The NSW Court of Appeal has recently held that a worker can obtain compensation for discrimination relating to a work injury, without stopping their right to also seek workers’ compensation payments for the same injury.

Discrimination claim

In Gardiner v Laing O’Rourke Australia Construction Pty Ltd (2020), an employee of Laing O’Rourke Australia Construction Pty Ltd brought a complaint against his employer immediately following the termination of his employment. He alleged discrimination on the grounds of disability (for a mental health condition), and victimisation, in the course of his employment with his employer.

The complaint was settled at a conciliation conference, where the employee was to be paid approximately $30,000 and legal costs. The terms of the settlement were set out in a Deed of Release and Confidentiality (the Deed) signed by both parties, with payment made later that month.

Claim for workers’ compensation

Prior to the settlement of the discrimination claim, the employee had also lodged a claim for compensation under the Workers Compensation Act 1987 (NSW), on the basis that he had suffered aggravation, acceleration, exacerbation or deterioration of a psychological condition in the course of his employment.

The employer resisted the claim and argued that the employee had received a payment of “damages” awarded “in respect of” the same injury, so that the claim for compensation was precluded by s151A(1) of the Workers Compensation Act 1987 (NSW). As with most workers’ compensation laws in Australia, that section provides that an employee who “recovers damages in respect of an injury from the employer liable to pay compensation under this Act ... ceases to be entitled to any further compensation under this Act”.

At first instance, the President Judge of the NSW Workers Compensation Commission agreed with the employer’s argument and rejected the employee’s claim for workers’ compensation. In making this decision, the President Judge followed earlier decisions of the Workers Compensation Commission. Those earlier decisions held that even if the settlement agreement stated that there was no intention to remove an employee’s workers’ compensation rights, those rights could still be removed as a matter of law.

However, the Court of Appeal overturned that decision and found that the payments made under the anti-discrimination complaints process was not relevant.

The Court held that while the legislative purpose of s151A was to ensure that a worker could not get workers’ compensation and damages with respect to the one injury, the workers’ compensation law was concerned with “damages” payable in respect of an injury caused by the negligence or other tort of the employer, and not amounts recoverable in satisfaction of a liability created by, what they called, an extraneous statutory scheme.

The Court held that statutory protections provided by the Anti-Discrimination Act formed a discrete and independent statutory scheme. By examining the two sets of laws, and taking the view as to the purpose of each law, the Court held that they were two separate and independent schemes of regulation. As such, any payment resulting from a complaint of discriminatory conduct, even if the discrimination gave rise to a personal injury, would not prevent a claim by the employee against their employer for workers’ compensation or work injury damages. The Court noted that this was consistent with the Deed that made clear that the settlement was not intended to remove the employee’s workers’ compensation rights.

Lessons for employers

It is important when looking to settle any claim with an injured worker to seek advice on the terms of the settlement deed and the extent to which they may release the employer from other claims. As with this decision, it should not be assumed that an employee’s rights to seek workers’ compensation will be removed just because a claim relates to a personal injury that is work related.