Employer liable for COVID-related death

In brief 4 min read

The Personal Injury Commission of New South Wales (the Commission) has found an employer liable for the death of an employee who contracted COVID-19 during the course of their employment.¹

Key takeaways

• In a case highlighting the types of workers' compensation claims that may be made in relation to COVID-19, an employee's widow sought more than $11 million following her husband's death due to complications arising from COVID-19.
• Employers may be liable for a COVID-19-related death or injury where it can be established that the employee contracted COVID-19 in the course of their employment, and their work-related activities were the main contributing factor to the COVID-19 infection.

Background

Mr Sara worked for G & S Sara Pty Ltd, an Australian-based company that sells dental equipment and technology. He travelled to New York in 2020, to sell and promote G&S's dental technology. On 23 July 2020, he was admitted to a New York hospital and diagnosed with COVID-19. During hospitalisation, he suffered several heart attacks and strokes. He died of complications from COVID-19 on 21 November 2020.

Mr Sara's wife made a claim under the Workers Compensation Act 1987 (NSW) (the Act), seeking weekly compensation for the period of his hospitalisation, medical and funeral expenses, and the lump sum death benefit. Mrs Sara alleged that Mr Sara's COVID-19 infection occurred in the course of his employment with G&S. G&S argued that he performed work in New York for its US entity, Stoneglass Inc, and therefore no liability arose under the Act.

The key issues before the Commission were:

• whether Mr Sara was an employee of G&S;
• whether his COVID-19 infection arose out of or in the course of his employment; and
• whether his employment with G&S was the main contributing factor to his COVID-19 infection.

The decision

The Commission determined that Mr Sara contracted COVID-19 between boarding his flight in Sydney and arriving at his hotel in New York. This finding was based on a variety of factors, including the onset of symptoms, Mr Sara's aversion to wearing face masks, his exposure to a large number of people during his 24-hour travel period, and medical evidence as to the likely incubation period. The virus caused profound respiratory failure, which satisfied the meaning of 'personal injury'.² For the purposes of the Act, the date of injury occurred on 23 July 2020, when Mr Sara was diagnosed with COVID-19.

Once it accepted that Mr Sara contracted COVID-19 while travelling, the Commission had to determine whether he was travelling in the course of his employment with G&S.

G&S claimed that:

• the companies within the Stoneglass Group operated as distinct legal entities, and the work performed by Mr Sara in the US was for Stoneglass Inc and not for G&S; and
• Mr Sara's COVID-19 infection could not be said to have arisen out of or in the course of his employment, as he could have contracted the disease while engaged in non-work-related activities.

The Commission rejected the first claim, finding that Mr Sara was an employee of G&S for the following reasons:

• the Stoneglass Group was organised in such a way that G&S was Mr Sara's employer, as evidenced through taxation returns, payslips and workers' compensation insurance;
• there was no evidence that Mr Sara's employment had been transferred to Stoneglass Inc during his time in the US, as he continued to be paid his normal wage by G&S; and
• G&S directly benefitted from the work performed in the US.

As to the second claim, the Commission accepted G&S's argument that not all of Mr Sara's activities in the US could be linked to his employment. However, the period of travel to the US 'was clearly within the course of the employment' because G&S 'induced and encouraged' the activity. It followed that, given the finding he was probably infected with COVID-19 while travelling, Mr Sara sustained his injury in the course of his employment.

G&S was ordered to pay Mrs Sara an $834,000 lump sum death benefit and weekly compensation for the period of Mr Sara's hospitalisation, 23 July to 21 November 2020. The Commission stood over Mrs Sara's claim for US$11 million in expenses, and directed the parties to consider the maximums recoverable.