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March 18, 2026Uninsured Employer Hit
A NSW employer has been ordered to reimburse the Workers Compensation Nominal Insurer $59,001 in weekly compensation payments and medical expenses – after failing to hold workers compensation insurance at the time a worker was psychologically injured on the job. The worker had been employed for just three days when the incident occurred. The case, CJD v BQH [2026] NSWPICPD 8, decided by NSW Personal Injury Commission Deputy President Michael Snell on 4 March 2026, is a blunt reminder: workers compensation insurance is not optional, and liability begins on day one of employment.
What Happened
In August 2022, a 26-year-old worker – her third day in the role – attended her employer’s Penrith warehouse. The company director was the only other person present. The two drank beer from the work fridge and shared a cigarette, before the director initiated unwelcome sexual touching. The worker reported the incident to police the same day. The director was charged with assault but found not guilty in the Local Court.
The worker lodged a claim for psychological injury with the State Insurance Regulatory Authority (SIRA) on 2 September 2022. Her claim was accepted. Weekly compensation payments and medical expenses were paid on her behalf by the Workers Compensation Nominal Insurer – the safety net that steps in when an employer has no workers compensation policy in place.
| The employer was not insured in respect of its workers compensation liabilities at the time of the incident. Because the employer was uninsured, it was subsequently issued with a notice to reimburse the Nominal Insurer $59,001 – the total cost of the worker’s compensation entitlements. |
The Risk of Operating Without Workers Compensation Insurance
In NSW, workers compensation insurance is compulsory for any employer who pays more than $7,500 in wages per year, or who employs an apprentice or trainee – regardless of the number of workers. The obligation sits under the Workers Compensation Act 1987 (NSW) and is regulated by SIRA.
When an employer operates without a current policy and a worker is injured, the Nominal Insurer – administered by icare NSW – steps in to pay the worker’s lawful entitlements. It then issues the uninsured employer with a reimbursement notice for the full cost of those payments. The employer has no insurer to absorb or manage the claim. Every dollar paid to the injured worker comes back as a direct liability against the business.
In this case, the employer had no policy, disputed liability all the way through to appeal, and still lost – resulting in a $59,001 debt, plus the costs of the proceedings.
Beyond the financial exposure, operating without workers compensation insurance is a criminal offence in NSW. Penalties include:
- Fines of up to $55,000 for an individual and $110,000 for a corporation (first offence)
- Higher penalties apply for repeat offences
- SIRA may also issue penalty notices and refer matters for prosecution
Three Days on the Job – Still Fully Covered by Law
One of the most important lessons from this case is that workers compensation entitlements arise from the moment employment begins. There is no minimum service period, no probationary exemption, and no waiting period before an employer’s liability attaches. A worker injured on their first shift, their third day, or their first week is entitled to the same compensation as a worker of 10 years.
The employer in this case argued the incident never occurred and that the worker had a capacity for work that should have reduced her payments. The Personal Injury Commission rejected both arguments at first instance and on appeal, finding the employer had not discharged its onus of proof. The worker’s psychological injury claim stood – and the $59,001 reimbursement notice stood with it.
| Key principle: Workers compensation liability is no-fault. An employer does not need to have caused the injury, or been negligent, for a workers compensation claim to succeed. The worker simply needs to establish that the injury arose out of, or in the course of, employment. A psychological injury sustained on day three of employment is a compensable injury. |
What Employers Must Do
- Obtain a current workers compensation insurance policy before engaging any worker
- Ensure the policy accurately reflects your actual wages and workforce – underreporting wages is a common and costly error
- Understand that probationary employees, casual workers, and labour hire workers may all be covered
- Maintain a return-to-work program and injury management procedures as required by the Workplace Injury Management and Workers Compensation Act 1998 (NSW)
- Report workplace injuries promptly to your insurer – late reporting can increase claim costs and complicate liability
HSE Direct assists employers across NSW and Australia with workers compensation compliance, injury management planning, and WHS system development. If you are unsure whether your business has adequate coverage or compliant injury management procedures in place, contact HSE Direct today.
Source: CJD v BQH [2026] NSWPICPD 8, NSW Personal Injury Commission, 4 March 2026.