The purpose of the Workers Compensation and Injury Management Act 2023 (WA) (2023 Act) is to “provide for employers to be liable to compensate workers who suffer injuries from employment”.[1] It is supposed to be a “no fault system”, but even so, there are limits.
So what happens when a worker’s own misconduct directly results in their injury, even though they happen to be working at the time? It seems unjust that an employer is liable to pay workers compensation in these circumstances. Despite this, the bar to prove a worker’s misconduct is high. The conduct must be both serious and wilful and cannot result in serious and permanent injury to the worker. Disputing a claim under section 20 of the WCIMA is seriously not straightforward.
Section 20 of the 2023 Act replaces section 22 of the Workers Compensation and Injury Management Act 1981 (WA) (1981 Act) and provides that:
“An employer is not liable for compensation if it is proved before an arbitrator that the worker’s injury is attributable to —
(a) voluntary consumption by the worker of alcoholic liquor or of a drug of addiction, or both, that impairs the proper functioning of the worker’s faculties; or
(b) the worker’s failure to use protective equipment, clothing or accessories provided by the employer for the worker’s use; or
(c) other serious and wilful misconduct by the worker.
(3) Subsection (2) does not exclude liability if the worker’s injury has serious and permanent effects on the worker or results in the death of the worker.
(4) Subsection (2)(b) does not exclude liability if it is proved that there was a reasonable excuse for the worker’s failure.”
While the wording differs slightly between the 1981 and 2023 Acts, the operation of the section and required elements are largely similar.
This article will focus on section 20(3)(c). That is, if the worker’s injury is attributable to serious and wilful misconduct by the worker, the employer will not be held liable for compensation.
There are a number of elements to consider when looking at section 20. Those working in the workers compensation framework should be well acquainted with these elements and includes:
The onus of proof lies with the employer to establish that compensation should be excluded on the grounds of the worker’s serious and wilful misconduct. It is not sufficient to merely demonstrate that the worker engaged in misconduct at the time of the injury. The employer must also prove a direct causal link between the alleged misconduct and the injury sustained. That is, the specific conduct must have caused the injury, rather than being merely incidental or ancillary to the event that resulted in harm
For example, a factory worker, despite repeated safety briefings, decides to bypass a machine’s safety guard to speed up production. This action violates the employer’s strict safety protocols, which had been clearly communicated and enforced. While reaching into the unguarded machine to clear a jam, the worker's hand is caught and seriously injured.
Here, the worker has deliberately overrode a known and significant safety requirement by removing the guard, and the injury occurred because the guard was removed, directly linking the misconduct to the injury.
In contrast, if the same worker had removed the guard earlier in the day and was later injured by a separate malfunction in the equipment that had nothing to do with the guard’s removal, the employer would struggle to prove the necessary causal connection. Even if the misconduct was serious and wilful, it would not have caused the injury.
If causation can be proved, the employer must then show the worker’s conduct was serious and wilful. Since the case of Johnson v Marshall Sons & Co Ltd [1906] AC 409, it has been established that this requires more than proving negligence on the part of the worker. An employer must prove that the worker knew of the risk, deliberately ignored the risk and suffered injury as a consequence.
In Stoddart v Gates (Unreported), the Court found the worker was negligent in failing to stop at a rail crossing, which resulted in his injury. However, the evidence did not give rise to a finding of wilfulness and, as such, the employer was held liable. Wilful requires misconduct that was deliberate and not inadvertent or thoughtless, while the term serious relates to the nature of the conduct, as opposed to the consequences of the behaviour itself.
The employer is still liable for workers compensation if the worker’s injury has both serious and permanent effects (as opposed to an impairment). In determining whether an injury is serious and permanent will differ under individual circumstances. As is discussed in the case of Elvin v Comcare [1998] AATA 276 (21 April 1998), case law suggests that the term ‘serious and permanent’ must mean the effects are very considerable considering the term is read next to the term ‘death’. The impairment must be more than marked or significant.
A leading case in relation to the New South Wales section 20 equivalent is Higgins v Galibal Pty Ltd (t/as Hotel Nikko Darling Harbour) (1998) 45 NSWLR 45. In Higgins, the worker was working at a hotel. Mr Higgins used the laundry chute to move from one floor of the hotel to the other. While he was doing this at the conclusion of his shift, he sustained an injury. The majority decided that Mr Higgins was in the course of his employment, as his role required him to travel from the fifth floor to the mezzanine floor to sign out for the day. His conduct, while determined to be serious and wilful, was still considered to be within the course of his employment.
So, why does it matter if the worker was acting with serious and wilful misconduct as opposed to acting outside the scope of their employment? If the worker sustains an injury that is serious or permanent and they were injured in the course of their employment as a result of serious and wilful misconduct, their employer is still taken to be liable. If the worker’s actions took them outside the scope of their employment and the injury is serious or permanent, the injury no longer arises out of the course of their employment and so the employer is not liable.
In Mr Higgins’ case, the worker’s injuries were determined to be serious and permanent, but he was found to be within the course of his employment. The employer was therefore still liable for workers compensation.
The dissenting judgment of Powell J argues that the injuries sustained by Mr Higgins were not sustained during the course of his employment, and as such, the wilfulness or seriousness of the conduct need not be relevant. Powell J found the worker was acting contrary to, or without instruction from, the employer which brought him outside the scope of his employment. These reasons were not adopted by the majority.
The circumstances that might cause an employer or insurer to inquire about whether conduct was serious and wilful misconduct, are usually similar to circumstances that might cause an employer or insurer to consider whether a worker’s conduct was so unexpected, unintended or outside of strict parameters that the worker might have “taken themselves out of the course of employment”. So if section 20 is not available, then it is still worth considering whether an argument could be raised that the worker might not have been in the course of employment.
Section 20 contains many high bars, both for the employer to prove serious and wilful misconduct, and the worker to show serious and permanent effect. This makes sense, considering the overall effect of the provision could mean a worker is not covered under the workers compensation scheme.
In considering the provision, careful consideration must be paid to whether the worker was in the course of their employment when the injury was sustained and whether the specific behaviour they were engaged in was the direct cause of the injury sustained.
This article was written by Hayley French, Solicitor Insurance & Risk.
[1] As stated in the WCIMA 2023.