In a 2017 decision of Southwest Helicopters Pty Ltd v Stephenson, the New South Wales Court of Appeal held that if any negligence attaches to an employer, that employer is precluded from recovering WC payments from 3rd party tortfeasors even if the third party carries a vastly higher share of liability. This interpretation of s.151Z was contrary to the long-held understanding of the WC legal fraternity however, whilst controversial, it was not appealed.

The decision means employers with a lesser share of common law liability will pay a greater proportion of a Plaintiff’s loss through unrecoverable WC payments. It will have a particular impact in labour-hire cases where an employer (labour hire company) is often hit with a 10 - 20% share of liability for breaching its non-delegable duty to ‘ensure care is taken’ by 3rd parties. We note however that the Courts are willing to absolve employers of any liability where an employee is injured ‘offsite’ under circumstances where the employer’s intervention would not have prevented the injury. Hence, a case-by-case approach should be adopted.  

Although Southwest Helicopters is manifestly unfair to employers, it will not always take effect, and if it does, contribution for future loss can still be sought under s.5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946.

For further information please contact Dan Wilkins at