The modern trend towards flexible working arrangements and creative salary packaging may see employers exposed to workers’ compensation claims in increasingly unusual situations.

In this Alert, Senior Associate Anna Hendry and Solicitor Hannah Staunton consider the liability of an employer for a sexual assault inflicted at shared accommodation.[1]


A female guest services agent (the worker) employed by Oaks Hotels and Resorts (Qld) Pty Ltd (Oaks) at the Seaforth Resort on the Sunshine Coast was offered the position of guest services agent at the Oaks Felix in Brisbane.  On expressing reservations regarding the transfer relating to the cost of accommodation in Brisbane, the employer indicated the worker could live rent free in an apartment located at Oaks Lexicon as long as the other occupant, a caretaker employed by Oaks, was satisfied with that arrangement.

The worker accepted the transfer, moved into the apartment and was ultimately sexually assaulted in her room at the Oaks Lexicon by the caretaker.  She applied for workers’ compensation in relation to the psychological injuries she sustained as a result of the assault.

To be entitled to compensation, the worker had to establish that she had suffered an “injury” as defined in section 32 of the Workers’ Compensation and Rehabilitation Act 2003 (WCRA) (as it was then) and in particular that:

  1. The injury arose out of, or in the course of, her employment (the first limb); and
  2. Her employment was a significant contributing factor to the injury (the second limb).

The insurer determined the worker had suffered an “injury” and that determination was upheld on review by the Workers’ Compensation Regulator.  The insurer’s decision was again upheld when the Queensland Industrial Relations Commission (QIRC) dismissed Oaks’ appeal.

Appeal to the Industrial Court of Queensland

Oaks appealed the QIRC decision to the Industrial Court of Queensland on the basis the QIRC erred in making various findings of fact relating to the accommodation arrangement and that without those findings of fact, the QIRC erred in law in holding that the worker had suffered an injury pursuant to section 32 of the WCRA.


In considering the first limb of s 32 of the WCRA, the court had regard to the decision of Hatzimanolis v ANI Ltd (1992) 173 CLR 473 (recently applied in Comcare v PVYW (2013) 88 ALJR 1) which found that:

  1. Where an injury occurs due to engaging in an activity, the question is whether the employer induced or encouraged the worker to engage in the activity; and
  2. Where an injury occurs because the worker is in a particular place, the question is whether the employer induced or encouraged the worker to be at that place.

Because, the worker was not engaged in a work activity at the time of the incident, the court turned to the question of whether she was at the place where the injury occurred, the apartment, because of the employer’s inducement or encouragement.  It accepted that the employer owned the apartment, had suggested that the worker live there rent free with the agreement of the caretaker and had encouraged the worker to enter into that arrangement by indicating that the caretaker was of good character.  On that basis, it found that the employer had induced or encouraged the worker to reside at the apartment and thus the injury arose out of her employment.

In considering the second limb of s 32 of the WCRA, the court noted at paragraph 163:

“While it was not the practice of the employer to provide assistance to transferees in the form of temporary accommodation, an exception was made for the female worker.  The female worker was reluctant to relocate to Brisbane and in order to persuade her to take the step and to facilitate the relocation, her employer offered to provide free temporary accommodation, and encouraged the female worker to accept the shared arrangement offer.  It is these circumstances, and the related facts, that lead to a conclusion that there was a significant connection between the female worker’s employment and the injury for the employment to be a significant contributing factor”.

The court therefore upheld the decision of the QIRC and dismissed the appeal.

Key take away points

Employers should be mindful of the activities and premises they encourage their employees to attend.  These would include accommodation venues, social functions and sporting and fitness activities.  Where a worker is injured in circumstances where the employer encouraged or induced the worker to attend certain premises or undertake the activity causing the injury, there will likely be a finding that the worker sustained an “injury” within the meaning of the WCRA and is entitled to statutory compensation.