QZ v Sydney South West Area Health Service & Anor

The applicant, QZ, brought proceedings against Sydney South West Area Health Service and the Minister for Health (NSW) in the Federal Court of Australia. The dispute concerned the applicant's claim for compensation under the *Safety, Rehabilitation and Compensation Act 1988* (Cth) (the SRC Act) for a psychiatric injury allegedly sustained during the course of her employment. The primary judge had dismissed the application, and the applicant sought to appeal this decision.

The central legal issue before the Full Federal Court was whether the applicant's psychiatric injury was a consequence of reasonable management action taken in a reasonable manner in respect of her employment. Specifically, the court had to consider the application of section 14(2) of the SRC Act, which provides a defence to employers where an injury is caused by reasonable management action taken reasonably. The court also considered the proper interpretation of "reasonable management action" and "reasonable manner" in the context of the applicant's employment circumstances.

Gummow and Kiefel JJ found that the primary judge had erred in their assessment of the evidence. Their Honours applied the principles established in cases such as *Comcare v McCallum* and *Comcare v Martin*, which clarify that the employer bears the onus of proving that the management action was both reasonable and taken in a reasonable manner. The court concluded that the evidence did not establish that the management actions taken by the employer were reasonable in all the circumstances, nor that they were taken in a reasonable manner. Consequently, the defence under section 14(2) of the SRC Act was not made out.

The Full Federal Court allowed the appeal, set aside the orders of the primary judge, and remitted the matter to the Federal Court for redetermination of the applicant's claim for compensation.