The NSW Court of Appeal has recently held that a worker can obtain compensation for discrimination relating to a work injury, without removing their right to also seek workers compensation payments for the same injury.
In the case of Gardiner v Laing O’Rourke Australia Construction Pty Ltd  NSWCA 151, an employee of Laing O’Rourke Australia Construction Pty Ltd brought a complaint against his employer immediately after the termination of his employment, alleging discrimination on the grounds of disability (for a mental health condition), and victimisation, in the course of his employment with his employer.
The complaint was settled at a conciliation conference where the employee was to be paid approximately $30,000 and legal costs. The settlement terms were set out in a Deed of Release and Confidentiality (Deed) signed by both parties with payment made later that month.
However, prior to the settlement of the discrimination claim, the employee had also lodged a claim for compensation under the Workers Compensation Act 1987 (NSW) (WC Act), on the basis that he had suffered aggravation, acceleration, exacerbation or deterioration of a psychological condition in the course of his employment.
The employer resisted the claim and argued that the employee had received a payment of “damages” awarded “in respect of” the same injury so that the compensation claim was precluded by s 151A(1) of the WC Act. As with most workers compensation laws in Australia, that section provides that an employee who "recovers damages in respect of an injury from the employer liable to pay compensation under this Act ... ceases to be entitled to any further compensation under this Act".
At first instance, the President Judge of the NSW Workers Compensation Commission agreed with the employer’s argument and rejected the employee’s claim for workers compensation. In making this decision, the President Judge followed earlier decisions of the Workers Compensation Commission. Those earlier decisions held that even if the settlement agreement stated that there was no intention to remove an employee’s workers compensation rights, that those rights could still be removed as a matter of law.
However, the Court of Appeal overturned the first instance decision and found that the payments made under the anti-discrimination complaints process were not relevant to the employee’s workers compensation rights.
The Court held that while the legislative purpose of s 151A of the WC Act was to ensure that a worker could not receive both workers’ compensation and damages with respect to the one injury, the workers’ compensation law was concerned with “damages” payable in respect of an injury caused by the negligence or other tort of the employer, and not amounts recoverable in satisfaction of a liability created by, what they called, an extraneous statutory scheme.
The Court noted that provisions like s 151A(1) do not encompass all kinds of payments which could relate to the injury and that whether a payment was excluded depends on the characterisation of the relevant payment, in accordance with the statutory scheme under which it was sought or obtained.
Importantly, the Court noted that the statutory protections provided by the Anti-Discrimination Act 1977 (NSW) (Anti-Discrimination Act) formed a discrete and independent statutory scheme from the workers compensation scheme. By considering the purpose of each statutory scheme, the Court held that any payment resulting from a complaint of discriminatory conduct, even if the discrimination gave rise to a personal injury, was a payment under an independent scheme for a different purpose.
Accordingly, the Court held that recovery of damages pursuant to a complaint under the Anti-Discrimination Act will not engage the operation of s 151A of the WC Act. The Court found that the complaint made was in respect of conduct rendered unlawful by s 49D of the Anti-Discrimination Act dealing with such discrimination in relation to work. It was considered that, although such discrimination may give rise to a personal injury which would fall under the definition of “injury” in the WC Act, such an injury is not an element of a contravention of s 49D of the Anti-Discrimination Act. It is the act of discrimination that is being compensated
Terms and operation of the Deed
Having regard to the structure, purpose and content of the Deed, the Court came to a conclusion that the settlement was also not intended to remove the employee’s workers compensation rights.
Factors the Court considered, among other things, included:
- the primary, if not the sole, purpose of the settlement was to provide a final resolution of the subject matter of the complaints of unlawful discrimination under the Anti-Discrimination Act
- the recitals expressly recognised that the parties were aware of, and did not intend to resolve, any claim the employee might have pursuant to any applicable workers’ compensation legislation
- given the express exclusion, it was clearly not the parties’ intention to release the employer from all or any liability, for claims pursuant to workers’ compensation legislation
- the recitals did not identify any personal injury suffered by the employee as forming an element of the dispute
- the “General Damages” of $29,412 paid under the Deed was not defined and the basis of calculation was not specified
- the employee was not required to discontinue his claim for workers’ compensation.
Lessons for employers
It is important when looking to settle any claim with an injured worker to seek advice on the terms of the settlement deed and the extent to which they may release the employer from other claims. As with this decision, it should not be assumed that an employee’s rights to seek workers compensation will be removed, just because a claim relates to a personal injury that is work-related.