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Businessman to repay insurance cash to employee

A businessman has been ordered to repay a former employee for the cost of health insurance deductions that were not put towards health insurance.

Brandon Thompson had launched a legal suit against Harold Darrell seeking $10,321, the bulk of which represented money deducted from his pay in respect of health insurance and pension benefits which were not provided.

However, after a trial in Magistrates' Court last year, Mr Thompson was awarded $617.75 plus costs based on a ruling that he was entitled to be compensated only for actual medical expenses and that the Health Insurance Council otherwise had an exclusive right to seek compensation on his behalf.

While the Pension Commission subsequently received judgment on behalf of Mr Thompson in connection to the pension benefits included in the original suit, Mr Thompson appealed the court ruling seeking the remaining $7,914 in respect of his health insurance premiums that were not put towards insurance.

In a ruling dated last month, Chief Justice Ian Kawaley wrote that the ability of the Health Insurance Council to seek compensation on behalf of an employee should not limit the employee's ability to seek compensation himself.

“It is difficult, if not impossible, to construct a coherent basis for contending that the existence of a right of action enjoyed by the Health Council under section 25(6) of the Health Insurance Act is inconsistent with the employee retaining the right to pursue his own common law remedies in the circumstances to which the statute applies,” he wrote.

“The only obvious potential inconsistency which arises is in particular factual scenarios where, for instance, the council has commenced proceedings and it would be unjust to permit a double recovery.”

The Chief Justice noted that it was inarguably the case that Mr Thompson's contract of employment that money claimed for health insurance would go towards insurance coverage, and that it was admitted that while deductions were made no insurance coverage was obtained.

“The respondent admittedly breached his contractual obligations,” he wrote. “Was there a related implied term that any monies deducted would be repayable in the event that it was clear that the relevant sums had not been and would never be applied for the contractually agreed purpose and that the employee would never receive the benefit he ‘paid' for?

“I find that the right of recovery asserted by the appellant is so obvious that it must be regarded as an implied term in his contract of employment.”

Mr Justice Kawaley allowed the appeal, awarding judgment in favour of Mr Thompson for the additional $7,914.

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Published August 05, 2016 at 9:00 am (Updated August 05, 2016 at 8:04 am)

Businessman to repay insurance cash to employee

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