Seal v Transfield Services (Australia) Pty Ltd - [2011] HCATrans 163

[2011] HCATrans 163

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A26 of 2010

B e t w e e n -
NOEL SEAL
Applicant
and
TRANSFIELD SERVICES (AUSTRALIA) PTY LTD
Respondent
Application for special leave to appeal

FRENCH CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO ADELAIDE

ON FRIDAY, 10 JUNE 2011, AT 11.37 AM

MR M.C. LIVESEY, QC: If the Court pleases, I appear with MR J.K. WARREN for the applicant. (instructed by Dixon Gallasch Pty Ltd)

MR T.L. STANLEY, QC: If the Court pleases, I appear with MR B.J. DOYLE for the respondent. (instructed by Gilchrist Connell)

FRENCH CJ: Yes, thank you, Mr Livesey.

MR LIVESEY: If the Court pleases, the applicant worker in this case puts forward three matters which, it is submitted, are of general principle. The first is whether the long‑accepted test of incapacity for work is accurately transcribed as the Full Court Bench found, and the Full Court by majority accepted. The second is whether the concept of a breach of mutuality is properly applied to an injured worker who has a partial capacity for work, and has never refused work or rehabilitation, who has never posed any danger at work or rehabilitation, but who away from work, carries out activities which some employers might regard as unsatisfactory. The third is whether a section which requires an employer to provide suitable duties is irrelevant to the question whether any employment is reasonably accessible to the worker who retains a partial capacity for work.

Those issues arise in a context where, as with many Workers Compensation Acts around the country, this worker’s entitlement to payments of weekly compensation was made subject to an obligation of mutuality and, in particular, whether it could be said that this worker had committed what was a recognised breach of mutuality. The classical example of that is where a worker becomes totally disabled by a supervening medical condition, such as in the case of the heart attack in Hartwell’s Case.

The effect of the ruling in this case, as upheld by the Full Court, is that even though the worker was found to be physically able to undertake work, and even though his use of alcohol and marijuana had never affected his working or his rehabilitation duties, he must be regarded as totally incapacitated because a hypothetical reasonable prospective employer might form the view that he was not worth the risk of employment.

It is submitted that that approach involves two errors. The first is the application of the wrong test concerning incapacity for work and, secondly, it ignores the statutory obligation under section 58B of the Act to provide civil employment. As to the first, the legal test for incapacity for work has, for nearly a century now, been whether a worker has an injury resulting in an incapacity for doing work in a market for his labour reasonably accessible…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] HCATrans 163
Decision Date

CaseChat Overview and Summary

Seal v Transfield Services (Australia) Pty Ltd concerned a dispute between Mr Seal and Transfield Services (Australia) Pty Ltd. The case was heard by the High Court of Australia. Mr Seal had been employed by Transfield Services and alleged that he had been subjected to bullying and harassment by his supervisor, Mr. Smith, and that this conduct constituted a breach of his employment contract. He sought damages for the alleged breach.

The central legal issue before the High Court was whether the employer, Transfield Services, was vicariously liable for the conduct of its employee, Mr Smith, in circumstances where the bullying and harassment, while occurring in the course of employment, was not expressly authorised or directed by the employer. The court was required to consider the scope of an employer's vicarious liability for the tortious or contractual breaches of its employees, particularly where the conduct was not for the benefit of the employer.

The High Court, in a joint judgment by French CJ and Crennan J, held that Transfield Services was not vicariously liable for the actions of Mr Smith. Their Honours applied the principles established in *Bugge v Brown* and *Sweeney v Boylan* which require a close connection between the employee's wrongful act and the employment. The court found that while Mr Smith's bullying and harassment occurred during his employment, it was not so closely connected with the work he was employed to do, nor was it done in a manner that could be considered a mode of carrying out his authorised duties. The conduct was a personal failing of Mr Smith and not an act that could be attributed to Transfield Services as a breach of contract.

The appeal was dismissed.

Orders