Thinking | 16 March 2020

When does COVID-19 trigger an entitlement to workers’ compensation?

By Terry Killian 

Much commentary to date has focused on the steps that employers should be taking to minimise the COVID-19 risks to their businesses and employees. What if an employee contracts the virus? Are they likely to be entitled to workers’ compensation?

COVID-19 is likely to be considered a disease under the workers’ compensation regimes of the Commonwealth and each of the States and Territories.

The precise language and definitions may alter slightly in each jurisdiction but, fundamentally, to establish an entitlement to workers compensation, a worker must show:

  1. they suffered an ’injury’; and
  2. the ‘injury’ arose out of or in the course of employment.

For a disease such as COVID-19 to be an ‘injury’:

  1. it must be contracted in the course of employment;
  2. the exigencies of the employment - what the worker does during the course of employment - must contribute in some significant way to the contraction of the virus.

In the course of employment

Establishing ‘in the course of employment’ may be more difficult with a virus, where an individual worker might have been exposed in a variety of different locations, both inside and outside the workplace. If the worker was not performing actual work at the time of exposure, questions then need to be asked about whether the employer encouraged or induced the worker:

  • to be at the place, if the exposure occurred because the worker was at the place; or
  • to engage in a particular activity, if the exposure occurred because the worker was engaged in the activity.

Connections needed between duties performed and virus contraction

For the most part, a worker must go further than showing they contracted the virus ‘in the course of employment’.

In the context of a disease, they must also show a real connection between the duties they perform and the contraction of the virus. The language differs across jurisdictions:

  • ‘ a significant contributing factor’ (Vic and Qld);
  • ‘the main contributing factor’ (NSW);
  • ‘a contributing factor and contributing to a significant degree’ (WA);
  • ‘the major or significant contributing factor’ (Tas);
  • ‘substantial contributing factor’ (ACT); or
  • ‘contributed to, to a significant degree’ (Cth)

But the practical effect in COVID-19 claims is likely to be similar across the jurisdictions.

The case law makes clear that the requirement for a worker to establish the requisite ‘contribution’ is additional to and requires more than simply establishing ‘arising out of or in the course of' employment.

Insurers and employers should also be aware that, in some jurisdictions, provisions which deem a connection between certain diseases and employment might also be relevant.

It is important to note that the requisite contribution between employment and the contraction of COVID-19 is not, in this context, a question of fault by the employer.

Clearly, there are some industries and occupations where the requisite contribution is likely to be easier to establish:

  • workers whose roles require them to interact with people who are known to have contracted the virus;
  • where a worker is required/permitted to travel to ‘high risk’ areas with known significant outbreaks.

The more challenging claims are likely to arise where a worker simply asserts that they contracted the virus from a co-worker, while at work. Are the steps which an employer puts in place to manage COVID-19 risks likely to be relevant to the significant or substantial contribution test? These claims will test the bounds of workers’ compensation.

Each individual claim will need to be considered on its own merits.

Author

Terry has over 25 years' experience in insurance litigation, with a focus on advising underwriters and self-insurers.

More about Terry

If you hold statutory insurance we encourage you to contact your respective statutory scheme agents regarding claims for compensation.  Alternatively you can contact us below.  If you are a self-insurer in Victoria, Ilona Strong and Andrew Stamp can assist with queries regarding claims for compensation.

Contacts

Rhett Slocombe
Partner & Insurance National Practice Leader

Rhett is the firm's National Insurance Practice Head and has over 25 years' experience as a statutory insurance lawyer.

More about Rhett
  • Fluent in Greek - conversational

Anastasia specialises in personal injury litigation management and administrative law.

More about Anastasia

With over 25 years' experience Simon is a highly experienced litigator and partner in the NSW Statutory Insurance team.

More about Simon

Anton practices in all areas of insurance law, focusing on workers' compensation, medical treatment and public/property liability.

More about Anton

For self-insurer employers (VIC)

Andrew practices in personal injury litigation on behalf of self insurers, employers, and WorkSafe Victoria and its agents.

More about Andrew

Ilona focuses on both statutory and common law claims across both Victorian and Tasmanian workcover legislation.

More about Ilona

Useful Information and Contacts

Victoria

In Victoria entitlement to workers compensation is determined pursuant to the Workplace Injury Rehabilitation and Compensation Act 2013.  To establish an entitlement to compensation, there must be a clear causative link with the worker’s employment.

Useful resources for employers who are seeking information regarding the coronavirus include:

If you hold WorkCover insurance we encourage you to contact your WorkSafe agent or the WorkSafe Advisory Service for any queries regarding claims for compensation.  Contact details for WorkSafe’s agents can be found at: www.worksafe.vic.gov.au/your-worksafe-agent

If you are a self-insured employer, Ilona Strong and Andrew Stamp can assist with any queries regarding claims for compensation.

Queensland

Some useful resources for Queensland

You might be also interested in...

Financial Services | 16 Mar 2020

New AFS licensing framework for foreign financial services providers

In this article, we outline briefly the new regulatory framework in respect of the Australian financial services (AFS) licensing regime as it will apply to foreign financial services providers (FFSP) providing financial services to wholesale clients in Australia. This new framework will replace the existing AFS licensing exemptions for FFSPs which rely on either the ‘sufficient equivalence’ class order regime or the ‘limited connection to Australia’ class order. For a background to the new regime, see our earlier article.

Insolvency & Reconstruction | 17 Mar 2020

How the safe harbour regime can help businesses through the economic effect of COVID-19

No one could have predicted how important the ‘safe harbour’ regime (implemented in September 2017) is about to become, given the escalating stress on businesses of COVID-19.