Key Takeaways

• This case confirms that it is possible for a ‘host employer’ (that is, someone other than a worker’s actual employer) to be vicariously liable for the actions of a worker provided to them pursuant to a labour hire arrangement.
• When apportioning liability in any case involving labour hire arrangements, it is essential to look at the actual factual arrangements that play out between the host employer, the actual employer and any workers whose services are lent on hire on a case-by-case basis. This will override any contractual agreement.

Brief Facts

The worker was employed by Titan Technicians Enterprise (‘Titan’). The worker’s labour was hired out by Titan to Mt Owen Pty Ltd (‘Mt Owen’). Mt Owen was the proprietor and occupier of an underground coal mine.

The worker sustained physical and consequential psychiatric injuries while working at Mt Owen’s site. It was clear that the worker’s injury was caused, at least in part, by a casual act of negligence on the part of a co-worker, Mr Kemp who was also employed by Titan.

The Court was required to determine:

1. If either defendant owed the worker a duty of care and if so, was this breached?
2. If either defendant was vicariously liable for the negligence of Mr Kemp.

Judgment

Did either defendant owe the worker a duty of care and if so, was this breached?

In considering the duty of care owed by each defendant, Justice Campbell confirmed there was a non-delegable duty owed to the worker by Mt Owen. That duty required Mt Owen to take reasonable care not to expose the worker to an unnecessary risk of injury in its capacity as a ‘host employer’ (TNT Australia Pty Ltd v Christie (NSWCA 2003)).

In determining that Mt Owen was a host employer in the TNT v Christie sense, such that the law of negligence imputes a duty of care, Justice Campbell relied on evidence that the worker and Mr Kemp had been accepted as supplementary workers to take the place of Mt Owen’s direct employees who were then on strike. Further, the risk assessment and system of work documents were documents of Mt Owen, not Titan. Additionally, it was a supervisor of Mt Owen who approved the system of work in place at the time for the task being performed.

In determining that Mt Owen had breached its duty of care owed to the worker, Justice Campbell considered that the TNT v Christie duty is, like the employer’s duty, non-delegable and is a duty of some stringency.

Justice Campbell also found that Titan, as the legal employer, owed a non-delegable duty of care and was negligent on the same basis at Mt Owen.

Which defendant is vicariously liable for the negligence of Mr Kemp?

Justice Campbell noted the question of whether Mr Kemp had become the employee of Mt Owen pro hac vice ('for this occasion') was to be determined on the facts. It did not depend upon any contractual arrangements between the defendants.

Titan relied upon the following in argument for Mt Owen being the employer pro hac vice:

• Mr Kemp had been on the Mt Owen site for over three years
• Mt Owen exercised power and authority over the way Mr Kemp performed the work. Mt Owen required him to be trained to their requirements; comply with their system of work and conferred its authority on him by appointing him as the person in charge
• A Mt Owen employee had the authority to intervene if he did not approve of the way the task was being performed by Mr Kemp
• While the work was being performed there was no difference between workers hired from Titan and direct employees of Mt Owen

Mt Owen refuted being the employer of Mr Kemp pro hac vice, relying on the following:

• Mr Kemp was a skilled employee, whose qualifications and competency had been certified by Titan to Mt Owen upon which certification Mt Owen reasonably relied
• It was by Titan’s authority that Mr Kemp must comply with Mt Owen’s directions, not authority which had been transferred to Mt Owen
• Titan had retained substantial control of its employees working at Mt Owen. Titan carried out its own inductions when employees started; it issued letters of competency; its employees were subject to Titan’s policies and procedures including in relation to risk management, safety and injury reporting
• Titan had a presence on the Mt Owen site, with its supervisors frequently attending and consulting with employees regarding the work at Mt Owen

Having regard to the above, Justice Campbell was satisfied that Mr Kemp was the employee of Mt Owen pro hac vice. It followed that Mt Owen were vicariously liable for his actions.

On the findings made, Justice Campbell apportioned liability of 60 percent to Mr Kemp (for which Mt Owen was liable), 20 percent to Mt Owen and 20 percent to Titan.

Implications

Traditionally, apportionment of liability between a labour-hire employer and a ‘host’ employer has been governed by the principles of TNT v Christie, with the labour-hire employer bearing 25% and the ‘host’ employer bearing 75%.

This decision affirms the principle set out in TNT v Christie, however is an example of a decision where the court is prepared to consider the specific facts of the case to attribute a different percentage of culpability between the parties, if the facts call for this, as opposed to a formulaic apportionment based on TNT v Christie.

This case required, in addition to apportioning liability between the employer and host employer, the determination of whether a worker, who’s negligence was the most significant contributor to the injury, had become the employee of the host employer pro hac vice. The finding in favor of this, demonstrates the adaptability of common law principle to accommodate changing industrial arrangements. In this case, the evidence demonstrated that the ‘host employer’ had much greater control over the employee responsible for the negligent act as opposed his ‘real’ employer. This decision illustrates that ultimately the determination is one of fact and all circumstances of the employee’s hire will be considered.

It will be interesting to see in the coming years, with the ever changing industrial landscape and in a time where labor hire arrangements continue to be more prevalent, whether New South Wales decisions may result in lower apportionments to employers due to a lack of control over workers.