A recent case before the NSW Court of Appeal highlights the
relative duties of care owed to workers by a labour hire employer
and a host employer.
Macpherson was an employee of APS Pacific Pty Limited
(APS) (the labour hire employer). His services
were hired to Clarence Valley Council (Council)
(the host employer) for the purposes of weed reduction. APS did not
give Macpherson any training, and left it to the Council to control
the work undertaken by him. Unbeknownst to APS, the Council on the
day in question tasked Macpherson with drilling holes in trees. It
issued him with a chainsaw rigged for drilling, but which did not
have a clutch fitted. During drilling operations the drill snagged
and the chainsaw twisted. Macpherson's wrist was badly
Macpherson sued the Council and APS for compensation for his
injuries. In evidence, the Council's engineer stated that the
Australian standard and relevant regulations did not require a
clutch to be fitted to a chainsaw. But he agreed that it was usual
practice for a clutch to be fitted, that a clutch would have
prevented the injury to Macpherson's wrist, and that it was
foreseeable that injury could result if one was not fitted.
The trial judge found that the Council was liable for 85% of the
damage suffered and APS liable for 15%. The Council appealed but
the Court of Appeal upheld the findings. The Court of Appeal held
that the relevant consideration is what the employer knows or ought
to have known is unsafe, not necessarily what workplace law or
industry standards prescribe.
The Court of Appeal also confirmed that the immediate and
substantial cause of Macpherson's injuries was the
Council's failure to provide safe equipment. However, APS still
owed Macpherson a non-delegable duty as his employer and therefore
the apportionment of 15% liability to APS was upheld.
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Whereas most insurance policies exclude liability arising under contract, insurers can
positively benefit where an insured has limited or excluded its liability under contract.
This usually arises where the insured's contract has a limitation or exclusion of liability clause in the insured's favour.