An employer has been ordered to pay over $830,000 in death benefits and funeral costs due to COVID-19 death at work, and could potentially be on the hook for millions more.

Even with the prospect of over 90 per cent of adults becoming fully vaccinated, and with the community operating as ‘normal’ again, the risk of employees contracting COVID-19 at work will be a real prospect. After all, we will live with COVID-19 for the foreseeable future.  

While employers in retail, health, construction, emergency services and other COVID-essential industries have been balancing and managing these risks since the beginning of the pandemic, employers whose workforces have largely been working from their homes will now have to start managing these risks, too. 

This has the potential to open the floodgates for workers compensation claims, work health and safety breaches and other legal liabilities. 

The recent Sara v G & S Sara case is a perfect example of this. The NSW Personal Injury Commission recently ordered a NSW employer’s insurance provider to pay over $830,000 to the widow of an employee who died from COVID-19 – with millions more in medical bills currently being assessed.

Before we dive into the details of the case, it’s worth exploring how the pandemic has impacted legislation around workers compensation.

Workers compensation liability

Back in May 2020, as the pandemic hit its stride in some states, the NSW Government extended workers compensation legislation so that workers in essential industries (as specified above) who contracted COVID-19 were presumed eligible for workers compensation payments for the period of their absence from work as they recovered.

Essential workers are presumed to have contracted COVID-19 at work, unless proven otherwise. Death benefits for those who died as a result of COVID-19 contracted at work were also covered by the changes to the legislation.  

Fast forward to October 2021, and there have been almost 1600 COVID-19-related workers claims in NSW alone, with an expected gross cost of almost $14 million for 2021. In addition, and more alarming, is that it is predicted that claims under the NSW workers compensation regime will balloon to $638 million in the next 12 months. 

As Australia opens up again, claims are expected to rise further as the virus infects those who are vulnerable, unlucky or unvaccinated.  

If a worker can establish that they contracted COVID-19 in the course of their employment including while travelling to or from the workplace (for example by contact tracing or genome testing), they may be eligible to receive workers compensation payments, including death benefits.  

Work trip still counts as work

The NSW Personal Injury Commission recently ordered an employer’s insurance provider to pay death benefits, funeral expenses – which amounted to $834,000 – and almost four months of weekly compensation payments to the widow of a worker who was found to have contracted COVID-19 and subsequently died during a work trip.

The employee, who worked for a company that supplies dental technician products and services in Australia and America, had travelled to New York on 15 July 2020 for business.  One week later, he was taken by ambulance to hospital where he remained for four months until his death in November 2020, amassing around $11 million USD in medical bills. 

During this time, he suffered several heart attacks and strokes, but his cause of death was noted as “acute respiratory distress because of complications from COVID-19”.

The Commission is still considering whether medical expenses are payable to the employee’s widow.

iCare NSW argued that compensation was not payable under the workers compensation regime as the employee was not working for the Australian company when he contracted the virus, but rather he was working for its US affiliate, and that he could have contracted the virus when socialising on his trip, rather than when he was working.

The NSW Personal Injury Commission rejected these statements, finding that the employee received his normal pay, via his Australian payroll system, during his visit.

The Commission also pointed to evidence which suggested the employee contracted the virus either when he was boarding the plane in Sydney, when he passed through customs in San Francisco, or when he first arrived in New York (i.e. during work travel time). The Commission notes also mentioned that the employee was reluctant to wear masks, which may have increased risk of exposure.

This unfortunate case may potentially be the first of many, and highlights the importance of employers getting COVID-19 safety protocols right – first and foremost to protect their employees, but also to protect their business in the event of a fatal transmission. 

How to protect your people and business

So what are an employer and directors duties in this instance?

In the shadow of such massive potential liability, and where there are very clear work health and safety duties in relation to COVID-19 safety, employers across all states and territories should be looking at ensuring they apply and follow as many safety control measures as possible.  

Under relevant work health and safety legislation across Australia, both businesses, individual officers and directors may be at risk of being held liable for breaches of their positive obligation to exercise due diligence on work health and safety matters, which may include implementing and monitoring COVID-safe systems of work.  

All employers, officers and directors should consider the compulsory rules that apply to their organisations under various state and territory health orders at any given time.  

They should also consider best practice going forward, to reduce potential safety risks and liability. We recommend, at the very least, the following measures.  

Aaron Goonrey is a Partner and Emma Lutwyche is a Senior Associate in Lander & Rogers’ Workplace Relations & Safety practice. 

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