Is driving home from a Christmas work party intoxicated in the course of employment?
Judgment date: 20 December 2010
Scharrer v Redrock Co Pty Limited  NSWCA 365
New South Wales Court of Appeal1
Where an employee sustains injury as a result of disobeying an employer's directions then:
- the employee's action is not to be regarded as being for the purposes of, and in connection with, the employer's trade of business, and
- the employee's action is not within the course of employment.
On 15 December 2001, the Appellant suffered serious and permanent disablement whilst travelling home from her employer's Christmas party in her employer's motor vehicle. After the accident, she registered a blood alcohol reading of 0.124, which was significantly over the legal blood alcohol limit of 0.05.
The Appellant received weekly workers' compensation benefits up until mid 2005 when the Respondent's workers' compensation insurer decided to decline liability for future payments on the basis that the Appellant's injuries were attributable to serious and wilful misconduct whilst under the influence of alcohol (s 14 (1) and (2) of the Workers Compensation Act 1987).
The Appellant appealed to the NSW Workers Compensation Commission (Commission).
The Appellant's case to the Commission was as follows:
- She was entitled to compensation because she was injured during a journey within the meaning of s 10 of the Workers Compensation Act, 1987 (1987 Act), or
- She was entitled to compensation because she suffered injury in the course of her employment (s 9), that her employment was a substantial contributing factor to her injury (s 9a) and that, by virtue of either s 14 (1) or (2), her contraventions did not preclude her from recovering compensation.
At first instance, Arbitrator Oldfield held that the Appellant suffered a serious and permanent disability in the course of her employment and the disqualifying provisions in the 1987 Act did not apply. The Arbitrator found that she was entitled to weekly compensation.
The Respondent appealed the decision.
Deputy President O'Grady revoked the Arbitrator's decision and entered an award in favour of the Respondent. The Deputy President conceded that the Appellant was in the "course of her employment" when she attended her employer's Christmas party, however, she was not entitled to compensation because she was not within the course of her employment when she disobeyed her employer and drove home under the influence of alcohol.
The Appellant appealed from the Deputy President's decision.
Appeal to NSWCA
By a 2 to 1 majority (McColl JA dissenting), the Court held that the Deputy President made no decision in point of law which was legally erroneous in a material respect. Accordingly, the appeal was dismissed. The majority upheld the Deputy President's decision that the Appellant could not succeed on a journey claim as she was unable to establish that her intoxication did not contribute to her injury or that she had not voluntarily drunk the alcohol.
The Appellant made submissions that the Deputy President failed to apply the principles established in Hatzimanolis v Ani Corporation Limited2 (Hatzimanolis) when determining whether the Appellant was in the "course of her employment". Applying the principles in Hatzimanolis, the Appellant argued that since her employer had provided her with a car, and "authorised, encouraged and permitted" her to use the vehicle to drive home after work, then it followed that she remained in the course of her employment until she reached home.
However, the Court found that the Appellant's employer had expressly prohibited her from driving herself home in the company vehicle due to her intoxication. As such, it was held that the Appellant was not protected from the consequences of her deliberate disobedience by s 14 (1), because the act of driving home was not done for the purposes of and in connection with the employer's trade or business.
The court held that unlike Hatzimanolis, the Appellant's relevant episode of work concluded once she left the party because, although the period may have included the trip from the party to her home, she failed to establish that she commenced such a trip when she left the party.
Further, unlike Hatzimanolis, the Appellant was not living away from home so as to permit the conclusion that the overall period or episode of work extended beyond the hours required in a particular day. Thus, whilst the principles stated in Hatzimanolis may be viewed as expansive of the concept of "course of employment", the Court held that it did not apply to the present circumstances.
The Court held it sufficient to assume in favour of the Appellant that an independent basis of claim is available under s 14 (1), however, it was not relevant to be determined in the current proceedings.
In relation to s 14 (2), the Court observed that the section commenced as a limitation on the primary entitlement in the case of relevant misconduct. However, when a qualifying exception was made to it, in the case of death or serious and permanent disablement, the appropriate interpretation requires that the primary entitlement to compensation be restored by disregarding the qualifying misconduct as it did not create a new form of entitlement. As such, the injury must, at the time, have arisen out of or in the course of employment.
McColl JA, dissenting, believed the Deputy President had erred in his decision by failing to adopt the approach as set out in Love v Lysaght Works Pty Limited3. According to McColl JA, the Deputy President, on the proper application of the law, ought to have held that the Appellant was injured in the course of employment and then proceeded to determine whether, notwithstanding the contraventions, she satisfied the subordinate clause.
Determination of the subordinate clause issue involved having regard to the activity in which the Appellant was engaged when she was injured and not, as the Deputy President approached the question, by only taking into account the contraventions.
In this regard, McColl JA considered the Appellant had been injured in the course of her employment and accordingly was entitled to receive compensation in accordance with the 1987 Act.
The case is a timely reminder to employers to ensure the safety of employees by directing them not to drive home from work functions when under the influence of alcohol, particularly in circumstances where company cars are involved. It is important for employers to be mindful that attendance at work parties or functions can be deemed to be "in the course of employment" in the following circumstances:
- 1. if attendance is regarded as compulsory; and
- if employees are complying with their employer's directions.
1. McColl JA, Basten JA and Handley AJA
2.  173 CLR 473, 8 NSWCCR 242
3.  57 SR (NSW) 70
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