An Employer’s Duty of Reasonable Care is not Strict Liability

Legal Directions

WR Engineering Pty Ltd ATF WR Engineering Trust v Nickola Jancevski [2017] ACTSC 202

Her Honour Ashford AJ recently considered the extent of an employer’s duty of care to its employees and/or subcontractors in the ACT Supreme Court decision of WR Engineering Pty Ltd ATF WR Engineering Trust v Nickola Jancevski. The decision involved an examination of the well-known High Court authorities of Czatyrko v Edith Cowan University (2005) 214 ALR 349 and Hollis v Vabu Pty Ltd 207 CLR 21. The appeal to set aside the finding of negligence at first instance was upheld. Moray & Agnew acted for the successful appellant.

Background

The plaintiff was engaged by the defendant to install garage doors at residential premises in the ACT. Following a faulty installation in late-2012, rectification was required under warranty. The defendant directed the plaintiff to return to the premises together with an experienced installer who would supervise the rectification work. A date and time was agreed for the parties to attend.

The plaintiff arrived at the premises on the agreed date, but prior to the agreed time. He commenced the rectification work by himself, in breach of the direction given by the defendant. He also adopted a ‘short cut’ method of work, contrary to his training. In performing the rectification work, the plaintiff sustained serious injuries to his thumb and index finger.

Facts established at hearing

The plaintiff made a claim for common law damages against his employer. The matter was heard at first instance in the ACT Industrial Court, and was subsequently appealed to the ACT Supreme Court. The factual findings can be summarised as follows:

Employee or Subcontractor

  • The plaintiff had an ABN, claimed GST and claimed business expenses in his income tax returns;
  • The plaintiff was not paid sick or recreation leave, nor did the defendant make superannuation contributions on his behalf;
  • The plaintiff was identified as a ‘subcontractor’ on all contractual and safety material;
  • Payment was made upon submission of invoices, not for the number of hours worked;
  • The defendant mandated the method of work to be adopted by the plaintiff;
  • The plaintiff commenced work at a regular time each day and he worked at least four days every week; and
  • The plaintiff was not free to delegate or subcontract performance of the work to anyone else.

Breach of Duty of Care

  • The plaintiff was an experienced carpenter, albeit not an experienced garage installer;
  • At the request and cost of the defendant, an expert installer had provided training to the plaintiff for one week;
  • The plaintiff had been provided with safe work methods statements, training material and installation manuals;
  • The plaintiff was directed to wait for his supervisor to arrive at the premises prior to performing the rectification work; and
  • The plaintiff adopted a ‘short cut’ method of work.

Judicial consideration

Employee or Subcontractor

Both at first instance and on appeal, when characterising the nature of engagement between the plaintiff and defendant, the Court considered the test established in the decision of Hollis v Vabu Pty Ltd.

The Court held that the presence or absence of control was just one of the number of factual elements, or ‘indicia’, which must be examined before a decision was reached. This balancing exercise was described as ‘necessarily impressionistic’, as there was no universally accepted understanding of how many indicia, or what combination of indicia, must point towards a contract of service before the worker can be characterised as an employee.

At first instance and on appeal, it was held that the balance of indicia favoured a finding that the plaintiff was an employee. Ashford AJ found that ‘having weighed all those matters it is clear she [the Magistrate] reached that conclusion after careful consideration of the authorities and after correctly assessing the indicia’.

Breach of Duty of Care

The Court established that the defendant owed the plaintiff a duty of ‘reasonable care’, as prescribed by ss40, 42 and 43 of the Civil Law (Wrongs) ACT 2002 (ACT). These provisions are similar to those contained within analogous legislation in other jurisdictions.

In assessing whether a breach of that standard of care had occurred, the Court considered the well-known test set out Czatyrko:

An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work.

At first instance, it was considered that the specific task the plaintiff was performing at the time of injury, albeit a ‘short cut’ method, was so dangerous that an explicit warning was required to have been provided. Accordingly, it was deemed that the defendant had breached its duty of care in failing to train and warn the plaintiff of the specific dangers involved in the short cut method he had adopted.

On appeal, Ashford AJ was ‘satisfied the scope of the appellant’s [defendant] duty did not extend to providing minute details in respect of a work practice never anticipated by the appellant, and in circumstances where the respondent was the author of his own misfortune’.

The initial finding of negligence on behalf of the defendant was ‘akin to a finding of strict liability being imposed on the appellant, which is not the case’. Accordingly, the defendant was found not to have breached its duty to exercise reasonable care in the circumstances giving rise to the injury, the appeal was allowed, and the decision at first instance was set aside.

Conclusions

The decision demonstrates that the Court would look behind the veil of a workplace arrangement to consider how it should be categorised at law. It is not sufficient for an employer to impose a title of subcontractor onto a party who, in reality, is employed for the provision of services.

With reference to the decision of Czatyrko, it is common ground that an employer’s duty of reasonable care to an employee is an onerous one. Employers are required to go to great lengths to protect employees from injury while at work. The public policy rationale behind this position is self-evident.

That said, the standard of care is one of ‘reasonable care’. The occurrence of an injury at work does not of itself give rise to a finding of negligence in tort. A key finding in Jancevski was the plaintiff directly disobeyed a direction of the defendant in the circumstances giving rise to the injury. This goes beyond conduct which could be categorised as inadvertent, thoughtless or careless.

Authored by Chase Deans, Senior Associate, Canberra


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