Tales of Byrne’s Demise are Greatly Exaggerated? The Amendment of Workers’ Compensation and Rehabilitation Act 2003 (Qld)

Legal Directions

Introduction

The Queensland Parliament passed amendments to the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (‘WCRA’) on 31 August 2016. It was anticipated that these amendments would abolish the effect of Byrne v People Resourcing (Qld) Pty Ltd v Anor [2014] QSC 269. However, whether this has occurred remains unclear.

Amendments

The amendments include all of those proposed by the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (‘the Bill’), with the exception of one – the proposed amendment to the meaning of ‘damages’ designed to reverse the decision in Byrne, which was referred to in the parliamentary debates as the ‘proposed Byrne amendment’.

Accordingly:

  • The meaning of ‘damages’ in the WCRA remains as it was, with no changes; and
  • Byrne – which held that an employer’s liability under a contract was a legal liability of the employer to pay ‘damages’ that WorkCover Queensland (‘WorkCover’) (as the employer’s statutory insurer) must meet – has not been expressly overruled, and arguably remains good law.

Strong opposition was raised in the parliamentary debates to the ‘proposed Byrne amendment’. However, those in Parliament who were opposed to the ‘proposed Byrne amendment’ did not also raise opposition to the proposed amendment to insert into the WCRA the new section 236B titled ‘Liability of Contributors’ (‘the new section’). This amendment, although not specifically addressed in the parliamentary debates, was passed.

The new section provides that where an employer agrees to indemnify a person for any legal liability of the person to pay damages for injury sustained by a worker, then:

  • The agreement does not prevent WorkCover – on its own behalf and/or on behalf of the employer – from claiming, against that person, an indemnity from, or contribution towards, the employer’s liability and/or WorkCover’s own liability for the worker’s injury; and
  • The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify that person for any contribution claim made by WorkCover, on its own behalf and/or on behalf of the employer, against that person.

The new section applies to current claims for damages made by workers which have not yet been settled, in addition to future claims to be made.

Comment

An indemnity which cannot prevent the person giving the indemnity from making a claim against the person who the indemnity is supposed to protect, which is the effect of the new section, is practically no indemnity at all.

Arguably, the new section actually abolishes Byrne, notwithstanding the ‘proposed Byrne amendment’ was not passed. This, of course, would be an extraordinary outcome.

The ‘persons’ who will be affected by the operation of this new section will not be injured workers, but will be the persons who deal with the workers’ employers, including principal contractors, subcontractors and occupiers of worksites, and their liability insurers. The explanatory notes to the Bill included comment that reversing the effect of Byrne would save WorkCover an estimated $40 million per year. It will be these ‘persons’ who will bear this cost, if indeed Byrne has been abolished.

Given the uncertainty as to how the new section will operate and in what circumstances, time will tell as to whether further statutory or judicial authority will be warranted. It seems, however, that the tale of Byrne’s demise may yet prove to be greatly exaggerated.

Authored by Berren Hamilton, Senior Associate and Scott Cowell, Partner, Brisbane


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