LUCIANO LOMBARDO and COMCARE
[2013] AATA 470
[2013] AATA 470
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/3723
Re
LUCIANO LOMBARDO
APPLICANT
And
COMCARE
RESPONDENT
DECISION
Tribunal PROFESSOR RM CREYKE, SENIOR MEMBER
Date 5 July 2013 Place Canberra The decision under review is affirmed
...................................[sgd].....................................
Professor RM Creyke, Senior Member
Catchwords
COMPENSATION – Commonwealth Employees – depressive disorder – whether contributed to by employment to a significant degree – whether reasonable administrative action – decision to not offer a redundancy – failure to obtain a benefit – whether taken in a reasonable manner in respect of employment
Legislation
Department of Education, Employment and Workplace Relations Collective Agreement 2009 – 2011
Safety, Rehabilitation and Compensation Act 1988 (Cth) sections 4(1), 5A, 5B, 6, 7 and 14
Cases
Bropho v Human Rights and Equal Opportunity Commission (2004) 135 FCR 105
Comcare v Martinez [2013] FCA 439
Comcare v Ross [1996] (FCA 680/96, unreported, 2 August 1996, Finn J)
Commonwealth Bank of Australia v Reeve and Another (2012) 199 FCR 463
Curragh Coal Sales Co Pty Ltd v Wilcox (1984) 1 FCR 461
Falconer v Pedersen [1974] VR 185
Re Hospital Benefit Fund of Western Australia Inc (1992) 28 ALD 25
Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42
Trewin v Comcare (1998) 84 FCR 171
Secondary Materials
Pearce, DC Statutory Interpretation in Australia (6th edn, 2006) [3.30]
REASONS FOR DECISION
Professor RM Creyke, Senior Member
5 July 2013
Mr Luciano Lombardo sought compensation for depressive disorder deemed to have been sustained on 2 February 2011. Liability was denied by Comcare under section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (Act) on 11 May 2012, a decision upheld on 2 July 2012. On 28 August 2012, Mr Lombardo sought further review by the Tribunal.
Background
On 20 December 2010, Mr Lombardo lodged an expression of interest in taking a voluntary redundancy at work. He was employed by the Department of Education, Employment and Workplace Relations (agency) in its Targeted Jobs Projects Branch. The Branch was affiliated with the Victorian State office of the agency, although based in Canberra. Mr Lombardo’s expression of interest was made in response to an offer on 16 December 2010 of a small number of redundancies in the agency due to a restructure and in the face of budgetary constraints.
The redundancy process was to take place in two stages: first the national office, and second, state and regional offices. As Mr Lombardo was aligned with the State office network his expression of interest was considered in the second tranche. In the result, Mr Lombardo was not one of those to whom a redundancy was offered. He was so advised on 1 February 2011.
Mr Lombardo emailed the Secretary of the agency on 2 February 2011 complaining that the decision was ‘vindictive in nature’ and a punishment of him, since it prevented him obtaining favourable superannuation entitlements, a matter which had been mentioned in his expression of interest.
On 2 February 2011, Mr Lombardo obtained a medical certificate from Dr Helen Wessell, his general practitioner, that he was unfit for work for 2 – 11 February 2011. She said it was due to ‘severe depression’ and that he would benefit from a ‘long break from work’ prior to a graduated return to work. On 24 February 2011, Dr Wessell issued an open letter to the effect that Mr Lombardo was ‘suffering from work stress since an apparent offer of redundancy was suddenly denied him’. Thereafter, Dr Wessell periodically certified Mr Lombardo as unfit for work between 8 April 2011 and 18 February 2012.
A report from a psychologist, Dr Neil Harrigan, on 25 February 2011 was that Mr Lombardo had presented on 23 February 2011 displaying ‘distressing levels of depression and anger’.
On 8 February 2012, Mr Lombardo completed a Claim for Workers’ Compensation in respect of a psychological condition. The claim recorded that Mr Lombardo had first noticed the illness on 1 February 2011 at 5.30pm and first sought treatment on 2 February 2011 at the Phillip Medical & Dental Centre.
In the first half of 2012, the agency commenced negotiations with Mr Lombardo about his return to work. On 10 August 2012, negotiations had broken down and Mr Lombardo was directed to return to work. Mr Lombardo responded on 15 August 2012. On 22 August 2012, his employment was formally terminated.
Evidence dated 10 December 2012 from the Manager, Victorian State Network of the agency, was that as there was no excess capacity in the area in which Mr Lombardo worked no redundancies came from that area.
The Director, People Policy and Performance Branch, in her statement of 10 December 2012, said that Mr Lombardo did not fit the criteria in the Department of Education, Employment and Workplace Relations Collective Agreement 2009 – 2011 (Collective Agreement) for being declared an ‘excess employee’. Evidence as to the criteria was provided by the Manager, People, Policy and Performance Branch. He said there were two principal drivers: budgetary; and criteria for being an ‘excess employee’. Mr Lombardo, as a full-time employee whose skills could be deployed elsewhere if the role he was performing came to an end did not fall within those criteria. The expression ‘excess employee’ was defined in the Collective Agreement.
The Director outlined the process for deciding on the redundancies which was that the former Group Manager State and Regional Group decided which expressions of interest would be endorsed and the final decision was made by the Associate Secretary of the agency.
Legislation
The relevant provisions of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (Act) are ss 4(1), 5A, 5B, 6 and 7.
The Collective Agreement, made in accordance with the Workplace Relations Act 1996 (Cth), defines ‘excess employee’ as:
a. the employee is part of a class of employees that is larger in size than is necessary for the efficient and economical working of the department; or
b. the services of an employee cannot be effectively used because of technological or other changes in the work methods of the department, or structural or other changes in the nature, extent or organisation of the functions of the department; or
c. the duties usually performed by that employee are to be performed in a different locality, the employee is not willing to perform the duties at the other locality and the Secretary has determined that these provisions will apply to that employee.
Issues
The issues are:
·Whether Mr Lombardo has suffered an ‘injury’ in the terms of the Act (section 5A); and
·Whether, if that is so, there is no liability for the injury because it was due to ‘reasonable administrative action’ (section 5A(2)).
Consideration
Whether Mr Lombardo has suffered an ‘injury’ in terms of section 5A of the Act
At the outset of the hearing, the Tribunal was advised that both parties accepted the findings in the reviewable decision that Mr Lombardo was suffering from a depressive disorder, that the deemed date of injury was 2 February 2011, and that the injury had been significantly contributed to by his employment.
The Tribunal is not obliged to accept concessions agreed by the parties or findings made at a previous level in the decision-making hierarchy. The Tribunal must be satisfied that the finding is either the correct or the preferable decision. In the circumstances of Mr Lombardo’s claim it is so satisfied.
A person has suffered an ‘injury’ under the Act and liability to pay compensation arises if the employee suffered either a ‘disease’ or an ‘injury (other than a disease)’ (section 5A(1)(a), (b)). A ‘disease’ is defined to cover an ‘ailment’ or an ‘aggravation of such an ailment’. An ‘ailment’ is defined broadly to mean ‘any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)’ (section 4(1)).
The reviewable decision accepted that Mr Lombardo suffered a depressive disorder, with a date of injury of 2 February 2011 (section 7(4) of the Act), being the date on which Mr Lombardo sought medical treatment for his condition. A depressive disorder is a mental ailment. That concession is consistent with the predominant medical evidence:
· Dr Wessell provided a medical certificate on 2 February 2011, that he was suffering from ‘severe depression’;
· Dr Neil Harrigan, Mr Lombardo’s treating psychologist, in a letter dated 4 April 2011, referred to Mr Lombardo’s ‘stress and resultant depression’;
· Dr James Hundertmark, consultant psychiatrist, in a Fitness for Duty report dated 23 May 2011, concluded that Mr Lombardo ‘was close to suffering from psychotic depression’;
· Dr Donald Lawrence, psychiatrist, in a report dated 6 November 2011, said that in August 2011 Mr Lombardo ‘presents with a mild resolving depressive episode’;
· Dr Inglis Howe Synnott, consultant psychiatrist, in a second Fitness for Duty report dated 20 July 2012, concluded that in July Mr Lombardo had no psychiatric condition. He did not express an opinion as to Mr Lombardo’s psychological state in February 2011.
The test also meets the criteria in section 7(4) that the deemed date of injury is either the date on which ‘the employee first sought medical treatment for the disease’ or ‘the disease…first resulted in the incapacity for work’. Mr Lombardo’s history meets the first of these tests.
In light of these findings and the concessions by the parties, the Tribunal finds that Mr Lombard did suffer from a psychological condition with a deemed date of injury of 2 February 2011. The Tribunal is satisfied that these findings are the correct or preferable findings. That satisfaction is based on the medical evidence as to his psychological condition, accepted by all the medical experts except Dr Synnott, who did not report on his condition until some 18 months after he first suffered symptoms, and Mr Lombardo’s testimony as to the circumstances leading to his disorder.
The Tribunal is also satisfied that Mr Lombardo’s condition was significantly due to his employment. That finding is consistent with the medical evidence that Mr Lombardo had not previously suffered from any psychological condition, that there was no family history of such a condition, that there appeared to be no other reason for the disorder, and the evidence that it was the events in the workplace leading up to the decision by his employers on 1 February 2011 which were significantly causal of that condition. That link had also been accepted by the agency in its initial, and its reviewable, decisions.
Whether, if that is so, there is no liability for the injury because it was due to ‘reasonable administrative action’ under section 5A of the Act.
Mr Lombardo’s submission was that the process of selecting those whose expressions of interest would be offered a voluntary redundancy was flawed. His argument was that the decisions taken were unreasonable because they failed to take account of his personal circumstances and the financial advantages to him and others like him. In his view the fact that he was not offered a redundancy discriminated against him and he has a strongly felt view that the process was unfair. As a consequence, he argued, the decision was unreasonable and hence invalid.
Mr Lombardo’s claim was rejected on the basis that Comcare had no liability for his injuries because they were caused by ‘reasonable administrative action taken in a reasonable manner’ (section 5A(1)). A non-exhaustive list of what is ‘reasonable administrative action’ is found in section 5A(2) of the Act. The provision states, as relevant, that ‘reasonable administrative action’ comprises ‘anything reasonable done in connection with the employee’s failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment’ (section 5A(2)(f)).
‘Administrative action’
The first issue is whether the rejection of Mr Lombardo’s application for a voluntary redundancy amounts to ‘administrative action’. As Gray J said in Commonwealth Bank of Australia v Reeve, ‘administrative action’ is ‘action with respect to the employee as employee and his or her employment relationship with the employer’.[1] Rares and Tracey JJ in the majority judgment in that case said of ‘administrative action’ that it referred to ‘action directed specifically to the employee as opposed to it affecting him or her because it was an ordinary feature of his or her work, workplace or environment or otherwise connected to his or her employment’.[2]
[1] Commonwealth Bank of Australia v Reeve and Another (2012) 199 FCR 463 at [30].
[2] Id at [57] per Rares and Tracey JJ.
If a decision was not ‘administrative’, Gray J described it as ‘operational’, which covers ‘the activities or business of the institution or enterprise in which the employee is employed’[3] including the designation of the ‘duties that an employee is employed to carry out’.[4] Operational actions are also ‘matters of general administration, management and the implementation of policy…even if they affect the employment of employees’.[5]
[3] Id at [31] per Gray J.
[4] Id at [30] per Gray J. See also Rares and Tracey JJ at [60], [74].
[5] Id at [33] per Gray J.
The decision about the need for redundancies was an ‘operational’ decision because it was management action and related to ‘the activities or business of the institution or enterprise in which the employee is employed’.[6] By contrast, the decision to not give Mr Lombardo a voluntary redundancy was a decision specific to him, made in response to his expression of interest. It was accordingly ‘administrative action’ and the Tribunal so finds.
‘Failure to obtain a…benefit’ (section 5A(2)(f))
[6] Id at [31] per Gray J.
Counsel for Comcare relied on failure to obtain a benefit, a statutorily nominated example of ‘administrative action’, for the purposes of this application for review. A ‘failure to obtain’ entails a failure to acquire something.[7] The something in this instance was a ‘benefit’ and this was argued to be a voluntary redundancy. There was a failure to obtain or acquire that redundancy. So the issue is whether a ‘redundancy’ is a ‘benefit’. A ‘benefit’ must be ‘something desirable, good or beneficial from the applicant’s point of view’.[8]
[7] Comcare v Ross [1996] (FCA 680/96, unreported, 2 August 1996, Finn J) at 10-11.
[8] Trewin v Comcare (1998) 84 FCR 171 at 176 per Heerey J.
There is no doubt that Mr Lombardo considered that obtaining a redundancy was something he desired, and that he believed was beneficial to him. He was desirous of obtaining the redundancy as is evidenced by the lodgement of his expression of interest on 20 December 2010, only four days after the invitation, and some time prior to the closing date of 14 January 2011. He had also had preliminary discussions with the Branch Manager, People, Policy and Performance, in June 2010, some considerable time prior to the invitation. His contention was that he would have been considerably better off financially had he been granted the redundancy since his ‘pension benefit was $9,000 higher than [his] pay and $17,000 higher than [his] normal retirement option – after tax’. This was a feature of his being a member of the more generous Commonwealth Superannuation Scheme.
Mr Lombardo argued that his failure to be offered a voluntary redundancy meant he was ‘working for nothing’. He said that did not mean he was not being paid while employed, but that he considered he was being asked ‘to work for [his] pay which is less than [his] accrued benefit under the redundancy for which [he did] not have to work’. As he said: ‘the benefit I had qualified for was higher than my take home pay [so] the department is forcing me to effectively work for nothing’. In addition he said ‘the decision also imposes a futility in the notion of working to 65 because the superannuation benefits are much less than the benefits I had qualified for under voluntary redundancy’. His firm belief was that the result of the failure to grant him a voluntary redundancy was to deny him something that he wanted, the acquisition of which would be financially advantageous to him, and the denial of which was a danger to his mental health.
The financial advantage is attested to by the calculations provided by a superannuation and advice service used by the agency. The advice was that if Mr Lombardo had been offered a redundancy in 2011 when he was aged 61 he would have received $67,300 as an annual pension after tax. If he had age retired at age 65, he would have received an annual pension after tax of $67,649, only $349 more than if he had been made redundant at 61. His then current salary was $67,277. For that reason his working for four more years, from age 61 to age 65, was in effect working for nothing since the net benefit to him in after tax pension terms would only have been $349 if he had been offered a redundancy, only a little more than his current salary. However, this would be subject to the incremental increases in salary which would occur in the normal course of his employment over the years.
Other advantages or beneficial impacts of the voluntary redundancy listed in Mr Lombardo’s expression of interest were that it gave him the option of early retirement at a time when his health was beginning to deteriorate, that it was a particular benefit to him since he had joined the Australian Public Service later than some colleagues and had only accrued 25 years of service, and the equivalent benefits were only available to him if he received a redundancy. He also needed the higher level of pension to retire because his wife’s superannuation pension would be minimal.
The Tribunal is satisfied that the voluntary redundancy was something Mr Lombardo was desirous of obtaining, and he clearly regarded it as financially beneficial to himself. Accordingly, it fell within the meaning of a ‘benefit’ in section 5A(2)(f). By being denied the option to obtain a voluntary redundancy, Mr Lombardo failed to acquire the benefit.
Was the failure to obtain a benefit ‘reasonable’?
When ‘reasonable’ is a standard for statutory decisions it attracts an objective assessment.[9] What is ‘reasonable’ is not be to given its judicial review or ‘Wednesbury’ meaning. Rather it is to be given its ordinary, natural meaning,[10] and that may involve recourse to a dictionary in accordance with long established practice.[11] At the same time, ‘one must interpret the phrase [or word] as used in its context, assisted as it may be but not necessarily bound by one of a variety of dictionary definitions’.[12]
[9] Bropho v Human Rights and Equal Opportunity Commission (2004) 135 FCR 105 per French J at [78]-[79]. See also Re Hospital Benefit Fund of Western Australia Inc (1992) 28 ALD 25.
[10] Curragh Coal Sales Co Pty Ltd v Wilcox (1984) 1 FCR 461.
[11] DC Pearce Statutory Interpretation in Australia (6th ed, 2006) [3.30]. As Pearce comments ‘the law reports contain thousands of examples of cases in which courts have referred to dictionaries for guidance’.
[12] Falconer v Pedersen [1974] VR 185 at 187.
At the same time what is reasonable must be considered in context. The context of the decision relating to Mr Lombardo’s expression of interest in a voluntary redundancy includes the decision by the agency for budgetary and restructuring reasons to offer a number of redundancies; the call for the expression of interest; the need to assess expressions of interest against the terms of the Collective Agreement; the processes adopted to assess applications and the communications about the offer; the limit on the number of redundancies which could be offered; and the need for the agency to retain staff with the appropriate ‘capabilities, knowledge and experience’ to deliver departmental programs.
Mr Lombardo claimed that the administrative action was unreasonable because it did not take into account the significant financial and other benefits to him when it made its decision.
The principles underpinning the choice of those to receive a voluntary redundancy were listed in the Minute as:
·the state office’s budget realignment strategy;
·the criteria in the Certified Agreement; and
·the consistent application of the criteria for prioritisation.
The Tribunal accepts that the principles listed do not take into account benefits to individuals. The principles refer to budgetary considerations, the criteria relating to ‘excess employee’ in the Collective Agreement, and criteria for prioritisation. The criteria for prioritisation are not specified other than in correspondence and announcements relating to the voluntary redundancy process but include that there was a need to retain staff with appropriate ‘capabilities, knowledge and experience’ to maintain the agency’s workload. Mr Lombardo was advised he fitted within this prioritisation category.
Mr Lombardo was advised that in view of the continuing workload of the employees in the Targeted Jobs Projects Branch, there was no evidence of technological changes affecting Mr Lombardo, nor of any proposal to move the work of the Branch to another area to which Mr Lombardo was unwilling to move. So he could not be classified as an ‘excess employee’ for the purposes of the criteria in the certified agreement.
The processes involved did not appear to involve any deficiency which may have adversely affected Mr Lombardo. There was a call for expressions of interest, and a reasonable time, namely a month, was provided for their lodgement. The list of potential candidates was drawn up in mid-January 2011. According to the terms of the covering Minute, appropriate criteria were taken into account, and no evidence was provided to the contrary.
In her email to staff dated 16 December 2010, calling for expressions of interest for voluntary redundancies, the State Manager emphasised only that there ‘may be a need to offer a small number of voluntary redundancies in some areas of the Cluster’. She also said ‘at this stage, we don’t know exactly where [the voluntary redundancies] may need to come from or how many may need to be offered’. She also noted ‘putting in an expression of interest in no way obliges you or the department to any particular course of action’.
As a consequence, Mr Lombardo was on notice that the expression of interest did not trigger any right to a voluntary redundancy. The offer of a redundancy was at the discretion of the management of the agency, and the acceptance of any offer was equally at the individual officer’s discretion. No expectation of entitlement could arise from that call for expressions of interest. She also gave evidence that at the time of the call for expressions of interest her view was that on workload grounds there was no justification for offering voluntary redundancies within the Targeted Jobs Projects Branch. That too put him on notice that it was unlikely that his Branch would receive any of the redundancies on offer.
The criteria for grant of a voluntary redundancy included a limit on the number which could be offered. The assessment of these numbers was fluid. Initially, it was believed that around 50 would be offered. However, for financial reasons the number was eventually reduced to 35. These figures were taken from a Minute to the Director, People, Policy and Performance Branch, dated 20 January 2011, outlining the processes followed and the names of those to whom a voluntary redundancy was to be offered.
In summary, none of the contextual issues involved in the decision either provided an indication to Mr Lombardo that there was any right to a voluntary redundancy, nor made any undertakings to take into account issues personal to a person who had lodged an expression of interest, other than those specified in the definition of ‘excess employee’. Nor were there faults affecting Mr Lombardo adversely in the processes by which the choice of candidates was undertaken. Mr Lombardo’s claim that he had been discriminated against because the special and particular benefits for him were not taken into account cannot be sustained. There is no indication in the evidence that his expression of interest was singled out and deliberately excluded. Rather he was advised in advance that his name was not being put forward. The reason was that on workload grounds, there was no excess capacity in his Branch and hence no expressions of interest from his Branch were considered. That criterion was generic, and did not consider the circumstances he outlined in his expression of interest, nor was there an opportunity to discriminate in that process. In other words the administrative processes involved in the choice of those to receive the voluntary redundancies were reasonable.
‘Taken in a reasonable manner’
As Lander J said in Keen v Workers Rehabilitation and Compensation Corporation:
Whether the administrative action was taken in a reasonable manner by the employer will depend upon the administrative action, the facts and circumstances giving rise to the requirement for the administrative action, the way in which the administrative action impacts upon the worker and the circumstances in which the administrative action was implemented and any other matters relevant to determining whether the administration [sic] action was taken in a reasonable manner by the employer. [13]
[13] Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42 at 47-48. The extract was quoted with approval by Robertson J in Comcare v Martinez [2013] FCA 439 at [83].
Mr Lombardo had first had discussions about the possibility of his being offered a voluntary redundancy in June 2010. He was then told that the State Offices Process would be undertaken later in the year. He claimed he had been told by a Group Manager, that ‘it was very easy to get a redundancy in the position [he] was in by simply moving his position to Melbourne’. He also claimed that the State Manager had told him that no redundancies would be offered to the Targeted Jobs Projects Branch so although they could lodge expressions of interest they would not be considered.
The administrative action was the processes for offering voluntary redundancies. The Tribunal has already decided that those processes generally, insofar as they applied to all employees in the agency, were conducted reasonably. The facts and circumstances giving rise to the requirement of the administrative action were the budgetary pressures referred to earlier, the need to retain staff for the agency’s continuing workload, and the need to take a principled approach to the offer of voluntary redundancies.
The manner in which the administrative action impacts upon the worker has also been detailed in earlier discussions. There is no indication that the information given to Mr Lombardo about transferring to a position in the State Office was something he acted on to his detriment, even assuming that the statement was made and was correct, a matter not tested in evidence. He was already in a work area associated with a state office and the Tribunal did not receive evidence that he changed his position.
The only avenue for taking into account information personal to Mr Lombardo was the two matters listed in the definition of ‘excess employee’ neither of which applied to him. Also, as earlier discussed, his presentation of facts specific to himself were not taken into account, since the only facts personal to individuals were whether they had ‘capabilities, knowledge and experience’ needed for ongoing work of the agency. Mr Lombardo did so since he had generic auditing and accounting skills which he was told were needed. In any event, Mr Lombardo was told that his expression of interest was not going forward so there was no opportunity for other facts personal to Mr Lombardo to be taken into account.
The circumstances in which the administrative action was implemented include the reduction in number of applications to be considered, the ongoing workload for the Targeted Jobs Projects Branch, and the fact that only a limited number of voluntary redundancies nationally would be proposed. In those circumstances, the manner in which the administrative action was implemented was not unreasonable.
Although Mr Lombardo is understandably disappointed that a financial windfall of the kind he might have received had he been offered a voluntary redundancy did not materialise, there is nothing in the information provided to the Tribunal which indicates that the administrative action was not reasonable or not conducted in a reasonable manner. That means, the decision under review is affirmed.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke, Senior Member ......................................[sgd]..................................
Associate
Dated 5 July 2013
Dates of hearing 6 and 7 May 2013 Applicant Self-represented Counsel for the Respondent Ms Kristy Katavic Advocate for the Respondent Mr Luke Woolley Solicitors for the Respondent Sparke Helmore
8
0