Tazleem v Certain Underwriters at Lloyds [2026] NSWSC 124

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Key takeaways

In this matter, the public liability insurer of the host employer raised a novel argument, asserting that the host employer was the actual employer, in an attempt to deny that the public liability policy responds because the injured worker was an employee of its insured.

The court declined to make that finding and noted despite how business is conducted by a host employer, it must also consider the commercial reality created by entering into a labour hire agreement.

Brief facts

The subject injury

On 9 February 2018, the worker was undertaking duties at Better Truck Repairs Pty Ltd’s (BTR) premises. The worker was employed by JP Business Consulting Pty Ltd (JPBC) and outsourced to BTR.

A supervisor employed by BTR directed the worker to repair a bucket on an excavator. The bucket had been placed on the tines of a forklift and weighed in excess of a ton.

To repair the bucket, the worker had to remove it from the tines of the forklift but had difficulty removing the bucket. To solve this, the worker attempted to contact the BTR Supervisor for further direction, then requested assistance from a floor manager who could not assist and then he finally instructed an apprentice to assist him. They were unsuccessful in removing the bucket but at some point, the bucket suddenly detached and struck the worker, causing injuries to his neck, left shoulder and left elbow.

The issue of insurance

The worker claimed that he was employed by JPBC, a labour hire company. As JPBC was deregistered when the proceedings commenced, the Workers Compensation Nominal Insurer was joined as the second defendant.

It was alleged that JPBC provided the worker’s labour to BTR, which later went into liquidation. Accordingly, the worker joined Certain Underwriters at Lloyds as the first defendant and BTR’s public liability insurer.

The worker himself only became aware that his wages were paid by JPBC after he obtained legal representation.

It was the first defendant’s position that the public liability policy would not respond because the worker was an employee of BTR. Accordingly, it would be more appropriate for the worker to bring a work injury damages claim against BTR and for the workers compensation policy to respond.

With respect to the circumstances of employment, the first defendant argued that the worker was employed by BTR for the following reasons:

• BTR contacted the worker directly after he submitted his resume on job seeking sites;
• the worker had an interview with the BTR Supervisor, who is described as a ‘principal of BTR’;
• the BTR Supervisor asked the worker to commence work and informed him of his start date, working hours, probationary period and rate of pay; and
• there was no contract between the worker and JPBC.

The second defendant admitted that JPBC employed the worker and noted that the workers compensation insurer had already made payments in respect of his injury.

Judgment

The matter was heard before Acting Justice Elkaim of the Supreme Court of NSW, who determined that JPBC was the employer and the first defendant’s public liability policy responded to the worker’s claim as he was not employed by BTR. His Honour apportioned liability between BTR and JPBC on an 80/20 basis.

In determining that the worker was employed by JPBC, his Honour provided the following reasons:

• JPBC’s workers compensation policy responded to the claim and payments were made to the worker’s benefit;
• there was no suggestion that BTR held a workers compensation policy and they did not notify any workers compensation insurer of the worker’s claim;
• JPBC paid the worker’s wages; and
• the contractual agreement between BTR and JPBC made it so that any individual working for BTR automatically became an employee of JPBC.

His Honour also rejected BTR’s argument that the supervisor, in setting the work conditions gave rise to a contractual employment relationship.

Additionally, his Honour noted that the first defendant did not call the BTR Supervisor to give evidence and drew the inference that his evidence would not have assisted the first defendant.

With respect to apportionment, his Honour found that a greater share of liability should fall on the first defendant, as BTR provided direction and supervision to the worker at the time of injury. Although JPBC owed a non-delegable duty of care, the task was undertaken entirely under BTR’s supervision.

Implications

Even if a host employer can take a more active role in hiring and deploying workers into their workplace, it cannot ignore the systems and obligations created by a labour hire arrangement, including wage payment and responsibility for arranging workers compensation cover.