Tribunal Rules that an Employer was Liable for an Employee Contracting COVID-19

A tribunal has determined that a widow of an employee who contracted COVID-19 is entitled to compensation despite the employee’s reluctance to a wear mask.

In the decision of Sara v G & S Sara Pty Ltd [2021] NSWPIC 286, the NSW Personal Injury Commission (‘Commission’) granted compensation to a widow of an employee who died from contracting COVID-19 while working in the United States of America (‘USA’).

The Commission was required to determine whether compensation was payable under the Workers Compensation Act 1987 (NSW) (‘Act’). Section 4 of the Act required the employee to have suffered a personal injury, which includes a ‘disease injury’, arising out of or in the course of employment. A ‘disease injury’ is relevantly defined to mean “a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease.”

Section 19B of the Act provides a reverse onus of proof. If a worker is engaged in prescribed employment such as the health sector and contracts COVID-19 then it is presumed, unless the contrary is established, that the worker contracted the disease in the course of the employment and that the employment was the main contributing factor to contracting the disease.

Stoneglass Dental Laboratory Pty Ltd (‘Stoneglass Australia’) was created to provide dental technician products and services to the NSW health sector. It later expanded into developing software for precision dental modelling and fabrication targeted at the east coast of the USA.

The respondent, G & S Sara Pty Ltd, paid salaries, wages and on costs including Mr Sara’s wage, and charged a monthly management fee to Stoneglass Australia for the work performed. Mr Sara was a Director of the respondent and Stoneglass Australia.  While there was dispute between the parties about Mr Sara’s true employer while in the USA, the Commission found that Mr Sara was an employee of the respondent and not Stoneglass US which operated in the USA and secured contracts with clients.

On 15 July 2020, Mr Sara travelled to Sydney Airport and boarded a flight to New York via San Francisco. Mr Sara arrived at Newark Airport later that day, based on east coast USA time, and then travelled to his hotel in New York. While in New York, Mr Sara attended a number of meetings and engaged in work activities including attendance at a restaurant for dinner. There was evidence given that Mr Sara disliked wearing masks, questioned whether a mask was required for an indoor meeting and on one occasion did not wear a mask while waiting to be collected outside his hotel.

On 18 July 2020, Mr Sara was noted to have occasionally yawned and commented that he had been affected by jetlag. On 19 July 2020, Mr Sara communicated by text message with a colleague that he had a cough and was fatigued. Later text messages indicated his condition became worse until he was transported to hospital by ambulance on 23 July 2020. He was diagnosed with COVID-19 and later died on 21 November 2020 due to acute respiratory distress because of complications from COVID-19. Mrs Sara is the widow and executor of Mr Sara’s estate who sought compensation as the applicant in this matter.

The Commission determined that Mr Sara was exposed to and contracted COVID-19 during the period of travel from boarding his flight at Sydney Airport until arrival at his New York hotel. The Commission found that the COVID-19 virus then caused a pathological change causing strokes, heart attacks and the destruction of his lungs which constituted an injury under the Act.

The Commission was satisfied that Mr Sara had contracted COVID-19 in the course of his employment with the respondent despite not all activities in the USA being in the course of the employment. The Commissioner determined that the period of travel to the USA was clearly within the course of the employment as this activity was induced and encouraged by the respondent. Based on these findings the Commission established liability under section 19B of the Act.

The Commission ordered that the respondent pay Mrs Sara a lump sum benefit of $834,200, funeral and body transportation expenses, plus weekly compensation of $1,389.38 per week from 23 July 2020 to 21 October 2020 and $1,170 per week from 22 October 2020 to 21 November 2020. The applicant’s claim of $11 million USD for medical or hospital treatment expenses was stood over to enable the parties to consider various maximums recoverable prior to relisting of this issue.

Employers must be mindful that COVID-19 is a potential deadly disease that poses a serious health risk. Mr Sara was very likely unvaccinated for COVID-19 given that the events took place in July 2020. Nevertheless, while Mr Sara was a working Director, the evidence suggests he was reluctant to wear masks in a country where there was a much higher risk of exposure to COVID-19.

It is essential that employers assess the risk of their employees contracting COVID-19 out of or in the course of their employment and ensure appropriate control measures. This can be implemented through workplace health and safety policies and procedures. To do otherwise may result in tragic death as well as costly litigation and compensation.

If you would like to know more about the implementation of COVID-19 policies and procedures, please contact us at hello@mapien.com.au and a Mapien Workplace Strategist will be in touch within 24 hours.