By Gaby Grammeno Contributor

On 4 July 2018, the worker was driving a haul truck at the West Angelas iron ore mine in Western Australia when it was struck by a loader. The driver of the loader had been reversing away from the ore face while manoeuvring to avoid some rocks that had fallen in his path when he hit the back corner of the haul truck with the tooth of the loader bucket, injuring the driver of the haul truck.

The injured worker was employed by a labour hire company that provided personnel for the mine. Its employees at the mine were integrated into Pilbara Iron's workforce and supervised by Pilbara Iron's supervisors.

The labour hire company’s insurance policy insured it against common law claims made by its employees for workplace injuries.

The insurance policy’s ‘Principal's Extension’ extended the policy’s coverage to a principal – the host employer – for whom the labour hire company carried out work under a contract, where an injury caused or contributed to by the principal's negligence arose out of and during the performance of the work.

The injured worker alleged that the collision and his injury were caused by the negligence of Pilbara Iron and its employee, who was driving the loader.

The worker claimed that Pilbara Iron was both vicariously liable for the loader driver’s negligence and directly liable to the worker for its own negligence. 

Pilbara Iron denied it was liable. It also began proceedings against the insurer, seeking indemnity for the worker’s claim on the basis of the labour hire company’s insurance policy.

The case was heard in the District Court of Western Australia.

In court

There was no dispute that the collision between the loader and the haul truck injured the worker. The quantum of damages to which the worker is entitled had been agreed at $1.1 million.

There were two key issues for the court to determine – whether Pilbara Iron was liable to compensate the worker, and whether it was entitled to an indemnity for any liability to the worker and, if so, the extent of the indemnity.

To decide if the company had to compensate the worker, it was necessary to consider whether the loader driver – an employee of Pilbara Iron – breached his duty of care to the worker, and whether the employer was vicariously liable for that. The court also had to decide whether Pilbara Iron owed the labour hire worker a duty of care and, if so, whether it breached that duty. This last question required consideration of the adequacy of the safety precautions at the mine.

With regard to the second issue concerning the company’s entitlement to indemnity for liability, the court had to consider whether:

  • there was a contract between Pilbara Iron and the labour hire company 
  • the worker's injury arose out of and occurred during the labour hire company's performance of the contract
  • Pilbara Iron's negligence caused or contributed to the worker's injury 
  • any indemnity extended to the legal costs of defending the worker's claim, and
  • Pilbara Iron breached the conditions of the insurance policy, or failed to mitigate its loss.

 

Pilbara Iron admitted it was vicariously liable for the loader driver’s conduct. It also admitted it owed the injured haul truck driver a duty to exercise reasonable care to avoid injury to him, and that if the loader driver breached his duty of care, Pilbara Iron was liable in negligence to pay damages for his conduct. However, it denied that the loader driver breached the duty of care he owed the haul truck driver.

Both Pilbara Iron and the insurer accepted that there was a foreseeable and not insignificant risk of injury if there was a collision between the haul truck and the loader, but the insurer denied any obligation to indemnify the miner, and maintained that the miner did not breach any duty to the injured worker and so could not be liable for damages.

The injured worker submitted that the loader driver had failed to take proper care and attention and to adequately control the loader so as to avoid the collision. The insurer accepted that the loader driver had been negligent, but attributed this to an individual act rather than something for which his employer was responsible.

The injured worker also contended that Pilbara Iron should have specified a minimum safe distance that loader drivers must maintain while loading trucks.

Judge Terence Palmer heard evidence that though the loader driver had been assessed as a safe and competent driver, and the operating manual for the loader required drivers to keep a safe distance from other mobile plant, drivers had received no instruction in how to measure a safe distance. Pilbara Iron did not specify a minimum safe distance until a few days after the incident, when it issued a ‘three metre rule’ to reduce the risk of collision.

Judge Palmer considered that a reasonable person in Pilbara Iron's position would have taken the precaution of mandating the minimum safe distance to maintain between loaders and haul trucks. He considered that three metres would have been a reasonable safe distance but it could have been greater.

Further, he considered that a reasonable person would have appreciated that loader operators performed repetitive work for long shifts and that the repetitive nature of such work meant that the judgment of loader operators risked being impaired by thoughtlessness, inadvertence and carelessness, reinforcing the need to mandate a minimum distance that allowed a margin of error to reduce the risk of a collision.

Judge Palmer found that the loader driver breached his duty of care for the haul truck driver through a misjudgment and consequent failure to maintain a sufficient distance from the truck. He was also satisfied that Pilbara Iron had breached the duty of care it owed the labour hire worker, causing or contributing to his injuries.

On the question as to whether the insurer was required to indemnify Pilbara Iron, the judge considered the evidence in the light of relevant cases and concluded that the worker’s injury arose out of the labour hire company's performance of the contract.

Judge Palmer determined that Pilbara Iron was entitled to indemnity for any common law liability it might have to the injured worker, but that the insurer was not obliged to indemnify Pilbara Iron for its legal costs.

What it means for employers

Employers need to establish and maintain systems to prevent collisions between mobile plant and pedestrians or other equipment, and to train workers in the specifics of those systems. It is not enough to have a general rule such as ‘keep a safe distance from other plant’ and leave it up to the judgement of individuals to decide how close is too close.

Read the judgment

Fussell -v- Pilbara Iron Company (Services) Pty Ltd[2024] Wadc 72 (30 August 2024)