Company breaches common law duty of care, employee awarded over 1/4m

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Company breaches common law duty of care, employee awarded over 1/4m

Australian companies with employees abroad are obligated to meet a common law duty of care.

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Australian Business Ltd  

 

Australian companies with employees abroad are obligated to meet a common law duty of care. The decision of the New South Wales Court of Appeal in Pacific Access Pty Ltd v Davies, [2001] NSWCA 218 (12 July 2001), confirms that although there is no statutory obligation placed on companies with expatriates abroad to provide safe workplaces, companies may nonetheless breach their common law duty of care owed to employees.

Background

The sales consultant (the plaintiff) at the centre of these proceedings was employed by Pacific Access Pty Ltd (the defendant company). In 1985 and again in 1991 the plaintiff was a member of a group of expatriate Pacific Access Consultants temporarily located in Port Moresby in Papua New Guinea. In 1991 the plaintiff was attacked as she was about to enter premises of a client. Although brief, the attack was none-the-less frightening and had serious physical consequences over the longer term for the plaintiff. Amongst those consequences was the development of reactive depression. Accordingly, the plaintiff brought a damages claim against Pacific Access for breach of its common law duty of care.

On 12 July 1999, Adams J gave judgement for the plaintiff against the defendant company for $571,362 plus costs. Pacific Access appealed that decision and it is that appeal that constitutes the substance of these proceedings.

Trial Judgement

At first instance the plaintiff alleged that Pacific Access had been negligent in:

  • Failing to provide and maintain a safe system of work;
  • Failing to provide any adequate security;
  • Failing to warn the plaintiff of the dangers of her employment; and
  • Failing to instruct the plaintiff on how to perform her work safely.

In finding against Pacific Access the trial judge expressed the opinion that Port Moresby was dangerous to a degree considerably greater than that which might have been found in Australian workplaces. In relation to the facts, the Court at first instance found that the plaintiff drove to the client's premises by herself. When she reached the premises she drove into the open space beside the office stopping just short of the office door. Putting her handbag over her shoulder the plaintiff got out of the car. She then went to get her briefcase out of the back of the car, as she did so, a young man grabbed her handbag. The plaintiff was forced to her knees and was punched whilst the man took her handbag and ran away.

Based upon the evidence presented at first instance, Adams J drew four conclusions. The first was that it was reasonably foreseeable that the injury suffered by the plaintiff may have occurred in the circumstances in which she found herself by virtue of her employment with the defendant company. Secondly, it was concluded that the risk of personal injury through an attack of the kind suffered by the plaintiff was so substantial that the defendant company had a duty to evaluate the likelihood of such an attack as well as the appropriate modes of protection or avoidance that should have been taken by employees. Thirdly, it was held that any advice offered to the plaintiff was inadequate in that it failed to cover the possibility of an attack occurring at the premises of a client. Finally, the trial judge concluded that because the defendant company had failed in fulfilling its duty of care, the plaintiff was not in a position to take appropriate steps to secure her safety and minimise the risk. As a result of that failure on the part of the defendant company, the plaintiff suffered the injuries which were the subject of her claim. Based upon these conclusions Adams J found Pacific Access to be liable to the plaintiff.

Consideration of grounds of appeal

The majority decision of the NSW Court of Appeal, which was handed down by Priestley and Heydon JJ, focused predominantly upon the second ground of appeal. That being that it was not open to the trial judge to make and act upon some of his findings of fact. It was the understanding of the majority of the Court of Appeal that Pacific Access objected to the following findings:

  • That the defendant company had been under a duty to obtain expert advice about the safeguards that should have been used in regard to employees visiting Port Moresby;
  • That the defendant company had not called upon professional security expertise;
  • That there should have been a warning to employees that they should not carry bags in the street unless absolutely necessary;
  • That the plaintiff should have been warned not to get out of her car unless a security guard was present.

It was the contention of Pacific Access that none of the above concerns had been put as part of the plaintiff's case at trial. Therefore, Pacific Access had no fair notice that the matters would be relied upon by the trial judge in finding for the plaintiff on the question of liability.

In light of this submission the Court of Appeal took the view that it would be necessary to consider the course of the trial proceedings in some detail. In so doing the majority of the Court of Appeal arrived at the conclusion that the trial judge was entitled to take into account the various facts identified by the defendant company when reaching his decision on the question of liability. As such it was held that the appeal should be dismissed and the judgement of the trial judge confirmed with costs.

Proposed legislative measures 

The decision of the NSW Court of Appeal was all the more significant for the fact that last year the Australian Democrats introduced a Bill into the Senate that proposed imposing civil penalties on Australian companies and subsidiaries that contravene ILO, OHS, environmental and employment standards in foreign countries. At present Australian companies are only required to comply with local laws in the countries where they operate. The Bill introduced by the Democrats in September last year is known as the Corporate Code of Conduct Bill 2000. It provides that Corporations with more than 100 persons in a foreign country must provide safe and healthy workplaces for their employees. Whilst this proposed legislation would enforce a statutory obligation upon employers to provide a safe workplace, the Pacific Access decision demonstrates that Australian companies with employees abroad are still obliged to meet a common law duty of care.

 

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