Business trips – blurring the line between work and play

A recent decision of the South Australian Employment Tribunal highlights the potential workers compensation liability risks associated with sending employees on business trips.

In Palmbachs v Return to Work Corporation of SA [2022] SAET 14 the worker, Eric Palmbachs, suffered a fatal heart attack while exercising in a hotel gym during a business trip to China. Mr Palmbachs’ widow sought compensation under the applicable workers compensation scheme. Her claim was initially rejected by the insurer on the basis that Mr Palmbachs’ death did not “arise out of or in the course of employment”. The dispute was referred to the South Australian Employment Tribunal.

Injuries sustained during an interval between discrete periods of work

Where a worker is required to travel to a location away from their permanent place of work and stay away from their usual residence, they will be deemed to be carrying out an overall period of work for the duration of the trip.

If, whilst on the trip, the worker is injured during a break between periods of actual work, they will be eligible to make a workers compensation claim in respect of their injury if:

• the injury occurs whilst the employee is at a particular place, or doing a particular activity; and
• the employer has “induced or encouraged” the employee to spend the break at that particular place, or do that particular activity.

Was Mr Palmbachs’ induced or encouraged to use the gym

Mr Palmbachs was exercising in the hotel gym at the time of his death. Accordingly, the key issue for determination by the Tribunal was whether his employer had induced or encouraged him to engage in that activity.

It was not disputed that Mr Palmbachs’ employer had booked his accommodation in China and was aware of the hotel’s facilities (including the gym). Nor was it disputed that the employer did not say anything expressly to Mr Palmbachs about the gym or whether he could use its facilities.

The Tribunal confirmed that there is no need for any positive action on the part of the employer. The mere fact that the employer had provided the hotel accommodation, complete with gym facilities, was sufficient to establish that it had “induced or encouraged” Mr Palmbachs to use the gym.

The Tribunal concluded that Mr Palmbachs ' death arose out of or in the course of his employment and his widow’s claim for compensation was successful.

What does this mean for employers

This case is a timely reminder that, absent gross misconduct by an employee, an injury suffered during a work related trip but not whilst engaged in actual work will invariably lead to a successful workers compensation claim if the employer expressly or impliedly induced or encouraged the employee to spend their time between periods of actual work at a particular place or in a particular way.

Before sending employees on business trips, employers should undertake a risk assessment of the activities that employees may engage in whilst on the trip and, where practicable, put appropriate control measures in place.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

The authors would like to thank Harry Yous for his assistance in preparing this article.