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Compensation While on a Work Trip – Where You Stand as an Employee.

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Is all activity while on a work trip covered?

The importance of inducement in workplace compensation has been highlighted in the case of Comcare v PVYW [2013] HCA 41. The High Court of Australia recently decided the case and in a majority decision, favoured the appellant Comcare in finding that Comcare is not liable to pay compensation to the respondent. The High court ruled that the employer did not “induce” or “encourage” the employee to engage in a private activity whilst on a work trip.

The Court emphasized that to have a valid claim for compensation, there must be an injury sustained during a work interval and the activity must be induced or encouraged by the employer.

In this particular case, the High Court found that the inducement is missing. The requirement of “inducement” or “encouragement” by the employer could not be proven. There was no evidence suggesting that the employer induced or encouraged the activity of the worker that led to the injury.

The facts of the case

In 2007 Ms. PVYW, whilst on a work trip, was hospitalized when a glass light fitting installed above the bed fell on her whilst having sex in a motel room she was staying at. The falling of the fitting resulted in injuries to her nose and mouth.

Ms. PVYW claimed compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth). She argued that her injuries were suffered “in the course of her employment,” and she was entitled to compensation. She further argued that the injury sustained during sex was “no different than slipping over in the shower or being bashed by a gang of thugs.”

The case became controversial when the Federal Court and the Administrative Appeals Tribunal gave opposing decisions. The Administrative Appeals Tribunal (AAT) decided in favor of Comcare. The decision stated that the woman’s injuries were not sustained by reason of her employment.

On appeal to the Federal Court of Australia the tribunals decision was set aside, and Ms. PVYW was found to be eligible for compensation, the Federal Courts decision was affirmed later by the Full Federal Court. Comcare then appealed to the High Court.

The issue

Questions were raised on whether or not a worker injured during a private activity while on a work trip was considered ‘in the course of employment’ for purposes of the workers’ compensation claim as required by section 5A of the Safety Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act).

The application of the test; the case of Hatzimanolis v ANI Corporation Ltd

Upon review, the High Court had the chance to reconsider the central test from Hatzimanolis v ANI Corp Ltd [1992] HCA 21 as applied by the Full Federal Court in this case. The decision states:

 “Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment.”

In this principle, the Full Court noted that in the absence of gross misconduct on the part of the employee, an injury that had occurred during an interval or interlude in an overall period of employment would customarily result in a finding that the injury occurred in the course of employment.

The High Court Ruling

The High Court stated that there is more to the test in Hatzimanolis than simply being induced to be at a place by your employer when an injury occurred.

In determining the case the High Court explained that it must determine whether the employer had induced or encouraged the employee to be at the place where the injury occurred, and also whether there was any inducement or encouragement from the employer to engage in the activity that caused the injury.

In applying the facts of the case to this determination by the High Court, the Court determined that although Ms. PVYW was in the hotel room at the inducement of her employer, as the employer had encouraged her to stay at this motel for the night, her mere presence was not the primary cause for her injury. The Court determined that the injury was only sustained due to the engagement in an activity that was not induced or encouraged by her employer, in this case sex. The Court held that the injury therefore was not sustained in the course of her employment and thus the injury is not eligible for compensation from her employer.

It should be noted that this case doesn’t exclude the test in Hatzimanolis but merely adds to its interpretation. An employee is still eligible for compensation when an injury occurs during an interval or interlude of work where the employer induces or encourages an employee to spend the interval at a particular place, or in a particular way, but only when undertaking an activity that was encouraged by the employer.