Relevant to the determination of the above issue, Flynn DCJ found that Auspray had entered into a contract for services with Prestige Helicopters Pty Ltd (Prestige).
When providing the services to Prestige, the deceased was involved in an industrial accident where he unfortunately passed away.
It follows that if insurance is not purchased pursuant to section 160 then an injured working director is not a “worker”. If there were doubt about this, then section 10A(7) says: “if a company (other than a company that is, or is one of a group employers that is, exempt under section 164) does not comply with section 160 on the basis that a working director of the company is a worker, then, for the purposes of this Act, the working director is not a worker.” (our emphasis added).
The appellant argued that section 10A(2) limited the effect of section 10A(7). Section 10A(2) says: “despite anything in section 5, a director of a corporate body is not a worker of that corporate body for the purposes of this Act, unless and to the extent that this section makes the director a worker” (our emphasis added). The appellant argued that section 10A(2) limited the effect of section 10A(7) to saying that the deceased was not a worker of Auspray, however, could still be regarded as a worker for the purposes of section 175 of the Act and claim compensation from Prestige.
He explained that section 18 of the Act creates both an entitlement of a worker to compensation and a liability to pay the entitlement upon an employer. “The entitlement and liability crystallise upon an injury to the worker”.
In rejecting the argument, Flynn DCJ said that: “section 175 of the Act does not create an entitlement to compensation. It is concerned with identifying the parties who have liability to pay the entitlement that is created by section 18”.
The effect of section 175(1) is that the liability of Prestige was the same as Auspray’s liability. Given that Auspray had no liability to the deceased (because the company did not purchase insurance under section 160) then Prestige had no liability to pay compensation under section 175 of the Act.
This is the first case that has offered an interpretation of the combination of sections 160, 10A(2) (7) and section 175 of the Act. It highlights the obvious task when confronted with questions about liability of asking what is the entitlement and what is the source of liability.