A new frontier: Employers and insurers exposure for workers compensation claims as a result of COVID-19

22 April 2020

As the COVID-19 infection rate continues to grow, businesses and employers have taken important measures to minimise the spread of COVID-19 by allowing workers and employees to work from home. However, there are still a large number of health workers (and other workers) on the frontline who cannot avoid potential exposure to the virus, and this creates a significant risk for employers and insurers.

The need to respond to the virus has shone a light on workplace safety issues and raised questions of whether workers who contract COVID-19 through their work, or who suffer an injury while working at home, are entitled to compensation under the relevant workers compensation scheme.

The ACT is somewhat unique in that a large proportion of its workers (including those employed by the Commonwealth government, the ACT government, and the Australian National University) are covered by the Safety, Compensation and Rehabilitation Act 1988 (Cth) (SRC Act) while others (in the private sector) are covered by the Workers Compensation Act 1951 (ACT) (the ACT WC Act). The principles affecting the assessment of whether a contraction of COVID-19 (or the suffering of a related injury) is compensable is similar under both schemes.

Under the SRC Act, a worker will be entitled to compensation if he or she has suffered a physical or mental injury arising out of or in the course of employment. The definition of injury includes a disease and, for a disease, employment must have made a significant contribution. Any psychological disease will not be compensable if it arose as a result of reasonable administrative action undertaken in a reasonable manner.

Under the ACT WC Act, an employer is liable to pay compensation to a worker who suffers injury arising out of, or in the course of, employment. An injury means a physical or mental injury (including stress), and includes the aggravation, acceleration or recurrence of a pre-existing injury. Like the SRC Act, an injury includes a disease, however, under the ACT WC Act, work must be a substantial contributing factor.

Claims related to COVID-19

COVID-19 is likely to be found to be a disease such that it is a compensable injury if the workers employment has been a substantial contributing factor (under the ACT WC Act) or employment has made a significant contribution (under the SRC Act). Some cases may be more apparent than others, for example a nurse who was exposed to patients sick with COVID-19 who then contracts the virus.

Determining the exact date and time that a worker contract the virus could be challenging. The worker could have been exposed to COVID-19 both inside and outside of the workplace. Consideration of the worker’s employment duties may also be relevant to assessing the likelihood of contracting the virus at work. An obvious issue will be whether the worker has recently returned from an overseas holiday.

Injury whilst working from home

The lack of boundaries between a worker’s day-to-day routine and their work duties could pose a challenge for insurers in determining whether an injury was sustained in the course of the worker’s employment. An employer has little control over whether a worker’s workstation is set up in accordance with ergonomic principles – but best practice guides are easily accessible, and we can assist identify the most appropriate information to pass on to workers.

Recent cases show that workers are likely to be entitled to compensation for the same types of incidents that would be covered if the worker was working in the workplace, including injuries sustained during lunch or tea breaks. However, under the ACT WC Act, journey claims do not apply for travel between home and work for someone working from home, unless the injury occurred while the worker is travelling from home for the purposes of work (there is no allowance for journey claims under the SRC Act).

Concerns have also been raised about the deterioration in the mental state of workers working from home as a result of prolonged isolation. Insurers could expect to see an increase in claims for psychological injuries in the near future. Insurers should work with employers to make sure they have mechanisms in place to address this risk (such as regular check-ins with workers).

Takeaway points

As at 31 March 2020, WorkSafe ACT had not yet been notified of any claims related to COVID-19. However, as the COVID-19 pandemic continues, with more people having to work from home and health workers having to treat more and more sick people, there could be a rise in workers compensation claims.
Claims arising from this pandemic could test the boundaries and threshold of the workers compensation legislation. In the meantime, as with all claims, each claim should be considered on its merits and based on factual and medical evidence.

By Andrew Allan, Partner, Angel Li, Senior Associate and Lisa Gooneratne, Special Counsel.

Lisa Gooneratne

Special Counsel | Canberra

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