A tribunal determined an employer could have to pay workers’ compensation after an employee died while exercising in a hotel gym, but this lawyer thinks an appeal could be coming.

If you fracture your arm while participating in a lunchtime pilates class organised by your employer, is the company to blame?

Or what if you suffered an unforeseeable and fatal injury while on a work trip in another state or country – should your family be eligible to apply for workers’ compensation?

The South Australian Employment Tribunal recently answered ‘yes’ to this last question. It looked into whether an employer was responsible for the death of an employee who died while exercising in a hotel gym on a work trip. 

Will Snow, Partner at Finlaysons Lawyers, says he was “very surprised” by the ruling.

“I can understand that some employers might be scratching their heads here and thinking, ‘Do we not provide gyms on site anymore, or maybe a discounted membership as an employee benefit?’ 

“It’s a growing trend to see corporate wellbeing programs, such as weekly yoga sessions or subsidising employees’ access to a local gym… These programs are really beneficial, and you’d hope that a decision like this wouldn’t discourage employers from providing those benefits so their employees can stay well and healthy.”

It’s also important to bear in mind that the current case concerns a particularly tragic and unique set of circumstances.

“Sometimes people do get injured from recreation activities encouraged or induced by the workplace. It’s usually not something as tragic as what’s happened here, but could be tendonitis or a sprained ankle. These are injuries that are unfortunate but can be dealt with,” says Snow.

Given the unique and tragic set of circumstances in the case at hand, Snow says there’s “every chance that this matter will be appealed”.

“This is a really devastating situation where someone who had a very serious illness wasn’t aware of it, and they suffered a fatal heart attack. It’s very unfortunate and unlucky… But I can see an appeal being made because this seems to be a very unique case that relates to its own set of facts, so watch this space.”

While we keep an eye on any further developments, let’s unpack the ins and outs of what happened in this particular case, and why the tribunal has found the incident entitles the family to put forward a workers’ compensation claim.

Employee’s tragic death on a work trip

In November 2018, a 60-year-old employee of a mining company visited Hangzhou City on a business trip when he suffered a fatal heart attack while exercising in the hotel gym.

Unbeknownst to the employee or the company at the time, he had “developed severe and extensive coronary artery disease in his coronary arteries as noted at autopsy”, according to a cardiologist’s medical report.

Following the employee’s death, his widow applied for workers’ compensation, claiming the death of her husband arose during the course of his employment and that the company is therefore liable.

The argument was also made that providing accommodation in a hotel with a gym constituted an activity that was induced, encouraged or expected by the employer.

Finding in favour of the applicant, Deputy President Judge Miles Crawley SC likened the current case to the High Court ruling of Hatzimanolis v ANI Corporation Ltd.

In the latter case, an employer was held liable for an injury sustained by the employee while they were on a sightseeing tour. The outing was organised by the employer on the workers’ day off. On the return journey, one of the employees was seriously injured when a vehicle overturned.

Drawing a connection between the current case and the High Court ruling, Snow explained: “The High Court said the employer had induced this because it encouraged people to spend their time in a particular way.”

In a similar vein, the judge ruling on the current case noted: “By providing hotel accommodation complete with gym facilities, I consider the employer induced or encouraged the worker to use the gym and therefore to engage in the activities he was performing at the time of his death.”

Wellbeing programs

Increasingly so, employers are expected, by their employees, to offer their workforce a suite of wellbeing initiatives.

Organisations have a vital role to play in supporting employees’ mental and physical health, but there’s a risk that the case in question could cause them to think twice about extending such benefits.

“Employers may now wonder: ‘If we provide a subsidised gym membership, does that mean we’ll be handed a worker’s compensation claim if someone gets injured?’” asks Snow.

“Many employers want to do everything they can to support their employees, be an employer of choice and have a fit and healthy workforce… But in that situation, isn’t the employer then inducing or encouraging employees to do those activities because they’ve made them available? 

“Are they just creating problems and liabilities for themselves where previously there were none? The problem is that conclusion may do more harm than good, and I don’t think it’s the one that should be made.”

In fact, he suggests there could be more risks if you don’t offer such benefits. 

“The risk of having to pay workers’ compensation will be minimised if you have a physically and mentally strong workforce. If you’re providing employee assistance programs and can show that you’re managing employees’ stress and dealing with interpersonal conflict, those steps are going to reduce the chances of your employees getting injured or becoming ill.“

“I can understand that some employers might be scratching their heads here and thinking, ‘Do we not provide gyms on site anymore?’” – Will Snow, Partner at Finlaysons Lawyers

Snow says wellbeing programs are not only “of significant net benefit” in terms of supporting staff wellbeing, but also for boosting attraction and retention during the Great Resignation.

“If you take away these sorts of benefits, then your organisation can become a far less attractive place to work,” he says. “In general, people are also happier and more productive when they’re fit and well, and exercise is a huge part of that.”

Importantly, the tribunal also noted that a gym workout does not fall under the social or sporting activity exclusion clause in South Australia’s Return to Work Act 2014.

According to the legislation, a social or sporting activity is not compensable under the Act except “where the activity forms part of the worker’s employment or is undertaken at the direction or request of the employer”.

Although access to workers’ compensation varies state by state, Snow says most states have similar legislation in place, which effectively says: “When organisations are organising and encouraging social sport competitions, they can be liable for injuries that take place during those competitions. 

“If the employer is not organising or encouraging the activity, then the exclusion may apply. The decision here was that, although exercising at this gym was not part of this worker’s employment, exercising at a gym does not constitute a social or sporting activity.

The tribunal said that sporting activity takes place within an organisation in a structured way, and the activity must have rules, customs, a team or a competition, explains Snow.

“The fact that he was doing a workout in a gym doesn’t mean it was a sporting activity.”  

Employers may get some comfort from providing waiver documents for employees to sign as a condition of using an employer-provided gym, adds Snow, and while the effect of these documents can vary, it “could be an important protection in the event of a claim”.

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Preventing workers’ compensation payouts

For businesses to keep employees safe and protect themselves against workers’ compensation claims, it would be prudent to introduce some precautions, says Snow.

“Some businesses require senior employees to undergo annual medical check-ups. That can sometimes be a requirement of income protection insurance as well. If an employer had that sort of measure in place here, it might’ve allowed them to identify a chronic illness or disease, and on the basis of medical advice provided, they could’ve told the employee they really ought to do X, Y and Z to maintain health.”

Snow concedes that few workplaces undertake this kind of process, but says it’s an available option that could be built into their existing practices.

“You could include a clause into the contract of a senior member of staff which says, ‘You will be required to go to a doctor of our choosing every year to have a medical assessment.’

“Maybe the lesson overall here is to encourage people who, because of their age, demographic make-up or some other factor, are more prone to certain illnesses, to have regular check-ups.”

Snow also says that this isn’t an automatic discretion for employers.

“Unless you have a clause in a contract that enables the employer to direct an employee to have a medical assessment, it’s usually not going to be reasonable to require that to be done. So, it’s one of those clauses in a contract that might be better to have since if you leave it out, it can really cut off your options.”

It should also be noted that the company in this case has a ‘Fitness for Work Policy’, which requires its staff to be fit for work – although Snow notes the tribunal placed little importance on the policy.

“It’s really just touched on briefly,” he says. “It’s probably something that says, ‘If you’re going to work, you have to be fit for work, and if you’re not fit for work, take sick leave.’ That wasn’t actually a relevant consideration in the decision. 

“This issue could be picked up in an appeal where the insurer may argue that the tribunal put insufficient weight on its terms.”

Beyond the case

Although the case highlights the need to underpin wellbeing programs and employee support with precautionary steps, we’re also likely to form a skewed perspective of the effectiveness of wellbeing programs if we only look at the legal cases, says Snow.

“Most of the time, these programs work extremely well in supporting employees’ physical and mental health. We just don’t hear about the times when the results are positive, it’s usually when something goes badly that it hits the news or ends up in court,” he says.

“What we don’t see is the silent evidence of staff who have integrated wellbeing programs effectively into their routines and have gained some flexibility or lost some weight, or just experienced more vitality because of the workplace’s support. Those outcomes don’t become interesting court cases. They’re just people living their lives a little better with an employer’s support.”