Coinix v Ian Hayes & Co Pty Ltd [1989] NSWCC 1; (1989) 5 NSWCCR 55 (19 April 1989)

[1989] NSWCC 1; (1989) 5 NSWCCR 55 (Matter No. 1099-88)

COINIX v. IAN HAYES & CO PTY LTD

Compensation Court of New South Wales: Wright C

FOR WHAT INJURIES COMPENSATION PAYABLE - EMPLOYMENT RISKS - SCOPE OF EMPLOYMENT - ACTS INCIDENTAL TO CONTRACT OF EMPLOYMENT - RECREATIONAL ACTIVITIES - INJURY SUSTAINED DURING "ROOF PARTY" - WHETHER ATTENDANCE WAS REQUIRED, EXPECTED OR AUTHORISED - WORKERS COMPENSATION ACT 1987, SECTION 4

WORDS, PHRASES AND MAXIMS - "IN THE COURSE OF EMPLOYMENT" - WORKERS COMPENSATION ACT 1987, SECTION 4

A.T. Brown, for the applicant

M.C. Newton, for the respondent

Cur adv vult

WRIGHT C: This matter proceeded to hearing in Newcastle on 19 April 1989 when evidence was taken and the decision was reserved.

The applicant seeks weekly compensation at the rate of $418 per week from 4 December 1987 to 11 January 1988 in respect of an injury to his right upper limb.

The applicant had been employed as an electrical tradesman's assistant with the respondent at the Garden City, Kotara construction site for about 12 months prior to his injury. On 4 December 1987 the applicant had been attending a roof party staged by the head contractors for the site, Civil and Civic, when he sustained his injury.

The basic issue was whether the applicant was in the course of his employment with the respondent at the time of his injury, and thereby entitled to be compensated for incapacity resulting from injury in the course of that employment. At the outset of the hearing, the respondent admitted that the applicant had received an "injury", but not in the course of his employment, and was entitled to an award for the closed period if the injury was found to arise out of or in the course of his employment.

The applicant gave evidence that it was a custom in the building industry, so far as he was aware, for the head contractor on a major construction project to put on a party for all the on-site contractors and their employees when work had reached certain stages. One of these stages involved completion of roofing and was appropriately called a roof party. The head contractor provided food and drink without charge, it may be inferred, as a gesture of goodwill and appreciation for the work done to that stage. In this instance Civil and Civic caused notices to be published on site extending an invitation to the party on 4 December 1987.

Prior to the end of his shift (3.30 pm) on the day in question, the applicant stated that he, as an employee of the respondent, had assisted his foreman Mr Stephenson to illuminate the area to be used for the party. The pattern of lighting installation at this project would ordinarily have been different, according to the applicant, so it may be inferred that the respondent co-operated with the head contractor to assist with the social arrangements.

The applicant gave evidence that he arrived at the function at about 3.55 pm. Apparently total attendance numbered about 300 persons, with about six of these being employees of the respondent. At between 6.00 pm and 6.30 pm he stated that he was talking to one of the employees of Civil and Civic when he was pushed as a "bit of a joke". He struck his right thumb, the site of a previous arthrodesis, against a steel container. The action by the other person was unexpected. The applicant was not acting the fool at the time.

The applicant in cross-examination agreed that there was no compulsion on employees of the respondent to attend or to remain once they had decided to attend. He denied that the executive officer of the respondent Mr Hayes had discouraged him or other employees from attending the party or any other party, although he agreed that Mr Hayes had spoken after the party about the undesirability of drinking and then driving company vehicles.

Mr Hayes, chief executive of the respondent, in giving evidence for the respondent stated that at odd times prior to the roof party he had spoken to his employees and counselled them to behave themselves if they attended such occasions. Mr Hayes did not like to learn of his employees getting drunk. He considered that the roof parties visited no benefits whatsoever on his company, although they could possibly create goodwill amongst the employees. He agreed that they were a public relations exercise. Whilst Mr Hayes stated that he would refuse his employees attendance or terminate their employment if he found that any such employees were misbehaving, he readily conceded that he did not have much control over what his employees did out of working hours. He considered that there were subtler ways of terminating an unsatisfactory employee's services than straight out sacking.

Counsel for the respondent invited the conclusion that the extension of the applicant's employment to cover the party was inappropriate. There was an onus on the applicant to show that the course of employment was extended. The undisputed facts were that there was no obligation on the applicant to attend or remain at the party and that there was no benefit derived by the respondent from the applicant's attendance.

Counsel for the applicant pointed to the tradition within the industry of having roof parties, the co-operation by the respondent in rigging the lights and the undoubted benefits for industrial relations of providing employees with such a perquisite. In referring to the decisions in WOLMAR V. TRAVELODGE AUSTRALIA LTD (1975) 26 FLR 249 and WARDELL V. WENTWORTHVILLE LEAGUES CLUB [1980] 54 WCR (NSW) 169, counsel invited the conclusion that there was an expectation and a tradition that the applicant attend such a function and that therefore the applicant was in the course of his employment with the respondent when he sustained injury.

Compensation is payable if a worker sustains an injury arising out of or in the course of his employment with his employer. The phrases "out of the employment" and "in the course of employment" have been the subject of considerable judicial interpretation. In this case, the applicant mainly relies upon an injury allegedly "in the course of employment."

"In the course of employment" connotes a temporal relationship with employment as has been illustrated in a number of decisions: see COMMONWEALTH V. OLIVER [1962] HCA 38; (1962) 107 CLR 353; WESTON V. GREAT BOULDER GOLD MINES LTD [1964] HCA 59; (1964) 112 CLR 30. However, the course of employment is not co-terminous with the worker's paid hours of employment; it includes all the time while the worker is engaged on the performance of the duties of his employment and those things which are reasonably incidental to it. According to the circumstances of employment, it will extend for limited periods before and after the hours of duty while the worker is at his or her place of work, and it will include meal and other breaks, but it will not include any time during which the worker is at a place, or doing a thing, otherwise than in, or reasonably incidental to, the performance of the duties of the employment: DAVIDSON V. MOULD [1944] HCA 10; (1943) 44 SR (NSW) 113; see also HENDERSON V. COMMISSIONER FOR RAILWAYS (WA) [1937] HCA 67; (1937) 58 CLR 281).

In HUMPHREY EARL LTD V. SPEECHLEY [1951] HCA 75; (1951) 84 CLR 126, the High Court considered the facts of a break in employment. The following principle or ratio of Dixon J has been adopted in considering the extent or scope of activities included within the course of employment. Dixon J said at 113:

"The acts of a workman which form part of his service to his employer are done, needless to say, in the course of his employment. The service is not confined to the actual performance of the work which the workman is employed to do. Whatever is incidental to the performance of the work is covered by the course of employment. When an accident occurs in intervals between work the question whether it occurs in the course of employment must depend upon the answer to the question whether the workman was doing something which he was reasonably required, expected or authorised to do in order to carry out his duties."

This principle was applied in TOWNSEND V. COMMISSIONER FOR RAILWAYS [1959] 33 WCR (NSW) 29 and Oliver, supra.

The principle of the activity needing to be incidental to employment - something the worker is reasonably expected, required or authorised to do in order to carry out his duties - has been examined also in relation to activities outside usual working hours such as parties and picnics. Whilst there are arguments for and against categorising decisions on the basis of circumstances, and although each case is decided on the specific facts in evidence, there is a stream of cases dealing with parties or social functions held on and off employer's premises which deserve some examination. Union or employer-organised picnics may have some similarities with parties, but these may be distinguished since they are invariably held away from the worker's place of employment.

The case of SHILL V. TURRELLA INDUSTRIES PTY LTD [1953] 27 WCR (NSW) 63 involved a Christmas party during the afternoon, at the employer's expense, off the premises. Work had earlier ceased on the last working day of the year. The worker was paid wages for the full day and was not obliged to attend. The worker died after a collapse whilst engaged in an act of entertainment. Conybeare J held that any act of the worker was not done for the purposes of the employer's trade or business.

In JAMES V. FRESH FOOD & ICE PTY LTD [1960] 34 WCR (NSW) 168 the workers had left their place of employment late after attending a Christmas party on the employer's premises, the employer having organised and financed the party. Whilst the Court found that the workers were on a prescribed journey, it was also found on the facts that the workers whilst at the party were making a permitted and reasonable use of the premises.

JOHNSON V. GRACE BROS PTY LTD [1970] 44 WCR (NSW) 128 involved a worker injured after work at a staff party organised by the employer to promote good relations between the employer and workers but without any obligation on the part of the worker to attend. Conybeare J relying upon Speechley and Henderson concluded that there was no obligation or requirement to attend, that the test implied a positive, although minimal, obligation on the worker under the contract of service, and hence the attendance was not incidental to or in the course of her employment.

In WOLMER V. TRAVELODGE AUSTRALIA LTD (1975) 26 FLR 249 the worker was injured on the employer's premises after working hours whilst attending a Christmas party organised by the employer. Connor J considered the purpose of the party, the furtherance of good relationships between management and staff, to be a relevant factor. In considering the cases of Henderson, Speechley and Oliver, his Honour concluded that the exercise of the employer offering hospitality to the worker, against the background of a changing employer-employee relationship, could aid business efficiency and as such was so closely associated with the employment as to be incidental to it. In considering whether such attendance was incidental to employment, his Honour examined the categories set out in Speechley, and distinguished Johnson, concluding that whilst it would be relevant, and generally decisive, to know that a worker was doing an act pursuant to a positive contractual obligation, there could be some acts which may not be performed pursuant to a positive contractual obligation but which are nevertheless incidental to the employment.

The attendance by the worker at the party was something that she was "authorised" to do:

"If, on a ...voluntary, unpaid basis, the employer organises an exercise aimed at improving the morale as distinct from the efficiency of his workforce, I do not see in principle why there should be any different approach. I think that an employee who, without being required or paid or expected to do so, co-operates freely with his employer in doing something associated with the business is 'authorised' by the employer to do it; and if the thing that the employer and the employee are doing together is sufficiently associated with the employment it will be incidental to it, and injury sustained while doing that thing will arise in the course of employment." (at 255)

An after-work drink by licensed club employees was considered in WARDELL V. WENTWORTHVILLE LEAGUES CLUB [1980] 54 WCR (NSW) 169. A worker could choose to remain on the premises after his shift in accordance with practice and custom and was reimbursed the cost of one drink per shift. His Honour Judge Coleman found that it was in the interests of the employer to provide an amenity and approve of the custom. The worker was doing something incidental to his employment - if he was not expected to do so, he was certainly authorised to do so. Whilst his Honour considered that a prolonged stay on the premises after work may well take an employee out of the course of his employment, the applicant's presence on the premises in the circumstances, together with the leave, licence, permission and authority given by the employer, should be regarded as a reasonable consequence of the circumstances in which he was placed and that he was doing something that was sufficiently associated with his employment as to make it incidental to it.

Looking at the circumstances of the party held at Garden City, the event took place at what could be generally called the applicant's place of employment, although that place of employment could not be said to be under the control of the employer. The party was organised and paid for by a third party not the applicant. The party could be said to be directed at generating goodwill in the workers and subcontractors towards the head contractor, Civil and Civic. The event may have also had the effect of encouraging co-operation between the various contractors, upon whom Civil and Civic relied, to complete the project economically.

The respondent did not take any active and direct part in the organising the party, although it co-operated by installing the lighting, as requested, in working hours. I am satisfied that the employer through Mr Hayes did not encourage any of its workers to attend, or remain at the party. Mr Hayes in his evidence may not have addressed himself adequately to the realities of employee dismissal in the 1980's but that fact does not depreciate his evidence that he did not encourage his employees to attend such functions and had made attempts at communicating his personal dislike for such functions due to their potential for loss of productivity through over-indulgence by employees. Whether his positive discouragement was effectively communicated to the applicant is unclear.

It was not an obligation of their employment that the employees of the respondent attend the party. There was no requirement on the employees to remain and have a drink with other persons on site. It could not be said that the applicant himself was authorised to attend the party, or encouraged to so do. The function was not organised by the respondent but by a third party, Civil and Civic. The applicant may have been authorised to remain on the premises after work but this authority would have flowed from the controller of the site and not from the respondent. It may be true that the applicant was making a lawful use of the premises, but I do not consider that that use was incidental to his contract of employment but rather was incidental to the social purpose of associating with his workmates and any others of his choosing.

Moreover, this is not a situation where key personnel are expected, required or authorised by the employer to attend a party held by another for the purpose of cementing business contacts or encouraging increased business opportunities.

I conclude that the injury sustained by the applicant did not arise out of or in the course of his employment with the respondent.

I accordingly enter an award for the respondent.

Award for the respondent

Solicitors for the applicant: Moroney Rutter & Mantach

Solicitor for the applicant: J. Mitchell