Navigating workers compensation claims with common law potential: Part 1

Workers compensation claims with common law potential can be complex and require careful, early-stage preparation to ensure an employer is best positioned to respond to any claim which might eventuate.

When can a worker bring a common law claim?

When a worker sustains an injury in the course of their employment, it may result in a compensable Whole Person Impairment (WPI) pursuant to section 71 of the Workers Rehabilitation and Compensation Act 1988 (Tas).

WPI is a method used to assess and quantify the extent of permanent impairment caused by the injury. The WorkCover Tasmania Guidelines provide detailed criteria for assessing impairments to different body systems such as musculoskeletal, cardiovascular, respiratory and nervous systems.

Any WPI must be assessed by accredited medical specialists. For physical injuries, workers are eligible for WPI compensation if their impairment is 5% or greater. For psychological injuries, the threshold for compensation is 10%. This payment is in addition to any weekly payments or medical and related expenses.

Workers can only pursue a common law claim if their WPI is 20% or more. The Tasmanian Civil & Administrative Tribunal (TASCAT) must determine that the worker’s impairment is at least 20% for a common law action to be available. Where the employer and worker’s experts disagree, TASCAT may refer the determination of the WPI to a medical panel who will advise on the WPI. This determination is then binding on both parties.

A worker has three years from the date of the TASCAT determination of their 20% or above WPI to file proceedings in their common law claim.

However, in many cases it will be obvious that the worker will meet the 20% threshold and in other cases it may be easily foreseen that a worker will or may reach the threshold in the future thus opening up the possibility of a common law claim. For these reasons it is always necessary to consider at an early stage if such a threshold is likely to be met so that proper investigations can be made whilst matters are fresh in the mind of witnesses so that the employer’s position is protected.

When does a 20% WPI lead to a common law claim?

Once a worker has a 20% WPI, they must establish a cause of action against their employer, typically through a claim in negligence. In doing so they must establish four essential elements, Duty, Breach, Causation and Damage.

• Duty – Employers are legally required to uphold a duty of care towards their employees, which is often explicitly stated or if not, will be implied by law in employment contracts. The duty of care is not necessarily all encompassing but it involves ensuring a safe working environment and addressing foreseeable risks to employees. The scope of this duty entails recruitment of adequate and competent staff, provision of safe machinery and equipment and safe systems of work including adequate training and warnings.
• Breach – Whilst establishing the duty of care is usually straightforward, proving a breach of that duty involves assessing whether the standard of care was met. This is an objective test, based on what a reasonable person in the employer’s position would have done in similar circumstances. A worker must show that their employer did not adhere to this standard of care. The greater the seriousness and likelihood of the potential harm, the greater precautions that may be expected of the employer. An example would be providing staff with machinery or equipment but not providing adequate training to staff.
• Causation and Damage – A worker must demonstrate that the breach of duty by their employer is causally linked to the harm or injury suffered. This means proving that the harm/injury was a direct result of their employer’s failure to uphold their duty of care. This often involves a consideration of additional medical issues that might not arise in a workers compensation claim.

It is also important to consider potential for contribution from a party.

• Contribution by a worker – It is important for employers to explore whether there was any contribution (fault) by a worker to their injury. The onus is on the employer to establish that a worker failed to take reasonable care for their own safety, and that failure contributed to the foreseeable injury or loss suffered by that worker. The employer must demonstrate that a worker’s failure to take reasonable care contributed to their loss, in that the loss could have been avoided or reduced. For example, when a worker does not wear appropriate personal protective equipment provided and injures themselves, or when a worker fails to adhere to the relevant safety procedures. Establishing contribution will likely lower the overall settlement sum.
• Contribution by a third party – It is important to identify whether there are any avenues for an employer to pursue recovery from a third party. This may be from a host employer in labour hire arrangements or a principal contractor at a construction site where there are multiple contractors.

Summary

Handling workers compensation claims with common law potential requires early preparation. Employers should understand WPI assessments and the conditions for common law claims. It is also key to consider any worker or third party contributions. Early action can significantly improve an employer’s chances of successfully managing such claims. Next month we will provide some tips for doing so.