Contracting COVID in the Workplace Results in a Massive Payout to the Estate

Arbitrator John Harris has found in the case of Sara v G & S Sara Pty Ltd [2021] that the estate of a deceased director is entitled to compensation for his death as he contracted COVID 19 in the course of his employment.

Under the death benefit provisions the estate was able to seek $834,200, weekly payments for the period of time that he was ill and unable to work and medical expenses valued at some $11 million pursuant to the provisions of the Workers Compensation Act 1987 (the Act).  Note that the medical expenses may need to be adjusted to the NSW scaled rates.

The worker had contracted COVID19 whilst in the United States of America. Icare sought to deny the claim and the matter ultimately was referred to the Personal Injury Commission for determination. At the hearing, iCare argued in this case that the deceased was not in the course of his employment for the Australian company that employed him when he contracted the virus and that he could have contracted the virus during social interactions.

The deceased was a dental entrepreneur. He had set up a group of companies which included G & S Sara Pty Ltd, an Australian-based company of which he and his wife were the sole directors, and which also paid him a wage. Another company in the group was a United States-based company of which the deceased was the Managing Director and President.

iCare argued that at the relevant time the deceased was not employed by the Australian company that is insured, G & S Sara Pty Ltd and that he travelled to the United States to perform work associated with the United States-based company and business in the group.

When we consider defining injury we must consider the definition of injury defined in section 4 of the Act, which states:

‘injury’:

(a) means personal injury arising out of or in the course of employment,

(b) includes a “disease injury”, which means:

(i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and

(ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease.

The Commission was strongly influenced by the fact that G & S Sara Pty Ltd paid the deceased a wage. In contrast, the US company did not employ anyone. The Commission concluded that there was a clear intention by G & S Sara Pty Ltd that there be continuous employment on the part of the deceased and that there was no evidence of a change in those arrangements when the deceased travelled to the United States.

After hearing evidence that the deceased disliked wearing masks and did not always wear them, the Commission found that he contracted COVID-19 between boarding his flight in Sydney and arriving at his hotel in New York, which was work-related travel and thus in the course of his employment.

The Commission also accepted that the virus caused the respiratory failure and that this amounted to an identifiable pathological change that constituted a “personal injury” within the meaning of section 4(a) of the Act. Other medical evidence established further pathological changes were caused by the virus, including strokes and heart attacks.

Sara v G & S Sara Pty Ltd is the first known COVID-19 case to be determined by a tribunal or court in Australia.

What does the decision in Sara v G & S Sara Pty Ltd mean for employers?

If you contract COVID19 in the course of your employment, you may have a right to workers compensation. If your employees are unvaccinated then you run the risk that a claim for compensation could be substantial.

It is for this very reason we are seeing more and more employers moving to mandating vaccination or in the alternative moving employees to positions to limit contact in the workplace.

There have been a total of 1,222 claims lodged on the basis of Covid19 claims with 974 of these accepted as of 13 May 2021.

It is a challenging time for employers and employees in relation to vaccination. Considerations such as work health and safety risk, medical contradictions, disability, discrimination, human rights and equal opportunity all need to form part of the framework for policy considerations.

Employers must satisfy their consultation obligations under work health and safety legislation and any applicable industrial instruments.

We recommend seeking legal advice prior to making any decisions in relation to a vaccination position and having an experienced team to assist you with management and policy.

ABOUT KARENA NICHOLLS:

Karena is a Partner at Coutts and is the Head of our Injury Compensation (with extensive knowledge in personal injury) and Employment Law teams. She is passionate and dedicated to helping her clients understand their rights and obligations and advising them on the best course of action to achieve their desired outcomes. It is her practical and client-orientated approach that has attributed to her authentic reputation positioning her as a highly regarded compensation and employment lawyer.