In Issue

  • Liability of Council as 'quasi-employer' of plaintiff injured in the course of employment performing contract work for Council.
  • Liability of GIO as public liability insurer of plaintiff's former employer.

The Background

The plaintiff (Mr Healey) was employed by Usshers Solid Waste Pty Ltd (Solid Waste), who provided garbage collection to a related company, Usshers Pty Ltd (Usshers). Usshers held a contract with Penrith City Council (the Council) for the emptying of council owned bins. Mr Healy claimed for two injuries: a discrete shoulder injury which occurred when emptying a damaged bin; and further injury due to the cumulative effect of the work caused by damaged bins.

Mr Healey was assessed by WorkCover as having less than 15% WPI, and accordingly was not entitled to bring a claim against his employer. He instead commenced proceedings against the Council on the basis that Council’s control over performance of the contract with Usshers placed the Council in the position of a “quasi-employer”, and they were negligent in failing to repair damaged bins. He also commenced proceedings against GIO (insurer of Usshers) on the basis Usshers had control and direction over the manner in which he worked and accordingly owed him a duty of care analogous to that of an employer and that the policy responded to his claim.

The Decision at Trial

The trial judge found in Mr Healey's favour against both the Council and GIO, and awarded damages in excess of $1 million. Both defendants appealed against the determinations of liability and the quantification of damages.

The Decision on Appeal

The Council’s appeal was unanimously allowed albeit for different reasons. The majority held that the medical evidence did not support the plaintiff’s argument that the plaintiff’s injuries were ‘mainly’ caused by the damaged bins, and that it was instead the general nature and conditions of the work that were the cause of the ongoing symptoms. Since the Council was not responsible for the conditions of work, it was not liable to the plaintiff.

A majority of the Court of Appeal allowed GIO’s appeal but, again, for different reasons. Basten JA held that the labour hire exclusion in clause 13 of the policy applied because the business of Solid Waste included the supply of labour and the work was in part under the care, control, direction or supervision of Usshers; accordingly the policy did not respond to any liability Usshers may have had to the plaintiff. Emmett AJA held that GIO was not entitled to rely on any of the exclusions in the policy but its appeal succeeded because after 30 November 2004, Usshers did not owe a duty analogous to that of an employer to its former employees, who had then become employees of Solid Waste.


This decision is a useful example of how councils and insurers can avoid potential liability arising from injury to a labour hire worker. In order to rely on a labour hire exclusion, an insurer must establish that the company providing the labour was in the business of labour supply; and that the work performed was in part under the care, control direction or supervision of the insured.

Penrith City Council v Healey; GIO General Ltd v Healey [2016] NSWCA 161