Is the applicability of the PVYW question limited to an injury sustained during an Interval?
24 PVYW claimed compensation for facial and other injuries sustained whilst she was engaged in sexual activity. The injury occurred because a light fitting was displaced and struck the employee. It was sustained in a room at a motel booked by PVYW's employer to accommodate her overnight stay so that she could visit a regional office the following day to carry out work required by the employer. PVYW's claim was rejected by Comcare. That decision was affirmed by the AAT. A single judge of this Court upheld the employee's appeal. Comcare's appeal was dismissed by a Full Court: Comcare v PVYW (2012) 207 FCR 150. Comcare successfully appealed to the High Court.
25 At each stage of the litigation it was accepted that the Hatzimanolis principle was applicable. The injury was sustained in an overall period of work and there was no issue that the employee was injured during an Interval. Comcare did not submit that Hatzimanolis was incorrect. The issue before the High Court was whether the Full Court had misinterpreted the Hatzimanolis principle. The majority (French CJ, Hayne, Crennan and Kiefel JJ) found that the Full Court had. The dissentients (Bell and Gageler JJ) found that it had not.
26 At [7] the majority expressed the question on appeal as follows:
Although the respondent was injured whilst engaged in an activity, she seeks to maintain the approach of the Full Court - that the relevant inquiry is not whether she had been induced or encouraged by her employer to engage in that activity. It is not disputed that the answer to that inquiry would be "no". On the approach for which the respondent contends, that inquiry does not arise, or is irrelevant, because she meets the condition of the alternative circumstance stated in Hatzimanolis, namely that she was required to be present at the place where she was injured.
27 The majority rejected that Hatzimanolis stood for the proposition that, absent gross misconduct, "an employer [that] requires an employee to be present at a particular place away from their usual place of work will be liable for any injury which the employee suffers whilst present there" (at [9]). If that was so, the majority reasoned, Hatzimanolis would make liability for an injury dependent upon it simply having occurred during an Interval. The majority considered that that result, if correct, would have required reconsideration of Hatzimanolis. But no reconsideration was embarked upon because, as the majority said at [11], Hatzimanolis is not to be understood as requiring that result.
28 At [14] the majority expressly stated that the case did not require reformulation of the Hatzimanolis principle but acknowledged that further explication of the principle, in light of the instant factual situation, may be required.
29 The majority then considered the reasoning in Hatzimanolis and the principle there stated. The Hatzimanolis principle was set out at [31]. At [34], the majority explained what the Court in Hatzimanolis had sought to do. It said:
It is important to identify how Hatzimanolis sought to define the circumstances for, and the extent of, an employer's liability for compensation. Hatzimanolis sought to provide a legal justification for an injury, which occurred between periods of actual work, being regarded as occurring in the course of the employee's employment. It did so by characterising the interval by reference to the employer's inducement or encouragement. The employer's liability in such circumstances depends upon what the employer induced or encouraged the employee to do. Hatzimanolis did not seek to extend the employer's liability beyond that.
(emphasis added)
30 An important passage in the majority's reasoning is at [38]. That is where what I have called the PVYW question was posed, and the manner in which the Hatzimanolis principle is to be applied was explained. Under the heading "Applying the Hatzimanolis principle", the majority said:
The starting point in applying what was said in Hatzimanolis, in order to determine whether an injury was suffered in the course of employment, is the factual finding that an employee suffered injury, but not whilst engaged in actual work. The next inquiry is what the employee was doing when injured. For the principle in Hatzimanolis to apply, the employee must have been either engaged in an activity or present at a place when the injury occurred. The essential inquiry is then: how was the injury brought about? In some cases, the injury will have occurred at and by reference to the place. More commonly, it will have occurred while the employee was engaged in an activity. It is only if and when one of those circumstances is present that the question arising from the Hatzimanolis principle becomes relevant. When an activity was engaged in at the time of injury, the question is: did the employer induce or encourage the employee to engage in that activity? When injury occurs at and by reference to a place, the question is: did the employer induce or encourage the employee to be there? If the answer to the relevant question is affirmative, then the injury will have occurred in the course of employment.
(emphasis added)
31 As is apparent, the order of relevant inquiry is here set out. The "starting point" is a factual finding that the injury was suffered by the employee "not whilst engaged in actual work". The PVYW question is only a relevant inquiry if all anterior inquiries are first satisfied. In the absence of a finding that the injury was sustained during an Interval, the PVYW question does not arise.
32 I recognise that the majority expressed the gateway in different terms ("not whilst engaged in actual work") to that expressed in Hatzimanolis ("during an interval in an overall period of work"). But, read in context, that formulation is merely one of a variety of short-hand expressions the majority used to refer to "an interval or interlude within an overall period or episode of work", for example: "an interval between periods of actual work" (at ([26] and [27]); "between periods of actual work" (at [34]); "not whilst engaged in actual work" (at [38]); "in an interval in a period of work" (at [60]); and "an interval between periods of actual work" (at [61]). In the absence of any contest as to the nature and scope of an interval as expressed in Hatzimanolis and of any indication that the majority was concerned to reformulate that concept, there can be no doubt that in identifying the "starting point" for the application of the Hatzimanolis principle the majority stated that the injury in question must have been sustained during an Interval.
33 Senior counsel for Linfox submitted that, in the first sentence of [38], the majority in PVYW was presenting a "different organizing principle" to that laid down in Hatzimanolis. In Linfox's submission, it was a two-stage test. The first stage focused upon the words "actual work." Linfox said that those words ought to be read, in effect, as "carrying out duties or carrying out what is incidental to duties," such that if an employee was carrying out duties or something incidental thereto, the employee was "engaged in actual work" within the meaning of that phrase in the first sentence of [38]. Linfox's submission was that such an employee was therefore in the course of employment, and it was not necessary to go to the question of inducement or encouragement set out in the last sentence of [38] of PVYW: the PVYW question. The second step, which is reached only if the employee was not "engaged in actual work," is the PVYW question. The submission was put thus by senior counsel for Linfox:
And the way of looking at the facts is to ask - looking at the injury - was that suffered while the employee was engaged in actual work? And if the answer to that is no, it won't be in the course of employment unless you can find this encouragement or inducement in relation to the activity or in relation to the location.
Or, alternatively expressed:
Our proposition is that an injury will be one in the course of employment if the injury occurs while the employee is carrying out the duties of his employment or something incidental to those duties, or assuming that the employee is not doing that, doing neither of those, if an injury occurs while the employee is doing something induced or encouraged by the employer.
I will call that the two-stage submission. Elsewhere in oral submissions, Linfox described the "induce or encourage" test as creating a third connection, category, or possibility, the first being actual duties, the second being something incidental thereto, and the third being something that was induced or encouraged by the employer. Being within any one of those three categories had the effect that an employee was "in the course of employment."
34 I think it is necessary to record that the two-stage submission is not the submission that Linfox put to the AAT. The two-stage submission contemplates at least two aspects. First, the meaning of the words "actual work" in the first sentence of [38] in PVYW is of central importance. Second, one does not get to the "induce or encourage" question unless one first rules out "actual work," meaning "ordinary duties or things incidental thereto." Before the AAT, not only were the words "actual work" not the focus of the Linfox's submissions, the first sentence of [38] - which before me it was submitted contained a "new organizing principle" - was omitted from the quotation from PVYW in Linfox's written submission (at [16]), and was not referred to at all. Further, as Linfox submitted to the AAT, there were not two stages to the analysis, but only one:
17 The majority's proposition in [PVYW] … is not confined to an injury suffered between periods of actual work … .
18 On that basis, the single question to be asked in the present case is:
18.1 Was Mr O'Loughlin doing the very thing that Linfox had encouraged him to do when, and as a result of which, his injury occurred?
18.2 The answer is plainly "no": Linfox did not encourage Mr O'Loughlin to engage in the activity of confronting, and seeking to correct the behaviour of, Mr D and continuing that confrontation; and the injury occurred while he was engaged in that activity.
19. Contrary to the submission advanced on behalf of Mr O'Loughlin, the reasoning of the High Court majority in [PVYW] is not confined to injury "sustained outside of the ordinary working period".
35 There was some confusion in the way that Linfox advanced its case before me. Orally, it put the two-stage submission as outlined above, which necessarily requires determination of whether the employee is engaged in ordinary duties or something incidental thereto (or, as Linfox would have it, "actual work"). But that is not the approach that Linfox invited the AAT to adopt, nor is it the approach that the AAT adopted. That approach was that the only question that was necessary to answer was whether a particular action or presence in a particular location was induced or encouraged. In particular, it was not necessary to address whether the employee was on an interval.
36 I cannot see how the analysis contemplated by the two-stage submission can be conducted without ascertaining whether the employee was on an interval. In particular, if the employee was not on an interval and was instead carrying out actual duties, then (as Linfox submitted orally), inducement and encouragement are irrelevant. One might think, therefore, that the approach put to and accepted by the AAT had no proponents or defenders before me. But, in its written submissions, Linfox said in various places (e.g., at [32.1]) that "[t]he majority in PVYW did not limit the principle in Hatzimanolis to an interlude or interval within an overall period of work," and other words to that effect. That cannot be reconciled with the two-stage submission. Elsewhere in Linfox's written submissions it said things more in keeping with a two-stage submission. So, at [24]: "[w]here an employee suffers injury, 'not whilst engaged in actual work', the question would be what the employee was doing when he or she was injured (because there must be a temporal connection with employment)."
37 It is not clear to me whether Linfox argues that there is one question - as it put to the AAT - or two - as per the two-stage submission. But, ultimately, I am persuaded that each of Linfox's two approaches is a wrong approach. I have already explained why - contra the approach put to and accepted by the AAT - Hatzimanolis and PVYW apply only to injuries suffered during Intervals. Thus, the approach that says it is unnecessary to determine whether an employee was in an Interval is a wrong approach. But, it is necessary for me also to explain why Linfox's two-stage submission is a wrong approach. It has a number of difficulties. The first is that it cannot be reconciled with Hatzimanolis or cases that went before Hatzimanolis. The second, which is related, is that it is a strained (and indeed, in my view, unavailable) reading of the majority's reasons in PVYW.
38 It is important to understand what Hatzimanolis was addressing. It was concerned with when an employee will be "in the course of employment." As stated in Hatzimanolis, "the course of employment" covered not only actual work but also the natural incidents connected with the class of work (at 478). In Whittingham at 29, Dixon J said that in order to be in the course of employment the accident must happen "while the employee is doing something which is part of or is incidental to his service." I interpolate to note that it is this meaning that Linfox's two-stage submission attributed to the phrase "actual work." Another way of phrasing that is as per Fullager J in Kavanagh v the Commonwealth (1960) 103 CLR 547 at 559: "while the worker is engaged in work which he is employed to do or in something incidental to that work."
39 A number of cases have considered the second aspect of that test, that is, what is "something incidental to that work." In Whittingham, Dixon J said (at 29) that that which is incidental to a worker's work depends upon the sufficiency of the connection between the employment and the thing done by the employee, which is a matter of degree, in which time, place and circumstance, as well as practice, must be considered, together with the conditions of the employment. As Stephen J identified in Bill Williams Pty Limited v Williams (1972) 126 CLR 146 at 159, it is a consideration of those factors that determines whether or not a worker has sustained his injury while engaged in something incidental to his work. It is apparent from what was said at 478-9 of Hatzimanolis that the majority was setting down an organizing principle for determining when, in the context of an Interval, an injury was sustained while doing something incidental to employment:
Incidence of service, however, is not a principle the application of which will determine whether the injury was sustained in the course of employment; it is a conclusion. When a tribunal concludes that a worker sustained injury while doing something incidental to his or her employment, it records a result which must have been reached, consciously or unconsciously, by reference to some principle or standard which leads to that result. Furthermore, while the matters to which Dixon J. referred in Whittingham must be examined for the purpose of determining whether an injury was sustained in the course of employment, those matters do not automatically determine that question. Without the assistance of an organizing principle, a tribunal of fact cannot know which of them is or are determinative.
40 The majority went on to identify a number of subsets of the overarching concept of "incidental to employment." It observed (at 479) that Australian courts had almost invariably applied the test formulated by Dixon J in Henderson v the Commissioner of Railways (Western Australia) (1937) 58 CLR 281 when called upon to determine "whether an injury occurring during intervals between work was sustained 'in the course of employment'" (emphasis added). It stated (at 483) that an injury is "more readily seen as occurring in the course of employment when it has been sustained in an interval or interlude occurring within an overall period or episode of work than when it has been sustained in the interval between two discrete periods of work" (emphasis added), and gave examples of the two kinds of interval. In that context, it laid down (at 484) the organizing principle that it had set out to establish: "Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way."
41 Hatzimanolis was thus concerned with quite a limited area. The "course of employment" comprises duties and things incidental thereto. Hatzimanolis was concerned only with the latter. "Things incidental thereto" can include things occurring in intervals between two periods of work and intervals within an overall period of work. Hatzimanolis was only concerned with the latter. Hatzimanolis said only that if the test set out at 484 is fulfilled, then an injury sustained in an interval within an overall period of work will have been sustained during something incidental to the employee's work, and therefore in the course of employment.
42 That exposes the difficulty with the first stage of Linfox's two-stage submission. Linfox reads "actual work" in the first sentence of [38] in PVYW as meaning what Dixon J set out in Whittingham - i.e., duties and things incidental to duties. It says that one does not get to the question of inducement or encouragement until one has ruled out "actual work," that is, ruled out duties and things incidental thereto. But Hatzimanolis, which applied an "inducement or encouragement" test, was concerned precisely with whether something was "incidental thereto." If Linfox is correct and PVYW stands for the principle that one only arrives at "inducement or encouragement" after "incidental thereto" has been ruled out, that is a radical departure from Hatzimanolis and previous authorities. It would raise a number of difficult questions, which Linfox did not answer. As Hatzimanolis is concerned with working out when something is incidental to duties, and requires an "induce or encourage test" to be applied, why is an "induce or encourage" test again applied once "incidental to" has been ruled out? Is Hatzimanolis overruled in so far as it establishes an "induce or encourage" test for working out when something is incidental to duties? If not, is it not the case that - where an interval in an overall episode of work is concerned - Linfox's second step (application of an "induce or encourage" test) will never have any serious work to do? If the answer to the Hatzimanolis "induce or encourage" test is that (for example) an action was encouraged, then the action occurred "in the course of employment," and the second stage is not arrived at. If the answer to the Hatzimanolis test is that the action was not induced or encouraged, then the same answer will inevitably be reached in Linfox's second stage.
43 Indeed, in so far as Linfox did address the effect of its two-stage submission, it seems that the two-stage or three-category formulation would, if anything, add to the ways something done might be in the course of employment. The first two categories (actual duties and things incidental thereto) would include all cases already covered by Hatzimanolis, as senior counsel for Linfox acknowledged. That leaves the "induce or encourage" test - Linfox's second stage or third category. If it is correct that all that is required to fulfil this test is that the employer encouraged the action, then (for example) if the employer encouraged its employee to visit the doctor after working hours and in so visiting the employee was injured, that injury would be in the course of employment. I choose that example deliberately because it shows that Linfox's third category would include encouragements or inducements operating in regard to intervals between two periods of work, and because precisely that example was given in Hatzimanolis (at 483) as being one where the employee would ordinarily not be in the course of employment.
44 This brings me to the second reason why I reject Linfox's two-stage submission. I am not persuaded that the majority in PVYW, under the heading, "Applying the Hatzimanolis principle," would set out to establish a different organizing principle. Still less am I persuaded where the organizing principle thereby established (on Linfox's submission) would constitute a marked departure from earlier-decided cases, and where it would raise (but not answer) a number of questions concerning how one would then treat Hatzimanolis and earlier-decided cases. Especially am I unpersuaded where, as it appears from the judgment in PVYW, no party submitted that a new organizing principle was required and there was no argument on the question. It appears to me that if that was the majority's intent, it would have said so plainly (as in Hatzimanolis). It would have explained what was the shortcoming of the existing organizing principle. It would have explained how it was that the new organizing principle differed from the old. It would have explained how older authorities were thenceforth to be understood. In the event, the majority did none of those things, and in fact it expressly disavowed an intention to reformulate Hatzimanolis (at [14]). At no time did it suggest it was departing from, or expanding upon, what had been laid down in Hatzimanolis, and it returned in its conclusion to what Hatzimanolis had decided and how it was that that disposed of the case before the Court.
45 It follows that I do not accept that PVYW contains any statement of a new organizing principle. I do not accept that "not whilst engaged in actual work" in the first sentence of [38] in PVYW is to be read as meaning "not whilst engaged in ordinary duties or something incidental thereto." Rather, as I have said, I consider that the phrase was another way of saying, "in an interval in an overall period of work." I do not accept that the "induce or encourage" formulation in the last sentence of [38] in PVYW establishes a second stage or a third category. Rather, I consider that (as in Hatzimanolis) it describes when an injury sustained in an interval in an overall period of work will be one sustained in the course of employment. I consider that the "organizing principle" remains as set out in Hatzimanolis (as clarified in PVYW).
46 Lastly on this subject, Comcare urged the Court to not follow the judgment of Siopis J in Lee v Transpacific Industries Pty Ltd (2013) 136 ALD 652. Lee was injured whilst on a journey to visit a doctor. The AAT held that Lee's employer had encouraged and induced him to attend the appointment with the doctor but also found that Lee was injured in an interval between two distinct periods of work. Applying Hatzimanolis and the observations of Cooper J in Gregory v Comcare Australia (1997) 72 FCR 196 at 201-202 as to the applicability of the Hatzimanolis principle to an injury occurring between two distinct periods of work, the AAT determined that the injury had not occurred in the course of employment because it was not satisfied that a temporal connection had been established between the journey undertaken by Lee and his employment by his employer.
47 Subsequent to the AAT's decision, the judgment in PVYW was delivered and Siopis J took it into account on the appeal. His Honour at [41] held that the AAT had failed to embark upon the inquiry identified at [38] of PVYW. That was so, Siopis J reasoned, because the AAT had been "distracted by the question of the characterisation of the 'interval' during which the injury occurred". His Honour's approach at [41]-[47] seems to be based on the proposition that, post-PVYW, the Hatzimanolis principle is also applicable to an injury occurring in an interval between two distinct periods of work. Comcare contested the correctness of that view and urged me to conclude that it was clearly wrong and should not be followed. However, the facts before me do not concern an injury occurring in an interval between two distinct periods of work or the applicability of the Hatzimanolis principle to an interval of that kind. The correctness of Lee does not arise. Neither Linfox nor Mr O'Loughlin relied upon it. In the circumstances, whilst there is room for thinking that Siopis J took a different view of the intended meaning of the first sentence of [38] of PVYW to that which I prefer, I need not and ought not consider the correctness of Lee.