O'Loughlin v Linfox Australia Pty Ltd [2015] FCA 1000 (10 September 2015)

The Federal Court of Australia has rejected an argument that the High Court decision in Comcare v PVYW set out a new test for determining liability for all work-related injuries.

How this will affect insurers

The O'Loughlin v Linfox decision, has confirmed that the legal test for determining liability for injuries that occur during ordinary work hours is unchanged by the High Court decision in Comcare v PVYW.

This decision means that consideration of any encouragement or inducement by an employer to undertake an activity or to be in a particular place applies only to injuries incurred in intervals and/or interludes in overall periods of work.

Background – the decision in PVYW v Comcare

In this significant decision, a Commonwealth Government employee (PVYW) was injured while engaging in consensual sexual intercourse in her motel room during an overnight work trip and claimed compensation. After a series of appeals, the High Court found that Comcare was not liable to pay compensation and agreed that determining whether an injury (in an interlude or interval in an overall period of work) occurred in the course of employment required consideration of whether an employer had encouraged or induced an employee to be at a particular place and/or undertaking a particular activity. Sparke Helmore represented Comcare in its appeal to the High Court.

O'Loughlin v Linfox Australia Pty Ltd 

In September 2010, while transferring fuel from his vehicle into storage tanks at a service station, Mr O'Loughlin saw a man throwing objects at a woman in her car. When he asked the man to stop, the man turned on him, punching him in the face and kicking his knee. Mr O'Loughlin sought compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) for his injuries. Linfox denied the claim and argued that the decision inPVYW "articulated a test applicable for the determination of whether an injury occurred in the course of employment generally and not merely during an interval" and that Mr O'Loughlin's actions were not encouraged or induced by Linfox and, as such, in accordance with the test in PVYW, he was not entitled to compensation for his injuries.

At first instance, the AAT upheld the decision to deny the claim and found that Mr O'Loughlin's actions were not encouraged or induced by his employer and, therefore, were not compensable under the SRC Act.

Federal Court appeal

Mr O'Loughlin appealed to the Federal Court. In his decision, Justice Bromberg indicated that the majority judgment in PVYW did not go as far as "departing from, or expanding upon what has been laid down in Hatzimanolis". His Honour said that the majority decision in PVYW was predicated on a finding that the injury in question occurred during an interval or interlude in an overall period of work and this was not the case here. Accordingly, Justice Bromberg found that the question of whether an employer encouraged or induced an employee to engage in a particular activity simply did not arise.

Justice Bromberg also dismissed Linfox's secondary argument that Mr O'Loughlin was injured in a "short interval" in his employment, because the AAT had found that Mr O'Loughlin was engaged in service to his employer when the incident occurred in view of the fact that his vehicle was still connected to the service station storage tanks.