Covid Travel
Legal24/08/2021 12:00:00 AM

Workers Compensation Law (NSW) - Australian company liable for worker’s death from COVID-19 in New York

The dependant widow of Mr Sara, who died in New York (NY) in November 2020 from complications resulting from COVID-19, has succeeded in establishing a compensable injury against Australian company, G & S Sara Pty Ltd.

The Personal Injury Commission found that, most probably, Mr Sara was exposed to and contracted the COVID-19 virus between boarding a flight at Sydney Airport and arriving at his accommodation in NY when on a work trip in July 2020. This finding was based on a number of factors, including the onset of symptoms, his documented reluctance to wear a mask, the likely exposure to many people during the period of travel, and the medical evidence of likely incubation period.

The Commission found that in Mr Sara’s case the virus caused pathological changes including strokes, heart attacks and profound respiratory failure, which fell within the meaning of “personal injuries” under s 4 of the Workers Compensation Act 1987 (NSW) (1987 Act).

The respondent company argued that firstly, while it employed Mr Sara “at times”, it was not the employer “at the relevant time” when he contracted COVID-19. Secondly, it argued that Mr Sara did not contract COVID-19 in the course of his employment.

Who employed Mr Sara?

The Commission examined the caselaw when considering potential multiple employers and the indicia of employment, concluding that at the relevant time of contracting the virus, the respondent company did employ Mr Sara, despite there being no written contract of employment.

The Commission explored the evidence of the related companies involved in the business to which Mr Sara provided work. He and his wife were directors in the respondent, as well as Stoneglass Dental Laboratory Pty Ltd (Stoneglass Australia), which provided dental technician products and services across the healthcare sector in New South Wales. It was the respondent company that paid the employees’ salaries and wages (which was its sole purpose) and provided workers to Stoneglass Australia in exchange for a monthly management fee from Stoneglass Australia.

The business had expanded into the US and secured contracts with various universities and NY dentists. Stoneglass Inc (Stoneglass US) was incorporated for that purpose, of which Mr Sara was Managing Director and President. His work involved travel to the US every second month to sell and demonstrate dental technology. The respondent argued Mr Sara was working for Stoneglass US at the time he contracted COVID-19.

However, the Commission concluded that the payment of wages, payslips, tax returns, workers compensation and travel insurance policies were all indicative of employment with the respondent, and there was no suggestion this arrangement was a sham. There was no change in the working arrangement or transfer of employment to Stoneglass US, and he was not entitled to wages from the US company.

Did Mr Sara’s injuries arise in the course of his employment?

The Commission accepted the respondent’s submission, based on the principles set out in PVYW, that not all of Mr Sara’s activities in the US would be considered as occurring in the course of the respondent’s employment. Some included work as the president of the US company. However, the period of travel to the United States was clearly within the course of employment with the respondent as it had induced and encouraged that activity. Consistent with this finding and that Mr Sara was probably infected with the COVID-19 virus whilst he was travelling, the Commission concluded that Mr Sara sustained injury in the course of his employment with the respondent.

How were the COVID-19 presumptions applied?

The Commission’s consideration of the s 19B COVID-19 presumptions was limited by the concessions made in the arguments before it. The respondent company conceded that if Mr Sara was in the course of his employment in NY, then s 19B was satisfied. As such, the earlier finding that Mr Sara was in the course of his employment with the respondent when he contracted the COVID-19 virus was sufficient to establish liability under s 19B of the 1987 Act. The respondent did not attempt to rebut the presumptions under s 19B(1) (eg that being employed in prescribed employment in the health sector, his employment was the main contributing factor to the cause of his disease). The date of injury was therefore deemed to be 23 July 2020, the date he was diagnosed with COVID-19.

Compensation

Mrs Sara was entitled to the lump sum death benefit payable at the date of Mr Sara’s death of $834,200. Mrs Sara was also entitled to specialised insurer expenses and body transport expenses, and to weekly compensation from 23 July 2020 to 21 November 2020.

Mrs Sara sought compensation of $11 million for the cost of medical and hospital related treatment, an issue which the Commission stood over for the parties to consider the various maximum recoverable amounts.

Source: Sara v G & S Sara Pty Ltd (2021) AWR ¶20-707; [2021] NSWPIC 286, 10 August 2021, accessed 19 August 2021.

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Annelies Herrmann
Content Management Analyst, Wolters Kluwer
Annelies has considerable experience in writing and editing at Wolters Kluwer, having managed the Employment Practice Area. She now brings that experience to bear as the content management analyst for the Defamation Law, Property Related Torts and Economic Loss, and Workers Compensation Practice Areas.