Australia: Court upholds liability findings against host employer while employer is found not liable

Inadequate supervision: 11 August 2016
Last Updated: 14 August 2016
Article by Robert Tidbury and Janine Oberhardt

In the recent decision of Jurox Pty Ltd v Fullick [2016] NSWCA 180, the NSW Court of Appeal dismissed an appeal by the host employer, Jurox, made in relation to liability, damages and contribution.

Here, Associate Janine Oberhardt and Partner Robert Tidbury provide a summary of the NSW Court of Appeal's decision.

Take away points

  • In addition to devising a safe system of work an employer has a duty to properly train its workers in that system of work and to ensure that the system of work is enforced.
  • From a practical perspective this may involve:
    • Appointing a designated supervisor for the employer's workers who is in a position to monitor, and if necessary, enforce the system of work;
    • Requiring the worker to conduct a practical assessment demonstrating their understanding and competence in performing the task as prescribed;
    • Performing 'spot checks' to ensure compliance with safe working procedures;
    • Immediately correcting any deviations from either training or the system of work and documenting the action taken to remedy the breach; and
    • Providing periodic refresher training to employees.
  • In labour hire cases such as this one, provided the employer can establish that it discharged its duty of care owed to the worker, then the employer may be able to avoid liability altogether, notwithstanding any negligent acts of the host. In other words the traditional TNT v Christie labour hire apportionment of 25/75 may not apply.

Facts

The respondent, Ms Fullick, was employed by Integrated Pty Ltd (Integrated). In January 2010, Integrated assigned Ms Fullick, pursuant to a labour hire arrangement, to work as a production operator at a factory premises occupied by Jurox. Ms Fullick claimed that on 5 December 2011 she was directed to work in part of the factory called "the powder room", in which a machine that had two hoppers was situated. Ms Fullick was required to empty 25kg bags of sugar substances (called dextrose) into one of the hoppers. Whilst in the process of emptying a bag of dextrose into the hopper, Ms Fullick sustained an injury to her back.

Ms Fullick commenced proceedings in the NSW District Court. At first instance the matter was heard before Mahony DJC. Mahony J found in favour of Ms Fullick, concluding that the host employer had breached its duty of care. Whilst accepting that the host employer did have in place a safe system of work, the Court found they failed to adequately supervise Ms Fullick to ensure she was performing the task in accordance with the training and instruction she had been provided.

Mahoney J also found that Integrated was not a joint tortfeasor as the employer had not been shown to have breached its duty of care to Ms Fullick.

Jurox also appealed against the primary Judge's assessment of damages which was quantified at $588,515.00. Jurox argued that the award was manifestly excessive and unsupported by the evidence.


Decision

In dismissing the appeal, the majority of the Court agreed with the trial judge's findings that the system of work in place for emptying the dextrose into the hopper was safe. That system involved the 25 kilogram bags of dextrose being transported from a corridor outside the power room and stored on pallets. A lifter was provided which had a platform that would be lowered to the level of the pallet and the bag slid onto the platform. The lifter would then be wheeled into the powder room and placed adjacent to the hopper. The bag would be placed on the platform so the operator could split open the bag and its contents would empty by force of gravity into the hopper.

However, Ms Fullick's evidence illustrated that she did not complete the task as per her training and instruction. Rather, after placing the bag into position on the hopper she used her right hand to grab the end of the bag, slice it open after which some of the contents would spill out. Thereafter, she would pick up the bag to empty the remainder of the contents. In performing the task in that manner, the Court accepted that 'she adopted an unsafe work practice, and that work practice continued, uncorrected, until the day of her injury."

After examining the evidence lead at Trial, the Appellate Court was not satisfied that Jurox had any formalised system of supervision in place noting that there was no person whose role or responsibility it was to ensure that Ms Fullick had understood her training and complied with that training.

When examining whether a reduction should be applied on account of contributory negligence, the NSW Court of Appeal concluded that no reduction should be made stating the worker's incorrect technique resulted from "not a conscious departure from what she had been taught, or even carelessness but from the entrenchment of a practice that ought to have been and could easily have been corrected at an early stage". Further, there was no evidence that she ought to have known that her technique was incorrect and exposed her to danger.

As to the question of whether Integrated was a joint tortfeasor, the Court of Appeal also upheld the original judge's decision finding that the claim against Integrated failed on causation grounds. That is, any audit of the system of work undertaken by Integrated would have revealed the safe system of work and not a failure of the host employer's supervision. The employer's duty did not extend to supervising the host employer's supervisory regime.

Jurox's appeal with respect to the damages awarded to Ms Fullick was also dismissed. Jurox argued that the amount of damages awarded to Ms Fullick was manifestly excessive on the basis that she suffered from a pre-existing condition and the incident of 5 December 2011 merely caused a temporary aggravation of that condition. The Court of Appeal rejected that argument finding that it was open on the medical evidence for the Judge to find that the aggravation was serious and not transient.

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