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Home | Blog | Compensation entitlements for injured labour hire workers

It is common for workers to be employed by a labour hire company and for that company to “hire out” the worker to another company on a short or long term basis.

Injured during employment by a labour hire company

Workers in NSW who are injured during the course of their employment with a labour hire firm may have compensation entitlements both against their employer and also the “host employer”, that is, the person or company with whom the worker is hired out to.

An injured worker may have benefits arising from the Workers Compensation Act 1987 against their employer including the payment of weekly benefits, medical treatment and lump sums for permanent impairment. If a worker can establish that they have at least 15% whole person impairment under the workers compensation regime, they may be entitled to sue their employer for their past and future loss of income.

The worker may also have a claim against the host employer if they are able to establish that the host employer owed them a duty of care. The benefit to a worker in pursuing a claim against a host employer as opposed to suing their actual employer (or remaining in receipt of workers compensation benefits) is that they may have access to general damages under the common law that would not otherwise be available to them in a claim against the employer alone.  Furthermore, a worker injured in these circumstances does not need to demonstrate that they have at least 15% whole person impairment in order to proceed with a claim against the host employer.  Many injured workers are precluded from suing their employer because they do not meet the 15% threshold.  Those workers may only access workers compensation benefits and cannot sue their actual employer.  In those circumstances the only access the worker would have to lump sum compensation for damages is from the host employer.

The forgoing can be demonstrated with a short example. A mechanical fitter is employed by LabourHire XYZ Pty Ltd (“XYZ”).  XYZ contracts with widget manufacturer ABC Pty Limited (“ABC”) to provide labour to service ABC’s plant and equipment.  John has recently lost his long held position with a mining service company and registers his interest to work for XYZ, who employ John and set him to work at ABC.  Aside from handing in a resume to XYZ and watching a short DVD regarding manual handling at XYZ’s office, the only contact he received from ABC thereafter is a fortnightly payslip and annual tax documents.

After three years of working at ABC’s widget factory, John makes a complaint to Mr Boggle, the maintenance supervisor of ABC to whom John reports. John’s complaint is that the widget press cannot be properly isolated and he fears that another employee may try to operate the machine while he is working beneath it performing repairs.  Mr Boggle tells John that he is on close terms with the Director of XYZ and if John wants to keep his job he should keep his suggestions to himself.

A week later while John is working beneath the press an operator employed by ABC inadvertently activates the press causing it to move and crush John’s hand. John undergoes emergency surgery and his surgeon decides to amputate John’s index finger on his dominant hand.

Six months down the track and John has returned to full duties with ABC but he’s been going slow at work because he’s been having trouble with some of the finer aspects of his work like manipulating certain tools and machine components. Mr Boggle tells John he cannot keep him on at the factory. XYZ terminate John on medical grounds.

In summary:

  1. John will have difficulty obtaining further employment given his injury.
  2. Having returned to full duties, he is unlikely to receive any weekly payments from XYZ’s workers’ compensation insurer.
  3. John’s impairment is less than 15% and therefore he cannot sue XYZ
  4. John does however have a good claim in negligence against ABC for his loss of ability to earn, as well as a claim for pain and suffering, and medical expenses.

An injured worker must be able to prove that the host employer did owe the worker a duty of care. It is often the case that a host employer will owe an injured labour hire employee a duty of care because the host employer will exercise a significant degree of control over the labour hire employee and how they go about their work.  The worker must also demonstrate that the host employer was negligent.  That involves obtaining expert opinion as to why the circumstances which caused the injury presented a risk of injury, and how that risk could and should have been avoided.

It is important that a worker who is injured at the premises of a host employer seek legal advice immediately because the time limits that apply are strict. Court proceedings must be commenced within three years of the injury occurring.

Contact Turner Freeman Lawyers on 13 43 63 if you are a labour hire employee and have been injured at work.

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