In a recent case concerning a tanker driver and his application for workers compensation, Justice Bromberg of the Federal Court of Australia rejected the employer’s interpretation of the much discussed ‘motel sex case’.
Motel sex case revisited
To understand the implication of this recent case, it is necessary to revisit the details of the famed motel sex case.
In that case, the employee was employed by a government department and suffered an injury whilst in a motel in country New South Wales. The employee had been required by her employer to travel to the country town to conduct budget reviews and provide training to regional staff.
The employee stayed at a motel that was booked by her employer. During her overnight stay, the employee met with an acquaintance. Whilst the pair were having sexual intercourse, a light fitting was pulled from the bed mount and caused injuries to the employee’s nose and mouth. The employee required hospital treatment and subsequently lodged a workers compensation claim.
After a number of appeals, the High Court of Australia finally determined that an employee who was injured whilst having sex in a motel room paid for by her employer was not entitled to compensation from the employer’s insurer. The Majority of the High Court held that there was not enough of a connection between the employee’s employment and the cause of her injury, noting that the injury was sustained during an interval in her employment. The Majority considered it important that the activity that caused the injury was not an activity which had been induced or encouraged by the employer, the employer could not be held liable for injury.
Tanker driver case
The motel sex case decision became a crucial point of consideration in the tanker driver’s application for workers’ compensation.
In this case, the tanker driver arrived at his second delivery point on the day in question. He had finished unloading the fuel he was carrying, albeit the hose was still draining into the storage tank. At that point a woman drove into the service station ‘forecourt’ and was honking her horn. A man subsequently came out of the service station’s workshop and… “threw two objects at the car, and struck the windscreen and window with his fist.”
The tanker driver then decided to confront the man about his actions. There was a heated verbal exchange between this man and the tanker driver. Ultimately, the two became involved in a physical altercation where the man punched the tanker driver in the face a number of times and kicked him in the knee. The punches to the face and the kick to the knee caused the injuries that were the subject of the tanker driver’s workers compensation application.
The employer was a self-insurer and accepted the workers compensation application at first instance. Then, approximately 3 years and 3 months after the application was accepted, an agent of the employer revoked the employer’s acceptance of the claim and denied liability for the employee’s injuries, presumably relying on the findings in the motel sex case for the change of position. The tanker driver subsequently sought a review of the revocation, and the Administrative Appeals Tribunal upheld the employer’s revocation of the application. The AAT’s decision was then appealed to the Federal Court.
The focus of much of the Federal Court decision was the AAT’s application of the motel sex case decision and the finding that the tanker driver’s injuries were not sustained in the course of his employment. The argument run by the tanker driver was that the AAT had misapplied the motel sex case decision.
Before the Federal Court, the employer argued (and it is noted it did not run the same argument with the AAT) that the motel sex case had established a ‘new organising principle’ that differed from the test in preceding case law. The employer argued that a compensable injury (according to the motel sex case) is one that occurs “while the employee is carrying out the duties of his employment, or incidental to those employees, or assuming that the employee is not doing that…, if an injury occurs while the employee is doing something induced or encouraged by the employer”.
This argument was based on an abbreviated reading of one of the key paragraphs of the High Court’s motel sex case decision. The employer’s argument was that, as the injury did not occur whilst the tanker driver was carrying out his duties, and because the employer did not induce or encourage the tanker driver to do that which caused his injuries, then the tanker driver’s injuries were not compensable injuries.
The tanker driver’s representative argued that the principles applied in the motel sex case and previous relevant cases, being the consideration of whether the employer had induced or encouraged the employee, were only relevant where the injury occurred in the course of an ‘interval’ in the employment (like in the motel sex case).
Federal Court decision
Justice Bromberg agreed that the AAT was incorrect to find that the tanker driver’s injury had not occurred in the course of employment on the basis that he was not performing his actual duties at the time of the alleged injury and that the employer had not induced or encouraged the tanker driver to confront the man whom caused his injuries.
In ruling that the tanker driver should succeed in his appeal, Justice Bromberg stated:
“… in the absence of a finding that [the tanker driver’s] injury was sustained during an interval in an overall period of work, the AAT posed and answered the [motel sex case] question. It was wrong to do so. For reasons I have given above, in the absence of a finding that [the tanker driver] was injured during an Interval, the[motel sex case] question was not applicable to [the tanker driver’s] circumstances and the AAT was wrong to ask that question in determining whether [the tanker driver’s] injury occurred in the course of his employment.”
Implications for Employers
This is a significant ruling from the Federal Court as it seeks to limit the application of the motel sex case decision of the High Court. This decision clarifies that the question of whether the employer encouraged or induced the employee to be in the place of the injury or engaging in the activity in which the injury was sustained, only becomes relevant where an employee is injured during an ‘interval or interlude’ in their employment.
If the employer’s argument had been upheld in this decision, then the question of whether the employee had been induced or encouraged by the employer could be raised in every case where an employee is injured whilst not performing their actual duties. This finding means that the question will only be asked where an interval or interlude in the employee’s employment is established.
Lisa Aitken, Managing Partner