A host employer and the employer of a labour hire worker were each liable in damages for serious injuries suffered at a worksite when a forklift operator dropped a heavy load onto the plaintiff.
In issue
- was the host employer liable in negligence to the plaintiff?
- was the labour hire employer liable to the plaintiff in negligence?
- who was vicariously liable for the negligent actions of another employee employed by the labour hire employer?
- whether the accident was a ‘motor accident’ under the Motor Accidents Compensation Act 1999 (NSW), and
- was the plaintiff contributorily negligent for the harm?
The background
Usinch Pty Ltd (Usinch) owned and operated an abattoir in New South Wales. Mr Brett Scott (the plaintiff) was employed by Epona Pty Ltd (Epona). Epona was a labour hire company who provided workers to Usinch. There was no written agreement between Epona and Usinch. Both Epona and Usinch had the same sole director.
In July 2017, the plaintiff sustained serious injuries when a stillage (a storage container of packaged meat) fell from a forklift and struck him on the head. The forklift was being operated by another Epona labour hire employee, Mr Smith. The forklift was unregistered and uninsured. Further, Mr Smith was not licensed to operate the forklift.
The plaintiff received statutory workers compensation payments pursuant to the Workers Compensation Act 1987 (NSW) (WCA).
The plaintiff commenced proceedings for damages against Usinch pursuant to the Civil Liability Act 2002 (NSW) (CLA).
The plaintiff commenced a claim against Epona under the Motor Accident Compensation Act 1999 (NSW) (MACA), or in the alternative, a claim pursuant to the WCA.
The decision at trial
Negligence of Mr Smith, Usinch and Epona
The Court found that the incident arose because of the negligence of Mr Smith, as the operator of the forklift, Usinch and Epona.
Usinch argued that the incident arose out of a casual act of negligence by Mr Smith when he was operating the forklift. The Court disagreed with this argument.
The Court held that Usinch did not have a safe system of work and this ‘considerably contributed’ to the incident. Whilst Usinch had a written forklift policy which required the forklift to be driven by a licensed forklift driver, the Court noted there was no evidence led to establish the forklift policy was in practical operation at the time of the incident. Further, Usinch did not tender any documents to demonstrate Mr Smith had received training in the forklift policy.
Epona argued that as the labour hire employer, it was not aware of the way Usinch utilised the persons it supplied to operate the forklift – it had vested all control in Usinch. The Court dismissed this argument. The Court reasoned both Epona and Usinch were under the control of the same mind, Epona operated out of the same location, the plaintiff’s personnel file demonstrated Epona had involvement in the management of workers it supplied to Usinch (for example Epona counselled Mr Smith after the incident occurred) and it knew Usinch used Mr Smith to operate the forklift.
Vicarious liability
The Court held the incident arose because of the negligent operation of the forklift by Mr Smith. There was a dispute regarding whether Epona or Usinch was vicariously liable for the actions of Mr Smith.
The Court said the starting position was a worker’s employer was vicariously liable for the tortious acts of their employee. However, if the worker’s employer can transfer authority to control the doing of the worker’s tortious act to another defendant, the other defendant will be vicariously liable for the worker’s tortious act.
The Court held that Usinch was vicariously liable for the actions of Mr Smith, as opposed to Epona. The Court reasoned that Usinch exercised control over Mr Smith’s actual day to day work, including requiring him to drive the forklift, despite Mr Smith being unlicensed. As a result, Usinch was responsible for Mr Smith’s negligence.
Apportionment
With respect to apportionment between Usinch and Epona, Usinch argued that apportionment ought to be an even 50/50 between Usinch and Epona respectively. Whereas, Epona said the cause of the incident arose from Usinch’s unsafe system of work and Usinch ought to bear greater liability, submitting that a 75% to Usinch /25% to Epona was appropriate.
The Court held that Usinch had primary responsibility for the plaintiff’s injuries and ought to bear a greater contribution to the plaintiff’s damages. The Court said Epona should not have allowed the plaintiff to work under Usinch’s unsafe system of work. The Court awarded a 70% to Usinch /30% to Epona apportionment split.
Plaintiff’s claim under the MAC Act
The plaintiff advanced a claim against Epona under the MACA, or in the alternative, a claim pursuant to the WCA. The Court examined whether the MACA or the WCA applied.
Epona argued that the MACA did not apply as there was no fault on Epona’s part in relation to the use or operation of the forklift. The Court agreed with Epona’s argument, holding there was not a requisite connection between Mr Smith’s negligent driving of the forklift and Epona.
Contributory negligence
It was argued that a finding of contributory negligence ought to be made as the plaintiff was also an experienced forklift driver who ought to have been aware of the dangers of working near the forklift.
Whilst it was accepted the plaintiff was an experienced forklift driver who understood the risks associated of working in close proximity to the forklift, the Court was unable to conclude contributory negligence had been established as the defendants did not call any evidence from the people who witnessed the incident, or supervised the plaintiff and Mr Smith.
Implications for you
This decision serves as a salutary reminder to host employers that they should be wary that the scope of control they exercise over labour hire employees can open themselves up to liability despite the absence of a direct employment relationship. Further, host employers should be careful to ensure there is a safe system of work in place, and this system of work is actively enforced.
