Qantas Airways Limited v Arnott - [2013] NSWWCCPD 35

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Qantas Airways Limited v Arnott [2013] NSWWCCPD 35
APPELLANT:	Qantas Airways Limited
RESPONDENT:	Gregory Alan Arnott
INSURER:	Qantas Workers Compensation
FILE NUMBER:	A1-11182/11
ARBITRATOR:	Ms F Robinson
DATE OF ARBITRATOR’S DECISION:	28 February 2013
DATE OF APPEAL DECISION:	17 June 2013
SUBJECT MATTER OF DECISION:	Section 4 and 9A of the Workers Compensation Act 1987; application of the principles in Hatzimanolis v ANI Corporation Ltd [1992] 173 CLR 473; whether injury arising out of or in the course of employment; worker assaulted during slip time in foreign city.
PRESIDENTIAL MEMBER:	President Judge Keating
HEARING:	On the papers
REPRESENTATION:	Appellant:	HWL Ebsworth Lawyers
Respondent:	Leitch Hasson & Dent
ORDERS MADE ON APPEAL:	1. The Arbitrator’s determination of 28 February 2013 is confirmed. 2. The appellant employer is to pay the respondent worker’s costs of the appeal.

BACKGROUND

The respondent to the appeal, Mr Arnott, is employed by the appellant, Qantas Airways Limited (Qantas), as a long haul flight attendant.
On 8 October 2011, Mr Arnott was scheduled to work an eight day flight pattern from Sydney to Dallas and return. He commenced duties at the Qantas base at Mascot on 8 October at 1.00 pm. The flight arrived in Dallas on 8 October 2011 at 2.00 pm.
Mr Arnott was transferred by crew bus to the Qantas crew accommodation hotel, the Renaissance Worthington Hotel Dallas Forth Worth.
Mr Arnott was scheduled to remain in Dallas until the return flight at 10.00 pm on 12 October 2011. The interval in between times is referred to as slip time.
On the evening of 8 October 2011, Mr Arnott met a number of colleagues at approximately 7.00 pm in the lobby of the hotel and walked to a nearby restaurant “Riscky’s BBQ” which was located a short distance from the hotel. Around 9.30–10.00 pm on the evening of 8 October 2011, Mr Arnott and his colleagues walked a short distance from the restaurant to the Lone Star bar to listen to live music.
Mr Arnott claimed that he consumed one margarita at the restaurant and two stubbies of beer while at the Lone Star bar. He remained at the bar for approximately 30 minutes after his colleagues had left to return to the hotel.
Between 2.00 am and 2.30 am on 9 October 2011, Mr Arnott was walking alone from the Lone Star bar back to the hotel he was staying in when he was assaulted. He has no recollection of the assault. He alleges a closed head injury, dental and facial injuries, injuries to his right upper extremity, and cervical and lumbar spine injuries as a result of the assault.
When Mr Arnott was admitted to the Tarrant County Hospital at 3.02 am on 9 October 2011 his blood alcohol concentration was recorded at 0.261 grams of alcohol per 100 grams of blood.
On 31 October 2011 Mr Arnott submitted a claim for weekly payments of compensation from 9 October 2011. On 10 November 2011, Qantas notified Mr Arnott that it denied liability for provisional weekly payments of compensation on the basis that the injury is “not work related” and his employment was not a substantial contributing factor to the injury.
On 15 December 2011, Qantas issued a notice under s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act). In the notice Qantas declined liability for two reasons. First, the injury did not occur in the course of the worker’s employment or arise out of the employment with Qantas and, second, his employment was not a substantial contributing factor to the injury.
On 14 December 2011, Mr Arnott lodged an application for expedited assessment in the Commission. He claimed weekly compensation and medical expenses in respect of the alleged assault on 9 October 2011.
On 22 December 2011, Qantas filed a Reply to the Application. It confirmed the matters in dispute were those identified in the s 74 notice.
On 7 March 2012, the matter was listed for a conciliation/arbitration hearing before a Commission Arbitrator. Both parties were legally represented. No oral evidence was called. The Arbitrator reserved her decision.
On 28 February 2013, the Arbitrator delivered her decision and a Statement of Reasons. The Arbitrator found that Mr Arnott was injured during an interval or an interlude in an overall period of work and was engaged in activity which the employer had expressly or implicitly induced or encouraged him to engage in at the time of the assault. The Arbitrator also held that Mr Arnott’s employment as a substantial contributing factor to the injury.
The Commission issued a Certificate of Determination in the following terms:
“1.     The respondent to pay to the applicant weekly benefits of compensation, pursuant to the provisions of the Workers Compensation Act 1987 as follows:
(a)$1420 per week from 12 October 2011 to 10 April 2012 pursuant to section 36 of the Workers Compensation Act 1987, and
(b)the payment of weekly benefits to continue, in accordance with the workers compensation legislation, during any periods of total or partial incapacity.
2.      In the event of any dispute arising in respect of the payment of weekly benefits after 10 April 2012 then either party has the right to restore these proceedings on short notice.
3. The respondent to pay the medical and related expenses incurred by the applicant pursuant to section 60 of the Workers Compensation Act 1987.
4.      The respondent to pay the costs of the applicant as agreed or assessed. I grant to both parties a 15 per cent costs uplift.”
Qantas appeals the Arbitrator’s determination.

ON THE PAPERS

Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Both parties have submitted that the mater can proceed on the papers without a formal hearing.
Having regard to Practice Directions Nos 1 and 6, the documents that are before me, and the submissions by the parties, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time as found in the provisions of ss 352(3) and 352(4) of the 1998 Act have been met.

THE ARBITRAL PROCEEDINGS

Issues in dispute before the Arbitrator

The issues for determination by the Arbitrator were stated at [8] of the Arbitrators decision:
“Were the injuries, sustained by the applicant on 9 October 2011, in the course of employment with the respondent or arising out of that employment and if so was employment a substantial contributing factor to the injuries.”

The evidence

Gregory Alan Arnott

Mr Arnott confirmed that he arrived in Dallas at about 2.00 pm on 8 October 2011. He was transported to the Fort Worth Renaissance Worthington Hotel, Fort Worth (‘the slip hotel’) which is located in an area of Fort Worth known as Sundance Square. He was rostered to depart from Dallas to operate back to Sydney at 10.00 pm on 12 October 2011. He was paid each hour during the slip time in Dallas.
During the first 12 hours of slip port time Qantas can place a flight attendant on notice that at the expiry of the minimum slip period they are required to work on an alternative flight which deviates from the flight attendant’s prescheduled flight pattern.
During slip time flight attendants are paid a daily meal allowance of US$138 per day.
Qantas provides the flight attendants in slip ports with an information sheet relevant to the particular location. The “Qantas Onboard Manager Brief” dated 11 May 2011, for “Port Dallas” provided information in relation to the hotel, details of discounted prices for meals and other services, information in relation to the possibility of extreme weather conditions, and relevantly it stated:
“Nearby facilities. The hotel provides direct access to Sundance Square in central Fort Worth. Restaurants, cafes, bars, nightspots, shops, bookstores, cinemas and theatres are easily accessible from the hotel. Nearby museums and galleries are easily accessible.”
Mr Arnott states that during slip time flight attendants are permitted and encouraged by Qantas to travel around the particular city and engage in shopping, use of cafes and restaurants, visit tourist attractions and engage in recreational facilities. Mr Arnott stated that in 1999 during the course of his training for long haul aircraft operation by Qantas he was told that Qantas crew are encouraged to familiarise themselves with facilities and tourist attractions at slip cities to enable them to answer passenger questions. He said that he was consistently asked by passengers for his advice with respect to tourist attractions, recreational resources, bars and restaurants in slip ports.
By pre-arrangement on the evening of 8 October 2011, Mr Arnott met a number of colleagues at 7.00 pm in the lobby of the hotel. He went with them to a nearby restaurant called “Riscky’s BBQ”. He stated that he consumed one margarita drink whilst at the restaurant.
After the meal Mr Arnott and his colleagues walked to a nearby bar, the Lone Star bar, which was known to play live music. The bar was located approximately 200 to 250 m from the hotel. Mr Arnott stated that he left the restaurant with his colleagues some time between 9.30 and 10.00 pm and walked the short distance to the Lone Star bar. To the best of his recollection he states that he arrived at the bar somewhere between 10.00 and 10.15 pm.
During the time that he was in the Lone Star bar he consumed two stubbies of beer. Mr Arnott states that his colleagues left the bar to return to the slip hotel approximately half an hour before he did. He stayed behind to enjoy the live music.
Mr Arnott left the Lone Star bar somewhere between 1.45 and 2.00 am on 9 October 2010 to walk back to the hotel, which he states was a distance of 200 to 250 metres. Mr Arnott said “I crossed the road and walked back along the street. After checking, I walked into a well lit, very open car park as a brief diagonal short cut. I did not at any time observe any persons loitering or any lights on or any people in any of the cars which were in the car park. Nor did I hear anything that would cause alarm...”
It is apparent that during the course of the journey between the bar and the hotel Mr Arnott was assaulted. He has no recollection of the assault but noted that a modest amount of money was stolen and assumed that the motive for the assault was robbery.

Gregory Hugh Broome

Mr Broome is employed by Qantas as a senior flight attendant. Between 1986 and 2004 he held various positions with the Flight Attendants’ Association of Australia (FAAA).
Between 1994 and 2004 Mr Broome was a member of the FAAA accommodation and allowance committee. From 1998 he was the chairman of the committee. In that role he participated with the Qantas representative and a member of the Pilots’ Association to inspect and shortlist slip hotels. He states that part of the selection criteria included the internal and external safety of the hotel and internal and external amenities including access to parks, restaurants, recreational facilities, department stores, supermarkets, chemists, transport and banks.
Mr Broome stated that as part of his training he was instructed to “get out about” in slip ports. Trainers emphasised that this was to assist in his knowledge to answer questions from passengers in relation to tourist activities in specific ports.

Police incident report

A brief incident report of the Fort Worth police department is in evidence. The report is in the following terms:
“On 10 September 11, at 0232 hours, I, Corporal O. Flores #3402, working off duty with city centre security, was flagged down reference a male who had been ‘knocked out’ in front of the Lone Star club at 425 Commerce Street. WIT advised that he saw the SUS assault the VIC and flee in the SUS vehicle. VIC transported to JPS Hospital by med staff 53.”
The offence location is recorded as “425 Commerce St”.

Clinical notes

The clinical notes of the Tarrant County Hospital District – JPS Facility – are in evidence. They note the admission of Mr Arnott on 10 September 2011. They record his correct age and date of birth. The entry which has been referred to in the Arbitrator’s decision is in the following terms:
“Findings: This patient is a 36 year old Caucasian male who was admitted on October 9, 2011, as a result of an assault. Injuries included scattered small subarachnoid haemorrhage and an eyebrow laceration. His blood alcohol level measured at 0.261 at admission. The patient was referred by his physician for a neuropsychological evaluation to assess current level of functioning and needs. The patient was drowsy and appeared to fall asleep several times during examination due to his decreased level of consciousness. The neuropsychological examination was only partially administered. The examiner will return when the patient is more alert to assess the patient. The patient reported his name to be Greg Arnott and his age to be 49 years old. He was partially oriented in time. He knew the year and month but was unable to state the correct season of the year, date, or day of the week…”

THE ARBITRATOR’S REASONS

The Arbitrator made the following findings of fact:
(a)     the applicant, at the time he was injured, was on “slip time” for which he was being paid;
(b)     the applicant was engaged in a single period or episode of work and the injuries were sustained during an interlude or interval within the overall episode of work;
(c)     the selection of crew accommodation was an important policy and industrial issue and the respondent allocated extensive resources to that selection;
(d)     external amenities considered included access to public parks, restaurants, recreation facilities, department stores, supermarkets, chemists, train/buses and banks;
(e)     it was anticipated crew would leave the slip hotel for the purposes of eating, shopping (including food) and recreation;
(f)      crew were paid a daily allowance, in cash, on arrival at the hotel;
(g)     there were no curfews;
(h)     there was no prohibition on the consumption of alcohol;
(i)      the applicant was on slip time for a period in excess of four days before he was back on duty;
(j)      the applicant was not on notice he was to work on any other flight other his scheduled return flight to Sydney;
(k)     the resources and facilities of Sundance Square were noted in a Qantas briefing document (a search of the internet reveals the hotel, restaurant and club were all on the perimeters of the square);
(l)      the restaurant and the club were short walks from the hotel;
(m)   the applicant did consume a significant amount of alcohol during the evening (enquiries revealed the testing and reading levels are identical in USA and Australia), and
(n)     the witness to the assault makes no mention of any provocation.
There was no express encouragement for Mr Arnott to attend a particular restaurant or the bar however those activities, in Sundance Square, were so incidental to what was induced or encouraged by the employer as to be within that inducement or encouragement.
Mr Arnott was engaged in normal (and necessary) day-to-day activities eg eating and socialising with other crew members. These activities are reasonable and clearly anticipated by Qantas. This created the required connection or nexus between the injuries suffered by Mr Arnott and his employment.
The briefing material made available to Mr Arnott at the slip hotel made reference to the facilities available in Sundance Square and noted that they were easily accessible from the hotel.
Mr Arnott sustained an injury outside a nightspot on the perimeter of Sundance Square. He was therefore at a particular place where Qantas induced or encouraged him to be during an interval or interlude between an overall period or episode of work. This established the temporal relationship.
The activity of dining and socialising with colleagues would not be unexpected and in any event all the activities occurred at a place where Mr Arnott was expected to be.
The Arbitrator accepted that Mr Arnott had consumed a significant amount of alcohol but found there is no prohibition by Qantas on the consumption of alcohol while crew are on slip time.
Mr Arnott was engaging in activities at a place where he was expected to be. There was no indication of any misconduct by Mr Arnott due to the consumption of a significant quantity of alcohol.
There was no evidence that the assault on Mr Arnott was provoked by him.
There is no evidence that consumption of alcohol, or any other action, by Mr Arnott contributed to the assault. No activity was unlawful and for these reasons the Arbitrator found that there was a clear nexus between the employment and the injury.
The facts in Watson v Qantas Airways Limited [2009] NSWCA 322 (Watson) are not analogous to the facts in the instant case.
Mr Arnott was assaulted in a place where he was expected to be and engaged in activities anticipated and expected by Qantas. There is no evidence that the consumption of alcohol, or any other action, contributed to the assault. His activities were not unlawful. There is a clear nexus between the employment and the injury.
Mr Arnott was engaged in activities during an interval or interlude in his overall period or episode of work and Qantas has expressly or implicitly induced or encouraged him to engage in those activities in this particular location.
The injuries occurred in an interval between actual periods of work and in the course of his employment with Qantas.
On the facts as stated, and the findings and reasons, given the only available inference is that the worker’s employment was a substantial contributing factor to his injury.

ISSUES OF APPEAL

The issues in dispute in the appeal concern whether the Arbitrator erred in finding:
(a)     Mr Arnott was in the course of his employment at the time of his injury on 9 October 2011;
(b)     the injury arose out of Mr Arnott’s employment with Qantas;
(c)     Mr Arnott’s employment was a substantial contributing factor to the injury, and
(d)     In the application of the decision of the Court of Appeal in Watson and Qantas Airways Limited v Watson (2) [2010] NSWWCCPD 38 (Watson No 2).

SUBMISSIONS ON APPEAL

Qantas submissions

Qantas accepts that Mr Arnott’s slip time is to be characterised as an interlude occurring within an overall period or episode of work.
The Arbitrator’s finding that Mr Arnott was engaged in normal (and necessary) day-to-day activities eg eating and socialising with crew members is factually wrong. Mr Arnott’s co-workers had returned to the hotel at least half an hour before he was assaulted.
The Arbitrator’s finding that Mr Arnott was at a place where Qantas induced or encouraged him to be is not consistent with the comments of Deputy President Roche in Watson (No 2) at [68] where he said:
“at its highest, Qantas may have impliedly authorised Mr Watson to spend his time away from Los Angeles, if only because it failed to prohibit such excursions. However, that falls well short of inducement or encouragement.”
So too in this case, Qantas submits that its conduct fell well short of inducing or encouraging Mr Arnott to be at the place he was at the time of the assault.
The Arbitrator was required to determine whether Qantas expressly or impliedly induced or encouraged Mr Arnott to spend the interval or interlude at a particular place or engage in a particular activity.
The activity, during which the injury occurred, was leaving the bar whilst intoxicated after the rest of Mr Arnott’s colleagues had left the bar. More broadly, it can be said that the activity was attending the bar and continuing to consume alcohol after all his colleagues had left, noting Mr Arnott’s blood alcohol level at 0302 hours was 0.261 and the assault occurred at approximately 0230.

Qantas disputes that it expressly or impliedly induced or encouraged Mr Arnott to continue to consume an excessive amount of alcohol at a bar before and after the rest of his work colleagues had left. It submits that the excessive amount of alcohol consumed was not an activity consistent with Mr Arnott’s employment.
The evidence establishes that flight crew are encouraged to spend their time as they wish during slip time so long as it was reasonably consistent with the status of their employment. The information provided to them gave them options to use their time as they wished, perhaps at locations such as Sundance Square, but equally perhaps elsewhere. This does not establish that every activity undertaken by a worker is covered by the employment concept (Watson).
There is nothing in the evidence to suggest:
(a)     that Mr Arnott was encouraged or induced to attend the dinner at the restaurant. Although it might well be that the consumption of meals is consistent with his employment, his activities after this event could not be said to be encouraged or induced by the employer;
(b)     that the appellant was encouraged or induced by Qantas to attend the bar and to consume excessive quantities of alcohol, and crucially,
(c)     that Qantas encouraged or induced Mr Arnott to stay at the bar after his colleagues had left and continue to consume excessive amounts of alcohol.
Additionally, or in the alternative, “if it is the case that the Appellant encouraged or induced the Respondent to attend the bar and consume alcohol (simply by choosing the Hotel in Sundance Square), the causal nexus between this activity (employment) was broken when Mr Arnott decided to go to the bar and certainly when he chose to remain at the bar consuming, by that stage, excessive amounts of alcohol before and after his colleagues had left”.
The fact that Mr Arnott consumed alcohol sufficient to record a blood alcohol reading of 0.261 within half an hour of the assault indicates that his perception and senses were impaired and that the risk of injury had significantly increased. This is evidenced by:
(a) Mr Arnott returning to the hotel by himself, and
(b) if Mr Arnott had left with his colleagues on the balance of probabilities he would not have been assaulted. This is confirmed by the fact that none of his colleagues were assaulted at the time they walked back to the hotel.
The particular activity to be assessed in this case is the activity of staying at the bar after his colleagues had left and continuing to drink. This was not an activity encouraged or induced by Qantas and it could not be said that his injuries sustained after performing that activity had arisen during the course of his employment.
It is accepted that, as the Arbitrator said, Mr Arnott was not prohibited from drinking alcohol, but the quantity and effect of the alcohol will be relevant in determining whether the employment relationship was broken.
Conduct in cases such as this involves a question of degree and it is submitted that upon a thorough examination of the facts it is more consistent with his actions taking him outside the course of his employment: Miller Hotels Pty Limited v Tunks (1973) WCR 154 (Miller Hotels).
The Arbitrator’s finding that the facts in Watson “are in no way analogous to the facts in these proceedings” is an incorrect statement as a matter of law.
For these reasons it is submitted that the Arbitrator’s decision should be revoked and a finding should be substituted that Mr Arnott’s injuries did not arise during the course of his employment and therefore his employment was not a substantial contributing factor to his injuries.

Mr Arnott’s submissions

There is no dispute that the period between when Mr Arnott left Australia until he returned to Australia should be seen as an overall period of employment. The appellant’s submissions are based on the injury occurring during an interval in the overall period of employment.
The test in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; 173 CLR 473 (Hatzimanolis) is a test for determining whether a worker is in the course of his employment during an interval in an overall period of employment. The Court held that a worker was in the course of his employment if the employer has induced or encouraged the employee to spend the interlude at a particular place or in a particular way.
Mr Arnott cited a number of authorities involving the application of the test in Hatzimanolis in similar factual circumstances: Timothy Frederick Kennedy v Telstra Corporation [1995] FCA 1640 (Kennedy), Comcare v McCallum (1994) 19 AAR 142 (McCallum), Inverell Shire Council v Lewis (1992) 8 NSWCCR 562 (Lewis) and McCurry v Lamb (1992) 8 NSWCCR 556 (McCurry), Comcare v Mather (1995) 56 FCR 456 (Mather).
The facts of this case are similar to those in Kennedy. In this case Qantas selected the hotel. The Qantas Onboard Manager Brief Version 2.0 expressly referred to Sundance Square as providing cafes, bars, nightspots, shops, book stores, cinemas and theatres that are easily accessible from the hotel. By providing this information Qantas has encouraged the Mr Arnott to spend his time in that place. There is no other explanation for Mr Arnott’s attention being specifically drawn to the attractions of Sundance Square.
Mr Arnott had been provided with accommodation by Qantas and was walking back to it when injured. He was provided with a meal allowance which could be used at a venue of his choosing. He, unlike Mr Kennedy, was paid for each hour he spent in Fort Worth.
The facts in this case are also similar to Mather. The employer provided the equivalent of local leave when it provided a meal allowance and gave the worker information about the nearby restaurants and bars.
The principles in Hatzimanolis were most recently considered by the Full Court of the Federal Court in Comcare v PVYW [2012] FCAFC 181(PVYW). That case involved injury when a worker was staying in a hotel booked by her employer. She was injured when a lamp fell on her whilst having sex. Their Honours found that the test in Hatzimanolis was disjunctive. It was sufficient that the worker spent the time at the particular place without showing that the employer encouraged the employee to spend the time in a particular way. In the instant case it is immaterial whether Qantas induced or encouraged Mr Arnott to remain at the bar and drink. Mr Arnott was at the particular place and his conduct did not amount to gross misconduct.
There is no evidence that drinking alcohol during slip time was prohibited by Qantas.
The mistake in the appellant’s case is that it focuses entirely upon whether Qantas induced or encouraged Mr Arnott to stay at the bar and drink. That enquiry is irrelevant once it is understood that Qantas induced or encouraged Mr Arnott to spend the time in the area around the hotel. It is instructive that Qantas does not contend otherwise.
This matter is distinguished from Watson. In that case the worker had travelled for over an hour out of Los Angeles. He was clearly not within an area that could be described as part of the particular place where the employer encouraged or induced him to spend his slip time. He had gone far afield to meet with friends. That is clearly different from a short walk into the immediate environs surrounding the hotel. The distinction is clearly seen at [68] of the decision where the Deputy President framed the question as whether the employer had induced or encouraged the worker to spend his time away from Los Angeles.
It should also be noted that the decision in Watson was reached without reference to Lewis, McCurry, Kennedy, Mather or McCallum. As such regard was not had to the statements that Hatzimanolis should not be read narrowly and in particular that a reference to a particular place is not to be read as being limited to the actual premises such as the hotel but includes surrounding areas such as elsewhere in the caravan park in Lewis and elsewhere in the town as in Kennedy and Mather.

Submissions in reply

Qantas rejects Mr Arnott’s submission that it focussed on Qantas’s inducement or encouragement to Mr Arnott to spend his slip time in a particular way rather focus on inducement or encouragement to spend his time at a particular place. Qantas submits that it dealt with this issue at paras [24] to [31] of its submissions (summarised at paras [58] to [64] of this decision).
Mr Arnott’s submission that enquiries as to the worker’s conduct are irrelevant once it is understood that Qantas induced or encouraged him to spend time in or around the hotel ignores the concept of gross misconduct. In determining whether Mr Arnott’s conduct amounted to gross misconduct, the particular facts and the activities undertaken by him must be considered. Qantas submits that Mr Arnott’s conduct, by drinking to excess amounted to gross misconduct “breaching the causal nexus between his employment and his injuries”.
Qantas submits that the remarks of Tamberlin J in Kennedy [at 56] are to be distinguished on the basis that Mr Arnott had consumed a very large amount of alcohol and was thereby considerably intoxicated.
Qantas further submits that McCurry and Lewis are distinguishable on the basis that the worker’s conduct in those matters was not found to amount to gross misconduct.
Further, Qantas submits that it is likely if Mr Arnott had left the bar with his workmates then he would not have been assaulted. Rather by deciding to stay and continue to drink at the bar he was on a “frolic” of his own. His actions were a direct cause of the assault.

CONSIDERATION

In Hatzimanolis, which is the relevant leading authority, the majority (Mason CJ, Deane, Dawson and McHugh JJ) said:
“Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment ‘and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen’ (Danvers v Commissioner for Railways (NSW) [1969] HCA 64; 122 CLR 529 at 537).”
As Qantas submits, in Hatzimanolis the High Court reformulated the test to be applied in determining whether an employee’s injury could be characterised as occurring “in the course of employment” for the purposes of ss 4 and 9 of the 1987 Act, and provides the approach to be taken and the test to be applied.
The reformulated test in Hatzimanolis requires in the first instance a determination or characterisation of the period or periods of work of the employee as one overall period or episode of work, or two or more; one does not first, before that task, examine aspects of the employer’s attitude to how the period of work is spent. Once the period of work of the employee is characterised, the circumstances of work are to be analysed within that framework.
There is no dispute in this case that from the period when Mr Arnott left Australia until he returned was one overall period of employment. The following consideration proceeds on the basis that Mr Arnott’s injury occurred during an interval in that overall period of employment.
In determining whether an injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment, and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen (Hatzimanolis at [16]).
It must be remembered that Hatzimanolis applied a disjunctive test; namely, did the employer induce or encourage the worker to spend the interval or interlude at a particular place or in a particular way?
However, to satisfy either of the two limbs of the test in Hatzimanolis Mr Arnott needs to establish more than mere authorisation to be in the particular place or to be undertaking the particular activity he was at the time that he was injured. Kirby A-CJ (as his Honour then was) stated in WorkCover Authority (NSW) v Billpat Holdings Pty Limited & ors (1995) 11 NSWCCR 565 at 593:
“To give the very substantial protections which that Act [the 1987 Act] affords, there needs, according to the majority opinion in Hatzimanolis, to be a more direct connection with the employer’s enterprise. This involves encouragement or even inducement by the employer.”
The authorities referred to by Mr Arnott involving the application of the principles in Hatzimanolis in similar circumstances to the instant case are instructive.
Lewis and McCurry were both were cases where the worker was injured while staying in accommodation provided by the employer during an interlude in an overall period of work. In Lewis the worker was staying at a caravan park for an extended period whilst undertaking training. During an evening of socialising and drinking he was in another caravan within the park when he was shot by a stranger. In McCurry, the worker, a shearer, was in bed with another female employee in a cottage provided by the employer when he was shot by a deranged co-worker. In both cases the workers were found to be in the course of their employment when injured.
McCallum was another case involving an injury sustained in an interval during an overall period of work. In McCallum the worker was injured when she slipped in the shower of the hotel where she was staying. The case concerned the application of s 4 of the Safety Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), which is in similar terms to s 4 of the Workers Compensation Act 1987 (the 1987 Act), the Full Court of the Federal Court held that the worker was in the course of her employment despite the fact she was not required to stay in the specific hotel. It was sufficient that she was required to say somewhere in Young and that she was paid a travel allowance.
Kennedy is another decision involving the consideration of s 4 of the SRC Act. The worker in that case was engaged in installing equipment in WeeWaa, some 40 to 50 km from Narrabri. The worker was staying overnight at a motel in Narrabri. He was not required to stay at the particular motel but it was one of the motels with which Telstra had an arrangement. He and fellow workers went from the motel to the Telegraph Hotel for a meal. After the meal the group went to the Clarence Hotel which was further away from the motel. Whilst walking back to the motel the worker was assaulted. Tamberlin J did not consider that the trip to the second hotel took the worker outside the course of his employment. He overturned a finding by the Administrative Appeals Tribunal that by going to the second hotel the worker had reached a point where the employer could no longer be said to be inducing or encouraging the employee to spend the interval in a particular way. That approach was held to be “too ridged” an application of the Hatzimanolis test. There was no dispute that by the time of the assault the worker was over the .05 blood alcohol limit. His Honour considered the worker was in the course of his employment throughout the night and early morning in question.
In Mather the claimant was a soldier camped at Darwin Showground. The injury occurred when he was struck by a car on the way back to the camp from the Humpty Doo Hotel. Kiefel J found that the soldier was encouraged by the grant of local leave to participate in drinking and socialising at hotels and to return to camp from a not too distant point. The workers blood alcohol reading at the time of the injury was .061percent.
The principles laid down in Hatzimanolis are not to be construed narrowly. I note the observations of Tamberlin J in Kennedy at [56] where his Honour said:
“I do not think that the principles laid down in Hatzimanolis should be construed narrowly but rather they should be applied in a common sense and practical manner to accord with the realities of human behaviour.”
I also note the remarks of Kiefel J in Mather, where her Honour said at [22]:
“In my view “encouragement” is not to be taken as of narrow meaning and limited to some positive action in specific terms which might lead the employee to undertake a particular activity or attend at a particular place.”
The Arbitrator’s reasons at [37] (summarised at [40]-[46] of this decision) identified the factors that established inducement or encouragement by the employer for Mr Arnott to be in the place he was when he was injured. Those findings were open to the Arbitrator on the evidence and disclose no error.
It is relevant that Qantas adopted a procedure in selecting slip hotels by reference not only to the facilities of the hotel itself but also the external amenities. The Qantas “Onboard Manager Brief” pertaining to Dallas, which was provided to staff, made specific reference to the hotel providing direct and easy access to Sundance Square and its facilities including its restaurants and bars.
Qantas’s case has focussed upon whether Qantas induced or encouraged Mr Arnott to stay at the bar and drink excessive quantities of alcohol. In other words whether he was induced or encouraged to spend the interlude in a particular way.
To the extent that Qantas’s submissions focus at all on the question of whether Mr Arnott was induced or encouraged to be at a particular place, it did so simply by submitting that the Arbitrator’s findings were inconsistent with Watson. The submission was not further developed by any reasoned argument or authority
The facts in this case are distinguishable from Watson because in that case the worker hired a car and had travelled for an hour and twenty minutes out of Los Angeles to visit friends. When he was injured Mr Watson was not at a particular place where the employer encouraged or induced him to spend his slip time.
Qantas submits that its conduct fell well short of inducing or encouraging Mr Arnott to be at the place he was when assaulted. That submission cannot be sustained. The hotel Mr Arnott was staying at was selected by Qantas partly because of the amenities surrounding the hotel. He was provided with a meal allowance which he was free to spend at his discretion either within the hotel or elsewhere. It is the unchallenged evidence of Mr Arnott and Mr Broome that Qantas encourages its crew members to engage in social and recreational activities away from the slip hotel. This evidence was reinforced by various Qantas publications and staff briefings referred to in Mr Broome’s evidence referring to local attractions including the Sundance Square area. It is noteworthy that a number of staff, not just Mr Arnott, visited restaurants and bars in Sundance Square during this particular slip period. For these reasons, the Arbitrator was correct to conclude that when Mr Arnott and other members of the crew visited that area it was with the encouragement of Qantas.
Once it is accepted that Mr Arnott was at a particular place with the encouragement of his employer during an interval within an overall period of employment at the time he was injured, unless he was guilty of gross misconduct taking him outside the course of employment, then he is entitled to succeed.
The Arbitrator found that Mr Arnott had not been guilty of gross misconduct. That finding was not directly challenged by Qantas in its grounds of appeal. However, Qantas’s submissions in reply squarely challenge the Arbitrator’s finding, that Mr Arnott was not guilty of misconduct. In breach of Practice Direction No 6, Qantas has made no attempt to identify the respects in which error of law, fact or discretion is alleged to have occurred on this question. Contrary to the terms of s 352 of the 1987 Act, Qantas seems to be seeking a review on that issue. Notwithstanding the failure to comply with Practice Direction 6, I have considered this issue and, for the reasons explained below, reject Qantas’s arguments.

Qantas’s reliance on Miller Hotels does not support its submission. It was not a case involving the application of principles in Hatzimanolis, nor was not a case involving an injury sustained during an interval in an overall period of work. The worker was employed as a barmaid working fixed hours. On the day she was injured, she ceased duty at 10.30 pm. She remained at the hotel consuming food and alcohol with colleagues for the next three and a half hours. After leaving the hotel she commenced driving home and at 2 am she was involved on a motor vehicle accident. She did not fall and break her ankle leaving the hotel as submitted to the Arbitrator. Nor did the Court of Appeal find, as was also submitted to the Arbitrator, that the worker had “broken the nexus of employment” resulting in an award for the respondent. The worker succeeded in her claim at first instance on the basis that the injury was sustained whilst on a periodic journey. That finding was upheld on appeal.
In the proceedings before the Arbitrator, Qantas relied on Dew v Maher [1996] NSWCA 154; 14 NSWCCR 56 (Dew), to support the gross misconduct submission. In that case the worker was living and working on a rural property where explosives were used to control the spread of feral animals. The worker was injured while on a pig shoot, between periods of work, when he participated in the use of explosives to fashion a bomb. It was intended that the bomb would be detonated in close proximity to other participants of the pig shoot as a prank to frighten them. However, the bomb exploded prematurely resulting in the worker’s injuries. Overturning an award in favour of the worker by the trial Judge, the Court of Appeal held the worker’s conduct amounted to gross misconduct and entered an award for the respondent.
In Dew, Cole JA (Handley JA and Cohen A-JA agreeing), agreed with Tiver Constructions Pty Ltd v Clair (1992) 110 FLR 239 (at 246-248) that the High Court is not to be taken as laying down “a universal proposition of law that whenever gross misconduct occurs during an interval between episodes of work, the employee must be outside the course of employment” His Honour noted the High Court’s concluding observation in Hatzimanolis that in determining the course of employment, regard had to be had:
"to the general nature and circumstances of the employment and not

merely to the circumstances of the particular occasion out of which

the injury to the employee has arisen".
I do not accept Qantas’s submissions that by staying at the bar and continuing to drink after his colleagues had left, the worker was on a “frolic of his own”, and his actions were the direct cause of the assault.
There is no evidence that Mr Arnott’s intoxication was the direct cause of him being assaulted. The assault was a random act and, given that a sum of money was stolen from Mr Arnott, his theory that the assault was motivated by an intention to rob him is entirely credible. It may well be different if, for example, because of his intoxicated state he stepped off the kerb and into the path of an oncoming car or he stumbled and fell down a flight of stairs, but that is not the case.
Qantas’s theory that because Mr Arnott was intoxicated and alone at the time of the assault, he was therefore more vulnerable to the particular assault is mere speculation. Even if Mr Arnott exposed himself to a greater risk of injury by being heavily intoxicated and alone at the time of the assault, which has not been established, that of itself does not amount to gross misconduct.
Having regard to the general nature, terms and circumstances of the employment, and the circumstances of the particular injury, the Arbitrator was correct to conclude that Mr Arnott’s conduct did not amount to misconduct that took him outside the course of his employment at the time he was injured.
The following factors established that Mr Arnott was in the course of his employment at the time he was injured:
(a)     the crew were paid a daily allowance in cash on arrival at the hotel;
(b)     Qantas accepted that crew would venture away from the slip hotel for the purpose of eating, shopping and recreation;
(c)     there were no curfews;
(d)     there was no prohibition or limitation on the consumption of alcohol;
(e)     the injury was sustained while the worker was at a location with the encouragement of his employer;
(f)      Mr Arnott had not been notified that he was required for further work before his scheduled return flight, four days after the assault, and
(g)     Mr Arnott was the victim of an unprovoked assault.
In the circumstances, no question of gross misconduct arises and Qantas’s submissions are untenable.
I reject the submission that the Arbitrator’s finding that Mr Arnott was engaged in normal (and necessary) day-to-day activities eg eating and socialising with crew members was factually wrong. The activity of having a meal and drinks at a local restaurant with fellow workers was, in the circumstances, a normal day-to-day activity. The fact that Mr Arnott’s co-workers had returned to the hotel at least half an hour before he was assaulted does not make it any less so.
Qantas alleged that the Arbitrator erred by finding that the worker’s injury arose out of Mr Arnott’s employment by Qantas. The Arbitrator did not make that finding. The Arbitrator found that Mr Arnott was injured in the course of his employment. That finding was, and as is already noted, open to the Arbitrator and discloses no error.

Substantial contributing factor

The Arbitrator found on the facts as stated and for the reasons given by her that the only available inference is that the worker’s employment was a substantial contributing factor.
Qantas’s grounds of appeal challenge the Arbitrator’s finding on this issue, however, that ground of appeal was not further developed in its submissions. Parties are reminded that an appeal under s 352 of the 1998 Act is not a review. Appeals are concerned with the identification and correction of fact, law of discretion. No error on this issue has been identified by Qantas.
Mr Arnott submits that once it is appreciated Mr Arnott was in the course of his employment at the time of the assault there can be no doubt that employment was a substantial contributing factor as explained in Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Limited [2009] NSWCA 324 (Badawi) and Da Ros v Qantas Airways Ltd [2010] NSWCA 89 (Da Ros). The assault was something to which he was exposed and would not have otherwise been exposed, as a result of his employment.
Employment will be a substantial contributing factor to the injury if its contribution was “real and of substance” (Badawi). It is not sufficient that the injury was received in the course of the employment or that it arose out of the employment (see s 9A(3)(a) and Van Wessem v Entertainment Outlet Pty Ltd[2011] NSWCA 214; 9 DDCR 375).
In the satisfaction of s 9A it is neither necessary nor appropriate to enquire whether the particular activity was the subject of a specific direction by the employer or was simply a permissible activity chosen by the employee: Badawi at [22].
In the present case the unprovoked assault occurred in the course of the worker’s employment. It was an incident to which he would not have otherwise have been exposed had he not been in the Sundance Square area, an area where he was encouraged by his employer to visit. In those circumstances and in the absence of any other reasoned submission to the contrary by Qantas, the only finding open was that found by the Arbitrator, that is, that s 9A is satisfied. No error on this ground of appeal has been made out.

CONCLUSION

The Arbitrator was correct to conclude that at the time Mr Arnott was injured he was in the course of his employment. The assault occurred during an interval within an overall period of work whilst he was at a particular place with the encouragement of his employer.

DECISION

The Arbitrator’s determination of 28 February 2013 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal.

Judge Keating
President

17 June 2013

I, MARGOT UNDERCLIFFE, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JUDGE KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE