EMPLOYMENT
UPDATE
NOVEMBER 13
HIGH COURT FINDS EMPLOYER NOT LIABLE
FOR MOTEL SEX INJURY
This Employment Update
outlines the High Court’s
ruling to overturn the Full
Federal Court’s decision
on
this
Workers
Compensation case.
High Court Decision
2
Implications for Employers
3
The High Court of Australia has held that an employee who was
injured whilst having sex in a motel room paid for by her
employer was not entitled to compensation from the
employer’s insurer.
The Facts
In the case of PVYW v Comcare,
the employee was employed by a
government
department
and
suffered an injury whilst in a motel
in country New South Wales. The
employee had been required by
her employer to travel to the
country town to conduct budget
reviews and provide training to
regional staff.
The employee stayed at a motel
that was booked by her employer.
During her overnight stay, the
employee
met
with
an
acquaintance.
Whilst the pair
were having sexual intercourse, a
light fitting was pulled from the
bed mount and caused injuries to
the employee’s nose and mouth.
The employee required hospital
treatment and subsequently lodged
a worker’s compensation claim.
At first instance, the Administrative
Appeal Tribunal held that the
employee’s injuries were not related
to her employment and rejected her
claim. The matter was appealed to
the Federal Court of Australia.
The Appeals
In the Federal Court, Justice Nicholas
ruled that “absent serious and wilful
misconduct or an intentionally selfinflicted injury, an employee who is
at a particular place at which he or
she is induced or encouraged to be
by his or her employer, during an
interval or interlude in an overall
period or episode of work will
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2.
ordinarily be in the course of
employment.”
In finding that the injuries sustained
by the employee were suffered in
the course of employment and
therefore compensable, Justice
Nicholas stated that:
‘If the applicant had been injured
while playing a game of cards in
her motel room she would be
entitled to compensation even
though it could not be said that
her
employer
induced
or
encouraged her to engage in
such an activity.”
As sexual intercourse is a lawful
activity (like playing a game of
cards in a motel room) and does
not constitute serious and wilful
misconduct, the Federal Court
held that the injury was sustained
in the course of employment.
Comcare then appealed this
decision to the Full Court of the
Federal Court of Australia.
The Full Court upheld Nicholas J’s
decision,
noting
that
compensation for an injury can
arise in two ways:
1.
2.
Where
the
employer
encourages or induces an
employee
to
spend
an
interval between periods of
work at a particular place; or
Where
the
employer
encourages or induces an
employee
to
spend
an
interval between periods of
work in a particular way.
In this case, given the employer
had directed the employer to stay
at the motel, and in the absence
of gross misconduct, the Full
Federal Court held that the injury
was therefore compensable.
place – the motel – creates an
interval in that period whilst
she is at that place. An injury
occurring in that interval is in
the course of employment.
9.
The High Court Decision
Comcare appealed to the High
Court. The High Court of Australia,
by a 4:2 majority, overturned the
Full Court’s decision.
At the heart of this matter was the
interpretation of the frequently
cited
Hatzimanolis
v
ANO
Corporation Ltd case, a 1992
decision of the High Court. During
the
appeal,
the
employee
maintained that the Hatzimanolis
decision established that the
simple fact that the employer
encouraged or induced her to
stay at the motel where she
incurred her injury meant that the
employer was liable for that injury.
It was the employee’s position that
because of this inducement, it was
irrelevant as to whether the
employer encouraged her to
spend the time in a particular way.
In response to this argument, the
Majority commented that:
“8. The respondent may be taken
to draw the following from
what was said in Hatzimanolis.
The employer had directed
her to be at a location away
from her permanent place of
work and her residence. While
at that location, she is
therefore seen as carrying out
an overall period of work. Her
presence at a particular
If this is what Hatzimanolis
conveys, it means that, absent
gross misconduct on the part
of an employee, an employer
who requires an employee to
be present at a particular
place away from their usual
place of work will be liable for
any injury which the employee
suffers whilst present there. It
means that the employer has
become the insurer for the
employee during the time that
the employee is at the place.
That would be so even though
the injury was suffered in the
course of an activity which
was clearly unrelated to the
employment.
10. These are odd results, yet
results which the respondent
says must follow because
Hatzimanolis makes liability for
an injury depend upon it
simply occurring within a
period of time – that is, the
interval. If this is the natural
consequence of what was
said in Hatzimanolis, that
decision would need to be
reconsidered…”
The
Majority
rejected
the
employee’s interpretation of this
earlier decision and confirmed
that it is not just the inducement to
be at a certain place that is
relevant as to whether the injury is
compensable, but also whether
the particular activity which led to
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3.
the injury was induced:
“35. Because
the
employer's
inducement
or
encouragement
of
an
employee to be present at a
particular place or to engage
in a particular activity, is
effectively the source of the
employer's
liability,
the
circumstances of the injury
must correspond with what
the employer induced or
encouraged the employee to
do. It is to be inferred from the
factual conditions stated in
Hatzimanolis that for an injury
to be in the course of
employment, the employee
must be doing the very thing
that
the
employer
encouraged the employee to
do, when the injury occurs.
36. Moreover, it is an unstated but
obvious
purpose
of
Hatzimanolis to create a
connection
between
the
injury, the circumstances in
which it occurred and the
employment itself. It achieves
that connection by the fact of
the employer's inducement or
encouragement. Thus, where
the circumstances of the injury
involve
the
employee
engaging in an activity, the
question will be whether the
employer
induced
or
encouraged the employee to
do so. “
The majority emphasised the
difference between where an
employee incurs an injury by
simply being present in a particular
place where they are encouraged
or induced to be; and where an
employee incurs an injury in the
same place whilst undertaking a
particular activity that was not
encouraged or induced by the
employer:
“45. An injury occurring to an
employee by reference to or
associated with a place
where
the
employee
is
present
may
involve
something occurring to the
premises or some defect in the
premises. For example, if the
light fitting in this case had
been insecurely fastened into
place and simply fell upon the
respondent, the injury suffered
by her would have arisen by
reference to the motel. The
employer
would
be
responsible for injury because
the employer had put the
respondent in a position
where
injury
occurred
because of something to do
with the place. Liability in
those
circumstances
is
justifiable.
Liability
for
everything that occurs whilst
the employee is present at
that place is not.
46. Nothing said in Hatzimanolis
supports the notion that the
employer is to be liable for an
injury which occurs when an
employee
undertakes
a
particular activity, if the
employer has not in any way
encouraged the employee to
undertake that activity, but
has merely required the
employee to be present at
the place where the activity is
undertaken…”
The Majority therefore held that
there was not enough of a
connection
between
the
employee’s employment and the
cause of her injury, noting that just
being induced or encouraged to
be at the motel room was not
enough:
“An
inducement
or
encouragement to be at a
particular place does not provide
the necessary connection to
employment merely because an
employee
is
injured
whilst
engaged in an activity at that
place.”
Implications for Employers
This decision undoubtedly narrows
the scope of what may be
considered ‘in the course of
employment’
for
workers
compensation related matters.
The decision acknowledges that
for an injury to be compensable,
the employee must be able to
demonstrate
a
connection
between the activity that caused
the injury and their employment.
There is no question that there are
numerous situations that will still
give rise to employers being liable
for injuries incurred whilst an
employee is travelling for work
purposes, and for that reason it
remains important that employer’s
consider the risks when making
travel
and
accommodation
arrangements for their employees.
Mark Bunch
Partner
+61 7 5593 1665
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