Nervous shock and the 2012 amendments to the workers compensation legislation

21 November 2016

The NSW Court of Appeal explains the effects of the 2012 amendments to the Workers Compensation Act 1987 in relation to claims for damages by non-workers for nervous shock injuries in WorkPac Pty Ltd v Thearle [2016] NSWCA 303.

Background facts

Ms Thearle is the mother of a coal miner who was injured at his workplace, the Boggabri Open Cut Colliery (Colliery), where he was employed by WorkPac Pty Ltd (WorkPac). The Colliery was operated by Downer EDI Mining Pty Ltd (Downer).

Ms Thearle commenced proceedings in the District Court against WorkPac and Downer claiming damages for nervous shock, which she alleges she suffered as a result of becoming aware of the injury to her son.

Procedural history

By notice of motion, WorkPac sought an order that Ms Thearle’s claim be summarily dismissed or struck out on the basis that her claim was precluded by s151AD of the Workers Compensation Act 1987 Act (the 1987 Act).

Judge McLoughlin SC dismissed WorkPac’s motion. WorkPac appealed that decision to the Court of Appeal.

Legislative framework

Section 151P, which was repealed by the 2012 amendments, relevantly provided:

‘151P Damages for psychological or psychiatric injury

No damages for psychological or psychiatric injury are to be awarded in respect of an injury except in favour of:

  1. The injured worker; or
  2. A parent, spouse, brother, sister or child of the injured or deceased person who, as a consequence of the injury to the injured person or the death of the deceased person, has suffered a demonstrable psychological or psychiatric illness and not merely a normal emotional or cultural grief reaction.’

Section 151AD, which was inserted by the 2012 amendments, relevantly reads:

‘151AD  No damages for nervous shock injury to non-workers
  1. No damages for pure mental harm may be awarded against an employer liable to pay compensation under this Act in respect of the death of or injury to a worker if the pure mental harm arises wholly or partly from mental or nervous shock in connection with the death of or injury to the worker unless the pure mental harm is a work injury (that is, an injury to the worker or to another worker).

Note. This section prevents a claim for damages for nervous shock when the nervous shock is not a work injury. It prevents claims for damages by relatives of an injured or deceased worker because their injuries are not work injuries.’

Schedule 6, Division 3, Clause 26, which was also inserted by the 2012 amendments, relevantly states:

’26  Coal miners
  1. The amendments made by the 2012 amending Act do not apply to or in respect of an injury received by a coal miner (before or after the commencement of this clause), and the Workers Compensation Acts [i.e. the 1987 Act and the 1998 Act] (and the regulations under those Acts) apply to and in respect of such an injury as if those amendments had not been enacted.’
Decision of McLoughlin DCJ in the District Court

In the District Court, it was argued by WorkPac that Ms Thearle’s claim was precluded by s151AD of the 1987 Act as she was not a coal miner herself. His Honour ultimately did not determine the issue raised on the motion as he considered that the question was more appropriately left for determination at the trial.

Grounds of Appeal and submissions

The primary issue on appeal was as to the construction of Clause 26, with the arguments by each party focussed on the operation of the phrase ‘to or in respect of an injury received by a coal miner’.

WorkPac contended that Ms Thearle’s claim was based upon an injury independent from her son’s injury, and which was not an injury ‘to or in respect of… a coal miner’.  Ms Thearle submitted that her injury should be considered as being ‘in respect of’ her son’s injury, within the meaning of Clause 26, and, hence, her claim was unaffected by section 151AD of the 1987 Act.

Decision

After setting out some observations and on the law in relation to statutory construction in the context of the workers compensation legislation, McColl JA considered that the 2012 amendments were designed to remove the anomaly Section 151P created and did so entirely in relation to workers other than coal miners (and, in the case of Sch 6, Pt 19H, cl 25, police officers, paramedics or firefighters). Her Honour stated:

‘I can discern no intention on the part of the legislature, by means of cl 26, to preserve the operation of s151P(b) in favour of persons who are strangers to the employment relationship.’

McColl JA then considered Clause 26 and the application of Section 151AD of the 1987 Act, finding that while an injury to a coal miner was a necessary pre-condition for a nervous shock claim by a non-worker, it was an injury independent (rather than “in respect”) of the coal miner’s injury.  According to Her Honour, this did not mean the phrase “in respect of” was otiose; it was designed to do no more than extend the ambit of Clause 26 to derivative actions, such as compensation to relatives claims in respect of the death of a coal miner.

In the result, Ms Thearle’s claim for nervous shock was untenable and the Court of Appeal set aside the orders of McLoughlin DCJ and ordered that Thearle’s proceedings against WorkPac be dismissed with costs.

Lessons

The decision of the Court of Appeal clarifies the effects of the 2012 amendments on the 1987 Act.

Following on from the decision, it is now clear that only workers who are coal miners may make a claim for damages for nervous shock.

As McColl JA also noted in passing, that similar considerations apply in relation to police officers, paramedics and firefighters.

The decision does not affect other derivative claims, such as claims for compensation to relatives, which may still be brought.

This article was written by Ivan Medak, Partner and John Fennel, Solicitor.

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