Latest case updates for self-insurers – April 2024

Vision Australia Ltd v Elisha [2023] VSCA 265

The worker was employed with Vision Australia Limited (Vision); his employment was terminated after it was alleged he demonstrated ‘aggressive and intimidating’ behaviour towards a hotel staff member during a work trip. The worker issued proceedings claiming he suffered psychiatric injury because of Vision’s implementation of processes that led to, and resulted in, the termination of his employment. The worker alleged Vision had breached his employment contract, or alternatively, was negligent. Initially, Justice O’Meara rejected the negligence claim, finding Vision didn’t owe a duty of care to protect the worker from psychiatric injury in the context of the investigation and subsequent termination of his employment. However, His Honour found Vision was liable to pay damages by reason of breach of contract. His Honour ordered Vision pay the worker $1,442,404.50.

On appeal, the Court of Appeal determined Justice O’Meara erred in awarding damages by reason of breach of contract. While the court accepted the employment contract had been breached, they found no damages were payable for psychiatric injury resulting from the breach.

The court also found that an employer does not owe a common law duty of care to an employee to take reasonable care to avoid injury to the employee in its implementation of the processes leading to and resulting in the termination of employment.

The decision means it’s unlikely workers will be awarded damages for breach of contract or for injuries sustained because of the investigation and termination of their employment. On 7 March 2024, the High Court granted a special leave application made by Mr Elisha’s solicitors. Hall & Wilcox will provide a further update on this area of law after the High Court’s decision.

Mason v McClure Excavations [2023] VMC 5

The worker suffered injuries when assaulted by a co-worker outside a pub in Castlemaine, following an end-of-year workplace barbeque lunch held by the worker’s employer. The worker submitted that, while socialising and drinking alcohol - activities he was encouraged or induced to do by his employer - he was assaulted. The location was irrelevant as there was a continuation of the activity. The employer, on the other hand, argued the assault occurred in circumstances that had no relationship or connection to employment, given they weren’t involved in any aspect of events following on from the barbeque.

There was consensus the assault occurred while the worker wasn’t engaged in actual work. Accordingly, the central question for determination was whether the activity the worker engaged in after he left the barbeque lunch was one the employer had induced or encouraged him to do.

The employer argued employees, including the worker, attended an optional barbeque lunch in the workplace, which was over by about 5:30 pm. A group of staff then chose to attend the pub, where the assault then occurred three hours after the barbeque ended. The worker claimed it was of no material consequence the employees changed venues, and it was the activity that was the salient feature.

The court found that, though it was likely the discussions extended to some staff going to the local pubs after the barbeque, the discussion didn’t amount to an invitation from the employer. It was found it was more likely the worker went to the pub due to the urging from friends or the general discussion of the group. In the absence of express or implied encouragement by the employer or an implied inducement by provision of funds for drinks or meals, it was concluded some staff simply opted to meet up at the pub after the barbeque finished to enjoy each other’s company. Therefore, the court concluded the worker failed to prove he was injured in the course of or arising out of his employment with the employer.

This case suggests for events to be connected to work, there must be specific inducement or encouragement from the employer. While this encouragement can vary on the facts, merely engaging in an activity following a work event with colleagues and supervisors isn’t sufficient to render that activity work-related.

Vincent v Victorian WorkCover Authority [2023] VCC 1667

The worker, a dental nurse, sought damages for psychiatric injuries she alleged arose from bullying by her boss.

The worker alleged in late 2015, her boss’ behaviour became erratic. She believed the practice wasn’t doing well financially and her boss was trying to get rid of her. She claimed because of being bullied, she suffered a permanent psychiatric injury. The employer denied these allegations and submitted it was the worker whose behaviour was unacceptable, resulting in a need for her boss to supervise and discipline her.

The matter was heard before the County Court. During the hearing, Judge Morrish told the jury (who were subsequently discharged) the law doesn’t define bullying. Rather, the jury must use their common sense and experience to decide what amounts to bullying. She also stated bullying isn’t a separate cause of action and doesn’t require a different standard of proof. Rather, the worker needed to prove some act or omission on the part of the employer created a reasonably foreseeable risk of a diagnosable psychiatric injury.

Her Honour also provided a useful reminder of the types of activities that don’t usually constitute bullying. Specifically, lawful directions, corrections or warnings to employees - particularly when that conduct is designed to protect employees, and in this case, patients, or to ensure compliance with the system of work.

Several incidents were considered separately and in combination to determine if the employer had engaged in bullying behaviour. The court determined the employer was dealing with a ‘querulous employee’ who was combative and unwilling to abide by directions. On balance, the court determined the directions given by the employer weren’t unreasonable or unjustified and the employer had the right to supervise and train the worker. Accordingly, there was no negligence on the part of the employer to cause the plaintiff’s injury, loss, and damage. 

This case reminds us that when an employer takes management action for a legitimate reason, this is unlikely to amount to bullying.

Stankovic v Arc Plastering [2023] VMC 2

The worker lacerated his right middle finger during his employment as a carpenter/plasterer. This wasn’t disputed by the employer, and it agreed it was responsible for treatment expenses, including hand surgery. Following surgery, the worker was absent from work for approximately two months. During this period, the employer paid him his normal wages. The worker subsequently returned to work, performing his full-time hours for approximately 20 months before being laid off on 1 April 2021.  

Shortly after being laid off, the worker lodged a claim for compensation seeking weekly payments, as well as medical and like expenses for his lacerated finger. While his claim was accepted, a dispute emerged regarding the start date for his entitlement to weekly payments. After the court ruled in favour of the worker, determining he wasn’t preforming his pre-injury duties during the period between his return to work after the incident and the termination of his employment, it had to establish the commencement date for the first entitlement period.

Section 152 of the WIRC Act provides definitions for ‘first entitlement period’ and ‘second entitlement period’. Each period is similarly defined as ‘paid or is payable to the worker’’.

The employer argued since the court had accepted the worker’s incapacity for his pre-injury duties from the time of the incident, it logically followed the first entitlement period commenced on the date of the incident. Consequently, the period of 130 weeks would’ve already expired by the time of the hearing.

In contrast, the worker contended weekly payments weren’t ‘paid or payable’ until after the initial certificate of capacity was issued, and his incapacity was recognised, which occurred on 2 April 2021, the day after his employment was terminated.

Of significance in this case was the fact the worker received his full wages from the date of injury until his employment ceased on 1 April 2021. During this period, even when he was off work altogether after surgery, the employer didn’t pay the worker sick leave or any form of compensation other than his ordinary pre-injury wages.

Top of Form

Applying the principle in McCluskey v A B Oxford Managers Pty Ltd [2017] VMC 002 [34], where Magistrate Wright concluded the words ‘paid or payable’ didn’t cover payments made by an employer outside the strict provisions of the Act (albeit in a different context), the court ultimately accepted the worker’s position and determined the commencement date of the first entitlement period was 2 April 2021, which was the date of the first certificate of capacity.

In reaching this conclusion, the court determined the employer had provided wage payments to the worker outside the strict provisions of the WIRC Act and, on that basis, weekly payments weren’t ‘paid or payable’ until 2 April 2021. The worker’s entitlement hadn’t crystalised because the employer paid for wages and treatment outside the strict provisions of the WIRC Act, effectively eliminating the need (in practical terms) for the worker to make a WorkCover claim.

This case illustrates when an employer chooses to pay an injured worker their full pre-injury wages without the submission of a compensation claim and certificate of capacity, this payment period won’t be included in the calculation of the first entitlement period for weekly payments.

Hobbs v Lindsay Park Racing Pty Ltd [2023] VMC 13

The worker was a full-time stable hand. Before her injury, she was responsible for tasks such as grooming, feeding, exercising and caring for horses. She suffered an injury to her coccyx, and a consequential psychological injury, when she was struck by a vehicle driven by a co-worker. Following the injury, the worker took eight weeks off before returning to work on modified duties, which she disliked.

After the worker’s return to work, various conflicts arose between the worker and her employer. In May 2018, the worker was informed she had been overpaid and the over-payment amount would need to be repaid. In September 2018, the worker was informally disciplined about using her mobile phone during work hours. 

On 9 November 2018, the worker received a formal written warning after she failed to attend work on Oaks Day (the previous day), which was accepted as a peak time for the employer’s operations. The worker instead attended Flemington to watch a family-owned horse. On the same day she received the written warning, the worker subsequently resigned from her employment.

By way of notice dated 11 December 2018, the agent determined the worker’s current weekly payments would be reduced because she resigned for reasons unrelated to her capacity (in accordance with section 185(1)) of the WIRC Act. The worker issued proceedings in the Magistrates’ Court, seeking an order the decision be set aside. The sole issue to be determined was if the worker resigned for reasons unrelated to her incapacity.

The agent argued the worker’s resignation wasn’t in any way linked to her incapacity, because:

• she resigned because she was given a formal warning for breaching the employer’s spring carnival leave ban policy. This warning was issued because she chose not to attend work on Oaks Day 2018. Had she not received the warning letters, she would’ve continued working 27 hours per week; and

• the basis of the resignation was her own volition, unilateral decision (and right) to resign and to not pursue any position with the employer.

The worker argued the weight of the evidence established that her resignation was due to her ongoing pain and physical limitations from her injury, compounded by her distress and frustration. She gave evidence the warning was the ‘final straw.’

Magistrate Hoare found the worker resigned for reasons of incapacity, rather than because of the warning given on 9 November 2018. This decision was based primarily on the fact the medical evidence supported the worker continued to suffer ongoing pain. Additionally, the worker’s evidence regarding her pain, distress and frustration over the return-to-work plan was corroborated by the contemporaneous clinical records. The worker’s unchallenged evidence was she was heavily curtailed in the tasks she could do, which she found frustrating and resulted in her feeling anxious and depressed.

This case highlights that although there can be strong evidence to suggest a worker has resigned for reasons unrelated to their incapacity, the broader impact of the worker’s injuries must also be considered. In particular, attention should be given to whether the injuries have caused frustration, conflict or dissatisfaction that has permeated the working relationship and may have contributed to the worker’s resignation.

Shrimpton v Victorian WorkCover Authority [2024] VCC 245

The worker sought leave to bring proceedings against her employer for pain and suffering damages. The worker had been exposed to COVID-19 in the course of her employment and consequently began suffering ‘long COVID syndrome’ (‘LCS’). The main issues before the court was whether the impairment of the worker’s immune system would be considered a ‘body function’ as required under the serious injury test and if yes, were the consequences significant.

The worker argued she suffered a serious impairment of her immune system and her immune system constituted a ‘body function’. The employer contended the immune system is not a ‘body function’ and the worker had, in fact, suffered separate impairments to multiple body functions with no singular impairment being serious. Judge Tran accepted the worker’s submissions and granted leave on that basis.

The worker relied on the opinion of Professor Denholm, an infectious disease physician. His report stated the nature of LCS is ‘not pathologically established’ but involves a ‘variety of physiological mechanisms’, including ‘haematological pathways, viral persistence and immunological dysregulation, as well as superimposed psychological impact of illness and disease’. On that basis, Professor Denholm considered the ‘predominantly affected body system (by LCS) is the immune system’.

The worker’s reported consequences included:

• coughing fits at least three times a week and sometimes every day, causing her to feel fatigued, ache in her whole body and occasionally experience pain and urinary incontinence. Exposure to certain air particles can trigger these fits and now she must monitor her environment and activities to avoid these triggers;

• shortness of breath, a sore throat, nasal drip and headaches;

• stress incontinence ‘most days’;

• tinnitus affecting her conversational ability and sleep every night;

• feeling constantly ‘foggy’ and issues with concertation and memory; and

• overwhelming all-over tiredness, which amongst other things, has meant she ‘no longer has any energy for anything outside of work’, is unable to do ‘anything spontaneously’ and is unable to complete exercise, hobbies and driving at pre-injury levels.

In finding the immune system was a ‘body function’, Judge Tran restated two key points about the interpretation of this provision. First, Her Honour noted determinations under this provision require a ‘commonsense and practical approach’. Second, ‘function’ means a ‘physical act or operation’ of the body, rather than a ‘part’.

Her Honour also considered the fact the worker was a single parent. Additionally, she noted while the evidence on the long-term effects of LCS is uncertain, there’s a consensus suggesting these symptoms are likely to continue indefinitely.

This decision suggests a cautious approach should be taken in cases of LCS (or, in fact, other post-viral syndromes). It notes unless significant credit issues exist or serious disentanglement concerns arise, the court may take a ‘pragmatic and commonsense’ approach when resolving medical uncertainty about such syndromes in favour of a worker who is evidently suffering.