COVID-19 contracted in the course of employment - Sara v G & S Sara Pty Ltd [2021]

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By Louise Cantrill, Partner and Cassandra McAlary, Lawyer

The case of Sara v G & S Sara Pty Ltd [2021] NSWPIC 286 (decided on 10 August 2021) confirms that employers can be held liable for employees who contract COVID-19 during the course of their employment. As such, the case is likely to add to employers’ concerns over how to manage the risk of COVID-19 and vaccination requirements for employees.

Proceedings

In early July 2020 Mr Georges Sara (the deceased) travelled from Sydney to New York via San Francisco for business. On 23 July 2020, Mr Sara was admitted to a hospital in New York and was diagnosed with COVID-19. When Mr Sara died on 21 November 2020, it was accepted that his death was due to acute respiratory complications from COVID-19.

The applicant, Sayd Sara, was the widow and executor of Mr Sara’s estate. G & S Sara Pty Ltd (the respondent), was one of a number of related corporations that provided dental technician products and services in both Australia and the United States, which also included:

  1. Stoneglass Dental Laboratory Pty Ltd (Stoneglass Australia);
  2. Stoneglass US (Stoneglass United States).

Mr Sara was a director of both the respondent and Stoneglass Australia, as well as Managing Director and President of Stoneglass United States. The respondent paid employees’ salaries and wages, including those of Mr Sara, for which it invoiced Stoneglass Australia. Stoneglass United States operated solely in the United States, deriving the majority of its earnings from US universities.

Key Issue for the Commission

The Commission accepted that it was more than likely Mr Sara contracted COVID-19 during his travel to New York from Sydney (including transit in San Francisco) for the following reasons:

  1. the duration of travel exposed Mr Sara to a substantial amount of people in a quickly spreading outbreak;
  2. Mr Sara’s unwillingness to wear masks; and
  3. the medical evidence as to the likely incubation period.

Having accepted that Mr Sara contracted his illness while travelling on business, the primary issue for the Commission was to determine was whether Mr Sara was travelling in the course of his employment with the respondent when he contracted the COVID-19 virus. The respondent’s main argument was that at the relevant time Mr Sara was working solely for Stoneglass United States.

Ultimately the Commission was satisfied that Mr Sara was an employee of the respondent whilst in the United States for various reasons including:

  1. The Stoneglass group was organised in a manner consistent with the respondent being the employer and that Mr Sara was paid as an employee of the respondent having regard to its tax returns, payslips and workers compensation insurance arrangements (and there was no suggestion it was a sham: Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd).
  2. The work performed by Mr Sara in the United States was for the benefit of the respondent, Stoneglass Australia and Stoneglass United States and not exclusively for Stoneglass United States.
  3. No evidence was provided to support that Mr Sara’s employment was shifted solely to Stoneglass United States while he was in the United States, and Mr Sara continued to be paid his ordinary wage by the respondent.
  4. The Commission rejected the respondent’s argument that Mr Sara may have been on annual leave.

In light of the above, on 10 August 2021 the Commission found that Mr Sara was engaged in the course of his employment with the respondent when he contracted the COVID-19 virus. The injury was deemed to have occurred on 23 July 2020 when the test was performed and Mr Sara received a positive result leading to a diagnosis of COVID-19.

Implications

Employers are already concerned about their obligations to provide a safe work environment and the extent this may require them to mandate vaccination in the workplace, even in the absence of health directives to do so. A decision such as this, which confirms that employers can be held responsible for employees who contract COVID-19 during the course of their employment, will add weight to those concerns. It remains to be seen how this will be balanced against individual rights to autonomy in health decisions and issues of discrimination.

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