A Full Court of the Federal Court has found that an employee was entitled to workers’ compensation for injuries resulting from an assault by another employee outside a local tavern.

Implications for employers

This case highlights the extent of potential employer liability for workplace related injuries under the Federal Safety, Rehabilitation and Compensation Act 1988 (SRC Act) where employees are accommodated in towns established for the employer’s operations.

Background

Edward Westrupp was employed as a silo operator for BIS Industries Ltd (BIS Industries) in Leinster, Western Australia. Leinster is a remote ‘company’ town operated by BHP Billiton Nickel West Pty Ltd (BHP). Leinster was built for the mining operations and only workers employed for those operations, or in businesses that support the operations or the town, can live there.

Mr Westrupp worked a roster of two weeks on and one week off for BIS Industries, and while he was working he lived in company provided accommodation. This accommodation was not far from the Leinster tavern, which was run by a company under contract to BHP. BIS Industries had village rules that applied to its employee’s conduct while in Leinster, including a code of behaviour (Code), which applied to ‘Bis Industries employees at all times, whether working or not on Company or Customer premises’.

Mr Westrupp went to the Leinster tavern with a friend in the middle of his rostered two weeks on. There was no suggestion that he was intoxicated. On leaving the tavern he was approached and assaulted by another BIS Industries’ employee, injuring his right shoulder. The injury required surgery and incapacitated Mr Westrupp for work. The conduct was investigated by the company and the assailant was found to have breached the Code.

Mr Westrupp sought compensation under the SRC Act on the basis that his shoulder injury arose out of, or was in the course of, his employment. The claim was rejected by the company and a further independent reviewer. Mr Westrupp sought review of the decision to the Administrative Appeals Tribunal (AAT).

Decision at first instance

Deputy Nichols of the AAT found that the principles in Hatzimanolis v ANI Corporation Ltd(1992) 173 CLR 473 (Hatzimanolis) were applicable and that Mr Westrupp needed to show ‘a connection or association’ with his employment and the injury. The injury did not arise out of, or in the course of, Mr Westrupp’s employment. The ‘establishment and provision of the tavern’ did not create a liability on the company ‘for everything that occurs whilst the employee is present at that place or not’. The assault causing the injury was of a ‘personal nature’. Mr Westrupp appealed this decision to a Full Court of the Federal Court.

Decision on appeal

The Full Court found that the AAT conclusions were legally unsound. The Court emphasised a number of principles inHatzimanolis, including that in determining whether an injury happened ‘in the course of employment’, regard must always be had to the general nature, terms and circumstances of the employment and not merely to the circumstances of the particular incident out of which the injury arose.

The Full Court also stressed that the principles in the case law regarding ‘activity’ and ‘place’ should not be construed as requiring the Court to ask ‘whether the place at which the injury occurred and the activity in which the employee was engaged were each induced or encouraged by the employer’ (our emphasis).

It found that the AAT did not take into account ‘the general nature, terms and circumstances’ of Mr Westrupp’s employment and did not sufficiently recognise the breadth of employer ‘encouragement’ or ‘inducement’. Mr Westrupp was engaged in a recreational activity that was endorsed by his employer when he was injured.

The Full Court set aside the decision of the AAT and upheld Mr Westrupp’s claim for compensation. BIS Industries was ordered to pay Mr Westrupp’s costs of the appeal and the AAT proceedings, and the claim for compensation.