The recent Supreme Court of NSW decision in Gong v AWI Steel Pty Limited concerns proceedings brought by Mr Gong (plaintiff) against AWI Steel Pty Limited (defendant), in which a host employer was found liable for a contractor’s serious workplace injury, despite having written safety policies in place.
In issue
- whether the defendant owed the plaintiff a duty of care that was breached
- whether liability should attach to the defendant or to other entities within the labour-hire chain
- whether the defendant had implemented an adequate and effective system of work including induction processes
- whether the plaintiff was contributorily negligent, and
- whether any liability should be apportioned to the plaintiff’s employer via cross-claim.
The background
The defendant, AWI Steel Pty Ltd (AWI Steel) operated a steel fabrication facility (AWI Steel’s Factory).
The plaintiff, Mr Gong, an experienced boilermaker, was engaged through a multi-layered labour-hire arrangement to work at the AWI Steel’s Factory.
The plaintiff was employed by Gong Engineering Pty Ltd (Gong Engineering). Gong Engineering then contracted to Ebenezer Engineering which supplied workers, including the plaintiff, to AWI Steel.
In April 2021, while working at AWI Steel’s Factory, the plaintiff sustained serious injuries when a heavy steel plate fell onto his foot as he tried to manually flip it. Mechanical lifting equipment was available, but the plaintiff was instructed by the defendant to complete the task manually. Following the incident, the plaintiff developed chronic physical and psychological injuries rendering him unfit for further employment.
The plaintiff alleged that he had received very limited induction, no instructions about safety, manual handling or usage of equipment.
The Court heard that the plaintiff had undergone an inadequate safety induction, which was compromised by language barriers and the use of unverified AI tools to translate the material into Korean. This resulted in inaccuracies and a failure to properly communicate the safety requirements.
The plaintiff commenced a claim against AWI Steel in the New South Wales Supreme Court. AWI brought a cross-claim against Gong Engineering pursuant to section 151Z of the Workers Compensation Act 1987. At the time of the trial, Ebenezer Engineering was no longer in operation, and no orders were sought against it.
The decision at trial
The Court held that AWI Steel owed a duty of care to labour hire employees such as the plaintiff.
AWI Steel argued that it had a manual handling policy which included weight limits for individual manual lifts.
The Court was critical of AWI Steel because:
- the evidence did not establish the plaintiff was informed about AWI Steel’s manual handling policy as part of his induction process
- the Court did not accept that AWI Steel provided explanations to labour hire workers such as the plaintiff about safe manual handling procedures
- AWI Steel retained overall control and supervision of labour hire workers such as the plaintiff. Labour hire workers were under the direction and supervision of employees of AWI Steel
- the Court accepted that as a result of AWI Steel’s business needs, AWI Steel’s supervisor placed pressure on labour hire workers, including the plaintiff, to undertake manual lifts which would be considered as unsafe, and
- the Court accepted AWI Steel’s supervisor directed the plaintiff to manually flip the plate immediately prior to the incident, as opposed to using mechanical assistance such as a crane.
The Court considered the work which was undertaken at AWI Steel’s Factory required heavy metal objects on which both its employees and labour hire workers such as the plaintiff, to undertake grinding and welding work. The Court identified that AWI Steel’s own system contemplated manual lifting being undertaken by workers, such as the activity the plaintiff was performing at the time of the incident.
The Court held the risk of a worker such as the plaintiff suffered an injury when manipulating a heavy metal plate without the use of machinery was foreseeable and was a not insignificant risk given the metal plate was too heavy to safely lift manually. The Court reasoned this risk could have been obviated by either use of a crane or a team lift.
The Court rejected AWI Steel’s cross-claim against Gong Engineering, finding that given AWI Steel’s complete practical control over the plaintiff’s work, the unique labour hire arrangement and the short time the plaintiff had been at the factory before he was injured, there had been no opportunity for Gong Engineering to have acted to prevent the breach of duty materialising.
The Court awarded a 25% reduction for contributory negligence on the basis of the plaintiff’s experience as a tradesperson and his awareness of the risks associated with manual lifting.
With respect to damages, the Court accepted past economic loss of $373,200 and past out-of-pocket expenses of $208,875.51. A future medical expenses buffer of $150,000 was also accepted, as was non-economic loss assessed at 40 per cent of a most serious case. Critically, the Court found the plaintiff had no future earning capacity. The Court did not make a quantitative award for future economic loss as the Court awaited specific calculations to assess this head of damage.
Implications for you
This case is a salient reminder that written safety policies alone are insufficient to avoid liability if evidence demonstrates they are not implemented or enforced effectively. Further, despite the existence of labour-hire or contractual intermediaries, a host employer can be wholly liable where it is the creator of the relevant system of work and exercises complete control over a relevant worker.
