Workers Compensation - Employment risks "arising out of and/or in the course of employment" - Arising in the course of employment - Whether a depressive illness arose in the course of employment notwithstanding that injury deemed to have occurred after employment terminated.

Hockey v Yelland (1984 - [1984] HCA 72; 1985) 157 CLR 124; South Maitland Railways Pty Ltd v James [1943] HCA 5; (1943) 67 CLR 496; Kavanagh v The Commonwealth [1960] HCA 25; (1960) 103 CLR 547; Weston v Great Boulder Gold Mines Ltd [1964] HCA 59; (1964) 112 CLR 30; Bill Williams Pty Ltd v Williams [1972] HCA 23; (1972) 126 CLR 146; Pasminco Australia Ltd v Fairchild 57/1991, referred to.

Workers Rehabilitation and Compensation Act 1988 (Tas), ss3(5) and 25(1).

Judgment Number: [1999] TASSC 47

STEVEN JOHN SHERRIFF v COMMUNITY PRIDE INCORPORATED

1 This is a worker's appeal against the dismissal of his claim for compensation under the Workers Rehabilitation and Compensation Act 1988 ("the Act") by reason of the fact that the Tribunal constituted thereunder held that, his injury not having occurred when he was in the employment of the first named respondent, it could not be said to have arisen "in the course of his employment".

2 Briefly, the facts were that in November 1994, the first named respondent was a community organisation with the goal of employing long term unemployed people so as to equip them with working skills and get them back into the workforce. These people had been unemployed for periods ranging from five to fifteen years. The worker was employed as a supervisor. He had the task of hiring, firing, buying materials and tools, estimating jobs, pricing work, spreading work and creating work. Several programmes were very successful and the number of employees under his supervision grew. However, not all of them were co-operative and by mid-1996 those under his supervision numbered about 44 long term unemployed, many of whom were cunning in their avoidance of effective work and some threatened him with physical violence. The problems he encountered were described by the learned Commissioner in these terms:

"He was asked to describe what problems in particular he had with the workers. He described them as deliberately breaking machinery, theft and doing this to avoid work. Later in 1996 he said that a number of these people threatened him with physical violence. He said he accepted it as part of the people he was dealing with. He also said that on occasions marijuana was smoked on the job and that when he went to dismiss the persons that were smoking he was threatened.

He said that if these people had been tradesmen he would have had no trouble supervising them but they were 'like grade 2 kids'. They were professionals and knew how to beat the system. In about September 1996 he described his condition as wound up very tight and took off the September school holidays."

3 At the beginning of October 1996, an incident at work with an unco-operative employee so angered him that he nearly assaulted that employee and the matter was discussed with the executive committee of the first named respondent. Concern was expressed about his health and he said he felt "wound up like a spring about to burst". He took four weeks' leave due to him and in November 1996 voluntarily left his employment. He went to Perth, Western Australia, and undertook "tarping" work, which involved dragging huge tarpaulins to cover work. He stayed there six months and returned to Tasmania in July 1997 when he saw a solicitor and thereafter a doctor who gave him a certificate dated 25 July 1997 certifying that he was unfit for work for a period of one month from that date due to a condition he described as "stress", which was stated to be caused by work-related stress, and certifying that the condition was consistent with the stated cause. He was at that time unemployed by anyone.

4 Evidence was given to the Commissioner of complaints made in October 1996 of symptoms of sleep deprivation, giddiness, concentration and memory loss and irritability. Psychiatrist Dr Ian Sale examined the worker in January 1998 and concluded when the worker saw him that although he was in no distress at that time, on the history he gave him, the worker had suffered a major depressive illness. The learned Commissioner made a finding that the worker suffered a disease "being a condition of gradual development which culminated in him becoming incapacitated on 25 July 1997", the day of the medical certificate referred to above. He determined this as the date upon which the worker suffered the injury by reason of the Act, s3(5)(b) which provides:

(5) For the purposes of this Act, where a worker suffers an injury that is a disease, that injury shall be deemed to have occurred -

(a) on the day on which the worker became totally or partially incapacitated by reason of that injury; or

(b) if a day cannot be ascertained under paragraph (a), on the day on which a medical practitioner has certified that the worker was first incapacitated by reason of that injury."

5 Statutory warrant for the payment of workers compensation is to be found in s25(1), which provides:

(a) a worker suffers an injury, not being a disease, arising out of and in the course of his employment; or

(b) a worker suffers an injury, which is a disease, arising out of and in the course of his employment and to which his employment contributed to a substantial degree -

his employer is, except as is otherwise provided by this Act, liable to pay compensation in accordance with this Act -

(d) if the injury results in the death of the worker, to the persons who are the worker's dependants at the date of his death or who would, but for any incapacity due to the injury, have been his dependants."

6 The learned Commissioner specifically found that the worker's employment with the first named respondent in 1996 contributed substantially to the development of the symptoms which eventually led to the disablement that he suffered. The requirement that the worker's employment contributed to a substantial degree to the injury, which is a disease, is accordingly met. The learned Commissioner was not, however, prepared to make a finding that the injury arose in the course of that employment. His hesitation arose from the dictum of Gibbs CJ in Hockey v Yelland (1984 - [1984] HCA 72; 1985) 157 CLR 124 at 132 - 133:

"The meaning of the expression 'arising out of or in the course of employment' is well understood. The words 'out of' express causality, and require that the injury had its origin in the employment, but the words 'in the course of' require that the injury must occur 'whilst the worker is doing something which is part of his service to his employer or master or incidental to the employment, or, in other words, whether the workman was at the time of the injury about his own business or that of his master': South Maitland Railways Pty Ltd v James [1943] HCA 5; (1943) 67 CLR 496, at p 502. That case was decided when the phrase was conjunctive and required two conditions to be fulfilled, but the meaning of the words has not altered now that in more liberal legislation the expression is disjunctive: see Kavanagh v The Commonwealth [1960] HCA 25; (1960) 103 CLR 547, especially at pp 556 - 557, 558 - 559, 576; The Commonwealth v Oliver [1962] HCA 38; (1962) 107 CLR 353, at pp 359, 362, 366; Weston v Great Boulder Gold Mines Ltd [1964] HCA 59; (1964) 112 CLR 30; and Bill Williams Pty Ltd v Williams [1972] HCA 23; (1972) 126 CLR 146, at pp 154 - 155 and 158."

7 Unfortunately, the liberal legislation referred to in that case has not been followed in Tasmania and the expression remains conjunctive. In the first case cited by Gibbs CJ, namely South Maitland Railways Pty Ltd v James (supra), his Honour was quoting from the judgment of Starke J. The full quotation is:

"The words 'out of' require that the injury had its origin in the employment, while the words 'in the course of' are not equivalent to 'during'; the injury must occur in the course of the employment, that is, whilst the worker is doing something which is part of his service to his employer or master or incidental to the employment, or, in other words, whether the workman was at the time of the injury about his own business or that of his master."

That was not a case of injury through disease, but one caused by an unlawful and fatal assault by a fellow worker. Mere contemporaneity was held insufficient for the injury to be said to have arisen in the course of the worker's employment, but no question arose there as to any necessity for contemporaneity between the occurrence of the injury and its arising in the course of employment. Had the injury not been inflicted at work with a rifle, but by the despatch from the place of work of a parcel bomb or some other form of delayed injury, the legal result may still have been the same.

8 Kavanagh's case (supra) determined that where the legislation used the disjunctive expression, there was no necessity to prove any causal connection between the injury and the employment or its incidents. Thus an injury by accident in the form of a sudden fit of unexplained vomiting which resulted in the rupture of the worker's oesophagus was held compensable because, it having occurred while the performance of the worker's duties was interrupted only by a visit to the convenience and immediately before their resumption, the accident could be said to have occurred in the course of his employment. Dixon CJ at 556 said:

"Few, if any, expressions had received so much judicial consideration and in so many jurisdictions as had the words 'personal injury by accident arising out of and in the course of the employment'. Repeatedly the contrast had been made between the effect of the words 'out of' and the effect of the words 'in the course of'. Whatever language was chosen to institute the contrast the first expression was treated as requiring a causal connexion between the employment or its incidents and the second as requiring that the pursuit of the employment should be an accompanying condition. I have seen nothing to suggest that within the expression 'in the course of the employment' there had been discovered any element of causal relation with the employment and its incidents. To prescribe that element was considered to be the work of the words 'arising out of'. It was thus natural for this Court to say after the word 'or' had been substituted for 'and' in the Western Australian provision that the result of English authority was 'to show that the words 'arising in the course of the employment' describe a condition which is satisfied if the accident happens while the workman is doing something in the exercise of his functions although it is no more than an adjunct to or an incident of his service'. That was said in Pearson v Fremantle Harbour Trust [1929] HCA 19; (1929) 42 CLR 320, at pp 329, 330, where there is some citation of authority."

Once again, with respect however, it was unnecessary to decide whether the words "arising in the course of the employment" describe a condition which can only be satisfied if the accident (or injury) happens while the worker is doing something in the exercise of his functions. So, too, the facts of Commonwealth v Oliver (supra) where an injury occurred to a worker playing cricket at his place of employment during a lunch break did not raise this issue. The same can be said of Weston v Great Boulder Gold Mines Ltd (supra) which was an injury caused by an assault upon a worker performing his duties at his place of work by an intruder with motives unconnected with the worker's employment; and Bill Williams Pty Ltd v Williams (supra) where a finding that an injury inflicted upon a worker by someone with a private grievance as the worker ran from his place of work was not sustained in the course of his employment was held to be open to the Tribunal of fact in that case.

9 The requirement that an injury should arise out of and in the course of the worker's employment, though less liberal than other regimes, causes little difficulty of interpretation in respect of injuries which occur at a clearly identifiable point of time, as frequently happens in industrial mishaps. Greater difficulty arises in respect of injuries which are a disease. Most compensable diseases are of gradual onset and they progress to the stage where compensation is payable. The entitlement to compensation only arises when the worker is wholly or partially incapacitated by the disease (Pasminco Metals - EZ v Kaitinis (1993) 2 Tas R 387). A reading of s25(1) in conjunction with s3(5), treating the dicta of the High Court as laying down that only where the injury is suffered while the worker is doing something in the exercise of his functions for his employer, would mean that if disease is suffered by activities undertaken in the course of his employment but progresses naturally to a state of incapacity subsequently to the termination of his employment, the worker could obtain no entitlement to workers compensation. This is because the injury is deemed to have occurred on the day on which he is or is deemed by a statutory fiction to have become incapacitated for work. The fiction is contained in s3(5) which I have already set out.

10 In the present case, the worker's disease clearly arose out of his employment and in the course of undertaking the duties of his employment. It was found that his employment contributed to it to a substantial degree. It only became compensable when it reached the stage of being an injury and that stage was only reached when the worker became incapacitated, an event which was deemed to have occurred when the doctor certified him incapacitated seven months after he left the employment in question.

11 Counsel for the worker submits that Parliament could not have intended that a worker in this position could be deprived of any entitlement to compensation because the injury, although undoubtedly caused by it, was deemed to have occurred after the employment was completed. He points to a number of sections in the Act which would serve no purpose at all if that is the case. Section 25A provides:

"25A - (1) Subject to section 25(2), where -

(a) a mining employee is suffering from silicosis, carbon-monoxide poisoning, pneumoconiosis, cadmium poisoning, fibrosis of the lungs, ankylostomiasis, lead poisoning and its results, nystagmus, arsenic poisoning or contact dermatitis caused by work; and

(b) he or she has been engaged continuously in mining operations in Tasmania for a period of 2 years immediately before ceasing to be employed as a mining employee and is incapacitated from continuing to work as such

the disease is, in the absence of evidence to the contrary, to be taken to have arisen out of and in the course of his or her employment and that employment is taken to have contributed to a substantial degree to that disease.

(2) For the purposes of subsection (1), a mining employee is taken to have been engaged continuously in mining operations in this State for the period mentioned in that subsection, notwithstanding that he or she may, at any time after that period commenced, have been absent from his or her employment for any periods not exceeding 3 months in the aggregate."

This section facilitates the proof of a number of matters essential to a claim for compensation, but it does not give an entitlement to compensation. That entitlement is to be found in s25(1). The worker must prove all the matters specified in that subsection. If one of the matters to be proved is that at the time the injury occurred (that is, when the disease incapacitated him) that injury not only arose out of but also arose contemporaneously in the course of his employment, a mining employee whose employment had ceased by the time any disease mentioned in s25A had incapacitated him could not receive compensation therefor, notwithstanding the deeming provisions of s25A. The mere suffering of such a disease deemed to have arisen out of and in the course of his employment which is taken to have contributed to a substantial degree to that disease, confers no right at all. It is the suffering of the injury which has those characteristics which create the entitlement and that in turn cannot come into existence until incapacity occurs.

12 The same comment can be made about s26(1), which provides:

"26 (1) Subject to section 25 (2), where a worker suffers a disease of a kind referred to in column 1 of Schedule 4 and has been employed in work of a type referred to in column 2 of that Schedule opposite that disease, it shall be presumed, in the absence of evidence to the contrary, that the disease arose out of and in the course of his employment and that his employment contributed to a substantial degree to that disease."

The diseases in question are frequently of slow progression. A requirement that sufferers of such diseases must, at the time the disease has progressed to the state of producing incapacity and hence amount to injuries, demonstrate that such injuries arose contemporaneously in the course of their employment would deny a remedy to any who, by then, had changed employment and who, prior to incapacity, were engaging in work which in no way contributed to the progress of the disease. The presumption in the section would not avail them at all.

13 Section 32(2A) demonstrates the point further. It provides:

(2A) For the purposes of this Part, where a mining employee

(a) suffers from silicosis, pneumoconiosis or fibrosis of the lungs within 12 months after ceasing to be a mining employee; or

(b) suffers from silicosis within 5 years after ceasing to be a mining employee, and since ceasing to be engaged in mining operations he or she has not engaged in any occupation in which he or she would be exposed to contamination by industrial dust; or

(c) suffers from lead poisoning or cadmium poisoning within 3 months after ceasing to be a mining employee; or

(d) suffers from lead poisoning within 6 months after ceasing to be a mining employee, and since ceasing to be engaged in mining operations he or she has not exposed himself or herself to contamination by lead in any form; or

(e) suffers from dermatitis caused by work within 2 months after ceasing to be a mining employee

a claim for compensation is to be made no later than 6 months after the relevant period specified in this subsection or, where the disease results in the death of the mining employee, within 6 months after the date of the death."

Such a section does not confer a right to compensation. It merely relieves the worker of some of the obligations in respect of giving notice, a failure to observe which might otherwise disentitle him. It clearly contemplates that there may be mining employees whose entitlement to compensation only arises after they have ceased to be a mining employee. If the respondents' contention is correct, such employees could not suffer an injury which was a disease which arose in the course of their employment.

14 While in many cases of conventional injuries the requirement that the injury arose in the course of employment will be satisfied by proof of its occurrence during the performance of the duties of the worker's employment, that will not be possible in many cases of disease. The use of the phrase "arising out of and in the course of his employment", although well understood in cases of injury by accident, was totally inappropriate to cases of progressive disease. There is no reason to suppose that Parliament intended that workers who suffered a disease which incapacitated them before their employment terminated should receive compensation provided their disease arose out of and in the course of activities necessary or incidental to their employment, while those who, though suffering a disease arising in exactly the same way should not be so entitled merely because they had ceased to work for that employer. What surely was contemplated was that the disease arose in circumstances where the worker was carrying out his functions on behalf of his employer. The relevant phrase is not "injury which is a disease arising out of and occurring in the course of his employment". The paragraph requires that injury which is a disease, to be compensable, must arise out of the employment and in the performance of activities in the course of the employment. The disease is only compensable, however, when it has reached the stage of producing incapacity.

15 Though the injury is deemed to occur on the date of incapacity (often ascertained by statutory fiction), I am of the opinion that s25(1)(b) requires that the injury, that is, the morbid condition amounting to a disease which is then producing incapacity, should arise out of and in the course of employment in the sense of having its origin in the performance of activities in the service of his employer or which are incidental to his employment. Both concepts are subsumed by the additionally expressed requirement that the morbid condition was one to which his employment contributed to a substantial degree.

16 This is also consistent with the provisions of s78, which provides:

"78 (1) Where an injury suffered by a worker is of such a nature as to be contracted by a gradual process, compensation is payable by

(a) the employer in whose employment the worker was when the injury occurred, if the injury was due to the nature of his employment with that employer; or

(b) the employer who last employed the worker if the nature of the employment was likely to have given rise to that injury, in any other case;

(2) An employer who, at any time during the period of 3 years immediately preceding the day on which an injury referred to in subsection (1) occurred to a worker, employed the worker in any employment to the nature of which the injury was due shall make to the employer referred to in that subsection such contribution as is agreed between the employers.

(3) Where the employers referred to in subsection (2) cannot agree as to the amount of contribution, any of the employers may refer the matter to the Tribunal for a determination as to the amount of contribution."

This section clearly provides for a contribution to be made by an employer who was not the worker's employer at the time the injury occurs.

17 In my view, the learned Commissioner was in error in concluding that the worker had failed to establish that the injury arose in the course of his employment because by the time it occurred that employment had come to an end. I do not accept the arguments of the respondents that the provisions to which I have referred, other than s25(1), are special provisions dealing with and giving entitlements to compensation for specific diseases from the list of which stress has been deliberately excluded by Parliament. They do not confer any entitlement to compensation, but merely facilitate proof of some of the matters upon which entitlement depends or relieve the worker from the consequences of failing to give notice which is otherwise required. I am also unpersuaded that the preparatory words of s25(1) "If in any employment" impose a temporal limit which makes entitlement dependent upon the injury happening while the worker is still employed by the employer. It is more concerned with the existence of the relationship of employer and employee by virtue of which an injury suffered by the latter becomes compensable on the satisfaction of the remaining conditions in the subsection. An interpretation that imposes such a temporal limitation is inconsistent with the sections I have mentioned which recognise a right in workers to claim compensation for diseases suffered after the termination of their employment.

18 For the purposes of compensation, an injury which is a disease is the morbid condition existing at the time of incapacity. In Pasminco Australia Ltd v Fairchild 57/1991, the disease was a bout of tinea attended by symptoms of such severity as to incapacitate the worker for work. It mattered not that the predisposing condition of tinea may have been contracted in circumstances wholly divorced from his employment. Whilst engaged in his employment with the appellant in that case, the worker was required to work in wet conditions which caused his feet to sweat, aggravating the tinea to a state in which he was wholly incapacitated for work. The morbid condition from which he was then suffering was found to have arisen out of and in the course of his employment and to have been contributed to in a substantial degree by his employment. In the present case, the learned Commissioner found that the worker suffered a major depressive illness which was caused by his employment with the first named respondent and that such employment contributed to a substantial degree to that injury. No other cause for his stress than the performance of the duties of his employment was suggested. In those circumstances I think the only conclusion is that his ultimate compensable disease (or injury) arose in the course of his employment, notwithstanding that this phrase in the context of an injury by accident, as opposed to disease, normally connotes contemporaniety between the performance of the incidence of a worker's employment and the suffering of such an injury.

19 The appeal will be allowed and the matter remitted to the Tribunal for final disposition in accordance with this ruling.