonstrate they are producing materials in a sustainable way that meets or exceeds community expectations. In Australia it is widely used in the canola industry, enabling Australian canola growers to access the European biofuel market. CBH Marketing and Trading holds certification for the ISCC EU and ISCC PLUS programs, that cover canola, barley, oats, wheat and lupin, allowing WA growers to participate in both programs. Participating in the ISCC program can result in a premium on grain, however participants are subject to more stringent measures to satisfy sustainability accreditation requirements. Recent decision on aerial spraying ISCC Principle 2.6.2 prevents aerial spraying from taking place within 500 metres of a body of water. CBH has successfully lobbied for an exemption to this Principle, for farm dams and salt lakes of low ecological value. As part of its lobbying, CBH provided expert reports to the ISCC on the hydrology and ecology of WA farm systems. For farmers who are signed up to the ISCC program, this removes an obstacle during the season for weed management. The Principle does still require a 500 metre buffer for other bodies of water, including freshwater lakes, rivers, ponds or creeks. However, for those who farm yabbies and marron, this change may not be welcome. Marron and yabby farmers have noticed impacts on their populations where aerial spraying has taken place close to their properties, and aerial spraying can unintentionally damage natural vegetation, including young and old growth trees. For growers, it’s always prudent to follow best practice guidelines for aerial spraying to avoid spray drift – including monitoring weather conditions and the effect of water added to the chemical. For some farmers, this decision may prompt an examination of whether signing up to the ISCC program might be best for their business. In this circumstance, it is important to weigh up the potential benefits of the program compared to the sustainability accreditation requirements. For others, this decision is a timely reminder to stay up to date with best practice guidelines when it comes to spraying, particularly during the seeding season. For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au By Ciara Nalty (Solicitor) 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 any of the content.
How does the Annual Wage Review affect workers and small business owners? Each year, the Fair Work Commission reviews the National Minimum Wage and the minimum wages set out in awards. Cost of living and inflation are front of mind for both employers and employees, and this year’s Annual Wage Review is likely to see an increase in the minimum wage and award rates. The Annual Wage Review is conducted by an Expert Panel, which takes submissions from interested groups, including the Federal Government, unions, and business lobby groups. The Federal Government’s submission to the Wage Review this year called for an increase to the minimum wage, though not specifying an amount. The Australian Chamber of Commerce and Industry has advocated for an increase of 2 per cent, at most. The announcement will likely take place in early June and any increase to the national minimum wage will take effect in the first full pay period on or after 1 July 2024. Failure to pay employees at least the minimum rate that is set out in an applicable award can result in penalties, including requirements for back pay and fines. The Fair Work Ombudsman uses its enforcement powers to issue compliance notices to employers, and recovered $14.8 million in unpaid wages in 2022-23. Small and medium businesses are subject to the same scrutiny as large businesses. For business owners, this is a timely reminder to review employment agreements and payments to staff. You should be conscious of which awards cover your staff members, as award rates for each level increase commensurate with the national minimum wage increase. It is also important to be aware of employee entitlements and set-offs, to ensure you are paying employees what they’re entitled to and avoiding future claims. If you are not sure what award your employee is covered by, have a question about employment conditions or require any other assistance with employment and workplace matters contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au . By Ciara Nalty (Solicitor) 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 any of the content.
Working with you, working for you
