Jacquie Seemann and Bridget Nunn

Some clarity on COVID-19 and COVID-19 vaccination liability for employers

Jacquie Seemann and Bridget Nunn

2 September 2021

Employment Disputes Employment Policies

The last week has seen some developments in the COVID-19 space that give employers guidance about their potential liability for:

  • COVID-19 contracted by employees in the course of their employment; and
  • side effects of COVID-19 vaccination if the employer has mandated or encouraged vaccination.

One NSW Personal Injury Commission case has confirmed that employees will be entitled to workers compensation if they contract COVID-19 carrying out activities that have been induced or encouraged by their employer.

The Federal Government has also announced a COVID-19 vaccine claims scheme to compensate anyone suffering moderate to severe side effects following COVID-19 vaccination. This provides employers with some comfort that they will not face significant liability for such side effects if they have induced or encouraged employees to get vaccinated.

Further details are set out below.

Employer liability for COVID-19

The dependent of a NSW man who died from COVID-19 which he contracted during a work trip to the USA have been found to be entitled to death benefits under the Workers Compensation Act 1987 (NSW) (WC Act).[1]  The NSW Personal Injury Commission accepted that the employee would not have been ‘in the course of his employment’ for the entirety of the trip, applying the principles established in Comcare v PVYW (2013) 250 CLR 246 that an employer must induce or encourage the employee to do something or be somewhere in particular for the employee to be regarded as being ‘in the course of the employment’. However, the Commission found that the employee most likely contracted COVID-19 during the flight to the USA, which was clearly an activity that was induced or encouraged by his employer.

Whilst this case was decided under specific provisions of the WC Act, its principles do provide some broader guidance for all Australian jurisdictions. Employees who contract COVID-19 while engaging in activities that have been induced or encouraged by their employers are likely to be entitled to compensation under State and Territory workers compensation schemes. Employers should also be mindful of their potential liability for breach of duties under work health and safety legislation if they induce or encourage employees to enter settings where there is a heightened risk of contracting COVID-19.

Liability for COVID-19 vaccination

Employers and industry bodies have been increasingly concerned about potential liability for COVID-19 vaccination side effects suffered by employees in circumstances where employers have mandated or encouraged vaccination. Any loss suffered following a Therapeutic Goods Administration approved COVID-19 vaccination exceeding $5,000 will now be covered by the Federal Government’s COVID-19 vaccine claims scheme, which goes live on 6 September 2021 and will apply retrospectively to any claims dating back to February 2021.

The creation of the COVID-19 vaccine claims scheme provides employers with comfort that they will face little or no liability for mandating or encouraging COVID-19 vaccination if employees suffer side effects.

However, claims for $5,000 or less may still be covered by workers compensation schemes if employers are found to have induced or encouraged employees to be vaccinated, which is likely to be the case if:

  • the employer has introduced a policy of mandatory vaccination; or
  • the employer has strongly encouraged vaccination by facilitating or incentivising vaccination, for example, providing onsite vaccination services.

Please contact a member of the Employment, Workplace Relations and Safety Team if you would like assistance with any of these issues.


Jacquie Seemann | Partner | +61 2 9020 5757 | jseemann@tglaw.com.au

Bridget Nunn | Special Counsel | +61 8 8236 1129 | bnunn@tglaw.com.au


[1] Sara v G & S Sara Pty Ltd [2021] NSWPIC 286