By David Slatyer, Partner 

In a personal injury damages claim in Queensland, where there is a liable employer defendant and a liable non-employer defendant, any contractual indemnity claim by the non-employer against the employer is rendered void, leaving the apportionment of damages between the defendant based on joint tortfeasor principles (i.e. respective culpability for the plaintiff’s injury).

That is the effect of first decision regarding s236B of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA), by the Queensland Court of Appeal on 13 September 2024, in Bilson v Vatsonic Communications Pty Ltd (2024) QCA 171.

Before the introduction of s236B WCRA, the law was that if each of the employer and non-employer were liable to an injured worker, an employer could be liable to indemnify a non-employer for 100% of the plaintiff’s damages, if that was the effect of a contract between them (Byrne v People Resourcing (Qld) Pty Ltd (2014) QSC 269).  Section 236B of the WCRA was introduced to attempt to overcome that result, however many questioned whether its drafting would be adequate to do so, and it had never been tested in court, until now.

In its unanimous decision, the Qld Court of Appeal held that s236B of the WCRA provides that an agreement between an employer and a third party is void to the extent it requires the employer to indemnify the third party (and further that the employer’s statutory insurer, WorkCover Queensland, is not required to indemnify the insured employer for a liability arising under contractual indemnity between the employer and a third party).

Facts

The plaintiff (Bilson) was employed by Vatsonic to operate a vacuum truck, and Vatsonic contracted with the Townsville City Council to perform work with the truck. The plaintiff was injured in the course of his work when uncoupling a vacuum hose from the truck and the hose sprung from his grip and hit him in the face. Bilson brought personal injury damages claims against both his employer and the Council, in negligence. The Council asserted a claim for contractual indemnity against the employer, pursuant to the contract between them.

Trial

At first instance, it was decided that both defendants were liable to the plaintiff for their respective negligence. The employer did not address the risk in is work method and instructions to the plaintiff. The Council had not followed its standard procedure in moving the hose when the plaintiff was attempting to uncouple it.  Liability was apportioned, as joint tortfeasors, at 70% against the employer and 30% against the Council.

However the District Court found that the Council was able to enforce its contractual indemnity against the employer (such that it could recover its 30% liability from the employer), and determined that s236B WCRA did not render the contractual indemnity void.

WorkCover Qld, on behalf of the employer, appealed that decision.

Appeal    

The court of appeal agreed with the joint tortfeasor apportionment of liability below, but found that the intent of s236B was clear and it renders void any contractual indemnity sought against an employer.

In practice, that has been the position and practice of WorkCover Qld, however it now has the precedent to clearly uphold that stance.

As such, liability remained apportioned at 70% against the employer and 30% against the Council.

The decision confirms that, in such claims, non-employers (and their liability insurers) will not be able to rely on any contractual indemnity against an employer co-defendant.