Australia: Overcoming the statutory limitation of damages: Is federal jurisdiction the answer for workers compensation?

The recent Federal Court decision in Leggett v Hawkesbury Race Club Limited (No 4) [2022] FCA 622 was handed down on 30 May 2022, specifically examining the interrelationship between State statutory limitations on damages and the overriding judicial power of the Commonwealth.

In that case of Leggett, the worker (Ms Leggett) was employed at a racing and held responsibility for managing the club's sponsorships, among other things. It was alleged that she was bullied and harassed by an overbearing manager. She claimed that her exposure to that environment caused psychiatric injury. Consequently, a claim for workers compensation was made under the relevant NSW legislation and was assessed at a level of impairment entitling her to lump sum benefits. She also became entitled to pursue a claim for Work Injury Damages as to her economic loss.

Subsequent to the claim under the Workers Compensation Act, the worker brought a further claim against her employer on the basis that they had breached the Fair Work Act which, of course, is subject to federal jurisdiction. It was alleged that the bullying by her employer constituted "adverse action" within the meaning of the Act, and that such conduct was the cause of the termination of her employment. She sought further compensation on that basis.

The worker relied upon ss340 and 545 of the Fair Work Act in bringing that further claim.

The crucial questions for the Federal Court to determine was whether the past findings of an Arbitrator in NSW created any estoppel issues and also the extent to which the previous workers compensation benefits affected the claim under the Fair Work Act. Furthermore, and most importantly, the Court was required to consider whether the restrictions applicable to claims under the NSW legislation (modified damages) also applied to relief (or compensation) sought under a Commonwealth regime.

In short, the Court found that the limitations upon damages imposed by NSW legislation would not act to restrict the damages available under the Commonwealth legislation (such as the Fair Work Act). This meant that not only could the worker claim damages for economic loss, but also an amount for non-economic loss.

The Court then considered the issue of whether the previous benefits received by the worker needed to be considered in awarding further compensation. Ultimately, the Court upheld the principle against "double-dipping" meaning that the worker could not receive the same type or amounts of compensation twice. Given there were additional entitlements available under the Fair Work Act, those additional amounts could be paid and awarded to the worker.

Whether that decision is to be appealed is yet to be seen. It is possible that an appeal will follow and, if so, this could change the approach taken in relation to these claims. It is therefore important to keep a close eye on this particular landscape in the near future.

All lawyers practicing in personal injury should consider the availability of relief under the Fair Work Act as an alternative to the Workers Compensation Act, where relevant breaches under the Fair Work Act can be established.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.