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 in PVYW "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
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.
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guide to the subject matter. Specialist advice should be sought
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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