It was agreed that Mr Palmbuch’s death resulted from an aggravation, acceleration, exacerbation or deterioration of a pre-existing illness, being coronary heart disease. The key issue in this case was whether the aggravation of his illness arose in the course of his employment.
This case drew from the High Court cases of Hatzimanolis v ANI (1992) 173 CLR 473, and Comcare v PVYW  HCA 41. Comcare v PVYW is an infamous case where a worker’s claim for compensation was rejected by the High Court, for an injury sustained while in participating in sexual intercourse in a hotel room while on a work trip. This case is a key authority because it contemplates injuries which occur during an ‘interval’ between overall periods of work. Essentially, an injury which occurs during an ‘interval’ between periods of work will be compensable if the injury occurred from an activity that was induced or encouraged by the employer.
In the case of Mr Palmbachs, it was agreed that the ‘interval’ between periods of work is the time that he was at the hotel in China, before his working commitments for the day had started. The main cause for dispute was whether his employer had ‘induced or encouraged’ his exercising in the hotel gym.
Key evidence to the arguments was the employer’s Fitness for Work policy, which stated that employees were obligated to ensure they were fit for work throughout the work period. Fitness for work was defined to include the ‘absence of fatigue and dysfunctional levels of stress’
- Mr Palmbach’s estate argued that the expectation that he would be ‘fresh’ and ready for work would encourage him to utilise the hotel’s facilities, including the complementary gym. It was also raised that as a senior executive, the distinction between on and off working hours was ‘blurred or non-existent’.
- The insurer argued that the Fitness for Work policy was related to WHS related matters and not relevant to Mr Palmbach’s circumstances. They argued that the hotel happening to have a gym was not a deliberate choice by the employer.
Deputy President Judge Crawley of the South Australian Employment Tribunal held that the injury was compensable. His Honour considered that the Fitness for Work policy was relevant to Mr Palmbach’s employment, despite his executive role. His Honour further considered that exercise was a ‘well recognised’ way to combat fatigue, stress and jet lag.
The lack of structure and sophistication left Core Lithium and its insurer open to a compensable claim. A more structured approach as seen in Tran v Vo, where there was a clear delineation of work and non-work may have prevented a successful claim.
It was therefore deemed that Core Lithium had ‘induced or encouraged’ Mr Palmbachs to exercise on the work trip, which meant his death arose out of the course of his employment.
It is worth noting that an injury may not be compensable but the circumstances around the injury can be serious misconduct. There are three factors for determining out of hours misconduct, as set out in the case Rose v Telstra: the out of hours behaviour is likely to cause serious damage to the relationship of employee/employer, the behaviour damages the employers interests, or it is incompatible with employees duty. So, there needs to be great care in policies and procedures and directions given to employees to keep them acting on their best behaviour but not make an injury compensable.