Wednesday, September 8, 2021

Return to listings

Managing Your Business’ COVID-19 Vaccination Risk Exposures

With COVID-19 outbreaks continuing to disrupt life around the country, maximising the vaccination rate has become a national priority. Reaching the vaccination rate of 80% in Australia is now in our sights, raising questions about the best way to navigate a safe and sustainable return to the workplace.

The issue of whether employers should mandate vaccinations is receiving considerable attention around the world.   Multinational companies such as Google and Facebook have introduced a compulsory vaccination policy for staff. This move has been closely followed by Australian companies such as Qantas and SPC, with others indicating they will follow suit.

As businesses seek to understand their risk exposures, we explain how COVID-19 claims and liabilities are currently being viewed and summarise key considerations for employers as they navigate this next phase.


In Australia, four tiers have been set out by The Fair Work Ombudsman (FWO) to help businesses assess where it might be "lawful and reasonable" to mandate COVID-19 vaccinations in their workplaces. The tiers range from Tier 1, where workers are exposed to the most risk and therefore it may be reasonable to enforce vaccinations, through to Tier 4, where the risk of transmission or infection is likely to be lower.

Tier 1 work — employees are required to interact with high-risk people (e.g., border control, hotel quarantine)

Tier 2 work — employees are required to interact with vulnerable people (e.g., health care or aged care workers)

Tier 3 work — employees are required to interact with the public in the course of their employment duties (e.g., retail workers at essential stores)

Tier 4 work — employees have minimal face-to-face interaction with others.

A workplace may have employees performing work in different tiers, which might change over time. With no test cases currently available to show the tier system in action, these guidelines raise the question of what steps are considered “reasonably practicable” for employers to help keep staff safe. At the time of publication, this decision sits with employers.


Having consulted with the medical, healthcare, business, and insurance sectors, the Federal Government has released the details of the national no fault COVID-19 Vaccine Claim Scheme (the Scheme). The Scheme will provide Australians with efficient access to compensation for COVID-19 claims related to the administration of a Therapeutic Goods Administration (TGA) approved COVID-19 vaccine delivered through a Commonwealth Government approved program, irrespective of where that vaccination occurs.

From 6 September 2021, Australians who suffer injury and loss of income due to receiving the COVID-19 vaccine can register their intent to claim from the COVID-19 vaccine claims scheme webpage. The Scheme will be backdated to February 2021.

The Scheme will cover the costs of injuries exceeding $5,000 caused by a proven adverse reaction* to a COVID-19 vaccination. Independent experts will assess the claims, and compensation paid based on the recommendations. Compensation payments under the Scheme will be fully funded by the Commonwealth.

Australians who receive a COVID-19 vaccination and experience an adverse reaction are encouraged to report it to their doctor who can provide the information to the TGA.


Separate to the COVID-19 Vaccine Claim Scheme, in some circumstances, an adverse reaction to the COVID-19 vaccine may be covered under workers’ compensation. To be covered, the insurer will need to be satisfied that:

  • the vaccine injury arose out of, or in the course of the worker's employment; and
  • the worker's employment was a substantial contributing factor to the vaccine injury or was the main contributing factor for a disease, injury; or
  • in the case of heart attack or stroke injury, the nature of the employment was a relevant factor in increasing the risk of the injury (see below).

While each claim needs to be assessed on the relevant facts and evidence, several issues may increase the likelihood that a vaccine injury is covered under workers’ compensation, including whether an employer:

  • took steps to arrange for its employees to receive a COVID-19 vaccine
  • encouraged or induced its employees to receive the vaccination to obtain benefits for its business
  • permitted or directed employees to have a COVID-19 vaccination during ordinary working hours; or
  • provided instructions to employees relating to the administration of the vaccine.

Workers’ compensation outcomes will always be subject to the individual merits of the claim, however, the key factor determining liability is the relationship between the workplace and how an injury arose out of or in the course of employment.  Therefore, the role of the employer is important when considering the exposures presented by COVID-19 vaccinations and how this can be determined to be in the course of employment. The link between a vaccine injury and the worker's employment is easier to establish where a worker is influenced by their employer's requirement to receive the vaccine or is subject to a Government Public Health Order. In these circumstances, there is a greater likelihood of the vaccine injury being covered under workers’ compensation. When lodging a claim, employers and workers will need to provide information on the link between their employment and the serious adverse reaction to the vaccine.

If a vaccine injury is a "heart attack injury" or "stroke injury", the worker is also required to establish that the nature of their employment significantly contributed to the injury. In practice, this may require the worker to satisfy additional requirements. For example, the worker may need to provide evidence they opted for a particular vaccine brand due to their employment.


In NSW, icare has confirmed it will exclude COVID-19 claims and COVID-19 vaccination claims from the individual claims experience, meaning it will absorb the costs of the claim without passing on premium impact to the policyholder. This will protect any individual employer or industry from disproportionate premium increases due to COVID-19. This is a continuation of the Job Keeper exemption during 2020 where regulators supported the exclusion of these payments per the declaration of rateable remuneration. Whether the remaining State regulators follow icare’s lead is yet to be seen, however, Honan is liaising with our regulatory contacts to understand their position.

Businesses are encouraged to report any COVID-19 outbreaks directly to the relevant State or Territory regulator (e.g., WorkSafe Victoria, SIRA, etc.) and consider an employee who has tested positive to COVID-19 as having a reportable injury.


The TGA has provided guidance on communications regarding COVID-19 vaccinations to support the Government’s roll-out.  Employers should familiarise themselves with these requirements which include conditions around offering incentives to people who are fully vaccinated.


These issues remain a complicated area of discussion in the business community and the situation is evolving each day. We encourage businesses to seek legal advice based on their individual circumstances where appropriate before proceeding.

Alexandra Slimming

Head of Global Benefits

Jules Paolino

Workplace Risk Consultant

Flexible work: Here to stay, but have you nailed the formula?*The TGA will provide clarity on recognised adverse reactions.  

Return to listings