A Case of Double Compensation Against an Employer

10 January 2018

A recent NSW Supreme Court case relating to a worker’s death has seen an employer ordered to pay both death benefits and permanent impairment compensation, which is likely to result in a payout amounting to more than $1 million.

Background

Hunter Quarries Pty Ltd (Hunter Quarries) were charged with WHS breaches after the 2014 death of a worker, who was operating a 40 tonne excavator on rocky terrain when the vehicle overturned, sending a large rock through the cabin. The worker sustained serious chest injuries and died minutes later.

Later in 2014, the employer argued that the NSW Resources Regulator unlawfully interviewed witnesses without first seeking requisite information in writing. This claim was dismissed by the NSW Supreme Court.

Then, in September 2016, the regulator announced the WHS charges against the employer on the basis that the excavator was not appropriately equipped with preventative safety measures, offering minimal protection in the event that the vehicle overturned. The worker’s estate claimed death benefits under section 25 of the state Workers Compensation Act 1987 (the Act), and permanent impairment compensation under section 66 of the same legislation.

First Instance

Hunter Quarries accepted liability for death benefits and funeral expenses, but sought to have the charges for permanent impairment dismissed, contending that the legislation could not have intended double compensation for the one injury.

Under section 66 of the Act, an injured worker will be entitled to compensation for permanent impairment when the degree of impairment is greater than 10%. The section also proscribes that permanent impairment compensation is in addition to any other compensation under the Act.

The employer argued that the term “permanent impairment” was not intended to encompass an injury which shortly thereafter resulted in death. Initially, an approved medical specialist agreed with that submission, deeming the degree of permanent impairment to be 0%.

However, a panel disagreed with the assessment, determining the correct degree of permanent impairment as 100%.

The Appeal

On appeal, Hunter Quarries contended that the term “permanent impairment” could not operate concurrently with an injury resulting in death because the injury wasn’t permanent as a consequence of the death. It further argued that the legislation could not have intended for both to operate at the same time for the one injury.

Irrespective, Justice Schmidt found that, had the intention of the legislation been to avoid such overlap, the Act would have expressly stated as much. Instead, both relevant sections state that they operate in addition to other compensation in the Act.

[The worker’s] impairment was permanent, there being no suggestion that he could recover from it,” she said. She further noted that his original injury gave rise to his entitlement under section 66; his death then gave rise to compensation for his estate under section 25.

Lessons for Employers

For employers, this case highlights the importance of ensuring adequate safety precautions are always prioritised, and provides a reminder of the many potential ramifications that can occur when WHS standards are not met. Employers should:

– Ensure compliance with OHS laws
– Implement proper procedures and policies to ensure worker safety
– Manage and mitigate risks as much as is possible