The South Australian Employment Tribunal (the Tribunal) has found that the death of an employee while exercising in a hotel gym during a work trip to China to be compensable under the Return to Work Act 2014 (SA) (the Act).

The employee, Mr Palmbachs, who was the Chief Financial Officer of the Core Lithium Ltd (the Employer), travelled to China for work and stayed in a hotel that was arranged and paid for by the Employer. He suffered a fatal heart attack while exercising in the hotel gym the morning after his arrival, before commencing any work. Mr Palmbachs was found to have suffered severe coronary artery disease, which had developed over a number of years.

A claim for compensation under the Act was brought by Mr Palmbachs’ wife, who was his sole financial dependent. The claim was initially rejected by Return to Work SA, on the basis that the gym exercise did not constitute part of his employment, and was not undertaken with the inducement or encouragement of the Employer. 

The decision to reject the claim was challenged by Mrs Palmbachs in the Tribunal, where she argued that the injury had arisen in the course of employment as it occurred during a work trip, and that the Employer’s conduct implied that Mr Palmbachs was encouraged to use the gym, including by way of its ‘Fitness for Work’ policy, which required staff to be fit for work.

Mrs Palmbachs also relied on the presumption in section 7(11) of the Act, which provides that it will be presumed, in the absence of proof to the contrary, that employment was a significant contributing cause of injuries in circumstances of an aggravation of pre-existing coronary heart disease.

The Tribunal found that the mere fact that the Employer had paid for a hotel, which included gym facilities, for the worker was sufficient to imply that the Employer had accepted and expected the worker to use the gym facilities. This implication was sufficient to constitute encouragement or inducement, such that the test of causation was satisfied. The Tribunal rejected the arguments advanced by Return to Work SA, including that the gym workout was a social and/or sporting activity, as such activities are excluded from the coverage of the Act. Consequently, the claim for compensation was accepted.

While we anticipate that the decision may be appealed, it highlights the breadth of potential activities that may be deemed as ‘arising out of or in the course of employment’ as described at section 7 of the Act.

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