Workers’ compensation and the sharp end of vaccine mandates

A tribunal’s recent finding that the State of South Australia is liable to compensate an employee injured after being directed to have a Covid vaccine under the Emergency Management Act opens up a legal minefield, writes Morry Bailes.

Feb 08, 2024, updated Feb 08, 2024
Photo: Josh Fernandes/AAP

Photo: Josh Fernandes/AAP

A recent decision by the South Australian Employment Tribunal (SAET) has shed new light and developed new law on the consequences of mandating Covid vaccines as an employer.

In the case of Shepherd v State of South Australia, the SAET found that an employer making a vaccine mandatory and threatening employment consequences if the vaccine was not administered, meant that an adverse reaction to the vaccine, as occurred to Mr Shepherd, was work related and thus compensable in workers compensation law.

The facts of the case were that Mr Shepherd, having had two Covid vaccinations, was directed by his employer – the Department of Child Protection – to have a third. He didn’t want to, but understood that he would lose his job, which he enjoyed, and wished to maintain in order to provide for his dependants.

There was some dispute on the facts as to whether the employer said only that there would be ‘employment implications’, or whether, as Mr Shepherd understood, he was going to be sacked. The judge hearing the case said that the factual difference didn’t matter much because the effect was the same; Mr Shepherd was in fear that that if he didn’t have the vaccine, he would lose his employment. So he had the shot.

Unfortunately for Mr Shepherd, he was one of the unlucky ones and developed pericarditis, which left him with likely serious and permanent debilitating symptoms. Had he had the vaccine voluntarily there would not necessarily exist a question of the employer’s liability. However, he was directed to have the vaccine by his employer, who in turn complied with a direction given by the then State Coordinator under the Emergency Management Act.

The Covid pandemic seems now like a receding nightmare. Pity those who had to make difficult and indeed unprecedented decisions during that difficult time. One of them, by dint of the Emergency Services Act, was the Commissioner of Police, who courtesy of the Parliament which declared a State of Emergency, became the State Coordinator wielding enormous power (albeit from his own lips, not something he sought or wanted).

It was by Act of Parliament that he came by the power, ordinarily used sparingly and usually to coordinate reactions to natural disasters such as bushfire or flood.

As the State Coordinator, he issued a direction that public servants in certain occupations must mandatorily be vaccinated against Covid. That in turn to the direction being made to Mr Shepherd by the Department of Child Protection.

But when Mr Shepherd made his workers compensation claim for the adverse reaction to the vaccine, it was rejected by the employer, and liability denied. This was presumably on advice from the Crown Solicitor, whose office went on to argue at trial that because the injury sustained by Mr Shepherd was as a result of the direction of the State Coordinator under the State Emergency Act rather than at the whim of the employer, even though the vaccine was causally related to employment, it should be regarded as nonetheless not compensable.

Furthermore, it was argued by the Crown that Section 32A of the Emergency Management Act should apply and that no liability should attach to the Crown in Mr Shepherd’s case as the mandate and direction were provided lawfully.

The SAET did not agree. The foreseeability of an adverse reaction to the vaccine resulting in what would otherwise be regarded as a workplace injury meant the State of South Australia could not rely on what it argued was an exception to the usual workers compensation rules, and the rejection of the claim was set aside.

What does it mean?

Having only been recently decided, the case is still within the period of time in which an appeal could be lodged by the State of South Australia against the judgement, although comments from the Attorney-General on the issue, joined with the fact that an appeal would displease trade unions who are traditional supporters of a Labor government, may militate towards making an appeal less likely. But one never knows.

In the meantime, and should the decision stand, what ramifications are there for employers faced with the difficult choice of mandating all variety of vaccine, including such common ones as influenza A and B?

At the time of Covid the issue of mandating vaccines was an extremely controversial one. People were sacked for refusing to comply, and a question of individual rights versus the collective good made for interesting times. What’s more, there emerged a suspicion amongst some that the adverse effects from the Covid vaccine were being downplayed.

The issue of inaccurate public health information is nothing new. Take for example directions as to a healthy diet. A generation ago what we were being told by public health agencies constituted a good or bad diet is totally different to today. If we followed every public health directive, we’d be fools.

I am not one for advocating that vaccines are a problem. Quite the reverse. Notwithstanding occasional adverse outcomes, vaccines have been used effectively across the globe to control diseases of many kinds on and from the early 20th Century. That said, many felt uncomfortable with the idea of taking away individual choice and forcing people to be vaccinated. What’s more, we now know that the unvaccinated did not become spreaders of Covid any more than vaccinated. We all got it in the end. It was an example of the State stepping beyond its authority, in the minds of many.

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Employers at the time were on the horns of dilemma. Not mandate vaccination, and the vaccinated complained about working along side the unvaccinated. Mandate it, and those who did not wish to be vaccinated became the complainants, and some even went so far as to assert the vaccinated were ‘shedding’ the virus and endangering the workplace (a claim not supported by science).

Employers were between a rock and hard place, more so if you were complying with a directive issued by the State Coordinator.

This case however does not judge the rightness or wrongness of vaccination for Covid. Neither should it be seen as a commentary on the good or evil of vaccines. It confines itself to the finding that where an employer mandates vaccine on pain of potentially losing your job, and there is an adverse reaction to the vaccine, that is compensable under workers compensation law in South Australia.

Are the floodgates now open?

Subject to an appeal, to an extent yes, recognising that adverse reaction to vaccine is relatively rare so such claims will be uncommon. Numerous workers across the State have been awaiting this judicial adjudication, so they will now advance their claims subject to their individual circumstances and facts.

Also under consideration must be those who were vaccinated voluntarily, but did so because of their type of work. For instance if at the time of the pandemic you were in a customer-facing position, travelled regularly for work, or were a health worker, and thus felt it was sensible to heed an employers suggestion that vaccination was a wise course of action, or came to that realisation themselves.

Lawyers and the courts will no doubt ultimately explore how far the nexus between the demands of the workplace in a more general sense and the need for vaccination goes. Should workers compensation be granted to those who have adverse vaccine outcomes even though there was no mandate to be vaccinated, but were vaccinated owing to the nature of the job?

Additionally, it remains to address the many more people who suffered adverse reaction to Covid vaccination but who had the vaccination voluntarily and uninfluenced by the nature of their work. The Australian Government has established a national compensation scheme but it is very limited in the maximum sum of compensation one may receive. As a matter of public policy, if we are encouraging the population at large to be vaccinated, knowing full well that a small percentage will experience an adverse reaction, some severe, should we not bolster vaccine compensation schemes so that victims are adequately compensated for their loss, which can include losing the capacity to work? Such schemes already exist in the U.S., and other countries.

Finally, there is the difficult question of potential liability of manufacturers of vaccines. It is a balancing act between not discouraging vaccination research and production whilst simultaneously ensuring public safety. The law has a role to play over and above considerations of public policy.

Shepherd v State of South Australia is a milestone for compensating adverse vaccine reaction in Australia and a blow struck for common sense. If not successfully appealed it may have wider ramifications. Whilst the decision deals with what constitutes workplace injury in this State, on the back of the Covid pandemic it causes a wider reflection on what is fair and unfair if we are urged to vaccinate and inoculate.

When it is in the interests of the public to be vaccinated against preventable diseases but some are unlucky, we should not be turning our backs to them. If as a society we wish to encourage continued vaccination, and have the community maintain our current high levels of vaccination as a benefit to us all, those who suffer rare adverse reactions deserve proper and adequate compensation. We ought to ask that of our public health policy makers and of our legislators.

Morry Bailes is Senior Lawyer and Business Advisor to Tindall Gask Bentley Lawyers, past president of the Law Council of Australia and a past president of the Law Society of South Australia.

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