Scott v Usinch Pty Ltd [2025] NSWSC 983

Link to decision Link to video

Key takeaways

When considering the competing liabilities for a forklift accident between the host employer and its related labour hire company, the Supreme Court recently held that the vicarious liability for the driver’s negligence rested with the host employer, resulting in:

1. the labour hire company, despite being the actual employer of the driver, being liable only on a work injury damages basis; and
2. the liability of the host employer, based on the breakdown in its own system of work and its vicarious liability for the driving of the vehicle, being assessed solely under the Civil Liability Act 2002 (NSW).

Brief facts

Usinch Pty Ltd (Usinch) operated an abattoir in Whittingham in Northern New South Wales. The worker was employed by Epona Pty Ltd (Epona), a related payroll/labour hire company. On 19 July 2017, the worker sustained an injury when a stillage slipped off a moving forklift at the abattoir and struck him. The forklift was driven by an unlicensed co-worker who was also employed by Epona.

The worker commenced proceedings against both Usinch and Epona. Against Epona, he sought damages under the Motor Accidents Compensation Act 1999 (NSW) (MACA) and, in the alternative, for work injury damages under the Workers Compensation Act 1987 (NSW).

Epona argued that, primarily, the system of work controlled by Usinch was the cause of the injury, rather than the driving of the vehicle. In the alternative, Epona argued that, despite the driver being an employee of Epona, Usinch was vicariously liable for the negligence of the unlicensed driver because:

1. the system was wholly controlled by Usinch; and
2. the placement by Usinch of the unlicensed driver was a breach of Usinch’s own forklift driving protocols.

On this basis, Epona, the labour hire employer, argued that any damages for which it was liable should be assessed as a work injury damages claim, rather than a motor accident claim.

Judgment

Acting Justice Schmidt found that both the host employer and labour hire employer had breached their respective duties of care to the worker.

It was held that Usinch had an unsafe system of work and failed to implement documented safety procedures. Epona, who had a non-delegable duty of care, was also found liable based on its knowledge (through common officers) that the unsafe forklift work was occurring. This included the failure to secure the stillages to the tines properly.

Her Honour found that Usinch had primary responsibility and therefore bore a higher degree of culpability for the worker’s injury. Epona’s contribution was assessed at 30%. No finding of contributory negligence was made against the worker.

Damages against Usinch were to be assessed under the Civil Liability Act 2002 (NSW). In assessing damages against the host employer, her Honour concluded that:

• The worker’s injury was sustained during the driving of the forklift, and as a consequence of that driving.
• The host employer required the forklift driver to drive the forklift in circumstances where the labour hire employer had provided the forklift driver as a labourer only, and the host employer failed to provide relevant training or supervision.
• The host employer’s unsafe system of work resulted in the negligent driving, which caused the worker’s injury.
• The worker was under the host employer’s ‘direction and practical control’, which placed it in an employer-employee-like relationship.
• Her Honour therefore found the host employer to be vicariously liable for the actions of the forklift driver, rather than the labour hire employer.

Her Honour agreed with Epona’s position that the MACA did not apply, as Epona was neither the owner of the forklift nor vicariously liable for the forklift driver’s actions. The worker was therefore only entitled to work injury damages, rather than motor accident damages, as against Epona.  

Implications

When receiving claims under the motor accidents legislation, employers and insurers must carefully review the facts to determine whether the worker is in fact entitled to motor accident damages, or alternatively, work injury damages.

The importance of this lies in the fact that work injury damages only entitle a worker to seek past and future economic loss, whereas motor accident claims allow a worker to seek greater damages than those available under the limited work injury damages regime.