The Town Sinks Compensation Claim

by Andrew Piper and Alex Millman, NRA Legal

Many employers offer their employees the opportunity to travel during their employment – whether to meet clients or customers, or to attend training, seminars, or conferences, and this is often considered a “perk” of the job.

Often these journeys come with a reasonable amount of down-time between formal engagements, during which the employee may choose to socialise, go out, and enjoy their new surroundings. When unfamiliar territory and alcohol are combined, this all too frequently leads to things going wrong.

The first priority in such a situation should always be the health and welfare of the employee who has suffered the injury; a person who has endured an injury is always deserving of respect and support.

While ensuring that this is maintained for the employee, an important question arises: is the employer liable for an injury an employee sustained on a work trip after staying out late on the town?

In the case of Dring v Telstra Corporation Limited [2020] FCA 699, the Court’s answer to this question was “no”.

Justice John Snaden of the Federal Court reached the conclusion that the injury was not sustained within the course of employment.


A slip in the night and a slide through the courts

In April 2016, Ms Dring was employed by Telstra as a Senior Project Manager. She had flown from her Brisbane base to Melbourne to attend a conference organised by Telstra at the Novotel Hotel on Collins Street.

Upon the conclusion of the days’ workshops, Ms Dring joined a colleague to share a bottle of champagne. This was followed by another shared bottle of white wine at dinner before finishing the night at a cocktail bar.

Returning to the Novotel Hotel at approximately 2:30am, Ms Dring slipped on recently-mopped tiles causing a contusion to her left hip.

In September 2016, Ms Dring made an application under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) for compensation. Telstra rejected this application in October 2016 when it was first made, and again in December 2016 when Ms Dring requested an internal review.

In January 2017, Ms Dring applied to the Administrative Appeals Tribunal (the Tribunal) for a review of this decision, where the Tribunal upheld Telstra’s decision. Ms Dring appealed this decision to the Federal Court of Australia in September 2018.


Should an employer catch an employee wherever they fall?

The SRC Act provides the framework for workers’ compensation for employees of the Commonwealth and ‘licensed corporations’. Telstra is one such ‘licensed corporation’.

Section 5A(b) of the SRC Act defines ‘injury’ as meaning, among other things:

“An injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment.

Concerning the meaning of ‘… in the course of, the employee’s employment’, his Honour looked to the decision of the High Court in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21 (Hatzimanolis) as authority.

In that case the High Court decided that where an employee was working and living away from their usual workplace, such as on a work trip, it was likely that the whole time spent “away” was “in the course of the employee’s employment”, and therefore any injury occurring between work periods on such a trip was likely to be captured by the workers compensation legislation.

Further, in this case it was found that if the employer expressly or impliedly has ‘induced or encouraged the employee to spend the interval or interlude [between periods of time actually performing work] at a particular place or doing a particular activity’ then this is in the course of the employee’s employment.

The case of Comcare v PVYW [2013] HCA 41 (PVYW) is illustrative for understanding the importance of the distinction made in Hatzimanolis concerning an employee being induced or encouraged by their employer to be at a particular place or doing a particular activity.

The details of the PVYW case are quite salacious and consequently well known. An employee had been sent by her employer to one of the employer’s regional offices. The employee had been provided with accommodation for this trip.

One evening, while the employee was having sex with an acquaintance at this hotel, a light fitting was pulled from its mount and hit the employee in the face. Unfortunately, this incident resulted in both physical and psychological injuries to the employee.

In considering the claim for compensation in PVYW the High Court accepted that the employee was at the hotel in the course of her employment. However, the Court found that the injury did not occur due to the place but rather due to the activity being engaged in – and the activity in question was not induced or encouraged by the employer.

As the employer had not induced or encouraged the employee to engage in that activity, the Court found in Ms Dring’s case, as it did in PVYW, that the injuries did not occur “in the course of” the employee’s employment.


Stepping out the decision

If Ms Dring had slipped on wet tiles in the hotel moments after leaving the final session of the days’ conference, this would be a very different case and it would be quite clear that this occurred within the course of employment.

The factor that makes this case unique and what was referred to by Justice Snaden as “… the proverbial elephant in the room” was that Ms Dring was only exposed to this slip hazard after eight and a half hours of weeknight socialising.

In the view of his Honour the circumstances surrounding how Ms Dring came to be exposed to this risk at 2:30 in the morning separate the connection between the incident/injury and Ms Dring’s employment.

Ms Dring was in no way induced or encouraged to engage in the socialising that she did that night, and as such a connection to her employment cannot be established.

Justice Snaden concluded that the injury Ms Dring sustained on that morning in April 2016 was not one that arose out of, or in the course of, her employment with Telstra. His Honour dismissed the appeal.


Takeaways for employers to (safely) walk away with

While the conclusion in this case was favourable to the employer, this case reaffirms the importance of understanding the risks involved when an employee performs work away from the usual place of business. In particular, an employer must be careful to recognise the circumstances where they are inducing or encouraging an employee to engage in an activity.

After parties, drinks paid for by the company, and activities organised by the employer are all examples of circumstances where an employee may be seen to be induced or encouraged to participate in an activity. In such circumstances an employer is much more likely to be held liable for injuries that may occur.

To ensure that you are appropriately managing the risks associated with employee travel, particularly when attending work functions or conferences be sure to contact the National Retail Association’s Workplace Relations team on 1800 RETAIL (738 245) for advice.