(Do not) go with the flow: A host employer's duty to supervise its safe system of work – Jurox Pty Ltd v Fullick [2016] NSWCA 180

Sandra Fullick (the plaintiff) was employed by Integrated Pty Ltd (Integrated) to work as a production operator under the direction of Jurox Pty Ltd (the defendant) at the defendant's premises pursuant to a labour hire agreement. Her duties included cutting open 25 kg bags of dextrose and emptying the contents into a hopper. In the course of carrying out those duties on 5 December 2011, the plaintiff sustained injury to her lumbar spine. The plaintiff alleged the defendant was negligent in failing to provide a safe system of work. Integrated were not a party to the proceedings although the defendant pleaded a reduction in total damages pursuant to s 151Z(2) of the Workers Compensation Act 1987 (NSW) (the WCA).

The trial judge, Mahony DCJ, found the defendant's system of work was that the plaintiff was to cut open a 25 kg bag of dextrose with her left hand and thereafter allow the dextrose, using the force of gravity, to flow from the bag into a hopper. Because this system did not require the plaintiff to physically lift the 25 kg bag, the trial judge found the defendant's system of work was safe.

However, even though she was given a demonstration as to the correct procedure shortly after her commencement with the defendant, the trial judge found the plaintiff was not performing the task in accordance with the defendant's established safe system of work. Rather, the plaintiff cut the bag, allowing some of the dextrose to fall in, lifted the bag with her right arm, twisted her back toward the hopper, and poured the remaining dextrose in. Because the defendant failed to call its employee, who was said to be the plaintiff's supervisor, to give evidence as to its system of supervision, the trial judge made an adverse inference in relation to its system of supervision pursuant to the principles of Jones v Dunkel.² The trial judge also found that other employees had also failed to adopt its safe system.

As such, the trial judge found the defendant breached its duty of care in that it failed to ensure the plaintiff complied with its safe system of work and failed to provide adequate supervision. The trial judge found that the plaintiff's incorrect method of emptying the bags would have been detected had she been supervised by the defendant and, therefore, factual causation was established pursuant to s 5D of the Civil Liability Act 2002 (NSW).

While the trial judge found Integrated owed the plaintiff a non-delegable duty of care as her employer, it was not in breach of its duty given the safety audits it undertook did not, and could not, reveal the defendant's lack of supervision. No reduction was therefore made under s 151Z(2) of the WCA. The trial judge did not address the defendant's pleading of contributory negligence. The plaintiff was awarded $588,515 in damages.

It was not in issue on appeal that the plaintiff adopted an unsafe system of work which was contrary to the defendant's established safe system. The defendant appealed the trial judge's fact-finding exercise in relation to its system of supervision, contending that the trial judge failed to engage with the evidence and that the plaintiff was not a credible witness. Simpson JA (with Rothman J agreeing) held that the trial judge had in fact engaged with the evidence, pointing to the fact none of the witnesses for the defendant's case could clearly say who, if anyone, was charged with supervising workers at its premises. Whether the plaintiff gave credible evidence as to the defendant's system of supervision was therefore of little significance.

The defendant also appealed what it said was the trial judge's failure to address its pleading of contributory negligence. The majority found that the plaintiff's adoption of a risky method of performing the work was in fact indicative of the defendant's breach of duty. The majority held, given the plaintiff continued to adopt the incorrect method of emptying the bags after she had been inducted, which could have been discovered upon even a modicum of supervision,³ her unsafe practice became entrenched. As a result, the majority found the plaintiff could not have known that she was adopting an unsafe method of work and no finding of contributory negligence was therefore made. The majority also agreed with the trial judge in respect of the liability of Integrated, holding that it could not be held responsible for failing to ensure the defendant supervised its own safe system of work.

In his dissenting judgment, Leeming JA held the trial judge had insufficient regard to the amount of dextrose left in the bag when the plaintiff lifted it to empty its contents. His Honour stated that the defendant's safe system of work relied upon the dextrose flowing out of the bag and the plaintiff accepted, in her evidence in chief, that at least some of the dextrose would flow out of the bag after she had cut it open due to its fluidity and the force of gravity. As such, in the absence of any evidence as to the how much dextrose was left in the bag, and therefore its weight when it was lifted by the plaintiff, his Honour held that a retrial should be ordered given the Court of Appeal cannot make primary findings of fact.

The Court of Appeal upheld the trial judge's assessment of damages.

This case reiterates the responsibility of a host employer to ensure workers on its premises are supervised in their adoption of safe systems of work. A host employer must therefore provide evidence of any formalised system of supervision to avoid an adverse finding at trial.

The case also reiterates that while a labour hire company owes a non-delegable duty to its employees, a labour hire company is not required to ensure the host employer supervises its own safe work systems.

Because the Court of Appeal cannot make primary findings of fact, it is critical all relevant evidence is ventilated at trial in the court of first instance.