Employer in breach of duty of care avoids hefty damages claim

A security guard has lost a million dollar damages claim against his employer, even though they breached their non-delegable duty of care.

Employer in breach of duty of care avoids hefty damages claim
A security guard who injured himself at work while moving a heavy trolley has lost a million dollar damages claim against his employer and club occupier.

Despite a first instance decision awarding the plaintiff $1,162,779.80 in damages, the New South Wales Court of Appeal found that while his employer had breached its non-delegable duty of care by failing to inspect his work environment, the breach did not cause his accident.

The plaintiff Ross Gazis was working at South Sydney Juniors Rugby League Club during the early morning cash clearance round, where the club would empty its poker machines and count the money.

Gazis was supplied as labour hire to the club’s security contractor Sermacs by MPS as an armed guard and his role was to stand guard outside of the ‘soft room’ where the money from the poker machines was counted.

Standard procedure for the cash clearance included places boxes of money from the poker machines onto large trolleys, to be transported to the money counting room.

On the morning of 19 May 2006, Gazis suffered injuries while attempting to pull a trolley by grabbing hold of its handle with one hand and pulling to move it away from the wall.

While doing so, he lost his grip and fell backwards landing on a smaller trolley behind him.

Although he had continued to work for a further two weeks in immense pain, thereafter the court heard he was unable to keep working due to debilitating back pain caused by his injuries.

Gazis commenced proceedings against the club (occupier), Sermacs (host) and MPS (employer) seeking damages for personal injuries.

In the first instance, the trial judge found that although the club did not have any knowledge that the plaintiff had been moving trolleys, the club’s management knew its employees, including those working in the soft room, regularly moved trolleys and thus the club was deemed to have knowledge that the plaintiff had been moving the trolleys.

In a similar case, Thomson v Woolworths, his Honour found that the club placed the trolley in the plaintiff’s work location and ought to have known that as a result the plaintiff was likely to attempt to move it. By permitting the plaintiff to regularly move these trolleys, the club was effectively sanctioning a system of work that imposed a risk for workers in the area.

It was found that the plaintiff’s employer MPS had a non-delegable duty of care, which extended to checking the system of work which the plaintiff was required to undertake. However, this was not done by MPS.

Therefore, the trial judge awarded the plaintiff the sum of $1,162,779.80 and apportioned liability 75% to the club liable and 25% to MPS, while finding that Sermacs had no liability.

However, MPS and Club appealed against this decision, arguing that Sermacs as the contractor should be liable to contribute and/or the assessment of damages was in error. Sermac’s insurer HCC also challenged the court’s decision that it was not able to rely upon the exclusion by way of notice of contention.

Special Counsel Brooke Jacobs from HopgoodGanim says it is necessary for courts to consider the scope of duty owed by employer and occupier and for workers to prove that any breach of duty was causative of harm.

“Relevantly, the evidence demonstrated that moving the trolley did not form part of the plaintiff’s employment duties and MPS, Sermacs and the Club were unaware that the plaintiff engaged in moving the trolley,” Jacobs says.

Interestingly, the trial judge did not accept that Sermacs acquired the services of the plaintiff from MPS under a contract of labour hire, she says.

“This was relevant to Sermacs’ insurer HCC, which sought to rely on an exclusion in its policy with respect to claims for injury ‘to employees of subcontractors arising out of or in the course of his/her employment in your (Sermacs’) business.’,” Jacobs says.

The New South Wales Court of Appeal upheld the appeal by MPS and the Club as it related to primary liability.

While Justice Basten found that the arrangement between MPS and Sermacs was clearly a contract for labour hire, HCC was not entitled to rely upon the policy exclusion.

“In relation to the Club, whilst the court accepted that the Club owed a duty, it found that the exercise of reasonable care did not require the Club to direct the plaintiff to desist in moving the laden trolley in circumstances where it was unaware that the plaintiff was doing so and any risks posed were obvious, but remote,” Jacobs says.

The court accepted that MPS, as Gazis’s employer, owed a non-delegable duty of care and was in breach of it by failing to inspect his work environment.

“However, the court held that the breach was not causative of the accident, because even on reasonable inspection by the employer, any risk posed by the trolley would not have been identified,” Jacobs says.

Key take away points
  • Employers owe a non-delegable duty of care to workers deployed to work at sites controlled by others
  • For a claim to succeed against an employer, a breach of its non-delegable duty (for instance, for failing to inspect the workplace) must cause the harm
  • The scope of an occupier’s duty is lesser and the courts will look to what the occupier knew or ought to have known about the risk that manifested and caused the harm
  • Courts continue to make narrow distinctions to avoid giving effect to insurance exclusions – in this case, it distinguished between an employee provided under a contract of labour hire and a subcontractor’s employee
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